Free The Family by Kitty Kelley Page B

individuals for the purpose of purchasing and carrying securities was unwise and financially hazardous. That’s when he butted heads with Bert, the financial buccaneer.
    “One day Walker asked me to come to his office,” Woolley recalled. “He was seated at his enormous flattop desk with my month-end balance sheet before him. He was jotting down some figures on a small pad as he looked up and said: ‘We have a big underwriting coming along at the end of next week. I would like to clean up some of our current loans now, so we will be out of the banks for a period of about a week. I want you to liquidate at once your treasury bills, call loans and acceptances and turn the money over to us. We’ll give you an I.O.U. note. I figure that your quick assets will just about do it. Later on, we’ll return these funds to you.’”
    Woolley immediately saw the proposition as a “dangerous dealing.” He tried to keep calm and speak slowly. “I explained our obligations to our depositors and to the Federal Reserve Bank. They had our figures on file and were ready buyers of our commercial acceptances. Private banks, such as ours, in those days did not publish balance sheets, but depositors had every right to believe we handled our affairs, as did the public banks. I ended by saying to Mr. Walker that I was sorry, but that I would not do what he had ordered.”
    Within seconds the two men abandoned all pretense of composure. Walker, who brooked no insolence from subordinates, was red-faced and grew livid when Woolley started shouting at him. At that moment Averell Harriman walked into the room.
    “Without waiting for Walker to speak, I turned to Averell and hastily outlined Walker’s demand for all of Harriman Brothers’ quick assets. I also reminded him of our obligations to the New York Fed as well as to our depositors . . . I concluded by saying that if Walker had his way, I intended to resign forthwith.”
    Harriman quickly seized control. “Knight, why don’t you leave us now,” he said. “I want to have a chat with Bert about this. You will hear from us later on.”
    Neither Harriman nor Walker ever said anything further to Woolley about the matter. “Rumor had it that a pretty vehement argument ensued,” Woolley said. “Rumor also had it that they had had a series of prior disagreements. As Pres Bush . . . informed me later, it all led up to Bert’s decision to retire some nine months later.” The matter irrevocably settled itself—proving Woolley’s fears to be correct—when margin buyers and sellers panicked, causing the stock-market crash. Over the next few months, more than a thousand banks failed. Farm prices fell, factories closed, soup kitchens opened, and breadlines formed. When people started jumping out of windows on Wall Street rather than face financial ruin, Bert Walker was comfortably ensconced at Walker’s Point in Kennebunkport, nursing a bad stomach. But even he was reassessing.
    Five and a half weeks after the crash he wrote a “Dear Averell” letter dated December 6, 1929:
    As I stated to you last spring I am willing to step out of the picture if doing so will best suit your book. You were good enough at that time to say an emphatic no and if that view still holds I propose that we continue as we are for another year, making certain organization changes as discussed and assigning to you such organization work as you may wish to take on . . . I should like to have Pres made an assistant to the president to handle details under my direction.
    The arguments over Bert’s margin buys, plus his ill health—he alluded to intestinal pain in his letters—led to his decision to resign as president of W. A. Harriman and Company. Within five months he began extricating himself from almost all the Harriman companies, except the Harriman Fifteen Corporation, the holding company Averell had created to handle his personal investments in shipping and mining. By May 1930 Bert Walker had returned to his