Chapter 32
New York Times, September 4, 1998
W. L. Morgan, Finance Pioneer, Dies at 100
Walter L. Morgan, a pioneer of finance who founded an early mutual fund that sailed through the booms and busts of seven decades, died on Wednesday at Bryn Mawr Hospital in Pennsylvania. He was 100 and lived in Bryn Mawr.
Mr. Morgan headed the Wellington Fund for 42 years until he retired in 1970. The fund, which later became a mainstay of the Vanguard Group, started with $100,000 pooled by a handful of Morgan relatives and Pennsylvania business people, and it grew into one of the nation’s biggest mutual funds, with $23 billion in assets and 900,000 shareholders.
As a young accountant in the boom years before the 1929 stock market crash, Mr. Morgan put together an assortment of stocks, bonds and government securities that he thought would be less risky than competing funds that were borrowing money and concentrating on stocks at wildly inflated prices.
“There was so much speculation, and stocks were just too high” before the 1929 break in prices, he recalled in an interview. . . . Mr. Morgan’s fund, originally called the Industrial and Power Securities Company, sold United States Steel at $258 a share and watched the stock plummet to $24 as the Depression set in, he recalled. He renamed the fund in 1935 for the Duke of Wellington, the 19th-century British general who defeated Napoleon. “Words like ‘industrial’ and ‘power’ sort of fell out of favor with investors after the crash,” he said. . . .
Rare is the man for whom the Lord acts as a shepherd for a full century on this earth. Walter Morgan was a deeply religious man who loved the Holy Bible, and often commended the 23rd Psalm to those who were troubled or in ill health. At his passing, he lieth down in green pastures, beside the still waters, his soul restored to eternal life.
Walter Morgan used to say to me, “I don’t know why the Lord would keep me alive for so many years.” To which I would reply, “Because the Lord knows how much I need you to be with me.” His spirit sustains me to this day. This grand and gentle man must have been the most active, vigorous man of his age, whatever his age, all through his life. And during the last half of his life—the nearly 50 years (a half-century!) I have known him—he was remarkably wise, sharp of wit and mind, interested in everything around him, reading the papers, following the financial markets, recalling the past, all with a thirst for the details of names, dates, and numbers.
Before he began his business career, he was a proud member of Princeton’s Class of 1920, and he became its last surviving member. Princeton was a big part of his long life, and I was proud to be a fellow Princetonian with Walter Morgan as my role model sharing that common heritage and becoming eternal Tigers (as, if you’ll forgive me, only Princetonians understand.)
Wellington and Vanguard
Surely he was a tiger in business. His ambition and entrepreneurship led him to found Wellington Fund and to become the dean among industry pioneers. Wellington was the precursor of Vanguard—its sine qua non—and he is the real hero of the dramatic history that took both firms to eminence—proud, lustrous names that are recognized all across the land. As he got used to the idea of Wellington and Vanguard together, he loved the historical Napoleonic War era association of the Iron Duke and Lord Nelson, permanently linked in word and picture as part of our joint corporate history.
Walter Morgan retired five years before Vanguard began. While he fully supported this new venture, he was saddened that the new structure required a new name. He didn’t much care for the name “Vanguard” when he first heard it, and thought that the index fund was a “wild and crazy idea.” But his support for the new road less traveled by for the firm he had created in 1928 was unremitting and unequivocal. I did my best to assure that Wellington Fund would survive and prosper, as it has. Our linked service as chairmen of the Fund’s Board of Directors from 1948 to 2000 (including my four years as senior chairman), constitutes a 72-year total that may be unmatched in the annals of America’s corporations.
Mr. Morgan inculcated in his young protégé many of the principles that governed his enterprise, where I worked for 23 years, principles that remain at the very core of Vanguard’s character today:
• Investment balance—stocks and bonds, working together.
• Conservative investing—quality, quality above all.
• Long-term focus—for the goals of our funds, and for the horizons of our shareholders.
• Fair-dealing with clients—particularly by full disclosure and complete candor, and by keeping costs low.
• Equitable and honorable relationships with the human beings within our two primary constituencies—those shareholders (whom we now call clients) and employees (whom we now call crewmembers).
Given my eternal love and respect for Walter Morgan and my enduring loyalty to him, I dedicated the first edition of my 1999 book—
Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor—to him. Providentially, I framed a pre-publication cover and the dedication, and presented them to him on his 100th birthday, only months before his long journey ended. Here’s what I wrote:
Dedicated to Walter L. Morgan, founder of Wellington Fund, Dean of the Mutual Fund Industry, fellow Princetonian, mentor, friend. He gave me my first break. He remained loyal through thick and thin. He gives me strength to carry on.
I shall never forget how he inspired me and challenged me to do my best. When I lacked confidence in myself, he exuded confidence in me. In many respects, he was a father to me—demanding, giving, shaping, loving. After his death, I was told that he considered me the son he never had. His high values—especially his unyielding integrity and uncompromising honesty—reinforced my own values, and made me a better person. I, along with so many others, didn’t dare let him down.
Remembering Who Gave Me My First Break
Four decades ago, a wonderful public service ad, sponsored by United Technologies, appeared in the
Wall Street Journal. It was entitled “Do You Remember Who Gave You Your First Break?” Here is part of what it said:
Someone saw something in you once. That’s partly why you are what you are today. It could have been a thoughtful parent, a perceptive teacher, a demanding drill sergeant, an appreciative employer. . . . Whoever it was who had the kindness and foresight—two beautiful qualities—to bet on your future. In the next 24 hours, take 10 minutes to write a grateful note to the person who helped you. . . . Matter of fact, take another 10 minutes to give somebody else a break . . .
Well, I did take those recommended 10 minutes to write that grateful note to Walter Morgan. And I hope that I am not exaggerating when I say that his longstanding kindness and trust helped me to initiate—in a time almost infinitely surpassing that second 10 minutes—what I fervently hope has now become a Vanguard tradition: the idea that people should be given a break, should be encouraged, and should be respected. That is the central basis for our philosophy that “even one person can make a difference,” embodied in the Awards for Excellence that we have been awarding to Vanguard crewmembers since 1978.
Walter Morgan cared about people. He was a real, honest-to-God, down-to-earth human being. In contrast to so many business executives, he was not full of himself. A humble man, he was not impressed with the trappings of wealth and power. He loved human beings, not for who they were, but for what they were. An exceptionally generous man, he reveled in sharing his blessings with others.
I could not begin to do justice to all of Walter Morgan’s fine qualities—intelligence, grace, integrity, ambition, generosity, competitive spirit, breadth of vision, range of interests—the list is too long. But, for me, a special quality stands out: his interest in young people, his confidence in their abilities, his willingness to cede to them substantial responsibility if he thought they could handle it (“pile it on them” might be more accurate). He was unsurpassed as my mentor, and it is fair to say that his decision to hire me made a difference, for the better I hope, in the future development of the Wellington organization, and in the founding and creation of Vanguard.
Time, like an ever-rolling stream, has now borne another of her sons away. But he does not fly forgotten, as a dream, dying at the opening day. Walter Morgan lives on, in our hearts and our minds and our souls, not only for those fortunate enough to be close to him, but also for those many others who knew him solely by the glory of his deeds, the strength of his reputation, the high character of his honorable life. As the Psalmist assured us over all those years—and reassures those of us who must carry on in his absence—he will dwell in the house of the Lord forever.