Ehrlichman, Ben Bernard (1895-1971)

  • By Cassandra Tate
  • Posted 8/06/2006
  • HistoryLink.org Essay 7861
Ben B. Ehrlichman was an investment banker and developer who played a key role in the commercial and civic life of the Puget Sound region from the 1920s through the 1960s. As the president of a holding company that at one time included 10 separate corporations, he was involved with projects as varied as the construction of the Exchange Building in downtown Seattle in 1930; the Northgate Shopping Mall, opened in 1950; and the 1962 Seattle World’s Fair. Much admired in the business community, Ehrlichman encountered unexpected opposition from preservationists in the 1960s when he led an effort to tear down the Pike Place Market and replace it with office buildings and hotels. That issue had not yet become a public controversy when the Seattle-King County Association of Realtors named him First Citizen of 1961.

Early Business Acumen

Ben Bernard Ehrlichman was born on August 20, 1895, in Minneapolis, Minnesota, one of four children of Walter and Antoinette Ehrlichman. His father was a merchant. The family moved to Tacoma in 1900 and then to Seattle in 1907, where Ehrlichman attended Broadway High School (now part of Seattle Central Community College's Broadway Performance Hall).

Ehrlichman was barely out of high school when he stepped into the financial world, as an office boy in the Seattle investment-banking firm of Carsten and Earles, Inc., in 1912. Three years later, he joined the Guardian Trust and Savings Bank as an assistant cashier. He was promoted to manager of the bank’s bond department in 1916, at the age of 20.

After the United States entered World War I in 1917, Ehrlichman enlisted in what was then the Army Signal Corps’ Air Service. The war ended before he was able to complete his training as a pursuit pilot. Ehrlichman’s brother Rudolph (father of John D. Ehrlichman, who would become a key figure during the Watergate political scandal in the 1970s) also trained as a pilot with the Army. Both brothers served briefly as flight instructors after the war.

Returning to Seattle in 1919, Ehrlichman became manager of the bond department of National City Bank. The next year, he took a similar position in Tacoma, at the Puget Sound National Bank. He went into business for himself in 1921, organizing the investment banking firm of Drumheller, Ehrlichman and White (later renamed the Pacific Northwest Company). Ehrlichman initially served as vice president. The company relocated from Seattle to Tacoma in 1924. Ehrlichman became president the next year.

Ehrlichman’s business acumen made the company successful from the outset. In one reflection of the company’s early prosperity, Pacific Telephone and Telegraph installed a 30-line switchboard in the main office in 1926. Most businesses at the time were served by switchboards with only three or five lines.

Boom Times

Ehrlichman married Genevieve Ament Grout of Seattle on August 24, 1920. The young couple had one child, a daughter, Nancy Grout. In December 1925, they bought a large house designed by Seattle architect Frank H. Fowler in the Mount Baker Park Addition, an exclusive development near Lake Washington. Ehrlichman hired another Seattle architect, David J. Myers, to design an addition to the house in 1935 and to make further changes two years later. The Ehrlichmans lived in the house until 1943, when they sold it and moved to Mercer Island.

Meanwhile, Ehrlichman’s commercial activities proliferated. He served as fiscal agent for the City of Tacoma in financing the construction of the Cushman Dam on the Skokomish River near Potlatch -- a $5.5 million enterprise -- in 1924. In 1928, he branched out into the insurance business, founding the United Pacific Insurance Company and the United Insurance Agency; and into commercial banking, organizing the People’s First Avenue Bank (now Peoples Bank) with Joshua Green, Lawrence Colman, and other prominent Seattle businessmen. He also formed partnerships with investors from outside the Puget Sound region, including Murphey, Favre and Company, with offices in Spokane and Portland, Oregon. In July 1929, he sold a one-third interest in one of his main subsidiaries -- the United National Corporation -- to the American Founders group, a New York-based holding company, for $4 million ($47 million in 2006 dollars). The sale gave Ehrlichman what he called "a great reservoir" of money for "important and meritorious Pacific Northwest projects that might be in the making" (Bagley, 25).

Ehrlichman used some of the capital available to him to finance his activities as a real estate developer and speculator. Working through the United National Corporation, he built, owned, and operated the Medical Arts Building in Tacoma. In 1936, he traded the building to attorney and real estate financier William Pitt Trimble (1863-1943) for Blake Island in Puget Sound. In 1954, he traded the island to the State of Washington for timber rights in Mason County.

Ehrlichman also organized the investment companies that built two of Seattle’s most notable 1920s-era buildings: the 18-story Medical and Dental Building on East Olive Way (completed in 1925) and the 23-story Exchange Building on 2nd Avenue (opened in 1930). The art-deco style Exchange Building, designed by noted architect John Graham Sr., was the second tallest reinforced-concrete structure in the United States when it was finished, on the eve of the Great Depression. It was the last major new construction in downtown Seattle for nearly 20 years.

Hard Times

The Exchange Building was originally built to house the Seattle Stock Exchange and the Seattle Curb and Mining Exchange, two local stock clearinghouses. The exchanges had just moved into offices in the still-unfinished building when the New York stock market crashed on October 29, 1929.

The biggest single loser on the Seattle Stock Exchange that day ("Black Tuesday") was one of Ehrlichman’s own companies, the United National Corporation, which lost more than 20 percent of its value between the opening and closing bells.

Business at the local exchanges evaporated in the wake of the crash. The Seattle Curb and Mining Exchange limped along until October 1, 1935, when it merged with the Seattle Stock Exchange. The latter ceased operations on October 1, 1942. Meanwhile, the Exchange Building was converted to general office use.

Many investors abandoned the stock market after the crash but Ehrlichman saw the opportunity for bargain hunting. In 1932, he founded the Equity Fund, the first mutual fund in the Northwest. In the 1960s, the fund became part of the Fidelity group, now the nation’s largest mutual fund company.

A Lesson in Civics

Ehrlichman served as vice chairman of the Seattle Civilian War Commission from 1942 until 1946, and then joined the Municipal League of Seattle (now the Municipal League of King County). He held various offices in the League, including two terms as president in the early 1950s, when the organization was heavily involved in a campaign to reform the King County charter. It was at his urging that a young attorney named James R. Ellis (b. 1921) was given a key role in drafting a proposed new charter.

Ellis, who went on to become one of the Northwest’s most venerable civic activists, describes Ehrlichman as "a sustaining force" in the Municipal League. "In an organization like that you need some people who are consistent and sustainers," he says. "He was a good role model for me" (Ellis interview).

The charter attempt failed, but Ellis credits Ehrlichman with helping build support for a subsequent campaign to establish the Municipality of Metropolitan Seattle (Metro) and clean up Lake Washington. In 1956, Ehrlichman hosted a luncheon at the Rainier Club to give Ellis and newly elected Seattle Mayor Gordon Clinton (b. 1920) an opportunity to explain their plans for Metro to the business community. "There were something like 200 people there," Ellis recalls. "Ben paid for it. Gordon and I had a chance to talk about Metro and answer questions. That’s an awfully good kickoff."

The National Municipal League honored Ehrlichman in 1955 with a Distinguished Citizen Award, presented at a banquet in New York City by George H. Gallup, then president of the League. Gallup praised Ehrlichman for "steadfast devotion and faithful service to his community and his self-sacrificing efforts to make a reality of self-government" (The Seattle Times, 1955).

Ellis also remembers Ehrlichman as a strong supporter of his family. He took a particular interest in his nephew, John D. Ehrlichman (1925-1999), the only child of his brother Rudolph, who died in a plane crash in 1942. Ben Ehrlichman encouraged John to settle in Seattle in 1951, after he had earned a law degree at Stanford University. John Ehrlichman practiced land use law in Seattle until 1968, when he became White House counsel and then chief domestic advisor to President Richard Nixon. In 1975, he was sentenced to two-and-a-half to eight years (of which he served 18 months) in federal prison for his role in the political scandal known as Watergate. His proud uncle did not live to see his fall from grace.

In selecting Ben Ehrlichman as First Citizen for 1961, the Seattle-King County Association of Realtors cited "his deep personal conviction that an individual business or a community must be guided by strong principles if it is to grow and prosper" (www.nwrealtor.com).

Urban Developer

Ehrlichman was involved in several important real estate developments in the Puget Sound region during the 1950s and 1960s, including construction of the Northgate Shopping Mall (at NE Northgate Way at 5th Avenue NE) in Seattle. When it was opened, in April 1950, the mall was described as "the largest planned business-city in the United States" (Stewart, 19). Ehrlichman not only arranged the financing, but also helped design the layout of the mall. However, shortly before it opened, he sold his interest to Allied Stores, owners of the Bon Marché department store.

In 1963, Ehrlichman announced the outlines of his most ambitious development project to date: a plan, fronted by the Central Association of Seattle, to tear down all the buildings in the Pike Place Market and replace them with high-rise office buildings and hotels. The effort encountered almost immediate opposition, led by University of Washington School of Architecture Chairman Victor Steinbrueck (1911-1985). Meanwhile, in 1966, Ehrlichman took on the chairmanship of the Urban Corporation, a group interested in redeveloping about 42 acres of downtown Seattle, centering around Pioneer Square.

In ill health as the decade ended, Ehrlichman seemed to lose heart in these battles. He gave less attention to commerce and more to cultural interests. Long a supporter of the Seattle Symphony and a trustee of the University of Puget Sound in Tacoma, he commissioned a symphony by the composer Leroy Ostranksy. Titled "Rainier," it was premiered in a performance by the college’s symphony orchestra on October 2, 1971.

Ehrlichman died three weeks later, on October 24, 1971, while on vacation in Carmel, California. In a special election held on November 2 -- a week after his funeral -- Seattle voters passed a measure preserving the Pike Place Market.


Sources: Clarence B. Bagley, History of King County Washington, Vol. 4 (Chicago: S. J. Clarke Publishing Company, 1929); Edgar Stewart, Washington: Northwest Frontier, Vol. 3: Family and Personal History (New York: Lewis Historical Publishing Company, Inc., 1957); Pacific Telephone Magazine, November 1926, Part 3, posted on RootsWeb.com website accessed July 2006 (http://boards.ancestry.com/mbexec/msg/rw/pBC.2ACE/3950); "United Founders Exercises Rights," Spokane Chronicle, July 22, 1929, clipping (search on title) WSU Northwest History Database website (http://content.wsulibs.wsu.edu/cgi-bin/advsearch.exe); Walt Crowley, National Trust Guide: Seattle (New York: Preservation Press/John Wiley & Sons, 1998); Cassandra Tate interview with James R. Ellis, July 17, 2006; "Citizenship Award Made to Ehrlichman," The Seattle Times, July 28, 1955; "1st Citizen Award Recipients," Seattle-King County Association of Realtors website accessed July 2006 (www.nwrealtor.com); "Ehrlichman Chosen Seattle First Citizen for 1961," The Seattle Times, December 17, 1961; "Ben B. Ehrlichman, Civic Leader, Dies," Ibid., October 25, 1971.

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