Part 22 (written 2004)
(Continued from last week)
A further responsibility, which I inherited from my predecessor, Mr. Fischmann, aside from the running of the traffic department in New York, was the supervision and management of the worldwide use of PB’s marine insurance policies. I had never taken a course on the subject in school, and nobody ever taught me; I just learned it on the job. All offices worldwide would have their marine insurance covered under New York’s policy. I wrote a manual for use by everybody and it became the universal reference that employees, even when they left the company, would take with them for use in their new jobs.
Also, my responsibilities as the traffic manager was to assist in the establishment and organization of new offices as they were opened and staffed in the US and abroad. As a result, I travelled to various destinations (mostly overseas) over the years whenever a new office was being opened in order to help set up a traffic department and have it function in accordance with the policies of PB, or to straighten out major problems, as well as give lectures on marine insurance.
After some years, having learned the ropes, I wrote a traffic manual as well. It included instructions in the do’s and don’ts of PB policy, procedures, form letters—anything that would be of help not only to new employees, but also as a guide to anyone. Both the insurance and traffic manuals were always kept up to date by me with changes and additions as needed, and completely reissued every few years.
Since as traffic manager it was also one of my responsibilities to approve payment of invoices and bills, as well as to sign dozens of checks every day, I had taught myself the principle of how to properly handle this responsibility. Namely, if one assumes that the invoice or expense bill that he is asked to approve is most likely correct, he will overlook many errors. The correct approach is for one to assume that the invoice or bill is incorrect and that it is his/her responsibility to find the error. I continued to apply that principle even later after leaving PB, and while working for volunteer organizations. Since invoices and checks for which I was responsible at PB often were in the seven figures, it was of the utmost importance to be extremely careful.
Originally PB also had a chemicals division. In July 1936 that original company split into two parts. The chemicals division became Philipp Brothers Chemicals, headed by Siegfried Bendheim, and the metals division became Philipp Brothers Inc., headed by Siegfried Ullmann. PB Chemicals continued to exist until very recently, with its last headquarters in Fort Lee, New Jersey.
PB had started out as a private company, owned by the four senior officers. The company then changed its structure and became Philipp Brothers Ore Corporation, with a modest number of shares being made available for purchase to some senior employees. Eventually PBO merged into Minerals and Chemicals Corporation of America, a New Jersey company listed on the NYSE. This, for the first time, enabled senior officers to cash out and solved the problem of settling with estates.
Later, that entity, then known as Minerals and Chemicals Philipp Corporation, merged with Engelhard Corporation, also a New Jersey corporation. That company, headed by Mr. Engelhard, dealt primarily in precious metals, and it is said that he personally was the model for the book and movie “Goldfinger.”
When the company grew in size by leaps and bounds, management appointed officers from among the employees. I was appointed at first assistant vice president, later vice president, and subsequently, group vice president, which was one level below senior vice president.
An interesting occurrence happened in the 1960s. It involved the US Customs assessing an import duty on a Norwegian artificial Columbite, claiming it was a chemical and not a mineral. Since PB was the agent for the manufacturer Norsk Bergverk, and since the assessment of the import duty would make the importation uneconomical, we felt it our obligation to object to this assessment. Since importation and import duty was part of traffic responsibility, I was requested by management to handle it. I did a lot of home reading and talking to attorneys and finally thought I was ready for the fight. A meeting was arranged in an office of the Department of Commerce in DC. When I got there, I got a sinking feeling in my stomach since I was facing a battery of lawyers both from the Department of Commerce and the Treasury Department. They all sat on one side of the table and I, together with me and myself, sat on the other side. I presented my case and fortunately, since it was an informal rather than a court hearing, there was no need for formalities. I argued that in 1933, when Congress passed the act establishing import duties, there existed no such thing as artificial Columbite. Consequently, Congress could not have had this material in mind when establishing that the mineral Columbite was duty free. Therefore, if it cannot be classified as a chemical, it must be a mineral and be duty exempt. Lawyers call that Congressional Intent. I won and the material was declared duty free.
Now here comes the punch line. In the elevator, later after the meeting broke up, one of the Treasury lawyers asked me: “What law school did you attend?” They could hardly believe me that I had never gone to law school. I felt 10 feet tall!
(To be continued)
By Norbert Strauss
