#143 Alfred Lee Loomis (the most interesting man you've never heard of)

What I learned from reading Tuxedo Park : A Wall Street Tycoon and the Secret Palace of Science That Changed the Course of World War II by James Conant. ---- [0:01] Few men of Loomis’ prominence and achievement have gone to greater lengths to foil history. [0:17] Independently wealthy, iconoclastic, and aloof, Loomis did not conform to the conventional measure of a great scientist. He was too complex to categorize—financier, philanthropist, society figure, physicist, inventor, dilettante—a contradiction in terms. [0:42] He rose to become one of the most powerful figures in banking in the 1920s. [4:42] The smile was a velvet glove covering his iron determination to get underway without any lost motion. [5:29] He would dedicate himself to overcoming Germany’s scientific advantage. [7:19] He had amassed a substantial fortune, which allowed him to act as a patron. [8:06] Loomis was a bit stiff, with the bearing of a four-star general in civilian clothes. He was strong and decisive. [10:15] He was enthusiastic about American know-how and was not inclined to sit idly by until the miliary finally determined it was time to take action—particularly if just catching up with the Germans proved to be a monumental task. [13:30] He carried himself with composure, but his politeness was merely a habit; he was preoccupied. [16:56]When duty called he helped reinvent modern warfare. [20:21] He became an enthusiastic champion of the new armored tanks. He became such an expert on tank construction, he built a scaled-down model in his garage in order to see if he could make further improvements in the design. When his cousin came to visit, Loomis rolled into the rail station in his light armored tank to meet the train, kicking up dust and causing quite a scene. [26:54] Loomis would later maintain that everybody on the Street knew the crash was coming, the only difference was that he and Thorne refused to bank on its being inevitably delayed. [31:20] After the shock of the sinking of the Lusitania by a German submarine in 1915, Thomas Edison said that Americans were “as clever at mechanics as any people in the world” and could defeat any “engine of destruction.:” Edison had advocated for preparedness without provocation, and to Loomis, it seemed as wise a course in the present as it had been then. [40:58] For the next four years, he would drive himself and his band of physicists almost without break to develop the all-important radar warning systems based on the magnetron. [43:44] He drew a striking parallel between the present international situation and the financial situation prior to the crash. He said that now people are asking him when we will enter the war just as in 1928 his friends were asking him when the stock market crash was coming. He said that in both cases such a question is quite beside the point. He said that once a person admitted a stock market crash was coming a prudent individual will immediately get out fo the stock market and not consider when the crash is coming and thereby try to hang on and make some more profits. Likewise, at the present time it is of secondary importance when we will get in; of first importance is the admission that we are going to get in, and our action accordingly should be that of preparing just as though we were actually in the war! [48:55] Loomis had one important characteristic. His ability to concentrate completely on the chief objective, even at the cost of neglecting matters that appear to other people to be of equal importance. ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

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• 0:00David Senra?

  Few men of Loomis's prominence and achievement have gone to greater lengths to foil history. He seemed to stand at the edge of important events, intimately involved and at the same time somehow overlooked. Yet here was a character who is at once familiar, independently wealthy, iconoclastic, and aloof. Loomis did not conform to the conventional measure of a great scientist. He was too complex to categorize: financier, philanthropist, society figure, physicist, inventor, amateur, dilettante. A contradiction in terms.

• 0:42David Senra?

  Although he rose to become one of the most powerful figures in banking in the 1920s, he was not satisfied with the laurels of Wall Street. He felt obliged to strive for a kind of excellence that had nothing to do with the external trappings of success. Loomis had the foresight to know that science would soon become a dominating force, and he used his immense fortune to attract a gifted group of young physicists to his private laboratory and endow pioneering research that pushed at the frontiers of knowledge. He created a scientific ideal in the cloistered fiefdom of Tuxedo Park, and in his belief

• 1:22David Senra?

  in invention and experimentation, he prepared the way for a series of scientific developments that would not only change the course of the war, but ultimately transform the modern world. That was an excerpt from a book that a listener recommended, and that book is "Tuxedo Park: A Wall Street Tycoon and the Secret Palace of Science That Changed the Course of World War II," and it was written by Janet Connet. So when I finished reading this book, I put it down and I asked myself, what the hell did I just read? This was probably one of the most insane books that I've read so far for the podcast because it sounds fictional.

• 2:03David Senra?

  A good way to think about Loomis and the story that takes place in the book, if you're coming to this with no background at all, comes from two blurbs that are actually praise for Tuxedo Park that you find in the beginning of the book. So I'm going to read both of those to you. The first one, it says, "An examination of the remarkable role of the shadowy but powerful amateur scientist whose intellect and energy spurred critical scientific research that shortened and helped win World War II. It's remarkable and remarkably told as if F. Scott Fitzgerald had penned Batman." So it's interesting that I saw that, the blurb, after I finished reading the book because I thought of, I was like, who, how could I describe to somebody who doesn't know who

• 2:48David Senra?

  Alfred Lee Loomis is? And that's, I was like, he's kind of like this Batman, Bruce Wayne figure where he lives two almost completely opposite lives. And then the second thing, the second blurb, I think, is really helpful too, because it says, "By the time you were finished, you were prepared to bestow on Alfred Lee Loomis the title of most interesting man I never knew anything about." So that was the situation I found myself in. I had this book recommended to me, but I didn't know anything about Tuxedo Park. I didn't know anything. I didn't know who Alfred Lee Loomis was before I started reading. And I think that title, "The most interesting man I knew nothing about," is a good way to think about him. Okay, so I want to start with his personality.

• 3:32David Senra?

  And there's embedded in this book is, one of the author's relatives was a young scientist working and doing experiments at Tuxedo Park, and he winds up killing himself when he was about, I think, 39 years old. But before he killed himself, he wrote a fictional account of some of the experiments that were done at this hidden laboratory, right? And this laboratory is about 40 miles outside of Manhattan. And the book he wrote was called Brain Waves and Death. The reason it's called that is because one of the early experiments at Tuxedo Park had to do with measuring brainwaves. The idea, you know how you have these different cycles of sleep? A lot of our understanding of those different cycles of sleep came out of some of the early

• 4:17David Senra?

  experiments that were done under the direction of Alfred Lee Loomis at Tuxedo Park. And so, the main character of that fictional novel, Brain Waves and Death, is this guy called Ward. Ward is a character, so I'm going to read a couple quotes throughout the book about Ward. When I'm reading these quotes about Ward, they're really about Alfred Lee Loomis. So I'm going to start there with this quick, few, two sentences, real quick. It says, "Ward was smiling, but that did not mean that he was amused. The smile was a velvet glove covering his iron determination to get underway without any lost motion." So that last sentence talks about his iron determination and the fact that he doesn't like to waste any motion.

• 5:02David Senra?

  He does not like to waste time, does not like to waste action, does not like to waste the money. That's a good understanding of Alfred Lee Loomis. Another sentence that I found that describes what the main story of this book is about is the fact that they call him one of the last great amateur scientists before this like industrial level of science that takes place in response to the threat that's happening in the world of World War II. Okay? So this sentence says, "He would dedicate himself to overcoming Germany's scientific advantage." That's a great way to understand the goal of Alfred Lee Loomis and how crazy this story actually is.

• 5:46David Senra?

  The idea that this one person, full of iron determination and, you know, almost unlimited resources because he was so wealthy, which I'll get to how he became wealthy, the idea that he could take on himself, he's like, "Okay, Germany is this huge threat, no one else sees it's coming, the United States Army is not ready for it, so I'm going to take this on my own shoulders and I'm going to dedicate my actions and almost every waking hour to overcoming Germany's scientific advantage."

• 6:13David Senra?

  Okay, so let me jump more into his personality. I looked over my highlights right before I said that I'd talk to you. Almost every single highlight is about his personality. I found him such a confusing and interesting figure. So this is his personality and really an overview of the story of the book that I hold in my hand. So it says, "The Loomis Laboratory in Tuxedo Park and the charismatic figure of Ward himself, which transparently based on Alfred Lee Loomis. The immensely wealthy Wall Street tycoon and amateur physicist, who among his myriad inventions claimed a patent on the electrocephalograph." There's no way I'm pronouncing it correctly, but it's important to know what that device does. It's a device that measures brainwaves.

• 6:53David Senra?

  "Loomis was also somewhat eccentric and disdain the glamorous swill around him. He had developed a passion for science and for some time had been leading a sort of double life." This is what I mean about this like Batman, Bruce Wayne kind of comparison that I think is helpful in understanding Alfred Lee Loomis. This is his double life. "He was a partner in Bond Bright and Company, a thriving bond investment subsidiary of J.P. Morgan. He had amassed a substantial fortune, which allowed him to act as a patron. Loomis had purchased an enormous stone mansion in Tuxedo and turned it into a private laboratory." So that the subtitle on the book where it calls that "The Secret Palace of Science."

• 7:38David Senra?

  That term, "Palace of Science," that describes Tuxedo Park, which is Loomis's laboratory, was bestowed by Albert Einstein, who was also one of the most, one out of, I don't know, dozens, maybe hundreds of the world's most famous scientists that have actually visited Tuxedo Park and did experiments, a lot of which was funded from Loomis's private fortune. More about his personality. This is one of the scientists describing Loomis. "He now appreciated him as a man who knew how to get things done. Loomis was a bit stiff with the bearing of a four-star general in civilian clothes, but he was strong and decisive. He was an intensely private man." Another way to describe him is, somebody else described him, "That he moved like a shadow."

• 8:23David Senra?

  Now, there's a bunch of historical figures that play important roles in the story. I have to admit, a bunch of them, FDR being one, Churchill being another. One person I can't omit that was probably the most important person in the story, other than Alfred Lee Loomis, is this guy named Vannevar Bush. And I don't think that's how you pronounce his first name. I've heard it pronounced other ways. But Bush appears over and over again in these books. I have to read a biography on him. I mean, he's probably been in 10 or 15 of the books I've covered on the podcast. You might remember because he was, there's a line in A Mind at Play, I think it was Founder's Number 95, that biography of Claude Shannon, where he says, describing Bush, they said that "he was the first to see Claude Shannon for what he was," meaning this genius

• 9:06David Senra?

  that you can kind of direct and put him on any project, and he's going to come up with unique insights. So I need to introduce you to the role he plays in this story, because him and Loomis form essentially a partnership here. So it says, Bush, I'm just going to call him Bush because I have no idea how to pronounce his first name. "Bush was agitating for an accelerated defense effort." Okay, this is right before World War II. "Alarmed that the United States military was technologically unprepared for war, Bush was exploring ways to mobilize the country's scientists for war." So they have like this parallel, that's a statement about Bush, but it could also be about Loomis.

• 9:47David Senra?

  They have this parallel goal, which is, hey, we're behind, and the only thing that's going to win the war is an emphasis on accelerating our scientific and technological understanding for weapons of war. So it says, "Loomis was uniquely positioned to play a pivotal role. As the country prepared for a war, the Germans had already demonstrated would be, in Bush's words, 'a highly technical struggle.'" Back to Loomis. He says, "He," meaning Loomis, "was enthusiastic about American know-how and was not inclined to sit idly by until the military, which he viewed as slow, finally determined it was time to take action." Remember, at this time in history, in case you didn't know, there was a heavy cultural

• 10:32David Senra?

  strain of isolationism in the United States. People were very hesitant to get involved in another world war. So it says, "Long before the government moved to enlist scientists to develop advanced weapons, Loomis had assessed the situation and concluded it was critical that the country be as informed as possible about which technologies would matter in the future war. He scraped all his experiments and turned the Tower House into his personal civilian research project. And he then began recruiting the brightest minds he could find to help him take the measure of the enemy's capabilities and start working on new gadgets and devices for defense purposes." So, a long time ago, I read Walter Isaacson's biography on Einstein.

• 11:15David Senra?

  And in that, there's a lot of talk, reading that book is actually helpful to understand this book, and there's a lot of talk about all the, you know, by, I think, in 1938, it was illegal for Jews in Germany to hold any kind of position in university, government, everything else. So Einstein being one of the most famous, you know, they were expelled all throughout the world. And some came to the United States, some went to other places in Europe, to try to find like a safe refuge. And a lot of these expelled Jewish scientists came to Tuxedo Park. And so that would answer the question that you might be asking yourself as well, well, how does Alfred Lee Loomis know what is going to happen before even the government in the United States?

• 11:57David Senra?

  And it's because he had direct relationships with a lot of these former German scientists that came over and said, hey, this is what we are capable of doing. Germany right now has the technical and scientific advantage over the United States and Britain. And I'm going to run over my point here, but I want to read this to you anyway. So it says, "From its grand beginnings in 1926," this is talking about the Tuxedo Park, "and to the day was hastily shuttered in 1940. During the decade and a half, the Tower House flourished, Loomis played host to a remarkable group of young scientists at a moment when new discoveries were transforming all their fields and the spirit of intellectual excitement and experimentation fueled their research. It is hard to believe that only in a few years that bright circle would not only build

• 12:41David Senra?

  the radar system that would alter the course of the war." So that is the main scientific achievement of what starts the Tuxedo House and then eventually goes into the RAD Lab, which is the laboratory, the radiation laboratory that Loomis is going to run at MIT for the government. That they developed radar and they say the radar won the world, won the war, but the, and the atomic bomb ended it. A lot of the people that were involved in developing the radar at the Rad Lab later went on to work in the Manhattan Project. Okay, so it said, "It was hard to believe that only a few years of bright circle would not only build a radar system, but would alter the course of the war, but would go on to create

• 13:25David Senra?

  a weapon that would change the world forever. It sounds like fiction. It's incredible to me now, looking back that it really happened." Okay, here's another quote from Brainwaves and Death. It says, "Ward," meaning Loomis, "carried himself with composure, but his politeness was merely a habit. He was preoccupied." Okay, so something to know about Loomis that is just insane is that he at first tried to have a conventional life. Married, corporate lawyer, three kids, normal job. And then realizing that's not who he really was, he did a 180-degree turn. So I'm going to talk to you more about that. This section, though, when I read it, there's a lot of things that

• 14:09David Senra?

  are very helpful in reading all these books, right? You start to match certain things. And one of, while I was reading this section, one of the most important quotes that I've ever come across, it's in, I think it's given from a speech Steve Jobs gave, but it's in the book by Isaacson, his biography on Steve Jobs. And I'm going to read it to you. It's about that your life can be much broader. And so I really think it's helpful in understanding, this quote's helpful in understanding not only the life Steve Jobs lived, really, really every single person that we've covered on the podcast. And it's something that like, I think is so important. Like, one of the benefits of studying biographies, of listening to this podcast, is that you realize that like, your life, you can design your life.

• 14:52David Senra?

  It can be as broad. It doesn't have to be these narrow tracks that are laid out for everybody else that most people operate in. So let me read that first. This is Steve Jobs. He says, "When you grow up, you tend to get told that the world is the way it is, and your life is just to live your life inside the world. Try not to bash into the walls too much. Try to have a nice family life. Have fun. Save a little money." That's a very limited life. Life can be much broader, once you discover one simple fact. Everything around you, that you call life, was made up by people that were no smarter than you. And you can change it. You can influence it. Once you learn that, you'll never be the same again. And I think that's true for Steve Jobs.

• 15:34David Senra?

  It's true for, I can't think of an example of any of the people we've studied, any of the biographies that I've read, that that's not true for. And we're gonna see Alfred realizing, hey, I mean, think about the amount, I don't wanna call it arrogance, cuz that's a lack, that's not a good description of it, but a single individual's like, "I'm gonna dedicate myself to overcoming Germany's scientific advantage." You can't get much more of a broader life, and then the, all the excitement and the experiences that he has in just a few short years, as a, as a direct result of that commitment to that goal. So let me get into that. There's a lot to read here. "Loomis exiled himself from the glittering world of New York society because he wanted to devote all his time to science.

• 16:18David Senra?

  He set himself up in a castle on a high hill in Tuxedo Park and financed his own audacious investigations of the stars, the heart, the brain, and the secrets of the world." This is before he makes that commitment, right? He's just interested in science, he wants to learn physics, but he's going to, all the experiences that he has, for the years that he's just like, "I'm gonna pursue, I'm gonna use my wealth to pursue the experiments that I'm interested in," eventually allow him to acquire skills that he can use in that dedication of overcoming Germany's scientific advantage. Okay? So it says, "He desired nothing more than to be actively involved in daily research and progress. And then when duty called, he helped reinvent modern warfare." That's not hyperbole, that is factual.

• 17:02David Senra?

  He was an unconventional person. He was not motivated by money or fame. He never needed the approval of other people. I would say, the clearest example that that statement is correct, is that he went about... Building a world within the world. He created his own world and he was not interested. He was extremely private, but he did not seek publicity. He just followed his natural drift, to use that quote from Charlie Munger. He never needed approval from other people. He was that sure of himself. Very, very intelligent, brilliant, also very cocky. He was motivated by the adventure. There was a certain awesomeness about him that made him, and I'm not sure what the right word is, somewhat inapproachable.

• 17:46David Senra?

  He was aloof, as if detached from a society he had once been very intensely involved in. That's what I mean about building your own world within the world. I always got the feeling this partly had to do with the divorce. I'll go into that later. Loomis erected a wall between his two worlds, completely insulating his scientific Valhalla from his business life. Just like Batman and Bruce Wayne don't really intersect, right? Although he socialized with close friends from both walks of life, he never introduced a single Wall Street associate to any of his tuxedo park experimenters or vice versa. So I want to give you a little background of what I just mentioned, that he had a perfectly

• 18:25David Senra?

  conventional life before he goes off and becomes this mysterious, very powerful figure. At the beginning of World War I, he's married, he's got, I think, three kids already at the time, and he's practicing law. When the United States declared war against Germany in April 1917, going back, obviously, in time, the 29-year-old Loomis promptly enrolled in officers' training camp. So he gets, he serves in the military. He has a constant stream of ingenious ideas for new arm. There's a hint that maybe this guy's not going to stay practicing law forever, because during, even when he's doing that, he starts applying for all these patents that he's working on the side. Like, he tries to invent a new safer fire extinguisher, some kind of new slide rule

• 19:10David Senra?

  for some mathematical process. All these just weird things that you wouldn't expect just a corporate lawyer to be doing, right? That's what they're meaning about that he's a constant stream of genius ideas. Now he's using this constant stream of genius ideas for new weapons, which, this job that they give him, right? So...

• 19:30David Senra?

  This is the job. It says, "He had ingenious ideas for new armaments and new solutions to old tactical problems. It earned him one of the most important jobs, Chief of the Development and Experimental Department." That is World War I. It's interesting that the military gave him that job. He kind of makes that, by his own decree, this job in World War II as well, when he's much older, smarter, and way wealthier than he is at 29 years old. "One of Loomis's responsibilities was to test ideas for new weapons." That's what I mean. He does the exact same thing, you know, almost 20 years later. While he's doing, heading this research and development department during World War II, or, excuse me, World War I, he gets really interested in tanks. He thinks they're like

• 20:13David Senra?

  the weapons of the future. And so, this is just a hilarious little story, that he picks up his cousin in a homemade tank. So, he says, "He also became an enthusiastic champion of the new armored tanks. He became such an expert on tank construction that he built a scaled-down model in his garage in order to see if he could make further improvements in the design." When Colonel Stimson, this is his cousin and also a very important character in this story, I'll tell you more about him in a second, when Colonel Stimson came to visit Loomis, Loomis rolled into Tuxedo's small rail station in his light armored tank to meet the train, kicking up dust and causing quite a scene. So, you know, what kind of person is going to build their own tank and then take it on the street to pick up his

• 20:58David Senra?

  cousin at the train station? Now, Stimson's very important because he's about 20 years older than Loomis. He has like a guiding hand. They are very close. They communicate constantly. And Stimson has one of the craziest resumes I've ever seen. He was the Secretary of War under Taft, I think it was from like 1911 to 1913. Then, FDR grabs him to be his Secretary of War like 20-something years later. And in between those two appointments, he was also the Secretary of State for President Hoover. Okay, so World War I ends. Loomis comes back and he realizes this is not the life for me. I have to help, I have to support my mother, my sister, I have three kids. So he's like, I gotta get rich.

• 21:40David Senra?

  And I want to get rich, not because I'm going to buy the trappings of wealth, even though he does have that, he has mansions, penthouses, all that kind of stuff. But he's like, I have to buy my independence, which I think is a really smart insight he has there. He says, Loomis returned from the war, determined to make a fortune. His brother-in-law was a very successful bond salesman, so they're going to partner up, this guy named Thorn. Thorn recognized that his brother-in-law's mathematical genius and its application to the financial game. He talked Loomis into throwing away a promising legal career for a much more speculative career in the investment banking business. They take over a firm that wasn't doing that well. So I'm going to skip over the details of that part and just get into what their unique

• 22:24David Senra?

  insight, how they were able to build a fortune so rapidly. And they did so, you know, less than, I would say, five to 10 years. It says, "Almost at once, they began specializing in public utility issues and quickly emerged as leaders in the financing and development of the electric power industry." So essentially, they made their wealth, and I'm going to give you a little more details here in a second. They made their wealth with the realization, hey, rural electrification is going to continue to grow, and in order for it to, for the entire country to gain access to electricity, those living outside of cities, which is a lot easier to electrify a city, you're going to have, you're going to need companies that are able to raise huge amounts of money,

• 23:07David Senra?

  because this is going to be a very expensive endeavor. So they're like, okay, we're going, this is very similar to, remember, it's a subsidiary of JP Morgan, of this JP Morgan idea where I'm going to roll up a bunch of other, of smaller companies into one larger company. That's going to make it easier for me to raise money from investors. So that's what they're doing. That's how they're going to make their money. What appealed to Loomis was the challenge of shaping the nascent industry. He had no respect for the old school Wall Street capitalist skills. He relished the opportunity to reinvent their creaky methods and along the way rewrite the rules as he saw fit. Rural electrification was the future and the key to growth of new factories, industries, and economic opportunities.

• 23:51David Senra?

  Loomis had complete confidence in the new technology as a force of change and a force of good. If they could spend, if they could speed the growth of the power industry and both them and the country would benefit. They helped create utility holding companies, this is what I mean about being similar to JP Morgan strategy. They helped create utility holding companies by bundling the management and facilities of smaller operators into larger integrated systems. They called them superpowers. This allowed the operating companies to obtain funds by issuing securities, that's how they're raising money, and thereby enlarge their operations. So very straightforward. The holding companies were also a better medium for investors who instead of taking common shares in one holding company were able to invest in a diversified group.

• 24:34David Senra?

  Loomis and Thorne's phenomenal nine-year run reviving Bond Bright, which is the firm they took over, from near bankruptcy to its vaunted status as the leading private investment house specializing utilities became a Wall Street legend. Now, this is the time in Loomis's life that he has essentially two full-time demanding jobs. So he says, "Loomis has continued in his capacity as vice president of Bond Bright, five days a week devoting nights and weekends and vacations to an expanding array of research experiments underway at Tower House. He was now thoroughly committed to his second career as a scientist and piled extra work on himself, spending every spare hour reading the journals and books Woods, this is R.W.

• 25:17David Senra?

  Woods, who's also a famous physicist, recommended as part of his ongoing education." So this is, so he's, right now, Loomis is, "I'm just gonna make as much money as possible." And eventually, he knows he's going to leave the finance industry. He's just using it as a means to an end. He doesn't really care about that. He's like, "I need to build a fortune so I can actually do what I want to do in life." He also does something very smart. He hires, I'm gonna read this to you. So this guy Woods becomes his, his personal, he's his mentor, but it also is personal tutor. So he says, "He hired R.W. Wood as his private tutor, and Wood came up and spent every summer at Tuxedo Park doing the experiments that he couldn't do at John Hopkins, that's where he was working, because they didn't have enough money." R.W. Wood taught Alfred Loomis physics.

• 26:03David Senra?

  What a better way to learn anything. You hire one of the leading people in the field to be your personal tutor. All right, so this is right before the crash. He's going to, he talks about this later on, which he has a really unique insight, how the Great Depression, the psychology of human beings, or I guess the misjudgment of human beings, how the same type of misjudgment caused people to make mistakes in the Depression and World War II, which I'll tell you more about later. So he says, they talk about the two brother-in-laws were, they were of like minds, even though they had different personalities, they agreed on how to run the business. This included adhering to a strict policy of keeping the bulk of their profits in cash. Their firm, unlike most other investment houses, never carried large inventories of

• 26:46David Senra?

  the securities it underwrote, which would prove to be the undoing of many of the biggest promoters of the bull market. That's the bull market in the 1920s before the Great Depression. Loomis would later maintain that everybody in the street knew the crash was coming. The only difference was that he and Thorne refused to bank on it being inevitably delayed. So the result was, I think around 1928, they become essentially all liquid. They have, they convert everything into either long-term treasury bonds or cash. So the result is, you have this huge crash, and guess what? They're sitting on a mountain. I guess, I think the sentence was, let me see if I can find it. "When the market crashed, Loomis was sitting on a mountain of cash."

• 27:29David Senra?

  So the result is, he mints a second dairy fortune because they're able to buy up everything when no one has cash and then sell it. So it says, "The fact that Loomis made an estimated $50 million during the first few years of the Depression served only to intensify the mystique about the scientific approach he used to guide his financial affairs." It's not really a scientific approach. It's the same thing Hetty Green did, the same thing Warren Buffett and Charlie Munger did. And that's, they know that crashes are inevitable, inevitable. So if you know it's inevitable, you should have the resources, the liquid resources to take advantage of that inevitability. So minting the second fortune allows him to leave finance. He says, "By the spring, Loomis informed Thorn that he was through.

• 28:12David Senra?

  There was a certain finality about this announcement, so that Thorn knew it was pointless to object. Alfred just totally lost interest in the business. He felt he had enough money to do whatever he wanted and what he wanted to do with science. Loomis was not someone you could argue with." This is what I meant about the reference at the very beginning, that, you know, he doesn't, he doesn't really care what other people think. Loomis was not someone you can argue with. "He would listen patiently to an opposing opinion, but his consultation, but his consideration, excuse me, was nothing more than that, an act of politeness on its part. He would always just shrug it, shrug it, shrug it off and walk away. I never once knew him to change his mind about anything. Alfred was a very premeditated person. He had it all figured out.

• 28:55David Senra?

  He did what he had to do, and in the first real chance that he had, he got the hell out. Without so much as a backward look, Loomis quit Wall Street for good." And he does that over and over again, doesn't look back on his legal career, doesn't look back on his finance career, eventually insists that the Rad Lab is shut down when the war is won, doesn't look back on that either. So that's just a personality trait that he applies to everything in his life. This was a very interesting way to think about Loomis. This is happening in 1933, so before World War, after his finance career, but before World War II. And, you know, he's becoming rather well-known, he's funding a lot of, a lot of scientists

• 29:37David Senra?

  all over the world come to him if they need resources and he obliges. And so they consider him, they talk about, thinking about Loomis as a 20th century version of Ben Franklin. And if you haven't gone back and listened to the two podcasts I've done on Ben Franklin, I'd highly recommend you do so. And if you want to understand American entrepreneurship, I don't think there's a single individual that's more influential than Ben Franklin. Anybody from Elon Musk, Charlie Munger, just, he inspired generations of American entrepreneurs. Probably, same thing for people living in other countries, too. So it says, "The citation listed his several identities," meaning Loomis, lawyer, businessman, physicist, inventor,

• 30:21David Senra?

  philanthropist, "and compared him to the prototypical American physicist. In his varied interests, his powers of invention, and his services to his fellow man, Mr. Loomis is the 20th-century Benjamin Franklin." And so it's during getting to know all these physicists and scientists all over the world that Loomis's focus is about the change, and this is where he dedicates himself to overcoming Germany's scientific advantage. So he says, "By the late 1930s, as the Nazi assault on Europe gained momentum, Loomis's scientific interests began to change. He was very troubled by what he learned about the highly-developed state of applied scientific

• 31:03David Senra?

  research in Germany. He heard unsettling things about advanced weaponry and the work German physicists were rumored to be doing in nuclear physics." So, you know, you don't want to have advanced, his point is you don't want to have advanced technology in the hands of somebody like Adolf Hitler. Now, I really like this part because this is a main theme that runs throughout all these books and in large part why this podcast exists. And that's idea, this idea that there's an idea that worked 100 years ago. No one owns ideas. You can take an idea from 100 years ago, 200 years ago, you can take an idea from a genius that has been dead for centuries and apply it to what you're doing today. He does the same thing. Thomas Edison is dead by this part, by this time, if I'm not mistaken.

• 31:47David Senra?

  And so Loomis's idea about, hey, I'm gonna, how am I gonna overcome Germany's scientific advantage is an idea that Edison recommended in World War I. So this is Loomis taking Edison's idea. After the shock of the sinking of the Lusitania by a German submarine in 1915, so you're talking about 25 years before this part in history, where we're at right now in the story. The famous old inventor, meaning Edison, had exhorted that Americans were as clever at mechanics as anybody in the world and could defeat any engine of destruction. That's a direct quote of Madison. Edison had advocated preparedness without provocation. Right?

• 32:27David Senra?

  We're not going on the attack, but if we need to, to, to fight a technologically superior army like Germany, then we need to have that done before the war happens. So he says, "preparedness without provocation." And to Loomis, "it seemed as wise a course in the present as it had been then." Exactly. "When Hitler rolled into Austria in 1938 and then decimated Czechoslovakia, Loomis made note of the tank models, the destructive, the destructiveness of the field artillery, and the brutality of their bombings. It had left him convinced that the military could not be counted on to develop and build

• 33:09David Senra?

  a stockpile of modern weapons for defense." Which is exactly what Edison recommended. "At the start of the last war," I'm running over my own point here. "At the start of the last war, Edison had recommended that the government create a great research laboratory." That's exactly what Loomis does. "whose purpose would be to develop new weaponry, so that if war came, the country could take advantage," another direct quote from Edison here, "take advantage of the knowledge gained through this research work and quickly manufacture in large quantities the very latest and most efficient instrument, instruments of war." That's the end of his quote. That's exactly what Loomis does. In the months to come, these accumulating influences would move Loomis to adapt Edison's

• 33:54David Senra?

  ideas to his own laboratory. That is no different than us adapting the ideas from the people that came before us to our day to day, to whatever it is that we're doing. And this is where he starts clearing the deck. He's like, okay, I'm, this is going to be my complete focus. He says, "In April 1940, he was more determined than ever to dedicate his private resources to scientific problems that might have value for defense purposes. Convinced that the United States would inevitably be drawn into war, he was juggling several disparate projects related to mobilization and believed that priority should be given to things that could yield results in a matter of months, or at most, a year or two." So it's, "I can't work on these things that might pay dividends that have nothing to do with, with defense. I'm going to get rid of those and we're going to focus."

• 34:38David Senra?

  This essentially is when he starts to focus on radar. Okay? "He decided that the Loomis laboratory would no longer muck about with a preliminary long-range exploration of propagation problems. Instead, it would focus on one pressing problem and work to find a practical and efficient solution." So that sentence, I want you to remember that sentence. Later on, at the end, there's a description of, talks about what is the single most valuable trait that Loomis had. And this idea, we come across over and over again, the singular focus. So it says, "It would instead, excuse me, instead, it would focus on one pressing problem and work to find a practical and efficient solution." That problem winds up being radar. Again, if you go back and ask, "What's the most important invention in World War II?" You could say the atomic bomb. Most people would say radar.

• 35:23David Senra?

  During this time, we see more insights into his personality. He was a person who loved to be with the leaders of, of any one particular enterprise. As such, he was called a dilettante by people who thought that he was, that thought that was a good name for him. So you had to work for him and talk to him a bit, and then you found out there wasn't anything phony about him. He was a first client, first-class scientific person, and he had a lot of money. With those two things, he could do a lot of, well, with those two things, he could do a lot of things. "Aggressive and enthusiastic, Loomis insisted on getting started right away."

• 35:56David Senra?

  So this is Bush on why they focused on radar. So it says, "He," meaning Bush, "believed it was vital that science and technology were broadly mobilized for the war," which would provide him with a way to address what he saw, what he saw as by far the most pressing military problem, the need to rapidly improve the country's air defenses. America is surrounded by two oceans. Their main vulnerability is from the air. So it says, "He was convinced that air power was the backbone of military strength. America was vulnerable only to transatlantic attack. Radar held the key to revolutionizing warfare by providing a better means to track the enemy and accurately destroy targets."

• 36:40David Senra?

  So they used this not only in the air defense, but also in the sea to wipe out the German U-boats, which I'll talk to you more about in a minute. "But to date, the Army had ignored radar's potential for defensive action and could not be interested in sponsoring any research." So the book goes into quite detail, quite a bit of detail. I'm going to give you the Cliff Notes version here, that Churchill was so desperate, because at the time FDR was still not willing to jump into the war, so he says, "Listen, we're going to give you all of our scientific advances that you guys don't know about, because we no longer have the ability to manufacture them. And hopefully you can make them, and then we can use the weapons that you produce to fight off Germany and Italy and the rest of the Axis."

• 37:23David Senra?

  So, one of those things they give is the fact that they figured out microwave technology. The American scientists, when they saw what the British scientists had come up with, and it was an interesting story how they smuggled that from Europe to America, they thought it was 1,000 times better than what the Americans had at that time. And so that insight by this gamble that Churchill did, becomes the missing piece for the work that Loomis and the Rad Labbers is going to do. There's a bunch of historical figures in the book. I have to admit a bunch of them, but I just want to tell you what bound all these historical figures together with one sentence. "What drew these men together," he explained, "was one thing we deeply shared: worry."

• 38:09David Senra?

  Reference to a bunch of historical figures. This is what Loomis says, "Of the men whose death in the summer of 1940 would have been the greatest calamity for America, Loomis would observe a few years later, the president is first and Dr. Bush would be the second or third." This is a description of the role Loomis played and who he was as a person from somebody that didn't like him. And so this is kind of high, this is high praise considering that Bolz, the guy I'm going to quote, doesn't like Loomis. He says, "In the end, Bolz had to admit that Loomis's recruitment strategy had worked like a charm. Roping Lawrence," that's Ernest Lawrence, who was probably the most famous, he'd already won the Nobel Peace Prize at this time, he was probably the most famous American physicist

• 38:54David Senra?

  at the time, and he winds up being like Loomis's right-hand guy. "Roping Lawrence into the radar project had been a stroke of brilliance." This is Bolz on Loomis. "Loomis was smart as hell, Bolz conceded. The Manhattan Project had not yet come into being. Here were all these unemployed nuclear physicists. Why not regiment them?" And they all worked underneath Loomis's apparatus. Loomis figured the way to do that was to put Lawrence on the microwave committee and get Lawrence to pick the head of the lab. So think about if you could take the most influential person. Loomis is focused on influencing the influencers. Ernest Lawrence has all kinds of relationships. He's respected by everybody else. So if he gives you a call and says, "Hey, come work on the secret project at MIT,"

• 39:38David Senra?

  you're going to drop everything and go do that. As opposed to if this Alfred L. Loomis character who you don't even know gives you a call, you're not going to do that. So that was the brilliance of what Bolz is saying. That was a brilliant strategy that Loomis deployed. "Loomis managed to light a fire under the detached apolitical physicist." That's Lawrence he's talking about. "Ernest was suddenly converted to the seriousness of the business and saw that physicists could be useful and therefore should be used, that they could do things other people couldn't do." What's interesting enough is that way before America's in the war, you know, German U-boats that were torpedoing all these merchant ships.

• 40:19David Senra?

  Ernest Lawrence's brother was on a ship that got torpedoed by a German U-boat. He winds up surviving, wasn't injured or anything. But, you know, for a few days, they couldn't contact him. So he's worried that his brother was killed in this, in this, in this attack. And, you know. Germany does a lot of dumb things during the war, but not that they did it on purpose, but the idea that you attack the brother of one of the greatest scientific minds that America has, and now this guy's going to go full, he's going to go against you. Very unwise decision there. So it's at this point, they have everybody, they have the resources, they shut down Tuxedo Park and they start the Rad Lab.

• 41:03David Senra?

  So it says, "For the almost, for the next four years, he would," meaning Loomis, "would drive himself and his band of physicists almost without break to develop the all-important radar warning systems based on the magnetron." That's the device that Churchill sent over to America. "Looking back on the tense autumn in 1940, Bowen boasted," that's another person, "it was a gift from the gods that we disclosed to Alfred Loomis and Carl Compton," meaning the magnetron. You know, I'm definitely pronouncing that incorrectly, by the way. This guy, Carl Compton. Compton is a physicist and the president of MIT, so he's got to work closely with Alfred Loomis. "Few understood better than Bush the critical role this unprecedented partnership would play in determining the course of the war.

• 41:47David Senra?

  The British and American physicists who had joined together to beat the Germans, and their collaboration immediately resulted in a more effective war effort and contributed significantly to both nations' ability to gain an edge on German science." So they start behind German science and then they greatly outpace them. And I want to talk more about Loomis's insight into how that's possible, and I think it's his fundamental insight to human nature that was very, very clever. "The corporation, the cooperation among scientists would later extend to military men and would have striking, striking results in the development of new radar devices and their performance in the field of battle. It was not always easy. The two sides had quarrels that were like the disagreements between Churchill and Roosevelt, which they described as quarrels of brothers.

• 42:32David Senra?

  But as Bush later observed, much has been written about the disagreements between allies during a great war. Little has been written about the deep friendships which appear between comrades in arms of different nations, even among comrades whose efforts behind the lines are devoted to placing advanced weapons in the hands of fighting men." So what's interesting, after the war... Loomis goes back to being almost a recluse, like a very private individual. He's offered all kinds of high positions in government, running institutions, and he says no to all of them. But he does continue to socialize and visit with all the scientists and physicists that he built great relationships during this four-year period, probably the most important

• 43:17David Senra?

  period of his life. So Loomis was early, in the sense that he's like, it's inevitable that America's going to get into the war, so we should prepare as if that's inevitable. So he picks up on this fundamental insight into human nature that I think is smart and we should apply to our lives. And this is where he talks about the similarities between the Great Depression and World War II, and the fundamental mistakes people made in both situations. Interesting enough, mistakes that he was able to avoid. So he says, "He drew a striking parallel between the present international situation and the financial situation prior to the crash." He said that now people are asking him, "When we will enter the war, just as in 1928, his friends were asking him when the stock market crash was coming." This is the insight.

• 44:02David Senra?

  "He said that in both cases, such a question is quite beside the point." He said that "once a person admitted a stock market crash was coming, a prudent individual," which is what he did, "will immediately get out of the stock market and not consider when the crash is coming, and thereby try to hang on and make some more profits. Likewise, at the present time, it is of secondary importance when we will get in the war. Of first importance is the admission that we are going to get in, and our action accordingly should be that of preparing just as though we were actually in the war."

• 44:45David Senra?

  Now, here's an example of the Loomis-led innovations are actually working. They're not hypothetical. They are created, then manufactured, and then put direct into deployment into war. So at the beginning, they're getting their ass kicked by the German U-boats. It says, "The country paid a high price for its lack of preparedness." They couldn't find them on rate. There was no such thing. They didn't know where they were. It says, "German U-boats were inflicting devastating losses. In February alone, 82 US ships were sunk by the Nazis." So then talks about, there's a few paragraphs where they realize, "I don't know enough of the sciences to tell you the difference between ASV radar, all these different kinds of radar." But essentially... Germans had like this crude version of radar.

• 45:26David Senra?

  And Loomis's lab created one with the help of obviously the technology from the British, created one that's a lot better. And this is the result. From then on, America, and this happened, you're talking about in February, they're getting their ass kicked. What is this? By the end of April, it's completely turned around. So it says, "From then on, America's scores improved steadily. All that summer, the roaming eye of the Rad Lab ASV radar had the German Wolf Pack on the run. The U-boats, equipped with receivers that had been designed to pick up the old longway ASV," that's the old technology that Loomis improved upon, "were not capable of detecting

• 46:08David Senra?

  the microwave pulses from the Allies' new search radars. German Admiral Karl Donitz, who in 1940 had boasted that the U-boat alone can win this war." So there's just something, I want to pause right there. If you've studied or read, listened to podcasts, anything about World War II, the amount of arrogance on the German side is just breathtaking. They had not won the war and they were just convinced that it was inevitable that they would. Even this statement is ridiculous. In 1940, you're saying, "We already have this war won just on the U-boat alone could win the war." So it says, "He had boasted the U-boat alone could win the war, was forced to admit that the methods of radio location that the Allies have introduced have conquered the U-boat

• 46:53David Senra?

  menace. As he later wrote, radar threatened to provide the Allies with the keys to victory unless Germany could address the disparity in their technological prowess." Now, let me read that to you again. "Unless Germany could address the disparity in her technological prowess." Compare that, juxtapose that with Loomis's personal goal. "I will dedicate myself to overcoming Germany's scientific advantage." And he fucking did it. Just listen to this description from Karl, this general, this German general, and tell me how you could not be fired up by the dedication of all these scientists and physicists led by Loomis. This is amazing. "For some months past, the enemy has rendered the U-boat ineffective."

• 47:37David Senra?

  He has achieved the objective not through superior tactics or strategy, but through his superiority in the field of science. This finds its expression in the modern battle weapon, detection, what they call radar. By this means, he has torn our sole offensive weapon in the war against the Anglo-Saxons from our hands. They use that technology not only to take out the German U-boats, they're able to start shooting out, they build this like automated anti, it's a gun that shoots planes out of the skies, so they're able to start protecting the air over, the night sky over Britain. Eventually, when they, they start destroying a bunch of the German planes, then they start going on the offensive.

• 48:22David Senra?

  D-Day, Normandy, they're using the Loomis-led technology, the radar technology, not only to, for the bombing of, in France, but also where to drop, like the picking the locations to drop soldiers. It completely changed the course of the war. And the book goes into way greater detail, if you're interested to read about that. I want to point out, I mentioned what they saw as Loomis's greatest attribute that we've seen in a couple of different areas as well. It says, this is somebody that's working with him describing him, "Loomis had one important characteristic: his ability to concentrate completely on a chief objective, even at

• 49:04David Senra?

  the cost of neglecting matters that appear to other people to be of equal importance." And so, his chief objective, once they saw the technology that the British had developed was, "We're going all in on radar. This is going to be the most important weapon in the war. It's going to be how we overcome Germany's scientific advantage, and it's how we're going to win." Okay, so after the war ends, I'm gonna fast forward in the story. Okay, this is really an interesting idea that I've, again, I've seen expressed in different ways in the lives of other great people that we've read biographies on, okay? So, Loomis understood human nature. And before I read this section too, I'm gonna read the note of myself, that extreme

• 49:46David Senra?

  external circumstances allow us to accomplish things that would be impossible otherwise. So, when they start the Rad Lab, you know, it's Loomis, a little bit of resources, maybe a dozen people. By the time the war's over, the Rad Lab is over 4,000 people, they're spending $4 million a month, they're on, they've overtaken, I don't know, thousands of acres of MIT's campus? Like, it's a gigantic organization. And Loomis insisted that it disappear. Okay? So, this is what I mean by that. "There were those who believed that the laboratory's great success story should continue on after the war, and still more marvelous gadgets and techniques might be forthcoming." Right?

• 50:29David Senra?

  You invented radar, you invented these anti-aircraft guns, all this other stuff that you guys invented here, let's keep this going. And this is what I mean about Loomis understanding human nature, which I feel is very common about the people we study. They're very smart, not just in, you know, formal education, they're smart with understanding humans. Uh, it says, "Loomis was vehemently opposed to the idea and took decisive steps to stop the juggernaut, including calling President Roosevelt himself." This is why, this is the important part of the section, okay? "Loomis felt the Rad Lab would surely stagnate and falter, and argue that only the pressure of war could make a government program of that size and magnitude flourish.

• 51:14David Senra?

  War was a great stimulus to science, but it was not a stunt that could be repeated in peacetime. Bush also shared his view, and it was decided that the Rad Lab should be terminated." So, again, Loomis understood human nature, extreme external circumstances allow us to accomplish things that would not be possible otherwise. This is very similar to recent examples of books that I've read. When I did that three-part series on Larry Ellison and then Arnold Schwarzenegger. Larry Ellison... Constantly, and you've seen this implied, employed in other domains in human nature, like the conquistadors would come over and one, it's called burning the boats. Because it comes from the fact that, you know, you're out exploring, you land on new territory.

• 51:59David Senra?

  They would burn the boats because there's no, it essentially eliminates the opportunity for a retreat, right? You have this extreme external circumstance that is either going to make you push forward or you're going to die. In the business context, Ellison says, like, he'd pick a target, pick an enemy, we'd take all of our boats as far offshore, metaphorically speaking, and burn them. And his quote on this is, "It's win or die." Because he understood that extreme external circumstances allow us to accomplish things that would be impossible otherwise. Arnold Schwarzenegger's version of this is, "Don't allow yourself to have any plan B." Now, this is very different from advice you're going to get from normal people. That is why this is called the misfit feed. These people are not normal. They don't write biographies of normal people. There's nothing wrong if you want to live your life and be a normal person, it's just

• 52:44David Senra?

  not going to write a book about you, which is fine. But this idea, you know, people say, "Oh, have a backup plan, oh, diversify." You see a lot of the people that we study say that's terrible advice. That's how you, that's a, that's a sure path to mediocrity. And this idea, Arnold's like, "I, once I made a commitment, I'm going to be a bodybuilding champ, that's it. I'm going to do this or I'm going to die. I'm going to be a movie star or I'm going to die." You know, this is a very extreme mindset. But again, I'd be remiss not to mention, because it's very obvious as you read these books, these are extreme people, they understood, they have to put themselves in situations that are going to allow them to tap into every single resource they have to accomplish the objective that they're going after.

• 53:28David Senra?

  And it's exactly what Loomis is saying here, it's like, "Listen, wars are great stimulus. You cannot repeat it in peacetime." This is a little bit about what Loomis wanted to do after the war. "He wanted nothing more than to return to the solitary wizardry of men like R.W. Wood, lone experimentalists who worked, who were working practically by themselves in a private laboratory, succeeded in making major contributions to the frontier of knowledge."

• 53:57David Senra?

  And this is a quote from Bush on Loomis. "He's probably the only man who ever, on the one hand, took the guys down in Wall Street for a ride and made a lot of money out of them, and on the other hand, got elected to the National Academy of Sciences on the basis of his accomplishments in physics." And I'll close on this. This is a description of Loomis by Ernest Lawrence. "Lawrence, who had stood at Loomis's elbow in the early days of the laboratory, could not pay high enough tribute to the banker-turned-scientist, who had organized physics for war and exerted his enlightened influence on the kind of war the country was ultimately able to fight.

• 54:39David Senra?

  He had the vision and courage to lead his committee as no other man could have led it. He used his wealth very effectively in the way of entertaining the right people and making things easy to accomplish. His prestige and persuasiveness helped break the patent jams that held up radar development. He exercised his tact and diplomacy to overcome all obstacles. He's that kind of man. He steers a mathematically straight course and succeeds in having his own way by force of logic and of being right." "He didn't take credit for things. That was very characteristic of him," said Haskins,

• 55:23David Senra?

  who counted himself among the fortunate band of scientists privileged to call Loomis a friend. "Of course, he was known in closed circles, but not widely known. After the war, history forgot him. Well, in a sense, he forgot himself, because he didn't care about all that. He wasn't interested in the past. He was interested only in the present and the future." And that's where I'll leave the story. If you're interested in World War II and science, technology, I'd recommend reading the book. If you buy the book using the link that's in the show notes, you'll be supporting the podcast at the same time. That's 143 books down, 1,000 to go, and I'll talk to you again soon.