McGaw, Foster G., 1897-1986
Foster Glendale McGaw was the founder and guiding force behind the American Hospital Supply Corporation, a multinational firm headquartered initially in Chicago and then in the adjacent suburb of Evanston. Under his direction AHSC grew during the course of the twentieth century from a small distributor of hospital supplies into a giant dominating a field that, for the most part, did not exist until McGaw invented it. As a result in part of his foresight and energy, AHSC expanded into every facet of the hospital supply industry, from the manufacture of rubber gloves to hospital planning and decorating. Over the years its structure was adjusted in response to new opportunities as AHSC adopted a strategy of market segmentation and vertical integration. The resulting vigorous growth elicited a rationalization of operations, demonstrating the salutary flexibility which was an important factor in the company's success. In addition to his activities as a businessman Foster McGaw was also a lavish philanthropist, bestowing funds on a variety of institutions from Chicago and Evanston area hospitals and Presbyterian welfare organizations to major universities. Along with his concern for education, he was deeply engaged with other social and political issues of the day. As a civic leader he disbursed money to conservative organizations and politicians including President Richard M. Nixon and U.S. Senator Jesse Helms.
McGaw was closely connected with Northwestern University: he was for many years a member of the University's Board of Trustees and a close friend of Northwestern president J. Roscoe Miller. As a young man he was briefly enrolled in an evening class at the Chicago campus of Northwestern; his second wife, Mary Wettling Vail, attended the University for two years; and his step-grandson, James T. Vail IV, was a graduate. McGaw displayed conspicuous generosity to the University with donations through the years totaling over $20 million.
Foster McGaw came from a Scottish-American family with strong Presbyterian convictions and several ministers and elders in its line. He was born in the Appalachian town of Hot Springs, North Carolina, on March 7, 1897, the only boy of four siblings. His parents, the fundamentalist Presbyterian minister Francis A. McGaw and his wife, English-born concert pianist Alice Millar McGaw, soon left North Carolina for the Midwest, settling eventually in Keokuk, Iowa, where Rev. McGaw was taken on as pastor by the local congregation. When Foster McGaw was twelve his mother, long an invalid, succumbed to the complications of rheumatism and died. Her husband stayed with his flock for some years until its progressive tendencies compelled him to resign his duties. His fundamentalist scruples left the family's always tenuous finances further compromised, forcing the son to quit high school at the end of his sophomore year. He was hired as a clerk at a district office of Standard Oil, where he worked for two years and achieved eighteen promotions. Upon his return to school McGaw, in a display of characteristic grit, completed both junior and senior courses in one year. The very evening of his graduation in 1915 he departed the family home for Chicago, and started work at Huston Brothers Company, a surgical supply outfit, the next morning.
Showing much promise, McGaw persuaded the firm's owner to let him sell on the road, mostly to doctors, and a few hospitals, in Iowa, Minnesota, and the Dakotas, during the course of which he jumped freight trains to get from one town to the next. He left his employer to serve in the U.S. Marine Corps near the end of World War I and was stationed at Guantanamo Bay, Cuba, where he won stripes with his bureaucratic skills behind a desk; in future years he would refer with some pride to his youthful association with the military. Upon his discharge he returned to the surgical supply trade, his vision sharpened by experience and a new maturity. After another term with his former employer, he was induced by fellow salesman Arthur L. Towner to sign on with the Colonial Hospital Supply Company, one of the earliest hospital supply concerns.
From this new position he saw an industry fraught with inefficiency and corruption. He sensed a future for the burgeoning commerce in medical supplies, were it rationalized and cleansed of unsavory practices. He likewise realized that that future lay increasingly with the network of hospitals spreading rapidly throughout the country, rather than with individual doctors who had until then comprised the bulk of the medical supplies market. Thus he conceived of a service industry that would assure the efficient distribution from a central repository of diverse medical goods produced by different manufacturers, an idea not entirely new then but still inchoate in its realization. This service, however, was by itself not sufficient: it needed to be prosecuted efficiently, at reasonable cost, and with ironclad integrity. In emphasizing these elements, Foster McGaw would project his personal values onto the nascent industry.
After working some time for Colonial, McGaw and Towner attempted unsuccessfully to purchase the company from its owner. Subsequently, following discussions in 1922 with Chicago notable and friend Harry L. Drake, who agreed to provide venture capital, and with Drake's close associate, attorney Charles F. Hough, who was enlisted as legal counsel, these four businessmen became partners in a firm they called the American Hospital Supply Corporation. From this nucleus, what was to become a corporate powerhouse was born, and with it an entirely new industry. Although many would contribute over the years to the emergence of AHSC as the acknowledged leader in its field, few would dispute the critical role of Foster McGaw in making it such.
Early in the Depression, when his company was in its infancy and before he had made his fortune, Foster McGaw declared his intention to get rich and then give most of his money away. He proclaimed himself to be “only God's steward” in the managing of his own financial interests. In a typical statement of principle McGaw declared that “The more one has in talents or means or both, the more one owes to others... Sharing brings the greatest joy of all.” These were not just pretty sentiments, for the scope of his eleemosynary involvement was staggering. Although the exact total is not known, he donated many millions of dollars to around three hundred educational, medical, religious, cultural, and social institutions. In 1970 alone he gave $1 million dollars each to seventeen colleges, in building funds and scholarships. His solicitude for the recipients of his largesse was genuine: the beautiful Alice Millar Chapel of Northwestern University which he funded was intended to be a haven where students could refresh themselves through meditation and devotion. When an elderly and infirm African American woman in McGaw's community, unknown to him personally, appealed to him for a loan with a detailed plan for its repayment, he replied that loans were strictly against his principles and proceeded to make her an outright gift, with no questions asked. “Give more than you get,” he adjured.
He financed construction of Northwestern's McGaw Memorial Hall which hosted the Assembly of the World Council of Churches in 1954, and the McGaw Medical Center of Northwestern University (at about $20 million) in 1970. Numerous academic endowments were established, such as that for McGaw scholarships in hospital administration; and there was a McGaw medal of excellence for outstanding hospital administration educators. The range of educational institutions benefiting from McGaw's funds extended from Dartmouth College and Northwestern University to Wooster College in Ohio and the Piney Woods Country Life School in Pippa Passes, Kentucky. Some of his philanthropic activities were the result of personal ties—his connection with Northwestern has already been noted, and his stepson James D. Vail III and long-time top AHSC officer Thomas Murdough were alumni of Dartmouth. Denison University in Ohio, alma mater of McGaw's deceased stepdaughter, Jeanne Vail, was the recipient of funds to establish the Vail Program, which sponsored scholarships and performers in the fine arts. His philanthropic resources were directed particularly to entities that would uphold his values. A number of colleges and universities to which he had contributed granted him honorary degrees, ranging from an Honorary Doctorate of Law from Maryville College in Tennessee to an Honorary Doctorate of Humane Letters from Northwestern University. He also took an active part in the affairs of several schools as a member of their boards of trustees.
Tall, erect, and soft-spoken, he was a man best characterized perhaps as a practical idealist. McGaw kept in his files copies of poems (for instance, by his esteemed Henry Wadsworth Longfellow), maxims, and quotations that reflected his world view. With the conviction of the self-made man he was given to aphorism and pithy observation. “Information is the Genesis of ideas. Ideas create action—only actions develop results,” was a representative formulation. The image of his father Francis, who died in 1944, seems always to have hovered over him as a beacon and goad. His father lived a life of Christian devotion and self-sacrifice and was given to scriptural speculation. He spent the final years of his life ministering to the flock at his own mission in Nairobi, Kenya. The last view Foster McGaw had of his father was of a distant figure perched atop the receding bow of the steamer that took him to Africa. Although he was largely absent from his son's life, the pastor's spirit was enthralling. “Father in his own religious zest,” McGaw said, “was as close to the Apostle Paul as any man I have ever known. He lived for Christ, worked for Christ, and died for him...” His mother Alice Millar McGaw, on the other hand, was more likely to stress the realities of earning a living and the value of hard work. The two streams combined in her son to render a man with a ferocious sense of mission in this world, with an eye to the next.
In his business dealings McGaw was guided by a strong commitment to service and rectitude. He operated on the assumption that “any company to be profitable—or even to survive—must perform some important service for others,” and he conducted his affairs upon what he took to be solid Christian principles. The needs of his customers and the quality of his products were the lodestones by which he navigated. During World War II, when others were making out handsomely on the conflict, he bridled at the notion of profiteering. McGaw attended to the personal well-being of employees with paternalistic alacrity. Though he would countenance no hint of a unionized work force, he committed his corporation to strong benefits and profit-sharing and a retirement plan for its workers.
His “Dear Friend” letters to hospital administrators, dispensing helpful notions and news of innovations in their field, won goodwill for AHSC, while his practice of sometimes sending hospital administrators works of art on their birthdays was an affecting demonstration of interest. Corporate growth, McGaw held, allowed for better and more personal service, which conduced ultimately to the health of hospital patients. An example of his real concern for those requiring medical attention was evidenced in a letter of commendation to an employee whose efficiency helped save a patient's life. McGaw was also alert to the importance of competent hospital administration and able nurses: he devoted time and resources to ensuring that the quality of both professions was high. Determined that nurses receive due acknowledgment, he lobbied the Postmaster General and the United States House of Representatives for the issuance of a stamp honoring their calling.
Foster McGaw's encompassing public spiritedness colored his every action. He was the champion of a free-market America always in danger of being undermined. Many of his philanthropic resources were channeled toward institutions whose values reflected his own; the vast list of institutions of higher learning to which he contributed was comprised in good part of schools with a solid Christian orientation, and his donations to public policy think tanks like the Manhattan Institute for Policy Research and the Rockford Institute were extravagant as well. McGaw tirelessly canvassed academic and political leaders in support of nuclear power, and restoring prayer to and distributing bibles in public school. He inveighed against the Panama Canal treaty and questioned the need for the United Nations and the U.S. Department of Education.
He was “guided by a «Superior Power»” and projected himself into the forefront of an envisaged offensive to shore the foundations of American civilization. His correspondence attests to numerous connections with like-minded social thinkers, of national or regional stature like President Richard M. Nixon, Senators Jesse Helms and Chuck Percy, and Congressmen Philip Crane and John Porter. Equal intensity was displayed in the voluminous interchanges with his friend, attorney A. Calder Mackay. On one occasion he wrote to President Jimmy Carter exhorting him to read certain biblical passages for guidance on questions of diplomacy. He urged President Ronald Reagan to display behind him during press conferences an enlarged reproduction of American coins with their motto “In God We Trust” clearly visible over his head; and proposed that a televised national moment of prayer led by Reagan would elicit answers to the nation's travails from the “Heavenly Father.” A cursory reading of the Old Testament, McGaw suggested, proved incontrovertibly how godly monarchs prospered, and wicked ones were brought to ruin. The highest corporate officers of AHSC, who appear to have seen eye-to-eye with him on political matters, were targeted as well for much correspondence and many articles reflecting his sympathies. But interestingly, McGaw was also a dedicated environmentalist at a time when that label bore a leftist tinge, and he once advised Helms that he could not support the Senator's stand against abortion because the government had no business meddling in the private lives of its citizens.
Foster McGaw, a man with a dense network of friends and social contacts, was affiliated with a remarkable array of clubs and associations, and won many civic and business awards. His correspondence demonstrates both meticulous attention to the details of his associates' personal affairs and a touching consideration for their well-being. McGaw's stepson, James D. Vail III, said of him after his death, “He was one of those rare individuals that you feel fortunate to have met, worked with, and known.” He had been AHSC's company president from 1922 to 1946 and chairman of the board from 1946 to 1970, and he was very active in corporate affairs after his formal relinquishing of power. The firm was too much a part of his life to abandon entirely: he remained its Honorary Chairman/Founder until 1985, and replicated his business office in his Lake Forest home.
He was married twice, first to Mary Wallace Harrison and then, after she died, to Mary Wettling Vail from 1949 until his death in 1986. The latter appears by his side often in photos, present for the many special occasions studding their social and business calendar. She was herself very much a partner in the McGaw philanthropic endeavor. Her interest in education was as keen as his, and she was the driving force in arranging the Vail endowment at Denison University. Like her husband, she was awarded honorary doctorates from several institutions. She had been married previously and had two children from that marriage, James D. Vail III and Jeanne Vail. Jeanne Vail died of polio at 23. The Foster McGaw papers were acquired by Northwestern University from James D. Vail III, who donated them mindful of the deep affection of Foster McGaw for the institution to which he had devoted so much effort.
Information on the career of Foster G. McGaw may be found in Frederick D. Sturdivant's study, Growth Through Service: The Story of American Hospital Supply Corporation (Northwestern University Press, Evanston, 1970). The biography folder (Box 3, Folder 1) contains clippings and press releases with details of his business activities, along with an eight-page, quasi-official sketch of his life. For lists of the organizations to which he belonged, capacities in which he served, awards he received, and trusteeships he held, see Box 29, Folder 9; this folder also has photocopies of several Who's Who entries. The history of AHSC is summarized in the inventory of the AHSC records held by the Northwestern University Archives, Series 55/28/3.
Found in 3 Collections and/or Records:
Most of the material in the collection is concerned with university business, and consequently sheds little light on MacChesney's private life or his military and civic activities. The collection's value lies primarily in its reflection of many of the varied activities undertaken by Northwestern's central administration during the university's emergence as a major American educational institution.
The papers of Foster McGaw (the founder and guiding force behind the American Hospital Supply Corporation) document his life between 1908 and 1986 and fill 95 boxes. They are divided into three subseries: Personal Files, Philanthropic Records, and Financial Records. The papers illuminate both McGaw's personal concerns and, to a lesser extent, his business affairs, although these areas sometimes overlap.
This series consists of twenty-six scrapbooks presented to Foster and Mary McGaw by some of the institutions nationwide to which the McGaws made substantial financial donations. The scrapbooks acknowledge the McGaws’ gifts of building funds, scholarships, and other monetary contributions, and commemorate ground breaking and cornerstone- laying ceremonies, building dedications, award dinners, memorial concerts and arts festivals.