Family Capital. Curtis Gregory

clients, often taking stock in lieu of legal fees, and otherwise simply buying the stock whenever they could do so.

      The clients of Knox & Reed, however, were of an older generation, men who'd built great fortunes in the second half of the nineteenth century. Jake wanted to represent the young men of the coming twentieth century who, he hoped, would soon be building new fortunes.

      While Jake didn't resemble his grandfather in many ways, in one way they were very much alike: both were astute judges of character. Jake seemed to know intuitively when a young man had the right stuff to build a company and when he didn't. And if the young man with the wrong stuff nonetheless had a good business idea, Jake considered it part of his legal duty to find men who could take the idea and run with it. Sometimes the young men kept an ownership interest in their ideas, but sometimes they didn't, and Jake rather quickly became known as a man who didn't hesitate to make hard decisions, a man not to be trifled with.

      When Jake died of cancer in 1945, he headed a small but very successful law firm. More important for his heirs, he owned important pieces of more than 30 companies, and he had nearly surpassed his grandfather in the accumulation of capital.

      The Extended Titan Family

      We won't need to know all the members of the Titan family down through the years, but we do need to know a couple of the family groups, as we will be observing them as they grapple with various investment issues.

George Titan Jr. and His Family

      Nearly everybody who met George Jr. remarked on the resemblance between father and son. George looked like his father and talked like his father. He moved and thought like his father. And consequently, it was no surprise that when it came time for George Sr. to step down as CEO of Titan Industries, it would be George Jr. who took over.

      Unfortunately, despite the superficial similarities between the two Georges, the younger man lacked his father's vision and creativity. Perhaps even worse, he lacked a partner like his mother had been to his father. George Jr. was married late in life to a much younger woman. It was a good marriage, but a very traditional one. Even worse, George Jr. became CEO somewhat prematurely, upon the death of George Sr., and, of course, the son no longer had the father around to mentor him.

      During the years that George Jr. ran Titan Industries, Pittsburgh's growth rate slowed considerably. In retrospect, Titan Industries should have expanded into more rapidly growing regions of the country, but George Sr. had kept Titan focused on Pittsburgh and George Jr. didn't see any reason to change that. As a result, instead of remaining independent and family-owned, Titan Industries would eventually be forced to sell itself, although this wouldn't become obvious for some years.

      George Jr. and his wife, Mary, had three children: daughters Ellie and Grace, and a son, George III. Ellie, named for her grandmother, died of typhus in her teens, but Grace and George III lived to adulthood. George Jr. was an older father and a largely absent one, spending most of his time at the office and the rest at the Duquesne Club, Pittsburgh's renowned business club. This had a particular effect on George III, who resented his father's absence from his life.

      Grace, however, proved to be a remarkable young woman. She seemed to most people to be a throwback to her grandmother, Ellie Titan, not so much in looks (she unfortunately resembled her grandfather, George Sr.) but in her lively personality and quick mind.

      Upon graduating from Pennsylvania College for Women, known as PCW, now Chatham University, Grace went directly to work for Titan Industries, intending to work her way up through the firm as her father had done. She started in the typing pool, but was quickly noticed by one of the junior executives and she moved up to be secretary to the assistant comptroller at Titan.

      After four years, Grace moved up again, this time to be secretary to the comptroller himself, an older, gentle, soft-spoken man, but also a very traditional male of that era. Much as he enjoyed having a secretary as competent as Grace, he was constantly telling her she was wasting her time working all day long and that she should focus on finding a man, getting married, and raising children. Grace, however, had little interest in these suggestions, and after several more years working in the comptroller's office she complained to her father about her slow progress in moving up the ladder.

      George Jr. was astonished by Grace's complaints – he, too, had wondered when she was going to settle down and start a family. Father and daughter had a long and awkward conversation about the role of women in the world and about the role of Grace in particular at Titan Industries, the result of which was that Grace quit in a huff.

      But she didn't quit to start a family; Grace quit to join a firm across town called Lawson & Dyer Engineering, known by everyone as L&D. She had majored in math at PCW, which offered no engineering courses, but she'd taken courses in mechanical and electrical engineering at the University of Pittsburgh.

      The men at L&D were bemused to encounter this young woman who was interested in an engineering career, and under most circumstances Grace would probably never have been hired. Why, the men at L&D would have asked, should a good job go to a young woman who didn't need it and who would probably quit after a few years to raise her kids, when there were so many men who needed to support their families?

      But L&D was growing so rapidly that they were willing to hire just about anybody, and Grace got her job. She stayed at L&D for 30 years, never marrying, and at the end retired as the firm's senior engineer. Along the way, L&D had merged with the much larger firm of Smythson Brothers – the very firm that would eventually acquire Titan Industries.

      The career of George III was not such a happy one. He joined Titan Industries, as expected, starting in the brickyard and working his way up. George III wasn't a particularly capable fellow, but he was willing to work, and under ordinary circumstances would probably have found a useful place for himself at Titan. But because his father was the CEO, George rose up through the ranks too fast – far faster and far higher than his limited capabilities warranted. This caused endless problems for Titan and, much more important for our purposes, endless problems for George III.

      Eventually, when Titan Industries was sold to Smythson-L&D, George was eased out of his role as a vice-president-without-portfolio and he never worked again. He did, however, continue to manage the family's liquid portfolio, with results that were, as we shall see, unfortunate.

Jake Titan and His Family

      Jake Titan turned out to be the most successful member of his generation in the Titan family, using his small law firm as a vehicle to build very significant wealth for himself. Along the way, however, Jake alienated many people in Pittsburgh with his hard-charging ways and he struggled to build his law firm because he found it impossible to delegate authority or to allow younger lawyers to have any significant responsibility for the management of the firm.

      As a result, it was Jake Jr., Jake's son, who actually built J. Titan & Partners into a serious law firm. Jake Jr. had begun his legal life working for a Pittsburgh law firm that competed with J. Titan & Partners. But when Jake Sr. became ill, Jake Jr. moved over to J. Titan and ultimately became one of its most dominant partners.

      The long hours at the law office didn't leave Jake Jr. much time for a social life, but he did finally marry just after World War II, and his son – and only biological child – Edward (Ned) Titan was born in 1948. Unfortunately, Jake's wife died in childbirth, leaving Jake as a single father. (From this point forward, “Jake” will refer to the son, technically Jake Jr.)

      This made Jake one of the most eligible bachelors in Pittsburgh, and mothers across the city were soon angling for advantage. Jake began to think that if he attended one more dinner party at which an eager, young, unattached woman happened to be seated next to him, he was going to scream.

      Then Jake did something completely unexpected – he courted and married an older woman, a widow named Margaret Ellison who already had four children of her own. Margaret was five years older than Jake and had settled into what she thought of as a permanent widowhood. When she realized the young lawyer was actually interested in her, she considered the matter to be little more than amusing.

      But Jake was nothing if not persistent. He bided his time, never pressing Margaret too hard, but never leaving her alone for too long, either. On Sundays they would have