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Regional Oral History Office University of California

The Bancroft Library Berkeley, California

Pillsbury, Madison & Sutro Oral History Series

Albert J. Brown

BUILDING THE CORPORATE-SECURITIES PRACTICE
AT PILLSBURY, MADISON & SUTRO: 1942-1982

With an Introduction by
Paul L. Davies, Jr.

An Interview Conducted by
Carole Hicke
1986

All uses of this manuscript are covered by a legal agreement between the
University of California and Albert J. Brown dated January 8, 1987. The manu
script is thereby made available for research purposes. All literary rights
in the manuscript, including the right to publish, are reserved to The
Bancroft Library of the University of California, Berkeley. No part of the
manuscript may be quoted for publication without the written permission of the
Director of The Bancroft Library of the University of California, Berkeley.

Requests for permission to quote for publication should be addressed to
the Regional Oral History Office, 486 Library, and should include identifica
tion of the specific passages to be quoted, anticipated use of the passages,
and identification of the user. The legal agreement with Albert J. Brown
requires that he be notified of the request and allowed thirty days in which
to respond.

It is recommended that this oral history be cited as follows:

Albert J. Brown, "Building The Corporate-Securities Practice at
Pillsbury, Madison & Sutro: 1942-1987," an oral history con
ducted in 1986 by Carole Hicke, Regional Oral History Office, The
Bancroft Library, University of California, Berkeley, 1987.

•

Copy No.

ALBERT J. BROWN
ca. 1985

San Francisco Chronicle
November 7, 1995

Albert J. Brown

San Francisco attorney Albert
J. Brown, who handled some of the
biggest corporate mergers of his
time, died Friday after a long ill
ness. He was 81.

Mr. Brown was a partner for
many years with Pillsbury, Madi
son & Sutro, the Bay Area's largest
law firm, founding its corporate
and securities practice. After 38
years with the firm, he became an
advisory partner in 1980.

The son of Russian immigrants,
he was born in San Francisco in
1914 and attended public schools
in the city. He received his under
graduate degree from the Univer
sity of California at Berkeley and
his law degree from UC's Boalt
Hall School of Law.

During the course of his career,
he was called on by many major
companies to guide them through
complex mergers, acquisitions and
reorganizations. His clients includ
ed Joseph Magnin, Levi Strauss
and Dean Witter.

He gained national prominence
because of his work for Standard
Oil Company of California — now
Chevron, handling the oil giant's
corporate mergers with Standard
Oil Company of Kentucky in 1961
and with Gulf Corporation in 1984.
At the time, the $13 billion merger
with Gulf was the largest corpora
tion acquisition in history.

He also represented Occidental
Petroleum in the 1950s when the
company was going through f inan-
cial difficulty and was bailed out
by outside investor Armand Ham
mer. Mr. Brown and Hammer be
came friends, and after Hammer
took over Occidental, Mr. Brown
represented both Hammer and Oc
cidental.

Mr. Brown is survived by his
wife, Sylvia of Lafayette; his
daughter Kathi Brown-Favrot of
Elk Grove; his son David Brown of
San Ramon; and three grandchild

ren. No services are planned. Do
nations may be made in Mr.
Brown's memory to Friends of the
Bancroft Library, Regional Oral
History Office, 486 Bancroft Li
brary, University of California,
Berkeley 94720-6000.

Harriet Chlana

TABLE OF CONTENTS

PREFACE by George Sears i

INTRODUCTION by Paul L. Davies, Jr ii

INTERVIEW HISTORY iv

BRIEF BIOGRAPHY vi

I FAMILY BACKGROUND 1

II EARLY LAW PRACTICE 4

Solo Practice in Jackson, California 4

Joining PM&S 7

Pacific Telephone & Telegraph Company 16

Administration 18

The Securities and Exchange Commission 19

III CLIENTS AND CASES 24

Utah Construction Company 24

Golden State Milk Company 25

Occidental Petroleum Corporation and Armand Hammer 27

A Solution Which Never Occurred to Others 35

American President Lines, Ltd 38

FMC's Acquisition of American Viscose Corporation 40

Ranger Oil (Canada) Ltd.: Dealing With The British 44

Iran Consortium 47

Chevron Tankers 50

Growth of the Corporate-Securities Practice Group 51

The Boeing Company 56

Ethics 61

IV ADVISORY PARTNER ACTIVITIES 62

Becoming An Advisory Partner in 1980 62

The Chevron/Gulf Merger 63

The Securities Exchange Act 67

V REWARDS OF A CAREER IN THE LEGAL PROFESSION 68

INDEX . , 70

ILLUSTRATIONS

Albert J. Brown, 1985 [following title page]
Yesterday and Today:

Age Five 3a

At a Recent Lunch with Friends 3a

Al and Sylvia Brown Wedding 23a

Al and Sylvia at Parthenon in Greece 23a

Al and Sylvia at Home 23a

Albert J. Brown, 1987 26a
Al Brown's Sixtieth Birthday Party

Pillsbury, Madison & Sutro Oral History Series

Charles F. Prael, Litigation and the Practice of Labor Law at Pillsbury,
Madison & Sutro: 1934-1977. 1986.

John A. Sutro, Sr. , A Life in the Law, 1986.

Albert J. Brown, Building the Corporate-Securities Practice at Pillsbury,
Madison & Sutro: 1942-1987, 1988.

John B. Bates, Litigation and Law Firm Management at Pillsbury, Madison &
Sutro: 1947-1987, 1988.

Francis N. Marshall, Looking Back: A Lifetime Among Courts , Commissions, and
PM&S Lawyers , 1988. In Progress

Harry R. Horrow, A Career _in the Practice of Tax Law at Pillsbury, Madison &
Sutro, 1988.

Noel J. Dyer. In Progress
Wallace L. Kaapcke. In Progress
Francis R. Kirkham. In Progress
Turner H. McBaine. In Progress
James E. O'Brien. In Progress
Frank H. Roberts. In Progress

PREFACE

The history of Pillsbury, Madison & Sutro extends more than 100 years.
Its founder, Evans S. Pillsbury, commenced the practice of law in San
Francisco in 1874. In the 1890s, Frank D. Madison, Alfred Sutro, and
Mr. Pillsbury 's son, Horace, were employed as associates. In 1905, they and
Oscar Sutro became his partners under the firm name Pillsbury, Madison &
Sutro.

In serving thousands of corporate and individual clients over the years,
the firm helped to write much California history. It played a leading role in
landmark litigation in the Supreme Court of California and other courts. In
its offices, a number of California's largest corporations were incorporated
and legal arrangements for numerous major transactions were developed. In
addition to its services to business and other clients, the firm has a promi
nent record of services to the legal profession and to the community,
charitable, and other endeavors.

In March 1985, with the firm approaching 400 attorneys situated in mul
tiple offices, the Management Committee approved the funding of an oral his
tory project to be conducted by the Regional Oral History Office of The
Bancroft Library of the University of California, Berkeley. The purpose of
the project is to supplement documents of historical interest and earlier
statements about the firm's history with the recorded memories of those who
have helped build the firm during the past fifty years. It is our hope that
the project will preserve and enhance the traditional collegiality, respect,
and affection among the members of the firm.

George A. Sears

Chairman of the Management Committee
May 1986

INTRODUCTION

I have worked for and with Al Brown for thirty years. He has been my
mentor, my close friend and my inspiration through the whole of this period.
Al is a superb corporate and securities law practitioner who has -- throughout
his stellar carreer -- retained the humility of -- and the ability to be --
the general practitioner who commenced his career in Jackson, California, in
1941.

Al Brown is witty, and he can be warm, but he is wary of permitting many
people to become close. Thus, he may on occasion also be crusty. His humor
tends toward the base -- "if he does not do it right, he will be sent to clean
out inkwells in Sacramento," is an example. Or, "He spends his time picking
fly droppings out of pepper."

I recall particularly accompanying Al to Sacramento to meet with Secre
tary of State Frank Jordan to discuss changing the name of California Packing
Corporation to Del Monte. Although other corporations -- Del Monte Properties
and Del Monte Meats, in particular -- already used the "Del Monte" name, the
grocery brand had long been that of Calpak. In talking with Jordan, Al simply
showed him a can of Del Monte fruit, reminded him of its long use, and the
Secretary of State concurred in the name change.

Al is a brilliant lawyer, but more importantly -- from the point of view
of his clients -- he has always leavened his genius with a large quantity of
common sense. In fact, I recall his saying to me thirty years ago, roughly
the following: "The successful practice of law is 90 percent good judgment
and 10 percent knowledge of the law; if you find a [sport] case that is 100
percent on your side but goes against your better judgment, you rely on that
case at your peril." In another of his practical asides -- in the days we
represented Louis Petri and United Vintners -- I recall Al's observing that
"You know Petri makes better wine than Gallo when you have a bottle of each in
the closet and the cleaning lady drinks all of the Petri before she opens the
Gallo." I assure you, this did happen.

I could recite a litany of major transactions which Al has handled as
principal counsel -- dozens of Chevron, PT&T, and Pacific Lighting debt
issues; many stock issues, including the initial public offerings of Joseph
Magnin, Levi Strauss, Dean Witter, and American Building Maintenance Indus
tries; mergers and acquisitions such as Standard Oil of California (now
Chevron) and Standard Oil of Kentucky, FMC and American Viscose, Chevron and
Gulf, and FMC and Link-Belt. However, I can best tell the story of his prac
tical genius by describing a homely solution to a crisis.

In 1960 International Paper bought most of the assets of Muirson Label, a
San Jose-based concern which was our client. IP could not, however, due to a

iii

consent decree, buy Muirson's Illinois and Connecticut plants and machinery.
To make certain of a [Internal Revenue Code] section 337 liquidation (tax lan
guage for a corporate dissolution), Muirson had within one year to sell "sub
stantially all" its assets and distribute to its shareholders the proceeds.
Accordingly, it agreed to sell the Illinois and Connecticut assets to two
Brooklyn junk dealers -- Hook and Fishbane. Eleven and a half months into the
twelve-month tax period, Hook and Fishbane advised they could pay less than
half the agreed amount in cash. While I was still fuming, Al had calmly
devised several series of six- and nine-month "bonds," secured by the unsold
assets and issued by Messrs. Hook and Fishbane which -- with $50,000 in
cash -- I carried home from a closing in Brooklyn in a lawyer's office above a
fish market. Al thus saved the tax integrity of the transaction. One may
question whether these "bonds" would have withstood the I.R.S. attack, but
that review never came.

While I flew home from New York with the cash and bonds, Al was off to
Louisville, Kentucky, to represent Standard of California in acquiring Stan
dard of Kentucky. There, I recall, we disagreed with Kyso's counsel as to
whether they had "retail outlets" or -- as Socal called its -- "service sta
tions." A holiday came along, during which Al and I drove into the country
side, passing dozens of general stores, each with a pump in front. Next day,
we gave in on that issue.

Al's family -- his wife, Sylvia, his daughter, Kathi, and son, David, now
a Brobeck partner and father of their beloved grandchildren -- have played a
wonderfully supportive role in allowing Al throughout his career to focus his
immense energy on his law practice. In more recent years, the Browns have
taken some "time outs" at their Palm Springs home, but for many years, law was
the total focus.

Al's career in corporate law began when Marshall Madison asked him to
build a practice for PM&S in that area. As he did so, Jack Hofmann first
joined him, and I, soon thereafter. Today, that area of expertise occupies
the time and energy of two groups in the firm aggregating thirty-five lawyers.
Their existence, prosperity, and continuing growth is a tribute to Al's vision
and leadership.

Paul L. Davies, Jr.
Pillsbury, Madison & Sutro

September 18, 1987

INTERVIEW HISTORY

Albert J. Brown was interviewed as part of the series of oral histories
being done with twelve advisory partners at PM&S. Mr. Brown played a major
role in the growth of PM&S's corporate-securities practice, establishing a
national reputation for himself and the firm.

Mr. Brown joined PM&S in 1942, after practicing in Jackson, California,
for a short time. He began working with Felix Smith on Standard Oil of
California (now Chevron Corporation) matters, and with Al Tanner on other cor
porate matters. He gradually assumed more Securities and Exchange Commission
work, and the filing of registration statements for the sale of bonds by
Pacific Telephone & Telegraph Company took him often to New York. He also
participated in trial work during his early years.

When Felix Smith died in 1947, Mr. Brown was called into the office of
Marshall Madison, who told him, "You are now the corporate man." As head of
the Corporate Securities Group at PM&S, Mr. Brown presided over a long period
of enormous growth. He handled the financial aspects of such significant
transactions as the merger of Standard Oil of California and Standard Oil of
Kentucky; the sale of Dollar Steamship Lines to American President Lines; FMC
Corporation's acquisition of American Viscose Corporation; and he took part in
the negotiations for forming the Iranian Consortium. Over a period of many
years, he handled the financial activities of Occidential Petroleum Company
and its president, Dr. Armand Hammer.

Working frequently with SEC people and with the California Corporate Com
missioner, he established an excellent relationship with them which benefited
his clients. Francis Kirkham calls him "the best corporate lawyer in America
in SEC matters," and goes on to say that he was "always at my right hand
(during the 1961 merger of Standard Oil of California and Standard Oil of
Kentucky), worrying and helping and handling that aspect of the transaction."

Mr. Brown served as counsel to The Boeing Company's Review Committee
established to investigate the company's foreign operations that were being
challenged by the SEC: a sensitive and difficult assignment.

Although he became an advisory partner in 1980, Mr. Brown continued to
practice law, and in 1984 he was called in to work full time on the Chevron/
Gulf merger.

As he himself said to partners and associates at his retirement dinner,
"I hope that you sense that while all this [law practice] was going on, I was
having fun. And I want to emphasize that if you are not having fun, go do
something else." His continued enthusiasm for his practice today underscores
those words.

Mr. Brown chose to write down his recollections about the topics
suggested by the interviewer, rather than taping his answers to questions. He
agreed to maintain a somewhat informal tone in keeping with the idea of an
oral history. These written answers to questions were supplemented by two
taped interview sessions in his downtown office at PM&S. These took place on
December 9 and December 18, 1986.

His office is furnished with warmth in teakwood desk, bookcases, and two
comfortable couches whose upholstery pick up the earth tones of a striking oil
painting. A Japanese paper collage decorates another wall, hanging over an
antique chest.

Mr. Brown carefully reviewed the final manuscript and returned it in
record time. Old photographs, he explained to the interviewer, were stashed
in his attic, virtually out of reach, but with the help of his wife, Sylvia,
he found some for the finished volume.

Carole Hicke
Interviewer -Editor

August 1987

Regional Oral History Office
486 The Bancroft Library
University of California, Berkeley

Regional Oral History Office
Room 486 The Bancroft Library

University of California
Berkeley, California 94720

Your full name
Date of birth

Father's full name_
Occupation KJ-<

Mother's full name
Oc cupa t i on

Family

Spouse

Children

BIOGRAPHICAL INFORMATION

Birthplace

1L±

Birthplace_

Birthplace

Where did you grow up? ^L^u_^ 7 ,
Education

f £, -

Areas of expertise

Special interests or activities

"Y>^<~.

I FAMILY BACKGROUND
[written answers]

Hicke: Can you tell me about your family background and your childhood?

Brown: I was born and reared in San Francisco. My mother told me I cost $25
at the University of California Hospital. My parents were both born
in Russia. My father had just finished his required army service when
the Japanese-Russian war commenced. He thought this about time to get
out of Russia. He went to Amsterdam and subsequently to New York. My
mother, at age 14, decided she did not care for her stepmother and she
went to Glasgow [Scotland] . I suspect that in those days one did not
leave Russia legally. They met in New Jersey in 1906 and married. My
sister, who is 6-1/2 years older than I, was born in 1907. In about
(I believe) 1911 or 1912 they moved to San Francisco, and I was born
in 1914. My father could read and write English (I don't know where
he learned) . My mother could speak English (some words with a Scot
tish accent) but did not read well. This never bothered her because
she had a brain that retained everything she heard. Further, she kept
in her head all our financial matters (which unfortunately were very
meager). We never had very much money but by and large, we got by.

My sister played the violin quite well and earned her money for
college by giving lessons to young children.

I went to grammar school and did very well but, unfortunately,
the school kept promoting me, mid-year, to a higher grade. I didn't
mind this except that I was always the youngest one in the class by
several years. My high school was Commerce High, a dreadful school at
which I learned very little, unlike many of my friends, who went to
Lowell High School and learned much. In any event, I commenced col
lege at U.C. (Berkeley) at barely age 16.

I really had no idea what I wanted to do. To make matters worse,
I had never learned to study or understand what one was supposed to do
in college. Needless to say, my grades were terrible. In point of
fact, I barely avoided being put out. I went from chemistry to other
things and decided I wanted to be an optometrist. I tried that but I
still had not learned self -discipline.

In 1935 I left school (there was a depression) and worked at var
ious things -- from manual labor to being a playground director. I
finally decided that what I really wanted to do was be a lawyer. In
order to go to law school, I had to have an A.B. One had to have a
"major" to be graduated. I looked in the catalogue to see how I could
put together the courses I had taken to meet the requirements for
having a major. I found that in one year I could get an A.B. in psy
chology, and a number of courses I had taken could be used as part of
the requirements, such as anthropology (with respect to which I had
done well) .

By now I was 22 and had an incentive. I found the courses inter
esting and got all A'S, except for one B. Accordingly, at age 23, I
entered Boalt Hall. My class was the largest ever until the present
law school was built. The school had three classrooms. The first-
year room seated, with difficulty, 165 students. We all knew that the
second-year class only held about 75 and thus knew that quite a number
were not going to get into the second year.

My grades at law school were good. I never really broke my back
to be at the very top of the class because by that time I was tired of
going to school. Nevertheless, I did have a good record, much to the
surprise of many who knew I went to class infrequently. Toward the
end of the semester, before the examinations came, I buckled down and
learned what I was supposed to learn. I think that the one thing that
annoyed me most was the fact that law school was padded. That is, it
spent a great deal of time on matters that did not require that much
time. I often thought that law school only needed about one and a
half or two years, rather than three. No doubt I was mistaken, but
that's what I thought.

[oral answers]

Hicke: You were telling me earlier a little bit about your parents, and I
wondering if you know where they lived in Russia.

Brown: No, I don't really know. I do know that my father's complexion looked
like he lived close to Finland in that he was very fair, blondish,
with blue eyes, like people who live in that part of the world. As to
my mother, on the other hand, I have a vague recollection I heard
Latvia. Now whether that was Latvia or Russia, I don't know. I
assume it was Russia, but it was in that general area, I believe, but
I never did know.

Hicke: I also just want to ask, did they ever encourage you to read or to
study or was there anything like that in your family background?

Brown: Not really. Of course, when I was very young, why they wanted to be
sure that I was doing the proper things in school and learning,
because I had no problem in the lower classes. So they never had to
tell me about that, I just did it. And I learned to read early on.

Hicke: Did they speak Russian at home?

Brown: No. They spoke English.

Hicke: So you never got a chance to learn Russian at home?

Brown: No. My mother did work for charity. Right after 1918, apparently
there were a lot of American soldiers in parts of Russia, such as
Siberia, and apparently they all brought wives back. The wives didn't
talk English and they all were pregnant at that point, so my mother
used to go to Lane Hospital, which at that point was part of Stanford;
it was the Stanford Hospital here in San Francisco. She used to
translate when these women needed to tell the doctors something. Of
course, they didn't speak English and the doctors didn't speak Rus
sian, so my mother helped out in that way.

My father for some reason never talked very much Russian. I
think he kind of forgot the language. My mother met some of these
people and she talked to them. So her Russian apparently was pretty
good. I don't know how good it was. I don't know whether she spoke
with poor grammar or what. But she could convey what people were
saying.

Hicke: So she actually did keep it up a little bit by doing those things?
Brown: Yes.

II EARLY LAW PRACTICE

Solo Practice in Jackson, California
[written answers]

Hicke: What did you do after you graduated from law school?

Brown: I'd like to just quote from a part of the after-dinner speech I made
at the time I became an advisory partner. For some reason that I
can't explain now, I decided that I wanted to practice law in a small
town. I had never lived in a small town. I was born and reared in
San Francisco, didn't really know what small town life was like, but
nevertheless I got into my old Model A Ford and drove around Northern
California. When I got to Jackson, up in Amador County, that was the
first place I got to where lawyers there didn't tell me how good the
next county over was. I commenced practicing law in Jackson,
California early in 1941.

At that time, Jackson was a rather unique place. The main street
was two blocks long, on which there seemed to be twenty-six bars.
Each of the bars had a roulette table, crap, and card tables. They
never heard of the two o'clock closing law, or that gambling was a
no-no. The saving grace was that everything was run honestly. It was
all local enterprise -- there were no out-of-town professional gam
blers. The only rule there was on gambling was that there were no
slot machines allowed in the city limits of Jackson or Sutter Creek --
the only two towns of any size. When I say of any size, I mean
between 1,000 and 1,200. I was told that the theory of keeping slot
machines out of the cities was to keep the school children from
playing the slots. I guess it was all right for them to play the
slots out of the cities.

In addition to gambling, one of the major local enterprises was,
for lack of a better name, girls. There were basically two large
establishments where the girls were the main attraction: one was
called the Stockade, and the other the Plantation. At the Stockade,

At about age five

YESTERDAY
and

TODAY

At a recent lunch with friends

which in point of fact was a stockade, each of the girls had her name
in electric lights so that you would have no trouble finding where
Rosie was or where Sally was, et cetera. This again was operated as
honestly as these things can be. The girls were run through the doc
tors' offices periodically and if the report was bad, they no longer
were working in Jackson.

This, then, was the community in which I hung my shingle, which
read, "Albert Brown, Lawyer." I rented an office which had a recep
tion room, an office, and a storage room. The total rent was $10 a
month. My stationery consisted of dime-store, letter-size, plain
paper. I had a rubber stamp made which said, "Albert J. Brown,
Lawyer, 10 Court Street, Jackson, California."

I had no secretary at first. Whatever little amount of typing I
had to do, I did myself on the Remington portable I had since high
school days, and as for someone answering the telephone, that was
simple. My offices were on the second floor of the building above the
telephone company. Whenever I went out of my office, I would stick my
head into the telephone office, which consisted of an old-fashioned,
shutter-type telephone system where about five or six ladies sat, and
I would say, "I'll be back in fifteen minutes," or, "I'm going over to
such-and-such a place." It really worked very well, and the best of
all, it was free. PT&T didn't know about this service they were
giving me. Anyway, there were no tariffs to cover it.

I'm very proud of the fact that during the first month -- and it
was not even a complete month; I think it was about twenty days -- I
netted $13. Thereafter I managed a living.

My library consisted of the Civil Code, the Code of Civil Proce
dure, and the Penal Code, and a very old copy of Witkin. However, one
of the first things I suggested was that the Board of Supervisors
appoint me the legal librarian because the library was in terrible
disarray. A new courthouse had just been built and the books for the
library had just been dumped into the room and not even put on
shelves. Not having a lot of other things to do, I spent a consider
able time finding out what was in the library and getting the books in
shape and even got permission to order new books, so that I had at my
disposal a very competent library.

My practice was varied -- I am sure it would be useless to try to
explain this to PM&S lawyers, but I did contracts, leases, divorces,
annulments, and trial of various matters. In addition to all this, I
also had to handle criminal cases -- some not of choice and some of
choice. The not of choice would be when on Monday mornings all four
lawyers in the county, including the district attorney, would be in
court for law and motion, and the judge would assign one of the three
of us to defend the current gentleman in the pokey who didn't have
money for a lawyer. Generally, these cases could be worked out; I
think the expression is "cop a plea."

The criminal cases of choice would arise when the sheriff would
call up and say, "I have Tom Smith here in the jail and he's yelling
for a lawyer. I told him that I would call you and ask you to come
over. I guess I should tell you that when we took his personal
effects, he had $104 on him, and I now have that in an envelope out
there." This obviously permitted you to tell your new client what the
down payment was going to be.

Thus, things went along, practicing law in Jackson. I tried
quite a number of cases in a relatively short time, only because one
of the lawyers, Ralph McGee, who subsequently became the judge, didn't
like to try cases and the other lawyer in the county was rather liti
gious, so that sort of left me and him to try all the cases.

My first experience in the federal court arose when I was repre
senting a client who had been arrested for operating a small still.
My client was a very nice fellow, a widower raising very beautifully
two young children, at that time about ages ten and twelve. There was
no question about the crime having been committed, but the United
States attorney was very nice about the matter. I discussed it with
him, and we worked out an arrangement where if I pled my client guilty
he would join with me in a plea for probation. At this time,
Sacramento was the closest place where the federal court sat. It did
not have judges of its own, but the judges from San Francisco took
turns in coming up to Sacramento and sitting. On the occasion of this
matter the judge was old Michael Roche. Some of you may, of course,
remember him. He was a crusty old gentleman even then.

My client appeared in court with his two children, who were
dressed very neatly and looking bright with hair slicked back. My
client was also dressed very nicely and appeared very, very meek and
repentant. At the appropriate moment, which was after the guilty plea
and the two arresting officers told their story (so that the judge had
some idea of the nature of the crime committed) , the United States
attorney gave me the nod and I put in a bid for probation. Judge
Roche looked at me and said, "in these kinds of cases for first
offenders, I don't grant probation. I only fine them the amount of
the tax that's been avoided, and probably the fine I impose will be
less than your fee, counselor."

Now, I'm an advocate, and I just couldn't restrain myself at that
point from saying, "Your Honor, I'm not charging my client any fee at
all." I thought Judge Roche was going to have a stroke, as he turned
purple, choked, looked at me, made no further comment to me, but then
muttered some small amount of money and that was the end of the
matter. I must hasten to add that my client very generously offered
to pay me a fee, but I, very ethically, refused it. Years later when
I was on the road and had to go before Judge Roche to put over a case,
he didn't remember me -- fortunately.

Jackson, in addition to the two industries already described,
primarily was a gold mining community. I was a little fearful that
gold mining having stopped (the government's idea was to get these

gold miners to go into other types of mining such as ferrous mining;
that never worked, but nevertheless gold mining terminated), I thought
I had better get out of Jackson before the town dried up and blew
away. It never did, of course, but those were my fears. So I came
down to San Francisco and thought I'd look around and see what there
was in San Francisco.

Joining PM&S

Brown: One day I came to San Francisco. Immediately I was offered two

jobs -- one by Arthur Dunne and one by Pillsbury, Madison & Sutro. It
was an easy decision. Dunne offered me $165 and PM&S offered me $200.
So in April 1942, after I had been out of law school about two years,
I commenced working at Pillsbury, Madison & Sutro.

I went to work for Felix T. Smith. Felix Smith was then the gen
eral counsel of Standard Oil Company of California. Things worked a
little differently then. All memoranda that came to the firm from
Standard were addressed to Felix Smith, and all replies to those memo
randa went out physically signed by Felix Smith. Felix Smith's method
of distributing the work was a little unusual. As these memoranda
would come in, he would pile them up, and eventually he would sort
them out in piles across his long desk and then call for a messenger.
The messenger would come in, and Mr. Smith would say, "Mr. Capocelli,
Mr. Brown, Mr. Kaapcke, Mr. Whoever, Mr. So and So," and of course,
the messenger was trying to put these packets between his fingers and
trying to remember which finger was who, and so on. Eventually these
all got to us.

We often suspected we were doing work that was probably origi
nally intended for somebody else, but there we were. We also
suspected now and then that one of us would probably not be in love
with the memoranda he got to answer and would sneak around and drop it
on someone else's chair. I am not suggesting that I was ever a party
to that, but as I say, some of us suspected others were doing those
kinds of things. I hadn't thought much about it, but it now occurs to
me -- some got all the glamorous work, like admiralty, while I got the
patent work. I never heard Mr. Smith complain, so I am not really
sure he remembered who he sent this work out to. Nevertheless, it
seemed to work pretty well.

In any event, I worked for Felix Smith and did all kinds of work,
including patent, antitrust, stock transfers, anything that came
along. In those days, we actually did a lot more of the patent,
trademark, copyright, that sort of work, than we do now. In those
days, the so-called Patent Department was run by a gentleman named
John Adams , who was not very happy about the fact that everything had
to come through Felix Smith and be approved by him. He thought the
department should be autonomous, as it now is, I understand. Never-

theless, this very often caused hot memoranda to be sent to Felix
Smith (really Albert J. Brown) by Mr. Adams. If a red hot memorandum
from Mr. Adams would come, Felix would ask me to come in, would hand
it to me and say, "You got me into this; get me out of it." That
meant going and trying to find some really obscure point of law and
calling Adams on the phone and having a conversation with him or going
over to see him and dropping this old case someplace in the conversa
tion. We would then work out something where we could each write the
other a memorandum that resolved the problem and saved everyone s
face.

At any rate, things went on and I don't know that I was doing
spectacularly or poorly in the firm -- at that point I was just
earning a living. One day Felix called me into his office and told me
that a client wanted to publish a notice in the newspapers saying, "I
am no longer responsible for my wife's debts." Mr. Smith asked me to
prepare a notice to put in the local papers.

I had had a course in domestic relations in Boalt from Barbara
Armstrong. I recalled from that course the Mrs. Armstrong said those
kinds of notices were of no legal effect whatsoever. I said to
Mr. Smith that I understood and believed that there was no point in
such a notice and that it had no legal effect. He looked hard at me,
whereupon I said I would go down to the library and look and make
sure. He said, "All right, go ahead." So off I went to the library.

To my consternation, I couldn't find anything on the subject.
Nothing; zero. Maybe I didn't look in the right places. I should
have looked, as Francis Marshall says, under "Indians" -- that's where
you find everything. But, in any event, in about thirty or forty- five
minutes Felix comes marching into the library -- I am sure, to see my
cases. I jumped up quickly from my table and ran up to him as he
entered the room and said, "Mr. Smith, it's just as I said; it just
has absolutely no legal effect whatsoever. Besides that, it's in very
poor taste." Felix Smith looked at me. He said, "You're right," and
turned around and marched out, and I never heard another word about
the matter. However, from that point on, I did notice a little change
in Mr. Smith's attitude toward me. He seemed to think that perhaps I
was a gentleman and maybe I could become a lawyer. After all, it was
Mr. Smith who said to me, "Anyone who can't afford to practice law,
shouldn't practice law."

When I was first at PM&S, it was usual in Standard on the day
before Christmas for the various Socal offices to have parties at
which some substantial amounts of liquid refreshment would be enjoyed,
until a few little things got out of hand and the word was passed
through the Standard Oil building (at least to the Standard Oil
employees) that there was to be no drinking in the building. Where
upon some of us undertook to have parties in our offices, and I had
what was known as the stock transfer party, that is, the stock
transfer people and some others from the secretary's office and any
body who had ever worked on stock transfers in the firm. Of course,
at some of those parties during the war you drank some pretty horrible

brandy, which was about all you could get -- Portuguese brandy or some
such thing.

At one Christmas party in my office on the twentieth floor, quite
a number of us were standing around drinking brandy out of paper cups.
The door opened (Mr. Smith always entered a room by throwing the door
open), and in marched Felix Smith with all of us standing there with a
paper cup in our hands. He looked around and said, "You know that
Standard Oil uses the hardest wax known to man to coat those cups, and
it's impervious to water, but I don't know what the effect of alcohol
on that wax is . " Whereupon he turned around and marched out . His
only comment ever about the party.

Gradually, I started doing more and more work for Al Tanner, who
also worked with Felix Smith. Al did the corporate work we had in
addition to doing Standard work, and that was my first introduction to
SEC [Securities and Exchange Commission] work.

In 1947, Felix Smith died unexpectedly, and on the day of Felix's
funeral, Marshall Madison called me into his office and said, "You are
now the corporate man." I must have looked a little puzzled, but he
said, "Well, that's not so bad; look at Graham Sterling down there at
O'Melveny. Look what it has done for him." I thereupon became a cor
porate man.

[oral answers]
Hicke: Who was Graham Sterling?

Brown: Graham Sterling was certainly older than I, of course. He was head of
the firm of O'Melveny & Myers. He was the man at O'Melveny who ran
the sort of work that I was now getting into. He had a reputation and
did well, and so on. So, that's what Madison was referring to.

Hicke: He thought this would be a good place for you.
Brown: Well, I think he was just kidding me. [laughter]

Hicke: He was trying to tell you that it would be a good place for you.
Well, that turned out to be the case actually.

[written answers]

Brown: In order to make the record complete, I should also say that during

the war years, there weren't any associates around the firm really who
had very much trial experience except Charlie Prael and myself.*

* See Charles Prael 's oral history: "Litigation and the Practice of
Labor Law at Pillsbury, Madison & Sutro: 1934-1977," available in the
Pillsbury, Madison & Sutro library and in The Bancroft Library,
University of California, Berkeley.

Charlie got into a case involving bonds of the South San Joaquin Irri
gation District and he went to trial and it lasted quite a while, so
there I was, the sole surviving trial lawyer of trash cases, and quite
a few little dumb cases came along that I had to try. These cases
(all in the Superior Court) involved such diverse matters as defending
a collection of a note on the grounds of forgery; defending an annul
ment case, resisting on behalf of British counsel the appointment of a
disbarred lawyer as administrator of an estate.

Right after [President Harry S.] Truman was elected -- I think it
was early in 1949 -- Standard Oil thought it would be nice to have
representation in Washington through us, and we agreed to open a
Washington office. I first learned of this when Marshall Madison
called me into his office and told me that we were opening a
Washington office and that the partners had selected me to go back and
open the office and run it. Marshall said, "I want you to take your
time about deciding whether you would like to go, but let me know
tomorrow . "

My in-laws were living in Arlington, Virginia, so I called them
and inquired about schools and what the problems were living in
Washington. So the next morning I came in and told Marshall that I
had discussed it with my family and made some inquiries about schools
and so on, so if the firm wanted me to go, that was fine. It wasn't
very long after that that it was announced that Hugh Fullerton was
going to become a partner and open the office in Washington. So that
was really a break for me, because I had not said no, and I didn't
have to go.

After almost forty-five years, * I suppose one could go on indefi
nitely, but I think I would like to tell about several incidents about
the acquisition of Standard Oil of Kentucky by Standard Oil of
California. The transaction was consummated I believe in 1961, but it
had gone on for about a year because of the time it took to convince
the Justice Department. In any event, sometime in '60, I believe it
was, I was fishing -- this was around Easter time -- up at Lake
Shasta, and eventually I was tracked down by the proprietor of the
motel I was staying in, telling me I had an urgent and important tele
phone call. It was Francis Kirkham. He briefly told me on the tele
phone to get back immediately, that this transaction was going to go
forward and we had to go to Louisville at the end of the week. So I
got back to San Francisco.

One of the things that has permitted me to last this long was
that I have had very good people working with me. Fortunately, Paul
Davies and Jack Hoffman had pitched in and more or less done all the
work already when I got there. We put together a merger agreement. I
arrived in Louisville with a printed agreement, which to people in
Louisville was quite intimidating. We never did change very much of

* As of 1987.

that print.

Scott Lambert (the client's general tax counsel), Francis
Kirkham, and I flew to Louisville on Easter Sunday. We left early in
the morning and got to Louisville in the late afternoon. We soon dis
covered that on Sunday, particularly Easter Sunday, all bars were
closed, all liquor stores were closed, and there was no way to get a
drink. That does not daunt Kirk. He gets on the telephone and calls
the senior partner of the law firm that represented Standard of
Kentucky --a man name Sealbach. We were staying in a hotel also
named Sealbach, as was almost everything else in Louisville.

Kirk put on this eloquent plea, and I think that Mr. Sealbach got
the idea that Kirk had some sort of medical condition which required
that he have a certain amount of bourbon every day and, of course,
this being Kentucky, why, where else could he get bourbon like they
had in Kentucky? So shortly thereafter a messenger appeared with sev
eral bottles of bourbon, and as there was nothing else to do with
them, we drank them!

Inasmuch as we had left San Francisco early in the morning, no
one had an opportunity to go to church, and after a few drinks -- more
than a few, perhaps -- Scott and Kirk felt that wasn't right, they
really should have gone to church, and the only way they could make up
for that was to commence to sing hymns. Well, the hymn singing
started, and I didn't know there were that many hymns. Whatever they
were, Kirk and Scott knew them all, and of course, their throats would
get dry as they sang and they would have to wet their throats obvi
ously, and what better way than with Kentucky bourbon? Let me say
this, I have been hymned for the rest of my life!

In the same vein somewhat, there were two more little incidents
which were interesting involving that transaction. While Standard of
Kentucky's counsel were quite good, they had no experience with SEC
matters or writing proxy statements and the like, so we wrote their
proxy statement and their letter to stockholders explaining the trans
action, which is about the only piece of paper the stockholders ever
read anyway. The letter of the president, Buddy Smith of Kentucky,
said that it was a good transaction because Kentucky, which was purely
a marketing company, was going to join up with an integrated oil com
pany. He took that home to read and his wife read it and she said,
"You all mean that we are going to join with an integrated company?"
Well, Buddy, who's pretty sensible, laughed, but he told me about this
and he thought perhaps we should change this, and so we changed it to
say a company which has production, refinery, manufacturing, et
cetera, et cetera, explaining what integrated meant.

The other incident is connected with the Kentucky stockholders'
meeting to approve the transaction. Paul Davies and I went to the
meeting, and I should tell you that the usual practice in the South
(and while Kentucky is not South, it is South in many things) is that
meetings commenced with a prayer. A Baptist minister got up, and let
me tell you, before he was through, it was very, very clear that any-

Hicke:

Brown:

Hicke:
Brown:

Hicke:
Brown:
Hicke:
Brown:

Hicke:

Brown:

body who voted against this transaction was going to be damned in Hell
forever and that went for anybody who sent in a proxy that said, "No."

Early Partners
[oral answers]

Tell me about some of the other partners who were there when you first
started. You did tell some good stories about Felix Smith, but I
wanted to ask you also about some of the others. Gene Prince, did you
know him?

Yes. I knew Gene Prince. Gene Prince was one of these people who was
nice to everybody and everybody loved him. Apparently he was a very
fine lawyer. However, I never did any work for him really, so I
didn't know anything about how he worked, except that I heard that he
was one of the best lawyers around, and so on. But, as I say, every
body liked him and he was very popular and that's all I really can say
about him.

What about Gene Bennett?

He was a great litigator, but I never did any work with him either.
Although he would try every once in a while, I would always tell him
that I had to be in New York, whether it was true or not, because I
could see that was just not for m.e.

He would try to get you to go along with him on cases?

Do something or other.

Well then, I think that Del Fuller was there?

Yes, I did work a lot with Del Fuller. Del Fuller had a lot of curi
osity. So every once in a while -- even before I was a partner and
after I was a partner -- he'd call me in and would give me a problem
about something. I learned fairly early that I need not do a darn
thing about it unless he came around and asked me again. It was just
something that came to his mind and he was kind of curious and then he
would forget about it. So I found that if I just ignored it, why
everything went away fine. Once in a while he would come back and
then I would look up what he was trying to find out.

He apparently had kind of a wide-ranging mind so that he just liked to
speculate on various possibilities?

Yes. His field was a little broader than usual, but he went into var
ious things. He got along quite well with the lawyers. Perhaps not
quite as well as some of the partners, but basically he was a very
nice fellow too. And he was a good friend of mine.

Hicke:

What kinds of work did you do for him?
examples?

Do you recall any specific

Brown: Mostly he did business matters and had a wide range, everything from
banking to real estate. He was quite good and he got along well with
quite a number of people. But he was quite blunt and sometimes that
disturbed people.

Hicke: Did you work with Sig Neilson at all?

Brown: Yes. He was in the tax business and that wasn't my business, but I

knew him. We would have a drink and so on, but I never really did any
work for him.

Hicke: Let's see, Francis Kirkham?

Brown: Francis Kirkham was the man whom I saw when when I first came looking
for a job. I don't know whether he hired me or Felix Smith hired me,
but he had talked to me. He has been a good friend in all these
years. I have done a little work here and there for him, but not to a
great extent. Some of the work I did for FMC was really to help him
in the lawsuit.

Hicke: And also you mentioned that you worked with him on the Kyso merger.

Brown: Yes. He was working to get the government to lay off on antitrust,
which is not my field either.

Hicke: Well, you were in on the final transaction, I guess?

Brown: Yes.

Hicke: Herbert Korte? Did you know him?

Brown: Yes. Norbert Korte was a litigator and of course I wasn't a liti
gator, except in the period where there weren't any other litigators.
After the war, for some reason or the other -- I can't remember how it
came about -- I got stuck with a suit. I got a case where the man had
befriended an elderly woman and was very helpful to her. When she
died, she left whatever she had, not very much money at all, to this
man. The brother of this woman thought it was terrible that she'd
left this money to this gentleman. So the first thing you know, he
tries to get all the money by coming up with a note for which he had
loaned some money to this woman.

I went around and got some experts and we decided that that note
had been forged, in the sense that it was an old, old note and we
didn't know whether it had been paid or not, but the statute of limi
tations had certainly run on it.

But in any event, Norbert Korte found out that I had this case
that I was going to try. He had a case coming up that he didn't want
to try at that point, so he was going to come along with me. He
wouldn't say anything, just sit in the courtroom with me. Further he
could say that there were witnesses from out of town coming and so
just couldn't try the case he was suppose to try at that point. Of

course, the truth of the matter was that the out-of-town people were
from Berkeley. He was a man who was always shouting and getting mad
at people and so on, but he sat very quietly throughout the trial and
didn't try to interfere except once. He didn't think I had made a
point or I was arguing to the judge about something that the judge was
not permitting me to put into the record. He got up and the judge
told him to sit down. That was the end of that. [laughter]

During the period of World War II, he was a very nice fellow and
he thought that I shouldn't have to go to war and that he would appear
and say how valuable I was to Chevron and so on. I just laughed and
said, "Go on and have your fun, but you're not going to get anywhere,"
which was true. He didn't. The only reason I didn't get into the war
is that when I was in college I hurt my foot. I had soldiers' foot or
something like that, which soldiers get after marching for twenty-five
years. When I went for my examination, I had to fill out a form. One
of the questions on the form was, "Do you wear arch supports?" And I
put, "Yes." So they immediately had to take x-rays and wanted to know
why and so on. I said, "Take x-rays." Well, they did and decided
that they didn't want me. So that's why I wasn't in the military ser
vice.

Hicke: You weren't going to be good for much marching.

Brown: Not for anything, apparently. At that point I was going to get a com
mission in the navy, and so I kind of balanced the two, and when this
came along, why everybody said I should just stay here, so I did.

Hicke: I think the firm needed all the help that it could get at that point.
Brown: I don't know how much help I was. But they did need help, yes.
Hicke: What was it like during the war years here?

Brown: Well, during the war years, we all worked, virtually worked six days a
week, all day, and there was a rule that everybody had to take turns,
that is not the partners, but the associates had to take turns on
Saturdays. In those days, you worked half day on Saturday, in theory
a half a day only, but someone was assigned to stay the rest of the
day so in case there was a telephone call or somebody wanted something
of PM&S, there was someone to answer the phone and do something about
it. But the way it worked out, no matter who had the duty, why every
body else was there anyway. Literally we did work full days on
Saturdays, too. We were short-handed.

Hicke: Well, back to the people. Was Al Tanner there?

Brown: Yes, Al Tanner did a little of the SEC work. We didn't have much of
it really, but he knew about it. So Felix Smith thought that I ought
to work with Al Tanner and still do a lot of the Chevron work. But I
could learn something about this and I did.

Al Tanner was a very good lawyer and he was very thorough. If he
had a failing, it was that he wanted everything to be so perfect that
he never could sit down and get something where you start from
scratch, write something, and put it together. Of course, I learned
that early on. I wasn't going to sit there while he just sat there
for two hours and just thought. The secretary would be sitting there.
He never dictated. She would be very patient, too.

I learned after a while that the thing to do was that after he
sat there and didn't say anything for quite a while, I'd say "Al,
look, let me just rattle something off and then you can fix it." He
would be relieved and I'd go with her and I'd rattle something off.
It would come back to him and then he just did a beautiful job of put
ting together a very good document. He just couldn't get started, but
once he got a start, why he was terrific.

A lot of people had problems with him because he had a tendency
to be sarcastic. That's when I learned early on that the one thing
that you don't do is be sarcastic with people, because it is the big
gest cut of all to a young lawyer, when somebody is being sarcastic
about something he did or didn't do or should have done and so on. So
I learned that. But he had that tendency. Other than that he was a
pretty nice fellow. But of course in those days, with him, you worked
until midnight almost every day. It was just terrible. But we all
learned that way, I guess. [chuckle]

Hicke: Then you would have to be back down here at the office bright and
early?

Brown: Of course you were.

Hicke: I know that Jack Sutro did much of the telephone company work, and

then he got you started on some aspects of it. Did you work with him
quite a bit on that?

Brown: Of course, Jack never lets anything go. He always wants to find out
about everything and so you would talk to him about it, yes. In one
sense we worked on it until after I was a partner. I tried to avoid
getting him into what I was doing, because he had enough to do and if
you started talking about it, why he would waste a lot of his time, I
thought. But at the very beginning, before I was a partner, I was
required to tell him what I was doing. Of course, he knew a lot about
the company that I didn't know at that point.

Hicke: Did you ever hear stories about Mr. Alfred or Mr. Oscar?

Brown: No. Oscar, I think, may have been dead by the time I came here. But
Jack's father was still alive. He used to come in, and I can't
remember the days he came, but occasionally I used to see him going
into the elevator. I never met him or anything of that nature. I do
remember I saw him going into the elevator one day and then he never
came back. Something either happened or he was quite ill then. But I
had never even met the gentleman.

Hicke: Is there anybody else that I've missed that you worked with closely?

Brown: No, because I've talked about the people I worked with closely: Felix
Smith and Al Tanner. Then I went into working for myself, sort of.
And, of course, I did work with other lawyers obviously, from time to
time.

Hicke: Just in general, were there big changes after the end of the war in

the firm?

Brown. Yes. A lot of people who had been with the firm came back. I am

speaking now not of the partners but of the associates. I'd say that
a good part of them left after a while for some reason or other.
Didn't work out. I don't know why.

Hicke: So a lot came back and then left. Then more obviously came in as the
firm started to grow. But there must have been a bit of a gap in time
for people returning from the war who wanted to go to law school, so
that maybe there were a few years where there weren't very many people
graduating from law school? Is that true?

Brown: I guess very many people is the right word. There were people who

came to work for us, who during the war were going to law school and
finished law school and for some reason didn't get into the war. We
did have some of those, yes. And of course, we hired as associates
people who were lawyers who already practiced law and they came to us
to do certain amounts of work. They all left right after the war.

Hicke: I understand the firm had some women lawyers at that time.

Brown: Yes, right. I can remember only one.

Hicke: I don't know how many there were. More than one?

Brown: Not very many. I know that there was one, because she was on my floor
when I was on the 21st floor, I guess then.

Pacific Telephone & Telegraph Company
[written answers]

Hicke: Tell me about the work you did for PT&T.

Brown: After World War II The Pacific Telephone and Telegraph Company, as
well as other Pacific Coast companies (in particular in California,
Oregon, and Washington), felt the need for additional funds due to
increased population, more homes being built, et cetera, in order to
meet the public's requirements. Jack Sutro came back to the firm from
the war about the time I started to do work in this area.

The telephone company had a very small number of lawyers.
Virtually all the legal work was handled by PM&S people, with Jack, in
effect, being the general counsel but without that title. When Jack
came back, the necessity for refiling and new filing of registration
statements (in all cases the sale of bonds) was urgent. Jack, in
addition to his other duties, took over this matter, which required a
great deal of time in New York because AT&T [American Telephone and
Telegraph Company] required that all this work be done in New York and
overseen by their people. Jack did this work for a year or so but
ultimately decided that someone else should do it. I was elected.

Thus, in January 1948 (I was still an associate) I went to New
York for the first time. I had a good knowledge of preparing regis
tration statements but I knew virtually nothing about the telephone
company. I remember the first time an AT&T person asked me about some
PT&T matter, I said that I did not know the answer but I would find
out. Apparently, this was the first time someone was so candid as to
admit he did not know -- or so I was told. I should add that after
the first trip to New York, I made sure I knew everything I should
know about PT&T.

The registration statement had been prepared prior to our going
to New York. With me was the PT&T treasurer and an accountant from
the company. We arrived for the first session of reviewing the state
ment. The schedule was that we would start on a Monday and spend
about two weeks putting it in final form and filing with the SEC on
the Friday of the second week. For quite a number of years the proce
dure went this way. On the first day and evening we would get about
four pages agreed upon. That night it would be put into print and the
next day we would start again on page one. That day sometimes we
would only get to page three. One way or other, including working in
the evenings, at the end of the first Friday, we would have completed
the statement .

On Monday of the following week we would commence at the begin
ning. Up to this time the man running the show was an AT&T assistant
treasurer. On that second Monday the treasurer was present. While a
number of things were changed, by Wednesday we were finished, and on
the evening of Thursday we would take a sleeper to Washington. On
Friday morning we would meet with the staff of the SEC, who was
responsible for the AT&T and subsidiaries' registration statements.
The PT&T people and the AT&T man and I would meet with these people
primarily to tell them how this one differed from the last or other
AT&T statements and discuss the whole statement. After that we would
take the SEC people to lunch at a fine restaurant.

The lunch program continued for quite a number of years until a
congressman learned of a law firm (not us) taking SEC people to lunch
and indicated that he thought this was terrible. Thereafter we could
only have lunch with them in the SEC cafeteria, and everyone paid for
his own lunch. Needless to say, that ended lunches. I should say,
however, that I never found an instance where, because of being on
good terms, anything was done by the SEC people that was improper
insofar as the SEC rules or the law was concerned.

In the early days I was required to stay in New York until the
bonds were sold and paid for. In later years the first meeting only
lasted a few days and I could go back to San Francisco and return just
prior to the opening of the bids for the bonds and stay through the
closing. The meeting with the SEC people was done away with about
this time.

From January 1948 until some time in 1972 I went to New York from
one to three times a year for PT&T. Needless to say, I really enjoyed
New York trips. I suspect that between the PT&T trips, the Chevron
trips, and trips to New York for other clients, I probably had seen
almost every show worth seeing in New York over a period of many
years .

Administration

Hicke: Can you tell me about personnel policies?

Brown: Although in 1949-1950 I was not a partner, I was running the corporate
department and I needed help. Jack Hofmann came out of school and he
was my first associate. I guess that was a good decision because Jack
is now the head of Corporate-Banking-Securities-Insurance Group.
Thereafter, the group became larger and larger and we hired more and
more people for the group. Among the first were Robert Sullivan and
Paul Davies, Jr. I must confess that I did not tolerate anyone who I
thought would not be top-notch. I pride myself that I think I can
spot this early on. At this time, our firm was growing quite rapidly,
so it was not difficult to be able to suggest that the person in ques
tion be moved to another group which was eager to get another body.
This meant that our group would be short a person and we would have to
work harder, but I think it worked out well to the extent that our
people were always the best. I also think that because we only had
excellent lawyers, we did get more business. I never kept anyone just
because I would be afraid of being short of help. As I indicated, we
all worked harder.

Of course, it is never easy to have to tell someone that he is
not making it. I inherited the job of telling associates that some
people don't work out in a large firm and that perhaps it would be
better to seek other employment. I also told them that we would give
them all the help we could and that they should stay on with us for a
while until they found another position. I can honestly say that as
far as I can remember, all of these people to whom I had to speak
sometime later would look me up and tell me I was right and they
appreciated the way we handled the matter.

There was one amusing incident that occurred. I needed some tem
porary help and asked if any partner could spare a lawyer for a day or
two. In due course, a young man came in, and as I started to talk to

him, I noticed that he looked like he was dying, having a heart attack
or something. Further, he was inarticulate. I told him I just remem
bered I had something to do and that he could go, I'd call him later.
I called a lawyer who knew the follow and I asked him if there was
anything wrong with the young man. Was he ill? The lawyer I called
broke out with laughter. He said, "Don't you know what it means when,
out of the blue, a young lawyer is told to see you? Having to see you
means he is being fired." With that, I told my partners I was not
going to have the job anymore. If they needed to fire someone, they
could do it themselves. To be honest, I always thought we didn't fire
enough people.

Hicke: What about the beginning of the committee system of administration?

Brown: I can't remember exactly when this occurred, but one day at a firm
lunch Marshall Madison announced that there would be a committee of
partners to reach conclusions on firm matters. On this committee were
Madison, Gene Prince, Gene Bennett, Jack Sutro, Francis Kirkham, and
me. I believe we met at least once a month, and occasionally a spe
cial meeting was called. Later other people, such as Jim Michael,
came on. We discussed everything from new partners to partner retire
ment programs. In this respect, Madison had remarkable farsighted
ness. Marshall Madison permitted us to say what we thought and, in
many cases, he changed his mind on matters which had differed from his
view. On the other hand, we all respected his canny sense of making
good decisions on firm operating matters. After Madison retired, Jack
Sutro became the senior partner and the committee continued except
that it grew larger. Today there are numerous committees, including
committees somewhat like the original ones.

The Securities and Exchange Commission

Hicke: What kind of relationship did you establish with the SEC?

Brown: A good part of my work, particularly in the earlier time of my prac
tice at PM&S, dealt at some length with SEC staff. Early on the only
place other than Washington that one could file a registration state
ment with the SEC was San Francisco.

Hicke: Was this in the late 1940s and early '50s?

Brown: Yes. Because we thought it made life easier, we filed in San

Francisco. As a matter of fact, after a while we suspected that
filing in San Francisco was just more trouble. While there was a San
Francisco staff that worked on registration statements, the Washington
staff also worked on the same matter and had the last say on what the
comments would be. Nevertheless, I enjoyed working with the San
Francisco staff. They were helpful, but never told us what Washington
thought until we actually received the comments.

Hicke:

When this portion of the San Francisco staff was abandoned, in
most ways it was easier to work with just the Washington people. In
point of fact, until President [John F.] Kennedy was elected, working
with the SEC staff was a pleasure. We could call them. They would
talk to us quite cordially, listen to our views, and generally, as
long as they had reason to trust us , we could work out something that
satisfied them and us.

My reference to President Kennedy was only for the purpose of
fixing the date when things changed. At that time, quite a number of
people came into the SEC who thought we were all crooks or at least
had to be dealt with sharply. I cannot say what caused this. Obvi
ously, the SEC group became so large that there would be changes. I
have always thought that the staff people in my early years stayed
with the commission, and to that extent they did their jobs in a
manner that did not attempt to make a big deal out of everything.
They did their jobs well, but they did not seek to introduce
controversy.

[oral answers]

That brings to mind a more general question. As the administration
changes every few years, does that often change the relationship with
the SEC?

Brown: Not really. This happened to be one of those things -- as I say all
these young people came rushing in. I don't know exactly what caused
it. The only thing that does change, of course, is the commission
itself, because there are five members, and three are Republicans, or
Democrats, as the case may be, and the other two are the other,
depending upon who got into office.

Hicke: Are they reappointed each time the administration changes?

Brown: Yes. Well, I have forgotten how many years the tenure is, whether it
is four years, three years, or whatever it is, but it works out so
that with a new president elected, he is bound to get a third member
in because the political party is changing. As for the staff itself,
basically it doesn't change too much. The only thing one could say is
that in some of the areas, there is a definite political flavor. For
example, in the division of enforcement -- those are the people who
pursue people who violate insider trading laws, and everybody is
trying to outdo the guy before them, sort of. So sometimes the poli
tical flavor has something to do with that, too. Other than that, no.
I would say not.

Hicke: Have there been any other changes regarding your work with the SEC?

Brown: In my early years -- say 1952 to 1970 -- basically there were only two
or three other firms in San Francisco that did any large amount of SEC
work. Two of these firms had partners with whom I got along very
well. If any of the three of us had any questions about some legal
matter that was involved in the kind of work we all did, we called one

or both of the others and discussed the matters. Further, when we
made what we considered the best decisions, we would agree that this
is what we would stick to and would back up the others if any problem
arose thereafter. None of us ever backed down once the decision was
made. After about 1970, when the other firms became very competitive,
this nice arrangement ended. I think I would have been willing to
continue it, but I sensed that the others were reluctant to help any
other San Francisco firm's lawyer.

Hicke: What sort of dealings would you actually have with the SEC?

Brown: We are now talking about the registration statements and that sort of
thing, I take it.

Hicke: Well, whatever. I don't know exactly what your work involved. You

mentioned that you had to testify or talk at a hearing for the SEC at
one point .

Brown: Well, I have done that several times. But generally that relates to
the kind of thing that I did, which was corporate finance.

Hicke: I see you have a handy guide to the SEC there. [points to book]

Brown: Yes. Corporate finance is the department that I mostly dealt with.

They are the people that are handling the things that have to be filed
regularly with the SEC. If certain events occur, you have to file
something which indicates and explains, and so on and so on. Some
times you have to make filings of certain things every quarter, and of
course you have the annual statement. You also have whatever the
material that you send to your stockholders for the formal proxy
statement when you have the annual meeting. That's all in one
department and that's mostly the department that I worked with.

Now occasionally in that area the staff in that department might
say no to something that you think you should be able to do -- it has
to be something that is quite important -- and can ask for a hearing
before the whole commission. But it still would be, you see, in the
area that I am talking about.

Hicke: I was just going to ask. You had to then check all the proxy state
ments that Chevron, for instance, would send out?

Brown: Oh, sure. We would write a good part of them.
Hicke: Oh, you would write them?

Brown: Of course, things that have financial matters in them, you know. Of

course they put that together, but we make sure that we think it's all
right.

Hicke: You would go over the annual report?

Brown: Oh yes. Not only would we go over the annual report, but whenever
these damned books would come out, I would check those out. Still
doing them. [points to magazines]

Hicke: Their company magazines?

Brown. Yes. Because, well, once somebody got mad at somebody else, so after
that, they sent it to me. You know how those things happen,
[laughter]

Hicke: [looking at magazine] That's Chevron U.S.A. They put out several,
don't they? Is that the major one?

Brown: Of course the annual report goes to all the stockholders. We look at
that and we help them put things together. A lot of it, of course, is
just material about the company and how well they are doing and that
sort of thing. But we look at it and make sure that there is nothing
in there that is going to get them into trouble because it is either
not accurate or goes too far, or whatever.

Hicke: Here's Chevron World.

Brown: They send out a quarterly statement, which is a short thing, four
pages, and they talk a little bit about how they did this last
quarter, and so on.

Hicke: It is sort of like the annual report, only it's quarterly, right?

Brown: Yes. We look at all that. I look at those now. People ask me to
take a look at it and so on. But I don't do it that much.

Hicke: What other clients have you done that kind of work for?

Brown: Over the years, Chevron probably would have more of this sort of

thing. Our other clients, of course, had the same. The SEC matters
are the same as to what you have to do and what you can't do, and so
on, for all of our clients who are subjected to the Exchange Acts and
we do that work for everybody. You know, after a while you can kind
of push that around a little bit so some people are doing one and some
the other.

Hicke: Is there anything else about dealing with the SEC that comes to mind?

Brown: Well, I can give you an example of something that you can't do any

more with the SEC, I am sure. We were having some problems with what
the SEC wanted us to say in a registration statement, and we didn't
want to say it or we didn't want to say it the way they wanted us to
say it. As I say, in those days, you could sit down and talk to these
people if there was any problem. They seemed be able to take the time
to do it. I never tried, you know, to take a lot of their time. We
could get it through very quickly. But the thing you couldn't do now
I am sure, is your working out what you would say and having them
agree to it. Then you could take it to their secretary and she would

type the darned thing for you and stick it in the document and you
file it. You can't do that anymore, I assure you. [laughter]

Hicke: Well, that certainly saved everybody time, I would think.

Brown: Yes, it did. But as I say, it was informal and they got to know us

and they trusted us. They knew that I couldn't afford to try to pull
a quick one on them because then I could never could practice again
with these people if I did that. So they were confident. Somehow or
other that's all kind of changed.

Hicke: When did you start going back to Washington instead of dealing with
the San Francisco office?

Brown: As soon as the San Francisco office did not handle these matters.

Hicke: That was fairly early, perhaps.

Brown: Yes.

Hicke: So you had to make frequent trips to Washington?

Brown: Occasionally you would have to go there. Most of the time, you could
do it over the telephone.

Hicke: Oh, I see. Okay.

Brown: It was so often that I was back in New York that I could always run
down to Washington and work something in.

III CLIENTS AND CASES

Utah Construction Company

Hicke: Can you tell me more about your major clients?

Brown: Among all the other pleasures at PM&S was working with people at Utah
Construction Company, in particular the financial vice president,
Orvil Dykstra. He and I worked many days and nights on various
finance matters and became good friends.

A Utah subsidiary owned and hired various vessels for carrying
iron ore from their operations in Peru, about 200 miles south of Lima.
Although these vessels did not carry passengers, they either had guest
suites or other accommodations for guests. One day my friend asked me
what I thought about he and I and our wives going on one of the ves
sels. I thought it was a great idea, but we both thought that in view
of the fact that the wives had never met us or each other, it would be
a good idea to meet .

My friends had tickets to a play at the Curran Theater. We had
dinner first and walked the short distance to the theater. When we
came in, my wife immediately went to a bench in the lobby and sort of
half lay down. The other two went over to her and began to converse
with her about what we had been discussing. Neither said a word about
my wife's actions. My wife and I looked at each other and, indepen
dently, we knew these people were all right. They absolutely ignored
my wife's actions. We then told them that my wife, due to an opera
tion, had to lie down for a few minutes after eating or she would have
great discomfort. We also told them that my wife knew where the best
lying-down places were in every theater or other place we might go to
after eating, including restaurants.

We made three trips on their vessels and had great times,
including going to many places outside of where the vessels went,
remain great friends to this day.

Hicke: How did you train new associates?

Above: Al and Sylvia Brown (right)
with bridesmaids after the
wedding

Right: Al and Sylvia at the

Parthenon, Greece, 1962

Below: Al and Sylvia at home, 1986

Brown: As soon as I thought that whoever was working for me was competent and
could handle matters, I would try to work things out so that my
clients were their clients. This has worked well over the years,
because now and then for various reasons, you might not be available.
So that's why quite a number of my partners have clients that they
forgot where the devil they came from or how they got them to begin
with.

Hicke: Did Utah remain a client after they were bought by General Electric?

Brown: To some extent, yes, because there was some work to be done here.
Well, we still did work for the corporation which General Electric
didn't want to do, so we did continue to do that. Margaret Gill took
took over and does that work. Of course, in recent years it has kind
of broken up now and fallen apart. They sold part of it, yes.

Hicke: Part of it went to Broken Hill and so forth.

Brown. Yes, and so whether we still do some work or not, I actually don't
know at this point.

Hicke: Had Utah been a client before you came?
Brown: Yes. Just in tax work.
Hicke: Oh, I see.

Brown: Let me back up a step. I have known abut Ed Littlefield since when he
worked for Chevron. I didn't know him then, but I met him when he
went to work for the milk company, Golden State Milk. When I first
met him, he and I went to Southern California trying to buy something
that the milk company wanted to acquire. It turned out we spent a
whole day putting on a good pitch and so on and working out what they
would like to do and how we'd go ahead and do it. Sounded like the
deal was done, but we didn't know until afterwards that the man that
we were going to buy from had already made his deal with somebody
else. He just wanted to listen to us. But Ed from there went to
Utah, but not as the top management. He worked his way up.

Golden State Milk Company
[written answers]

Hicke: Tell me more about Golden State Milk Company.

Brown: Many years ago we represented Golden State Milk Company. Golden State
and Foremost agreed to a merger, wherein Foremost would acquire Golden
State. One of the reasons why Foremost was eager to acquire Golden
State was that Golden State had become a valuable corporation pri-

marily, in my view, because the CEO [Chief Executive Officer] of
Golden State, who had not been with the corporation very long, had
done such a fine job. In this connection, he received some stock
options to purchase shares. The problem for the officer was that, due
to Section 16(b), he would be in the position of not getting the
benefit of the stock options. If he exercised those rights, which
would have been shortly before the merger, there would be a serious
question that he would be subject to Section 16 (b) and would have to
give back to the corporation the difference between his cost and the
value of the stock.

Section 16 (b) of the Securities Exchange Act of 1934 provides
that any profit realized by a director or officer of the issuers or a
beneficial owner of more than 10 percent of any class of any equity or
security from any purchase and sale, or any sale and purchase within a
period of less than six months, shall inure to and be recoverable by
the issuer of such security.

I arranged for a meeting with the SEC commissioners to see
whether they would agree to change the rules to make 16 (b) not appli
cable to the foregoing purchase and sale. I appeared before the com
mission and gave them the reasons why quite apart from unfairness, I
did not think that 16 (b) had been intended to cover this particular
situation. I should say at this point that there was a young lawyer
of the SEC who also appeared at the hearing in the event that the com
missioners had any questions they wished to ask their lawyers. Much
to my surprise, this lawyer agreed with everything I had said, which
was very helpful.

This all occurred during President [Dwight D.] Eisenhower's
administration, which meant that there were three Republicans and two
Democrats on the commission. I had observed that the Republicans were
a little uneasy. Unfortunately, all Republicans appeared to be
afraid, at least at that time, that people would say they were being
good to big business.

The time within which I needed an answer was growing short
because the merger was becoming effective in a very short time. I
heard nothing from the commission until just about when the time was
going to run out. I learned that a new rule had been promulgated and
adopted retroactively. I also had learned that the vote for the rule
was by two Democrats and one Republican. The Republican happened to
be the chairman of the commission.

I should also tell you that the Foremost people were very unhappy
with me because my client got such a good deal. The ridiculous part
was that my client, in appreciation of the job I had done for him,
gave me a present, that being a Golden State pen, worth, I'm sure,
98 cents. I should also tell you that the client made something over
one million dollars on the transaction.

ALBERT J. BROWN
1987

27
Occidental Petroleum Corporation and Armand Hammer

Brown: In 1955 three gentlemen from Southern California came to my office to
discuss the acquisition of a company called Occidental Petroleum Cor
poration. At that point Occidental had quite a number of shareholders
with very little in assets and its worth was about $7,000. Its stock
was listed on the San Francisco Stock Exchange. The principal man was
a gentleman named Dave Harris. I don't remember the other two gentle
men's names. Harris and one other were equal in their proposed acqui
sition and the other one would have a minor interest. I never learned
how they got to me .

At that time, for no sensible reason, the stock, when it did
sell, was selling for 20 cents. They proposed to pay 20 cents a share
for new shares and acquire in two bites a more-or-less controlling
interest. I told them that I would attempt to help them but that a
lot of work needed to be done. Further, I said that I would like
Mr. Harris to come with me and discuss the proposed matter with one of
the senior people with the California Corporation Commissioner's
Office. I made an appointment and we went and explained it all, and
apparently there was no objection by the commissioner.

The next step was to put together a proxy statement and include
therein a proposal to reduce the stock from $2 a share to 20 cents a
share and to increase the number of outstanding shares so that they
could be purchased by our client. On its books, the corporation had a
deficit of quite a number of hundreds of thousands of dollars. I
thought it would be a good idea to get rid of this by reducing the
stock shares to 20 cents. This would reduce the capital in sufficient
amount so that it would do away with the deficit. I had some problem
with the SEC on this matter because they said it all had to be done in
one step before they would approve it. However, after some conversa
tion with them, they agreed that doing it in two steps was really the
same, and they agreed to it.

The various matters were approved by the holders of a sufficient
number of outstanding shares so that it became effective, and in the
latter part of 1955 and in early 1956 the matter was consummated. In
order to sell the shares, the California Corporation Commissioner had
to approve the sale; but having discussed this at the beginning, there
was no problem in obtaining this.

Thereafter, until 1967, we represented Occidental Petroleum Cor
poration in all its legal matters with the exception of oil and gas
matters which could represent conflict with Chevron.

In 1956 or 1957 the company entered into some transactions with
Dr. Armand Hammer in which he put some money up in connection with
acquiring potential oil sites. It occurred to me that Dr. Hammer
would be an ideal person to become the CEO of the company and run it.
I talked to Dave Harris, who was the president of the corporation, and

he agreed with me that if he could convince Dr. Hammer to take over,
it would be ideal. I think it was about 1957 or 1958 that Dr. Armand
Hammer became president and chief executive officer and has run the
company to this very moment.

In connection with our work for Occidental, we handled innumer
able acquisitions, registration statements, and transactions borrowing
money from lenders. We might still have been handling these matters
but for what occured in 1967 .

In the spring of 1967 Occidental Petroleum Corporation determined
to attempt an acquisition of Kern County Land Company. It was unsuc
cessful in its attempt to induce the management of Kern to discuss a
merger. Accordingly, Occidental announced and published an offer to
purchase 500,000 shares of Kern at a premium of about $20 above its
then market price and subsequently increased the offer to include an
additional 500,000 shares. When the offer expired on June 8, 1967,
Occidental had acquired 887,549 shares to become the beneficial owner
of well over 10 percent of the common stock and as such, subject to
the provisions of § 16(b) of the Securities Exchange Act of 1934.
Management of Kern vigorously opposed the takeover bid and arranged
for a sale of its assets to Tenneco Corporation, a wholly owned sub
sidiary of Tenneco, Inc. An agreement in this respect was entered
into on June 1, 1967, subject to approval of the stockholders of both
companies .

At this time Pillsbury was no longer representing Occidental.
This arose from the fact that the Kern County CEO told the CEO of
Chevron that he was unhappy about Pillsbury representing Occidental in
its proposed takeover of Kern. Chevron advised us that there was a
conflict for the firm because of the closeness of various matters
between Chevron and Kern. Accordingly, we told Occidental that we
could no longer be their counsel. Prior to this time, we had repre
sented Occidental in all financial matters since 1955.

Several days prior to June 1, 1967, I received word from the
executive vice president, Walter Davis, of Occidental, that he had
come to an understanding with the CEO of Tenneco that if the mechanics
could be worked out to avoid the problems of § 16 (b) , Tenneco would
buy at $105 per share the preferred stock to be issued by Tenneco in
the merger of Tenneco and Kern which would be received by Occidental
as a consequence of the merger. Under these circumstances, Chevron
said that it saw no reason why we could not represent Occidental in
this settlement.

On the morning of June 1, 1967 Bruce Mann, Walter Davis, and I
met at the Cahill, Gordon, Sonnett, Reindell & Ohl offices with
F. Arnold Daum of the Cahill firm and a man whom I believe was presi
dent of a Tenneco subsidiary and the house counsel of Tenneco. There
may have been others of Tenneco and the Cahill office, but I cannot
recall who they were. The matter was discussed, with the conversation
being principally among the lawyers. After a number of hours and dis
cussion of various possibilities, the option concept was arrived at.

It was understood by Davis that the option was not, in fact, a sale
and that it could be that the shares would never be bought; but Davis
said that he was willing to take that chance. Bruce and I said that
before we went down this route he and I wanted to do some research on
the matter. Accordingly, we adjourned and Bruce and I went to the
Cahill library and spent several hours looking at various cases on the
subject.

At about the same time during the morning discussions with Ten-
neco and during the research, Bruce was on the telephone with Meyer
Feldman of Ginsburg and Feldman of Washington, D.C. Feldman read to
Bruce a proposed Rule 16(b)-ll designed to exempt from the 16(b) cor
porations who found themselves in the same position as Occidental with
respect to the Kern County stock. Feldman told Bruce that he had dis
cussed this with the appropriate people at the commission and that he
was advised that the rule would be adopted. While Feldman gave this
assurance to us, we also thought that we should attempt, if possible,
to frame the transaction in a manner which would, if possible, avoid
Section 16(b) .

While we were doing our research on the law, Davis was doing
research on the proper amount to be paid by Tenneco for the call.
Davis told us and also the Tenneco people that he was advised by
investment bankers that $10 a share was proper. (I believe that Davis
talked to a Mr. Gould of Donaldson, Lufkin & Jenrette.)

After our research, we concluded that we would proceed with an
agreement in the form finally executed, and by the afternoon of
June 2, the actual agreement had been agreed to and was typed. In
preparing the agreement, all the lawyers decided that it would be best
to execute the agreement in New Jersey rather than New York and avoid
the unknown of the New York stock transfer tax. Accordingly, it was
arranged that Gardiner Symonds and Walter Davis would pick up the
agreement, take a limousine to Jersey City, and execute the agreement.
Arnold Daum and I were sitting in a small conference room at the
Cahill offices waiting for Davis and Symonds to appear and pick up the
agreement .

At this point, Daum said that Gardiner Symonds was "uncomfor
table" about Occidental. I asked him what he meant, and Daum said
that Symonds did not trust Occidental. In view of this, he thought he
could help Symonds 's emotional feeling on the subject if Occidental
would give Tenneco its proxy to vote the Kern County shares. Up to
this point, no mention had ever been made of a proxy. It had never
been discussed, there was no indication at any time that it was part
of the bargaining, and, as can be noted from the option agreement that
was executed, there was no mention of a proxy in the agreement. I
told Daum that under no circumstances would I permit Occidental to
give a proxy to Tenneco. At this point, first Davis and then Symonds
came into the room and the discussion continued.

There was no indication by Symonds that the deal was going to
fall through if no proxy was given. It should be pointed out, how-

ever, that from the very beginning, starting on June 1, the atmosphere
among the parties negotiating and the lawyers was very cordial.
Everyone appeared to be honestly trying to reach a solution and solve
all problems. It was in that spirit that I said that if Occidental
executed a proxy in my favor authorizing me to vote for the trans
action between Kern County and Tenneco, I would so vote. However, my
recollection is quite clear that I pointed out that under the
California law the proxy was revocable and that I was capable of
voting the proxy only as long as it was in existence in my favor.
Under California law, a proxy could not be made irrevocable unless it
was coupled with an interest and so stated on its face. The proxy
executed was not of that type. Further, there was no agreement or
representation that the proxy would not be revoked. The proxy, dated
June 2, 1967, was signed by Walter Davis at that time.

Symonds and Davis then left with the option agreement, went to
New Jersey, and executed it. I gave the executed proxy to Daum and
told him to give it to the Secretary of Kern County, inasmuch as it
would have to be lodged prior to the meeting in order for me to be
able to vote. I remember saying that I preferred he do it inasmuch as
our relationship with the Kern County people and their lawyers was
somewhat less than cordial at this point.

When it became apparent that the SEC was not going to adopt
Rule 16(b)-ll, I thought that Occidental's position should be that it
was an involuntary recipient of the Tenneco stock and in no way should
participate in the merger proceedings. I thought it best that Occi
dental be an innocent bystander. Accordingly, I so advised Occi
dental. I believe that I talked to Tom Wachtell, a vice president of
Occidental and an assistant to Dr. Hammer. Accordingly, on July 14,
1967 the proxy was revoked by a letter addressed to me, signed by
Wachtell and an assistant secretary of Occidental, C. J. Lee.

This was delivered to me by courier and I called Arnold Daum on
such date and told him that the proxy had been revoked. He was dis
turbed by whether this meant that Occidental was going to oppose the
transaction. I told him that I knew of no such intention. I told him
that probably Kern County had enough votes without Occidental's
anyway, and he admitted that this was so, providing there was no
defection. After some conversation, he said he would like a letter
from Occidental which indicated that it did not oppose the sale of
assets to Tenneco and if the transaction had arisen differently, would
have voted for the transaction. We worked the form of the letter out
and ultimately I dictated it to Occidental, and Walter Davis signed a
July 14th letter to this general effect.

I should add that I made it very clear to Daum that the proxy was
revoked and that I was not bargaining for Tenneco 's consent. As a
matter of law, there was no way that Tenneco could prevent the proxy
from being revoked. There was no agreement relating to it and no con
sideration had been paid with respect thereto. It should also be
remembered at this point that the parties were still in a very cooper
ative mood and accordingly, I cooperated with Daum, agreeing to have

Occidental send the July 14th letter. It should be remembered that
because of not obtaining the SEC exemption, sometime in June Arnold
Daum had agreed with me (which agreement was honored) not to list the
new preferred shares being delivered until after the option was exer
cised or expired. In point of fact, Daum told me that his client was
aware of and had agreed to the assurances given to me by Daum. This
proved to be very valuable in the 16 (b) problem. It was in this same
spirit of entire cooperation that I agreed to the Occidental July 14th
letter.

The 16(b) problem, as one could guess, was the one which gave
everybody the most concern. Even before any lawsuit was filed with
respect to 16 (b), Occidental had asked us to give them our opinion
with respect to the matter. We gave the board an opinion with respect
to the matter, which said that it was our view that Occidental's pur
chase and sale within a period of six months was not really what was
contemplated when 16 (b) was adopted. In point of fact, Occidental in
some ways was an innocent bystander.

In due course, as could be expected, a suit was filed on behalf
of Kern, which was represented by Daum. Ultimately, a New York court
held that Occidental was liable for between $16 and $19 million.
Obviously, we did not represent Occidental in this matter. Armand
Hammer asked me to read the decision by the court and give him our
views. We pointed out to him a number of matters which were not accu
rate and further that in the brief written by the lawyers, a number of
things which we considered important had not been emphasized, if dis
cussed at all. Dr. Hammer then went out and canvassed lawyers to see
which firm in New York had won the most cases in the U.S. Supreme
Court. He ultimately selected a fine firm, which he had great diffi
culty in convincing to take the case, but ultimately did. The Second
Circuit Court found that Occidental was not liable for many of the
reasons we had always believed. The case eventually went to the U.S.
Supreme Court, which arrived at the same conclusion.

Meanwhile another suit had been brought, which had been held in
abeyance pending the termination of the 16 (b) question. A suit had
been filed to hold Occidental liable for substantial monetary benefits
allegedly realized in connection with its agreement to vote its Kern
stock in favor of the Kern-Tenneco plan. This claim was predicated
upon a common law duty of a shareholder not to sell his vote for pri
vate consideration. The main thrust of the suit was that at one time
I had been given a proxy to vote Occidental's Kern County shares in
the merger of Kern and Terineco.

The suit alleging vote-selling lingered and it was not until 1978
that the suit became very active. Earlier the lawyers for the
plaintff wanted to take my deposition. I had no objection, but I said
I was not going to go to New York. The plaintiff's lawyers did not
want to come to San Francisco. Finally, Occidental's lawyers thought
we could end the whole case if I came to New York and testified.
Accordingly, in early 1978 I went to New York and testified before the
same judge who initially had found Occidental liable under 16 (b) but,

of course, whose decision had ultimately been turned over by the
Second Circuit Court and the U.S. Supreme Court.

I testified for about an hour pursuant to the questioning by
Occidental's lawyers and then spent the rest of the day answering
questions of the plaintiff's lawyer. While plaintiff's lawyer asked
numerous questions, he mostly tried to get me to agree that there was
an understanding that Occidental would vote its shares on behalf of
the merger. The judge concluded that this was not true, that I made
it quite clear that I would not permit a proxy to be given to Tenneco
to vote the shares, and that there merely was a revocable proxy to me
pursuant to which I would vote the shares if the proxy were still in
force.

At one point, the judge said that in his opinion "Mr. Brown, an
entirely credible witness," testified that an alternative and non-
inculpatory account was offered for Occidental's subsequent revocation
of its proxy. I testified that this action was taken at my advice and
without any prior consent from Tenneco on July 14, 1967, when the SEC
had indicated on July 12 that favorable action on Occidental's request
for an exemptive rule under 16(b) would not be forthcoming, and not in
response to the earlier institution on June 28 of a suit in the
California courts charging vote selling. Because it was felt that
Occidental's position with respect to possible 16 (b) liability would
be improved if it did "nothing affirmative" in fostering the proposed
merger, Occidental was advised to revoke its proxy and refrain alto
gether from voting its stock. The letter to Kern, which was read at
the shareholders meeting, was submitted as a "voluntary gesture" to
assuage Tenneco's fears, and not pursuant to any "obligation."

Additionally, it was pointed out that all of the participants in
the option transaction had categorically denied any conditioning of
that agreement upon Occidental's undertaking to vote in favor of the
merger.

Hicke: You have remained in contact with Dr. Hammer?

Brown: As I may have indicated, Dr. Armand Hammer and I are good friends.
While I don't see him very often, we correspond from time to time.
Although we do not represent his company anymore, he has occasionally
called me and asked me to come down to Los Angeles and discuss certain
matters. If he starts to tell me something that could be embarrassing
at some future date, I tell him to stop, to hire me as his lawyer
right now, and then talk to me. In such a matter, I send him a bill.

[oral answers]
Hicke: How did Armand Hammer become interested in Occidental?

Brown: Armand Hammer invested in many things, but he never had invested in
oil. The Occidental people -- I don't know how they met him origi
nally, but they suggested to him that he put some money into oil.
That is, by putting up money to drill for oil or something of that

nature or to buy some. In those days, the tax law structure was very
good for putting money into this sort of thing because you got to
deduct virtually the whole thing, so that you had no great loss if the
thing didn't come out very well, or at all. So Armand thought that
this was the greatest thing he ever ran across. He became more and
more interested and he put some of his wife's money in these sorts of
things, none of which were at that point of time making a lot of
money. On the other hand they didn't lose a lot of money. But he was
very interested in the oil business. So Dave Harris, who was then the
president, suggested that Hammer, having such a successful career
prior, perhaps he would like to become president and run the company.
It turned out he did.

Hicke: Why did Dave Harris want him to do this?

Brown: Well, Dave Harris knew his own limitations and he thought that Hammer,
because he knew a lot of people and had a lot of money and so on,
would bring Occidental up. After all, Dave Harris owned some shares.
He would be delighted if somebody could make them more valuable.

Hicke: I see. Yes, that explains that. So then Mr. Hammer agreed to --

Brown: Dr. Hammer.

Hicke: Dr. Hammer, oh, okay.

Brown: Dr. Hammer was actually graduated as a doctor and never practiced.

Hicke: A medical doctor? Oh, is that right?

Brown: A medical doctor. Yes.

Hicke: Well, he has done so much else.

Brown: Probably can still practice in New York, I think. [laughter]

Hicke: So he did become chairman?

Brown: Yes, he took over and one way or the other gradually got to where he
is now. As I say, it was very clear to him that we were not going
touch any of the oil and gas law, as such. But all the financial
work, we would be happy to do. We demonstrated that we knew what we
were doing. One of the things, in particular, was dealing with the
California Corporation Commissioner, because we had to get a permit
every time we sold some stock. In those days, you had to do this.
Having known these people for a long time, why it was easier to deal
with them than might have been otherwise. Again, there is an example
where it was easier to work with them then than it is now. I assume
that's just the way life is in that case. [laughter]

Hicke: So, then, I think you've continued to --

Brown: Well, Armand Hammer and I have been friends for a long time. I think
I told you earlier that he was always trying to get me to go to work
for him as part of the corporation. I would never agree to that for a
lot of reasons. We still remained friends. For example, when my wife
and I decided to go to Russia, why I wrote a note to Armand and asked
him what I ought to know, and so on. He wrote back and said he had
made arrangements with his corporation there, the office that he has
there in Moscow, and I should go there and do this, that, and the
other thing. As a matter of fact, we could just never work out get
ting to his office. But anyway, when we got back I wrote him a note
and told him that, of course, that I appreciated his personal note
too.

Anyway, there are a lot of things. For example, even after we
were no longer representing Occidental Petroleum, I got these phone
calls from Armand. He would track you down everywhere. I remember
one time he tracked me down I was in London. He wanted me to come and
see him. I said I couldn't. I said, "Well, I can get through in --"
I forgot how many days away -- "and I'll come in after that."

The next thing I know, why he calls back and says, "Well, why
don't you come back through Los Angeles instead of going to San
Francisco?" I said, "Armand, I'll tell you, I am coming back on a
Friday. I will come down on Saturday and see you." Then he starts to
tell me things that he has no business telling, because if somebody
ever puts me on the stand I've got to tell what he said, so I'd say,
"Armand, stop. Wait a minute. All right, hire me as a lawyer,
please." Then he would laugh. "All right, you are hired." Then I
sent him a bill. I had to. [laughter]

Hicke: But after that, it was all confidential -- after he hired you.

Brown: Right. One of the last things that I did for Armand was when Hammer
gave, I think it was $50,000 anonymously to Nixon when Nixon was run
ning for president the second time. Hammer told me that he didn't
know that he was violating the law, and as soon as the matter came up,
he disclosed that was his money. Nevertheless, the Justice Department
brought suit against him because he violated the law. He pled guilty,
I believe.

Then the question came up as to what would happen to him. He
could go to jail, he could pay fines, but fines wouldn't bother
Hammer, because he could pay whatever was necessary. He asked me to
write a letter, which I did, to the people who look into these matters
and then advise the judge what they think the proper thing ought to
be. You are permitted to write and tell them why you believe that
Armand Hammer should be treated gently and so forth. I wrote and I
explained why: I had known him for many years and I knew that he
wouldn't do anything illegal voluntarily, that he was intelligent
enough not to do anything dumb, if he knew better. I said that if
Dr. Hammer had known he was violating the law, he would not have made
an anonymous contribution.

Eventually the case was moved to Los Angeles court and the judge
there did not give him a jail sentence, and I have forgotten what he
paid. I called Hammer to congratulate him. Apparently I was the
first one that called him. I heard it on the radio or something. He
thought it was great and said why he thought that and so on.

In any event, shortly after that, one day I get a call from down
stairs that "There is a man here that has a box for you. He has to
deliver to you. He just can't send it up here." So I said, "All
right, let him come up." So this man in uniform arrives and hands me
this thing, and says, "Are you Mr. Brown?" "Yes," and off he goes.
When I opened it, it was --as you know Mr. Hammer is a great art fan
cier -- so when I opened it here was this Daumier cartoon. I have it
at home. I didn't think I wanted to leave it at the office. That was
a thank-you note for what I did.

We have been friends a long time. Every once in a while, he
still wants to talk. A remarkable gent.

A Solution Which Never Occurred to Others
[written answers]

Brown: In 1960 Muirson Label Company, Inc. had determined to sell all of its
business. It entered into an agreement with International Paper Com
pany pursuant to which it would sell all of its properties and assets
except plants in Peoria, Illinois, and Meriden, Connecticut (plants
meaning land, buildings, machinery, equipment, et cetera). The pur
chase price was $6,200,000. With respect to the plants not to be sold
to International, while International Paper Company might have been
happy to acquire the rest of the plants, because of the antitrust
laws, it appeared that the government would not take kindly to such
action.

It was determined by the shareholders to accept a plan of com
plete liquidation and voluntary dissolution. The purpose of the com
plete liquidation and voluntary dissolution would result in only one
tax being made on what was received from the sale rather than the cor
poration having to pay and then the shareholders again having to pay
taxes .

The company entered into an agreement with Printing Machinery
Sales Company of Illinois and Printing Machinery Sales Company of
Connecticut (both owned by the same person) for these companies to
purchase from Muirson the land and buildings which constituted the
plants located at Peoria and Meriden and the machinery, fixed equip
ment, et cetera owned and located in such plants for a total of
$1,350,000. As it turned out, on the date on which the sale was sup
posed to be consummated, the companies could not come up with all of

Hicke:

Brown:

Hicke :
Brown:

Hicke:
Brown:

the money required. Meanwhile the period of time pursuant to which
the liquidation needed to be consummated in order to save one tax was
beginning to run out. The problem was resolved by selling the assets,
receiving what money was available, and taking bonds for the balance,
such bonds to be paid within a certain short date.

Paul Davies and I went to Brooklyn to meet the purchasers and
their counsel to receive the various written documents and also the
money to be paid in addition to the bonds. While we were riding in
the taxi in Brooklyn, Paul, who had never been in Brooklyn before,
sniffed the air and said, "Hey, this smells like Korea." (He had been
there during the Korean War.) When we arrived, we were told that they
were short a certain amount of money (I don't remember the exact
amount but it was relatively substantial). We said, no money no deal.
I knew that I had to close somehow because of the tax situation, but I
thought I would try this ploy first. We were told they would try.
After a few hours, they came back with cash in virtually every denomi
nation. I never asked where it came from. We counted the money and
found they were about $200 short. The lawyer reached into his pocket
and came up with $20 bills for the correct amount.

While there was some period of time beyond the payment dates,
eventually it was all paid, plus interest, and the stockholders
received all that they were entitled to and the tax situation had been
resolved.

[oral answers]

You have told me off-tape that this was a problem nobody else had been
able to solve.

We didn't have much time to solve the problem and everybody was
wringing his hands and not knowing where we could go from here. "Now
what do we do? We're just kind of sitting here." The tax people, of
course, were really upset because they had sort of advised it to be
done this way. Here all of a sudden it's falling apart. Everybody
was wringing his hands. The solution that was reached was very
helpful and worked out on that basis.

The problem was the taxes, right?

Well, the problem was that they had to sell, they had to, in effect go
out of business. The corporation would disappear within that one-year
period. And they couldn't do that if they still had some of the
assets. What we did was got rid of the assets and funds and so on,
including what went to the shareholders.

Those two plants?

What the shareholders received included the bonds that they received
from the people that bought that last bit of property. In other
words, part of it was not cash but were bonds. That is the way that
was solved. We got rid of everything and then we made the deadline
that way.

Hicke: Is this where Bentley Label came in? The two plants that they

couldn't sell at Peoria and Meriden went to Bentley Label? And then
perhaps went to International Paper?

Brown: No. The ones that you see here went to Printing Machinery Sales, and
Printing Machinery Sales did not go to International Paper.

Hicke: What about Bentley Label? I was just reading the file and they have
some of the Stockton assets or something to do with a plant in
California.

Brown: I can't remember precisely, but whether International Paper Company
then continued with that name or later under International, I can't
tell you now.

Hicke: Well, that's not too crucial. I also did want to ask you how this
work came to you. Was International Paper a client before?

Brown: Not in any great sense, but there was some relationship, a family
relationship between the people of Muirson and the people who were
officers and so on of then California Packing Corporation until they
became currently Del Monte. I think because of that we were asked by
Muirson to do this work.

Hicke: In reading the files, it looked to me like -- well we have already
said there were tax aspects. There was also an estate and trust in
this Bentley Label Company, which may have been completed before you
had anything to do with it. But there were many aspects to this case,
and my question is: what other lawyers in PM&S did you work with?

Brown: I don't remember who the tax lawyers were, but primarily working with
me was Paul Davies. He was then not a partner.

Hicke: You said before that you liked to leave a younger member of the group
with a client as often as possible. How do you go about doing that?

Brown: What I did was this: obviously the younger people would be working
with me with this client. Then you've got to do it sort of subtly,
but you kind of gradually, when they call, you turn it over to
someone, or you're not there or you say you're not there and you have
so and so call. It gradually works out. Pretty soon they have the
client. By then, of course, they have met this other person quite
often and the other person has talked to them and worked with them and
so on. So, it gets to work out all right.

Hicke: So you just gradually get them to gain more confidence in the
associate or younger partner.

Brown. Yes. Right. As I say, you have to be a little subtle doing it. Of
course there are some who insist that they want to talk to you. Then
of course, obviously you are not going to lose a client. Then you do
the necessary. Sometimes you'll talk to the client a little bit about
it and say, "You know, I am getting a little old now" and so on. It
works; reasonable people generally work things like that out.

Hicke: Obviously a client whom you had over a number of years goes through
this same sort of process themselves.

Brown: To some degree, yes.

American President Lines, Ltd,
[written answers]

Hicke: Why don't we go now to American President Lines?

Brown: American President Lines, Ltd. was originally owned by the Dollar

Lines. The government and Dollar entered into a transaction pursuant
to which the government owned the company and it ran it . After a
number of years (when shipping became financially more lucrative)
Dollar took the position that the company had not been purchased by
the government but the money that Dollar received had been a loan.
Numerous lawsuits were filed against the government and these suits
continued for many years. The principal suits had gone back and forth
in the U.S. Supreme Court. Finally, after there was some indication
that perhaps there was something to the Dollar position, the parties
agreed to sell the company and the parties would split the price
received.

I did not know anything about these matters until the general
counsel of the U.S. Commerce Department called us. Apparently, the
Dollar counsel and the Commerce Department lawyer agreed to have PM&S
and me represent the company in selling it.

I met with both gentlemen and we seemed to get along. I com
menced to prepare the various steps, documents, paperwork that would
be required, including filing a registration statement with the SEC.
With respect to the manner of calling for competitive bids, I followed
the type of documents that I learned to use for the telephone com
pany's calls for bids to buy bonds and notes of the telephone company.
The principal documents included: newspaper invitation for bids;
statement of terms and conditions relating to bids; purchase agree
ment; questionnaire for prospective bidders; and form of bid (which
included a substantial dollar amount as a deposit).

I prepared the registration statement but I noted that the finan
cial statements could not be verified by the company's independent
accountants. It turned out that inasmuch as the government was run
ning the company for itself, it did not bother with niceties like
having verifiable statements. I told the company's accountants that
the transaction would not fly without audited statements, but they
insisted that it was not necessary so we filed. It did not take long
before I got a telephone call from the fellow at the SEC who was han
dling the matter. He asked me what I thought I was doing (he knew

that I knew better). I thanked him because now I could say I told you
so to the company's accountants. With the help from the Federal
Maritime Commission, the problem was solved.

Additionally, however, more data was required with respect to
operations. The Maritime people put together a lot of data. I was
suspicious of certain of the material but was reluctant to put it to
them that way. I merely suggested that I thought, with regard to cer
tain material, that the company should be forbidden by the Maritime
Commission from making it public. The Maritime Commission was
delighted to do this. I then went to the SEC and told them what we
could and could not do in view of the Maritime Commission require
ments. The people at the SEC merely shrugged their shoulders and told
me to proceed as now presented, and we became effected. I should
state that as to much of the operations of the company, we had
outstanding assistance from the company's outside counsel.

[oral answers]

Hicke: Regarding these lawsuits over who owned the company, I just kind of
wonder how they could not really know who owned the company.

Brown: Well, the government owned the company but the question was whether
having paid the amount of money that the government had given to
Dollar, did Dollar get it back then or was it a loan only? Dollar
people said it was a loan and the. government said, "No, you sold it.
You sold it to us for that."

Hicke: There was nothing on any paper that said?

Brown: I don't know. I never got involved in the paper, but obviously it was
not very clear.

Hicke: That was an unusual transaction, I would say.
Brown: Well, that's the government. [laughter]
Hicke: Was Ralph K. Davies involved in this?

Brown: Yes. He was on the board of American. As you know, he was a good

Democrat and he got on a lot of boards like that. His company is the
one that of course acquired it eventually. I remember he was very mad
because he overpaid what he had to to buy it, because the next bids
were way below his.

Hicke: That was after this took place, is that correct? That he bought it?

Brown No, buying it was what I was doing. He didn't like the way that I had
drawn the documents for this and he thought he shouldn't be putting up
any money. He thought that it ought to be handled differently. In
other words, make it a lot easier for him. I used the conventional
way of doing it. He wrote a letter to the SEC about how terrible this
was because the SEC didn't do a darn thing about it, except on the
side they told me they laughed like hell, you know. [laughter]

Hicke: Was this rather characteristic of the way he went about doing things?
Brown: To some degree. Yes.
Hicke: He was a very unusual person also.
Brown : He was , yes .

FMC's Acquisition of American Viscose Corporation
[written answers]

Hicke: What about FMC's acquisition of Avisco?

Brown: In 1962-63 FMC Corporation became interested in acquiring American

Viscose. Viscose was primarily in the rayon manufacturing business.
Prior to FMC's interest, Stauffer Chemical Company had worked out an
agreement with Viscose to acquire the company. The U.S. Justice
Department took a dim view of this and either had filed or had advised
Stauffer that it was going to file a lawsuit on the grounds that it
violated the antitrust laws. Consequently Stauffer withdrew.

Thereafter, FMC negotiated to acquire Viscose. The transaction
was an acquisition of assets rather than the usual merger. Pursuant
to this plan, Viscose continued as a corporation and the stockholders
continued as owners of Viscose. Inasmuch as the asset value was less
than the book value, no tax was required to be paid by Viscose as a
result of the sale. The corporation received $116 million from FMC
and, in addition, shares of Monsanto Capital Company owned by Viscose,
marketable securities of about $37,400,000, and additional cash of
about $1,600,000. Thus, Viscose could become an investment corpora
tion.

It took many meetings and many drafts to work out the agreement
between the two companies for the sale of assets. In January 1963 at
a meeting at Viscose's offices in Philadelphia the agreement was
finally worked out to everyone's satisfaction. The actual agreement
that was signed had many longhand insertions and deletions necessary
to satisfy everyone.

The next question that arose was where to sign the agreement.
Philadelphia and Pennsylvania both being old hands at this sort of
thing, the question of stamp taxes and other taxes which would be
engendered by signing in Philadelphia arose. We had raised this ques
tion with Philadelphia lawyers several days before the agreement was
signed. A partner, who was an old gentleman, and his associate
appeared at the meeting to tell us what, if any, problems were engen
dered. The elderly gentleman talked for several hours, describing all
the things that would be involved and the taxes that might or might

not be required to be paid. This was entirely read from a document
obviously prepared by someone else.

It became clear to me that it was ridiculous to get into whatever
risks were involved. While the lawyer was still talking, I excused
myself temporarily and arranged to have a fleet of automobiles ready
to take us to New Jersey, which was not too far from Philadelphia.
When the gentleman finished telling us all about the various taxes, I
thanked him profusely and they left. The rest of us immediately left
for the Cherry Inn Motel, which, in point of fact, was more like a
hotel, with a very nice bar. The agreement was rapidly signed there
and we all returned to Philadelphia where the FMC airplane was waiting
to take us back to New York.

As might be expected, no sooner had the agreement been entered
into when the Justice Department again decided that there was an anti
trust problem. A number of discussions were had with the antitrust
lawyers; but in the end, the government filed a lawsuit.

The Justice Department sought an injunction to prohibit the sale
prior to the final decision after a full trial. The suit was princi
pally tried by Francis Kirkham, and he was assisted to a great measure
by William Mussman. One of our problems was that Hans Stauffer was
going to testify that if his company would violate the antitrust laws,
FMC did also. My task was to talk to the various people who purchased
rayon and dealt with Viscose in order to establish that if FMC was
selling rayon it did not violate the antitrust laws.

I got a list of all the people who dealt with Viscose and by
telephone talked to all the appropriate people at these companies who
knew what was involved. I asked them if the acquisition would be bad
for the purchasers of the rayon and whether the FBI had been asking
questions on the same subject. I was advised in every instance that
these companies had no problem with FMC acquiring Viscose and further
that in a relatively large number of cases, the FBI personnel had
asked the same question and had been told that there was no problem.
I put all this down on paper, and at the trial Bill Mussman read this
to the judge. I am sure that was helpful to the eventual decision by
the judge, which was to deny the government's request for an injunc
tion.

The matter ultimately went to the Ninth Circuit Court of Appeals
which held that there was no right to have the appeals court pass on
the injunction, and ultimately the matter was heard by a justice of
the U.S. Supreme Court. He held that there was no jurisdiction and
that the case would have to be tried in full. The government then
tried to get a full hearing of the matter by the entire Supreme Court,
and when this was denied, we closed. Shortly after that, the Justice
Department withdrew the case.

To be consistent, the closing of the transaction was also in New
Jersey. The closing date was August 5, 1963, at which time the pur
chase price was paid and a check drawn on a New York bank. Because of

the nature of the transaction, the documents relating to the closing
were quite numerous. The preparation of these documents was not
simple. Putting the deeds together alone was quite a job, as was also
the patents and patent applications. In addition, there was a number
of corporations which were entirely or partially owned by American
Viscose, which also required appropriate documents to vest FMC in the
Viscose ownership. Further, FMC was required to borrow $90 million
from banks, which, as could be expected, entailed a loan agreement and
the usual documentation required by banks. Fortunately the Viscose
people and their lawyers were very helpful throughout in putting the
whole thing together.

[oral answers]

Hicke: You mentioned that it took many meetings and many drafts to work out

the agreement and I wondered if you could tell me who was at the meet
ings?

Brown: Paul Davies, again, worked with me. As you may or may not know, his
father was chairman of the board of FMC.

Hicke: Did that present any problems?

Brown: No, not at all. Oh, there may have been some other lawyers on certain
limited points which I don't remember, but he and I were the ones that
went back to New York, Philadelphia, and so on, that worked on the
matter. I am speaking now of putting together the agreement. Of
course, then we got into the antitrust problems with the Justice
Department, and there we got our antitrust lawyers and litigators into
the act. Kirkham and Mussman were the two people who primarily worked
on the antitrust problems and the lawsuit that the government brought,
suggesting that this wasn't the proper thing for us to be doing.

Now the actual suit was never tried. The first thing that was
done was that they tried to get an injunction to prevent us from
acquiring the other company. If the injunction was given, we couldn't
have acquired until after the whole lawsuit was tried. And the judge
turned that down.

Hicke: Did you deal with Dr. Reichel from American Viscose or was Jack Pope
in on some of the meetings?

Brown: No. I don't remember the American Viscose people by name, but mostly
Paul Davies, Sr. attended the meetings. He was a great communicator
and also was very good at getting people to agree. Well now, other
FMC people may have been there too. That was so long ago now that I
just don't remember who was there and when. Pope was, of course,
quite interested in this and he may have been at one or two meetings,
I just don't recall. Various other people worked on the matter and
got a lot of information for us, but if you are talking about the
meetings with the other people, why I don't recall anybody but the
lawyers and Paul, Sr.

Hicke: Is there anything that stands out about those meetings, in particular?

Brown: No. It was a typical kind of meeting where the lawyers want to change
words and so on. It would help if I could dig up the originals, but
they are long gone -- that is, not the final ones, but the ones we
worked on. There were things that they didn't like and things that
they had questions about. It was a typical sort of thing.

Hicke: Just in general, in such a transaction, what are your goals?

Brown: We are trying to reach a place where both sides are quite happy with

what they have. One company wants to sell and the other company wants
to buy. In between there is price, there are a lot of other things.
There are certain assets that the one company doesn't want and the
other one wants to get rid of. That sort of thing. You want to work
something out where everybody finally feels that they can live with
it. That's basically all there is to it.

Hicke: Then when you write the documents, do you attempt to foresee every

contingency that might arise, or what are your goals for the document?

Brown: Well, I think you want to make sure that there are no misunderstand
ings. That's probably the most important thing. And of course, there
is just legal junk that you've got to put in documents, but the most
important thing is to make it very clear as to what the document is
saying and not leave loopholes where somebody can suggest that this
was not what was intended and that sort of thing.

Hicke: In order to do that, do you have to have recourse to a lot of esoteric
laws?

Brown: No, not really.

Hicke: So clarity maybe is the most important ingredient.

Brown: There is nothing really magic about the law, for God's sake.

Hicke: But a lot of people think there is. That is one of the things I am
getting at. For instance, I have read in articles that in a merger
and acquisition transaction, every attempt is made to cover every pos
sible contingency and all the options that might come up in the next
century or something like that.

Brown: To some extent this is what you're really doing when you try to make
it clear.

Hicke: That's true.

Brown: Some people go maybe further overboard than I consider necessary.

Hicke: And you indicated that the understanding between the two parties is

important but that there are also the government regulations that have
to be dealt with.

Brown: Of course, that goes without saying. But you have a pretty good idea
what they are and it's not too difficult to do that. Now, for
example, in the FMC/Viscose merger, Vicose had --oh God, I have for
gotten, it may get up close to 1,000, but I don't remember, it's in
the hundreds of various kinds of patents that they had. We are not
patent lawyers but they assisted us and their own people put together
the patents and then drew the relatively not too difficult documents
to transfer them from one company to the other. That's the kind of
thing that you want to discover ahead of time: what sort of things
are there so that we know what has to be done.

Most in that kind of situation are not going to hide anything.
So it is not difficult to get that. But you have to ask for it. And
you have to ask questions to see if somebody forgot something that he
should have told you about, and so on. That's just one illustration.
These things take days, days, and days to put together and find them
and discuss them. There are a lot of other things that you have to
inquire about, such as various states have very curious rules about if
you sell something that is next to a river or whatever it is, and
these rules vary. The new person: is he going to get some more dif
ficult problems than the other one had? The fellow that now has it
acts in certain ways because of the way their laws are, and so on.

That kind of thing you have to investigate. That's part of the
lawyer's job which may in some ways be more important than writing the
document. Most of it is using common sense to ask the right ques
tions. And finding out about these things. In this kind of a case
the seller knows about a good part of this and knows what problems
he's had, and so on.

Hicke: Did American Viscose have in-house counsel at all?

Brown: Yes, they had some in-house counsel but it was an outside counsel who
did most of the work.

Hicke: So they would be aware of the various state law requirements for their
different plants and so forth. So all you would have to do was ask
whether they had taken that into consideration?

Brown: Yes, that's right.
Hicke: Okay. Then on to Ranger.

Ranger Oil (Canada) Ltd. : Dealing With The British
[written answers]

Brown: When oil was discovered in the North Sea, a number of U.S. companies,
including Chevron, had interest in the development of this oil. A

company called Ranger Oil (Canada) Ltd. had an interest in one of the
UK production licenses in which Chevron also had an interest. The
various participants (I believe nine) were required to put up money to
develop the production. Ranger had to borrow a large sum but had dif
ficulty in its attempt to so do because the amount was so large that
bankers were reluctant to lend such an amount to a company of Ranger's
small size.

Ranger came to Chevron to see if Chevron would guarantee a loan
of $120 million from the banks. The consideration for Chevron's guar
anty at first was to be that Chevron, for the life of the crude oil,
would acquire Ranger's Ninian crude oil production at an 8 percent
discount. This caused some UK tax problems, and the consideration was
changed to provide that Chevron would acquire free of cost 8 percent
of Ranger's Ninian crude production. In addition, Chevron had the
right to buy the remaining amount of Ranger's Ninian crude.

Hicke: Do you know when Ranger went to Chevron?

Brown: It may have been the very end of '75 or beginning of '76, right in
there. The deal closed in '76, as I recall.

Hicke: Oh, okay.

Brown: In all, I made three trips to London on the Ranger matter, each of
which was for about two weeks. On these trips Don Henderson, now
Chevron's comptroller, also came along and greatly assisted in putting
the deal together. For obvious reasons, we also had Chevron's London
law firm working with us . Bank of America was the largest lender and
thus was the agent for the other lenders . Bank of America had a
London office and a California lawyer who was part of their organiza
tion in London. He and I worked well together in putting the loan
agreement into shape.

We had thought that the agreement was completely worked out to
everyone's satisfaction until the lawyer for one of the other four
banks announced that the agreement was not acceptable. The lawyer
then presented us with his version of the agreement. I did not mind
the style in which it was written, but a number of matters were
inserted that had never been agreed upon and which, in fact, never
could be agreed upon. I asked our London law firm for a form of a
typical UK loan agreement in their usual style. I then rewrote our
agreement in the UK style but put in only the matters to which we had
agreed upon. I even had in the form typical UK language that the
agreement written by the other lawyer did not have.

I presented the rewritten agreement to the lawyers for the
lenders. To my surprise, they thought it was fine. This worred me,
but I was assured by our London counsel that I had not changed the
original but that the UK lawyers were now comfortable because they
recognized the style. I never received any comment from the lawyer
who started this about the fact that I had removed his additional
matters .

Apart from putting together numerous documents, all of which were
for the purpose of protecting Chevron, it was necessary to enter into
agreements with the UK government to the end that all of the rights
Chevron had to protect itself would be preserved. In point of fact,
there were about fifteen agreements and other documentation which had
to be prepared and agreed upon by the UK government. I don't remember
how many meetings I had with UK government lawyers but it seemed like
there was one every other day. On one day we would spend a day in
which, finally, there was complete agreement with respect to the docu
ment or documents. These were prepared by the following day. On the
next day we would be told by the government people that they wanted to
make some changes. Accordingly, the process started all over again
and went the same route. As I said, I do not remember how many times
this was done but it was numerous .

The closing of the transaction involved, in addition to our
selves, Chevron people, Ranger people, UK Department of Energy people,
lenders, Bank of England people, British National Oil Corporation
people, and people I am sure I have forgotten. The closing was held
up by UK government people, such as lawyers and the like, complaining
about the documents and wanting to change them. We stood firm and
refused any changes. Time was very important because, while there is
five hours' difference between London and New York, things had to be
completed by a certain time in New York while the New York banks, in
particular, were open. With part of the $120 million Ranger was
paying off a loan from the UK government. Accordingly, it was impor
tant that timing would permit this. Finally, the Secretary of State
for Energy rose and glared at his companions and said he was prepared
to sign the documents, despite the fact that while he was signing, his
associates kept saying, "No! No! No!" As a result of his action,
the transaction was consummated.

The closing had been held in a very large office, the law firm's
dining room. Don Henderson and I left and went downstairs where we
had left our things, and we saw in one of the offices these same
people who had been shouting "No!" yelling on the telephone and com
plaining to somebody or other, insisting that the agreements should be
changed. Fortunately nothing came of their diligence. All in all,
the work done was interesting and very educational.

[oral answers]
Hicke: Who was the Bank of America's attorney?

Brown: I just don't remember that name. He had worked in the office in San

Francisco and I guess they moved him around, and he had gone to London
for a few years. He was a very nice fellow and made no pretense of
being the smartest person in the world. He knew when to ask ques
tions, and so on. So it worked out very well. Sometimes that doesn't
work that way.

Hicke: What was it like working with the British lawyers?

Brown: I had worked on other matters with Chevron's London law firm too.

There is no problem with that particular law firm, which is one reason
why they are still Chevron's lawyers. They are very tactful and they
deal very nicely with you and they don't upset you. If they think
what you are saying is not quite right, they'll eventually get around
to getting there without saying, "You are dead wrong," right now, as
we sometimes might. They are very pleasant people to work with. At
least this firm was and the people that I worked with at that firm
were quite nice.

Hicke: You said that the work was educational.

Brown: Yes, it was dealing with the very difficult British way of doing gov
ernment business. It was very enlightening as to why the British
sometimes don't do things as fast or as quickly as maybe we would do
things. I spent a lot of time. It was educational in the sense that
you saw how another government worked compared to our governments ,
which are not very fast either, I guess.

Hicke: I was wondering if their red tape is worse than ours.

Brown: In some ways, yes. But they have very strange things. For example,

if they want to change the taxes, they do it a little differently than
we do it, and so on. I won't bore you. That's not really germane to
what we are talking about here.

Hicke: No, but I think dealing with another country's lawyers is part of what
PM&S has had to do often.

Brown: We have. Now, you see there is an example of the lawyers that were
complaining about the agreement that I put up. That sort of thing.
That's just the way they are, I presume. Now that was only one firm
that did that. There have been others. Well, in the Ranger case
itself the Ranger's London counsel from time to time would be a little
difficult. I didn't get into that because it really wasn't too impor
tant. They had some problems with the agreements that I wrote. Some
times you couldn't understand what they were trying to say or what
they wrote .

Iran Consortium

Brown: I first ran into this in 1954. Did I ever talk about that?
Hicke: That you were in on the formation of the Iranian consortium?

Brown: Right. I spent a lot of time in London putting together the docu
ments. It was run by a British lawyer and I guess each of the
American companies had one of their American lawyers along. Everybody
else, including Chevron, had British lawyers. So that was my first

lesson in how you deal with them, that is, with the British, who are
quite difficult at times. They, of course wanted the biggest chunk of
this.* We would go there, let's say at 9 o'clock in the morning and
work through until 2 or 3 in the next morning. Once or twice during
that period, the British would bring in new, fresh lawyers. And of
course we were all still sitting there. The next morning you do the
same thing all over again.

Then you had to be very careful because -- I am not suggesting
they were cheating, but I think they were a little bit. The documents
were to be rewritten as to what we had all agreed to, but when we read
a clean copy the next morning, it had been changed somewhere along the
way. They always had an excuse why, how that came about. They were
all very nice people, but I had my doubts. No, I never knew whether
this was just the way things were done there or not. I never found
that kind of thing in later years. But those meetings, as I say,
opened my eyes. You know, I liked the people, don't misunderstand me,
but that group was very strange.

Hicke: These were lawyers representing the Anglo Iranian Oil Company or the
British government?

Brown: I don't know who they were representing, but they were UK lawyers,
yes. The whole room was full of lawyers and there was one man, who
was a barrister, who theoretically was the man in charge of trying to
get everything all worked out. He was very nice, too. He didn't
participate in any of this hanky-panky. I don't remember his name
now.

Hicke: Did you go to Iran or did you stay with the group in London?

Brown: No, I was in London. There was Jimmy O'Brien and I. Our London

counsel also sat in all those meetings. Jimmy wasn't there all the
time. He would be doing other things, but I was stuck with having to
listen to all this all that time. They would argue about things that
didn't seem very important, but that needed to be argued about.

That was kind of interesting, because when we were finished, it
was going to be signed in New York. I came back day before. In those
days, planes were a little different. They were not jets. So I went
from London to New York. Just within an hour, I got another plane and
came to San Francisco. Because the next day was when the documents
were supposed to arrive to be signed, it was suggested that I go back
to New York. So I got the Red Eye that night, went to New York. The
documents were supposed to have been signed that afternoon, but they
didn't arrive until late that night, so I got a plane around midnight
and came back here then, after the documents were signed, and went to
the office. Now, I hadn't been to bed for about three days. When I

* In 1954 a consortium was being formed of international oil com
panies to produce and refine Iran's oil.

got home, I was going to go to bed very early. My wife says, "What's
the matter with you, why are you going to bed so early?" I very
politely told her that I had to go to bed. [laughter]

Hicke: Once in every three days, you should get a good night's rest.
Brown: I don't know if that belongs in any book.

Hicke: Oh, that's interesting. It's a good example of what you had to do

when the pressure was on. That was obviously a very important agree
ment.

Brown: Yes, it was. As I say, you learn a lot by just listening to a lot of
people. Of course, I was relatively young. Not real young. I became
partner in 1951, and this was 1954. So I was a little experienced but
it was very, very, really good to listen to some of these people.

Hicke: Do you recall exactly what the major problems were that were dis
cussed? I know that one of the problems was how to divide up the take
and that kind of thing, but I don't know if that's what you were
involved in.

Brown: Yes that was, but actual numbers and the like were not being discussed
at that meeting much. It was just putting it all together. To be
honest with you, I don't really remember very much about what we did
and what we argued about, unfortunately.

Hicke: Well, your impression is that it was a lot of little details?

Brown: There were a lot of details, yes. Some of it may have been also, to

some extent, what you just said. This was a long time ago now. A lot
of things have happened and that's not the kind of work that I did
every day.

Hicke: How did you get the assignment?

Brown: O'Brien thought I would be the best one to go. He was the one that
suggested that I go, so I did.

Hicke: The fact that nothing stands out greatly, just re-enforces your

impression that it was a lot of little details that were causing a
problem and not maybe anything major.

Brown: To some extent, I think that's right. The big details were worked out
in Tehran and we had a partner there at that point.

Hicke: Turner McBaine.

Brown: He has probably told you a lot about that.

Hicke: He has told me a lot about that part of it and I am going to be

talking to Mr. O'Brien pretty soon, so I wanted get a little back
ground on the London negotiations.

49a

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Telegram received by Brown while in London
working on Iranian consortium. Sent by Marshall
Madison with respect to the work being done.

Brown: O'Brien had to live with that [agreement] when he went on the board of
Chevron.* So he probably has spent more time with that than I did
thereafter. That's one good reason I don't remember: because I dis
missed it.

Chevron Tankers
[written answers]

Brown: In the 1970s Chevron began having large tankers built in foreign coun
tries, all of which would ultimately be of Liberian registry.
Chevron, correctly appraising that the cost of these investments would
increase, paid for the vessels before they were built. Without
attempting to explain all that went into these transactions, they went
somewhat as follows: one or more investors would put up a partial
amount of the equity to acquire the tanker from Chevron. The balance
of the necessary money to acquire the vessel from Chevron would come
from the sale of bonds to insurance companies and other institutions
which usually buy this type of security. The vessel would be char
tered to Chevron and the charter hire would pay off the bonds. The
owners who purchased the vessel from Chevron would have the benefit of
the residual value of the vessel. The required documents could run as
many as ninety or more, including the requirements for registering the
vessel in Liberia.

At the beginning, more or less, of these transactions, the first
two were closed in Montreal for tax reasons. Thereafter, again for
tax reasons, they were closed in London. While all of the trans
actions were very similar, there always were one or two little differ
ences which could be important. While I did not seek this, the
Chevron financial vice presidents insisted that I go to these clos
ings. In many cases, however, I took with me one of the associates
who was familiar with these matters. Needless to say, I was delighted
to be able to spend so much time in London, in view of the fact that
it was my favorite city.

Inasmuch as there were always four other law firms involved at
these closings, I made sure I had a voice in the approval of these
counsel who were representing various other parties to the trans
action. Eventually it ended up with all of the selected lawyers being
the same as the previous time. Having selected well, all of these
people were a pleasure to work with and with whom I had fun in London.
While I don't consider London as having great food, we did find quite

* James E. O'Brien was appointed Director and Vice President for
Legal Affairs of Standard Oil Company of California (now Chevron
Corporation) in 1966.

a number of nice restaurants and, of course, there was always the
theater.

It seems almost a shame that in subsequent years, these large
tankers were no longer useful for many reasons, and some of the
tankers had portions of them cut out so that they became smaller ves
sels, and many are sitting idle in various parts of Europe.

Growth of the Corporate -Securities Practice Grouj

Hicke: Could you tell me about the growth of the corporate-securities
practice group in later years?

Brown: One of the great things about working for a very large client such as
Chevron was that whenever a new financing program would become
popular, I was able to learn about it and handle it for the client.
One of the best examples was the growth of Eurodollar bond sales.
Again, it was very nice for me because these transactions required
closings in Europe. Margaret Gill worked on these Eurodollar bonds
with me and she also had the "benefit" of getting to London and
Brussels in this connection.

Margaret was the first woman lawyer in our group and the decision
to hire her was made by Paul Davies and me. As time has shown, we
were very fortunate to have her agree to come with our firm.

Because the corporate group grew so much, the group itself was
split up in 1985, so that there is now the Corporate-Securities Group
over in the Russ Building and the Corporate-Banking-Securities-
Insurance Group at 225 Bush. This worked quite well, particularly
because the two groups still work with each other and, if necessary,
help each other out.

Hicke: Have hiring practices changed over the years?

Brown: Yes, they have changed. As more and more people went into law, and
the people who went to law school had better records, we tended to
look for these people entirely.

The adoption of the practice of not hiring members of the family
of a partner changed the lawyers hired. When my son decided to go to
law school, he hoped he would join PM&S. He was one of the first who
suffered by this new practice. He is now a partner of a very large
firm in San Francisco. I have avoided asking him how he felt on the
subject. The last lawyer who was the son of a partner was John A.
Sutro, Jr.

Needless to say, the biggest change has been in the hiring of
women. We now have the largest number of women lawyers in a law firm
in the U.S. and also, I believe, the most women partners.

Having become an advisory partner at the beginning of 1980
(having reached my 65th birthday in 1979), I was no longer head of the
group. Paul Davies followed as head of the group, and he worked in
the group until he became general counsel for Chevron.

[oral answers]

Hicke: Can you tell me when Paul Davies started, joined the group, or how he
came on?

Brown: He came to us in 1957. He came to work here because -- let me back up
a minute. The only work we did for FMC was some tax work that one of
our tax lawyers did. He was the FMC man. Then when Paul Davies came
to work, he wanted to do the kind of work that we did in this group.

Hicke: Was he right out of law school?

Brown: Yes. At that point, his father decided to move all of the work to the
firm, in addition to the tax work. I then became what you might call
the lawyer in charge of FMC work. I had to decide on what the bills
would be and so on and so forth. As soon as Paul became a partner, I
said, "Here, take it." Then of course it entailed having to find out
what exactly the background of FMC was and particularly in my area. I
went to the FMC offices, which were in San Jose. It took some time to
dig it all up, but people were very helpful in getting the material.
So when I was through with that, I had a pretty good picture of what
it was. Their prior lawyers did things a little differently than we
might have done them. There are certain things they did that I had
some reservations about and thought that maybe they should be done
differently. But anyway, it worked out quite well.

I used to spend a lot of time traveling when they moved to New
York. Of course they did have an office there, because that was their
headquarters back there. I spent a lot of time in New York on various
FMC matters. Some of it was just giving instructions to some of their
people about what they should or shouldn't be doing with regard to the
Federal Trade Commission or the Justice Department. For example, at
one point the Justice Department got the idea that if you're giving a
lot of business to somebody it's because you want some of their busi
ness and crazy things like that. So you have to tell your people to
be very careful about what kind of records they keep about what they
are doing, to indicate that whenever they are buying something from
somebody it's because that is something that they need, and these
people are the right people to buy from because they have good
products and so on -- that sort of thing. You kind of build that
record.

Hicke: Along these same lines, I would like to ask you a general question
about the kinds of advice you give to client. It sounds to me like
one of the things you tried to do is to head off trouble, just not
wait for it to happen.

Brown: Well, of course, you always try to keep your clients abreast of things
that have happened recently and the kinds of things that they might
get into trouble with. When those things come about, why you gener
ally, without charge, try to apprise them of these things and what can
happen and what they should be looking for. At times, they will come
to you and tell you certain things that they are going to do, and at
that point you tell them, "Yes, but." That is the kind of thing that
you should look out for: things that may not be proper under the var
ious laws. So, I think generally speaking you are at all times trying
to keep your clients out of trouble.

With a simple thing like a registration statement, you want to be
sure that what they're saying is absolutely correct. But more impor
tantly, you don't want to have them forget to tell you some things, or
maybe, for some reason or other, they don't want to tell you something
that is important and should be known to the public. Our primary
function is to keep them out of trouble. Once they are in trouble,
they're not in my hands, they're in the litigator's hands.

Hicke: So you have to be able to ask the right questions enough ahead of time
to know what they are planning.

Brown: Yes.

Hicke: Would you say that you venture into the policy-making area at all?

Brown: To some extent, yes, that's true. You know, policy is a broad word.
I don't know what it means. I don't know quite how you're using it.
You mean not the way they do their business necessarily in the sense
of what they're building or not going to build, or what they're going
to sell or how they are going to sell it, and so on. I take it that
is the kind of policy you're not talking about.

Hicke: Right.

Brown: But policy, in the sense of having proper guides for their employees
so that they don't get into trouble and they do the right sort of
thing or not do the wrong things. If that's policy, why yes, we do
that sort of thing. For example, Chevron has a lots of guides, docu
ments that they give their employees to know what they do and what
they don't do. We look at that and we help write those things and so
on.

Hicke: I know FMC made numerous acquisitions. Would you or Paul Davies , Jr.
be involved in giving some advice before they actually made the
decision?

Brown: To acquire? We always knew when they were going to acquire something,
yes. There would always be some conversation about what the problems
might be.

Hicke: Again, just in general, what are your responsibilities if the client
does not follow your advice?

Brown: That all depends on what the kinds of things we are talking about. If
he is going to go out and shoot somebody, I guess maybe we have a
problem. But we can't control him. We can tell him that this may
cause some problems, and that "Now, if you want to go ahead, that's
your problem." You try to talk them out doing things. On the other
hand, sometimes they want to do it and want to run a risk.

Hicke: Presumably there are also business decisions that may override certain
legal considerations.

Brown: What you are trying to say, I think, is that there are times when what
they are going to do is against the law.

Hicke: No, no. That's not the kind of situation I mean. I am referring to

the situation where it is not against the law, but you might give some
advice that another policy might be better from your point of view,
but they might have business reasons to go ahead and do it.

Brown: Well, we try to stay out of that. But there are times when they're
going to do something and we might say, "Well, if you're going to do
that, why don't you do it this way or that way? It might be a little
easier for us and for you too." But that's up to them. If it occurs
to you to say it, I don't think anybody minds hearing that.

Hicke: So maybe you suggest an alternative.

Brown: I wouldn't do that to Ralph Davies, for example, but most people are
willing to listen.

Hicke: Okay, again it might vary with the client?

Brown: Yes, right. By and large, though, I would say if that sort of thing
came up I don't think our clients would object to hearing me say that.
Now you don't make a big fuss; you know, you don't yell at them about
it. You just tell them what you think.

Hicke: Let's see, we are actually on this corporate group growth and we kind
of got off, but we got off on some interesting things.

Brown: No, we didn't. [laughter] I can't really help you much with that.

Hicke: Let me see. You said that there were a number of times when you rep
resented a client, and the corporation with which the client was
dealing liked what you were doing very much, and so later they would
come to you. Are there any specific examples that you can give of
this, or would you prefer to just leave that a general statement?

Brown: The International Paper Company is one example. You see, we were on
the other side of that when they acquired Muirson, but they liked our
work so well that they came back to us quite a number of times. As a
matter of fact, we defended a big case by the government against them.
Of course, obviously I didn't have anything to do with it, but they
came to us .

Hicke: Because of your work?

Brown: Right. That's one example. There are a number of other examples that
don't come to mind right away. That one came to mind because we had
been talking about the International Paper.

Hicke: As you took on new associates, how did you decide who would have what
work?

Brown: Some of it was primarily which partner needed help. So the work that
the partner was doing would be the work this associate would be doing
with this partner. You are talking about me now, not the firm?

Hicke: Your corporate-securities group.

Brown: Mostly, of course, we tried to get these people to have experience
with all the kinds of work we do. Now if that necessitated moving
people around a little bit from one partner to another partner who had
more work of this kind and this fellow had been doing a lot of the
other kind of work, why we would try to move them around so that he
would be sure that he had experience in all areas of the kind of work
we did. I don't know whether everybody does that, but that's what we
did.

Hicke: Then what kind of supervision do you exert over the associates?

Brown: Well, at the very beginning, you try to help them with their work. If
they have written something and you read it and you think it could be
improved, why you ask them to sit down with you and rewrite it with
them, literally. Explain why you think it should be done or said this
way rather than the way they did. I probably did more of that than
some of the other people because I would have more time in later
years. Virtually everybody, to some extent until more recently, kind
of went through that with me. Sometimes the partners, when they
started doing that sort of thing, did it like I did, and in some cases
they didn't.

I think it helps to sit with the associate and try to tell him in
a very gentle way, "What do you think? Don't you think if perhaps we
did it this way or said it that way, it might be a little better?" in
kind of a happy way. Of course, they are all bright and they get the
idea pretty quickly. I think that's how most of our people got
trained at the beginning.

I haven't done that in a long time. Cynthia Czerner, I think,
was the last one where I spent any time going over material with an
associate. At that point, she was not necessarily working with me,
but she would come and ask me questions and I would say, "Let's see
what you have here," and then we'd go from there. I always found it
stimulating to do that kind of thing. I don't think I could do it
now. I'd forget the right words at the wrong time. [laughter] I
always enjoyed it in some ways.

The Boeing Company
[written answers]

Hicke: I believe that the Boeing Company case was a very important one.
Could you tell me about it?

Brown: In 1978 the Securities and Exchange Commission brought an action in
the U.S. District Court for the District of Columbia against The
Boeing Company. Briefly stated, the commission alleged that Boeing,
since 1971, had engaged in an undisclosed course of business wherein
Boeing made payments of at least $27 million to at least seven offi
cials of foreign governments or instrumentalities thereof in connec
tion with the sale of Boeing airplaines; that Boeing had engaged in an
undisclosed course of business wherein it made payments of at least
$5.9 million to at least four individuals or entities controlled by
them who were officers or controlling shareholders of at least three
privately owned foreign airlines; that multiple consulting contracts
with foreign consultants were executed which facilitated the payment
of large sums of money outside the consultants' home countries, and in
connection therewith, one contract was for a nominal sum and the other
for additional compensation through accounts in Switzerland and else
where; that at least in two foreign countries Boeing certified to the
government that it would not pay compensation to any person when, in
fact, $3 million was so paid; that Boeing entered into contractual
arrangements with various consultants and commission agents and dis
bursed at least $19 million without adequate records and controls to
insure that the disbursements were actually made for the purposes
indicated or that services at all were received for the payments.

Boeing and the government entered into a consent decree pursuant
to which Boeing did not admit or deny any of the allegations but con
sented to a permanent injunction and certain other relief. At the
same time Boeing was required to file a current report with the Secu
rities and Exchange Commission on Form 8-K for the month of July 1978.
The report was to state the appropriate details with respect to the
matter alleged in the complaint and any other payments to governments
or foreign officials or instances of dual consulting contracts.
Boeing was to establish a special Review Committee and determine the
adequacy and accuracy of disclosures made by Boeing and its above-
referred-to Form 8-K. The committee was to retain outside legal
counsel satisfactory to the staff of the commission. The counsel was
to assist the committee in its review and further investigations.

The committee members (all directors of Boeing) were David
Packard (chairman of the board of Hewlett-Packard), Harold J. Haynes
(chairman of the board of Standard Oil Company of California), and
William M. Batten (Chairman of the Board of the New York Stock
Exchange). Mr. Haynes and Mr. Packard met with me and asked me to
serve as the counsel required by the Securities and Exchange Commis
sion and I accepted (although it meant that I had to give up a trip to
Spain that was planned and paid for already).

The company advised the Securities and Exchange Commission that I
had been selected by the committee to act as its counsel. In short
time I received a telephone call from a member of the Division of
Enforcement of the Securities and Exchange Commission. Inasmuch as I
personally had no recent contact with that division, we did not know
each other. We talked for forty-five minutes. While it was made
clear that he needed to discuss this further with others, he indicated
that I passed muster. The next day I was told I was acceptable.

Boeing's investigation of the foregoing matter had been conducted
primarily by its outside counsel. This created two problems for me.
First, in each case where an employee was interviewed by such counsel,
the firm also representated the employee and was subject to the
attorney-client privilege and the committee was unable to learn from
the firm what each employee told counsel. This did not become too
important because of statements under oath of employees taken by the
Securities and Exchange Commission and the Internal Revenue Service.
More importantly, in virtually all cases, when requested to be
reviewed by the committee or its staff, employees granted such inter
views. Further, in all cases senior management consented to be
interviewed by me or my staff.

The second problem arose by the assertion by outside counsel of
the attorney work-product privilege. Thus, materials put together by
such firm with respect to its interviews of employees and other per
sons, such as memoranda and notes made by such firm, were not avail
able to the committee. Consequently, the committee was required to
reach its conclusions with respect to the Form 8-K primarily by com
paring its findings with the disclosures in the Form 8-K. Accord
ingly, this did require some duplication of effort.

Prior to the foregoing settlement with respect to privilege, many
days were spent trying to work out something which would permit me to
see all the material but not be a waiver of the privilege. This was
never accomplished. Further, my litigating partners, after research,
concluded that there could be no assurance that the privilege would
not be waived. In all fairness, it should be known that the Justice
Department and the Internal Revenue Service were continuing their
investigations .

Early on I went to the offices of Boeing's outside accountants.
I interviewed two of the partners of the firm who were in charge of
the account. It soon became apparent that in view of their normal
audit procedures and the work done in the special report they con
ducted, the chances of there being "slush" funds were about nonexis
tent. There were no large sums of money in foreign countries nor were
there any large offices where sums of money could accumulate. On
October 20, 1976, the firm had furnished the company with a review
which concluded that there was no evidence of "corporate slush funds."
Pursuant to my request, they also, on November 28, 1978, gave a report
to the committee which stated that each payment listed in the July 28,
1978, Form 8-K was agreed satisfactorily and reconciled to their
working papers. Based on the foregoing, which included a number of

additional meetings with the accountants, the committee and I were
convinced that there was no "slush" fund.

While the people and the numbers changed, I had a number of asso
ciates go to Seattle from time to time to review certain of the docu
ments which were germane to determine the accuracy of the Form 8-K.
In addition, I went to Seattle almost every week for several days.

On October 9, 1978, a vice president, who was also counsel and
secretary of Boeing, and I met with a lawyer in Geneva to discuss with
him some of the transactions in which he participated. One involved a
payment of $300,000 to the chairman of an airline. The Swiss lawyer
had been recommended by one of the company's people who handled the
sale of Boeing planes. This lawyer arranged for funds to be sent to
Swiss banks and to a Liechtenstein corporation (owned by him) .
Accordingly, the Boeing funds could be sent to the banks or to
Liechtenstein and from there on to the person whose benefit the money
was .

The lawyer advised that he withdrew the $300,000 in cash and gave
it to the Boeing man. He showed us the Boeing man's receipt.

In addition, we were advised of other large sums received by
entities of the lawyer and he was able to demonstrate that the sums
ultimately ended up with the person for which it had been intended.

As an example of a Swiss bank's not telling everything, we had
been told that in order to get the $300,000 in cash to the country of
the airline, a courier provided by a bank had been used. We met with
a man whose title was Directeur Adjunct of the bank in Geneva. While
the conversation was lengthy (also not really helpful), one important
question was answered: by his saying the records did not show where
some money came from (which we knew could not be true) ; and as to the
courier, his saying that the bank never arranged for a courier, that
that is not their function -- we learned that bankers don't always
tell the truth. Subsequently, I learned from a man who had been there
that the courier was the banker's son.

Each member of the committee, together with me, participated in
interviews of witnesses, examined documents, and reviewed and dis
cussed with me and the staff various aspects of the matters under
investigation. In excess of 1,600 hours and over five months was
devoted to the investigation by the staff and me. We conducted inter
views of witnesses both in person and by telephone, not only in the
United States, but also abroad when deemed appropriate.

We reviewed the depositions of employees of the company inter
viewed by the SEC and the IRS, and questionnaires prepared by me and
completed by employees interviewed by the company's outside counsel
and who were not interviewed by the SEC or the IRS. In addition, we
examined the company records subpoenaed by the SEC, the IRS, and the
grand jury. Further, the company's outside counsel had assembled a
file with respect to each person to whom the company had made any pay-

ments in connection with foreign sales which included (1) copies of
company documents; (2) copies of pertinent portions of transcripts of
depositions taken by the SEC and the IRS, and (3) copies of statements
obtained from consultants and airline and government officials. Each
of these files was reviewed. Inasmuch as the foregoing materials
related principally to the years 1971-1975, we reviewed consultants'
agreements , payment records , and correspondence and other documents in
the company's central files for the years 1976 and 1977 and for the
first seven months of 1978.

I also reviewed certain material in the files of the SEC which
was not available to the company. Counsel discussed with members of
the staff of the SEC certain matters which still concerned such mem
bers. With respect to most of the countries involved, we reviewed
statements signed by consultants in such countries denying making any
improper payments and, in cases where the question might be raised,
that they had any voice in the determination of aircraft to be pur
chased, including statements procured at the request of the committee
relating to matters of concern to the SEC. Likewise, matters of con
cern to a few foreign governments, as reported in newspaper articles,
were also explored to the extent of the committee's limited ability.

The company's policies relating to sales consultants and proce
dures for implementation thereof as set forth in approximately twenty
memorandua since April 5, 1968, were reviewed, as well as the forms of
Consultant's Statements, Request to Engage Sales Consultant, Consul
tants' Agreements, and Request for Approval: Sales Consultant
Agreement .

The committee and I also reviewed the manner in which the com
pany's Policy 11A1 and Implementation Instruction 11A1-1 were being
monitored, including review of the documentation for approval of the
engaging of consultants and the content of the consultants' agree
ments. In this regard, employees and management personnel also were
interviewed as to the implemention of the policy.

I also reviewed a change in the company's mode of operations in
certain countries in the Middle East. On July 1, 1977, the company
entered into a distributorship agreement with an independent corpora
tion organized in the Netherlands and having offices in Geneva,
Switzerland; Rome, Italy; and Beirut, Lebanon.

The company believed that marketing its products in that part of
the world would ultimately enable it to reduce its sales force in that
area and would eliminate the need for local sales consultants in such
area. I interviewed the principal operating officer of the organiza
tion and, among other things, interrogated him as to the proposed mode
of operations of the distributor. I found no evidence that this
agreement was entered into as an indirect means of making improper
payments .

Our conclusion of our investigation was that the company's inves
tigation was reasonably complete. The Form 8-K was reasonably ade-

quate and accurate; however, based on our work, there were a few
matters which we believed should be commented upon. We learned that a
consultant, who was paid $857,000, was also at the same time a consul
tant to the government agency that purchased the aircraft. We also
learned that the company entered into a consultant contract with an
individual at the request of another government official pursuant to
which the contract payments of $20,000 and $1,000 were made. The
check for $20,000 bore the endorsement of the official as well as the
payee. In addition, there were two very minor corrections. We also
pointed out that certain patterns of payments and practices which,
while not of themselves were proof of improper conduct, did not pre
clude the kind of questionable activity that had been reported by
other companies . The committee recommended a number of changes in the
instructions as to policy in this area which would avoid these ques
tionable patterns of payments.

Several weeks after the company's Form 8-K containing our Report
of the Committee was filed, the SEC began sending to me or calling me
about various matters told to them by various people, none of which
persons was connected with the company. There were about one-half
dozen of these. I ran every one of these down and found in each case
that there was no basis and, in fact, some were utter nonsense to the
improper matter alleged. I convinced the SEC of this. I then told
the SEC that they should stop sending to me all the gossip and rumors
that got to them. I said it was not fair to the company to have to
pay me for looking up a bunch of nonsense. The SEC agreed and I have
not heard any more from them on this subject.

Since 1977 the Justice Department had been investigating and con
ducting grand jury proceedings with respect to the matters disclosed
by the company's Form 8-K, describing payments made in connection with
foreign sales. In addition, they looked into matters which were not
described in the 8-K.

In 1980 a new company committee was appointed for the purpose of
reviewing allegations being made by the Department of Justice with
respect to Boeing's foreign sales and marketing activities. Again, I
was retained by the company to act as counsel to this committee.
Eventually the Justice Department came up with a proposed plea agree
ment .

I attended only one meeting with the Justice Department. Mostly
in addition to Boeing's normal outside counsel, the company had
retained Edward Bennett Williams on behalf of the company and its
employees .

I recommended to the committee that it should recommend to the
board of directors that Boeing accept the settlement proposed by the
Justice Department. In this connection, I made it clear that my
recommendation was not because I thought Boeing was guilty of the
charges set forth, but because I believed that it was in the best
interests of Boeing to settle in the manner proposed.

Hicke: You mentioned that you went to Seattle and there were other associates
who went with you. Do you recall who went with you?

Brown: Only one person was from our group. The others were litigators, on
the theory that at least they should be used to shuffling papers and
were used to reading through papers to see what the problems were. By
and large, I got stuck with doing most of that. I think part of the
problem was that. I trusted my associate, but to be honest, I did not
feel comfortable with the others .

Hicke: It was a very sensitive case.

Hicke:
Brown:

Ethics

Could you comment on ethics in the practice of law in general?

I do not have any real knowledge of how good or bad the sense of
ethics of lawyers is. While perhaps this is not the sort of ethics
one thinks of in law practice, I have the following observations.

For years and years I interviewed many people who were seeking
employment as lawyers. In the course of the interview one learns they
are also interested in other law firms. Our cardinal rule was always
to either make no comment or, if asked about the other firm, to say
that it also is a fine firm. One could, of course, under these cir
cumstances, still tell what a fine firm we were.

As the years went on, I noted that more and more I was hearing
that other firms were telling people what a terrible firm we were and
what our problems were, none of which was true. I still occasionally
interview potential lawyers; but because this is not done often by me
anymore, I cannot in fairness say whether this practice of other firms
knocking us still continues. I consider such practice by these other
firms to be unethical.

Al Brown's sixtieth birthday party with his favorite ladies at the office

IV ADVISORY PARTNER ACTIVITIES

Becoming An Advisory Partner in 1980
[written answers]

Hicke: What activities do you engage in as an advisory partner?

Brown: The first few years after becoming an advisory partner, I continued to
work a rather reasonable amount. . I remained in my large office on the
fourth floor of 225 Bush. I think everyone was afraid to ask me to
leave. Other advisory partners moved into smaller offices or into
offices at 114 Sansome. In 1982 I decided that it was only proper
that I get out of my office and move to 114 Sansome, which I did.

About this time PT&T was going through its problems with AT&T's
reorganization. Bob Dalenberg, who is the executive vice president,
general counsel, and secretary of Pacific Telesis (formerly The
Pacific Telephone and Telegraph Company), kept me abreast of matters
as they developed and from time to time discussed with me a large
number of problems that had arisen or could arise. In addition, I
also reviewed a number of documents that were quite important for the
future of the company. In certain areas Mr. Dalenberg and I received
great help from my partners, Mike Halloran and Barbara Creed. In
addition, Terry Kee, who will become a partner on January 1, 1987,
held my hand throughout and kept me out of trouble. I still worked on
a number of Chevron matters, again with help from Terry.

I have never aspired to write a play for Broadway, but I always
thought it might be fun to write a play, preferably comedy. In 1983,
I commenced to write a Neil Simon type of play.* Having a secretary
made it less painful. When it was finished, I permitted a few to read
it. They all thought it was funny. I have not sent it off anywhere

Lead By The Hand, 1983.

to be published. It was fun doing it and I got it out of my system.

Toward the end of 1983, or very early in 1984, I moved back to
225 Bush Street into Margaret Gill's former office (she having moved
into a larger office). This move turned out to be useful. Toward the
end of February 1984, Chevron decided to attempt to acquire Gulf Oil
Corporation. My partner, Frank Roberts, then the general counsel for
Chevron, asked me to come back full time and work on this matter. I
agreed and from then until about the middle of 1986, I have been
working on Chevron matters .

The Chevron/Gulf Merger

Hicke: Tell me more about the Gulf /Chevron merger.

Brown: By 1984 I had pretty much stopped doing very much legal work at the
office, although I came in almost every day from about nine to four.
All of a sudden, I was up to my ears because of the Chevron acquisi
tion of Gulf Corporation and the subsequent matters arising from the
acquisition.

Gulf was afraid that it was doomed as an independent company,
particularly because of a tender offer for a portion of the Gulf stock
by a person not to Gulf's liking. On February 24, 1984 the Gulf board
of directors authorized James Lee, Gulf's chairman, to get in touch
with other companies in secret and offer them information about Gulf
in an effort to find a company whose bid would be better than that of
the present offer. About three weeks before the February 24th
meeting, Mr. Lee had called George Keller (chairman of Chevron) and
asked him to be in touch with him in view of the reports of the pre
pared tender offer. Lee's call resulted in a Chevron group to study
Gulf in earnest, although they had been studying other oil companies.

Mr. Lee called Mr. Keller again after the February 24th meeting
to advise him that Chevron was invited to study confidential Gulf
documents for the purpose of making a merger offer to Gulf. Chevron
signed an agreement with Gulf which required Chevron to keep the dis
closed information confidential and not to undertake a bid for Gulf
unless the Gulf board of directors approved. Inasmuch as Chevron
would never make a bid without the management of the company to be
acquired actively supporting the bid, this was no problem for Chevron.
Chevron entered into an agreement with Morgan Stanley & Co. to to rep
resent it in connection with the possible tender offer for Gulf.

As I mentioned, Frank Roberts asked me to come back to work full
time. I agreed, and on February 27, 1984, I found myself engulfed
with work. Fortunately for me, Terry Kee worked with me on all of the
acquisition problems and thereafter. In these matters the Corporate-
Securities [Group] lawyers have to be in touch with all matters

involved, such as the Hart -Scott -Rodino Act, reports, taxes, major
litigation of Gulf, arrangements for credit with banks and others,
and, in fact, help plan all strategy, plot out the necessary steps,
and see that all required action is taken.

Meetings were held to discuss the tax problems, if any, the cor
porate and securities law aspects, the form of tender offer and the
documents required, the agreement with Gulf, the most critical being
the position to take if the Justice Department were being difficult.

The meeting also determined who should go to Pittsburgh to
present the Chevron bid. There were still matters to negotiate with
Gulf, particularly in the merger agreement. It was determined that
Paul Davies, Terry Kee, and I would go with two secretaries and also
Hugh Taylor would help with antitrust questions. The people from
Chevron were Mr. Keller, Charles Renfrew, John Fruth, and Sellers
S tough.

After these meetings, Keller went to the Chevron special board
meeting which authorized the various agreements necessary to proceed.

The most difficult matter to negotiate we knew would be the pro
visions relating to what Chevron had to do with respect to the Federal
Trade Commission's reaction to the antitrust laws which might be
involved.

Terry and I spent Friday and Saturday (March 2nd and 3rd) working
on the various matters required if Chevron were the winning bidder.
On Friday, a large group of lawyers, counsel for Morgan Stanley & Co.,
descended upon us (as Terry said, "like a plague of locusts"). To us
their performance appeared to be one of overstaffing and overlaw-
yering. Nevertheless, because in one sense we were understaffed,
these lawyers were helpful and did have useful knowledge. Unfortu
nately, they were somewhat arrogant and sometimes were an irritant to
us and to Chevron.

On Sunday, March 4th, the people referred to before (plus Joe
Fogg and Frank Sica of Morgan Stanley and a lawyer representing
Morgan) flew on two Chevron planes to Pittsburgh, arriving there about
4 p.m. Limousines had been provided to take us to the Pittsburgh
Hilton. We all met in Sellers Stough's suite and I took the opportu
nity to tell the Morgan Stanley lawyer that the opinion he asked us to
give was one he would never give if requested. He laughed and agreed
that was so. I also told him that a lot of the things asked for were
silly. Again, he agreed. Consequently, in due course, we arrived at
an opinion we could live with.

The Mellon Bank had arranged for the use of some of their offices
for the remainder of Sunday. We went there for a short time, left our
secretaries there, and went to the offices of Gulf's outside lawyer.
There we met with Gulf's outside counsel, Gulf's principal corporate
lawyer, and about five other outside lawyers, representing various
aspects of Gulf's business. For the next several hours we worked out

the terms of the merger agreement. As anticipated, the difficult
matter was the antitrust problem. Gulf was anxious to avoid Chevron
doing what Gulf once did in a proposed acquisition (back out in the
event of certain conditions imposed by the federal antitrust people).
In the end, Chevron pledged to use its best efforts to avoid an
injunction which would prevent purchase of the Gulf shares and prof
fered its willingness to accept the forced divestiture of any and all
(if necessary) downstream Gulf assets.

At midnight we were back at the Mellon Bank and partook in drink
and food prepared for us by Mellon. The agreed upon changes were dic
tated by telephone to San Francisco. We all left about 1:30 a.m.
except Terry and one of our secretaries. They worked until about
6 a.m. on the telephone and telecopier and finally assembled twelve
copies of the merger agreement in the form Keller would present to
Gulf's board. Terry did not ever get to bed until early the next
night .

We all proceeded to the Gulf building where we were put in three
adjoining rooms on the 36th floor (only two telephones available) . We
sat and sat. About noon, Keller was called to make his presentation
to the Gulf board. Keller had initially thought of offering $78 per
share. The next morning he thought $79, and then shortly before he
was called, decided on $80 (about $13.2 billion for all of Gulf). He
did not tell us what the bid was. At that time we did not know that
another bidder had made a leveraged buyout bid which involved debt
securities and contingent financing arrangements, and the price was
nominally set at $87 per share. However, Gulf's investment bankers,
at the board's request, did an on-the-spot evaluation of the bid as
being worth $79 per share. While Keller had no way of knowing how it
would come out, he had a good feeling when he left the board meeting.

After a lunch break, the Gulf board resumed with the last bidder.
Gulf also provided food for us in the large room of the three pro
vided. As time went on, with no response, we each put up a small
amount of money and picked the time we would get word from the board.
Finally a call came through. Mr. Lee wanted to talk to Mr. Keller.
We all sat quietly in the "big room." Keller was in the small room.
Keller came into our room and in an off-hand manner said, It looks
like we've bought an oil company."

In about an hour or so Gulf's lawyers agreed that our merger
agreement was in the form we had negotiated the night before (there
were a few minor things that needed fixing, which our exhausted secre
taries quickly did). Keller and Lee signed the agreement, a press
release was issued, and thus at 5:30 p.m., it was no longer a secret.

We immediately started on the next step. We went to the offices
of Gulf's outside lawyers to meet with Gulf lawyers to finalize the
tender offer documents and coordinate the commencement of the offer.
Chevron and we considered that it was vital that the offer commence
promptly. For some reason it was difficult to get the Gulf people to
get to work. One even said there is no rule which says you have to

file the next day. I could see our schedule being in jeopardy.
Finally, I put on a calculated explosion and show of anger. They got
the idea and things were smoothed out. Paul Davies, Terry, and I
adjourned for dinner, leaving the Gulf people to study our documents.
Paul and I thought it only fair to let Terry go to bed inasmuch as he
had not gone to bed the night before.

When Paul and I got back to the lawyers' offices, it appeared
that everything had changed. They were very cooperative. We got our
people in San Francisco on the telephone and dictated the changes and
had them go to the printer.

The next morning Paul, Terry, and I met with Gulf's outside
counsel and went over the last of the various documents that would be
sent to Gulf stockholders and the SEC. About noon we boarded the
Chevron Gulf stream II and flew to San Francisco. Earlier that morning
Hugh Taylor, Charlie Renfrew, and Gulf's general counsel went on the
other Chevron plane (a Sabreliner) to Washington, D.C., to coordinate
the arrival of Chevron's Hart-Scott-Rodino Antitrust Act filing with
the Federal Trade Commission and the Department of Justice.

We arrived in San Francisco in mid-afternoon. The primary con
cern was the tender offer documents which were to be filed the next
day in Washington. Further, we had to commence printing and mailing
the 750,000 copies necessary to be distributed to Gulf stockholders.
I pled my age and went home. Paul and Terry went to the printer and
joined five other Pillsbury lawyers who had pitched in to help. There
were also five lawyers representing Morgan Stanley. They were still
troublesome and inserted an entirely new section without consulting
Paul or Terry. Paul and Terry exploded (they learned from me) and had
the insertion removed.

At 11 a.m. two of our junior lawyers departed from the printer
with the filing package in hand. A Chevron plane flew them. One
lawyer got off at Washington, went by our office, and picked up the
check for the filing fee for the SEC and filed the documents with the
commission. The other lawyer went on to Amarillo, Texas, where we
were required to give same day's notice of the offer to the rival
bidder. Thus, by Wednesday the tender offer was launched.

While Chevron filed its Hart-Scott-Rodino antitrust documents
with the Federal Trade Commission on March 7, 1984, it was not until
April 26, 1984, that the company received clearance to proceed with
the acquisition of Gulf. 'In the meantime the tender offer continued
to remain in force. In situations such as these, arbitrageurs and
other financial people called someone who might know to inquire when
and if at all the transactions would proceed. Terry Kee and I were
the people who answered all calls on the subject addressed to
Pillsbury or Chevron. We each received numerous telephone calls every
day. I assume because I was a partner and Terry had not as yet become
a partner, I received most of the phone calls.

We were very careful not to antagonize anyone, were always as
helpful as possible, but in fact made no commitment as to when (if at
all) we would get clearance from the Federal Trade Commission. We
never lied. We told them where we stood with the commission as far as
filing more documents, but never went beyond the facts. That is, we
never made a guess as to what the outcome would be. On the other
hand, we never indicated that there was any serious problem. All in
all, the people we talked to, I believe, were satisfied that under the
circumstances we were giving them the most we could.

Some of the calls were quite long (not because I wanted them to
be that way). In some cases, they were fishing for more information,
but in most cases they apparently just liked to talk and be able to
tell someone they they had talked for x minutes and they thought the
deal would probably go. Perhaps we contributed to this latter feeling
because, although we never made a predicition, we never were gloomy.*

I still continue to do certain things relating to Chevron but not
in the quantity done previously. As one might expect, after the
acquisition there were many things to do with respect to putting the
two companies together. Obviously finance was an important matter, as
well as putting one subsidiary into another. Additionally, there were
certain assets to be sold which either didn't fit and/or enabled
Chevron to reduce the debt arising from the acquisition.

The Securities Exchange Act

Hicke: How have changes in legislation affected your work?

Brown: Since I commenced practicing law with respect to SEC matters, the Fed
eral Security laws have changed greatly. In the area of the Securi
ties Act (sale of securities), the changes have not been dramatic in
most cases. The changes mostly simplify and reduce a great deal of
the work that was required. In the case of the Securities Exchange
Act, however, there have been a myriad of changes in the various
reports required (some of which require much detail), the rule
relating to certain stockholders, going private, tender offers, and
many others. Keeping up with these (and the rules within the rules)
has required a great deal of time, particularly if the work one is
doing does not too often run across certain of these new rules. Need
less to say, for someone of my age, it has been very helpful for me to
have all these bright, young lawyers in our firm keeping up with these
things and telling me what I should or should not do.

* See following pages.

67a

Offer to Purchase for Cash
All Outstanding Shares of Common Stock

Gulf Corporation

$80 Net Per Share
by

Standard Oil Company of California

THE OFFER WILL EXPIRE AT 1240 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, APRIL 3, 1984, UNLESS EXTENDED.

WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON TUESDAY, MARCH 27, 1984.

THE BOARD OF DIRECTORS OF GULF CORPORATION

HAS APPROVED THE OFFER AND
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER.

THE OFFER IS CONDITIONED UPON A MINIMUM OF 85,000,000

SHARES BEING PROPERLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER.

IMPORTANT

Stockholders desiring to tender their Shares should either (1) complete and sign the Letter of
Transmittal or a facsimile thereof, have their signature thereon guaranteed if required by Instruc
tion 1 of the Letter of Transmittal and forward the Letter of Transmittal or such facsimile with
their stock certificates and any other required documents to the Depositary or (2) request their
broker, dealer, commercial bank, trust company or other nominee to effect the transaction for them.
See Section 6. Stockholders having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such person if they desire to tender such
Shares. Stockholders who desire to tender Shares and whose certificates for such Shares are not
immediately available should tender such Shares by following the procedures for guaranteed
delivery set forth in Section 6.

Questions and requests for assistance may be directed to the Information Agent or the Dealer
Manager at their respective addresses and telephone numbers set forth on the back cover page of
this Offer to Purchase. Requests for additional copies of the Offer to Purchase and the Letter of
Transmittal may be directed to the Information Agent, to the Depositary or to brokers, dealers,
commercial banks or trust companies.

The Dealer Manager for the Offer is:

MORGAN STANLEY & CO.

Incorporated
March 7, 1984

67b

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67c

Gulf Agrees to Be Acquired by Socal
For $80 a Share, or $13.4 Billion

Continued From Page S
Pickens group has mailed a S65-a-share par
tial tender offer.

It was uncertain whether the Pickens
group would tender its 21.7 million shares
under the Socal offer. Mr. Pickens said he
hadn't seen the agreement and therefore
couldn't comment.

An investment banker for Mr. Pickens
said the i80-a-share price proposed in the
Socal offer was "a good price for sharehold
ers," but he hedged when asked if that price
was a fair representation of Gulf's value.

"If somebody offered $85 and Gulf turned
it down, then $80 is not necessarily a fair
price," he said. "We have to wait and see
what went on before we make a move."

If Mr. Pickens tenders his shares in the
Socal offer, he will earn about a $760 million
profit for Mesa and its partners as a result
of the group's investment in Gulf.

For Gulf, the merger into Socal will end
the history of an 83-year-old oil company
that began with the Spindletop gusher in
Texas, was nurtured with funds from heirs
of the industrialist Andrew Mellon, won the
leading concession in Kuwait in the 1930s
and then was rocked with political payoff
scandals in the 1970s.

Gulf had been fighting to stay indepen
dent since last fall, when Mr. Pickens sur
faced with an 8.75% stake in the company
and a proposal to spin off Gulf's oil and gas
producing assets into a "royalty trust,"
which would give investors profit from en
ergy reserves.

By February, Mr. Pickens wasn't talking
much any more about royalty trusts but had
boosted his stake to 13.2% and was planning
to buy more. Gulf executives, fearing that
the Pickens group might gain control of the
company, quietly began searching for a
merger partner while publicly denying they
were interested in such a thing, recent court
documents reveal. Gulf filed a lawsuit last
month against the Pickens group, alleging
numerous securities laws violations; the
group has denied the charges.

In the past week, the auction for Gulf
reached a fever pitch, with as many as a
dozen companies expressing an interest in
examining Gulf's books more closely. Pitts
burgh became a hub of activity, with corpo-

U.S. Gasoline Marketers

If the Standard Ojl Oo. of California
offer for Gulf Cojp. succeeds, the
merged company would become the
largest gasoline marketer in the U.S.,
assuming that none of the marketing op
erations are sold. The following is a list
of the leading gasoline marketers and
their estimated 1983 share of the U.S.
market based on statistics gathered by
Lundberg Survey Inc. of Los Angeles.

Socal /Gulf 10.1%

Amoco (Indiana Standard) 7.2%

Texaco/Getty 7.17c

Shell 7.0%

Exxon _ 6.8%

Mobil 5.7%

Gulf 5.1%

Socal 5.0%

Arco , 4.8%>

Union 3.5%

rate jets buzzing in and out of town, compet
ing investment bankers and lawyers bump
ing into each other in the lobby of the Wil
liam Perm Hotel, and Gulf workers here and
in Houston calling news agencies to find out
who was buying their company.

Socal 's victory in the Gulf contest was
considered important to Morgan Stanley &
Co. in establishing the firm's mergers and
acquisitions advisory team as a central
player in the record acquisition proposal.

In recent years, clients of the Morgan
mergers unit, with more than 50 profes
sionals, had been losing out in the biggest oil
transactions to First Boston Corp.. Arco's
adviser. During the past three years. First
Boston clients have been iivolved in a suc
cession of huge oil company acquisitions, in
cluding Texaco's S10.13 billion acquisition of
Getty Oil.

The biggest winners among Wall Street
professionals- apart from arbitragers,
whose aggregate holdings amount to tens of
millions of Gulf shares-will be Salomon
Brothers and Merrill Lynch & Co., Gulf's fi
nancial advisers. As previously reported,
they stand to split a fee equal to 0.35% of the
total consideration paid for Gulf. At the $13.4
billion indicated purchase price, the two
firms would split more than $46 million.

THE WALL STREET JOURNAL, March 6, 1984

V REWARDS OF A CAREER IN THE LEGAL PROFESSION

Hicke: Why do you think PM&S is successful?

Brown: I think I would suggest the following: (1) We have worked hard to
retain our present clients rather than chasing after new ones.
(2) We have a high proportion of good lawyers. (3) We got new
clients because of our excellent history and performance.

Hicke: What do you consider are the rewards of a career in the legal
profession?

Brown: I have had many rewards in my career. However, I cannot say that the
legal profession, or any other profession, offers certain rewards, as
such. The rewards come from (1) enjoying what you are doing;
(2) feeling that you are participating in something that is mean
ingful; and (3) being around people (clients, as well as lawyers in
the firm) who have more or less the same wish to accomplish the neces
sary.

As the firm has grown, certain things have changed. When our
firm was small (by today's standards), we knew every lawyer and many
of the other help. Not only did we know the lawyers, but we also knew
what everyone was doing. This was great because we could talk to each
other, get ideas about how to go about solving one another's par
ticular problems, and we had a good feeling of comradeliness . To a
great extent, this is no longer present because of the obvious prob
lems of size, despite the fact that the firm has done a good job of
breaking groups into smaller groups.

Hicke: Another question: What kinds of responsibilities do you and the other
partners have for developing new business in this area?

Brown: Generally speaking, of course, one of the things that we consider some
ways more important is to make sure our clients are happy enough so
that our clients stay with us. This business of chasing business,
bringing it in, is not something that we did very much of a number of
years ago. But I suspect we do more of that, or maybe quite a bit
more, I really don't know now, of that kind of thing. I don't think
that in my times we did what some of the other firms did. It wasn't
worth chasing business. I think our reputation brought us a lot of

work from outside the San Francisco area. A lot of the work we do
here comes from New York and other places like that, where somebody
asks who's a good lawyer in San Francisco. Their lawyers tell them,
"Well, we think that PM&S is probably where you should go," and so on.
That's where our clients were coming from. I can't tell you now what
they do.

Hicke: Obviously I am only asking you about the time when you were
responsible.

There is one more that I wanted to ask, and that is about some of
the changes in the practice of corporate law in the last forty years.

Brown: Oh God. People have written books on that. Let me think. Changes in
corporate law have been due to new laws having gone into effect. The
sort of things that have occurred in the last ten years that we didn't
have before. That has changed the whole business quite a bit. As I
say, the law itself has changed, and that has changed the practice.

I concluded the speech I made when I became an advisory partner
by saying that while I was practicing law I was having fun, and I
emphasized that if one is not having fun, he should go do something
else. Today I still enjoy practicing law and have been lucky to be
able to continue it, even though the amount of work has been reduced
dramatically.

Hicke: Thank you very much for taking time to participate in the PM&S history
project .

Transcribers: Georgia K. Stith

Charlotte S. Warnell
Kenneth W. Albertson

70
INDEX - ALBERT J. BROWN

Adams , John , 7,8

American President Lines, Ltd., 38-40

American Telephone & Telegraph v>ompany, 17, 62

American Viscose Company, 40-44

Armstrong, Barbara, 8

Bank of America, 45
Bennett, Eugene, 12, 19
The Boeing Company, 56-61
Brown, Albert J.

becoming an advisory partner, 62, 63

education, 1, 2

family background, 1-3

joining PM&S, 7

solo practice, 4-7

California Corporation Commissioner, 27

Chevron Corporation (formerly Standard Oil of California)
28, 44-47, 62

acquisition of Standard Oil of Kentucky, 10-12

Chevron tankers, 50, 51

merger with Gulf Corp., 63-67

See also Ranger Oil (Canada) Ltd.
counseling, 52-54
Creed, Barbara, 62
Czerner, Cynthia, 55

Dalenberg, Robert, 62

Daum, F. Arnold, 28-31

Davies, Paul L. , Sr., 10, 11, 18, 36, 37, 42, 52, 64, 66

Davies, Ralph K., 39, 40, 54

Davis, Walter, 28-30

Dollar Lines, 38-40

Dykstra, Orvil, 24

ethics, 61

Federal Maritime Commission, 39

Federal Trade Commission, 66, 67

Feldman, Meyer, 29

FMC Corporation, 40-44, 52, 53

Foremost Dairies, 25, 26

Fruth, John, 64

Fuller, Maurice De Lano, Sr., 12, 13

Fullerton, Hugh, 10

Gill Margaret, 63
Golden State Milk Company, 25, 26
Gulf Corporation, 63-67
Halloran, Michael, 62

Hammer, Armand, 27-35

Harris, David, 27, 33

Henderson, Don, 45, 46

Hofmann, Jack, 10, 18

International Paper Company, 54, 55

Iran Consortium, 50, 51

Kee, Terry, 62-66

Keller, George, 63-65

Kern County Land Company, 28-31

Kirkham, Francis, 10, 11, 13, 19, 41, 42

Korte, Norbert, 13, 14

Lambert, Scott, 11
Lee, C. J. , 30
Lee, James, 63, 65
Littlefield, Ed, 25

McBaine, Turner, 49

Madison, Marshall, 9, 10, 19

Mann, Bruce, 28,29

Marshall, Francis, 8

Morgan Stanley & Company, 64, 66

Muirson Label Company, 35-37

Mussman, William, 41, 42

Neilson, Sigvald, 13

O'Brien, James E., 48-50

Occidental Petroleum Corporation, 27-35

Pacific Telephone & Telegraph Comapny, 16-18, 62
Pacific Telesis

See Pacific Telephone and Telegraph Company
Pillsbury, Madison & Sutro

early days, 7, 8

growth, 54, 55

hiring practices, 51

personnel policies, 18,19

war years, 14, 16

Washington, D.C. branch office, 10
Prael, Charles, 9, 10
Prince, Eugene, 12, 19

Renfrew, Charles, 64, 66
Ranger Oil (Canada) Ltd., 44-47
Roberts, Frank, 63
Roche, Michael, 6

Securities and Exchange Commission, 17, 19-23, 26, 30, 38,

39, 56-61, 66

Securities Exchange Act, 67
Smith, Buddy, 11

Smith, Felix, 7-9, 14

Standard Oil Company of Kentucky, 10-12

Stough, Sellers, 64

Sutro, John A., Sr., 15-17, 19

Symonds, Gardiner, 29, 30

Tanner, Al, 14, 15
Taylor, E. Hugh, 64, 66
Tenneco Corporation, 28-31

Utah Construction Company, 24, 25

vignettes

British lawyers, 45-48
Christmas party, 8, 9
Dr. Armand Hammer, 34, 35
KYSO merger, 10-12

Wachtell, Tom, 30

Carole E. Hicke

B.A., University of Iowa; economics.

M.A. , San Francisco State University; U.S. history with emphasis on
the American West; thesis: "James Rolph, Mayor of San Francisco."

Interviewer/editor/writer, 1978-1986, for business histories, special
izing in oral history techniques. Independently employed.

Interviewer-editor, Regional Oral History Office, 1985 to present,
specializing in California legal and political history.

Editor, newsletters of two professional historical associations:
Western Association of Women Historians and Coordinating Committee for
Women in the Historical Profession.

Visiting lecturer, San Francisco State University; U.S. history, his
tory of California, history of Hawaii, oral history.

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Full text of "Building the corporate-securities practice at Pillsbury, Madison & Sutro: 1942-1982 : oral history transcript / 1986"

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