marshall field -- 8/28/23
Today's selection -- from Lords of the Land by Dana L. Thomas. Marshall Field (1834-1906) entered the department store business at a time when it was one of America’s most lucrative ventures, and further parlayed that into a real-estate empire. The following recounts his split with early partner Levi Leiter:
“After the [Great Chicago] fire, [department store impresario Marshall] Field and his partner Levi Leiter increasingly devoted their energies to real estate investments. They displayed an uncanny zest for the game and a sharp nose for bargains. As they stepped up their buying of parcels of land and buildings, their speculations had an increasingly important impact upon Chicago’s property values. Newspapers watched the ventures of the two men closely, and whenever they made a purchase, the fact was widely publicized.
“But a rift ultimately developed between the two plungers. Their temperaments were at opposite poles and they fought continually. Field had started out as a salesman riding on a shoeshine and a prayer. Leiter was a cautious, penny-pinching bookkeeper who managed the credit operation of the store but lacked Field's bold merchandising vision. Despite their bitter wrangling, they managed to accumulate over $5 million worth of real estate, of which $2 million was owned jointly by them.
|Marshall Field's State Street store "great hall" interior around 1910|
“But as the years passed the relationship between them became increasingly strained and a rupture was inevitable. Field seized the initiative in breaking off the partnership with typical cunning. He took five junior partners and key executives aside and asked each privately, ‘Would you stay with me if I decide to buy out Leiter and carry on alone?’ Each of the individuals replied in the affirmative. Leiter was a cranky man, difficult to work with, and he had few friends.
“Armed with these confidential promises, Field called Leiter into his office one morning and told him he wished to discontinue their partnership. It was time they broke off. Leiter was caught by surprise. Before he could respond, Field continued: ‘I'll name you a price for which I'm willing to buy your share or sell my share of the business, whichever you wish.’ The price Field quoted was amazingly low--only $2.5 million, ridiculous for a business that was generating annual sales of $25 million. ‘I'll give you first choice,’ offered Field, ‘you can either buy or sell.’ Leiter, enticed by the low figure, eagerly offered to become the buyer. Only after committing himself did he discover he had been booby-trapped. When he contacted his junior partners to sound out their loyalty, he discovered they had promised to stay on only if Field remained the sole proprietor. Without these key personnel Leiter feared the business would disintegrate.
“This astute manipulator had been conned by an even more subtle operator into agreeing to a preposterously low price for a sellout. Nevertheless he had committed himself to the price and he went through with it. ‘You win,’ he told Field, ‘I'll sell.’
“The details of the breakup of the partnership were supposed to be handled with the greatest secrecy, but Fred Cook, one of the Chicago Tribune's most enterprising reporters, received information through a leak and he wrote about some of the juicier aspects of the rupture, revealing in the course of his expose the enormous extent of Field and Leiter's property holdings. ‘Individually and collectively,’ wrote Cook, ‘Field and Leiter are the largest real estate owners in Chicago.’
“Leiter was hardly pauperized by the rupture. He left the firm, as noted, with $2.5 million in cash, plus millions of dollars worth of real estate. While he had parted from Field in anger, circumstances were to bring them together again years later."