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“It was a Dutch-uncle type of talk. It was cordial enough, but the Dutch-uncle aspect was there. We owed more money than virtually anybody in the country, and we owed it on very short terms. I tried once or twice to suggest how worried I was about the funding problem, hoping he might figuratively put his arm around me a little bit, but he didn’t do it. Prepare for all eventualities—that was something I didn’t know quite how to do. I certainly thought of strychnine or something of the sort.”

Then Corrigan sent Buffett out of the room so he could talk to Gutfreund and Strauss. “You have a problem with an employee in your firm,” he said, “that’s his problem. You’ve got a problem with an employee in your firm and you fail to do something about it, that’s your problem.”65 Then, with tears in his eyes, he told them how much he regretted ending their careers.

On the way out, while “Tom was in much more of a state of shock,” Gutfreund again seemed “quite composed.”66 He seemed to be blaming Corrigan for forcing him to resign. “I’ll be damned if I’m going to grant him absolution,” Gutfreund said.67 They rode back across downtown to Salomon, then went off to have a steak in a back room at Joe & Rose’s steak house on 49th Street. Strauss and Gutfreund insisted again that Meriwether had to go.68 They talked about the candidates for chief operating officer. Close to midnight, Buffett stumbled back to Katharine Graham’s apartment at the UN Plaza, and tried to sleep.

Later, many people wrote many things about why Buffett took the job. Some said it was his $700 million, and some said it was his duty to the other shareholders. “Somebody had to take the job,” he said. “I was the logical person.” Other than the people who were resigning, no one had more at stake. But it was not just the money, it was what he cared about just as much: his reputation. When he invested in Salomon and gave John Gutfreund his imprimatur, it was like nailing that reputation to Salomon’s door like a shield.

Buffett had told his children, “It takes a lifetime to build a reputation and five minutes to ruin it.” He thought of that risk primarily in terms of his own actions. Yet the people he had endorsed had put his reputation at risk. If he had made a mistake, it was to invest in Wall Street yet distance himself from it by relying on someone else; his judgment about Gutfreund’s ability to oversee the runaway culture of Salomon was flawed.

By this time Buffett was the second richest man in the United States.69 Berkshire’s per-share book value had grown by more than twenty-three percent a year for twenty-six years. His first group of partners had an incredible $3 million for each $1,000 they had put in. Berkshire Hathaway was trading at $8,000 per share. Buffett had a net worth of $3.8 billion. He was one of the most respected businessmen in the world.

At some point during that long, horrible Friday, he recognized with a sickening jolt that investing in Salomon, a business with problems over which he had essentially no control, had from the beginning put all that at risk.

He did not want to become interim chairman of Salomon. That way lay greater peril. If Salomon went down afterward, he would be even more closely associated with shame and disaster. But if there was anybody who could get himself and the other shareholders out of this mess, he was that person.

To do so he would have to extend the umbrella of his reputation, already at risk, even further to protect the firm. There was no way to avoid this challenge. Deryck Maughan and John Meriwether could not do it. He could not send somebody from Munger, Tolles, or Charlie Munger, or Tom Murphy, or Bill Ruane. He could not solve it by passing an idea along to Carol Loomis for an incisive article in Fortune. Even Big Susie could not solve this. For once, nobody could be his proxy. Only he could save Salomon. And if he walked away, the odds were high that Salomon would implode.

There is an old saying in the military: To advance, a general must expose his flanks.