National Recognition – 1901 to 1912

National Recognition – 1901 to 1912

During this period, even though archival materials are slim, the commercial paper business of A.G. Becker & Co. was apparently profitably expanding. A good portion of the Herman Schaffner Bank depositor repayment program had been accomplished. A.G. was now able to think about developing profits for personal gain. The roster of commercial paper issuers and investors was large and growing. As the new century opened, Mr. Becker must still have maintained an active hand in placing open market notes that he had purchased, or which he approved for purchase. The office staff was still modest. Lists of names, lots and denominations, maturity dates, and rates were still being provided by telegraph to a growing list of commercial banking customers -- from Michigan to Ohio in the East, to the Pacific Coast on the West, and all across the South, from Alabama to Arizona. About this time, the telephone began to replace the telegraph for offerings and orders.

Mr. Becker was also beginning to be well known around Chicago.  He had been active in the formation of the Standard Club and Jewish Charities of Chicago and a member of the relatively new symphony association.

New Century Growth - In Spurts

Although there was an underlying impetus for economic growth in the United States as the new century opened, the growth was in uneven spurts. In 1903, there was a modest national panic with a downturn in stock prices, a rise in short-term money rates, occasional bankruptcies, and pressure on bank deposits. During this period, A.G. Becker & Co. probably was taking on new issuers as companies scrambled for short-term funding.

In June 1902, in time to experience his first financial panic, David Stern, a nephew of Abraham Becker, graduated from the University of Chicago and looked forward to being employed at his uncle’s firm. His job application - including some very accurate forecasts, Mr. Becker’s response, and David’s acknowledgment, appear here.

The archives for this period include a number of envelopes labeled with a company name written in A.G. Becker’s hand. The contents were varied - memos, notes, correspondence, financial statements, receipts, and other scraps, up to long legal documents. Mr. Becker apparently kept these envelopes readily available in the firm’s vault. It would appear that some of the companies were sources of endorsed bills receivable or promissory notes which Becker placed with customer banks and which were paid sometime, but perhaps not at maturity. In some cases, Mr. Becker appears to have been working with the issuer as a representative of investors, and/or also as principal. Becker’s policy of purchasing paper outright for sale to investors - rather than working as agent with consigned paper - was well in effect by 1900, as was, likely, the straight issuance of promissory notes, as opposed to the earlier practice of endorsing and discounting bills receivable.

Included in the archives are envelopes involving such companies as Schlesinger & Mayer (predecessor to Carson, Pirie, and Scott); American Brewing Company; North and West Chicago Railway; Acme Harvester Company; N. Deutsch & Co.; W.B. Conkey; Amalgamated Machine; M. Rumeley & Co.; Atlas Engine Works; Yellow Poplar Lumber Company; American Rolling Mill Co.; and H.F. Halm.

The early part of the 20th century was a period of high growth and technological change in America, led especially by the rapidly emerging automobile industry, with its widespread, growing networks of parts suppliers, especially small manufacturing enterprises located throughout the Midwest. In Detroit, under the leadership of Henry Ford, assembly lines and mass production were showing the benefits of the economics of scale.

In the archives are some stock certificates of the Woods Motor Vehicle Company, with which Becker had some connection, possibly through Oscar Friedman, A.G. Becker’s father-in-law.

Becker also had a connection with the Woods Motor Company, which was founded in Chicago in 1899 by Clifton Edward Woods. According to Wikipedia, Woods “wrote the book on electric automobiles.” Between 1911 and 1918, the company manufactured a car utilizing a 4-cylinder internal combustion engine as well as being powered by battery-driven electric motors. Wikipedia reports that “at 15 mph . . . the car was electric powered and above that level the conventional engine took over (and could) take the vehicle to a maximum of around 35 mph. . . . It is today considered a historic hybrid electric vehicle.” Clifton Wood was clearly ahead of his time and would have found quite stunning the developments of 100 years later.

During this period, some person(s) at Becker (perhaps William Jacoby) must have become acquainted with the principals of the Mitchell Motor Company, Racine, Wisconsin, founded in 1900, and maker of the luxurious Mitchell car. As noted below, in 1916, A.G. Becker & Co. would be a joint manager in an underwriting of the common stock of Mitchell.

First appearing about 1898, and in full fashion by 1906, was the “trust” movement led by the Standard Oil Trust. Soon, the Copper Syndicate emerged, and in 1901, the United States Steel Corporation was formed. This was also the era of the great battles for the control of the major railroads, between the houses of Morgan and Harriman, with a wide range of small investors riding on their coattails in a speculative frenzy.

In 1905, in a market surprise, three Chicago financial institutions controlled by John Walsh closed their doors. Walsh was indicted in 1907. That year also saw the collapse of copper prices, breaking up a highly financed effort to corner that market. This was followed by the closing of the doors of the Knickerbocker Trust Company. This period was labeled “the 1907 panic.”


It was during these perilous times that A.G. Becker  became involved with the various Pittsburgh-based enterprises of George Westinghouse. Westinghouse was born in 1846 and in 1868, at the age of 22, was showing his inventive genius, starting with compressed air braking systems for train cars, and branching quickly into inventions involving railroad signaling and switching systems.

By the early 1900s, Westinghouse had formed a number of companies in the Pittsburgh area woven together though inter-company investments and loans, coordinated through a central holding company owned by Westinghouse. Westinghouse’s various products were in high demand, but rapid growth soon outstripped working capital.

Westinghouse’s main company, the Westinghouse Electric and Manufacturing Company, apparently depended heavily on short-term bank borrowings and the open market discounting of customer receivables - all with short-term maturities. As 1907 progressed, money became scarce, money market rates spiked, and the central Westinghouse company, and some affiliates, were unable to meet their short-term obligations. Open market paper rates rose into the 7 ½ to 8% range. At the peak of the panic, in October 1907, the Westinghouse companies were put into receivership.

Within a month or so, a Creditors Committee including Mr. Becker was formed. He was described in one press report as a “Chicago capitalist.” Also included in the Committee was a representative of F.S. Moseley, of Boston, a then leading commercial paper dealer in the East. As noted earlier, the Becker firm was apparently handling Westinghouse paper as early as 1902. It is not clear what the amount of delinquent bank loans might have been at the time, or the amount of open market paper that might have been outstanding, but it can be assumed that Mr. Becker was especially representing creditors of various types, especially in the Midwest. He was the only representative on the Committee not from New York or Boston.

The Committee was active from December 1907, through November 1908, proposing and modifying various “Plans of Adjustment” for the main Westinghouse corporation. In due course, almost all creditors were forced to take some Westinghouse common stock in the reorganization of the company, which emerged from receivership in November of 1908. At that time, a new Board was elected that included A.G. Becker. He served in that capacity for a number of years and helped the Company get back on its feet, pay dividends, and experience profitable growth.

A.G.’s work in Pittsburgh and New York on the Westinghouse reorganization not only enhanced his national recognition and reputation as a skilled financier but led to a regular acquaintance and work with some of the nation’s leading commercial and investment bankers in New York and Boston.

In the meantime, residential real estate development was taking place all around Chicago’s boundaries. Even though very busy with the firm’s activities, in 1907 Mr. Becker purchased a parcel of land creating the Stevens Jefferson Park Subdivision, consisting of some 150 lots which were sold from 1908-1912 with E.A. Cummings & Co. acting as agent. According to his personally maintained accounts in the archives, Mr. Becker made a nice profit on this investment.

On a personal basis, Nathan Becker, A.G. Becker’s father, died in April, 1907. Nathan Becker was born in 1821, came to Chicago at age 20, and entered the retail coal business in the 1880s. When A.G. Becker & Co. was incorporated, Nathan Becker was a small shareholder. On the occasion of “Pa Becker’s” birthdays during this period, a grand party was held at the patriarch’s home where he was hailed with many accolades and songs were sung in German.

By 1912, A.G. Becker was now well recognized as a leading financier in the Midwest.  He would already or soon count among his Board memberships: Westinghouse Electric and Manufacturing Company; the St. Louis and San Francisco Railroad; the Pressed Steel Car Company; the Hammermill Paper Company; Hart, Schaffner & Marx;  Drexel State Bank; and Greenebaum Sons Bank & Trust Company.  He was already or soon would become a trustee of the Art Institute, the Hebrew Union College, and Sinai Temple; and a member of the Union League, Midday, Standard, Downtown, Hamilton, Illinois Athletic, and Lake Shore Country Clubs.

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