Part IThe Story
On August 28, 1987, in a federal courtroom in New Jersey, Chief Judge Clarkson S. Fisher sat down to settle who owned a dead man's name. On one side stood the Schering Corporation of Kenilworth and its parent, Schering-Plough. On the other stood Schering Aktiengesellschaft of West Berlin and its American arm, Berlex Laboratories. Each believed it alone could call itself Schering in the United States. The parties, the judge observed with what reads like weary understatement, had "expended great quantities of time, effort and paper establishing the existence and histories of the corporations." He declined to recite most of it. He noted the essentials. The name belonged originally to Ernst Schering, a German pharmacist born in 1824, who had sold chemicals under the name "E. Schering and Company" from 1864 to 1871. Schering died in 1889. His son sat on the German company's board until his own death in 1947. And no descendant bearing the name Schering now worked for, directed, or ran either of the companies fighting over it.
So: two corporations, one on each side of an ocean and a war, spending years and lawyers' fees over a surname that no living member of either firm actually carried. It is the kind of dispute that only makes sense if you understand that a name, in commerce, is less a description of a person than a deed to a piece of property. And it is the kind of dispute that would not have existed at all had the federal government not, more than forty years earlier, taken the American half of the company away from the Germans and handed it to a lawyer from Bethesda, Maryland, who had never run a drug business in his life.
His name was Francis Cabell Brown. He does not appear anywhere in Judge Fisher's findings of fact. By 1987 he had been dead for twenty-one years, killed in a car crash on a family vacation in Brussels. The company he had held, rebuilt, sold, and then led again had been renamed, merged, and was suing the original over the right to its own identity. Brown had spent the better part of a quarter century as the steward of a German name in America, and when the name finally went to court, nobody needed to mention him.
That absence is where this story starts. It is also, in a sense, where it ends.
By the Numbers
The Custodian's Ledger
75%Share of Schering's sales from a single sex hormone before the end of World War II
1943Year Brown was formally appointed president of the seized company
$15MAnnual sales after Chlor-Trimeton, roughly a fourfold increase
$80MSchering sales by 1957, per Georgetown's citation
10,000%Profit Kefauver's aides claimed on one hormone product, December 1959
$41.1BPrice Merck agreed to pay for Schering-Plough in March 2009
The Man Who Was Asked to Mind It
The record of how Francis Brown came to Schering is short, and its brevity is part of its meaning. Leo Crowley, chairman of the Federal Deposit Insurance Corporation, was appointed Alien Property Custodian during the war, the official responsible for the domestic assets of enemy-owned firms that Washington had seized. In 1942, according to the citation Georgetown University read aloud when it honored Brown in 1954, the domestic assets of Schering AG, "the German pharmaceutical conglomerate," were seized under what the citation calls the Alien Property Custodian Act of 1917, and the company "was assigned to Leo Crowley." Crowley, "not wanting to run two organizations," asked Brown to serve as custodian of Schering's assets for the duration.
That is the whole origin myth. Not a founding vision. Not a garage. A bureaucrat with too many jobs looking down the hall at his counsel.
Crowley is a figure the surviving sources sketch in only a few strokes: a New Deal administrator who ran the deposit-insurance agency Roosevelt's reforms had created, then found himself, in wartime, also responsible for whatever the government had taken from the enemy. His defining trait, in this story at least, is a refusal to be in two places at once. He delegated. The man he delegated to had been with him through the FDIC years, first as legal counsel to Crowley personally and eventually, by Georgetown's account, as the corporation's chief counsel.
Brown was born in Bethesda in 1902. He took a law degree from Georgetown in 1923 and a master of laws there in 1924, which put him into the profession at twenty-one or twenty-two, and he went into government law work, the kind of career that by the 1930s meant New Deal agencies, emergency statutes, and the improvised machinery of a state learning to own and manage things it had never owned before. One corporate history describes him, flatly, as "a New Deal lawyer with no previous experience in the pharmaceutical business." The same history supplies the line that has followed him through every later summary: he "was dealt a hand that would bind his future to Schering."
It is a gambler's metaphor, and a good one, though it understates what happened next. A man dealt a hand can still fold. Brown played it out for twenty-four years.
His first move tells you most of what you need to know about him. The German executives who had run the American subsidiary were gone, their positions vacated by the seizure. Brown, according to the corporate history, "immediately filled vacated executive positions with associates from the FDIC." Bank-insurance lawyers and examiners, people who had spent the Depression deciding which institutions were solvent and which were not, suddenly found themselves running a drug company in New Jersey. It is hard to imagine a less obvious management team for a pharmaceutical firm. It is also hard to imagine a team better suited to the actual problem, which in 1942 was not chemistry. The problem was custody: how to hold an asset belonging to someone else, keep it alive, keep it honest, and keep it worth something until the government decided what to do with it.
In 1943 Brown was formally appointed president.
Seventy-Five Percent of Something
To understand what Brown was handed, go back to the pharmacy.
In 1851 Ernst Christian Friedrich Schering, a twenty-seven-year-old apothecary from Prenzlau in Brandenburg, opened the Grüne Apotheke, the Green Pharmacy, on the Chausseestraße in the north of Berlin. Twenty years later, on October 23, 1871, his chemical business became a joint-stock company. By 1913 it employed 935 workers, 112 master craftsmen, and 180 office staff in Berlin, with factories in Moscow and Idritsa and a plant in Britain, turning over about ten million gold marks on photochemicals and drugs: salicylic acid, the gout preparation atophan, sleeping agents, disinfectants. Schering himself had been dead since December 27, 1889, buried in a Protestant cemetery in Kreuzberg south of the Hallesches Tor. His name kept working without him. That is what names in industry do.
The company began exporting diphtheria medication to the United States in 1894. In 1928 its successor, Schering-Kahlbaum AG, formed a Schering Corporation in New York to distribute its products. By the eve of American entry into the war, the American subsidiary was overwhelmingly a hormone business. Until the end of World War II, according to the corporate histories, a single sex hormone accounted for as much as 75 percent of Schering's sales.
Three of every four dollars, one product, and the product was about to lose its market. The corporate history puts it plainly: "the post-war years marked a reduced demand for sex hormones." Whether that decline was visible from the custodian's desk in 1942 is not something the record says. What the record does say is that Brown, the lawyer with no pharmaceutical experience, looked at the portfolio and concluded the company had to diversify out of hormone therapy, and that "research and development was the key to success in the pharmaceutical industry."
There is something nearly comic in the image of an FDIC counsel arriving at that conclusion — a man whose professional life had been spent assessing concentration of risk in failing banks walks into a drug company and sees, essentially, a bank with one borrower. It is not comic at all if you take seriously what deposit insurance trains a person to see. Brown began building a research department. Like other drug companies of the period, Schering searched medical schools and universities for scientists and students "on the verge of new discoveries." In 1944, with the war still on and the company still the property of the United States government, it established the Schering student competition fund, a talent-spotting mechanism dressed as philanthropy.
Here, briefly, the two Scherings part ways in a manner that the official histories pass over in a sentence or two. In Berlin, in 1938, the German company had acquired the Scherk firm and the Scherk-Haus "in the course of the 'Aryanization,'" the forced transfer of Jewish-owned property. In July 1942, the same year the American subsidiary was seized and handed to Brown, a camp for foreign forced laborers was built on the German factory premises. Decades later, survivors of Nazi medical experiments sued Schering AG and Bayer; one of them, Simon Rozenkier, filed suit on March 25, 2003, alleging that the companies had cooperated with the regime in causing his sterilization. "What they did to me is beyond right and wrong," he told the New York Times.
None of this touches Brown directly. His company had been cut away from the German parent by the seizure; the property he held was the American half. But it is worth sitting with the arithmetic of 1942 for a moment. In Berlin, one company with the Schering name was building a camp for forced workers on its grounds. In New Jersey, another company with the same name was being run by a federal bank-insurance lawyer as a ward of the United States. The name was the same. Almost nothing else was.
The Same Molecule, Twice Named
The research department, in the corporate history's phrase, "could not have found a better moment to discover a new antihistamine." In 1946, by Georgetown's dating, Schering research introduced what the university called "the first popular antihistamine," Chlor-Trimeton.
It went to market twice.
Sold directly to consumers as a proprietary drug, it was Trimeton. Sold to doctors as an ethical drug, it was Chlor-Trimeton. Same compound. Two names, two channels, two audiences who would never compare notes. A corporate history calls it "a turning point in the history of the Schering Corporation," and the numbers bear that out: profits quadrupled, sales reached more than $15 million by 1951.
The dual naming is a small fact that carries a great deal of weight. Brown had inherited a company whose identity was literally on loan, its name the property of an enemy firm and its assets the property of the government, and the first great product of his tenure was a single molecule that existed under two identities depending on who was buying. The man understood, perhaps better than most executives of his era, that a name is a channel and not a substance. You could sell the same thing to a druggist's customer and to a physician as long as each heard the name that belonged to them.
He would later prove less flexible about this than the antihistamine suggests. But that comes further down.
Selling the Seized
Custody is temporary by definition. At some point the custodian has to give the thing back or give it away.
The sources disagree, slightly, on the timing, and the disagreement itself is instructive about how thin the record of this man's working life has become. One corporate history says that in 1951 "the U.S. attorney general put the company up for sale." Wikipedia's account says the company stayed under government administration "until 1952, when it was released, and its assets sold to the private sector." Georgetown's citation dates the release from government control to 1953. Some combination of these is true; the process of selling a seized company in the early 1950s was neither instantaneous nor simple, and different documents marked different moments of it.
What is not in dispute is the buyer and the outcome. A syndicate led by Merrill Lynch outbid the other prospective purchasers and, according to one corporate history, proceeded to sell $1.7 million of stock to the public. And then the new investors did something that tells you exactly what they thought they had bought. They asked Brown to stay.
They were not buying a laboratory or a hormone franchise or even an antihistamine. They were buying a company that had been run competently for a decade by a man who had no ownership stake in it whatsoever, and they wanted the man more than they wanted the assurance of their own management. Brown accepted. Georgetown's citation says the investors "kept Brown as its CEO and chairman." The custodian became the chief executive. The ward became a public company. The man who had been minding someone else's property for the government now ran it on behalf of shareholders who had bought it from the government, and in none of those configurations did he own the thing he was running.
The 1950s went well. By Georgetown's account, what the citation describes as "the subsequent discovery of cortisone" carried Schering's sales to $80 million by 1957. From $15 million at the start of the decade, that is better than a fivefold climb in six years, achieved by a company that a few years earlier had depended on one hormone for three-quarters of its revenue.
On April 29, 1954, in the ballroom of the Waldorf-Astoria in New York, Georgetown gave Brown its John Carroll Award, the alumni honor named for the university's founder. He shared the evening with J. Caleb Boggs, the governor of Delaware, and the Reverend Robert I. Gannon, S.J., who had been president of Fordham. The program listed Brown's address as Bloomfield, New Jersey, where the company had its offices, and his title as chairman of the board of the Schering Corporation. Three years later Georgetown gave him an honorary doctorate of laws, his third degree from the school, and eventually he sat on its Board of Regents.
The picture that emerges from these honors is of a man fully arrived: a Catholic university's favored son, a public-company chairman, a fixture of the Waldorf ballroom circuit. And yet the institutional histories of Schering itself barely note him. The Wikipedia list of the company's chief executives begins in 1971. Brown's name does not appear.
The Revlon Refusal
There is one story about Brown's judgment that every corporate history repeats, and it is a story about a door he chose not to open.
At some point during his tenure, Revlon proposed a deal to market certain Schering pharmaceuticals "as high-volume items." This would have meant, in the language of one history, "high-profile marketing through television advertisement," a drug company's products moving through a cosmetics company's machinery, sold on screens to consumers the way lipstick was. Brown said no. His "successful but conservative business style," the history explains, "did not make him receptive to the combination of drug and cosmetic advertisement and marketing."
Then the history adds a sentence that is either gently ironic or simply observant: "Interestingly enough, it is this very combination of drugs and consumer products that has contributed to the longevity of the company."
To feel the full weight of that irony, you need to meet Abe Plough.
In 1908, in Memphis, Tennessee, a sixteen-year-old named Abraham Plough borrowed $125 from his father and went into business. He was the entire company. He mixed something he called Plough's Antiseptic Healing Oil and sold it off a horse-drawn buggy, advertising it as "a sure cure for any ill of man or beast." From that buggy he built an empire of exactly the sort Brown distrusted: St. Joseph Aspirin for children, Maybelline cosmetics, Coppertone sunscreen, Di-Gel, and, for good measure, a chain of radio stations in Atlanta, Baltimore, Boston, Chicago, and Memphis, the very medium through which such products were pushed into American kitchens. Plough was, in the words of the corporate history, "the founder and marketing genius behind Plough, Inc." He was everything the custodian was not: an owner, a founder, a pitchman, a man whose name was his own and went on the label.
Brown's Schering would not sell drugs alongside cosmetics on television. Plough's company sold Maybelline and aspirin and owned the stations.
In 1971, five years after Brown's death, the eighty-year-old Plough, looking for a successor, merged his company into Schering. The matchmaker was Willibald Hermann Conzen, Schering's German-born chief executive, with whom Plough had, in the corporate history's phrase, an "unlikely friendship." It was Conzen who designed the merger and who became the combined company's first CEO. Plough became chairman. The new firm, Schering-Plough, combined Schering's antibiotics, antihistamines, and ethical drugs with Plough's household brands. Coppertone. Di-Gel. Maybelline.
The company Brown had protected from the cosmetics trade was now, by merger, partly a cosmetics company. And its longevity, its own historians would conclude, owed something to exactly the combination he had refused.
It would be easy to make Brown the loser in this comparison and Plough the visionary. That reading is too easy. Brown's conservatism took a seized company with a one-product dependency to $80 million in sales without the consumer apparatus; Plough's flamboyance took a buggy and a jug of oil to a national brand portfolio. Both worked. What they could not do was coexist under one man's judgment. It took the next generation of management, a German-born chief executive with no stake in either man's style, to marry them.
There is a further symmetry the record offers without comment. Plough was from Memphis, Tennessee. So, in a manner of speaking, was the trouble that came for Brown at the end of the 1950s.
Steamroller
Estes Kefauver, Democrat of Tennessee, chaired the Senate Judiciary Committee's Subcommittee on Antitrust and Monopoly. In December 1959 the subcommittee turned its attention to drug pricing, and to steroid marketing and pricing in particular. Steroids were, by then, at the heart of Schering's business.
The trade press account, published in Chemical & Engineering News on December 21, 1959, under the headline "Drug Industry Served Black Eye," is brutal and brief. The industry "took a pounding." The subcommittee "ripped into drug industry practices in general." Its accusations "grabbed headlines around the country": prices and profits too high, licensing practices possibly in violation of antitrust law, some advertising misleading. And one number, the kind of number a hearing is designed to produce: Kefauver's aides "put profits on one hormone product at 10,000%."
Then the sentence that matters most for this story, set off in dashes in the original as though the writer were lowering his voice:
— Chemical & Engineering News, December 21, 1959Schering's president Francis C. Brown faced a steamroller attack from the Kefauver group from which he never really recovered.
The magazine had covered his testimony the week before, on page 23 of its December 14 issue. Other drug executives, it reported, "managed some small successes" in presenting the industry's case, arguing that research, distribution, and promotion costs kept prices high. Brown, apparently, was the one who went first and got flattened.
Consider who was standing at the witness table. A man who had spent the 1930s as a government lawyer at a New Deal agency, who had come to Schering not as an entrepreneur but as an agent of the federal state, who had run the company for a decade as a public trust, was now being cross-examined by the federal state about whether he had gouged the public. The staff who prepared the case against him were, in all likelihood, the same species of lawyer and analyst that Brown and his FDIC associates had once been.
Nobody said this better, or more pointedly, than an unlikely correspondent. On November 17, 1961, Ludwig von Mises, the Austrian economist and the most uncompromising defender of free markets in American intellectual life, wrote to "Mr. Francis C. Brown, President, Schering Corporation, Bloomfield, New Jersey." Mises had met Brown and other drug-industry representatives and wanted to follow up.
— Ludwig von Mises, letter to Francis C. Brown, November 17, 1961The attacks upon the conduct of your industry are backed by the laborious efforts, pursued for many years, of many hundreds of lawyers and statisticians employed in the offices of various government agencies, institutes for alleged economic research and other outfits.
It is difficult to read that sentence without hearing the echo. Many hundreds of lawyers employed in the offices of government agencies: twenty years earlier, that had been a description of Francis Brown. Mises was writing, without knowing it or perhaps without caring, to a man who had come out of the very apparatus he was describing.
Mises went on, and his letter is worth more than a glance, because it is a strategic critique, not a pat on the back. The government's "enormous amount of material," he argued, was "arranged and manipulated in such a way as to provide an apparent, although spurious, justification" for the criticism, and its force "cannot be exposed by a short address delivered on some special occasion or by a memorandum dealing in a cursory way with one or a few of the problems involved." What was needed was "independent, impartial institutes staffed by competent researchers." And then the sting: private enterprise "has not only neglected to establish such independent, impartial research facilities, but has financially contributed to the upkeep of all those institutions that are imbued with a spirit hostile to freedom and free enterprise."
In other words: you lost because you showed up with a speech, and they showed up with a decade of files. And some of the files were paid for by you.
The letter closes graciously. Mises had read "with great interest the fine address you delivered at your company's 1961 Stockholders' Meeting," which Brown had evidently mailed him as a pamphlet. We do not have the address. That is the frustrating fact about Brown in the record: we have what was said to him and about him, a Senate subcommittee's charge, a trade magazine's verdict, an economist's courteous lecture, Georgetown's citation, and almost nothing in his own words. The stockholders' speech that Mises admired has not, so far as the sources here show, survived into any public archive. The man who ran Schering for twenty-four years is, in the documentary record, very nearly mute.
A Chorus of Francis Browns
Try to find him and you find everyone else.
Search the archives for Francis C. Brown and the results arrive like a crowd at a train station, each figure turning around to reveal a different face. A Hartford obituary for a Francis C. Brown of New Britain, Connecticut, born July 31, 1929, who spent his career at American Hardware, later Emhart, enjoyed gardening, and was buried at Chevra Kadisha in Worcester in December 2004. A Francis C. Brown of Osceola, Iowa, son of Charles and Viola, who graduated from Clarke Community High School a semester late in 1963 in a ceremony held in the superintendent's office ("Francis Brown completed his course of study, graduated on this day, and received his diploma") and was discharged from the Army in November 1965 with a heart condition. He remembered the principal, Oakley Pickup, as "short and bald." He could not remember the superintendent's name. A letter in the Theodore Roosevelt papers dated February 4, 1918, from Josephine M. Stricker, Roosevelt's secretary, to an F. C. Brown, catalog record still marked "in progress." A Francis C. Brown oil painting of Rockport, Massachusetts, for sale in Cincinnati for $1,600, hung on the website beside the work of a different Francis Brown, Francis Focer Brown, an Indiana Impressionist. A pair of journal articles, "The Impact on Business Firms. II," from September 1962, and "Toward a Science of the Mind," from January 1963, credited to a Francis C. Brown. Whether either is the Schering chairman, mid-fight with Kefauver's staff, reaching for a broader public argument in the way Mises had urged, the index does not say, and neither, honestly, can I.
Even the bookshelf plays the game. Look for the man under a near-variant of his name and you are offered Francis J. Browne, a volume devoted to someone else entirely, sitting on the digital shelf where a biography of the Schering chairman might have been, had anyone written one.
Some of the namesakes rhyme with him so closely it is unsettling.
Francis Cashel Brown, born in Haysville, Ontario, on April 29, 1851, the son of a Londonderry-born merchant, came to New York in 1875 and put his money and "business acumen" behind a stylographic pen invented by another Canadian, a man named MacKinnon. The pen, his family's biography admits, "lacked the qualities for permanent success," but "under Mr. Brown's management, the enterprise flourished for a time." He went on to found Caw's Pen and Ink Company, and his own autobiographical account of the fountain pen's history was, in the judgment of one modern pen historian, "so self-effacing and unassuming." The flattering frame his descendants wrapped around it was another matter. A manager of somebody else's invention, quieter than the legend built around him.
Frank Clyde Brown, born in Harrisonburg, Virginia, in 1870, spent his career at Trinity College in Durham as a professor of English and, when Trinity became Duke, served as the new university's first comptroller in 1926, the liaison between the president and the architects and contractors, credited with proposing the Hillsborough stone the buildings are clad in. On the side he collected 38,000 items of North Carolina folklore from at least eighty-four counties, recording ballad singers onto wax cylinders with a dictaphone and later, after the Duke Research Council granted him $295 in 1939, onto aluminum discs with a gasoline-powered Presto machine. When the Folklore Society he founded elected him president and the man elected secretary-treasurer complained about his own post, Brown simply swapped jobs with him and stayed secretary-treasurer for thirty years. "He was never able to stop collecting long enough to actually assemble his material," one account says. The seven volumes bearing his name were published after his death. An administrator of an institution built on another family's money, whose name ended up on the result only posthumously.
And there was a Francis Brown who presided over Dartmouth College from 1815 to 1820, a pastor from North Yarmouth, Maine, who led the trustees' resistance when New Hampshire's legislature tried to amend the college's 1769 charter and turn it into a state institution. Daniel Webster argued the case; Chief Justice Marshall ruled for the college, establishing that private institutions could run their affairs under their charters "without interference from the state." The four-year fight ruined the college's finances and Brown's health. He died in July 1820, at thirty-five. A man who spent himself defending a private corporation's charter against the state.
None of these men is Francis Cabell Brown. All of them, taken together, sketch a shape he fits: the steward, the manager, the comptroller, the defender of the charter, the person who holds the thing while someone else's name goes on it. A name as common as Brown's is its own kind of anonymity. You can stand at the center of an industry for a quarter century and still be outnumbered in the catalog by a gardener in New Britain.
Brussels
In 1966, on vacation with his family in Brussels, Francis Brown was killed in an automobile accident. He was sixty-three or sixty-four. The sources say nothing else about it. No date, no road, no other car. Just the city, the year, the vacation, the family, the crash.
What happened afterward happened without him, and mostly at a pace he would have found unseemly. Five years later, Abe Plough's company and Brown's were one firm. In 1982 the Schering Corporation sued Schering AG over the right to the name. The German firm counterclaimed that the name "properly is used as a surname," which is to say that it belonged to a person before it belonged to a product. Judge Fisher wrote his findings in 1987. In 2002 the company signed a consent decree with the FDA over manufacturing problems with its albuterol inhaler and was ordered to pay $500 million to the Treasury. In 2007 it bought the Dutch drug unit Organon BioSciences from Akzo Nobel for $14.4 billion. In 2008 Schering-Plough reported revenues of $18.5 billion and net income of $1.9 billion. On March 10, 2009, the New York Times reported that Merck would buy it for $41.1 billion; on November 4, 2009, the deal closed through a reverse merger in which, technically, Schering-Plough survived and renamed itself Merck.
So the name that had been seized, held, sold, defended in court, finally went away by agreement. Brown's Schering became Merck. And in Berlin, three years earlier, the German Schering had been the target of a €14.6 billion bid from the German Merck, Merck KGaA, before Bayer swept in as a white knight and took it. Both Scherings, at the end, with a Merck circling. Neither, at the end, with the Schering name on the door.
Two things carried Brown's name forward instead.
One was his son, or so every detail insists. A Francis Cabell Brown Jr., born January 6, 1936, graduated from Princeton's Woodrow Wilson School in 1958 and from Harvard Law in 1961, then practiced law in New York, "as a solo practitioner for most of his professional life." The same full name, the same unusual middle name, the junior. He was a collector. He gave Princeton more than 150 documents on slavery in America, bills of sale for human beings, many of them sold to an Andrew Hynes of Tennessee; deeds of manumission; free papers; a Civil War discharge for a Black Union sergeant; a loyalty oath signed by a Southern planter just after the war. And in 1980 he gave Princeton thirty-two bound volumes, each built around a single original French royal marriage contract, spanning 1607 to 1846, Marie de Médicis to Louis-Philippe, with portraits and biographical sketches of the witnesses who had signed. The signatures include Louis XIII, Louis XIV, Louis XV, Louis XVI, Napoleon Bonaparte, Marie Antoinette, Richelieu.
The son of a man who had spent his life holding title to someone else's property collected, of all things, documents of title. Papers that made people into property and papers that freed them. Contracts that joined great names to one another, witnessed and signed by kings. One does not need to over-read it. The boxes are in the Manuscripts Division at Firestone Library, available in the reading room, not digitized.
The other thing was a seat.
After Brown's death, the Schering Foundation endowed a professorship at Georgetown in his memory. It was the first endowed faculty chair in the university's history. The money came from a company named for a pharmacist who had opened a green-painted shop on the Chausseestraße in 1851 and been dead for seventy-seven years, a company that had become American only because the government seized it in a war. The subject was international law, the body of law that governs what nations may take from one another, and what they owe back. And the name on the chair, finally, after a quarter century spent minding somebody else's, was his own: the Francis Cabell Brown Chair in International Law.
Part IIThe Playbook
Francis Brown left almost no words behind, which means his playbook has to be read off his decisions the way a geologist reads a sequence of ash layers: by what was deposited, in what order, and what it rested on. What follows are twelve principles drawn from the record of a man who never owned the company he ran, yet ran it as though nothing else mattered. Some of them are lessons in what worked. A few are lessons in what it cost him.
The principles
- 1.Run the thing as if you'll be asked to stay.
- 2.Staff the emergency with people you've already audited.
- 3.Read a balance sheet like a bank examiner.
- 4.Build the lab before the market turns.
- 5.Let one product wear two names.
- 6.Make yourself the asset that survives the sale.
- 7.Price your restraint honestly.
- 8.Expect to be prosecuted by your former self.
- 9.Explain your margins before someone else does.
- 10.Fund the argument, not just the rebuttal.
- 11.Separate the name from the enterprise.
- 12.Leave a record in your own voice.
S
The Custodian's Arc
From federal ward to public company: the key moments in Brown's tenure and its aftermath.
1851
Ernst Schering opens the Grüne Apotheke on Berlin's Chausseestraße.
1928
Schering-Kahlbaum AG forms Schering Corporation in New York as a U.S. distributor.
1942
U.S. seizes Schering's domestic assets; Leo Crowley asks Brown to serve as custodian.
1943
Brown formally appointed president of Schering.
1944
Schering student competition fund established.
1946
Chlor-Trimeton introduced; sales climb toward $15 million.
1951–53
Company put up for sale; Merrill Lynch syndicate buys; investors keep Brown.
1957
Sales reach $80 million.
1959
Kefauver subcommittee hearings; Brown faces a "steamroller attack."
1961
Ludwig von Mises writes to Brown about the industry's defense.
1966
Brown killed in an automobile accident in Brussels.
1971
Schering merges with Plough, Inc.
1987
Federal court rules in the fight over the Schering name.
2009
Merck completes its $41.1 billion acquisition of Schering-Plough.
Principle 1
Run the thing as if you'll be asked to stay
Brown's original mandate was to hold Schering's assets for the duration, a caretaker's job with a built-in expiration. Caretakers have every incentive to do the minimum: preserve value, avoid embarrassment, hand back the keys. Brown did the opposite. He diagnosed a structural weakness, built a research department, launched a talent pipeline, and shepherded a blockbuster to market, all while the company belonged to the government and he owned none of it.
That behavior is what made him valuable at the moment of sale. Investors who had just bought a company from the attorney general looked at the incumbent manager and asked him to remain. Interim leadership rarely survives a change of control; Brown's did because he had never behaved like an interim.
The principle generalizes to anyone running something they don't own: a division slated for divestiture, a fund mandate with a sunset, an acting role. The temporary steward who invests as if permanent is the one whose temporary status disappears.
Tactic: In any interim role, make at least one long-horizon investment in the first year that only pays off if the institution outlives your tenure.
Principle 2
Staff the emergency with people you've already audited
When the German executives vanished, Brown did not recruit pharmaceutical veterans. He "immediately filled vacated executive positions with associates from the FDIC." On paper it was a bizarre choice: bank-insurance lawyers running a drug company. In practice, Brown was solving for the scarcest resource in a seized enterprise, which was trust, not domain expertise.
He knew how these people behaved under scrutiny, how they handled ambiguous authority, how they reported bad news. A seized company in wartime is under constant federal observation; the first requirement of management is clean custody. Domain knowledge could be bought later, and was, through the research department and the student fund.
Tactic: When you inherit a broken organization, fill the control positions first with people whose judgment you have personally tested, and hire for technical expertise second.
Principle 3
Read a balance sheet like a bank examiner
The single most consequential diagnosis of Brown's career was that a company drawing up to 75 percent of its sales from one sex hormone was dangerously concentrated. He reached it without any pharmaceutical background, which may be the point. He came from an agency whose entire function was assessing which institutions would fail, and concentration of exposure is the first thing such people look for.
Industry insiders often normalize their own concentration risk; the hormone franchise was what Schering was. An outsider trained in solvency analysis sees only the exposure. When postwar demand for sex hormones fell, the company already had the research capacity to replace it.
Tactic: Run a quarterly "examiner's review" of your own business by asking what share of revenue depends on a single product, customer, or channel, and treat anything above half as a solvency question rather than a strategy one.
Principle 4
Build the lab before the market turns
Brown began building research capacity during the war and established the Schering student competition fund in 1944, while the hormone business was still carrying the company. The antihistamine that rescued Schering arrived in 1946, almost exactly as the hormone market softened. One corporate history calls the timing lucky: the research department "could not have found a better moment."
Luck is only half the story. The department existed because it had been funded during the good years. Research timelines are long and market turns are fast; the only way to have a replacement ready when the core product declines is to have started looking while the core product was still paying for everything.
Tactic: Commit a fixed share of your strongest product's profits to developing its replacement, and protect that budget hardest in the years when it seems least necessary.
Principle 5
Let one product wear two names
Schering sold the same antihistamine as Trimeton to consumers and Chlor-Trimeton to physicians. One molecule, two identities, two distribution channels. The doctor heard the name that signaled clinical seriousness; the drugstore customer heard a name that worked on a shelf.
This is segmentation at the level of identity, not price. Brown, steward of a company whose own name was on loan, understood that names are interfaces to audiences, not properties of the substance underneath. The same insight governs much of modern product strategy, from white-label goods to enterprise and consumer editions of the same software.
Tactic: Before launching a product into a second audience, ask whether it needs a second name that speaks that audience's language rather than a second version of the product.
Principle 6
Make yourself the asset that survives the sale
When the Merrill Lynch syndicate bought Schering, it acquired plants, patents, and a brand. What it chose to keep at the top was a man with no equity, no founder's mystique, and no pharmaceutical credentials beyond a decade of results. The investors "asked Brown to remain on as company president."
Management that survives a change of control does so because the buyer concludes the manager is inseparable from the value being purchased. Brown achieved this not through self-promotion (the record suggests he did very little of that) but by being the visible author of the company's turnaround: the diversification, the research build-out, the antihistamine, the profits.
Tactic: Make sure the two or three decisions that created the most value in your unit are documented and attributable, so that any acquirer can see who made them.
Principle 7
Price your restraint honestly
Brown turned down Revlon. The proposed deal would have pushed Schering drugs through cosmetic-style television marketing as high-volume consumer items, and his "conservative business style" would not allow it. The decision protected the company's ethical-drug identity and fit the cautious culture that had grown it to $80 million.
But restraint has a price, and the record states it plainly: the "very combination of drugs and consumer products" Brown refused "has contributed to the longevity of the company," once Abe Plough's brands arrived in 1971.
⚖
Two Theories of the Drug Business
The custodian and the founder, compared.
| Dimension | Francis C. Brown (Schering) | Abe Plough (Plough, Inc.) |
|---|---|---|
| Origin | Government-appointed custodian of seized assets Steward | Borrowed $125 at 16; sold oil off a buggy Founder |
| Ownership | None; ran it for the state, then for shareholders | His name, his company |
| Channel | Ethical drugs; refused TV cosmetics-style marketing Risk | Maybelline, Coppertone, St. Joseph Aspirin, radio stations |
| Growth engine | Research department; antihistamines; steroids | Brands and promotion |
| Legacy | A chair in international law | Chairman of the merged Schering-Plough Scale |
The lesson is not that Brown was wrong. It is that a "no" is a decision with consequences, and the consequences should be estimated with the same rigor as a "yes."
Tactic: For every major opportunity you decline, write down what you expect it would have earned and revisit that estimate in five years.
Principle 8
Expect to be prosecuted by your former self
Brown spent the 1930s as a government lawyer. In December 1959 he sat across from a Senate subcommittee staffed by government lawyers and was, by the trade press's account, steamrolled. Mises's letter two years later described the industry's attackers as "many hundreds of lawyers and statisticians employed in the offices of various government agencies," an accurate portrait of Brown's own earlier career.
The danger here is overconfidence. A former insider assumes he knows how the other side thinks and therefore underprepares. Kefauver's staff had spent months building a case; the executives arrived with testimony. Knowing the opponent's culture is not the same as matching its preparation.
Tactic: When facing a regulator, auditor, or investigator from a world you once belonged to, prepare as though you had never worked there.
Principle 9
Explain your margins before someone else does
The headline number of the Kefauver hearings was not Schering's to control: staff estimates put "profits on one hormone product at 10,000%." Once a figure like that is in circulation, no rebuttal about research and distribution costs catches up with it. Other executives "managed some small successes" by explaining cost structures, but by then the frame was set.
Any business with unusually high margins on a specific product carries a latent narrative risk. The defense is not secrecy but prior, public, plain-language explanation of where the money goes, offered before anyone hostile has a reason to compute it for you.
Tactic: For your highest-margin product, publish or prepare a one-page cost-and-value explanation that a skeptical journalist could understand, and keep it current.
Principle 10
Fund the argument, not just the rebuttal
Mises's critique of the drug industry in 1961 was strategic, not ideological. The government's case rested on years of accumulated research; it "cannot be exposed by a short address delivered on some special occasion." The industry needed "independent, impartial institutes staffed by competent researchers," and instead had, in his account, funded institutions hostile to its own position.
Brown had applied exactly this patient logic to science: build the research department years before the antihistamine. Mises was asking him to apply it to public argument. Whether he ever did is not in the record. The asymmetry Mises described, organized evidence against occasional speeches, remains the standard way industries lose policy fights.
Tactic: If your business depends on a public argument, invest in long-horizon, credible research on that question years before you need it, rather than commissioning a defense after the attack.
Principle 11
Separate the name from the enterprise
The Schering name was seized, sold, merged, litigated, and finally retired. In 1987 two companies fought over it, though neither employed anyone named Schering. In 2009 Brown's company took the name Merck. Meanwhile the enterprise underneath, its research, its products, its people, kept compounding through every change of label.
Brown's career is a case study in that separation. He built enormous value under a name he never owned and that ultimately disappeared. The things that persisted were the capabilities he created and, eventually, a professorship carrying his own name, endowed by the company's foundation.
Tactic: Measure your work by the capabilities it leaves behind, and assume any brand you operate under may be renamed, sold, or contested within your lifetime.
Principle 12
Leave a record in your own voice
The most striking fact about Francis Brown in the historical record is how little of it is his. We have a Senate subcommittee's charge, a trade magazine's verdict, an economist's letter, a university citation, and a court opinion that never mentions him. We do not have his stockholders' address. We do not have a memoir. Search his name and you get a Connecticut gardener, an Iowa private, a Canadian pen merchant, a Duke comptroller, and a book about someone else entirely, Francis J. Browne. Schering's own list of chief executives begins after his death.
Modesty was part of his method; the steward does not put his name on the door. But modesty that leaves no trace lets others write your history, or leaves it unwritten. The custodian who spent two decades making someone else's name worth fighting over left his own name almost undiscoverable.
Tactic: Once a year, write down in your own words the most important decision you made and why, and put it somewhere it will outlast your job.
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Part IIIQuotes and Maxims
In their words
— Ludwig von Mises, letter to Francis C. Brown, President, Schering Corporation, November 17, 1961It is a fact that private enterprise has not only neglected to establish such independent, impartial research facilities, but has financially contributed to the upkeep of all those institutions that are imbued with a spirit hostile to freedom and free enterprise.
— Ludwig von Mises, letter to Francis C. Brown, November 17, 1961The ostensible conclusive force of these alleged "facts" cannot be exposed by a short address delivered on some special occasion or by a memorandum dealing in a cursory way with one or a few of the problems involved.
— Corporate history of Schering-Plough, on Brown's arrival at ScheringFrank Brown, a New Deal lawyer with no previous experience in the pharmaceutical business, was dealt a hand that would bind his future to Schering.
— Chief Judge Clarkson S. Fisher, Schering Corp. v. Schering Aktiengesellschaft, August 28, 1987This case arises from the parties' competing claims to the right to use the name "Schering" in this country.
— Label of Plough's Antiseptic Healing Oil, Memphis, 1908A sure cure for any ill of man or beast.
Maxims
- Steward like an owner. The interim manager who invests for the long term is the one who stops being interim.
- Trust before expertise. In a crisis, fill the control seats with people you have already tested, then buy the specialized knowledge.
- Concentration is a solvency question. Three dollars of every four from one product is not a franchise; it is an exposure.
- Fund the replacement in the fat years. The research that saves you has to be paid for by the product it will replace.
- Names are interfaces. The same molecule can speak to doctors and to drugstore shoppers if each hears its own name.
- Every "no" has a price. The deal you refuse may become the strategy your successors adopt.
- Prepare against your old colleagues as against strangers. Familiarity with the other side is not a substitute for matching its homework.
- Explain the margin first. A hostile number travels faster than any rebuttal.
- Speeches lose to files. Public arguments are won by research begun years before the hearing.
- The name is not the enterprise. Brands get seized, sold, and renamed; capability is what compounds.
