Corporate scandal: Was it ever thus?

THE BALTIMORE SUN

After the Ball: Gilded Age Secrets, Boardroom Betrayals, and the Party That Ignited the Great Wall Street Scandal of 1905, by Patricia Beard. HarperCollins. 416 pages. $25.95.

Patricia Beard started working seriously on this book in the late 1990s, as WorldCom, Tyco and the rest blossomed in rotten glory, and publishes it now, as the scent of scandal lingers in corporate suites.

Good timing. Her subject - riches, envy and iniquity at the Equitable Life Assurance Society in the early 1900s - is a dandy, overlooked gem of business disgrace. History holds up many distant mirrors, to use Barbara Tuchman's phrase. This one is small but elegant, an art-nouveau looking glass, perhaps, on a handsome heir's chiffonier.

The Equitable did not collapse in 1905; policyholders were not ruined. The names Credit Mobilier, Teapot Dome and Enron lose no luster by comparison in the corporate hall of infamy. But the Equitable shenanigans echo the hidden liabilities and self-dealing at Enron and Tyco, the huge executive pay at many firms and the insouciant power plays of commercial titans in any age.

And with such style! That Beard's characters demonstrate the eternal venality of the species might bring one to peruse After the Ball. That they do it in spats and capes while driving a coach and four and regularly dining at Delmonico's makes one lap it up. A sometime journalist for Town & Country, which probably graces the coffee tables of dozens of 21st-century Justice Department defendants, Beard is excellent on plutocrat lifestyles and competent on finance, too.

James Hazen Hyde inherited control of the Equitable at age 23. His father, Henry, had built the life insurer into a billion-dollar enterprise but died in 1899, before he could inculcate his son with financial savoir-faire. Fluent in French and German, exquisitely dressed, patron of theater and French culture, almost 6-foot-4, "the handsomest man in any room," James Hyde was clueless about commerce. It was a bad combination. His tastes bred large bills; his ignorance about business jeopardized the wherewithal to pay them.

The fight to control the Equitable began when James W. Alexander, the company president charged with shepherding Hyde into his inheritance, lost faith in his ward. Although Hyde seemed fairly serious about learning the business, he spent large sums on parties, trips to Europe and four-in-hand coach driving. He got a reputation as a bon vivant, which Alexander feared would raise concerns about Equitable's finances.

The trigger came when Hyde "gave one of the great balls of the Gilded Age, a French 18th-century-themed costume party for which he would be known all his life." The bash's opulence, chronicled in every paper, made Hyde vulnerable to intramural enemies such as Alexander as well as vultures such as railroad tycoon E.H. Harriman, who wanted his stock for a song.

Besides its other virtues, After the Ball gives a cheering glimpse of early financial journalism. New York reporters were all over the story, corporate flacks had not yet perfected their anodyne half-truths, and Equitable insiders were happy to dish. At one point, dismayed by leaks, the board resolved to find the culprits. "Those resolutions," Beard writes, "were promptly leaked as well."

Ah, the good old days.

Jay Hancock is a financial columnist for The Sun. He was The Sun's diplomatic correspondent from 1999 to 2001 and its economic correspondent from 1995 to 1999. He has twice been a finalist for the Gerald Loeb Award in business and financial journalism.

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