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Generations Mag
 

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The Saga of Samuel Shapiro & Company, Inc.

A rags-to-riches story of a first-generation Eastern European Jew ..... starting with a $5.00 roll-top desk

by M. Sigmund Shapiro

Reprinted from Generations Magazine (Jewish Museum of Maryland) - Fall, 1999

Editor's Note: Samuel Shapiro & Company, Inc. is today among America's largest and most prominent companies engaged in freight forwarding, customs brokerage and logistics management. The business, founded in 1915 by Samuel Shapiro in a one room office, now employs one hundred and forty persons in offices from New York to Savannah. The history of the Shapiro Company is a saga in the tradition of that hard working first generation of Baltimore's Eastern European Jews.

 

A personal note from the writer: This history of my family's business was inspired by Elizabeth Kohn Moser's fascinating article on her own family's business, Hochschild, Kohn and Co. (GENERATIONS, Fall 1998).  I think it important to chronicle successful business, large and small, whose longevity gives us insight into the way of life of these entrepreneuring pioneers in our Jewish community.

My father Samuel founded Samuel Shapiro & Company, Inc. in August, 1915 with, as he said "a $5.00 rolltop desk - everything else is profit." A small office in the Equitable building, one telephone and a Treasury Department license to be a customs broker comprised the firm's net worth. That was all that was needed at the time to be an "international freight forwarder."

Dad was born in Baltimore on June 8, 1895 and lived in South Baltimore in his earliest days. His father, Moritz Sigmund Schapira (Moshe Zelig) was from Brody in Galicia, and his mother Anna (nee Rosenberg) came from Taurage, Lithuania, the birthplace of the renowned Baltimore merchant, Jacob Epstein. Moritz and Anna both emigrated about 1880 and met in Baltimore soon afterwards. Like many others, Dad entered the business world as a clerk in Jacob Epstein's Baltimore Bargain House. Epstein had come to the U.S. some years before and was the godfather of the South Baltimore Jewish community.

In 1912 Sam Shapiro, then seventeen years old, took a clerical job with Paul Masson, a customs brokerage firm, and it was there that he became enamored of the business. Customs brokerage and its counterpart, foreign freight forwarding, while extremely detailed, is fascinating work, and has a certain romance to it. Dad used to call us a "travel agent for cargo." Since Masson also had an interest in a bookmatch manufacturer, he left young Sam pretty much alone to manage the brokerage.

After three years with Masson, when he was just a few months under twenty-one, Dad decided to go in for himself and inquired about getting a customhouse broker's license. On August 6 he received a letter from the Collector of Customs providing him with his license and wishing him luck. The letter cautioned, "If you take the step you do so on your own responsibility, unconnected with Mr. Masson, excepting that you may, of course, write to his customers..."

 

On January 28 the following year, a letter from the U.S. Treasury Department stated that "as the collector at Baltimore has now advised the department that you were duly licensed in August 1915, your name will be included in the next list published unless you resign prior to that time."

Samuel Shapiro was now in business, but the first few years weren't easy. According to his first ledger, at the end of 1916 Samuel Shapiro and Company, Inc. saw a net cash position of $46.50. (Even so, Dad made a contribution of $12.50 to the American Jewish Relief.)

 

To complicate matters, Dad was drafted early in 1917. Because of his knowledge of transportation, he was made a second lieutenant. But he never served in active duty since the armistice intervened and he was discharged. The army experience wasn't a total loss of time, however, Dad applied for and received appointment as the forwarder in Baltimore to handle government shipments of grain to war torn Europe. There was so much work that two of his brothers, Paul and Joe, came into the firm, forming a partnership.

The grain shipments moved on vessels of the United States Lines, which maintained regular service from Baltimore to Europe. At that time, grain was shipped in burlap bags, most of which were supplied by Baltimore firms. One of the firms, Commercial Bag Manufacturing Company, was owned by William Looban, a Jewish refugee who sensed that anti-Semitism was at work in the line's refusal to consider him. He approached Dad to run interference. He would pay a commission of $. 01 a bag if he got the contract. Dad was successful in convincing the line to buy Looban's bags, and for the next several months the company enjoyed substantial income from the arrangement. Then, my uncle Paul, who was never as cautious as my father, suggested that they take the cash they had earned, buy the bags from Looban in the future, and resell to United States Lines, thereby realizing a greater profit. Dad agreed. Shortly afterwards, the government changed the specifications. All grain was to be shipped in bulk, covered by tarpaulins. Bags were out, and the Samuel Shapiro & Company, Inc. was the proud owner of an infinite quantity of burlap bags. But the experience taught Sam a lesson that he imparted to me. Never, never act as a principal unless you know the game. Be an agent, take your commission, and walk away quietly.

 
After the government contract had terminated, the business grew slowly. As the only Jew in a predominantly Catholic industry, Dad wasn't part of the "network." Nonetheless, the clients did appear. Among them were Hutzler's, Polan Katz, Waverly Press, Hanover Cordage Company, American Oil Company, Marshall Field, Nestle's, The May Company, Londontown Clothiers, and Shleisner's. Dad felt that his client base could be expanded by creating relationships with forwarders in Europe, so that they would consign goods to him. He approached the Western Maryland Railway through his good friend Julius Offit who worked there, and convinced the company to send him to Europe where he would solicit for the railroad as well as for himself. So in 1923 we went to Hamburg, Germany, the most advanced port in Europe for general cargo at that time. He also was able to meet members of his father's family who had settled there in the late 1870's, and who had joined a family named Breslauer through marriage. The Breslauers were enjoying a measure of success in the textile trade. Most, if not all, of the Breslauer family perished during the Holocaust.

 

After the stock market crash in 1929, the firm went through hard times. To make maters worse Dad's brother Paul was spending money with both hands and charging it to the business. (Brother Joe had left a couple of years earlier.) Dad had had enough. He and Paul dissolved the partnership and, although it was not part of the agreement, Sam undertook to pay all of Paul's debts to Warner's, Hutzler's and many other creditors. He paid off those debts at $5.00 a week and ultimately cleared the accounts. He was able to borrow on an unsecured basis from the National Marine Bank (now part of Nations Bank). Dad was obsessed with maintaining the integrity of the family name. To help maintain that integrity, Mother was not allowed to spend money on a dress for four years.

Then in 1935, fortunes turned around. Under the Tariff Act of 1930, customs brokers were permitted to share fees with attorneys, in a sort of barrister / solicitor relationship, and, as a matter of fact, they could represent clients before the Board of General Appraisers (which later became the U.S. Customs Court, and is now the Court of International Trade).

At about that time, S. Schapiro & Sons, which principals were Joseph and Ben Schapiro (no kin) were importing rags from the Far East. Under the tariff, papermaking rags were free of duty, while wiping rags were dutiable at $ .03 per pound. Any commingling of the two was subject to the higher rate unless the importer segregated them at his own expense under government supervision, an arduous and expensive task.

Sam arranged with a customs attorney firm in New York to represent the Schapiros with a contingent fee of one third of the duties recovered or saved. Dad would get half the attorney's fee. The contention was that all of the rags were for papermaking.

On the date of the trial, Joe Schapiro took the stand and explained the difference between wiping rags and papermaking rags with respect to quality, size, texture, and for all I know, the phases of the moon. As he came off the stand, he whispered to Dad, "Sam, I could just as well have been a witness for the government."

In any event, the importer prevailed, and Dad received payment from the attorney of about $ 35,000 - a handsome sum in those days. He immediately paid off all of his debts and took my mother, Hilda, to Europe - the first of the annual trips they took up until the outbreak of World War II and then continued afterwards.

As a result of these trips, the company developed extensive relationships in Europe which, notwithstanding the demise or merger of some of the firms, still remain. The Samuel Shapiro name brought much business to Baltimore and strong personal friendships developed between our families.

World War II brought more changes. A shortage of help meant the staff was limited to four women who worked full time and me, who worked after school, on weekends and during the summer. Sam was forced to work a lot of overtime, uncompensated, of course, except for dinner.

Baltimore was a busy port. Ships would duck into the bay to avoid the U-boat menace, dump all of their cargo here, load, and move out. Goods for Philadelphia, Boston and most of all New York had to move, mostly under customs seal, for clearance at destination. Goods moved predominantly by rail and the port worked day and night. To make matters worse, we never knew what ships were coming until they arrived, since they maintained radio silence at sea.

But the war did end, and business slowly returned to normal. About this time, Dad was visited by a young woman, the newly hired maritime reporter for The Sun Helen Delich (now Bentley). She and Dad became good friends and, as Helen will acknowledge, my father became her mentor. The company became the first sponsor of a TV program on Channel 2, then WMAR, "The Port That Built A City." Each Sunday afternoon, Helen would report on the latest maritime news and then interview one or more of the port leaders, such as Dad or Joseph L. Stanton, then head of the Maryland Port Authority, or Captain W.G.N. Ruckert. Ruckert was the feisty warehouseman known for having thrown a typewriter at his son - who ducked. (The typewriter went sailing out a second story window.) Kinescopes of the show still exist and Helen is crusading to have them transferred to video tape and shown to the old timers and to a new generation who would be fascinated by their historic content.

In 1946 my father was one of this colorful group that helped to convince the state legislature to pass the enabling act that brought the Maryland Port Authority into existence, and ultimately brought Baltimore into the modern container era. Dundalk Marine Terminal came into being as a part of the effort.

Sam, Helen, and I were invited to attend two shipboard parties, hosted jointly by Germany and Japan, to celebrate their first calls in Baltimore since the end of World War II. The Japanese ship docked in Canton, and the German ship at Locust Point. There was much food and drink at both parties, and both were proper celebration of the epochal event.

Inevitably I came to the firm on a full-time basis. To say that Dad and I had our disagreements is putting it mildly. We had what would be called today different management styles. Nothing serious in our relationship except that I had to do end runs around him and make him think they were his ideas; for example, I replaced four Vornado fans that blew documents around the office with central air conditioning. I had a hard time changing a procedure that he had developed thirty years before and of which he was extremely proud.

Despite, or perhaps because of, the vigor of our discussions, we expanded. We began to serve Dulles, Baltimore Washington International airport, and Norfolk (the latter to protect us from diminishing Baltimore traffic) and Dad was pleased with the results.

When in 1978 we moved from South Gay Street, where we had been located in one building or another since the 1920s, to the World Trade Center, Dad ignored the whole process, and never set foot in the place until the day we moved in. He didn't want to believe we were spending so much money just to move. But we set up his new office exactly as it was in the old office. He loved it and eventually convinced himself that the move was a good idea of his.

For a time, all three of our children worked for the company and Dad kneeled over them. They, in turn, looked after him as he came to the office every day.

Dad was the most ethical person I've ever known. Here and abroad, his peers respected him as a man who paid his bills and kept his promises: He personified the word "integrity." That integrity, along with his love of baseball, appear to have been internalized by his grandchildren. At a ninetieth birthday party at the World Trade Center he was in his glory telling Brooks Robinson that he saw "Iron Man" Joe McGinty pitch and win both ends of a double header, separated by a few beers between games.

Dad came to the office every day, even in his ninety-first year. He had a good friend in the business named Alfred Burin, a feisty German Jewish immigrant and chairman of Globe Shipping in New York. Al was amazing. At the age of one hundred he worked every day; smoking his pipe, having lunch at Windows on the World with a martini before and a cigar after. On his one hundredth birthday, he appeared on "The Today Show," and he and Sam kept in touch often, no doubt comparing notes on how badly the "young whippersnappers" were handling the business these days.

Al died at one hundred and two, and Sam naturally thought it a pity that he went so young. Dad himself died a few months before his ninety-second birthday. Of course, he was at the office the morning of the day he checked in at Sinai Hospital. I went to see him that evening. He was very weak but wanted of course to know how business was. Then he asked me, "Did Al Burin have a big funeral?" I don't remember what I answered. He fell asleep and died later that night.

I often wonder what Dad would think of the company's growth today. With offices from New York down to Savannah, we operate with sophisticated data processing and are making an entry into logistics management. We have come a long way from that $5.00 rolltop desk of which he was so proud, where it all began.