Wriston: Walter Wriston, Citibank, and the Rise and Fall of American Financial Supremacy

By Phillip L. Zweig

Wriston is the definitive, inside story of the man who transformed Citibank into a global banking powerhouse—and led it to the edge of the abyss.

• Language: English
• Publisher: PLZ Publishers
• Release date: Apr 30, 2019
• ISBN: 9781625361417

Book preview

PROLOGUE

In early September 1991, Walter Bigelow Wriston, the tall, trim former chairman of Citicorp, stepped into an elevator in the vast atrium of New York’s Citicorp Center to return to his fourth-floor office from a meeting nearby. A few of the fresh-faced young Citibankers in the elevator knew him slightly, having joined the huge company just before he retired in 1984. The others knew him only from hearing older colleagues speak wistfully of the Wriston era. Almost in unison, they snapped soldierlike to attention and said reverently, Hello, Mr. Wriston.

Wriston smiled faintly, but his eyes were downcast. He had spent the morning in a directors’ meeting at bankrupt Pan Am, where he had participated in the wrenching discussion on the sale of the Washington-New York-Boston shuttle and most of the trans-Atlantic routes to Delta Airlines, the latest phase in the dismantling of the once proud pioneer of global aviation.

Hello, boys, he said, trying hard to be cheerful. Just got back from Pan Am. It’s so sad to see a great company go down the tube. As Wriston breezed out of the elevator, the bankers stared at one another, each certain that the other was thinking the same gloomy thought: Wriston was clearly referring to the airline, but his comment could also apply to the banking company he had run for more than seventeen years before turning it over to a cocky, impish technocrat named John Shepard Reed, once considered the boy wonder of American banking.

In those seventeen years, Wriston had built Citicorp into the world’s mightiest banking power and established for himself an unchallenged reputation as the world’s most influential banker. Along with J. P. Morgan and Bank of America founder A. P. Giannini, he ranked as one of the three most important bankers of the twentieth century. During his regime, Citicorp flexed more financial muscle around the globe than most countries. By force of intellect, acerbic wit, and hobnail boots, he transformed Citicorp from a genteel utility, where golf scores counted for more than IQ, into a tough, arrogant corporate meritocracy that dragged the rest of the industry out of the era of quill pen banking. Using Citicorp as an assault weapon for promulgating free market principles, he blew away many of the archaic rules that prohibited banks from operating across state lines, from competing with Wall Street investment banking houses, and from paying small savers the same market rates of interest earned by wealthy investors. By betting on youth and brains and by pouring hundreds of millions of dollars into automated teller machines and other advanced technology, he revolutionized the way Americans managed their money—and built a money machine for Citicorp in the process.

Yet for all the praise Wriston and Citicorp received for their managerial acumen, Citicorp was constantly in a state of turmoil and chaos. Reflecting Wriston’s own combative personality, Citibankers spent much of their time fighting one another, rather than other institutions, for business—in one instance, at least, in the parking lot of a corporate client. Though Wriston constantly spoke of the need for financial and management controls, they were often abysmal, and eventually broke down completely. Citicorp held itself out to corporate America as a shrewd adviser on mergers and acquisitions, but its own efforts to build the company by buying other companies often ended disastrously.

Most significantly, Wriston was blindsided by his hardheaded views that countries don’t go bankrupt and that banks don’t need capital. Armed with those convictions, he led the world banking system into Third World lending, ill-prepared, as it turned out, for the decade-long quagmire that was to come.

Wriston regarded the choice of a successor as the single most important decision any chief executive officer can make. To make that choice, Wriston orchestrated one of the longest and most publicized succession dramas in American business history, and his eventual selection of Reed was lauded at the time as a stroke of genius.

But now, in 1991, his beloved bank was in deep trouble. The wisdom of picking John Reed as his heir was being challenged by regulators, the media, and employees. While the fifty-two-year-old Reed was struggling to rid the bank of the burden of billions in Third World debt that he had inherited—Walt’s loans, he often wisecracked to colleagues—Reed’s own top managers had made billions in bum loans to high-rolling real estate promoters, Australian wheeler-dealers, and leveraged buyout artists. The solvency of the nation’s largest banking institution was being questioned publicly in the New York Times and by leaders of Congress. Thousands of employees were being sacked to slash expenses. Morale was at an all-time low. If that wasn’t enough, chairman Reed, a married man with four children, was humiliated by gossipy news stories and bawdy jokes about his affair with a young married stewardess on the corporate jet. Rumors were flying up and down Park Avenue that Reed himself would soon be canned and that possible replacements included everyone from Wriston’s onetime nemesis, former Federal Reserve chairman Paul Volcker, to Wriston himself. Don’t hang by your thumbs waiting for that one, Wriston said with characteristic wit.

There are many criteria for judging the performance of the leader of a giant public company. The easiest criterion to quantify, and to many the most important, is how much wealth he created for shareholders. But the head of a global bank is responsible to a multitude of constituencies, including depositors, individual and corporate customers, employees, local communities, and society at large. His performance is the sum total of how well he has served them all. Eight years after Wriston left office, the jury had finally come in on every measure, including the one he himself regarded as the most critical: how well he provided for the survival of his institution.

Wriston was not one to agonize over a decision, and certainly not after the fact. But never, since the sudden death of his forty-six-year-old first wife a quarter century earlier, had he felt such pain and disappointment. The institution he had nurtured to the pinnacle of power and prestige was now a crippled giant. And there was little that even Walter Bigelow Wriston could do to fix it.

In fact, the institution Wriston had created was so complex that few, if any, American bankers could comprehend it.

To bring Citicorp back from the brink in the face of endless criticism, John Reed drew on the capacity for pain he had tapped into as chief of the once troubled consumer business. As the board mulled over the possibility of replacing him, Reed hacked away at the bank’s troubled loan portfolio, its overweight bureaucracy, and the ruthless corporate culture he had helped create. By 1993 Citicorp was on the mend, and Reed had begun to regain the confidence of Wall Street and the man who had appointed him.

Citicorp had essentially lost a decade. But along the way, Reed and his institution had also lost much of their hubris. Because of that, there was finally reason to believe that their near-fatal mistakes would not soon be repeated.

1

THE EARLY YEARS

Walter Wriston was born on August 3, 1919, without a silver spoon in his mouth but with a leather-bound copy of Adam Smith’s Wealth of Nations, the bible of free enterprise, near his cradle.

In the years following World War I, the material wealth of Henry Merritt Wriston, then a $1,200-a-year history professor at Wesleyan University in Middletown, Connecticut, and his wife, Ruth, was modest indeed. But the intellectual capital that this brilliant, imperious educator and his quiet, reserved wife imparted to their only son, Walter, almost from day one, more than compensated for the lack of ready cash.

For Walter, Henry Wriston was a larger-than-life father figure, the shoes to be filled, and the footsteps to be followed. He was his son’s B.A., his M.B.A., and his Ph.D. Henry would, by his own success in education, inspire his son to become a world leader in banking.

It seems fitting that Henry Wriston, who grew up to be a staunch defender of American values, was born on July 4, 1889, in a clapboard cabin in Laramie, Wyoming, where his parents had moved after meeting and marrying in Colorado.

Both Henry Lincoln Wriston and Jennie Atcheson Wriston had wound up in Colorado in a roundabout way. Jennie’s father had earned a comfortable living in the mid-1800s as a marine woodcarver. But he had an abiding curiosity about the frontier that lay far to the west of their tidy home in Astoria, Queens, just across the East River from Manhattan. In 1868, his wanderlust prevailed. He and his wife packed up Jennie and her four siblings and left New York by train for the three-day journey to Pleasant Hill, Missouri. In her privately published memoirs, A Pioneer’s Odyssey, Jennie later wrote of their arrival in Reconstruction era Missouri, where, as New Yorkers, they met with resentment from locals sympathetic to the Confederate cause. They had expected to be transported from Missouri to their eighty-acre farm in a carriage drawn by a team of horses. Instead, the carriage was hitched to a mule team, prompting Jennie’s father to complain that his family was not in the habit of appearing in public behind jackasses. Like the spirit of rugged individualism that brought the Atchesons to the wilderness, this disdain for any association with jackasses, real or figurative, was a trait that would be passed down through every generation of the Wriston family.

Mr. Atcheson’s demand for a horse-drawn carriage was accommodated, but after five years in Missouri, during which they endured bouts of malaria, the family embarked on yet another westward journey. This one, by wagon train, lasted six months. It took the family on a perilous trek through Kansas, along the Republican River in Nebraska, the land of the Sioux, Arapahoe, and Cheyenne, and on to a small settlement near Denver. En route, the Atchesons met up with legendary army scout William F. Buffalo Bill Cody, and in one tense encounter with the Indians, a warrior on a pinto pony tried to exchange some blankets and ponies for Jennie, whom he dubbed the little squaw.

Jennie later spent the winter months teaching in the Denver schools, and the summer commuting seven miles each day on horseback between the family ranch and a rural school, packing a pistol to protect herself from bandits and bobcats. Jennie was one in a long line of Wriston women who were liberated long before the feminist movement began, though some of her talents were never fully developed because of the mores of the era. She was a talented person, a beautiful singer with an operatic-quality voice, but nice girls didn’t sing in the opera in those days, said her grandson Walter years later. The women in my life were all people with minds of their own.

Henry Lincoln Wriston journeyed to Colorado via an equally circuitous route. Originally from West Virginia, he attended Ohio Wesleyan for two years and, after a brief stay in Texas, traveled to Denver where he completed a bachelor’s degree at the university there. While attending college, he preached part-time in nearby Castle Rock, where he met his future wife, Jennie Atcheson. Their first son, George, arrived in 1887, followed two years later by Henry Merritt, who was born shortly after the family moved to Laramie, where Henry Lincoln served as minister of the First Methodist Episcopal Church.

Frugality and asceticism were Wriston watchwords. The Reverend Henry Lincoln Wriston eschewed alcohol and later refused to go to the movies on Sunday. He carried a small black book in which he scrupulously recorded every expenditure, including three cents for a newspaper, and every evening tallied up all his disbursements. Family legend has it that Jennie once found a five-dollar bill on the street and rushed home to carefully wash and iron it. It was probably the first time anyone in the Wriston clan ever heard anything about laundering money.

Shortly after Henry Merritt’s birth, his father succumbed to the same craving for an eastern education that he had once felt for the western frontier. The family moved to Boston, where he enrolled at Boston University and became a pastor at a church on Cape Cod.

In the summer of 1903, after having lived and preached in several small Massachusetts towns, Henry Lincoln finally put down more permanent roots in Springfield. That fall, young Henry entered Classical High School, where he displayed an aptitude for Latin, English, and history. For a superior student with a Methodist upbringing, Connecticut’s Wesleyan University was a logical destination.

Now a beanpole-thin six-footer, Henry Merritt Wris Wriston pursued his interest in history and English literature, served as class publicity agent, played on the basketball team, and became editor-in-chief of the Wesleyan Argus. Though he was raised and educated in New England, he greatly admired his mother’s pioneer spirit and rugged individualism. So it was no surprise that he readily embraced the teachings of Adam Smith and Herbert Spencer, the English philosopher who coined the term survival of the fittest.

Henry Wriston was later described by his Wesleyan associates as a fellow of boundless drive, energy, and intelligence. Although he did not always ingratiate himself with other undergraduates, who chafed at his caustic sense of humor, he was generally admired as a gifted student and leader.

Wriston earned a bachelor’s degree in English and a master’s in history in four years at Wesleyan, graduating Phi Beta Kappa and collecting most of the other honors the college could bestow. Having developed a deep interest in government and international affairs, he wrote his master’s thesis on the constitutional history of democracy in the United States. In 1911, Henry moved on to Harvard to study for a doctorate in diplomatic history, a stressful experience that reinforced his belief in the nurturing value of the small liberal arts college.

On June 6, 1914, immediately after completing his Harvard course work, Henry married Ruth Colton Bigelow, his high school sweetheart. The daughter of William Dwight Bigelow, an employee of the Springfield Fire & Marine Insurance Company, and Idelle Colton Bigelow, Ruth had graduated from Vassar in 1911 with a degree in chemistry and physics, an auspicious accomplishment for a young woman of that era. After graduation, she had returned to Springfield to teach physics.

In the summer of 1914 the newlyweds left Cambridge for Middletown, Connecticut, where Henry embarked on a career in academia that could only be described as meteoric. His freshman history class was packed with students thirsting for history enlivened by Wriston witticisms and vignettes, said former student and colleague Ted Cloak. He was a beautiful lecturer, said Cloak, recalling that in his talk on the history of New England Wriston quipped, You know about New England. It’s where they paint the rocks green to get the cows out to pasture. Henry Wriston was also a campus activist whose interests extended beyond the classroom; he relished stirring up the pot through controversial speeches, letters to editors, and participation in political activities, including presidential campaigns. Despite his Churchillian eloquence, the prospect of addressing a large audience put him through agonies of stage fright.

The couple’s first child, Barbara, born in 1917, was followed by Walter in 1919, the year Henry was promoted to full professor. In 1920, Henry—known to his friends as Hank—displayed a talent for fund-raising that would stand him in good stead later on, when he became a college president.

The origin of Walter’s interest in foreign affairs can be traced to a foundation grant that enabled his father, in 1920, to spend a year at the U.S. State Department while completing his Harvard dissertation. In Washington, where Henry had access to the highest levels of the State Department, he observed the formulation of American foreign policy firsthand. It was a heady experience for the young educator. He found life in the inner sanctum intoxicating. Although he kept his ambitions to himself, Henry apparently dropped enough hints so that his faculty colleagues later speculated that he dreamed of becoming secretary of state. He was never appointed to that post, but he wound up having more influence on American foreign policy than many of the men who did hold that office. His doctoral dissertation, Executive Agents in American Foreign Relations, was published as a book in 1929 and was for years the State Department’s final word on the subject.

Henry had become a globalist, a believer in an interdependent world, who marveled at the technologies that transcended borders and bonded nations together. In a 1924 speech he observed that the cable and the wireless have been shrinking the effective size of the world beyond the dreams of our fathers. In place of the three months it took Washington to communicate with Gouverneur Morris, we apparently get news in less than no time, for by reason of the difference in time, the resignation of a French premier at noon was reported by the Department of State at ten o’clock in the morning. It was bulletined by the newspapers before another thirty minutes had passed.

In late 1924, Henry Wriston’s dream of becoming a college president was about to be fulfilled. With the death of the Methodist minister who for thirty years had served as president of Lawrence College, a small coeducational school in Appleton, Wisconsin, Dr. Wriston was placed on the short list to succeed him, and on July 3, 1925, one day before his thirty-sixth birthday, he was elected president of the seventy-eight-year-old institution, becoming America’s youngest college head. Lawrence and Wesleyan were close spiritually if not geographically. Both had been founded by Methodists, and Lawrence regarded Wesleyan as a sort of sister school, albeit one with somewhat more intellectual cachet.

It is hard to imagine a better place to nurture an American capitalist than at Hank Wriston’s knee in the parlor of the president’s residence, a stately Victorian home overlooking the Fox River on the edge of the Lawrence campus. Walter Wriston’s belief in rugged individualism and patriotism and his views on the proper role of government in people’s lives were shaped there by his father, a self-described discontented Republican. The world immediately beyond the Wriston dining table would certainly reinforce those views.

Populated by descendants of German, Scandinavian, and Scottish settlers, the Fox River valley was in the 1920s and 1930s a pristine, tranquil paradise in the north woods that locals still refer to as Happy Valley. Wisconsin was, and still is, a state with clashing political crosscurrents. It was a stronghold of the kind of progressive Republicanism personified by Wisconsin governor and senator Robert La Follette, the reformer and political guiding light of the state for the first quarter of the twentieth century. Yet the Appleton of the early 1900s was in other respects no social pacesetter. For years the town is said to have posted a policeman at the railway station to make sure blacks traveling up from the South did not even think about disembarking.

The Republican party itself was founded at Ripon, Wisconsin, and despite Appleton’s intellectual tradition, the ultra-right-wing John Birch Society apparently considered the city sufficiently hospitable to its views that in 1989 it moved its national headquarters there. Extreme right-wing sentiments in the forties and fifties were virulent enough to permit the political rise of the state’s most notorious son, Senator Joseph McCarthy. But when McCarthy embarked on his reign of terror, Henry Wriston emerged as one of his earliest and most persistent critics.

Thanks largely to the presence of Lawrence College, Appleton was the intellectual heartbeat of eastern Wisconsin and a bastion of enlightenment and open-mindedness. Appletonians considered themselves culturally superior to their counterparts in Oshkosh and Green Bay, where the unscholarly influence of the Packers football team held sway. Music and the arts flourished in Appleton. That was due in part to generous support from local paper companies such as Kimberly-Clark and to the efforts of the Wristons. During the Depression, the college’s respected Conservatory of Music fell on hard times, but Henry Wriston rejected the urgings of many trustees to shut it down. While Henry was a music lover, Ruth Wriston enjoyed watercolor painting and interior decorating. Appalled at the Spartan appearance of dormitory rooms, Mrs. Wriston arranged for students to rent high-quality reproductions of original works, mostly by Chicago area artists who exhibited at Lawrence, for a nominal sum with an option to buy.

Appleton nurtured literary talent, notably that of Pulitzer Prize-winning novelist Edna Ferber, whose works, including So Big, Show Boat, and Cimarron, glorified America and American values. Later, another graduate of Appleton High, Walter Wriston, would continue in that tradition. The city was also home to famed magician and escape artist Harry Houdini, who was born in Appleton shortly after his parents immigrated to this country from Hungary. The Houdini influence apparently rubbed off on Wriston. As a youth, Walter studied magic and entertained friends by pulling quarters from his ear. Years later he would emerge as a kind of Harry Houdini of the marketplace as he fought to unshackle American business from burdensome government legislation and regulation.

Although Hank Wriston was the first president of Lawrence College who was not a Methodist minister, he attacked the job with a missionary’s zeal. When Henry Wriston first set foot on the Lawrence College campus, it was, said current President Richard Warch, an inhospitable environment dominated by vocationalism. Within a few years, Wriston fired the figurehead Methodist board of advisers, scrapped business and other vocational courses, and set out to build for the school a reputation as a leading midwestern nondenominational liberal arts college.

In Henry Wriston’s view, vocational courses had no place in a liberal arts education. But Henry was a pragmatist. In his 1926 commencement address, he told the graduating seniors, and perhaps six-year-old Walter as well, that they must have some grasp upon the principles of finance. It was a poor merchant, half a century ago, who did not own his own business. It was an unusual manufacturer who did not attend to his own financing. I once knew a businessman, he went on, who boasted that he had never borrowed a dollar. Needless to say, he retired from business long since…. The habit of thrift, and the conservation of assets, shrewd buying and selling, no longer suffices. It is essential today that everybody should understand the fundamental principles of the management of capital, the essentials of banking, and at least the elements of investment. Though he had no business experience himself, Henry Wriston ran Lawrence College with a sharp pencil. He learned at least enough about university balance sheets to be able to determine whether his business managers were competent, and didn’t hesitate to fire them if he determined otherwise. In his memoir, Academic Procession, he told of a parent who wanted to pay his daughter’s tuition on an installment plan but balked at paying interest. Wriston asked him if his own business involved any installment selling and, if so, whether he charged his customers extra for the privilege. The answer to both questions was yes. When I inquired what the difference was in the two situations, Wriston wrote, his answer was classic: one was business, the other education.

Even Henry’s parents, Henry Lincoln and Jennie Wriston, had an instinct for business. In the early years of the twentieth century, there was no life insurance for ministers, because, as Walter Wriston remarked later, the prevailing view was that God would take care of widows. When Walter’s grandparents were in their seventies, they helped establish a life insurance company to serve ministers, which was later acquired by a major insurer.

To the Lawrence College community, Henry Wriston was a godlike figure. He was bold and decisive in dealing with everything from faculty hiring to student discipline. There was a feeling that Hank was always right, recalled Ted Cloak. He was a sharp thinker, a hard thinker. He brought a breath of scholarly influence and organization.

In hiring faculty members, I simply haunted the graduate schools looking for the kind of people I wanted, Henry Wriston said later in an interview. He looked for three key qualities in a prospective professor: great teacher, great scholar, great personal force.

He told me a couple of things I never forgot, son Walter said later. One was, the smarter the people you hire the more trouble you’ll have with them. You hire a lot of dumb people, you won’t have problems, and you won’t get anywhere, either. Both loathed yes-men. In Academic Procession, Hank Wriston wrote, I never had any of those about me, nor wanted any; the office is already too isolated; yes-men remove it further from vital contacts.

While Henry Wriston believed in careful planning, he was also an opportunist. He regarded plans as guidelines for handling only routine matters. When something unusual supervenes, he later wrote, seize the opportunity and let the plan stay on ice for a while.

Henry Wriston was also a master at intelligence gathering. His ever-present bowl of jelly beans, said Walter Wriston, apparently induced faculty and students to volunteer equally juicy nuggets of campus gossip. He always seemed to know what was going on on campus, Wriston said. People accused him of having a spy system. I asked him how [he knew] what [was] going on, and he used to say, ‘People will tell you absolutely anything if you’ll listen.’

When Wriston arrived at Lawrence there was no mandatory retirement age, and some professors continued teaching into their eighties. He forced the retirement of tenured professors he considered incompetent or too old, lowered the status of football to the point where locals snickered that Lawrence had become a girls’ school, and sparked a revolt among faculty members over what they considered his high-handed methods. Said Lawrence professor of history emeritus Charles Breunig, He could walk into a room and within ten minutes he would have the room totally divided for or against him.

Henry Wriston was universally respected, but he was not universally loved. He and Ruth erected a wall between themselves and their friends. They guarded their privacy jealously, to the extent that this was possible in the Lawrence fishbowl, and they revealed few details of their personal lives. That’s true of the whole family, said their daughter, Barbara Wriston, later. You develop that habit if you appear in public a lot. People who reveal a lot of intimate details don’t have much else to reveal. Though stingy with intimate details about himself, he was generous when it came to digging into his own pocket to help hard-pressed students.

Henry Wriston thrived on intellectual combat and controversy, another characteristic he passed on to his son. I was urged, again and again, not to become ‘controversial’ by taking public positions with which there would be disagreement in ‘influential quarters,’ Henry Wriston later wrote. It was not advice that appealed to either my temperament or my judgment. As a public figure, a university president should make clear that his views are not necessarily those of his faculty colleagues or the trustees, Wriston went on. Once he has made those points explicit he should speak his mind, if he has one. It should be done on most matters with persuasive good temper; but there are occasions when indignation and even wrath are not only appropriate but necessary.

One such occasion followed Henry Wriston’s decision to end the tradition of giving students the day off after Thanksgiving. When Wriston entered the chapel to attend a service, then compulsory for all students, he was greeted by a loud chorus of stamping feet. Wriston immediately summoned the head of the student council and demanded, Are you the president of this college or am I?

The student was shaking in his shoes. You are, he replied.

Then you’ll have that foot stamping stopped, Wriston commanded in his booming authoritative voice.

At Lawrence, Henry further honed the sharp needle of wit and sarcasm, which he aimed at whoever needed it, as his daughter put it later. He could be fierce if he thought it was necessary. Needling each other, keeping each other on their toes, was a kind of family hallmark.

Though he might have angered others, Henry rarely lost his temper. When I became a president, I knew well what not to do. Never move in a hurry, much less upon impulse. Never get angry. If possible, use such temperate language as to give no occasion to the other man to blow his top. It was advice that son Walter would take to heart.

Although Henry Wriston was not a minister, no one forgot that he was the son of one. Smoking, drinking, and movies on Sunday were forbidden on the Wriston campus, as they were in the Wriston household. Henry Wriston didn’t permit liquor in his home until the early 1950s, and even then served it with hesitation. He insisted on compulsory chapel for students, though he obviously didn’t take religion as seriously as his father did, and he often wrote his own speeches while listening to Sunday sermons in church. Though the Wristons, including Walter and Barbara, participated in church activities, formal religion did not play a critical role in Walter’s life. The religion that really mattered was unerring self-reliance and the notion that everyone was responsible for his own life.

Despite his sometimes austere and stubborn demeanor—he didn’t slap the Rotarians on the back, superficialities didn’t interest him, said a colleague—the elder Wriston was nonetheless a jovial, even emotional man who enjoyed a hearty laugh, followed the New York Yankees with a passion, and cried at the movies.

For all of Henry Wriston’s rigor, he gave Walter plenty of freedom to experiment and to control his own personal domain. Professor Cloak recalls arriving at Lawrence for a job interview in 1927 and staying overnight at the president’s house. Mrs. Wriston matter-of-factly told him he could go anywhere you want except Skippy’s room. It’s a mess. Cloak couldn’t resist finding out whether it was really as bad as Ruth Wriston had described it. Indeed, it was. Young Walter lived amid utter chaos and clutter. It was a shambles, Cloak said, adding that Walter seemed to be interested in a lot of things. He was more than an ordinary kid.

Distinguished Americans from all walks of life, from statesmen to churchmen, visited the Lawrence campus and spent the night at the Wriston residence, bombarding Walter and Barbara with new ideas. But from Hank Wriston, they also acquired an irreverence toward people in positions of authority. After the guests departed, the Wristons typically sat around the dinner table laughing uproariously as Walter and Barbara took turns imitating or otherwise poking fun at their just departed guests. Before most youngsters had ever even seen a senator, cabinet member, or eminent scholar up close, Walter Wriston learned that they, like everyone else, put on their pants one leg at a time.

As a hard-nosed, disciplined scholar, Henry Wriston imparted to his offspring a jaundiced eye. Imbued with such skepticism, Walter Wriston was not easily awed. The only person who came close was his father.

Of his mother Walter Wriston would later concede to his sister that I didn’t know her that well. Ruth Wriston was a slight and, later, sickly woman, but one with backbone and compassion. When Cloak, as a Wesleyan undergraduate, was seriously ill with typhoid, Mrs. Wriston visited him regularly in the hospital. She was also a brilliant, no-nonsense woman with a clear sense of right and wrong, correct and incorrect. Ruth supplied the balance, the steady hand, that offset Henry’s sharp mood swings and emotional theatrics, such as when he arrived home after delivering a lecture, threw himself on the sofa, and declared it was the worst lecture I’ve ever given.

Dad used to get up and down, recalled Wriston later. He’d say, ‘I’ll never have another idea in my life,’ and all this baloney. She bought absolutely zero of that…. She’d just laugh at him and say he’d have fifteen more the next day. While Henry Wriston presented a tough exterior to his constituency at Lawrence College and later at Brown, the intellectual and emotional stresses incurred in battling faculty, trustees, alumni, and students revealed themselves when Henry retreated to the presidential residence. You go through hard times at a university, Walter said. She was a strong supporter of the notion that the sun will rise tomorrow morning, which was useful to him. She was also a great leveler who kept Henry Wriston’s considerable ego in check, said Walter.

Ruth Wriston imparted to Walter and Barbara a sense of the power of the individual to shape events. As a child growing up during the Depression, Walter Wriston shared the widespread pessimism about the future of humankind. What can one person do? he asked his mother.

She replied, "You’re only one, but you are one."

She was not one to say, ‘Let’s throw in the towel,’ Wriston said later.

From his mother, Wriston also received early training on such social niceties as how and when to leave a reception. As the teenage son of a college president, one of his duties was to scoop ice cream at freshman receptions. He would sit in the parlor as his mother seethed over the students’ ignorance as to when to call it an evening. The night used to drag on, Wriston said later, with the kids sitting in the living room. It used to drive her mad.

These kids don’t know how to go, she lamented. You’ve got to learn how to get out of a place. It’s very simple, she explained. You go up to your hostess, put out your hand, shake her hand and say, ‘Thank you very much. I had a wonderful time.’ Then you leave. It was advice that stood Wriston in good stead when he left Appleton for Wesleyan and went on to begin his business career in New York.

For a life and career where personal discretion was part of the job description, there could have been no better preparation than growing up on the Lawrence campus, where altercations between the college president and his son would have been welcome grist for the campus gossip mill.

One family friend remembers Walter Wriston as a somewhat sluggish youth who needed encouragement from his father to pick up his pace. Henry Wriston was big and imposing, said Appleton native John Reeve, and would yell Mach Schnell at young Walter in trying to get him to move faster. Wriston apparently picked up the pace, earning the nickname Skippy for his habit of alternately walking, running, and skipping through the streets of Appleton.

The Wristons were among the privileged residents of Appleton, and Walter and Barbara were sheltered from the pain and hardship that others of their generation experienced growing up in the Oklahoma dust bowl or on the streets of New York. Walter typically was sent away to camp for the summer, and in 1935, after his sophomore year in high school, the family sailed for Europe, a trip financed with money Ruth and Henry had received as a wedding present twenty years earlier.

In Appleton generally, and in the Wriston household in particular, thrift was a virtue. When Walter and Barbara received their first allowance of fifteen cents a week on entering the first grade, they were told that five cents was for Sunday school, five cents was to be placed in a bank account, and five cents was to raise Cain with or save up, according to Barbara Wriston. But the Wriston family rarely talked about money, and certainly never made any show of affluence. While Walter and Barbara learned how to manage money at an early age, they never aspired to make lots of it. In the Wriston household, the only currency that counted was ideas and ideals.

While the Wristons were well off by any standard, the contrast between them and other Appletonians of that period was by no means glaring. The Depression did not bypass Happy Valley, but it did not devastate it, either. Thanks to the college and the paper mills, most of which continued to operate, unemployment remained relatively low, as longtime residents recall. Nobody was poverty-stricken, and nobody was extremely wealthy. Nobody was showing off money. It just wasn’t done, said Barbara Wriston.

Indeed, Appleton in the thirties was an unlikely time and place to produce a banker whose name would become nearly synonymous with credit. It was not a credit-card society, said one native. It’s a long way from Appleton High to Third World debt.

But it was an appropriate setting to produce a banker who would become an unbending proponent of laissez-faire capitalism. Henry despised President Franklin D. Roosevelt’s New Deal, regarding it as an ill-conceived attempt to create a planned economy. It was a flawed concept, he said, for at least three reasons: it attempted to foresee the future and control it… it envisages society as a machine … and it destroys freedom. Throughout the Roosevelt era, Henry fought administrative and legislative injustice that favored labor while crippling business. At every opportunity, he railed against a centralized, bureaucratized economy, tapping his wealth of historical anecdotes to make the point. Controls, he said, wouldn’t work any better in the United States than they did in eighteenth-century France, when armies of bureaucrats sought to codify everything from the size of handkerchiefs to the design of fishing boats.

Henry Wriston had an opinion about, and an interest in, every issue, from morals to monetary policy. He was a tight-money man who was aware of the evils of inflation even when there was none. He decried government hostility to business, but called on businessmen to be business statesmen. Henry Wriston believed that the railroad financier [Cornelius Vanderbilt] who many years ago said ‘The public be damned’ wrote an important chapter in the history of human stupidity. And he might have been imparting advice to his son when he said that business statesmanship had three goals: Its first duty is to develop operating techniques with a view to economy and efficiency. The second function is constantly to develop new products through research and innovation. The third obligation is to cultivate human relationships along lines calculated to bring the highest morale, the most initiative, and the greatest amount of resourcefulness.

To his boyhood friends, Walter Wriston seemed alternately outgoing and introverted, cheerful and serious. His diverse interests ranged from scouting and puppetry to chemistry and mechanics. He spent some of his happiest days hiking with his Boy Scout troop and his dog, Black Robin, along the Fox River to Lake Winnebago. At the age of fifteen, Wriston became an Eagle Scout, making him, for a fleeting moment, the youngest boy in the nation to achieve that rank. Henry Wriston encouraged his students, and his son, to learn to work with their hands as well as their minds, to become craftsmen in both the literal and the figurative sense. With several high school friends, Wriston created a puppet theater with papier-mache marionettes; they concocted the stories, and Ruth Wriston sewed the costumes. Henry got Walter interested in mechanics, woodworking, and photography, and the two developed their pictures in a basement darkroom. One of the differences in their personalities manifested itself as they collaborated on woodworking projects. He had much more patience than I had, Wriston confessed later. He spent an hour sanding. I would get on with it.

As a teenager, Wriston was constantly experimenting and tinkering. On one occasion, while his parents were hosting a faculty luncheon, Wriston nearly suffocated the guests with a smoke bomb he manufactured with his chemistry set in the basement. Though usually tolerant of experimentation that bordered on mischief-making, this time Hank Wriston was not amused, as Barbara Wriston recalled.

Wriston clearly had a sense of who he was at an early age. He was the son of the man who was arguably Appleton’s leading citizen and almost certainly its smartest. The Wristons were better than most of us, said Betty Brown Ducklow, a lifelong resident of Appleton and a contemporary of Walter’s. It was difficult for him to be a normal little boy.

That was evident to the librarian at the Appleton public library, who recalled to a friend that Walter, as a junior high student, once appeared at the library for no apparent reason. When the librarian asked him if he had found a book he liked, Walter replied haughtily, I never read anything from your library. I use the Lawrence library. My father’s the president there.

Former classmates remember that Walter was usually buttoned up, literally and figuratively. In contrast to his classmates, who often appeared disheveled even in school pictures, Walter always showed up with his shirttails tucked in, his sleeves down, and his shirt buttoned up to the collar.

There was, however, a more devilish side. Betty Ducklow sat next to him in the clarinet section of the junior high school band, and she remembers her stringy classmate as funny, charming, lots of fun. Music was not his forte, however. He took up the clarinet only after abandoning the cello, and the clarinet soon met the same fate. For a time, Wriston attended Friday evening dance classes. He was clumsy, but he kept his classmates in stitches by waltzing with a coat hanger.

Life with Henry was not always easy for Walter, according to his contemporaries. One family friend remarked that Walter Wriston was not the easiest kid to bring up, but Henry Wriston wasn’t the easiest father to be brought up by. As the son of a college president, Walter was under heavy pressure to excel scholastically. On one occasion, when Wriston received a poor grade in high school, Henry admonished him, saying, It’s very hard for me to make public speeches about improving the educational system if you’re getting a C or a D in something. Wriston quickly got the message that it would be appropriate if I spent a little more time on books and a little less time playing soccer.

Home life for a college president’s child was highly cerebral. While his peers spent a mere six hours a day in the classroom, Wriston in effect spent most of his waking hours either in school or in the intellectual atmosphere of his parents’ house, where dozens of books competed for space with the evening meal on the dining room table. He was a teacher, Wriston said later of his father. He was always dredging up examples of this, that, and the other thing. Mother was a teacher. We all argued with him all the time. Everybody argued with everybody. It was sort of a Socratic method of teaching.

Henry Wriston regaled his children with tall tales of American history’s most colorful characters. Favorites were Daniel Boone and Hawaii’s Queen Liliuokalani.

Walter used to read the short biographies of successful people in Who’s Who, seeking some common thread or a key ingredient in a person’s success. He concluded that there was none. I was struck by the fact that there was no pattern, he said later. They started from all parts of America and from overseas, he said later. They attended all kinds of schools, from P.S. 2 in small towns to famous prep schools.

At Appleton High, Wriston participated in the German and math clubs, took pictures for the school yearbook, worked in the library, played on the tennis team, acted in the senior play, competed in the oratorical contest with a speech called Peace, and managed the debate team. In his senior year, he was chosen to marry a popular girl in a mock wedding—foreshadowing, perhaps, Wriston’s real-life early marriage. Years later, Rose Heinritz, whose daughter Lucille dated Wriston in his senior year, quoted her daughter as saying, Every girl should have as a first love a gentleman like Walter Wriston. And for teachers, having the children of the president of Lawrence in their classrooms was something of a status symbol.

In 1936, when Walter was a senior in high school, his father became president of Brown University in Providence, Rhode Island, replacing an ailing Baptist minister who had headed the school since 1929. Dr. Clarence Barbour’s regime had been a mediocre one. Brown lacked a national reputation and was considered the stodgy black sheep of the Ivy League. Under Henry Wriston, the first Brown president in years who was neither a minister nor a Baptist, that would soon change. Brown would become Lawrence redux.

Walter rebelled at the idea of leaving Appleton to complete his senior year of high school in a strange place. Barbara had already left the nest for Ohio’s Oberlin College, so Walter moved into the home of an Appleton teacher and was placed under the watchful eye of Ed West, a family friend. West’s approach toward handling young Walter was laissez-faire. If I didn’t get in from the school dance until five in the morning, he’d make some remark, said Wriston. For all intents and purposes Wriston was physically out of his father’s reach, but it would be decades before he moved out of his father’s shadow.

Given Henry’s Wesleyan legacy, no one was surprised when Walter was accepted there. But for Appletonians, it was still big news. In a community that prided itself on its Methodist College and its Methodist roots, going east to Connecticut Wesleyan was a major accomplishment. He could, of course, have gone to Lawrence or Brown, but opted not to attend a college where his father held a position of influence. He was afraid that if he excelled, people would gossip that the old man gave me the grades. And if I did poorly, he’d be embarrassed, Wriston said later. Though Wriston shared his father’s keen interest in foreign affairs, he contemplated majoring in chemistry, his mother’s subject, and perhaps becoming a chemist. He knew he didn’t want to return to Appleton, and he would not become a college professor, because he didn’t want to be seen as riding on his father’s coattails, but Wriston did not overly concern himself with his future career. We were brought up to get a good liberal arts education, said Barbara later. My father was dead set against people who try to get a kid in the sixth grade to decide what he wanted to do.

Wriston and his sister left Appleton having been assured by their parents that the world was their oyster and that they could be whatever they chose to be. But despite his accomplishments at Appleton High, Wriston wasn’t seen by all his contemporaries as someone who would wind up running the nation’s largest bank. Says Betty Ducklow, "When I saw [his picture] later in Time magazine, all I could think of was this kid who danced with a coat hanger."

Years later Wriston often referred in speeches to his Wisconsin roots, but he rarely returned to Appleton. Though he was fascinated with history, he considered it pointless to dwell on his own. I had a great time, he reflected later. But tomorrow’s another day.

For Wriston, the son of the president of an Ivy League university and legendary Wesleyan teacher, arriving on the Wesleyan campus in the fall of 1937 was not exactly like coming in from a farm in Iowa, as his classmate and fraternity brother Jack Faison put it later. He had, of course, been born in Middletown, Connecticut, and spent the first six years of his life there. A number of Hank Wriston’s colleagues from his own undergraduate days still taught at Wesleyan, so Walter Wriston’s appearance on campus did not go unnoticed.

In some ways, however, he seemed like any other unpolished and insecure college freshman. Like his father, Wriston had developed an eye twitch that would last a lifetime, and he sometimes spoke with his hand over his mouth, a disconcerting habit that made his comments difficult to understand and suggested that he was embarrassed by what he was saying. But Wriston began his college years with a well-developed value system and with strong views on everything from personal conduct to political and economic theory.

Early on, Wriston’s interest in chemistry flagged. Freshman lab, it turned out, conflicted with basketball practice, and he opted for the latter. With his six-foot-four-inch frame, Wriston should have been a natural. But he proved to be slow and awkward in his stint on the basketball team, and spent much of the time on the bench. So he chose to forgo chemistry and basketball in favor of history and foreign affairs, and for those subjects Wriston had come to the right place. The Wesleyan of the late 1930s was no mere ivory tower. The faculty included some of the nation’s leading thinkers in political science and foreign affairs, and there were political practitioners as well as professors. One prominent example was President McConaughy, who in November 1938 became lieutenant governor of Connecticut.

Walter’s college career was essentially a rerun of his father’s, except that the son joined a different fraternity and didn’t do as well scholastically. As a freshman, he joined the prestigious Eclectic Society of Phi Nu Theta, an independent fraternity that was the first Wesleyan house willing to accept students of all races and religions.

Wriston achieved distinction in his sophomore year, when he won, by unanimous acclaim, the school’s coveted Parker Prize for public speaking. The inspiration for Wriston’s talk was a university professor’s conclusion, based on a poll, that the youth of the era had a defeatist attitude. In rebutting the professor’s findings, Wriston declared, It seems to me that in Professor Zachary’s exhaustive survey, she has merely succeeded in unearthing some fundamental truths about part of the youth of any age.

Wriston’s campus years were marked by rigor and discipline. While the youthful Wriston enjoyed the company of the funny and the fun-loving, he did so on his own terms. Jack Faison, the self-described court jester of the class of 1941, recalls that Wriston often skipped off-campus excursions, explaining that he had to study. When we were all jumping into Johnny Wing’s car for a sweep through Harlem, he’d say he had a paper due at the end of the week, Faison said.

Despite Wriston’s studiousness, he and the happy-go-lucky John Wing (a.k.a. Wacky Wing) were roommates and the best of friends, a relationship that others—like his future brother-in-law Richard Brengle, who matriculated when Wriston was a senior—found difficult to understand. Most of Wriston’s friends throughout his life were highbrows, but his inner circle invariably included some affable, devil-may-care fellow whom others regarded as an intellectual featherweight.

With war clouds gathering over Europe, Wriston’s college years were dominated by soul-searching over the proper role for the United States in the inevitable conflict. In March 1939, five months before Hitler’s panzer divisions rolled over Poland, Wesleyan debated the U.S. role in a discussion of foreign policy that included prominent isolationists of the era such as Senator Gerald P. Nye, a North Dakota Republican. Wriston led the campus forces favoring intervention.

But it was an August 1939 visit to Europe, just before the start of his junior year, that confirmed forever Walter Wriston’s view of the dangers of government regulation taken to its ultimate and terrible conclusion. Walter’s father was a great believer in showing his children the world, and the family made two trips to Europe during Walter’s summer vacations in high school and college. During that summer of 1939, Henry Wriston, as chairman of the American Coordinating Committee for International Studies, chaired the U.S. delegation to the American Exchange Conference in Bergen, Norway, and Walter served as his father’s assistant. The family traveled the Continent by train, visiting, as Wriston put it later, every cathedral known to man. Huddled in their compartment, they whiled away the hours reading a single paperback book, which they shared by ripping out the pages and passing them from one member of the family to another, starting with Barbara, the fastest reader, then on to Hank, Walter, and Ruth. It was a weird way to do it, said Wriston, but it was economical.

In mid-August 1939, just weeks before the Germans invaded Poland, the Wristons found themselves standing outside the Frankfurt railway station watching in horror as waves of Nazi Youth units goose-stepped by, waving swastika banners and singing Deutschland über Alles, the Third Reich’s national anthem. I saw what happens with total regulation of people’s lives, which starts with economic regulation and leaps over into politics and abolition of free speech. That experience, more than any other, made Walter chary of anyone who wants to tell you how to run your life. By September 1, the day of the invasion, the Wristons had made their way back to Bergen to prepare for the voyage home on the Bergensfjord. Early on, Wriston drew a rigid line between the legitimate province of government and the zone where it had no right to tread. He conceded that the government had a role in regulating business activities affecting human health and safety—the design and location of railroad signals, for example, and rules barring the manufacture of drugs that would cause a mind to atrophy—but he believed that government intrusion beyond those limits should be viewed with suspicion.

A small clutch of high-powered professors reinforced the principles that Wriston had first been exposed to at his father’s knee. No one made a more profound impression on Walter than did Sigmund Siggie Neumann, a professor of political science. Neumann, a German Jew, had been one of the youngest full professors at the Reich Politik until he was kicked out by the Nazis. He came to the United States under the sponsorship of the Emergency Committee in Aid of Displaced Scholars, and found his way to Wesleyan through the efforts of CBS correspondent Edward R. Murrow.

Not surprisingly, Neumann had a keen personal and academic interest in dictatorships and wrote a benchmark work called The Permanent Revolution, in which he attempted to explain that form of government. If, after growing up with Henry and witnessing war preparations firsthand in Germany, Wriston needed further intellectual support for what would become a lifelong disdain for any form of centralized power, he could have found it in Neumann’s teachings. A practitioner of the Socratic method, Neumann was a magnet for Wesleyan’s intelligentsia, and Wriston and other students and their weekend house-party dates frequently sat cross-legged on the floor of the professor’s living room until two in the morning arguing about the world, as Wriston put it later. Neumann would hold forth on the monumental problems that would arise after the war. Someone, Wriston recalled, said that it would be virtually impossible to solve the problems of the postwar world Neumann described. I never told you it was going to be easy, he replied. From Sigmund Neumann, Wriston learned that intellectual property was far more valuable than any other commodity. Speaking of his life in Hitler’s Germany, Neumann said, I had absolutely nothing. I didn’t have a dollar, but they couldn’t take away what was in my head.

Neumann once told Wriston’s class, It is just possible that one of you guys might do something useful someday. Wriston yearned to be that someone.

Another profound influence was Professor Elmer E. Shaggy Schatts Schattschneider, a brilliant lecturer, writer, and intellectual provocateur. This dedicated, good-humored teacher, who was later elected president of the American Political Science Association, appealed to Wriston’s appreciation of the unconventional. A faculty profile later cited him for advocating the necessity of breaking down departmental barriers and modernizing the traditional lecture-reading assignment-examination pattern of teaching. Schattschneider was not content simply to teach his students about public life; he wanted to do something about it, as a later profile put it.

Neumann and Schattschneider were the leading faculty intellects at the time, said scholar-in-residence David Potts. They were Young Turks, he said, whose arrival on the campus represented an injection of new intellectual blood into a staid conservative institution. They espoused the life of the mind in a way students weren’t accustomed to, Potts said.

Walter Wriston was not a brilliant student, but he was, as one classmate put it, the man who made things happen. By his junior year, he was a campus force to be reckoned with. He was an editor of the college newspaper and a member of the board of Wesleyan’s radio station. He also worked as a stringer for the Hartford Courant, selling the newspaper an occasional photograph and earning ten cents an inch for a sports column. And he was a member of the Mystical Seven, an elite senior society of campus leaders who had the right to wear a purple beanie for the duration of their senior year. He wore the purple hat a great deal, said Brengle later.

At Wesleyan, Wriston got more than an education; he also found a wife. In his junior year he might not have known exactly where he was going, but he knew whom he wanted to accompany him. At a mixer with New London’s all-women Connecticut College, Barbara Bobby Brengle, a sophomore and the belle of the ball, stood out in the crowd for her good looks and infectious personality. Wriston crossed the dance floor, extended his hand to her, and said, Hi. I’m Walt Wriston. Will you marry me? He didn’t get his answer immediately, but it wasn’t long in coming.

Henry Wriston was as decisive in affairs of the heart as he was in academic matters. As soon as he met his son’s sweetheart, he commanded, Walter, marry that girl! Indeed, both the Wristons and the Brengles were thrilled by the match between Walter and Barbara—a marriage made at Wesleyan in more ways than one: both their fathers had graduated from Wesleyan, where they had opposed each other on the debating team.

Barbara, the daughter of George S. Brengle, a leading New York admiralty lawyer, grew up in the fashionable Westchester County suburb of Scarsdale and was educated at private schools. She attended the Baptist Church, sang in the high school glee club, served as captain of the hockey team, and was a devoted reader of the Reader’s Digest, The Ladies’ Home Journal, and Life. A talented aspiring commercial artist, Bobby illustrated campus publications with clever cartoons depicting the social and family life of the American upper class. One such cartoon shows a young woman trying on an expensive dress in a clothing salon while her boyfriend, who faintly resembles the youthful Walter Wriston, is fast asleep on a chair with a copy of Foreign Affairs tucked under his arm. In addition to her outgoing personality, she had an uncanny ability to remember names, an attribute that would prove invaluable to her future husband in his business career. More important, Bobby was exuberant and fun-loving, in contrast to her serious and sarcastic companion. Wriston would later tell close friends that Bobby taught me how to live.

In the second semester of his junior year, Walter Wriston was elected editor-in-chief of the Argus, the campus newspaper, following once again in the footsteps of his illustrious father. In his first editorial, Walter made it clear that he intended to expand the paper’s breadth to include news and commentary on important developments in the world at large.

As editor of the Argus, Wriston demonstrated his activist tendencies and brought to the paper a more controversial tone. He ran a series of editorials about the college’s archaic charter that ultimately led to the drafting of a new one, and he infuriated the faculty with his Candid Course Review, a series that rated the effectiveness of courses and faculty. In one editorial, he lambasted an unpopular course that attempted to teach the history of the world from 1500 to the present day in one