John Elliott Tappan and the Origins of American Express Financial Advisors

Transcription

1 ,QYHVWLQJ JIRU 0LGGOH H$PHULFD John Elliott Tappan and the Origins of American Express Financial Advisors Kenneth Lipartito and Carol Heher Peters for St Martin s Press

2 INVESTING FOR MIDDLE AMERICA: JOHN ELLIOTT TAPPAN AND THE ORIGINS OF AMERICAN EXPRESS FINANCIAL ADVISORS Kenneth Lipartito and Carol Heher Peters, 2001 Softcover reprint of the hardcover 1st edition All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews. First published 2001 by PALGRAVE 175 Fifth Avenue, New York, N.Y Companies and representatives throughout the world PALGRAVE is the new global publishing imprint of St. Martin s Press LLC Scholarly and Reference Division and Palgrave Publishers Ltd (formerly Macmillan Press Ltd). ISBN ISBN (ebook) DOI / Library of Congress Cataloging-in-Publication Data Lipartito, Kenneth, Investing for middle america : John Elliott Tappan and the origins of American Express Financial Advisors / Kenneth Lipartito, Carol Heher Peters. p. cm. ISBN Includes bibliographical references and index. 1. Tappan, John Elliott, American Express Financial Advisors. 3. Financial planners-united States. 4. Investment advisors--united States. Financial services industry--united States. HG L / Design by planettheo.com First edition: September

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4 Dedications Carol Peters: To Ruth Tappan Dowling Marion Tappan Ryan Marian Tappan Dowling Heher Kenneth Lipartito: To Isabel and Gabriel

5 7DEOH HRI I&RQWHQWV PrefaceandAcknowledgments...vii Prologue...1 CHAPTER 1: FromFrontiertoFinance...7 CHAPTER 2: TheMoneyQuestion...45 CHAPTER 3: AFoundationofTrust...75 CHAPTER 4: ATurningPoint CHAPTER 5: AdversityandSurvival CHAPTER 6: TheAgencySystem CHAPTER 7: WarandBetrayal CHAPTER 8: Into the Sunset Epilogue NoteonSources Notes Index...265

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7 3UHIDFH HDQG G$FNQRZOHGJPHQWV This book has taken a long and winding road from conception to completion. It began in the mind of Carol Heher Peters, who as a child spent hours listening to her grandmother Ruth Tappan Dowling s stories of her Minnesota childhood. Many of Ruth s stories included anecdotes about her father, John Elliott Tappan. Ruth told of John s adventures as a young man on the western frontier, his experiences as a homesteading farmer in northern Minnesota, and his life as a lawyer and businessman. Public awareness of Tappan s contribution to the history of American financial services evolved slowly. After Ruth died in 1989, Carol decided to complete the genealogical work her grandmother had begun sixty-three years before. At the same time, she also began a search to discover more about her great-grandfather. She uncovered the story of Investors Syndicate in a wealth of primary source material, including a collection of almost 20,000 letters written by Tappan between 1894 and These were made available through the generosity of Mr. William McKinney, who at the time was vice president of field management at American Express Financial Advisors in Minneapolis. As the mounds of source material grew, and the significance of Tappan s pioneering work emerged, it became clear that his life and the history of his business would be of interest to a wide audience. After six years of research, Peters produced a draft manuscript that eventually found its way to Kenneth Lipartito, a historian of American business who was looking for interesting material to publish in a book series. It quickly became apparent to Lipartito that here was a unique story, and a rare opportunity to gain insight into the everyday practice of finance during a period for which the historical record was dim. With the help of the descendents of John Elliott Tappan, an agreement was struck. Lipartito

8 YLLL INVESTING FOR MIDD DDLE AMERICA would have access to all the letters, research, interviews, and other materials Peters had collected. Taking the original manuscript, he would fashion a broader history, placing Tappan and his achievements in the context of American finance and business history. The task was to complete a work that would bring the very human, personal story of Tappan and his achievements to the public, while also meeting the stringent requirements of high quality professional history. Whether or not he and Peters have succeeded is for readers to judge. The book could not have been written, though, without generous help from many people. First and foremost the authors express their gratitude to the family of John Elliott Tappan, who provided intellectual, financial, and emotional support to see this project to completion. Marion Tappan Ryan (Mrs. Vincent J. Ryan) has been devoted to it from the beginning, and her words, and those of her late sister, Ruth Tappan Dowling (Mrs. Joseph L. Dowling), make possible the vivid portrayal of Tappan and his wife, children, friends, and business associates. Other family members were also vital to getting the manuscript out of its box in the attic and into the hands of a publisher. We list their names, in alphabetical order: Professor and Mrs. John Elliott Dowling, Jennifer Ryan Flynn, Doctors Eliot and Katrinka Heher, Mr. and Mrs. Gregory J. Heher, Marian Dowling Heher, Eleanor Dowling Kendrick, and Mr. and Mrs. Vincent J. Ryan, Jr. Carol Peters expresses special thanks to her mother, Marian Dowling Heher, and brother Eliot Heher. They both spent many hours reading and editing the manuscript, and supported it in countless other ways. Their constant encouragement, faith, and dedication made this book much better than it otherwise would have been. Carol s father, Harry Heher, Jr., gave generously of his time and offered many helpful observations and suggestions. He also provided the key introduction to Mr. Fred Kirby, whose knowledge of the Tappan archives at American Express Financial Advisors eventually led to the Tappan papers. She also thanks her brother H. Tappan Heher, whose resourcefulness led her to Ken Lipartito; her husband, David, and daughters Emily and Caroline, for their inspiration and constant support; Dr. and Mrs. Joseph L. Dowling, Jr., and Angela Dowling Munro for their encouragement and some very useful archival material.

9 PREFACE AND ACKNOWLEDGMENTS L[ At an early stage, Susan Moschen and Carol Maki worked as research assistants. They were responsible for finding a wealth of otherwise hidden sources and information. Their dedication and resourcefulness during those years were central to the success of the manuscript. Susan worked in upstate New York and Connecticut and uncovered piles of ancestral information on the Tappans and their relatives. Carol worked in Minneapolis, St. Paul, and elsewhere in Minnesota, in Wisconsin, the state of Washington, and North and South Dakota tracking down every detail she could find on John Elliott Tappan, his family, relatives, friends, and business associates. Carol Peters also thanks her cousin, Sharon Gallagher Walsh, for a place to stay in Minneapolis during visits to American Express Financial Advisors, and for her extended tours of Minneapolis and St. Paul. These led to every place John Tappan and his family lived and worked. Minerva Balke was equally generous with her time and home in Angora, Minnesota. She graciously extended an invitation to stay while Carol Peters conducted research in northern Minnesota, and drove her to the locations central to Tappan's life in Angora, including other towns in the Mesabi Iron Range where Tappan visited. Her coauthored history of Angora was an invaluable source of insight into early life there. In addition, Carol Peters thanks her professors at Clark University for their training in history, and her friends Donna and Steven Silvern, who helped locate the house where Tappan was born in Oshkosh, Wisconsin. Kenneth Lipartito wishes to thank his colleagues at the University of Houston and at Florida International University, and elsewhere, who helped to support his scholarship. The interlibrary loan departments of both universities did exceptional work in locating materials. The Milken Institute of Santa Monica, California, was the first public venue for presentation of this work. Constructive criticisms by members of the Institute and by Naomi Lamoreaux at that meeting were important in getting the project on the right track. Darden Pyron s discussions about the nature of biography provided needed guidance in this fine art. Thomas Castillo was a determined research assistant. Invaluable were the editing skills of Dr. Elisabeth O Kane, who overcame the inevitable problems of inconsistency in a jointly written manuscript. She has the sincerest gratitude of both authors. Karen Wolny and Alan Bradshaw at Palgrave handled the publication process smoothly and skillfully. Kenneth Lipartito also thanks Carol Peters family for tolerating his presence in their

10 [ INVESTING FOR MIDD DDLE AMERICA home and for the sacrifice of their dining room to mounds of papers and boxes. Finally, both authors acknowledge the many institutions whose collections provided crucial information and whose staff members were extremely helpful. We list them here, in alphabetical order: Baker Library, Harvard University; Connecticut Historical Society, Hartford, Connecticut; Connecticut River Museum, Essex, Connecticut; Connecticut State Library, Hartford, Connecticut; the collection of papers on Charles Henry Tappan from the Federal Bureau of Investigation, Washington, D.C.; Ironworld Discovery Center, Chisholm, Minnesota; Minnesota Historical Society, Minnesota History Center, St. Paul; Minneapolis Public Library, Minneapolis; Northeast Minnesota Historical Center, University of Minnesota, Duluth; National Archives, Washington, D.C.; Oshkosh Public Library, Oshkosh, Wisconsin; Senate House, Kingston, New York; South Dakota State Archives, Pierre, South Dakota; South Dakota State Historical Society, Pierre, South Dakota; State Historical Society of North Dakota, North Dakota Heritage Center, Bismarck, North Dakota; the University of Minnesota, St. Paul; St. Louis Historical Society, Duluth, Minnesota; the staff historian at the United States Post Office, Washington, D.C.; University of Washington, Seattle; Washington State Archives, Western Washington University, Bellingham; and the Wiltwyck Chapter of the Daughters of the American Revolution, Kingston, New York.