Harry Lincoln Wollenberg

Introduction

Second-generation German Harry Wollenberg (born June 10, 1886 in Prescott, Arizona Territory; died July 1, 1979 in San Francisco, CA) helped found Longview Fibre Co., a manufacturer of paperboard, corrugated paperboard, and corrugated boxes, in 1926. For the next fifty-two years he built the company from one plant to twelve and increased the share price from five cents in 1926 to $350 in 1979 (that is, from roughly 60 cents to $1,050 in 2010 dollars).[1] The initial capitalization of $3.5 million grew into a company valued at $170 million by 1979 (or from $43.1 million to $511 million, using 2010 dollars).[2] Wollenberg stepped down from active management only in 1977, at the age of ninety-one. His journey from a wild, gritty mining town in the Arizona Territory to San Francisco’s Pacific Heights neighborhood led through California’s public education system, mining ventures in the wildernesses of Mexico and Alaska, electric power generation, explosives manufacturing, petroleum refining, and finally papermaking. Wollenberg’s talent and experience as an engineer gave him the skills not just to pull ore from the earth, but to learn and understand a variety of industrial processes and the business strategies that ruled them. His legacy includes the Wollenberg Foundation which supports the educational opportunities that made such a difference in his and his family’s lives.

Wollenberg’s father, Louis Wollenberg, a sixteen-year-old Jew from Gollub, West Prussia (now Dobrzyń in north-central Poland), stepped ashore from the Hamburg-America steamer Hammonia at New York’s Castle Garden on July 31, 1858. Louis’s motives for leaving home are not precisely recorded, but better economic opportunities seemed to motivate him all his life. Letters home from America allude to an unhappy four-year apprenticeship with a Herr Hamburger in Kosten (now Kościan, Poland). The Prussian practice of drafting eighteen-year-old boys into military service could have also been an inducement to migration. Once in the United States, he wrote in glowing words to his brother Aaron about the fertility of the new land, the freedoms its residents enjoyed, and the opportunities offered to all. His early travels took him to Kinderhook, New York where he dined with former U.S. President Martin Van Buren. Louis never explained how he came to visit Kinderhook, but he wrote home that the old man quizzed him about his native land. Mrs. Van Buren asked for a shilling for the meal.[3]

Louis earned enough in eight months to make his way to San Francisco, California, missing military service in the Civil War. He entered a series of business ventures over the next ten years in San Francisco, in the Nevada silver fields, and in Castroville south of San Francisco near Monterey Bay. Sometimes he made money, but most of the time he did not. In 1868, in San Francisco he swore allegiance to his new country and became a U.S. citizen.[4] By that time, he had to apologize in a letter to his brother for his imperfect German.

In 1872 in Castroville, Louis married fellow German immigrant Fannie Kalischer, started a family, and then, in 1874, followed other ambitious men to Prescott, the capital of Arizona Territory. His wife and their two young sons, Charles (b. 1873) and Albert (b. 1874), joined him in 1876. Louis dealt in hides, wool, and grain, supplying army posts and Indian reservations, and he first operated and was later employed in a general merchandise store. He became active in his community serving as a Republican in the territorial legislature for two years in the early 1880s. Friends of the Wollenbergs included Territorial Governor John C. Frémont and his wife Jessie. A business partner and neighbor was Michael Goldwater, founder of Goldwater’s Department Store in Phoenix and grandfather of U.S. Senator Barry Goldwater.[5] A daughter, Ernestine, was born in 1878. In 1880, young Albert Wollenberg was killed when he was crushed by a wagon; he was buried in the Jewish tradition with Michael Goldwater officiating in Yiddish.[6] A year later, the Wollenbergs had another daughter, Lucille (b. 1881), followed by a third daughter, Bertine (b. 1884). Harry Lincoln Wollenberg was born to Louis and Fannie in Prescott on June 10, 1886, the youngest of their six children. Although raised in a Jewish home, Harry Wollenberg did not remain with the faith and did not embrace any organized religion as an adult. He later told his family he wanted to keep his options open.

Louis’ business ventures never resulted in any great prosperity and the family moved to San Francisco in 1891. San Francisco was, at the turn of the twentieth century, the largest city on the West Coast and home to half the population of California. There Louis and his eldest son Charles worked in a pharmacy. Fannie worked, too. Charles entered the University of California across San Francisco Bay in Berkeley and secured a degree in pharmacy.[7] Harry grew up speaking English and acquired the speech patterns of San Francisco that had been imported by the many natives of Boston. He told grandson Rick Wollenberg (later president of Longview Fibre) that his first job was as a runner and courier for a jewelry store. The foil tape in the windows fascinated him and he tried to learn more by picking at it with a fingernail. This set off the alarm system and disabled the protection. Harry boasted that this was the first job he was ever fired from.[8]

In high school he earned the notice of educators and in 1902 was offered a scholarship to the University of California even before graduation. But Harry had an older sister, Bertine, who also wanted to go to college. Harry arranged to have the scholarship awarded to her.[9] This left Wollenberg without the means to pay for his education. According to grandson Keith Wollenberg, Wollenberg approached his high school teachers to allow him to take final exams early so that he could leave school and earn some money for college. Only the chemistry teacher refused. He insisted that Wollenberg complete the requisite labs. Wollenberg took the other exams and, still lacking a high school diploma, headed to Utah as an assistant paymaster on the Southern Pacific Railroad.

Wollenberg was already interested in engineering. He related later that while in Utah he talked a project engineer into doing some calculations for a bridge under construction. The engineer found Wollenberg’s work to be of such a quality that they used the rest of his figures to complete the job. Wollenberg observed, however, that a civil engineer on a railroad did not have much latitude for ingenuity and resolved to specialize instead as a mining engineer. Back in California at the end of the summer of 1904, Wollenberg completed the lab course needed for his high school diploma and then entered the University of California at Berkeley that fall. At U.C. Berkeley, Wollenberg was an athlete and a member of student societies. As part of his studies, he had to work in operating mines, which today we would call an internship.[10]

Early on the morning of April 18, 1906, an immense earthquake struck the San Andreas Fault and devastated the unreinforced brick buildings of San Francisco. Multi-story frame structures pancaked into the ground floor. Houses leaned at crazy angles or were shoved off their foundations. Railroad lines, roads, and fences dozens of miles away lay bent and twisted. San Francisco’s fire chief was one of the first to die and the leaderless firefighters found water mains useless. City Hall completely crumbled.

Nineteen-year-old Harry Wollenberg was at school in Berkeley and set out for home across the bay. All travel to the city was restricted and he could not even buy a train ticket to the ferry dock in Oakland. He managed to find a conductor who knew him from his railroading days and cadged a ride to the Oakland wharf. At the wharf soldiers prevented him from boarding a ferry to San Francisco, already obscured by smoke from the thousands of fires that grew from overturned stoves and kerosene lamps. A special train then arrived at the Oakland wharf from Sacramento with Governor George Pardee and his party. Amid the chaos Wollenberg had the presence of mind to slip into the official group and board the ferry to find his family.

San Francisco lay in ruins and fires consumed block after block of wrecked homes and businesses. The streets were blocked with piles of bricks. With no serviceable source of water, the surviving firefighters could do little. Wollenberg found the family home on Pine Street empty, so he pitched in to fight fires several blocks north in the Russian Hill neighborhood. He and his fellow volunteers managed to save several structures in the 1600 block of Taylor Street at Broadway, but much of the rest of the city perished in flames, including his family’s home. U.S. Army general Frederick Funston ordered troops into the city to assist with fighting fires, public safety, and relief of the victims. Soldiers used dynamite to blast fire breaks to prevent the fires from spreading. Mayor Eugene Schmitz (who would later be convicted of corruption) proclaimed that looters would be summarily shot.

Homeless refugees, some with only the clothes they wore in bed that morning, found safety in Golden Gate Park, a thousand acres of open space overlooking the Pacific Ocean. Harry’s older brother, Charles, had been working in city government and General Funston picked him to serve as Chief Civilian Aide to the United States Army for Civilian Relief. Charles set up his operation in the home of the park superintendent and moved his mother, father, and younger sisters in. According to Keith Wollenberg, Harry found his family there safe, sipping lemonade on the front porch. With everyone accounted for, Harry returned to Berkeley.

In June 1908, Wollenberg completed his studies in mining engineering and was elected to Phi Beta Kappa. The San Francisco Call declared him “one of the most brilliant students of the class of 1908.” He and his chum, Harry C. Klaus, promptly offered their services to an entrepreneur who had a proprietary process for extracting gold from ore. This job took the young men to the mountains of Mexico where riches awaited.[11] One location was an eight-day mule ride from the nearest city. Some of his colleagues were threatened by Yaqui Indians, but Wollenberg never saw any danger. This did not prevent the Call from proclaiming, “Berkeley Student Escapes Redskins.”[12] The enterprise failed and Wollenberg was paid enough money to get as far as Mexico City. Wollenberg learned much about mining and mechanization from the adventure. “It was a wonderful year’s experience,” he recalled sixty-five years later.[13]

Mining and Construction Career

University of California star quarterback Bartlett Lee Thane (class of 1899) took his mining degree and built a gold mining empire in Alaska in the early 1900s.[14] He returned occasionally to Berkeley to help out as an assistant coach and met Harry Wollenberg there. He frequently hired UC athletes for his mining operations including, in the spring of 1909, Harry Wollenberg, fresh from his adventure in Mexico.[15]

Southeast Alaska is completely different from the Mexican wilderness. It was hard by the sea, with a rainy climate, and long summer days. And there were no hostile Yaquis. Chains of mountains plunging into the Pacific alternated with long, narrow fjords that reached into the interior where gold deposits teased the engineers to dig and process the ore into profits. By 1911, Bart Thane controlled six gold mines in the region. Another entrepreneur built the Alaska Perseverance Mining Company and a stamp mill near Juneau using water power, but the flow was available only five months a year. When Alaska Perseverance fell into a morass of litigation against its English owners and between competing heirs, Thane went after that mine as well.

Thane wanted to build a two-mile railroad tunnel through a mountain to haul ore to the stamp mill, a larger stamp mill, and a source of electricity that would have a reliable source of water power and be available year round. Electricity had transitioned from an exotic convenience in the homes of the wealthy to a widely-used necessity for cities, business, and industry. Demand was high for current for streetcar lines, factories, streetlights, home lighting, and labor-saving home appliances. Kerosene lamps gave way to electric lights and Americans conquered the darkness. Industries typically generated their own electricity and sold excess power to local communities that did not have their own lighting plants. Thane envisioned supplying his mill with electric current and the rest to Juneau as a source of revenue.

Thane sought out financing from several capitalists, including Utah mining engineer and copper baron Daniel Cowan Jackling. Harry Wollenberg came up with a plan to supply Alaska Perseverance with year-round electric power for the stamp mill by building a concrete dam on Salmon Creek, which flowed into Gastineau Channel south ofJuneau. Jackling read Wollenberg’s plan and decided to invest. Thane, Jackling, and other investors incorporated the Alaska Gastineau Mining Co. in 1911.^[16]

Previous hydroelectric plants were “run of the river” models that were subject to the seasonal fluctuations in the water supply. During the seven-month-long dry season the generators did not turn, electricity was not produced, and no one made any money. To provide a year-round supply of power Wollenberg, now Thane’s chief engineer, designed a concrete, variable-arch dam 175 feet high and 648 feet wide on Salmon Creek to impound a lake. The double-arch design by Wollenberg curved into the reservoir both horizontally and vertically. The dam held all the elements in compression eliminating the need for steel reinforcing. This was one of the first dams of its kind since the Roman Empire to use the principle of an eggshell to hold back the river. It was the first dam to employ a constant-angle arch.[17]

The challenges of such a project are not to be understated. Every nut, bolt, nail, bag of lime, roll of copper wire, and can of beans had to be transported thousands of miles by ship to Gastineau Channel and transshipped to a narrow-gauge railroad up Salmon Creek. Wollenberg’s construction crews completed the dam in two years. The dam fed two powerhouses, one above the other, effectively using the water twice. Not only did the system supply current to Thane’s new stamp mills, but it also powered the railroad hauling ore, and lit the homes and streets of Juneau. In July 1912, Wollenberg’s mother and sister traveled by steamer from San Francisco to Juneau to pay him a visit and see for themselves the project he was just beginning. Salmon Creek Dam remains in use one hundred years later.[18]

Once the Salmon Creek Dam was completed, Thane wanted still more power. Wollenberg came up with a way to tap remote Annex Lake, 800 feet above sea level. He designed a concrete lined tunnel drilled 1,400 feet through solid rock, 200 feet under the lake. When more than a ton of dynamite blew out the bottom of the lake on February 15, 1916, the penstocks, generators, and power lines downstream were ready to carry current to Juneau eighteen miles away.

Wollenberg wrote:

The tapping of the lake under a 150-foot head of water, and saving the water, represents an engineering problem that is unique in the history of hydroelectric developments. Other lakes have been tapped and the water wasted, and some of shallow depth have been tapped and water conserved, but within the knowledge of the writer, no similar works of this magnitude was ever undertaken before.[19]

The mines and the community now had a reliable source of electricity. Wollenberg also designed and superintended the construction of the transmission lines that he arranged to “carefully eliminate all danger from snow slides.”[20] The transmission system did not prove to be as reliable as Wollenberg had predicted in its first months, but the powerhouse steadily generated power.

A New Life and New Ventures

In 1914, Wollenberg married Gertrude Arnstein in San Francisco.[21] Gertrude was from a San Francisco family prominent in the Jewish community and she trained as an artist. Family lore describes them meeting on a train and sharing dinner in the dining car. At the end of the meal, they agreed to meet again for breakfast. Each repaired to compartments in separate cars. Breakfast never happened. The sleeping cars were cut away from the train in the night and took different routes onward. The couple found each other again in San Francisco. Gertrude joined her new husband in Juneau and son Richard was born there in 1915. Gertrude captured scenes in oil of Juneau and southeast Alaska, paintings that remain in the family.

Wollenberg found that building a hydroelectric system was much more interesting than operating one and he became bored in Alaska. While in San Francisco on vacation, Wollenberg met Harry S. Kimball, the president of Remington Arms. Remington and other U.S. industries were keeping busy supplying the combatants of World War I in Europe with armaments. In addition to his duties at Remington, Kimball worked part time as president of Aetna Explosive Co., which had plants in Pennsylvania, New York, Michigan, Indiana, and Ontario. Aetna manufactured TNT, smokeless powder, and picric acid. The owners had expanded much too fast despite the wartime orders, ran out of cash, and the plants fell into the hands of receivers. Kimball was hired to keep things going.[22] Wollenberg, who knew how to use explosives, but not necessarily how to make them, was recruited by Kimball to help run Aetna. As Wollenberg put it, he got “into an awful mess.”[23] Aetna was put together quickly as a series of small operations in several states and Canada and had suffered a fatal accident before Wollenberg started. Workers worried that the accidents were German sabotage, but this was never proven.[24] In 1916, Wollenberg became general manager and found ways to increase production without too much additional investment.

In 1917, after the U.S. entered the war on the side of the Allies, the receivers petitioned the bankruptcy court to liquidate Aetna’s assets so they could recover their investments. Wollenberg appeared in court and told the judge liquidation was not necessary. The company could be restored to productivity and profitability and, besides, the troops needed explosives at the front. Wollenberg’s presentation persuaded the judge and he kept Aetna in business through the war. After the war, Aetna’s assets were sold to the Hercules Powder Co. and Wollenberg, finding himself not needed, looked for a new opportunity. Wollenberg’s work in Alaska and at Aetna had established him as a skilled engineer and a talented industrial manager. These jobs also brought him to the attention of capitalists and industrialists on the East Coast.[25]

The next opportunity came from the organizers of the Beacon Oil Company, some of whom had also been involved with Aetna. They planned to build a refinery to make fuel oil and gasoline in Everett, across the Mystic River from Boston. Refined fuel oil as a replacement for coal had gained popularity in homes and businesses and created a huge demand. Also, the automobile had put America on wheels and consumers grabbed up cars at astronomical rates. Automobiles needed gasoline, once regarded as a waste from the production of kerosene. The market for refining and marketing was wide open. The one-hundred-acre refinery in Everett had railroad connections, waterfront, and access to the markets of New England.[26] The capitalists recruited Wollenberg to build and operate the new plant. As president of Beacon, Wollenberg brought his knowledge of construction, industrial organization, and hazardous materials to the project. The organizers offered him a salary. He countered with an interest in the company. He got both.

With crude oil from Venezuela, the first fuel oil flowed from cracking towers in July 1920. Beacon sold oil to the City of Boston and various industrial customers. Its gasoline was marketed through Colonial gas stations. By the end of the 1920s up to four hundred Colonial stations with distinctive copper roofs dotted New England and New York. All was not happy for Wollenberg though. On May 1, 1919, Gertrude gave birth to a second son, James Roger in New York City. Two weeks later, at the age of thirty-five, Gertrude died.[27] This left Wollenberg with two motherless little boys. Gertrude’s sister, Mabel and Harry’s sister, Lucille, joined him in his home in Brookline, Massachusetts along with three servants.[28] By all accounts Gertrude’s death struck him very deeply. No one in the family ever heard him even mention her name and his sons grew up knowing little about her. Her one tangible legacy is a few oil paintings showing gray scenes of Alaska.

Beacon did well with Wollenberg as general manager. The company had its own tankers to bring crude up from South America and to deliver product up and down the eastern seaboard. At Aetna Wollenberg had had just one customer, the Allied war effort. At Beacon he had to learn to develop markets and customers and maintain customer loyalty.

One of Beacon’s fuel oil customers was International Paper Co. During the downturn in business in the early 1920s, International Paper broke the contract and failed to buy the product as agreed. Wollenberg and Beacon sued to fulfill the contract and the matter went to court. International Paper claimed that with the slump in the paper market it could not profitably produce paper so did not need the fuel. Wollenberg looked for a way to counter this argument.[29]

Through his late wife’s family in San Francisco, Wollenberg had met Monroe A. Wertheimer, president of Thilmany Pulp and Paper Co. of Kaukauna, Wisconsin. He was the only man Wollenberg knew in that industry. Wollenberg convinced Wertheimer to testify that paper was not perishable and could be manufactured without regard to market demand. Therefore, International Paper could have continued production and bought the fuel oil as agreed. In the end, Beacon did not prevail in the suit. Wollenberg offered Wertheimer an honorarium for his time and the paper man declined. Wollenberg told him, “If you ever need a favor, just whistle.”[30]

In 1925, Imperial Oil of Canada, a subsidiary of Standard of New Jersey, bought the stock of Beacon. The new company kept Wollenberg on, but he did not care to work in a big corporation. After about six months, he left the company and Boston for California “with a stake good enough to live on” as he put it fifty years later. “I didn’t want to live in the East.”[31] He found a ranch near Los Gatos, south of San Francisco, to bring up his sons and raise horses. Shortly afterward, he went on a vacation to sunny La Jolla, California, just outside of San Francisco, with his family. He ran into Monroe Wertheimer who was also vacationing there. Wertheimer called in the favor from the court case and prevailed upon Wollenberg to look at a business plan that he was considering that involved a potential venture with Kansas City businessman Robert A. Long, suggesting he might want to invest. A man of his word, Wollenberg agreed to take a look, a decision that had important consequences.

Corrugated Paperboard

In the late nineteenth century, lumberman Robert A. Long of Kansas City built the Long-Bell Lumber Co. out of the pine forests of the Midwest and the Southeast. As these stands of timber approached depletion in the early twentieth century, he began to explore new opportunities. The vast stands of Douglas fir, spruce, hemlock, and cedar of the Pacific Northwest still held decades of potential profits. Not only did Long want to build a logging operation and a lumber mill, he wanted to plan and found an entire city. He believed that social vices such as gambling and alcoholism thrived in many mill towns and wanted to create a town where these vices would be controlled—and, too, where he could make money. In 1919, soon after the end of World War I, Long began planning the town of Longview, Washington, on a site where the Cowlitz River emptied into the great Columbia. He named the city after his farm in Lee’s Summit, Missouri. The site offered room for a planned community and several industrial operations with easy access to rail and deep-sea shipping. The economic heart of the community was the Long-Bell lumber mill along the Columbia riverfront. But that one mill alone did not employ enough men to make the planned community viable.

In another development, scientists had invented a way to make use of the waste from lumber mills, which was just being burned as waste or for fuel. Spruce, fir, and hemlock are relatively pitch-free and could be an excellent feedstock for paper. With this process in mind, Monroe Wertheimer, of Thilmany Pulp and Paper, looked for a way to site a paper mill next to a lumber mill and its (conceivably) inexhaustible supply of wood. He began discussions with Long and in 1926 drafted an agreement under which the new company would buy waste from Long-Bell’s sawmill, steam from its boiler, electricity, and land for the paper mill. It was a win-win whereby Long-Bell would pull another industry to the growing town and had a way to profit from what was otherwise destroyed or discarded. Wertheimer offered Long stock in the paper mill.

Long’s only concern was the odors generated by the manufacture of paper. A pulp mill up the river in St. Helens, Oregon emitted sulfur dioxide that the neighbors in Longview could smell. Long did not want a smelly industry to detract from land values. A “smelling committee” from Kansas City went to the Thilmany mill in Kaukauna to evaluate the aroma of Northwest wood processed into pulp. The committee judged the results acceptable. Next, a sample of the smell was bottled and sent to Longview for a review by the head of development for the new Longview. He was not pleased, but he noted that the winds trended upriver most of the time and the stink would blow toward St. Helens.[32]

Wollenberg read the business plan and thirty-six-page agreement Wertheimer and Long had put together and did some homework. The next morning he tactfully told Wertheimer that the project was not his “cup of tea.” Wertheimer pressed Wollenberg for details, but the retired mining engineer and industrialist was evasive. It was all none of his affair, he told the paper manufacturer. “Monroe asked me then if I kept promises,” Wollenberg recalled in the 1970s: “When I said, ‘yes I did,’ he said, ‘alright, then, I'm whistling. I remember the promise you made to me back in Boston.’”[33]

Wollenberg explained to Wertheimer that he had discovered from the Standard & Poor’s directory that Long and his company were financially overextended. If the lumber mill should shut down, even temporarily, the pulp mill would lose its source of wood and would have to close too. Wollenberg knew nothing about making paper other than suing a paper manufacturer once, but he knew business and industry. The feedstock for the paper mill, waste from the Long-Bell lumber mill, and the electric power, were all dependent on a single source. Wollenberg had learned the lesson of a single source of supply the hard way when Beacon Oil in Boston got its crude from Venezuela. When the wells hit salt water, Beacon had to explain to customers, including the City of Boston, that it could not meet its contracts. He thought the land allotted for Wertheimer’s paper mill was too small, and, finally, he did not think that the division of stock was equitable.

Wertheimer saw the wisdom in Wollenberg’s assessment and worried that he had been overly optimistic in convincing his investors of the plan’s promise. Wertheimer pressed Wollenberg for advice and kept whistling. Wollenberg began investigating the paper business and concluded, that “a mill at this locality did have a good chance of succeeding, providing the right kind of a contract could be made with Long-Bell, even though there was uncertainty about Long-Bell’s ability to deliver raw materials indefinitely.”[34] Wertheimer and Long were scheduled to sign the contract in Kansas City, but by now Wertheimer was convinced he needed a new deal. Wertheimer pressed Wollenberg to participate in reopening negotiations. The parties gathered in a paneled room with R.A. Long, known for his irascibility, who sat at the head of the table under a portrait of himself. Attendees were cautioned against smoking in the man’s presence and to always offer deference and respect. Wertheimer opened the discussion with his inability to sign the contract as agreed. The paper men waited for an explosion from Long’s end of the table. But Long remained calm and took in Wollenberg’s analysis. The lumberman asked his guests to return to their hotel. If they did not hear from him by 1:30 p.m., they could consider the matter closed. It was then 11:30 a.m.

Long wanted more industry in the town to make his dream of Longview a reality. He needed the new company very badly. Having his name on the project made him more than just an investor. The lumberman called the paper men back in for more negotiations.

Wertheimer and Wollenberg got a larger site, a perpetual supply of wood, and a new stock arrangement. Wollenberg was still troubled by no direct access to a waterfront, but this proved groundless with the nearby Port of Kelso (later Port of Longview) and access to four transcontinental railroads. Wertheimer left Kansas City with a new deal. Wollenberg fulfilled his obligation to Wertheimer and looked forward to returning to his sons, his little ranch in the Los Gatos Hills, and his horses. But Wertheimer was not finished. Would Wollenberg like to invest, to join the company even? Wollenberg did not know anything about making paper. Who would run the mill? Wertheimer’s son Robert, a twenty-seven-year-old M.I.T. graduate. Yes, Wollenberg asked, but for how long? “For God’s sake,” Wertheimer pleaded, “take this over.”

Wollenberg threw out conditions he was certain Wertheimer would refuse, but the man from Kaukauna surprised him. Wollenberg would receive a salary, an investment in the company, and be able to run the plant in Longview from San Francisco. Wollenberg wanted the main office in San Francisco because that was where the markets were. San Francisco was the financial center of the western United States and had been replaced only in 1920 by Los Angeles as the region’s largest city. For industries in the Far West, having corporate headquarters far from the location of production was not unusual. Mills that processed timber and ore were built by eastern capitalists who preferred to remain close to financial markets and their customers. Managers ran things in towns like Everett, Tacoma, Seattle, and Longview. In the case of Longview Fibre the waste wood that became container board was in the Pacific Northwest. The consumers of container board and finished boxes were generally in the east. San Francisco was, besides being Wollenberg’s home town, the closest financial center and a logical choice to find customers.

Wollenberg was still not finished. The arrangement was something of a joint venture with Long-Bell and he did not like joint ventures. “If I’m going to do this it’s going to be separate,” he told Wertheimer. A second set of negotiations in Kansas City made Longview Fibre a separate company with long-term contracts to purchase steam, electricity, feed stock, called “furnish”, and other services from Long Bell. Wollenberg became president of Longview Fibre Co., Wertheimer was Chairman of the Board, and Robert Salz Wertheimer served as mill manager. Robert stayed until he died of a heart attack thirty years later. Wollenberg stayed fifty years. The company’s incorporation date was August 2, 1926.[35] Wollenberg’s caution around the joint venture and dependence upon one source of feedstock proved prescient. R.A. Long died in 1934 and his holdings fell into the hands of executors and heirs. The “separate deal” that Wollenberg insisted on was well-advised. The Long-Bell sawmill’s contribution of wood chips for paper declined until by 1956 it constituted only a few percent of Longview Fibre’s supply. By the 1960s, the sawmills in Longview closed entirely.[36]

Harry Wollenberg set about doing something he loved: planning, designing, solving technical problems, and building. He went to Kaukauna for a month and examined every aspect of the mill there to learn the paper business and its language. He found William Dodge, who he had worked with before, to do the steel and concrete work on the new plant. C.R. Seaborne, chief engineer at Thilmany, was loaned to Fibre to set up the processes to produce one hundred tons a day of kraft paper. The kraft process, invented in Germany in 1879, removes the naturally-occurring compound lignin from wood chips, leaving behind a pulp that can be processed into paperboard or containerboard, materials of superior strength to regular paper.[37]

R.A. Long’s Longview was still a work in progress so there were plenty of carpenters and other building tradesmen available in Longview. These men were hired by the day as hourly employees and they set about constructing a mill. Besides a mill, Wollenberg ordered a paper machine. The Seattle Daily Times reported under a Longview dateline:

A machine to manufacture light, good quality cardboard, believed to be the largest of its type ever constructed, has been ordered by the Longview Fibre company for its $2,500,000 project to be developed on the Columbia River front here, it was announced today by L. C. Peabody, office manager for the company. The order was placed this week with the Black & Clawson Company in Ohio and delivery is expected within six months… the machine will trim 133 inches in width and is expected to produce 100 tons of sulfate liner a day.[38]

Papermaking in those days was a craft practiced by craftsmen. Most mills did not even allow chemists in the factories. Wollenberg and the Wertheimers arranged to have papermakers from Kaukauna go to Longview and set things up. A good number of these craftsmen were itinerant in character with spotty work records. According to Richard Wollenberg, Harry’s son and successor as president, some were heavy drinkers. Robert Wertheimer put together a workforce to run daily operations.[39]

The papermakers “blew the first cook” in October 1927 and the slushy pulp was fed into Machine No. 1 shortly thereafter.[40] Longview Fibre was in business. Wollenberg had been busy finding customers for the containerboard that was replacing wood as the preferred means of shipping products. The West Coast market was still weak so most customers were in the east. One of the first and largest accounts was General Fibre Box in Springfield, Massachusetts, which made corrugated boxes. Wollenberg was able to ship product to Springfield by way of the Panama Canal more cheaply than by truck to Portland, Oregon, just fifty miles up the river. General Fibre built a special warehouse and crane to handle these shipments. In 1929, a competitor bought a similar plant in New England so Wollenberg offered to buy General Fibre Box from its owner, Clarence J. Schoo. Schoo sold out and stayed on as manager. With know-how from Schoo’s employees, Fibre built its own box plant in Longview next to the paper mill to construct boxes out of the containerboard.

Once Wertheimer and Wollenberg had spent the first $3.5 million ($43.1 million in 2010 dollars) put up by investors, Wollenberg went to bankers for additional debt financing. They agreed to help, but Wertheimer and Wollenberg had to personally guarantee the loans. After that, and perhaps recalling his own father’s struggles with debt and the difficulties at Aetna Explosives, Wollenberg was careful never again to take on any long-term debt.[41] Expansion at Fibre over the next years and decades was typically marked by the addition of new machines to produce new kinds of paper ranging from bags to towels to corrugated paperboard. The paper market remained strong in the early years of the Great Depression because corrugated paperboard was cheaper and lighter than wood. Fibre was able to strike some bargains for machines with manufacturers whose employees were idled by the hard times. By 1940, Machine No. 5 was under construction. Purchasing and installing a new machine was a major undertaking not unlike a new brand in an automobile plant. Some machines were dedicated to paper, some to containerboard, and some could perform both functions. These improvements allowed production of bags, towels, and asphalt-laminated, creped, and treated papers in addition to containerboard. Containerboard, or corrugated fiberboard, is not branded, but producers strive to meet specifications of customers as to size and quality.[42]

Longview Fibre had the lowest raw material cost in the world among its competitors and pioneered the use of sawmill residuals in the U.S.[43] Wollenberg was cautious about letting his ideas leak to the competition so, despite the company being publicaly traded and obligated to publish financial information, he did not issue annual reports. In 1943, an insurance company holding Fibre debentures wrote to Wollenberg requesting financial information. He replied:

I regret to have to advise you that the directors of the company have from its inception deemed it in the best interests of the stockholders that no financial reports be distributed. Of course the statutory requirements are served in financial reports [that] are available for inspection at the annual stockholders meetings.

I appreciate the fact that in good faith you have offered to keep confidential any reports sent to you, but the management must treat all stockholders and debenture holders alike.[44]

His strong sense of privacy and confidentiality lasted all his life. In 1974, Longview Daily News publisher John McClelland interviewed Wollenberg as part of his research for a history of Longview. Wollenberg still refused to discuss financial arrangements from the 1920s even though all the other parties were dead and McClelland showed him the relevant documents. In the early 1950s, Richard Wollenberg, working his way up in the company in Longview, prevailed upon his father to issue a public report. The first annual report came out in 1952 and documents the company history. Sales then stood at $41 million (or $337 million in 2010 dollars).

Longview Fibre’s Business Development

By the late 1930s, the U.S. and the West Coast began to shake off the Depression and markets for paper and boxes continued to grow. Several more machines were added at Fibre. To better supply citrus growers in Southern California, Wollenberg planned a box plant in Los Angeles along with one for a glass manufacturer in Oakland, California. He acquired land for the plants, but the Second World War put those plans on hold.

World War II was a time of trial at Fibre. Valued employees left for military service and better paying war work. Women came in to perform jobs once held only by men. Important employees received exemptions from the draft. Everything was in short supply from fuel oil to logs to the transport to get it all to the mill. Fibre supported the war effort not only with box material from five machines and containers from the box plant, but the company turned its machine shop into a subcontractor for Henry J. Kaiser’s shipyards on the Columbia River manufacturing machined items such as pipe manifolds. At one point the machine shop operated three shifts to fill all the “government work” orders.

One product that Fibre produced for the war effort was the cardboard covers of ration books, but the big demand was for V-board, heavy-duty packaging strong enough to endure shipment to battle fronts overseas that was used for everything from food to ammunition. Specifications for V-board were very precise and the managers at Fibre struggled to maintain quality with the high turnover in the workforce and the pressures of wartime production. The yard at Fibre was full of material that was packed on site and sent on to Liberty Ships and aircraft carriers, while additional V-board packaging was shipped to other customers for their use. The paper mill ran seven days a week. It was not unusual for men and women who made paper for eight hours to work another four hours in the box plant because they were short-handed. Employees often skipped vacations to keep the mill and box plant running. In 1943, Wollenberg had to require that workers take at least one week of vacation.

Richard P. Wollenberg served in the Army Air Forces and his brother James R. “Roger” Wollenberg served in the Navy. Even though he was in his fifties, Harry Wollenberg registered for the draft. In 1943 and again in 1944, the federal Office of Price Administration asked Wollenberg to come to Washington, DC and help manage the system of economic controls during the war. Wollenberg had already participated in meetings in Washington to resolve issues of war production, but found the time away from the office, often ten days or more at a time, and subject to being bumped off an airline flight by someone with a higher priority, to be a distraction from his duties at Fibre. He declined the job offers.[45]

Historically, most logging in the Pacific Northwest was on private land. The loggers bought old-growth forests often from railroads that had received vast land grants from the government to help fund construction of the transcontinental routes. As the logging crews pulled the last useable logs out they left behind “stump ranches” to regenerate as new forests naturally. Without some human intervention, this process could take 300 years. Often the taxes on these logged-over lands exceeded their value to the lumbermen who simply defaulted. Thousands of acres came up for auction by county tax authorities.

Wollenberg always looked for ways to improve things at Fibre whether it was locating a box plant close to a customer, identifying new markets, exploring a new technology, improving processes at the plant, or diversifying his source of wood supply or feedstock. He saw an opportunity to obtain a reliable source of wood instead of depending upon the waste generated by mills. Beginning in 1940, Fibre began buying up land in Washington and Oregon in these tax sales. Wollenberg planned them as tree farms. Foresters were just learning the best way for forests to grow as crops instead of being used up like mines and then abandoned. The Weyerhaeuser Timber Co. was a leader in this area and Wollenberg paid close attention. If the supply of waste wood or purchased logs fell short, Fibre could harvest its own lands for furnish. By the time Wollenberg left active management of the company in the 1970s, Fibre owned over 407,000 acres of woodlands. Fibre not only could provide its own feedstock, but could sell logs to lumber mills. These mills were then more likely to sell the wood chips back to Fibre than to a competitor.

The immediate post war years proved difficult because Wollenberg wanted to build those box plants and financing was tight because he did not want to rely on debt. Finally, the Los Angeles box plant opened in 1949, the Oakland plant in 1951, and a Seattle plant in 1953. In the 1950s, paper and containerboard manufacturing expanded across the nation and with scale and capacity up, prices fell. Fibre felt the pinch of competition, but with low costs and constant attention to improving efficiency, Wollenberg guided the company to profitability and regular dividends. Wollenberg’s avoidance of long-term debt contributed materially to this picture.

Through the 1960s, Fibre enjoyed good relations with organized labor which was represented by the International Brotherhood of Papermakers. To most employees Wollenberg was not nearly as well known as the plant manager, Robert Wertheimer, or Wollenberg’s son Richard, both of whom lived in Longview. Harry Wollenberg traveled by train to Longview form San Francisco about once a month and left day-to-day management to Wertheimer and Richard. Although Fibre did not operate a company town (there were other large employers in Longview and Kelso, two sawmills and an aluminum plant) the company had a reputation as a good place to get a job. Fibre gave preference to hiring sons and brothers and even daughters and wives of employees for temporary and even permanent positions.

The year 1948 saw the implementation of a retirement plan. Union representatives worked out labor contracts with management through the Pacific Coast Association of Pulp and Paper Manufacturers and Fibre experienced no labor troubles. In 1964, a new union, the Association of Western Pulp and Paper Workers, won recognition and began to press for higher wages. In November the new union launched the first strike in the industry’s history against forty-eight mills. Fibre workers were out eleven days while management employees maintained production. The company experienced other strikes in the 1970s.

Longview Fibre enjoyed a feature in its corporate structure not widely seen in industry: simplicity. With Wollenberg as president in San Francisco and a plant manager in Longview instead of an elaborate arrangement of vice presidents and departments the decision making process was direct and fast. The company could respond to changes in the business environment faster than the competition, which often made a difference. In 1985, Richard Wollenberg explained:

In 1960, we said that we really ought to have more security in our primary mill by converting a bigger portion of tonnage in our own converting plants. So, we said to Clarence Schoo, who knew everybody in the Eastern part of the industry, “When you see your friends in the industry and when you talk to the independents, feel around to see if someone wants to be acquired.” He was down in Augusta Golf Club when he ran into George Downing. He said, “George, we are looking for box plants. Do you know of anybody who's thinking of selling out?” George said, “How about us?” So, Schoo, H. L. Wollenberg, myself, and Jack Goldberg, our counsel from San Francisco, had a meeting. We had gotten their figures to study. The negotiation took about two hours. Our ideas were about thirty percent below a fair price; their ideas about thirty percent above a fair price, and we split down the middle. They left, we'd concluded the handshake, and were ready to go with the lawyers.[46]

Later Family Life

In 1926, Wollenberg moved from Los Gatos up to San Francisco. He found a house at 2760 Divisadero Street at the corner of Green Street in the fashionable Pacific Heights neighborhood. He knocked on the front door and offered to buy the home from the family. He also asked for most of the furnishings. The owners accepted. Wollenberg moved in with his two sons and his sister Lucille, known as “Dee,” and they hired servants. His horses went to the stables in Golden Gate Park and he was able to ride regularly. His son, Richard, learned how to muck out the stalls and care for the animals.[47] Wollenberg established a small sales office on the seventh floor of the Wells Fargo Building in downtown San Francisco. Once a month or so he took an overnight train to Kelso across the river from Longview and stayed a week looking in on things at the mill. Another of his sisters, Ernestine, acquired a lease from the U.S. Forest Service to three building lots on Echo Lake in the Sierras near Lake Tahoe. She built a cabin on the middle lot and the Wollenbergs enjoyed many quiet vacations there. Harry Wollenberg loved to canoe and row. At one point the Forest Service insisted that Ernestine build on all the lots. Wollenberg undertook to design and build by himself a one-room cabin on one lot. This became the “Men’s Ward” where women were permitted to visit during the day, but which was for men only overnight. Sleeping accommodations in the Men’s Ward consisted of three-sided cubicles outside. Besides his horses, the quiet vacations at Echo Lake were Wollenberg’s main indulgence.

The Wollenberg origins in Germany reached out to touch the family on the eve of World War II. In 1929, Charles Wollenberg, a leader in the Masons, was photographed in his regalia setting the cornerstone to the Alameda County Courthouse in Oakland. Ten years later the photo found its way to Adolf Hitler’s propaganda ministry. The image was republished in a Nazi Party newspaper as a “sensational exposure of the dominating force of Free Masonry in America.” An elderly Jewish woman in Berlin saw the photo and wondered if this was connected to the story of a relative named Louis Wollenberg who went to America. She still had letters dating from the 1860s. She wrote to a contact at the University of California and enclosed a photo of Louis Wollenberg and his young bride. Harry and Charles Wollenberg were easy to find. With Harry’s help, the relatives found a safe haven in South America before the darkness of the Holocaust fell across Europe. Louis’s letters to Germany from America made a full circle back to the Bay Area and were collected into a book that was privately published.[48]

Harry’s sons Richard and Roger both married and together gave Harry ten grandchildren. Roger became an attorney and clerked for Supreme Court Justice William O. Douglas. Afterward he practiced law in Washington, D.C. Richard stayed with the company in Longview. Wollenberg’s grandchildren remember a happy grandfather who always had a great story. When asked if he would write down some of his experiences he replied that once written down, the stories could never be changed. Granddaughter Meredith Morrison recalled that Wollenberg gave a nickname to each of his granddaughters and even his granddaughters-in-law such as Mis-Le-Tow, My Cane, and VKG (very kissable girl).

Longview Fibre continued to thrive, but Wollenberg maintained the corporate goal of generating a long-term increase in earnings per share rather than size. Even when sales lagged, the company earned money. Wollenberg held onto the job of president until January 1969 when he agreed to assume the newly created job of chairman and CEO. Richard became president. Every day thereafter, Harry left his home in Pacific Heights, walked to a bus, and rode downtown to the office. As his hearing faded, he joked with his grandchildren that he had the perfect hearing aid, he just kept talking. At Echo Lake one summer, he took a tumble on one of the many granite outcroppings. He sustained a serious cut to the head and was treated in nearby South Lake Tahoe. Seeing this as an indication of advancing age, he never returned to the cabins and the lake. He left behind a 1918 rowboat and a 1926 Old Town sailing canoe as well as his Men’s Ward cabin. (The property remains in family hands and the buildings and the boats are all still there in 2013.)

Only in January 1978, at the age of ninety-two, did Harry agree to step aside and allow Richard to assume the position of CEO.[49] He continued to ride a city bus to the office every day. He lived alone in the house in Pacific Heights and a cook came in to prepare his meals. On Sunday evening, July 1, 1979, the cook arrived at the Wollenberg home and found Harry there, dead. Near him were old home movies that he had apparently been holding up against the light to view shots of his late wife. He was ninety-three.

At the time of Wollenberg’s death, Longview Fibre had some 3500 employees and over 406,000 acres of tree farms. Many original investors still held their positions. Thanks to stock splits original owners of a single share of stock worth $10 in 1926 ended up with 200 shares worth $350 each by 1979 (an increase in value from $123 to $210,000 in 2010 dollars). Starting in the 1960s, the company began buying back shares, which made the stock attractive to institutional investors. The year 1979 saw $335.5 million in sales ($1.01 billion in 2010 dollars), $38.9 million in profits ($117 million), and dividends of $33.60 a share (approximately $101). Six months after Wollenberg’s death, the Seattle Times described Fibre as “long noted as one of the most closed-mouth” in the forest products industry.[50] In 2007, Brookfield Asset Management of Toronto purchased Longview Fibre for about $2.15 billion including about $500 million in long-term debt. After eighty years, management of the company passed out of the hands of Harry Wollenberg’s family.[51]

Philanthropy

Wollenberg was always mindful of how he and his family had benefitted from the excellent, low-cost education they all received at the University of California. His older brother Charles graduated from Berkeley and rose to manage public health programs in San Francisco and later to head public health in California. Sister Ernestine worked as a journalist. Harry’s connections from UC led to his jobs in Mexico and Alaska. It was natural that one of his philanthropic efforts was to fund scholarships at UC for deserving students. Before his death, Wollenberg endowed a foundation to fund scholarships. One third of his will further benefitted the foundation. At that time, 1979, the foundation had a value of around $10 million, the equivalent of $31 million in 2011. The Wollenberg Foundation has grown and continues to provide funding for charitable organizations, with a primary emphasis on education.

Conclusion

Harry Wollenberg’s career was marked by taking skills learned in one position and using them in the next job where he continued to learn. The mining expedition to Mexico and his acquaintance with Bart Thane led to the Alaska experience and the management of complex industrial organizations. Always a builder rather than an operator, he gravitated to new challenges. Aetna Explosives showed him how not to run a company and how rapid expansion could be destructive. What exactly attracted him to organizing Longview Fibre, he never precisely revealed, but his background gave him every skill and lesson needed for the enterprise. Much of Fibre’s corporate personality could be traced to something Wollenberg had already seen and done. Letters written by Wollenberg to Fibre officials show meticulous detail in discussing issues whether technical or commercial.

Serving as president for forty-three years, Wollenberg’s personality and experience imprinted business at Fibre from a penchant for confidentiality to his abhorrence of debt. It all showed in the size and stability of the company at the time of his passing. Examples of Wollenberg’s German and Jewish roots are not immediately visible. Like most immigrants Louis Wollenberg embraced American society, which in the Far West was a blank slate relatively free of concern over a man’s history. Harry Wollenberg’s upbringing and life were entirely American.

Notes