The Snowball_ Warren Buffett and the Business of Life - Alice Schroeder [153]
Susie Jr., Howie, and Peter were sitting at the kitchen table one evening when their father came in, looking more depressed than they had ever seen him. “I’m going to Grandma’s house,” he said. “Why?” they asked. “Aren’t you going to the hospital?” “Grandpa died today,” Warren said, and walked out the back door without another word.
“I thought, we don’t want to talk about this,” Susie Jr. recalls. “This was going to be so big that talking about it was too painful.” Big Susie represented the family in planning the funeral, while Warren sat at home, stunned into silence. Leila was distraught, but she anticipated her reunion with her husband in heaven. Susie tried to get Warren to explore and express his feelings about his father’s death, but he literally could not think about it, fending it off with anything else available. Falling back upon his core of financial conservatism, he argued with Susie that she had been conned into spending too much money on Howard’s coffin.
On the day of the funeral, Warren sat in silence through the service as five hundred people mourned his father. No matter how controversial Howard Buffett’s views had been during his life, people came out to show respect for him in the end. Afterward, Warren stayed home for a few days.55 He parried unwelcome thoughts with the distraction of watching Congress debate landmark civil rights legislation on television. When he returned to the office, he continued buying American Express at a hectic pace. By the end of June 1964, two months after Howard’s death, he had put almost $3 million into the stock; it was now the partnership’s largest investment. Although he never did show any visible sign of grief,56 eventually he placed a large portrait of his father on the wall across from his desk. And one day, weeks after the funeral, two bald patches appeared on the sides of his head. His hair had fallen out from the shock.
27
Folly
Omaha and New Bedford, Massachusetts • 1964–1966
Six weeks after Howard died, Warren did something unexpected. It was not just about money anymore. American Express had done wrong, and he thought that the company should admit it and pay for the damage. The company’s president, Howard Clark, had offered the banks $60 million to settle their demands, saying the company felt morally bound. A group of shareholders sued, arguing that American Express should defend itself rather than pay. Buffett offered to testify on behalf of the management’s plan to settle, at his own expense.
“It is our feeling that three or four years from now, this problem may well have added to the stature of the company in establishing standards for financial integrity and responsibility which are far beyond those of the normal commercial enterprise.”
But American Express wasn’t offering the money to be an example; it just wanted to get the risk behind it of losing a lawsuit that was shadowing its stock. Nor did its customers care; the salad-oil scandal hadn’t registered with them in the first place.
Buffett wrote that two paths lay before the company, and that an American Express that took responsibility and paid the $60 million to the banks would be “worth very substantially more than American Express disclaiming responsibility for its subsidiary’s acts.”1 He described the $60 million payment as inconsequential in the long run, like a dividend check that got “lost in the mail.”
Susie, who had thrown the dividend checks down the incinerator and had never had the nerve to tell her husband about the incident, might have been shocked to hear him so cavalierly dismiss a $60 million dividend check lost in