Blenheim Partners Anthology September 2018

John F. KennedyBlenheim Partners’ Anthology

J.P. MORGAN J.P. MorganWho was J.P. Morgan?John Pierpont Morgan was born 17 April 1837 in Hartford Connecticut to Junius SpencerMorgan and Sarah Pierpont. Morgan came from a well-off family, his father owned part of alarge mercantile house in Hartford which advanced to a larger one in Boston, and he laterbecame Partner, then successor to the wealthy George Peabody – American Financier andPhilanthropist. Morgan received his formal education in Hartford, Boston, VeveySwitzerland and the University of Gottingen. As a teenager, Morgan became seriously ill andsuffered seizures, resulting in him spending long periods of time at home. This is when hisfascination with the arts began.At the age of 20, Morgan began his career as a clerk in Duncan. Two years later whilestudying sugar and cotton markets in the Caribbean, he bought a cargo of unwanted coffeeand put the draft in the company’s name without authorisation from his employers. Theycomplained at first, but happily accepted the profits when the coffee was wholesaled inNew Orleans.In 1860, Morgan set up his own company. He had plenty of business from his father inLondon and took advantage of opportunities to buy and sell in the booming city of NewYork. In 1861, he married Amelia Sturges, who was in the advanced stages of tuberculosis.At this point, Morgan gave up all commercial activities and took his stricken bride to Algiersand then Nice, hoping to find a cure. In 1862 he returned to the United States a widower.Morgan then formed a partnership with his cousin Jim Goodwin and called the firm J.P.Morgan and Company, Bankers.

During the partnership it was claimed that Morgan selfishly pursued profit during the CivilWar, trading gold against the Governments fluctuating greenbacks. On one occasion, hebought obsolete arms from the Federal Government in the East and then sold them toGeneral John C. Fermont in the West for an enormous profit. Morgan never apologised forhis actions, but it is argued that two other men arranged the arms affair, and that Morganwas only involved as their banker.In September 1864, he took on new partners and named the company Dabney, Morgan andCompany. At 27, he was a financial leader in the largest U.S. city. He also launched his careerin philanthropy, helping to raise money for the wounded and widowed, and established theYoung Men’s Christian Association (YMCA).In 1865, he married Frances Tracy, one of the six daughters to attorney Charles Tracy. TheTracy’s were fellow communicants of St. George’s Episcopal Church in Bowery, whichMorgan joined in 1861 and attended for the remainder of his life. Frances and Morgan hadfour children Louisa, Juliet, Anne and Jack. Jack took over his father’s business many yearslater.In 1879, his career took a leap forward when William Vanderbilt approached him about thesale of 250,000 shares of stock in the New York Central Railroad. Morgan pulled off thetransaction without driving down the share price, and in return, secured a seat on the NewYork Central Board of Directors. The following year, he fronted a syndicate that sold $40m inbonds to finance the Northern Pacific Railroad, the largest transaction of railroad bonds inU.S. history.In 1885, Morgan arranged a meeting with the feuding Directors of the New York Central andPennsylvania Railroad aboard his yacht, the Corsair. As they sailed up and down the HudsonRiver, Morgan made it clear that the yacht would not return to port until they reached acompromise that fostered suitable competition. The executives eventually agreed to theterms.After the death of his father in 1890, Morgan’s career and life took another turn. Hearranged the merger of Edison General Electric and Thomson-Houston Company to formGeneral Electric in 1892. He also continued expanding his already impressive collection ofvaluable works.Morgan’s power truly came to light in the Panic of 1893 when the U.S. gold reserves becameseriously depleted. Morgan formed a syndicate of international investors willing to supplygold in exchange for a favourable rate on 30-year bonds. He then reassured a scepticalPresident, Grover Cleveland by citing an 1862 statute that gave the Secretary of theTreasury the power to pull off such a transaction without congressional approval. In early1895, the syndicate bought and quickly resold the bonds, stabilising the shaky economy.Morgan’s firm, which is now J.P. Morgan & Co became a major player in the steel industryby financing the formation of Federal Steel in 1898. Three years later, after purchasing

Andrew Carnegie’s steel company for nearly $500m, Morgan merged the entities into U.S.Steel, which created the first billion-dollar corporation.In 1907, Morgan was again called to aid the U.S. Government in the grips of an economicpanic. Seeking to stabilise a series of collapsing trust banks, he called several bankPresidents to his Manhattan library, and, similar to what he did previously in hisCorsair meeting of 1885, locked the door until a solution could be reached. Morgan endedthe stalemate by drawing up a bailout contract and ordering the exhausted Presidents tosign.In 1913, Morgan set sail travelling on an overseas voyage. At this point his health steadilydeclined, and he died in Rome, Italy, on March 31, 1913. To commemorate his passing, theNew York Stock Exchange remained closed until noon on the day of his funeral.J.P. Morgan transformed the finance industry and left behind a powerful legacy. His namelives on into the 21st century through JPMorgan Chase & Co, which was formed as a result ofmergers of several large U.S. banking companies including Bank One and Chase ManhattanBank. He bailed out the U.S. Treasury not once but twice, spurring the creation of theFederal Reserve System.“No problem can be solved until it is reduced to some simple form. The changing of avague difficulty into a specific, concrete form is a very essential element in thinking”.J.P. Morgan was well known for problem solving in difficult situations. Famous examplesinclude the meeting between feuding railroad Directors in 1885, and when he assisted theU.S. Government in 1907. In both situations, Morgan simplified the issues and forced theparties to come to an agreement.“Go as far as you can see; when you get there, you’ll be able to see farther”.J.P. Morgan’s power grew due to an unusual combination of boldness and good sense,ruthlessness and responsibility, which made up his complex personality. The failure of theAmerican people, between 1836 and 1913, to have any sort of central bank created rareopportunities for investment bankers with strong connections to foreign centres of capital.Despising waste, inefficiency, and conflict, Morgan used his growing financial power toimpose order on the railroad and steel industries, reducing competition. Democrats alsofeared the growing power of rich men who appeared responsible to no one but themselves.Thus, Morgan stirred up controversy and antagonism; yet, at his death in 1913, he left alegacy of responsibility in business and civic affairs and a priceless collection of art for theenjoyment of millions.

HAVE AUSTRALIAN UNIVERSITIES LOST SIGHT OF WHAT THEY ONCE STOOD FOR? Benjamin DisraeliThe question as to whether Australian Universities have lost sight of what they once stoodfor, is not a simple yes or no answer. Universities have changed significantly in the last fewdecades, but does this mean they have lost their way in what they first set out to achieve?This report will firstly explain the history of Universities globally, and then discuss thequestion surrounding Australian Universities.University – Past and PresentA University if defined as an institution of higher (or tertiary) education and research whichawards academic degrees in various academic disciplines. The word “University” is derivedfrom the Latin words universitas magistrorum et scholarium, meaning “community ofteachers and scholars”. While qualifications had existed in Asia and Africa, the modernUniversity system has roots in the European medieval University, which was created in Italyand evolved from Christian Cathedral schools for the clergy during the High Middles Ages.The purpose of the early University system was to be learning grounds. Academics wouldcome together and share their knowledge, learn and undertake research to makeimprovements for their society. Universities were seen as a community, as the people thatwere attending or staff at the institution shared common interests which satisfies thedefinition of a community.Universities are still a place of learning, sharing knowledge and research is still conducted.However, they are also now a business, so is their main aim still to provide the highestquality education and research, or is it to raise capital?

University as a businessAs government funding is continually being cut for Universities, they are becoming moreand more independent. Consequently, they are becoming more dependent on studentfunding and other forms of funding. Many of Australia’s Universities hold the strongestcredit ratings in the world, therefore they are in a strong position to access debt marketsand issue bonds. It is known that in recent years many Australian Universities have movedbeyond the traditional Government and bank-funding models and pursued corporate-stylefunding arrangements through debt markets. This means that there is a large part of theUniversity that is purely for the growth of the business, not education. UnderstandablyUniversities, like any business must generate revenue to pay employees and ensure theycan fund projects but investing in overseas markets is extremely complex and has somewondering how they can focus on education and run a highly complex business.The loss of the University community through online educationA new type of University has emerged over time with the aid of technology, and that isonline Universities. These Universities have been created for a market of students that maylive too far away to attend Universities or because they need flexibility to accommodatefamily or work commitments. But they were also created to be beneficial for Universities aswell. Many cost saving advantages result from courses being run entirely online, such as nothaving to pay for classroom staff and reducing facility costs. Many Universities that havephysical campuses are beginning to offer many degrees online.A question that weighs on many people’s minds in the education industry is, how longbefore all tertiary education is online? Even the courses that are still ‘on-campus’ havechanged drastically in recent years. Many courses no longer include a traditional lecture andtutorial structure. They now offer ‘tutorials’ in a workshop format where there are usually60 students in the class being taught by one tutor, and instead of a lecture, students arerequired to complete pre-class study themselves. Less face to face time and larger class sizescan be viewed as a cost saving exercise, but is it benefiting the students in the classroom?The role of the physical campus cannot be underestimated. As stated by Bruce Dowton,Vice Chancellor of Macquarie University, “People need physical proximity to belong in acommunity and have effective communication”. So, the deeper question is whether offeringmore online learning is to allow students more flexibility or if it is purely cost saving, or acombination of both.University as a teaching groundUniversities are still a teaching ground, evident through the creation of policies and furtherentry pathways to enable a fairer education system for students and potential students.Students wanting to attend University that have not received a high enough mark or whohave not finished high school can undertake a program for a year to gain entry intoUniversity. A few decades ago, this was not an option for students, but it provides morepeople the opportunity to complete a tertiary education, subsequently allowing greatercareer choice.

The aim of Universities to still provide high quality education is further highlighted throughthe creation of provisions for disabled students, allowing the opportunity to gain a tertiaryqualification. This has been enabled by dedicated education departments established inUniversities, allowing some students extra exam time or a one on one exam.The loss of prestigious statusThere is also now the question as to whether a University degree has lost its prestigiousstatus. Attending University was previously viewed as highly prestigious and having abachelor’s degree demonstrated high intelligence and discipline to employers as gainingentry into and completing University was not easy. However, in recent years, entry markshave significantly decreased for some courses. Was this to make education more accessiblefor students, or was it to allow more students to attend University and ultimately pay forthe expensive courses? This practice could be highly damaging to the status of Universitiesand to those students gaining a degree from University. Without the challenge of gettinginto University, a student’s degree has lost value in the eyes of future employers and for thestudents themselves.There are also many cases of the classic supply and demand practice, if not enough studentsapply for a course with the required marks, the people who didn’t achieve the marks butapplied will still receive an offer to fill empty places. A higher course entry mark usuallymeans that there are not many job positions in this field of study. Therefore, those that didnot achieve a high enough mark for entry to the course may struggle greatly to findemployment upon competition of the degree. Consequently, they will become one of themany students that have an enormous student debt for a degree they cannot use.Loss of world class education in Australian UniversitiesAnother issue that has come to light is that some employers do not believe graduates arewell equipped with all the skills required for the workforce after University. Some leadingemployers from large companies are now choosing to hire graduates from the end of year12, instead of hiring graduates who have just completed a Bachelor’s degree. The reasoningbehind this is that employers are finding too many gaps in what students have not learnt atUniversity to be job ready. This is found predominantly in businesses that are heavily basedon technology, as University students may not have had exposure to the newest technologyor what may have been relevant in the first year of a four-year degree may not applicable bythe time students are ready to graduate.The main aim of attending a University is to learn and gain a qualification to ultimatelyobtain employment in an area of study. A survey from graduates revealed that 27% ofgraduates felt they were not well prepared for job search when they finished their studies.University a place of researchUniversities are still highly research driven with an aim to make significant improvementsfor society. University enterprise agreements allow all academic staff of a University theright and opportunity to have dedicated research time. Most Universities operate with a

40/40/20 system, allowing academics to devote 40% of their time to research, 40% to teachand 20% to administration work. The cost of research can be expensive, and while there isGovernment funding for research, in recent months funding has been cut from the FederalBudget. With research projects still continuing, it can be understood that Universities wantto give back to society and not just keep all profits for their own gains. Examples ofAustralian University research projects that have had significant impacts include TheUniversity of New South Wales established the world record for conversion efficiency forsilicon solar cells in 2014, University of Queensland developed the cervical cancer vaccine,and University of Adelaide discovered ground-breaking treatment for sinusitis.In conclusion, the question as to whether Universities have lost sight of what they oncestood for, still lingers. It is clear Australian Universities have a few major issues, but there isstill evidence supporting that they are still doing what they set out to. Only time will tell, andfuture changes will reveal the true aims of Universities.

ABRAHAM LINCOLN – FAILED ALL THE WAY TO PRESIDENCY Abraham LincolnAbraham Lincoln was a self-taught lawyer, legislator and the 16th President of the UnitedStates. He preserved the Union during the American Civil War, and brought about theemancipation of slaves. Lincoln was well known for his ability to persevere and not quitduring tough times and would not take no for an answer. He overcame various hardshipsduring his life, indicating his strong sense of determination.Lincoln was born on the 12th of February 1809 in Hodgenville Kentucky, to Thomas andNancy Hawk Lincoln. He was born into a family of complete poverty and faced a toughchildhood which saw the family move frequently in the first few years of his life. In 1816,Abraham and his family were forced out of their home and Abraham had to work to supporthis family. In 1818, his mother passed away after battling with a disease known as “milksickness”. A year later, his father Thomas remarried Sarah Bush Johnston. Albeit Abrahamand his father did not have a close relationship, young Lincoln and Sarah formed a loving,supportive relationship which continued throughout their lives.In 1830, Abraham and his family moved to Illinois, where he performed odd jobs includingflat boating goods to New Orleans. A year later, he was a Partner in a store which failed andovertime he spent many years repaying debts.In 1832, Abraham met a man who would change his life in many ways – John Todd Stuart.The pair both ran for Illinois General Assembly, which Stuart won. However, two years laterAbraham ran again, this time he won. Stuart showed Abraham the ropes as well as loanedhim law books, which helped Lincoln receive a license to practice law in 1836. During thistime, Abraham was engaged to Ann Rutledge who passed away. In 1836, he had a nervousbreakdown and was in bed for six months straight, until he decided to get back up and“never give up”.

In 1838, Abraham attempted to become speaker of the state legislature and failed, twoyears later he sought to become the elector and failed, three years later he ran for Congressand failed. In 1846, he was finally elected into the U.S. House of Representatives, where hegave the infamous “Spot” speech about where the war began in Mexico. In 1848 he did notrun for re-election to Congress, but for the first time in history, his home district elected aDemocrat instead of a Whig. He spent the next several years focusing on his law practice tosupport his growing family. At this point, Abraham was married to Mary Todd Lincoln andthey had four children.Although Lincoln did not seek office himself during these years, he remained active in theWhig Party, counselling candidates who sought his advice and in 1854 was campaignmanager for Richard Yates who was running for the General Assembly. At the same time, heran for Senator which he desperately wanted however, in 1857 his hopes were dashedwhen the vote was taken. Although he lost his chance to become Senator, he never gave upon politics. Instead, he began engaging in a legendary series of debates across Illinois withStephen Douglas, the author of Kanas-Nebraska Act on the issue of expanding slaverybeyond the states where it existed. The debates attracted national attention and Lincolnwas invited to speak in other states. This subsequently led to the Republican Partynominating him as their presidential candidate in the 1860 election.Lincoln won every Northern state as well as California and Oregon. Although he failed to winmajority of the popular vote in this drawn-and-quartered election, he won enough electoralvotes combined (180 compared to 123 for all his opponents) to become the 16th President.In 1861, not long into Abraham’s presidency, the Civil War began. As he knew little aboutmilitary affairs, he undertook self-education and read books on military history. The wardragged on and at the time of presidential elections in 1864, the war had resulted in tens ofthousands of causalities. Despite this, Lincoln was re-elected as President.On 9 April 1865, General Robert E. Lee surrendered the Confederate army following theAppomattox Campaign which ended the Civil War. To celebrate the end of the war, Maryand Abraham attended Ford’s Theatre to watch a comedy on 14 April. During theperformance an actor and Confederate sympathiser slipped into the presidential box andshot Lincoln. The President was pronounced dead on the morning of 15 April 1865 due to agunshot wound to the head. Lincoln was laid to rest in Springfield, Illinois.What can we learn from Abraham Lincoln?Abraham did in fact “fail all the way to presidency”, he failed until he succeeded every bumpin the road. Abraham is regarded as one of the most perseverant people to walk this planet.An ordinary person may have given up on day one, but Abraham continued from the age ofnine, all the way to old age to fight to overcome and succeed in his aspirations. Truedetermination.

As stated by Lincoln, “I am not concerned that you have fallen, I am concerned that youarise.” Abraham had resilience to overcome adversity and the challenges he endured whentransitioning from poverty to presidency. Despite the challenges he faced, he managed toconquer every hurdle and made a difference to the lives of many Americans. He has been arole model for many heads of state.

A DIGEST OF ONE LEADER’S KEY COMPONENTS OF SUCCESSFUL LEADERSHIP • At the very beginning ensure that you are really clear on what success means and looks like • Through it all and everything you do ensure that you are being true to yourself and your values/ethics • Leaders never achieve something on what they personally do – they simply don’t have the bandwidth to • Success is achieved by having people alongside you that share the vision, share the commitment and want to work with you and want to achieve that common goal • So, the aim is to gather people around you who: o Are committed to the task o Have the capabilities necessary to do their tasks; and o Work together towards the common goal • To get the best out of your people you need to set an environment of support by education and training and by inspiration and commitment to enable them to bring forth the best of what they have to give • Helping others develop their own careers is an essential component of generating loyalty, commitment, effort and engagement • Success is deserved and earned. The fundamental thread is doing the job better than anyone else, which can be observed in better effort, better application etc • Integrity of leadership where people feel that they can both trust you as the leader and believe in your judgment • An openness of style that encourages and provides the opportunity for people's to comment and contribute to the vision for the future and the journey along the way is an enormously important process to achieve that goal • A willingness to take risks and be entrepreneurial