“A Temple to Trade”

On Oct. 19, 2014, the A. B. Freeman School of Business will celebrate the 100th anniversary of its founding. In recognition of this historic milestone, the Freeman School is producing a special book highlighting the past, present and future of business education at Tulane University.

A Century of Business Education: The A. B. Freeman School of Business at Tulane University chronicles the history of the Freeman School with articles, faculty and alumni profiles, and rare photos from the Tulane University Archives.

Written by Mark Miester, editor of Freeman magazine, and Dennis Persica, former staff writer for the Times-Picayune and current columnist for the New Orleans Advocate, this richly illustrated book will be available this fall. In anticipation of its publication, we present the following excerpt.

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The A. B. Freeman School of Business was founded in 1914, but its roots can be traced back to 1847.

Louisiana had been a state for just 35 years when J.D.B. DeBow — the founder of New Orleans commercial journal DeBow’s Review — was appointed professor of commerce at the University of Louisiana, the forerunner to Tulane University. DeBow’s appointment made him the first professor of business in Louisiana and, some say, in the entire nation.

DeBow led a busy life, not only teaching at the university but also serving in the state Bureau of Statistics and later as superintendent of the U.S. Census Bureau. He died in 1867, and with his death the teaching of business at the collegiate level died out in Louisiana until the early 20th century. By then, the University of Louisiana had become a private institution with a new name, courtesy of a wealthy New Orleans businessman.

In 1882, Paul Tulane, founder of a successful dry goods and clothing business, contributed more than $1 million in land, cash and investments to the University of Louisiana, which had run into financial problems. In return, the Louisiana Legislature transferred control of the university to the board of a philanthropic fund the businessman had established. In recognition of his gift, the University of Louisiana was renamed the Tulane University of Louisiana.

By the end of the 19th century, the rise of land-grant colleges dramatically changed the higher education landscape. These public universities added an emphasis on practical studies such as agriculture and engineering to the traditional liberal arts subjects of college education. Soon, the study of commerce and business would be added to that list.

Although the private Tulane University didn’t share in the land-grant bounty, it still found itself caught up in the wave of colleges seeking to integrate business into their offerings. The country was changing and so too were its ways of conducting business. Corporations were growing and expanding, and the old method of teaching business — through apprenticeships with small, often family-owned firms — was no longer adequate for managing the world’s increasingly complex enterprises. There was also the recognition among forward-thinking individuals like philanthropist Joseph Wharton that business knowledge and skills could be used to help society address the most vexing issues of the day.

Business programs began to sprout up at universities across the country. The University of Pennsylvania’s Wharton School, the nation’s first collegiate school of business, was established in 1881 with a gift from Joseph Wharton. Other schools followed until, by 1910, there were more than a dozen business schools at universities across the country. None of those schools, however, were located in the Crescent City. The New Orleans Association of Commerce set out to change that.

Established in 1913 through the restructuring of an earlier group, the New Orleans Progressive Union, the Association of Commerce was a business organization dedicated to improving the city’s economic well-being. Among its members were the city’s most influential business people — including Leon C. Simon, Paul Jahncke and Edgar B. Stern — and those business people were united in their belief that a state-of-the-art business school was essential if New Orleans hoped to compete with cities like New York, Chicago and St. Louis.

Since at least 1902, Tulane economics Professor Morton A. “Doc” Aldrich had promoted the idea of establishing a business school at the university, but he had been unable to generate enough support in the community to bring his idea to fruition. With the emergence of the Association of Commerce, however, Aldrich finally had the business allies he needed to convince Tulane’s Board of Administrators.

In December 1913, the Association of Commerce sent an open letter to Tulane President Robert Sharp and the Board of Administrators calling for the establishment of a business college at the university. Local newspapers were unanimous in their support for the new college, and in his response President Sharp praised the idea, but he explained there was another issue that made establishing the college impossible: Tulane simply didn’t have the funds to start a new unit.

The Association of Commerce was undeterred. Two members of the association, Paul Havener and Levering Moore, had attended Northwestern University, which had established a business school in 1908. With a few modifications, the association adopted the plan that had been used to establish Northwestern’s College of Commerce, which called for the creation of a Board of Guarantors to underwrite the cost of launching the college.

On Aug. 13, 1914, the Tulane Board of Administrators approved a plan submitted by the Association of Commerce to establish the College of Commerce and Business Administration of Tulane University along with a Board of Guarantors to fund its operations. To no one’s surprise, Morton A. Aldrich was appointed the college’s first dean.

In a letter to the Board of Administrators, the chairman of the Association of Commerce’s education committee said the new college “will fill a real and genuine need to those seeking a higher business education.”

Initially, classes were to be held at night so that “the School will be available to working persons who could not otherwise attend such an institution,” the committee chairman wrote in his letter to the Board of Administrators.

Over the next several weeks, a Board of Guarantors was created, comprising more than 100 local business people including members of the Association of Commerce and the local branch of the Louisiana Society of Certified Public
Accountants. Under the terms of the agreement, the guarantors would provide $5,000 per year for three years to subsidize the college.

At a meeting on Sept. 14, 1914, the Tulane Board of Administrators acknowledged the creation of the Board of Guarantors and approved a budget of $4,440 to cover the college’s first year. The College of Commerce and Business Administration of Tulane University was established.

On Oct. 19, 1914, the new college officially began with the class Commercial Law, taught by Ralph Schwartz. Since Tulane didn’t have any space on its uptown campus, classes were held at the Association of Commerce’s office in downtown New Orleans.

Only a handful of subjects were taught that first semester, each one only one night a week. Perhaps surprisingly, one of the first courses to be offered was Commercial Spanish. As The States newspaper noted just a few years later, there were 20,000 residents of New Orleans who spoke Spanish only, and they “prefer to buy where Spanish is spoken.” It also pointed to the “large and rapidly increasing number of well-to-do Latin-American visitors” to the city.

But there was a larger factor at work. The start of World War I in the summer of 1914 meant the European powers would be distracted from their business interests in Latin America, opening the door for American concerns to fill the void.

Local civic and business leaders hoped that New Orleans would be uniquely situated to benefit in these changed times, especially with the Panama Canal — which had begun operating that August — creating easier access to the western side of South America. With its port at the mouth of the river, New Orleans would be the place where raw materials from Latin America would enter the United States on their way to the big manufacturing centers of the Northeast and Midwest.

Offering higher education in business, the city’s business community believed, would be a way to ensure that the city had a deep reservoir of business knowledge and skills to see that effort through.