The raison d’être of the skyscraper is therefore not physical but psychical; it arose in answer to the desire of the herd to become a super herd . . . Skyscrapers appear only and always on those sacred acres which for some mysterious reason have become the blue heaven of the businessman.
The roots of rivalry ran deep on the land where Severance planned to design a towering skyscraper. The site at 40 Wall Street marked the spot where, in 1799, Aaron Burr had deliberately opened a bank across the street from Alexander Hamilton’s Bank of New York, escalating a feud that resulted in, among other things, Thomas Jefferson’s election as president (Hamilton threw his weight behind Jefferson to block a Burr presidency) and the famous 1804 Hamilton-Burr duel, in which Burr killed Hamilton with a shot to the stomach.
New York was steeped in such bloody rivalries. They were the product of an environment where wealth, power, influence, and ego flourished. It was only natural then that George Ohrstrom, a master of negotiating these forces, would find himself interested in the land where one of its most storied feuds also took root. Burr’s bank owned the final and most critical parcel of property Ohrstrom needed for his skyscraper site. Ohrstrom knew The Bank of The Manhattan Company, which was in the midst of a significant merger, was looking for larger quarters than the fourteen-story building where they now operated. Aaron Burr would have appreciated Ohrstrom’s maneuvers to obtain the site, particularly in a real-estate market where a plot large enough to build a skyscraper hundreds of feet into the air was rare at best. An entire plot of land, like the site of the Waldorf-Astoria or Chrysler Building, seldom came on the market. Most often a number of plots needed to be cobbled together, one parcel at a time. Added to the surrounding lots, this last fourteen-thousand-square-foot lot promised great financial returns.
If there was one man who knew about making money, it was Ohrstrom, the “Boy Wonder” of Wall Street. In 1928 when he first took aim at the site, he was thirty-three years old. The son of a Danish immigrant, Ohrstrom grew up in Ford River, Michigan, a town whose population the Michigan State Journal said “could be tucked away on one floor” of the skyscraper he intended to construct. His father died when he was fifteen years old, and after he graduated from high school, he toiled away in lumbering and construction yards to earn enough money to go to the University of Michigan.
The call of World War I brought his studies to a premature end, and he enlisted in the air corps to become an aviator with the 104th Aero Squadron, 5th Corps Observation Group. He was shot down once over the French countryside (and rescued by the local resistance group), but then distinguished himself on the day before the Armistice was signed, November 10, 1918, while flying the slow, two-seated Salmson on a reconnaissance mission over the Verdun. A haze of clouds covered the sky. A German patrol of four Fokker planes flying several thousand feet above Ohrstrom sighted his plane and dove down to attack. The lead plane in Ohrstrom’s formation, as one account described, “rocked sharply, lifted, then slipped down to the right as a red-tailed Fokker flashed out of the clouds . . . Ohrstrom kicked the rudder and pulled back on the stick, waiting for the Fokker to pass. As it slid in front of them, he and his observer, Lieutenant Joseph Mallory, fired. The Fokker shuddered, hung for a moment, and then nosed over, trailing smoke and fire in a slow tailspin.”
Credited with the last enemy kill of World War I, Second Lieutenant Ohrstrom returned from France to finish his courses at Michigan. After graduating, he moved to New York to take a job with the investment firm P. W. Chapman & Company. In 1926 he jumped headfirst into running his own investment bank and began to underwrite securities, as well as invest in and acquire companies. As luck had it, he made his first great strides in business through owning water companies. Asked by B. C. Forbes how he came to the apogee of success by only thirty-four, Ohrstrom nonchalantly answered:
I haven’t reached the top. I was lucky, after being at business only a few years, to see that there was opportunity in a certain field, opportunity that nobody else apparently was going strongly after. I was fortunate in being able to do some financing for water companies at a time when this class of security was very little known. It took a lot of educational work to sell the bonds. I, of course, was sold on them myself. I realized that water is about the most fundamental necessity of man. There is always a demand for it every hour of the day.
So I began to become financially interested in a water company here and a water company there, and we branched out until the Federal Water Service Corporation, for which we are the bankers, controls the largest system of privately owned water supply companies in the United States, with properties valued at close to $150,000,000. Some of the water companies were interested in other utilities, so we became interested in them also, and now the People’s Light & Power Corporation, which we have financed, controls electric light and power and gas properties worth more than $40,000,000.
An empire was in the making. Newspaper photographs of Ohrstrom show a young man with a preternatural stare of determination. He was handsome, almost too handsome—with tan, unblemished skin, trim hair parted neatly to the side, and a nose sharpened on a whetstone. Mostly though, it was his eyes that commanded your full attention. In person, he had a politician’s skill of making those he met feel they were in the presence of the extraordinary. In a crowded room, he was its center.
And he inspired trust, a quality that proved useful when he asked for money. Sure he understood numbers and the legal nuances of a deal, but more important, he succeeded in his relationships. When the stock market plunged later that year, he went straight to his investors and told them which of his companies would weather the storm and which would not. Those who listened and held on made back their losses and more. As one British investor said, he was the “only person who bothered to come over to England to tell us how he lost our money.”
That was Ohrstrom. He took people seriously and expected the same in return. When he hired someone, he rewarded them generously if they achieved and took them out quickly if they did not. He made fortunes for many and ruined others. “There was no bullshit,” said one of the men who ran a company for him. Perhaps to remind people with whom they were dealing, Ohrstrom kept the General Order commending him for the “destruction, in combat, of an enemy Fokker” behind a glass frame in his office. That was if they could remove their eyes from his stare.
It was this uncompromising will that earned him a big English manor house on a 135-acre estate in Greenwich, Connecticut, and made securing the thirty-four thousand square feet of land for a skyscraper in Wall Street possible. For several years Ohrstrom had dabbled in real-estate development, underwriting the financing behind several buildings in the city before investing himself. With vacancy rates as low as they were, there was money to be made in development. Like water, people would always need New York; it was the financial center of the world, from where all capital flowed. In these endeavors he chose his partners well. The Starrett brothers, Paul and William, ran one of the country’s leading construction companies and boasted over one billion dollars in building contracts throughout their careers. They were respected, envied, and feared by their competitors, and with the help of Ohrstrom, they were increasingly becoming involved in the ownership of the buildings they constructed.
In September 1928, Ohrstrom formed a holding company, 36 Wall Street, to acquire a lease for the first two parcels he needed for his development. On the guarantee of an annual return of at least $175,000 a year, the Iselin family leased to Ohrstrom the land at 34–36 Wall Street and 31-33 Pine Street. This served as the first in a chess game of moves. The key to the attack on the land was not to alert others to the overall aim. If the six landowners Ohrstrom needed to negotiate with knew of his intention to assemble a large plot from their individual parcels, they would bid up the price. After all, this was the heart of Wall Street. A square foot cost upwards of seven hundred dollars, and people knew the game: the whole was greater than the sum of the parts by as much as ten to fifty percent. For his real-estate brokers, he hired Brown, Wheelock, Harris, Vought & Company in cahoots with Charles Noyes & Company, so that they could run interference with one another, negotiating separate plots with separate brokers, but holding the land in trust for Ohrstrom. Secrecy and deception were the tools of the game. Sometimes even the brokers were kept in the dark about the developer’s ultimate plan.
In a Fortune magazine profile of Ohrstrom, the writer likened his maneuvers to “the reverse of those of Foch on the Marne. The property is attacked from the principal front, and the lots facing on that street—say Wall Street—are first secured. Then the secondary lots are taken. By the time the gentlemen in possession of the rear lots have begun to suspect that their properties have key value to a great scheme, they find themselves cut off from the sun and with only one possible profitable movement—backwards and out.”
First Ohrstrom took Lot I, the Iselin property. Because Lot II only offered much value as an abutment to Lot I, the Iselins gave up that lease as well. Marshall Field owned 2,105 square feet of land at 38 Wall Street, Lot III. He turned down an offer to lease the land, but was more than willing to sell his land outright. The deal was completed. Then Ohrstrom’s brokers acquired Lot IV from J. A. Sisto & Company, given that Lot V was of only marginal value unless one held the land at Lot II and Lot IV. The final pawn fell with Hooker Electrochemical’s delivery of Lot V, but there was still the queen to claim and its fourteen thousand square feet of land, Lot VI. To the west, the Assay Office still threatened checkmate, if another developer bought the land and built high enough to cause the loss of light and air. Much needed to be done.
Once Ohrstrom had secured the other parcels, he went straight to the Vice Chairman of the Board of The Bank of The Manhattan Company, P. A. Rowley. The bank had long ago abandoned its water interests to focus on becoming one of the most prominent commercial lenders in the city. It had acquired a number of smaller banks and was set to merge with the International Acceptance Bank founded by Paul Warburg, creating a company with total resources of $700 million. Ohrstrom knew the board had formed a committee to explore the erection of a taller building, and he maneuvered his way into the conversation. After telling them he held the leases or owned the properties of 34-36-38 Wall Street and 27-29-31-33 Pine Street, he offered to construct a skyscraper of at least forty stories, providing the bank over one hundred thousand square feet of space, in exchange for four hundred thousand dollars annually in rent from the bank and the lease of the land at one dollar. On January 14, 1929, he called Rowley and then followed up with a letter to explain further that although he hadn’t yet secured the financing “there is no intention on our part to build this building, rent it and dispose of it; rather, it is a situation in which we all firmly believe and in which we have chosen to make a large personal permanent investment.” Shrewdly, he then told Rowley that he wouldn’t trade on the bank’s name to win the financing; rather he would call the project the 40 Wall Street Building until he had raised the money, then the skyscraper could carry the name Manhattan Company Building. Still the bank wavered. Ohrstrom needed to move things forward; the clock was running out on the commitments he had made to acquire the other parcels. He risked losing out on the titles of the land, not to mention the options he had paid to have them held. Finally on March 2, he went ahead and announced plans for a forty-seven-story office building.
The bank was coming around, though. Ohrstrom was relentless and the inclusion of the Starretts into the deal as builders and part investors helped smooth the way. The bank would avoid a major investment in the construction of their own building and gain the space they needed at a bargain price—all arguments Ohrstrom made. The bank’s directors agreed to meet on March 17 to discuss more definite plans for the site. In the meantime, Ohrstrom needed to iron out some of the financing and have plans drawn up for the skyscraper. He turned to an architect he knew and trusted: Craig Severance.
Severance was called into action to handle the plans. He and Ohrstrom had known each other for years. They inhabited the same world of high business and finance and shared a disdain for the old moneyed New York society. From their work together on a 400 Madison Avenue office building, Ohrstrom had seen the architect in action and understood him as a man who could run the kind of organization needed to design and execute a skyscraper on schedule and at a fair price.
For the financing, Ohrstrom knew his choice of knights and pawns to play on the board. As promised, he put up his own money in the 40 Wall Street Corporation, as did several leading financiers and the Starrett brothers. Then came the pawns to purchase mortgage bonds issued by Halsey, Stuart & Company, thereby funding a good share of the skyscraper.
In the past, money to finance a building was the domain of savings banks, trusts, and insurance companies. Builders sought their loans, and if they so chose, the lenders accommodated after a conservative appraisal to secure the fact that if the developer foreclosed, the exposure of their money, and those who entrusted their savings with them, was limited. In the twenties, mortgage companies took on a much greater role, seeking opportunities to work with builders for the issuance of bonds to the public. They financed upwards of seventy-five to eighty percent of the cost of the building. Their interest, as Fortune magazine explained, was more “in earning power than in brick and mortar value.” There were risks (sometimes substantial) for those who purchased the bonds, but this only mattered if one thought the demand for office space and/or the spree on Wall Street would come to an end. (Optimism was so great among builders and developers that plans were moving ahead to create a Real Estate Securities Exchange.)
As Ohrstrom prepared the financing and continued to raise the height bar of his skyscraper with every parcel of land added to the site—from thirty to forty-five to fifty to fifty-five stories and beyond—New Yorkers and the nation at large gaped at the frenzy of the stock market and all the money just waiting to be made if they only took the chance—stocks, bonds, buildings, whatever. The only check on Ohrstrom and Severance’s drive to go higher was the public’s willingness to invest, and in 1929 that willingness was decidedly unchecked. In a real sense, New York leveraged the greatness it sought in scraping the sky.
As historian John Brooks noted, New York in the 1920s was the new Golconda. The successor to the legendary city of India, where all who came went away rich, was founded in the canyons of Wall Street. It began with a terrific boom, literally, on Thursday, September 16, 1920. A horse-drawn wagon pulled to a stop in front of the office of the J. P. Morgan Company at 23 Wall Street. The time was 11:55. Herds of stockbrokers, clerks, and secretaries had just begun to come out on the streets to grab a bite for lunch. The Trinity Church bell struck its final note at noon. Suddenly there was an explosion, shattering windows, lifting people off their feet, and sending plumes of smoke and fire a hundred feet high. The bomb blast shot window-sash weights in every direction, cutting into unfortunate passersby and scoring the stone and marble façades of the surrounding buildings. The Manhattan Company bank was only two doors down from the blast. Mayhem enveloped Wall Street. Hundreds were hurt; dozens killed. Radical anarchists were blamed, but never arrested. The next day stretches of canvas covered the shattered windows. The daily flood of workers arrived for the day, some bandaged from shrapnel cuts. The exchange opened on time and rose in a defiant burst of trading and patriotic expression. The day launched a market bound for the clouds.
As jazz musicians played atop buses coming down Fifth Avenue and writers crafted their novels in speakeasies, the real business of America, as President Calvin Coolidge said, was business. “The man who builds a factory builds a temple,” he said. “The man who works there worships there.” Industrialists Andrew Mellon and Herbert Hoover were put in charge of the Treasury and Commerce departments, respectively. With increased efficiency, much of which was learned during the war, the steel, chemical, petroleum, construction, and automobile industries produced an economic expansion of unparalleled size. Retail chains consolidated into nationwide empires; utility companies brought electricity to the most rural parts of the country, growing power consumption an average of fifteen percent per year throughout the decade. People crowded into stores to purchase what they were convinced they needed: Kriss-Kross razor blades, Lucky Strike cigarettes, combination Electrolux gas refrigerator-stoves, cosmetics, mattresses, caskets, Mother’s Day cards, dandruff shampoo, exercise equipment, and gadgets, lots of gadgets. As radio sales rose from $60 million in 1922 to $650 million by 1928, a more than tenfold increase, advertisers from Madison Avenue crowded into the family living room, urging folks to buy, buy, buy. Prizefighters, cowboys, film stars, society mavens helped in the sales pitch: “Reach for a Lucky Instead of a Sweet,” “Coca-Cola—The Pause That Refreshes,” and “Say It With Flowers.” Magazine issues tripled in size thanks to ad pages featuring the latest washing machine or car. The pitches worked. In 1919 approximately 7 million automobiles were running on the nation’s roads. Ten years later that number had reached 23 million. America experienced prosperity never known before. Even Jesus Christ was credited. For two years, the best-selling nonfiction title in the country was Bruce Barton’s The Man Nobody Knows, a book that painted Jesus as the founder of modern business who “picked up twelve men from the bottom ranks of business and forged them into an organization . . . Nowhere is there such a startling example of executive success.” Jesus advertised, so why not American business?
The question was how to pay for everything. The age of the machine replaced manpower, and the economic expansion favored the rich, rather than wage earner. The advertisers and salespeople had created the demand and men like John J. Raskob provided the means of payment. As one of the leaders of General Motors, he revolutionized the way automobiles were bought: the installment plan. “No Money Down” and “Nothing to Pay Until——” came the cries from manufacturers, and the people flocked to the doors. Debt rose, the economy expanded; and the stock market mirrored the production gains. “It was a great game,” said Will Rogers. “All you had to do was to buy and wait till the next morning and just pick up the paper and see how much you made, in print.”
Short of an early stall and a few dips, the stock market rose steadily through 1927. Then it began to climb the sharp peaks of a mountain largely of its own making. Coolidge unburdened the rich of their onerous taxes. Mellon maintained low interest rates, and speculators bought stocks on margin, putting only ten to twenty percent of the price down and borrowing the difference. President of National City Bank, Charles Mitchell, ran a 350-strong sales force to drum up securities investments. To motivate his men, he brought them up to the top of a skyscraper and said, “Look down there . . . There are six million people with homes that aggregate thousands of millions of dollars. They are just waiting for someone to come and tell them what to do with their savings. Take a good look, eat a good lunch, and then go down and tell them.” Investors, many of whom experienced the first sweet taste of securities with the purchase of Liberty bonds for the war effort, were eager to buy. Trading volume on the New York Stock Exchange rocketed from 173 million shares in 1921 to 920 million in 1928. When Herbert Hoover crushed Democrat Al Smith in the November presidential election, the bull market surged ahead once again. Trading volume on November 23 went to seven million shares. All-time highs were a daily affair. Hoover, the Great Engineer, promised to live up to the slogan: “Four More Years of Prosperity.”
Amidst this boom, the country’s real estate market expanded beyond every expectation, but nowhere more so than in New York. In 1928, real-estate agent Joseph P. Day forecast that Manhattan’s building expansion would end, “Never . . . It would be difficult for any man to put his finger on a single piece of real estate in the City of New York that is not worth more today than it was ten years ago, and that will not be worth more ten years hence than it is today.” Vacancy rates in office buildings hovered at a low five percent from 1925 through 1929. Developers like Charles Noyes, Fred French, and Abraham Lefcourt poured borrowed money into projects across the city, adding millions of feet of office space into a market that promised not to crash—and each made fortunes for their effort. The rise in demand for space sent land values upwards of $350 to $400 per square foot in prime locations. To earn back the investment on such values, buildings had to rise higher so that more floor area could be leased, thereby reducing the cost of the land underneath. Skyscrapers were a self-fulfilling prophecy of the heated real-estate market.
To make way for the hundreds of new developments, no building, no matter how historic, was safe from the swing of the wrecking ball. The New York Times wrote: “American vision, daring, restlessness, engineering skill have all been properly read into this marvelous transformation from brownstone into Babylon . . . As for building for eternity, the need does not exist. Thirty years from now they will be tearing up the city once more.” The demolition crews had their way with McKim, Mead & White’s Madison Square Garden and Richard Morris Hunt’s Vanderbilt mansion on Fifty-second Street, but no event served notice to a changing of the guard as much as the sale of the Waldorf-Astoria on Thirty-fourth Street and Fifth Avenue. After rumors early in 1928 that a French concern would buy the famous hotel for the development of a culture and arts exhibition, the Bethlehem Engineering Corporation announced in December 1928 that it had acquired the site and was planning a fifty-story structure with over two million square feet of rentable space, the most of any building in the city by almost double. Its architect was the firm Shreve & Lamb, and the hotel would suffer the arrival of a demolition crew by springtime, taking with it Peacock Alley and the gathering place for New York society. The march of progress would lay victim to another city landmark, and in its place would be built a grand house for commerce.
At the dawn of 1929, prognosticators declared a future bright as gold. One broker explained, “it is a difficult matter to shake the confidence of the people when they are flush with money.” Paper profits were spent on conspicuous luxuries and bacchanalian parties. Speculators suffered few hangovers when the next day brought ten point gains on their stocks. Although they denied participation, the truly rich—including automobile magnates like Raskob, Chrysler, and William Durant, and financiers like James Riordan and the Fisher brothers—manipulated the markets in stock pools, enjoying quick kills by pumping up stocks like Radio Corporation. Meanwhile, the investor in Topeka, Kansas, or Mobile, Alabama, insisted that the “ticker don’t lie.” After first setting foot in New York, the Englishman Claud Cockburn commented, “If the attitudes of Americans to the stock market boom proved anything, it proved that they believed in miracles . . . that if you try hard enough you can make wonderful things happen.”
Wall Street, which was once actually a wall built to defend colonists in New Amsterdam from the threat of Indians and stray beasts, had long since been breached by a more formidable foe: greed. Whether in securities or buildings, speculators flocked downtown to seek the highest returns. The battle to build the tallest building was predicated on this exuberance. What was a few extra million dollars to be crowned the highest at a time when money flowed like water? Market panics and depressions were part of the distant past and not a future possibility—not in this new America—so why not spend some of those paper gains on the romance of a monument in steel and stone. When Ohrstrom pulled the lever on a skyscraper that would tower over all others, some of that romance must have been intoxicating.
The young investment banker, Ohrstrom, was the initial motivating force behind the Manhattan Company Building’s push to be tallest, having initiated the development and, at every stage of land acquisition, ratcheted up the height of the building. The higher the tower went, the more money there was to be earned, and the acclaim of building the world’s tallest made the risk of investing so much in its construction easier to swallow. With the Starrett brothers and Craig Severance at his side, each with their own agenda to have their name attached to the tower that out-topped every other, Ohrstrom had guaranteed himself a serious bid for the crown. He always knew who to surround himself with to achieve his goals, and he put them fast to task.
By March 12, 1929, Severance was given the go-ahead to begin the detailed plans. He set his team to the task. He didn’t have much time; the meeting with the directors of the Manhattan Company was five days away. Although he had already studied the site and sketched out preliminary figures for a skyscraper with the bank’s land included, he still needed to win over the bankers. Otherwise, they would move ahead with the plans for the forty-seven-story building or scrap the entire affair.
Approximately sixty blocks north, it looked like Van Alen was going to see his skyscraper with Chrysler built. The Lexington Avenue site had been cleared and the foundations set. They would soon begin setting the steel for the sixty-eight-story structure. With the plans for the Chrysler Building announced the previous week, Severance knew that to claim the title of city’s tallest his design had to stretch past 809 feet. Often plans for a skyscraper were revised: stories cut or added, towers redesigned. But since Van Alen would have now had the permits issued, blueprints finalized, and steel ordered, future changes would be expensive and, if far enough along in the construction, impossible due to structural concerns. It was not like Severance to consider Van Alen much of a threat to his goal of winning the height crown. Van Alen was a good Beaux-Arts architect, and Chrysler was a good commission for him, but as far as a competitor, able to seriously challenge Severance on any level beyond design, he considered Van Alen woefully inadequate. Building the world’s tallest took much more than some well-drafted plans.
Today Severance had other concerns, namely putting together skyscraper plans that made financial sense to the bank. As he later said, “You can build anything in New York City if you have the foundation, but there is a certain maximum and a certain average you can use in putting up tall buildings . . . Is it going to pay?” was the more important question at hand. To help him meet his deadline, the architect Yasuo Matsui was called to his side. Matsui worked closely with Starrett Brothers, and as the builder and key investor in the project, they wanted one of their own men involved. Matsui was born in Japan, educated at MIT, and trained at several of New York’s prominent firms including McKim, Mead & White and Warren & Wetmore. The fact that Matsui, an associate architect, was in charge of the design was a testament to Severance’s businesslike approach. Severance had enough to do organizing the project; the small matter of designing the skyscraper was something that could easily be delegated.
At fifty-three years old, Matsui was known for his quick design revisions, and as president of the firm F.H. Dewey, he was as busy as any architect in New York or abroad. To his credit, he was the consulting architect on several skyscrapers in the works downtown, and years before he had overseen the building of the three largest offices in Japan for the George Fuller construction company, then run by Paul Starrett. His devotion to architecture was clear.
“What is your hobby, Mr. Matsui?” a New York Sun reporter once asked him. “Your favorite pastime—your sport, you know.”
“My work,” he responded.
On Tuesday, March 12, Matsui started the sketches for the skyscraper under Severance’s watch. As a guide, they decided to use a design that Matsui had sketched in 1928 for the Houston Tower on Madison Avenue, a skyscraper that was never built. The tower featured a pyramidal crown topped by a narrow mast. Modernized French Gothic was the style, but to know the general shape said little of the details—economic height, story heights, floor plans, financial returns, lighting, elevator placement, zoning setback requirements, construction costs, column spacings, and hundreds of other considerations. In those, the plan would win or lose, and Severance and Matsui were responsible for the solution.
With tens of millions of dollars in potential construction and leasing costs, the building had to pay. This dominated their thoughts as they roughed out the building’s design. They weighed the land’s value and shape, potential rental income per square foot, building costs, construction schedules, and space loss due to elevators, corridors, and stairwells. The key was settling on the tower floor plan. It was “the theme of the symphony,” said Fortune magazine in an article on skyscraper design. For the floor plan, Severance considered how many office units (“cells”) he could fit on that floor, plus their position relative to the windows, utilities, and columns. From there the rest of the building took shape, particularly as to how the elevators were placed and the structural steel set.
Once the tower plan was fixed, they then decided on the number of setbacks and planned the ground floors. Zoning regulations put in place in 1916 had created what many called “wedding cake” skyscrapers. To prevent the crowding out of light and air, buildings could only rise straight off the street by so many feet. For instance, downtown a building was allowed to rise in height two and a half times its street width (on a hundred feet of street, two hundred fifty vertical feet or roughly twenty floors) before stepping back. Then every five feet of vertical height, it needed to step back one foot from the street. However, the regulations allowed the tower to stretch as high as the architects wanted as long as its floor plan dimensions equaled a quarter of the lot size.
Knowing all this, they needed to establish how high the tower should rise before calculating how much they would all make on rental income. Later that year economist W. C. Clark published a report that stated sixty-three stories would earn the maximum annual profit for a skyscraper, given zoning regulations and a two-hundred-dollar average square foot cost for the land. If land values were to rise to as much as four hundred dollars, then it was necessary to build to seventy-five stories to obtain the maximum profit. Having financed and constructed more skyscrapers than most outfits in New York City, the team at 40 Wall Street didn’t need to be told this was so. They understood the higher the tower rose, the more space taken up by elevators to carry the tenants. At a certain point the costs of extending more floors—elevators, heavier steel, stronger foundations, more utilities, and wind bracing—offset the income from renting them.
If the bank signed off, the skyscraper would rise sixty-three stories. After all, they were perfectly reasonable men of business. As long as occupancy rates remained flush to the ceiling, their investment would return in spades. On Thursday, March 14, when Andrew Mellon of the Federal Reserve urged investors to step back on the speculation spree, the Wall Street bulls turned a deaf ear and sent their hot picks up in a “broad advance.” Radio Corp shares rose 333⁄4 points; American Radiator, 10 points; Wright Aero, 9 points; du Pont, 63⁄4. Even with the wrong choices, it was hard not to get rich.
Severance and Matsui worked day and night until the meeting with the bank directors. Sunday March 17 came all too soon. While most in the city were enjoying their day with a stroll through Central Park, a quiet read of Sinclair Lewis’s new book Dodsworth, or a matinee at the Rivoli to see The Iron Mask with Douglas Fairbanks, these men of business had more pressing demands. The exact events of the meeting were not recorded, but Matsui described it as “the first time we led to the point of importance and told what could be done if they would do certain things.” One can imagine Ohrstrom and his team spread out along one side of a board table; the patriarch of The Bank of The Manhattan Company family, Stephan Baker, and his associates poised at the other end. No doubt Colonel William Starrett and his older brother, Paul, sat in a place of authority, having built more skyscrapers in their lifetimes than many of these men had visited. Ohrstrom was in his element; he was used to earning the trust of men two or three decades his senior. It was critical he convince them that he could get the money to back the project. Although Severance had only sketched out the broad strokes of the skyscraper, his ease and confidence must have been winning. Board meetings were his forte. Matsui likely had a rendering of the skyscraper for all to admire. It was difficult not to get excited by the prospect of so much steel and stone rising so high. The plans called for the bank to have one hundred thousand square feet of space in the new building, including a basement level for their vaults, ground and mezzanine floors for their banking rooms, and three floors above for their offices.
There were many factors still to overcome. They had to discuss the length and cost of the lease, adjustments to rent over the years, tax burdens, and expenses related to designing the bank’s interiors, which alone could run upwards of two million dollars. Then there was the issue of the tenants in the bank’s current building: several law and engineering companies leased floors at 40 Wall Street, and they had to surrender their space, not to mention that the bank needed a home once the wrecking balls showed up at their doorstep. Yes, arrangements could be made, potentially rent-free until the new skyscraper was complete. The big question on everyone’s mind was for the Starrett brothers to answer: was it possible to have the building ready by May 1, 1930? For the skyscraper to have any chance, given interest charges on leasing the land and taxes, the building had to be completed by May next year when old office leases expired, freeing up potential tenants. Plus, the bank wouldn’t want to be housed in temporary quarters for the two years or more it normally took to build a skyscraper of such proportions. Nothing like it had ever been accomplished, but if there was one builder in the country who might have a chance, it was Starrett Brothers.
The Herculean task of constructing such a skyscraper in one year was possible if everyone stuck to the schedule. The Starretts could do it. They were masters of scheduling massive construction projects and finishing them promptly. Severance and Matsui would have to burn the candle from both ends to finalize the plans; the steel needed to be ordered right away. As for the demolition of the buildings now on the site, that required special consideration given the time constraints.
The lawyers still had to hammer out the lease, but by the end of the meeting, Ohrstrom had his land.