John Whitehead, who died at 92 several days ago, was the classic personification of the American Dream come true. The son of a lowly telephone utility workman, John financed himself through Haverford College by setting up the pins at a local bowling alley, and then hiring others to work for him. As a naval officer in World War, he steered his landing craft away from danger to a safer beach in the Normandy landings to get his men ashore safely. After Harvard Business School, he joined Goldman Sachs investment banking operation where he became the protoge of the legendary self-made Goldman leader of an earlier age, Sidney Weinberg and helped guide to fruition the complex initial public offering of the Ford Motor Company in 1956. John's rise to power and wealth was due, he told me, to doing everything Mr. Weinberg asked him to do.
It is important to note that John was the opposite to your typical Wall Street wheeler-dealer who exploits his position as a flamboyant celebrity. He did not seek out media publicity for himself. Rather, he shared the leadership role at Goldman Sachs with John Weinberg, the earthy and trusted son of his mentor Sidney Weinberg. With the two Johns there would be none of the brutal infighting that periodically scourged Wall Street firms like Lehman Brothers and Lazard Freres, two important rivals to Goldman Sachs.
I remember John with a warm feeling of respect for seeking out from me an exclusive story in The Economist about how Goldman Sachs was going to use its $400 million profits in 1983 to expand into a vaunted global investment bank, a crucial strategic decision that has paid off big-time over the past 3 decades . Vision, he had, in spades.
Subtly, John became a leader in Wall Street, guiding the Securities Industry Association into the crucial role of pressing for the reduction of the long term capital gains tax from 28% to 20%, a move that definitely played a role in the tremendous creation of wealth the past several decades.
Then, in the 1990s he strongly remonstrated with Federal Reserve chairman Alan Greenspan to raise the margin requirements to dampen down excessive speculation in high-flying technology shares. All to no avail as Greenspan apparently hid behind the fib that raising margin requirements was the purview of the SEC. Whitehead represented an enlightened balance between the selfish private goals of Wall Street with respect for the public interest.
What's more, it was revealed at his funeral by former Secretary of State Henry Kissinger that John offered him a partnership at Goldman Sachs and even offered to tutor him in finance. A shrewd move for Goldman Sachs that Kissinger turned down in order to run his own global advisory firm.
For his part, Whitehead at first turned down Gov. John Pataki's request to take over direction of the World Trade Center rebuilding. Whitehead knew he might not like the political infighting that came with the challenge. But, many private sector leaders like David Rockefeller were requested to appeal to John's natural statesmanship and he too it on.
Much more natural and satisfying were the prestigious and manifold pro bono institutions John was both board member and financial contributor like the International Rescue Committee, Rockefeller University, the Boy Scouts, Harvard University and a motley number of major foundations like Mellon.
Nor did Whitehead live in a mega-mansion in n a high profile summer resort. He built a small modern cottage on a point facing the Atantic Ocean and a lighthouse in a small Rhode Island town that was opposite to the Hamptons. It replaced a simple barn-like structure with views to die for.