The great migrations of the nineteenth and twentieth centuries from Europe to the Americas are well-known, the United States rather than Latin America being the place that attracted most of the millions of migrating Europeans. The common factor motivating this immigration was the desire to achieve a qualitative improvement in standard of living through the acquisition of wealth and fortune.
This drive for change and adventure is Clayton’s theme in his account of the life and work of William Grace Russell (1832-1904) and the company he founded. Here is “an example of courage and constancy”, to use the words Professor Jorge Ortiz Sotelo employs in his introduction. This Irish emigrant, in escaping from the hunger of Ireland, went on to construct a great multinational enterprise that spanned the United States and Latin America.
This story of a man and of a business, published in its first edition in English in 1985, ranges from 1850 to 1930. It includes both the biographical element, taking us through the founding and evolution of Grace and Co., as well as the wider framework of the central role this company played in the process of economic modernisation not just in Peru, but also in Chile, Brazil, Costa Rica and other countries (p.11). As he explains, the author’s motives go beyond the strictly academic. In his childhood he lived for several years in Peru while his father was working for the company Grace founded. Having made this clear, Clayton warns us that he “has sought to be rigorous and impartial to the greatest extent possible, basing myself on my professional training. I realise that some of my opinions and interpretations will be challenged, but good history is not just a string of facts, it is an interpretation of those facts within their context, but in the light of the knowledge we have today (p.13)”. Prof Clayton’s words bring to mind the thesis advanced by the French historian, Henri Ireene Marrou (2), for whom history is the relationship between two planes of human existence; the past, lived by men and women of another time, and the present moment in which the historian recovers that past. That past can never be captured in itself, but rather as knowledge, in other words after being refashioned by the researcher’s mental faculties and the techniques and thought processes which he imposes on it.
The first chapter, “The Travelers”, recounts the difficult path to success of this Irish emigrant who left the Emerald Isle, as did so many others, when poverty and hunger became unbearable. Once hope for a better life made him “rebel out of a desire for independence”, he journeyed to New York in 1846. He worked in different jobs and by the age of eighteen was a shipping agent for the thousands of immigrants who were making for the New World. However, the young William got his chance when his father James invited him to work in an agricultural enterprise in Peru, a sugar plantation belonging to his friend, Doctor Gallagher.
In the following chapter, “Peru”, Clayton makes use of his knowledge of Peruvian history in order to give the reader a description of the place where William took his first steps in business. In the author’s words, “William looked around and undoubtedly asked himself what he was doing in this strange place … he soon discovered his vocation (p.41)”. In the chapter “Family Matters”, James returns to Ireland, while William remains in Peru and becomes an employee of the guano (3) business operated by the Bryce Brothers on the Chinchas Islands. By dint of his tenacity and good business acumen William converts the business into the biggest in the country. His talent and energy were recognised a few years later when he became a partner in the company, renamed Bryce & Grace.
But it was not a case of all work for William, as during his time in Peru he met the young Lillian Gilchrist, daughter of George Gilchrest, a captain of one of the many ships which sailed to the island. He married her in 1859 in a church in Tenant Harbor, Maine. The union “would last for years” (p. 48). Grace’s poor health — he suffered from dysentery — obliged him to retire from the company in 1865. His brother Michael Grace took over, and stayed on to direct the growing family business in Peru. This soon became Grace Brothers & Co, absorbing the former Bryce Brothers. It is worth noting that the author here stresses the enormous importance that William attached to his relatives (brothers, cousins or other relations) in supporting the strengthening of the business in Peru.
Once his health improved, William definitively established W.R Grace & Co in New York’s Brooklyn Heights. As the author points out, he was married to an American, he had made numerous personal and business contacts with Americans, and he had experienced the dizzy pace of New York life (p.59). Yet his links with Peru remained. In fact his most important business in that country was railroad construction; described in detail in the chapter “Railroads and Fortunes”.
In “The Mayor of New York,” the author recounts the most important moment in the life of William Grace. In 1880 he became the first Roman Catholic mayor of New York City, representing the Democratic Party. He faced the xenophobic American press, which accused him of being an Irish upstart who knew nothing of American life. It was at that moment that a Mr. Eldridge, captain of one of the famous American ships which had berthed at Callao during the Civil War, came forward and offered a very favourable account of the actions of Grace at Callao. This had the effect of turning public opinion and Grace won an unprecedented victory. He was re-elected in 1894. Despite the new road he was following, the Irish immigrant did not neglect his business interests, nor did he lose contact with his beloved Peru.
The following chapter, “The Pacific War”, offers an interesting interpretation of the causes of the war between Chile and Peru. The author warns the reader that “one must looks for causes as much in events as in the wishes of men, and it is hard to say whether it was the events which pushed the men; or the men who precipitated the events”. In this part of the book an important point emerges — William aided Peru by buying and shipping arms from the United States, with the goal of preserving the national territory, even when Peru lost some of that territory at the hands of the Chilean Army. Nevertheless as a businessman, his unconditional “love” for Peru did not prevent him from keeping good relations with Chile. On 19 October 1881 he opened a branch of Grace & Co in the port city of Valparaíso, despite the suspicions of the Chileans that the business was a “Peruvian company”. In the author’s words, “Grace considered that it was a good idea to maintain good relations with whomever would win, thus allowing him to keep a presence on the entire American coast (p.132)”.
American and European economic interests in Peru brought that country to put pressure on the American government to seek compensation from Chile. The hope was to reach agreement on the loss of the province of Tarapacá to Chile, a province rich in nitrate deposits and the guano production which Peru used as surety for foreign loans. However, the US left Peru at the mercy of Chile (p.134), causing Michael Grace, a Peruvian loyalist, to undertake the measures needed to help the Peruvian economy, following the economic disaster of the Pacific War.
Faced with the government’s difficulties in paying its foreign debt, in 1887 Michael Grace negotiated the debt owed to holders of English bonds by showing them the profits they could realise from acquiring Peruvian railways in payment on those bonds (p.137). With this negotiated solution, known as the Grace Contract (the title of this chapter) holders of bonds redeemed them for a value of 250 million US dollars. They received shares in the newly formed Peruvian Corporation, which took over the state’s ownership of the railway system. The agreement shows the Graces’ role in modernising Peru and freeing it from the burden of debt (p.167). For their part, the shareholders agreed to finish repairing the railroads within a fixed period, most of the contracts in this respect being under the direction of W.R Grace & Co. In Clayton’s judgment “the Graces did everything possible to keep Peru strong and independent in the midst of the disasters of war-they helped to identify Peru’s aspirations with those of the United States (p.167)”.
In his final chapters the author describes how W. R Grace & Co maintained growth in its business activity. The continual drive for maximum economic return - the logical essence of capitalism — brought about strong growth in the company. It became an authentic business empire with the creation of the Grace Line, the principal transport for goods - later for passengers - between New York, Callao, Valparaíso and points between, on the route of the Panama Canal. When William Grace died in 1904, his son Joseph succeeded him. In 1929 Joseph became president of the board of W.R Grace. In collaboration with PanAmerican Airways they established the first international air service on the western coast of South America, PanAmerican-Grace Airways, also known as Panagra.
The author should be congratulated for his ability to provide a wide-ranging but easily understood study which at the same time shows a deep understanding of the subject matter. From the point of view of research and historical analysis, the text is firmly rooted in original documentation, both of the Grace family and the W. R Grace company. The publication of this book also provides an opportunity to congratulate the Asociación de Historia Marítima y Naval Iberoamericana for making it available to the Spanish-speaking public and for overseeing its distribution.
In “W. R. Grace & Co. The Formative Years: 1850-1930” we follow the dream and the adventure of William Russell Grace (1832-1904) an Irish immigrant who realised the “American Dream” by forming one of the most important international businesses in the US. As Professor Clayton puts it in his Epilogue: “In many respects their ability to accommodate themselves to rapid historical change is extraordinarily modern, and often they themselves were the agents of change. We should consider them as among the principal makers of the modern world (p.335)”. This is, without a doubt, a book worth reading — I invite you to do so!
Fabián Gaspar Bustamante Olguín. Primary degree in History, Universidad Diego Portales. Master’s degree in the history of Chile , Universidad de Santiago de Chile (USACH)
2 Marrou, Henri-Irénée, El Conocimiento Histórico, Idea Universitaria, Barcelona, España, 1999.
3 Guano is bird excrement. The word comes from the word for the bird known as the Guanay Cormorant (Phalacrocorax bougainvillii).
I wish to thank Fabián Gaspar Bustamante Olguín for a thoughtful and extensive review of the book. The modernisation process has not always been smooth, but instead cluttered with controversy over how wealth is created and distributed. It goes on today, with the added factors of the environment, global terrorism and the other issues of how man manipulates his world. I think the prism of the historian is indispensable to making wise and informed decisions on where we go from here, in every category from morality to economic resources, and I thank both
Fabián Bustamannte and the Asociación de Historia Marítima y Naval Iberoamericana for helping to highlight this fascinating chapter in history.
Lawrence A. Clayton