He has the right to criticize who has the heart to help.
—Abraham Lincoln
James Hazen Hyde really enjoyed the insurance business. It was not that he knew more than other people. In fact, he spent very little time in the study of insurance matters. But he did know how to spend money. And the insurance business was good for that.
He owed it all to his father. In the late nineteenth century Henry B. Hyde was the president and controlling stockholder of the Equitable Assurance Society, one of the nation’s more profitable insurance companies. In 1888 the elder Hyde and his senior vice president, James W. Alexander, decided that they needed a little extra cash and some protection for the future. They decided that Hyde would get a salary of $75,000 and that, if he died, Alexander would take over the company and Hyde’s widow would get $25,000 a year for life. At a time when there were no income taxes and an elegant dinner could be had for less than one dollar, Hyde had a good deal. It did not take much to justify the new arrangement to the Equitable Board of Directors. In fact, it didn’t take anything because they weren’t told. Directors asked too many questions.
In 1899 Henry B. died and Alexander became president. James Hazen Hyde was only twenty-three at the time. And although he inherited his father’s controlling interest in the company, the terms of the will placed the stock in a trust until James reached the age of thirty. That was fine with James. He would not suffer. The company made him a vice president, and by the time he was twenty-six in 1902 he had a salary of $75,000.
The problem was that younger Hyde did not fit in with the other corporate magnates. Paris and fine wines interested him more than New York and stock deals. So he maintained a close-cropped beard and a French-style haircut, bought a French chateau, became a patron of the arts, ordered flowers out of season, acquired a special car, gave elaborate dinners for the French ambassador, and entertained other high society friends with a masked ball—all at company expense.
The other officers were a little disturbed by James’s tastes. There was of course nothing wrong with an exorbitant salary and the purchase of material things. But the other officers were more into railroads and banks. Those kinds of acquisitions were more American. And they were more discreet. That was no small advantage. Hyde’s activities were attracting a great deal of attention both inside and outside the company. People were beginning to ask questions—difficult questions that did not have good answers.
As Hyde approached the magic age of thirty, the Equitable Board of Directors decided it was time to do something. They could not strip him of the stocks left by his father, but they could dilute the voting strength of those stocks. So the Board resolved to give all policyholders the right to vote. That could eliminate Hyde’s anticipated control and, since the policyholders would probably bow to the company’s expertise, it would also leave the existing management in place.
However sound the plan may have been in theory, it did not go over well in practice. For one thing, Hyde did not like it. Nor did he like the charges that the Board leveled against him to justify the new voting policy. Hyde was no shrinking violet. He had some interesting knowledge of his own about the other members of the Equitable team, and he decided to make his own accusations. Before long the controversy was dominating the pages of the trade press. “We believe that the best interests of the business demand that this matter shall not be hushed up, but shall be thoroughly opened to the public,” observed the Life Insurance Independent in April 1905. The Equitable Society “today is like a patient whose tissues are threatened by some dread disease. The only proper course of treatment is to open the wound, to cleanse it thoroughly of poisonous matter, and after excising the rotten tissues, permit the normal vitality of the body to effect a cure.”1 The governor and legislature of New York—where the Equitable had its headquarters—responded with investigations that exposed rampant fraud and inefficiencies throughout the entire company.2
Meanwhile, the Equitable scandals were having a ripple effect in New England. Equitable policyholders, many of whom were prominent businessmen, felt that their policies and investments were endangered. They needed help. And they turned to Louis Brandeis.
At this point Brandeis was putting the final touches on the bill that would allow the consolidation of the eight gas companies. But he was more than happy when William Whitman, a major woollens manufacturer, asked if he would be interested in representing some Equitable policyholders. To Brandeis, the insurance scandals were another example of the community’s being exploited by large corporations. The matter of insurance, moreover, was an especially important one. Life insurance was often essential to a family’s financial security, and if that security depended on the whims of corporate managers, people could never hope to be independent.
There was one small hitch in dealing with Whitman’s group of policyholders: Brandeis already represented the Equitable management. It was nothing terribly important. The New York law firm of Alexander & Greene, which handled most of the Equitable account, often sent the Brandeis firm cases requiring attendance in courts and other forums in New England.
Brandeis saw no ethical problem at all in taking on the policyholders as clients. After all, his goal—and presumably theirs as well—was to take actions that in the long run would benefit the company. His only real concern was that representation of the policyholders might hurt Alexander & Greene, since the firm had acted for the old management. Brandeis discussed the issue with his partner George Nutter, and finally, as Brandeis later recalled, “we agreed that I should go ahead and take our chances.”3
Whitman and Edwin Abbott, another member of the newly formed committee of policyholders, came to see Brandeis. He was prepared to become their attorney, but with one major qualification. He would not be paid for his services. More was at stake than the interests of individual policyholders, he said; this was a matter that could also have a tremendous impact on the public, and he wanted the freedom to do what he thought best. Brandeis had apparently learned from his experience with the State Board of Trade in the gas fight. He did not want to be chained to the directions of a specific client when the public welfare was at stake.
It was a strange theory of legal representation, and it invited a storm of protest from Whitman and Abbott. They wanted an attorney to defend their group, not a public crusader bent on social reform. The attorney in their presence would not yield. Those were his conditions. Whitman and Abbott were faced with a difficult choice. They had not expected this. But they knew Brandeis, and they knew he was good, indeed, unusually good. So they submitted to his terms, and Brandeis quickly took charge.
Within a short time, he met with the company’s new trustees to present the views of the Protective Committee of Policy Holders of the Equitable Assurance Society, a group that claimed to speak for almost all of Equitable’s domestic and foreign policyholders. The committee’s first priorities were to end the excessive spending and to transform Equitable into a company that provided insurance policies at the lowest cost. To that end, the policyholders wanted Equitable “conducted as a benevolent institution. No one should be induced to take out a policy unless it is advisable to do so in the interests of those whom he desires to protect by it.” And to protect individual investments the committee proposed that the Society be fortified with legal safeguards similar to those applied to savings banks.4
While the committee and the trustees grappled with the specific problems of the Equitable, Brandeis decided that he had to learn more about the insurance business in general. He was in great demand as a public speaker, but he did not want to comment on the subject until he had a better fix on the situation. And he was convinced that no harm would be done by letting the matter drag out. As he explained to his father, “It is extremely fortunate that the Equitable disclosures came out so gradually. If all the ‘exposures’ had come at one time the country would have been shocked and then have quickly forgotten the matter as it is apt to do with abuses.”5
So almost every night Brandeis took the train to Dedham weighted down with books and pamphlets on the insurance business. After Labor Day he was besieged with other work on both private and public causes, including the sliding scale issue in gas regulation. But Brandeis had decided to take on this problem of insurance, and he would not ease up until he had mastered it. On October 26, 1905, he delivered a speech on the abuses of life insurance before the Commercial Club of Boston. It was a long and often dry speech, full of statistics and heavy thoughts. But it demonstrated that this man knew what he was talking about—and that others would do well to listen to him.
Brandeis focused on the top five insurance companies, which included the Equitable. There was no mystery to these choices. Those five companies dominated the field. As of January 1, 1905, the ninety major companies received annual premiums of almost $500 million; the top five companies held almost 70 percent of the 21 million policies covered by these premiums. The top five also possessed more than 60 percent of the total $2.5 billion worth of assets controlled by the ninety major insurance companies.
Not surprisingly, Brandeis found much to criticize in those top five companies. He generally concluded that the management of those companies was handled “selfishly, dishonestly, and in the long run, inefficiently.”6 The inefficiencies were especially galling to him. Most of the policies were held by “the people,” he observed—the lower- and middle-income groups whose average policy benefit ranged from $178 to $2,648. The problem was the expenses incurred to provide those policies. Between twenty-two and thirty-eight cents of every premium dollar went to cover the companies’ costs. This fared poorly when compared with Massachusetts savings banks’ handling of personal savings accounts. Brandeis thought this was an appropriate comparison since, to him, insurance was a form of savings for the future. Measured by total assets, the insurance companies’ expenses were seventeen times as great as the banks’.
Brandeis rejected federal regulation as the answer to the insurance company mess. Senator John F. Dryden had introduced a bill proposing that course of action, and it was supported by President Theodore Roosevelt. Brandeis placed no confidence in the proposal. Dryden happened to be the president of the Prudential Insurance Company—one of the top five. The bill might have produced uniformity in insurance regulation by centralizing control in the federal government, but there was a cost for that assumed benefit. As Brandeis explained it, the bill would “free the companies from the careful scrutiny of the commissioners of some of the States. It seeks to rob the State even of the right to protect its own citizens from the legalized robbery to which present insurance measures subject the citizens. . . .”7
Instead of federal controls, Brandeis thought that individual states could adopt various measures to reform the insurance business. As he had earlier told the Equitable trustees, insurance investments could be protected by safeguards similar to those applied to savings banks. Uniform accounting systems and other standard forms could also be prescribed. Of perhaps greatest significance, however, was the proposal to limit the size of individual insurance companies. Brandeis said companies should not be allowed “to expand beyond the point of greatest efficiency.” He did not know what that point was, but he knew that it was there. To him there was a “danger arising from concentration of quick capital in the hands of a few individuals.” And although he offered no specifics in support, he concluded that “many of the abuses in the life insurance business . . . result directly from the size of the company.”8 For this reason, Brandeis thought that true capitalists had more to fear from corporate giants than from those who advocated socialism. “The talk of the agitator alone,” he asserted, “does not advance socialism a step; but the formation of great trusts . . . and their frequent corruption of councils and legislatures is hastening us almost irresistibly into socialistic measures. The great captains of industry and of finance, who profess the greatest horror at the extension of governmental functions, are the chief makers of socialism.”9
The speech attracted a great deal of publicity. Brandeis contacted the editors of the major papers. He printed 25,000 copies of the speech and distributed them to people far and wide, both in and out of Boston. And he continually talked to civic and business leaders about the issue, asking them if they had read his speech and if they had considered possible solutions. It was not enough to identify a problem. In the end, people cared more about results.
Insurance was not the most absorbing problem Brandeis had to confront. It was Alice. Despite their hopes for improved health for her, things seemed to go from bad to worse. In the summer of 1905 her doctor prescribed care away from home, and Louis found the long absence frustrating. “I wish you would tell your esteemed doctor,” he wrote his wife at one point, “that he must do a hurry-up job as we aren’t prepared to leave you with him much longer. Indeed I felt quite like carrying you off with us in his absence.”10
Louis’s exhortations might have lifted Alice’s spirits, but they did little for her health. The next summer Alice’s doctor sent her to St. Hubert’s, a facility in upstate New York. Her condition remained serious—in fact, for awhile she could not even sit up. Letter writing was obviously difficult, and the dearth of mail pained Louis. “The heart has not yet brought me anything from Saint Hubert’s today,” he wrote in mid-September 1906, “and I feel quite lost.” By the fall Alice was back home, but the impact of her headaches and general condition remained with her. As always, her husband was full of encouragement. “The sun shines here,” he wrote in November from New York City, “and I trust it shines also with you. And that you will be as joyous when this reaches you. . . . You have had all the burdens of our fifteen years and you have borne them with a patience and courage which are of the noblest.” Alice’s response was full of despair, and Louis again tried to pick her up. “Don’t lose your courage, dear, which has been so fine,” he implored her. “The good times are coming.”
Sadly, Louis’s optimism was premature. Alice continued to suffer from headaches and poor health. In the summer of 1907 he went with her to Petersham for a quiet rest. He talked to her, he read to her, and he tried to give her hope. It was not easy. In early August he explained Alice’s condition to their daughters. “Mother is not especially uncomfortable,” he reported to Susan and Elizabeth, “but is very tired of the whole business. She talks much of wanting to die but also of wanting to get well. She evidently enjoys my being here and is eager to see you, which I tell her shall be later. She is really enjoying the reading aloud—listens quite a little and remembers less—but concentrates her thoughts I should think rather more than last year.”11
Louis’s care and patience would, in time, reap enormous benefits for both him and Alice. The wage earner would similarly benefit from Brandeis’s persistence. The difficulties with Alice did not divert him from his study of insurance matters. And the more he studied, the more he realized that there was one practice that was especially troublesome: industrial insurance. This was a form of life insurance made available to low-income workers who toiled in the factories and warehouses of the inner city. Unlike regular life insurance, the policies were solicited by agents who climbed the tenement steps and went door to door in hopes of signing up clients. Often agents would check the hospitals’ recent lists of births and advise the new parents of all the horrible contingencies that could befall them and leave their new child penniless in the cold, cruel world. For only fifty cents or so a week, the agent would explain, you could have a life insurance policy with a benefit of about $140—enough to cover the costs of a serious illness and a burial if the unfortunate should happen to the breadwinner. “What made this insurance technique even more insidious was the agent’s usual failure to inform the worker of the policy’s limitations. For instance, in most cases there was no coverage until a few months of premiums had been paid, and strict forfeiture clauses left the worker little leeway if he missed a weekly payment. Lapsed policies were very common.
Not surprisingly, industrial insurance was very profitable for the companies that handled it. But from Brandeis’s perspective that was not the worst of it. As always, he felt that people could not control their lives and fulfill their potential until they were financially secure. And that security should not depend on the good faith of companies interested only in the bottom line of a balance sheet. “In order that our working people may attain and preserve what we call the American standard of living,” he told a journalist, “it is essential that every working man should make adequate provision for the future. The ‘living wage’ is not satisfied by a sum sufficient to supply the immediate demand for food, shelter, clothing, education and recreation; to be a ‘living wage’ it is necessary that there should be a surplus to provide for the contingencies of the future, the contingency of unemployment or sickness or accident to the wage earner, or his superannuation or his premature death.” Life insurance, then, was not to be merely a bet against untimely death; it was also to be a means to provide security in retirement. To Brandeis, few things were more demoralizing than a tax that would be levied against wages and charge the government with the financial responsibility of caring for senior citizens. “The American spirit demands,” he said, “that provision for the workingman’s future be made through his own efforts to secure a wage sufficiently large to leave a surplus applicable to such purpose and to the development on his part of strength of character and self control which shall induce him voluntarily so to apply it.”12
Brandeis came to believe that savings banks might be the answer to the problem. In many ways they performed many of the same functions as insurance companies. Both collected the worker’s money, invested it, and paid it back when the worker or his family needed it—although of course the insurance company had more limitations on the return of the investment. There were some tasks that insurance companies alone performed—the medical exam, verification of the insured’s death, and the actuarial calculations. But Brandeis was convinced that the worker and the savings banks could take on those added responsibilities with minimum cost. If so, savings bank insurance would have several advantages over that offered by the insurance companies. To begin with, it could eliminate the cost of agents soliciting insurance; the worker could pick up the insurance where he saved his money. It could also introduce other features that would help the worker plan for old age—such as investment standards that would guarantee a certain return after retirement.
Although he sensed that his idea was workable, Brandeis knew enough to know that he was no actuary or statistician. In November 1905 he wrote to Walter Channing Wright, an actuarial consultant who had already advised Brandeis that the plan was practical. The tenacious lawyer was not satisfied with that observation, however; he wanted to popularize the idea with the public and then present it to the legislature. In order to succeed he needed more than general conclusions; he needed specific facts and analyses. Would Wright, he asked, be willing to help? He certainly would. He was a strong advocate of efficiencies in insurance regulation, and Brandeis’s proposal held a lot of promise in that area.13 Thus began an extended correspondence that would eventually give Brandeis the information he needed.
By June 1905 Brandeis had completed a draft of an article explaining the abuses of industrial insurance and his proposal to use savings banks as a solution to the problem. It was no easy task. Writing was—and always would be, even when he was a Supreme Court justice—a chore for him. It took him much thought and many drafts before he could settle on the right words to convey his exact meaning. And being a perfectionist did not speed things along.
Brandeis was nonetheless satisfied that his article was at least at the point where he could solicit comment from Wright and a host of other friends and insurance experts. To Charles Hall, the friend who had helped him on the gas question, the Boston attorney explained his intentions. “If you agree with the [article’s] conclusions,” said Brandeis, “I want you to join with me in the effort to have our Legislature at its next session pass a law authorizing savings banks to take over this business. Any bill introduced to that end,” he continued, “will meet with strenuous opposition from the insurance companies with their multitudinous ramifications throughout the community, and will also meet a serious obstacle in the conservatism of savings banks’ trustees. The campaign must, therefore, be very carefully planned, and we must secure for the work all possible support.”14
Brandeis knew how to maximize that support. He contacted Norman Hapgood, the editor of the much-respected Collier’s magazine. Hapgood, a wiry young man, had reached his position with the magazine through unusual channels. He had graduated from Harvard College and Harvard Law School, found the practice of law boring, and then turned to writing. Within a short time he produced popular biographies of George Washington and Abraham Lincoln. And then he began a career in journalism, ultimately getting together in 1903 with Robert Collier, the twenty-seven-year-old owner of the magazine bearing his name. Brandeis was convinced that there would soon be great public demand for insurance reform, and he inquired whether Hapgood “might deem it wise to have Collier’s lead in the movement.”15 Within a short time Hapgood responded affirmatively. It was the beginning of a lifelong and intimate friendship that would lead them to take on the leaders of big business, a hostile Congress, and even a naïve president.
As Hapgood prepared Brandeis’s article for publication, the attorney suddenly found himself placed in a ticklish situation. In August 1906, George Peters, an Equitable stockholder, filed a lawsuit in a Massachusetts court asking for an accounting of the company’s expenses. Although Peters’s complaint did not mention Brandeis’s widely distributed speech to the Commercial Club, the complaint looked as if it could have been written by Brandeis himself. The complaint recited all the abuses described in the Brandeis speech and asked the court to require the company to open its books so that people like Peters, who had a direct interest in the company’s affairs, could find out whether their money had been misused. It seemed like the very relief sought by Brandeis on behalf of the Equitable policyholders.
Since the lawsuit had been filed in Massachusetts, the Alexander & Greene law firm asked Brandeis to defend the company. And he agreed. Once again, Brandeis saw no inconsistency in representing Equitable. To be sure, he thought that Equitable had made mistakes and owed the public an accounting, but he did not think it should be pried from the company through a court case. Brandeis later explained to his partner Ned McClennen that “the Peters action was directly inimical to the Company; that if he obtained that accounting, it would have opened the door to liability to accounting in every State and Country, and would have subjected the Company to very heavy liability—all for the benefit of an individual. . . .”16 It was a technical explanation that would satisfy some impartial observers.17 But for a social reformer who ardently subscribed to the cleansing power of public exposure, it was a strange position. After all, the company would have faced a “very heavy liability” only if it had done something wrong and someone was entitled to relief.
While he argued for the Equitable against Peters, Brandeis busied himself with his savings bank proposal. The Collier’s article came out in September 1906.18 The article had virtually no passion to it. But the cold statistics laid bare the sad situation. If a wage earner saved fifty cents a week from the time he was twenty-one until the age of sixty-one—then the average life span of an American male—he would have almost $2,300 in the bank in principal and interest. If the same man took the same fifty cents a week and bought industrial insurance, his heirs would receive only $820 if he died at the age of sixty-one. The plain and simple fact, the article argued, was that industrial insurance was inefficient and inadequate. Proportionately, it cost the policyholder twice as much as a normal life insurance policy; and because of the conditions applied to it, about two-thirds of the policies were forfeited within three years. Savings banks, the article said—with their existing staffs and their goodwill in the community—could offer life insurance in low amounts for low premiums. And a new law could establish a guaranty fund that would protect both the bank and the policyholder in case of an unforeseen drain on the bank’s resources.
Brandeis had carefully laid the groundwork with newspaper editors, and press reaction to the article was generally widespread and favorable. The trade press was not quite as charitable. The Insurance Press characterized Brandeis’s savings bank proposal as “positively grotesque in its absurdity.” The Insurance Post had similar disdain for the scheme. “Getting life insurance, like ‘getting religion,’ has never been achieved to any appreciable extent by hanging out a sign or [by] distribution of printed exhortations. . . .” The magazine therefore saw nothing to worry about in Brandeis’s proposal: “Nobody need lose any sleep over the dream of the Boston theorist, for the dream has about one chance in a million of ever coming true.”19 Which shows how little the trade press knew about the “Boston theorist.”
Brandeis had already begun to prepare for the legislature’s consideration of his savings bank proposal. In August 1905, he had contacted Norman White, the younger brother of his good friend Herbert White. Since White faced no opposition in his campaign to become a state representative, Brandeis assumed that he was “beginning to think of what you are to do to make your first term in the Legislature most useful and effective.” Brandeis had a suggestion. “It seems to me,” he told White, “that you could do nothing better for the community and yourself than to make a thorough study of the life insurance situation, and possible legislation.”20 White agreed, and in a short time he became Brandeis’s first lieutenant in pushing the savings bank insurance bill through the legislature.
Brandeis had also talked to John Cole, the Speaker of the House, about his appointment to the Joint Recess Committee, which was to study the insurance question in the autumn of 1906. These initial efforts with Cole and other legislators, however, did not produce immediate results. When the committee met, there seemed little enthusiasm for the savings bank proposal. After one stormy session, Representative George Barnes, who was sympathetic to the proposal, met Brandeis in the State House corridor. “Perhaps you would like to know how the committee voted on your plan,” Barnes said. “Yes,” said the attorney eagerly, “how did it go?” “Fourteen to one against you,” Barnes replied.21
Brandeis could not have been terribly surprised. He knew the power of the insurance industry. And he also recognized that the savings banks themselves would be against the proposal. They just didn’t like to fiddle around with new ideas. “We have trouble enough as it is now from depositors who are hardly able to write their names,” one bank president lamented, “and if an insurance department were to be added here I don’t see how we could find time or floor space to handle it.”22
None of these obstacles discouraged Brandeis. He had faced tough hurdles before. And that experience proved useful here. As in other legislative fights, public opinion was the key. “What we need primarily,” he told a friend, “is publicity, which shall make clear to the community the enormity of the present system.” And the educational effort was especially important with respect to savings bank trustees and wage earners. “If we should get tomorrow the necessary legislation, without having achieved that process of education,” he added, “we could not make a practical working success of the plan.”23
Organization was an essential element to any sustained educational effort. So on November 26,1906, a group of prominent citizens met for lunch and established the Savings Bank Insurance League—a group that would, as in earlier Brandeis struggles, maintain a barrage of publicity to persuade people of the merits of their cause. Although he was not an officer of the League, Brandeis remained the principal moving force behind it. He would arrange to speak as many as six times a week—even to the point of keeping a dinner suit in his office so that he could change and go directly from his office to the speaking engagement. And as before, he always made sure to notify the editors of the various newspapers, advise them of the new disclosures in his speech, and suggest that they might want to have a reporter present. It worked like a charm, and Brandeis’s name and picture became regular features in the city press.
The insurance people began to see the handwriting on the wall, and they did not like the message. Something had to be done. On December 5, 1906, a businessman advised Brandeis that a new insurance company was being formed, that he had been selected as one of those to be invited to become a stockholder, and that, because of his significance, the company was prepared to make him a “special proposition.”24 Brandeis knew a bribe when he saw one and quickly rejected the offer. “My interest in life insurance is wholly with the view to aiding and correcting what I deem to be great evils in the present system which cause heavy burdens upon those least able to bear them . . . ,” he responded. “I should, therefore, under no circumstances become connected with any enterprise with the view to investment or personal profit.”25
The insurance company proposal was clearly an act of desperation by the industry. But their concerns were more than justified. Brandeis conferred several times with Governor Curtis Guild, and in his message to the legislature on January 3, 1907, the governor endorsed the savings bank plan. Within a few days the Joint Recess Committee issued its report and, in a complete reversal of its earlier stance, approved the plan in principle. The smell of success was in the air.
Brandeis was finding similar encouragement in his battles to demonstrate the merits of his plan to savings banks. He directed League officials to concentrate on bank trustees, since collectively they would decide the matter for their respective banks. To help make his case more persuasive, Brandeis knew it would help to secure the endorsements of prominent (and conservative) businessmen. He got a real boost in that area when William L. Douglas, a former governor and a well-known shoe manufacturer, endorsed the savings bank plan. “It is intolerable,” Douglas told the Savings Bank League, that the workingman “should be obliged to give up so much of his earnings to obtain a few hundred dollars of insurance. I believe your plan . . . [to be] not only sound and feasible, but the best way of furnishing to workingmen life insurance at cost. . . .”26 And more than that—as president of the People’s Bank of Brockton, Douglas said he would personally provide a $25,000 guaranty fund to help his bank start an insurance department as soon as the law permitted it.
Douglas’s statement was given wide publicity, and League members invoked it often with other bank men. By March hundreds of bank trustees were members of the League, and two banks explicitly stated that they would establish an insurance department as soon as it was authorized.
Even before the Douglas endorsement was clinched, Brandeis was starting to feel positive about the effort. “We are having quite a resistance from the ultra-conservatives, particularly among the savings bank officials,” he told his brother on January 3, “but the movement has acquired such a momentum that it will be very hard for them to stop us now. They began too late.”27 But the opposition, as Brandeis well knew, had hardly given up.
March 23,1907, was Al’s fifty-third birthday. Louis, of course, remembered it, and he could not let the day go by without a note to his most intimate friend. “Only a hasty line that this birthday greeting may reach you,” he wrote on March 21. “. . . [R]emember our arrival at Venice 34 years ago.”28 With the note went Louis’s deep concern for his brother’s health. In recent months, Al had been dragging and found the supervision of farm and business operations very trying. Louis knew all about those kinds of problems, and at one point he suggested that Al quit work daily at 2 p.m. Al no doubt appreciated his brother’s advice and the good wishes on his birthday. The separation of distance had not at all weakened the bond between them.
Birthday wishes were not the only matters on Brandeis’s mind on March 21, 1907. In fact, for those interested in savings bank insurance it was a big day. Hundreds of people crowded into Room 204 of the State House, with the overflow spilling out into the corridors. Louis D. Brandeis was about to testify on his proposal before the Joint Legislative Committee. For three hours, he treated the committee to a careful dissection of the problems of industrial insurance. As the lunch hour approached, the chairman asked if he could finish by one o’clock. “Most certainly not,” Brandeis replied. “Even if a small part of the people who favor this measure appeared before the committee each speaking the words—’I favor this bill’—the committee would be unable to hear them in the entire month of April.”29 The comment evoked laughter, and Brandeis joined in. He never could deliver a humorous line without being among the first to laugh himself. The chairman accepted the comment graciously and adjourned the hearing until April 2.
During the break, Brandeis consulted with Warren A. Reed, a municipal judge with extensive experience in Massachusetts politics. Reed had some advice for Brandeis to help assure his success. “At our hearing,” said Reed, “we need to make the committee feel that [ours] is a public demand, rather than a private hobby of a few well-meaning gentlemen. We must remember that laws are passed in answer to a public demand, rather than because they are good, and our first object should be to start such a demand.”30 It was especially important, Reed added, that committee members feel pressure from the labor unions—because they would probably be the only ones to counter the strong influence of the bankers. Brandeis took Reed’s advice to heart, and when the hearings resumed on April 2, the room was filled with labor men.
Brandeis did not let the matter rest there. He continued to talk to the legislators themselves and urged others to do so as well. A slight hitch in these legislative maneuvers arose when William S. Kyle, an important representative, complained to Brandeis about Norman White’s “asinine” behavior and “exaggerated ego.” Things would go more smoothly, Kyle counseled, if the legislative leadership were left to others. Brandeis was not about to let the ship sink because of one man, and White, in a spirit of accommodation, agreed to take a back seat in the final stages.31
Brandeis nonetheless continued to rely on White to keep him abreast of developments. Almost daily White would provide him with a list of the legislators and an indication of their inclinations. Brandeis then used the lists to determine whom to talk to and where to apply pressure. The legislature, used to intense lobbying campaigns, was nonetheless impressed with Brandeis’s organization. One senator, in fact, observed that no bill in his memory had been lobbied for as heavily. “Paid representatives have time and time again asked us to vote for the bill,” Senator Guy W. Cox commented; “great piles of literature have been forced upon the members and a great amount of money, legitimately spent, has been used to push this bill through.”32
All the work paid off. By the middle of May 1907, the Joint Legislative Committee approved the bill by a vote of 10–4. On June 5, the bill passed the House with a vote of 146–26, and the Senate shortly followed suit by a vote of 23–3. Confident of the Senate vote and the governor’s willingness to sign the bill, Brandeis began to make plans for its implementation. As the legislation neared its completion, Louis told his brother what lay ahead. “A respite in work would follow this much desired consummation,” he wrote Al, “but a respite only, as it will take much more work to make the bill a practical success than it has to march it along this far.”33
It was a fair prediction. Although two banks began insurance departments by 1908, it took many years and long hours of hard work before the new law was functioning smoothly. In later years, though, it would provide much satisfaction to Brandeis. In fact, he would call savings bank life insurance—with its contributions to the all-important independence of the workingman—his greatest achievement.34
He would feel almost as good about his battle with J.P. Morgan and the New Haven Railroad—a battle that was starting to heat up when the savings bank plan became law.