A close-up of the head of the world’s largest international life assurance company
ABOUT forty-five summers ago, all Montreal was agog over a battle in its small financial world. The Montreal of that day was about the size of the present city of Ottawa. Its commercial and social life was dominated by a few families and the repercussions of its business operations were felt in every part of the city.
The fight in question involved one of Montreal’s prominent and most respected families. The name of Gault has long been outstanding in the annals of the Canadian metropolis. At this particular period its representatives were A. F. Gault the father of Colonel Gault who organized the Princess Pats, and who was known as the ‘Cotton King’ of Canada; his brother,
Robert L., associated with him in a business, which was later to become known across the continent; and Matthew H. Gault, father of one of the members of the present Quebec legislature, who had given his attention to financial enterprises. Matthew H. Gault was interested in some modest banking, mortgage, loan, and insurance companies, which were just then beginning to find their place in the life of that new Canada which had been brought into existence with Confederation.
The contest centred round a small insurance institution, the Sun Life Assurance Company of Canada, which had been founded by Mr. Gault ten or eleven years previously. It had been launched in the darkest days of Canada’s life—the early seventies. It had survived, but the going had been hard and to add to its difficulties friction had developed between Matthew Gault, who was the manager of the company and his secretary, Robertson Macaulay, who had come to the company from the Canada Life seven or eight years before. Mr.
Gault, as founder and principal owner of the company, wanted to control his own enterprise—a not uncommon trait among proprietors. Robertson Macaulay was equally determined to run the company his way— not a surprising characteristic in a man of pure Scotch breeding. These two iron wills had come into conflict.. All attempts at reconciliation had failed and, at the time in question, they were in strenuous competition for possession of the infant company.
‘I Stand by my Father’
AS MOST of the stock was held in the * city of Montreal it was inevitable that echoes of the fray should penetrate the walls of even the exclusive clubs and interfere with the playing of good euchre hands at the social gatherings of that time. The partisans of each side were all canvassing keenly to secure the majority stock before the annual meeting. The fight was full of uncertainty, for men would authorize proxies to one party in the morning and, under strong pressure, might issue a proxy to the other party in the evening. In neither camp was it known what a day or an hour would bring forth.
The Gault family had the advantage of high social position and financial prestige; they were all handsome men of engaging manners and considerable wealth. But Robertson Macaulay was very close to the small group •of agents who were selling insurance for the company in the field. He gathered some of these around him one day and said that he proposed to take steps to wind up the company. W. T. McIntyre, still active in the assurance life of Toronto, and the late William Hill, of Peterborough, strongly remonstrated, urging him, instead, to try to purchase control from the Gaults. Robertson Macaulay finally consented to do so, providing these agents would cooperate in purchasing and placing the Gault stock, a transaction which was quite beyond his own means.
Meantime, the Gaults had conferred with their friend, including the late A. W. Ogilvie, the famous miller, Thomas Workman, who was the president of the insurance company, and others, as to what steps might be taken in the situation. Their decision involved a very young official of the company, Thomas Bassett Mac-
aulay, the son of the secretary. He had joined the organization at seventeen years of age, and so apt and industrious had he proved, that at twenty he had become its actuary. Though he was still in his early twenties they decided to approach him and J. N. Greenshields, K. C., who played later such an important part in many big
business and legal transactions in Canada, arranged for the young man to meet Matthew Gault. The latter frankly placed the situation before young Macaulay, explained that he and his associates could not work in harmony with his father and offered the young man the position of manager of the company. They promised, in case he accepted, to put all their influence and their resources behind him.
Thomas B. Macaulay probably recalls the incident not alone because of the momentous character of the decision involved but also because he was, on that day, addressed as ‘Mr.’ for the first time in his life. But even that compliment failed to move him. He assured Mr. Gault that he felt sure they could work together in perfect harmony but ended by saying: “You forget that I am not only an employee of the company; I am the son of my father, and we must stand or fall together.”
So with expressions of regret on both sides that the
matter could not be arranged, the Macaulays entered into negotiations for the transfer of the Gault holdings. The younger man drew' up an option on the stock of the other and both signed it. The field agents of the company in the main either subscribed personally or marketed allotments of the stock and in less than a year it had been all taken up. One of these agents residing in what is now a small Ontario city with difficulty subscribed and paid for forty shares. Year by year, he added to his holdings until they exceeded six hundred shares.
The other day he died, but before his death he had the satisfaction of seeing quotations for these securities reach the extraordinary figure of two thousand dollars per share. The same w'eek, T. B. Macaulay, the former actuary, now the president of the company, dictated an interview to the press urging its shareholders not to be stampeded by attractive offers into alienating their holdings to American purchasers. As he did so he must have had a vision of the contrast between the dingy and cramped offices on St. James Street, where the company’s first strenuous years w'ere spent and the imposing building of classic beauty on one of the finest sites in Montreal, where the company, nowgrown to huge proportions, is housed.
A Phenomenal Expansion
FOURTEEN hundred employees crowd to capacity even the stately edifice in which the company now does its business. The president himself had but recently returned from England, where, in Trafalgar Square, London, he had laid the corner stone of one of the finest new office buildings in the British metropolis. Outside his windows, steam shovels and electric drills were busily excavating for a colossal structure, twentythree storeys in height, sufficient to accommodate a staff of ten thousand. His room was banked with roses and other floral tributes marking his completion of fifty years of service with the company; his desk piled w'ith telegrams from India, China, Japan, South Africa, South America, Europe, the West Indies, as w-ell as from the United States and Canada, from the company’s representatives in those countries, indicative of the world-wide operations which have made the Sun Life the greatest international assurance company in the w'orld.
An expansion so phenomenal prompts curiosity as to its cause and the keynote best can be found in the simple statement of Mr. Macaulay at an epochal stage in his career: “I am the son of my father: we must stand or fall together.”
There are few' cases w'here the life work of the father has been transmitted so absolutely to the hands of the son or where the ideals of the one have become so unreservedly the objectives of the other. Indeed, so true is this that he w'ho would seek to review the activities of either will find himself involved in the enterprises of both. So interwoven is the record, that they are inseparably associated in one family regime. For nearly forty years before the death of the older man they worked together and many outstanding steps in the practice of life assurance were taken by them jointly. Robertson Macaulay was of middle age when he came to the young company' with sixteen years’ experience w-ith the pioneer Canada Life. His son was only' seventeen when he joined it. Thus to the ripe experience and sage counsel of the one was added the enthusiasm and dynamic energy of the other, with astonishing results.
A Believer in Hard Work
BOTH men possessed qualities which would have made them successful in any undertaking. One of these was complete absorption in their life task. To Robertson Macaulay, life assurance was a mission. His son has described it again and again as an organized and sane benevolence. Neither sought nor required any other distraction or recreation. To each the work and the associations of the enterprise itself were sufficient.
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“My associates are few,” said Macaulay pere a few years before his death in speaking to his staff. “The society of the great or wealthy I have never sought, and ou .side my family circle and my books you are my oldest, my most intimate and most trusted personal friends.”
His son, the present president, reechoed this sentiment at an ovation given him by his field force a few weeks ago in anticipation of his jubilee. He urged a retention of the family characteristics of the organization. “Don’t ever let us lose interest in one another,” he pleaded. So he is rarely seen in a club, nor does he join in the relaxatiors of the ‘Four Hundred.’
To this unique detachment and absorption in his task Mr. Macaulay adds an equally valuable quality, namely, phenomenal industry. One illustration of this may be given. Before it was possible to take the examinations of the British Actuarial Society in Canada, and thus obtain its degrees, Mr. Macaulay had, by hard study and private tutoring, familiarized himself with that science sufficiently to become the actuary of the company. It was more than ten years later, after he had married and had a family of children about him, that the British Society held these examinations in Canada. One of the officers of the company wrote and passed the first examination.
Mr. Macaulay foresaw that some of his juniors would soon become degreed members of the Actuarial Society. He determined that no one should hold higher qualifications than himself so he decided that he, too, must secure a degree. This required Spartan discipline and application. With the exception of Saturday nights and Sundays, he left the office at five o’clock daily and, after supper, devoted the evening from seven far into the night to the study of mathematics and mortality tables. Sometimes at little social gatherings at his house, a search for the host resulted in his discovery with a text book, in some upper room. He studied unremittingly. He passed his first year examinations in one year, his second year examinations in the second year and his third and fourth year examinations in the third year, securing his degree before any of his staff. This quality of familiarizing himself with every side of a question has remained an outstanding characteristic. No subject which he discusses is ever dismissed cursorily; he secures the fullest information and then makes his own decisions.
Montreal to Puntas Arenas
TN THESE prosperous days in Canada
it is easy to forget with what courage and vision some of its present outstanding institutions faced the discouraging conditions of the early days. From 1872 or 187.3 until 1880, Canada passed through the most gruelling period of its existence. Depression was general, and even the fates of political parties were decided by the prevailing discouragement in business. It was when hard times seemed to have reached their very peak, namely, 1879, that Mr. Macaulay’s company decided to embark in foreign fields and started business in the West Indies. Operations were rapidly extended through many Latin countries of South America and penetrated as far south as Puntas Arenas on the Magellan Straits. This expansion, which proved to be a happy one, was followed by an extension completely round the globe; though by that time less courage was required because of accumulated experience and more promising commercial conditions.
Most middle-aged men remember the time when a life assurance policy was regarded with some misgiving. It contained a mass of small print conditions embodying penalties which led to its be-
ing compared with a railway bill of lading. There were all sorts of conditions as to place of residence, all sorts of penalties growing out of failure to pay premiums and many were the tragic disappointments due to the forfeiture of policies through lapses of premium payments. The first unconditional policy ever used on this continent was issued at the instance of Mr. Macaulay, who boldly wiped out all the small print penalties and began the use of policies with attractive options. These things are taken as a matter of course today, but at the time 3ome of the oldest companies on the continent predicted disaster and it was not until after Mr. Macaulay’s company had practised it for a number of years with increasing success that its lead was followed by others.
Another instance may be given of a departure which vitally altered the whole basis of life assurance. At one time a candidate for insurance was either accepted or rejected. There was no middle ground. He was medically fit or he was medically disqualified, and there was no escape from that arbitrary limitation. Here, again, Mr. Macaulay was a pioneer in enunciating the principle that sub-standard lives could be insured as safely as standard ones asserting that the basis for the premium could be as accurately determined through mortality experience, as in the case of normal risks. He worked for years on this principle and finally evolved the system of sub-standard insurance, the first on the North American continent. This system now is followed by a great many companies and has enormously extended the benefits, without increasing the risks, of life assurance.
A Pioneer in insurance Finance
THE last twenty-five years has greatly altered the status of life assurance companies and their relationship to the economic life of the nation. They have become the savings banks of the thrifty. There are placed in their handsenormous •sums, representing accumulated premiums of assurance, which must be safely invested in such form that the money can be quickly available for death losses. In its earlier and more limited form, assurance monies were regarded as safe only if invested in mortgages and bonds. Mr. Macaulay was one of the first to discern that, with changing conditions, these forms of investments no longer retained exclusively their qualifications of stability and safety in comparison with the better class of industrial and publicutiluystocks. He boldly departed from what was regarded as the standard practice and has been one of the most active protagonists of the contention that the stocks in question were not only much more profitable but quite as safe as mortgages or bonds. His wisdom has been vindicated in the remarkable profits made by his company and by the declaration of an investment counsel in Boston that his company is the wisest investor among life assurance companies on the continent. So absolutely do many private investors depend upon his judgment in this regard that they limit their investments strictly to those securities which his company purchases. Some idea of how gigantic have become the financial operations of insurance companies may be obtained from the fact that Mr. Macaulay and his board will, during the next five years, have in their hands the investment of over half a billion dollars.
Keeping $31,000,000 Busy
YY THERE such huge sums are in W volved even the transfer of investments requires most precise provision so that not a dollar remains idle for a day. Some years ago, the Sun Life Company closed out enormous holdings in one security, part of the proceeds being represented in a single cheque for nearly $31,000,000. The daily interest on this :sum amounted to $5,500. Hence ex-
haustive provision had to be made for conversion so instant that no interest would be lost. The exact date when the payment would be made was uncertain. So the Sun people, for months in advance, were buying other securities for future delivery. The firms through which these securities were bought were instructed to deposit them in a New York bank which would carry .them for the sellers’ account. The very day the cheque was received by the Sun its proceeds were wired to New York and every security taken up forthwith. Hence not a dollar of interest was lost.
These obligations are rendered the greater in Mr. Macaulay’s case by the widely flung character of hîs company’s operations. It is the greatest international company, doing life business only, in the world. It writes its policies in four languages and pays its losses in twenty-five currencies. Hence it is necessary to make large deposits and investments in the various countries with which his company does business. The fluctuations of exchange have to be watched, the depreciation or inflation of currencies noted, and even the political movements of the world scanned, for ?11 these have an immediate and vital interest to the Sun Life. Hence its foreign department keeps in close touch with developments in every part of the world.
Many wonder how the president keeps intimate check on all the ramifications of such a stupendous concern, with business in force running over a billion and a quarter of dollars, and with assets of $350,000,000. He does so by a simple but very effective device. The company is a little world in itself. Internal details of the organization are cleared through numerous committees, whose personnels interlock. The president sits in few, if any of them, excepting the investment board, of which he is the active head. But the deliberations of each are made the subject of concise memoranda by its secretary, and these minutes are all scanned, and reviewed by the president, who indicates approval, dissent or a desire for further information, or suggestion, as the case may seem to require. Hence the vast business of the company is daily before him in review. The value of this system is greatly increased by the luncheon arrangements. Every day, when he is in the office, the president dines with his chief officers and officials. He does not like any of them to be absent, and sometimes for hours after their meal is finished, the conversation will continue on the policies and activities of the company. All matters of policy which involve more than one department are here brought under scrutiny, opinions obtained, difficulties reconciled, and incidentally every department head familiarized with not only the action finally taken but the reasons for it.
His Farm is His Hobby
"NTOTHING great was ever accomL > plished without enthusiasm,' was a dictum ' of Robertson Macaulay. Of disposition, and optimistic outlook the son has even a greater share than his father. The years have left scarcely a mark on his enthusiasms. A few months ago a big brotherhood which he founded over thirty years ago was felicicating him upon the fact In replying he swept the past aside. “Thirty years have passed,” he exclaimed, “but what of the next thirty years?” He is happiest wher planning bigger buildings, greater extensions, the invasion of new fields, the earning of greater profits for his company.
On his six-hundred-acre estate at Mount Victoria he is eagerly developing an Indian corn to ripen farther north than any existing variety. His ambition with his Holstein herd, one of the finest small herds on the continent, is to .produce a breed of Holstein cow capa. Je of a ten-ton milk production annually. His greyhound mind is constantly outleaping the limits of the present and finding
stimulating exercise in anticipating the future. Insurance is his domain, but by fancy he is a farmer. And the herds and crops and woodlands at Hudson Heights are the outlet for physical energies that in other men manifest themselves in yachts, and golf courses and racing stables.
He has, too, a wide botanical knowledge and after dinner will often devote the whole evening to studying the names and descriptions of flowers and shrubs. In the mountains a year ago a botanist was showing slides of the flora of the Rockies. It was surprising how many of the varieties the Sun Life’s president immediately identified, by their botanical names.
For society life, as the term generally is understood, he has no time. A deep reverence inherited from his father, leads him to view life as a serious undertaking and the daily round as a duty. His enthusiasm for social service in all its forms is quick and abiding. Church and brotherhood organizations, temperance reform and community betterment—all these find in him a quick sponsor. With a few other prominent men in Montreal he has maintained for years certain mission activities which have not been allowed to become perfunctory, but which bring under his personal scrutiny some of the humblest homes in the city. Opposite his country home, near the Trappist mission of Oka, there is an Indian rancherie. He will sacrifice his own rest of a Sunday afternoon to cross to the reserve, and talk to the assembled Indians, giving them advice on every subject from successful farming to the achievement of happiness. Not content with this he visits their homes, calling them by their first names —for many of them find employment at Mount Victoria—and taking a lively interest in everything that involves their comfort.
Concern for everyone’s happiness marks his daily life. Fetes and events of various kinds, make Mount Victoria in the summer, a Mecca for city folk and neighbors from the country. He started farmers’ field day with one hundred guests. Last year two thousand were present. The deputy minister of agriculture comes down from Ottawa and lectures. Others give demonstrations in cattle judging. Pure bred bull calves are given away as prizes. Once a year a special train brings the whole company headquarters staff to the farm for a dinner, drives, games and frolics. A community club house on the estate furnishes the medium of recreation for his employees, all of whom are married. All these employees have cottages provided for them with electric light, running water, and milk, wood, and garden vegetables. On New Year’s Day there is an old fashioned turkey dinner on the estate for all the families and a tree with presents for the children.
In his office the Sun Life president, to borrow a phrase from the athletic field, is ‘always on his toes.’ His physical alertness reflects his active and vigilant mind. Straight as an arrow he carries himself with the poise of middle-aged and well preserved manhood. Callers are familiar with the quick, impulsive action with which he springs to his feet when a subject interests him and how ha paces to and fro in the room, stopping now and then gleefully to rub his hands together over an amusing turn in the conversation. He talks little of the past, always of ten, twenty and even fifty years hence.
“I saw the sunrise this morning,” he said to a group of his field men recently, “and that’s just like our company—it’s just above the horizon. Youth is with you—it’s with the company.”
So his jubilee finds him not finishing an epoch with his great organization— but beginning one.