John S. Reed ’61, SM ’65

INTERVIEWER: Today is October 20, 2010. I am Karen Arenson.

We are speaking this afternoon with John S. Reed, who was elected chairman of the MIT Corporation this year. He has been a member of the Corporation since 1980 and a life member since 1985. He has served on the Corporation's Membership, Investment, and Development Committees, as well as on numerous visiting committees.

He was born in the United States, but grew up in Argentina and Brazil, and he served in the US Army Corps of Engineers in Korea. He holds Bachelor's degrees from both MIT and Washington & Jefferson College, and a Master's degree from MIT's Sloan School of Management.

Much of his career was spent at Citibank and Citicorp where he rose to chief executive and chairman, and he was later co-chairman of the successor entity Citigroup. He was tapped as interim chairman and then became chairman of the New York Stock Exchange during a difficult period of its existence. He's been a member of numerous corporate and non-profit boards and advisory groups, including Monsanto, Phillip Morris, The Rand Corporation, The National Bureau of Economic Research, The Memorial Sloan-Kettering Cancer Center and the Boston Symphony Orchestra.

John, thank you for talking with us today.

REED: Happy to do it.

INTERVIEWER: Some people have suggested that higher education in America could face the same fate as the auto industry. Do you share this concern, either about American higher ed generally, or about MIT in particular?

REED: Yes. It's a real concern. It's funny, a member of the Corporation here at MIT approached me not long ago, maybe a couple of weeks ago, and said, John, we may not exist in a couple of years. I said why? He said, look, it costs approximately $50,000 a year to get an education of the sort that we offer, and that would be true at Harvard or Stanford and the other major schools.

That's an awful lot of money. I mean you're talking about the annual income of the typical family in the United States. Clearly it would be possible, say for India -- just choosing arbitralily - they speak English, et cetera, et cetera -- to offer a first-class engineering education for substantially less because the cost of living wage is the whole structure.

The question is if you could get a fully equivalent education by traveling and living in India for a while, would that begin to attract students away? The answer would be certainly yes. I mean I think medical schools in the United States have certainly seen people go overseas to get medical education more cheaply and then they come back and become licensed in the United States. Engineering particularly, or engineering and science, is a global intellectual activity.

So one could imagine that you could create an equivalent educational experience, particularly at the undergraduate level but not necessarily restricted to that in other locations that were inherently a lot cheaper. At some point that could become a factor.

Now am I staying up nights worrying about it? No. But do I have it out there as sort of a model, asking what does that say to us about us. You know, I listened at MIT, probably in the late '60s, early '70s, to the chairman of General Motors at the time discounting the foreign car imports saying that they were small, not particularly profitable vehicles, and that if the foreigners wanted that part of the market they were welcome to it.

I think probably from that talk until today, General Motors lost market share almost every year since. The world has changed. The distribution of intellectual talent is getting increasingly widespread. Educational systems around the world are getting better and better. Certainly IQ, that is the potential intellectual capability of people is distributed pretty evenly across the world's population. It's certainly not concentrated only in Cambridge.

The unusual circumstances of World War II that resulted in the transfer of a tremendous base of intellectual talent into the US, and particularly into the university systems, that circumstance hopefully will not ever exist again. So people are going to be quite happy to stay in St. Petersburg or to stay in New Delhi or wherever they happen to be if they could pursue their careers and find appropriate things to do and so forth and so on.

So I believe that we have to take into account, as we worry about MIT and where we're going, that we've enjoyed a wonderful period that was somewhat special, not likely to be repeated, that the world in which we're going to live over the next 50 or 60 years is going to probably have a different dynamic. Cost is certainly an issue. I would point out that while it costs $50,000 a year to come here, MIT only gets $20,000 by the time you factor in the student aid and other support.

So we are certainly providing an immense amount of support for these students. Maybe we should provide more because we're going to have to make education reachable by people who aren't of the means to pay the sort of full sticker price.

But this idea that our educational system is expensive, it's certainly going to be expensive compared to alternatives, and that the talent pool is going to become more dispersed. The nature of our educational product is pretty globalized -- it's not like teaching American history, which would be difficult to do in a country outside of the United States.

So yes, I think we should regard ourselves as being in the same competitive situation as the US auto industry was 20 or 30 years ago.

INTERVIEWER: At one point when you were chairman of Citicorp it faced enormous problems. You've said that you thought about whether to step down at that time -- I think it was the early '90s -- but decided to remain because you were the right guy to deal with them. MIT doesn't have problems like that at this point. But what makes you the right guy to be MIT's chairman at this time?

REED: Ah, now there's a question for you.

I have no assurances that I am the right person, because obviously there are other people who might be here-- I don't know who they are. I could speak to what maybe I could try to do. But I certainly can't tell you that there aren't three other people who might have a different agenda that might be better for MIT.

The process was simple. When there was a need to find a new chairman, because Dana Mead decided that he should retire, they appointed a search committee. I presume, I don't know, that the search committee said now what kind of person are we looking for, what sort of thing? When I was first approached I was pleased, I said gee, that's an awfully nice thought. But I really didn't think that I was necessarily the right person, nor that MIT was necessarily the right thing for me to be doing.

But what happened is very simple. I was asked to at least get engaged -- that I probably owed it to MIT about, which I care a lot, to at least consider the thought seriously. So I did. The first thing I did is I called Dana and I said Dana, tell me what this is all about. Then I talked to Susan. By the way, I called and got a copy of the bylaws so that I could figure out what the bylaws say the chairman is. Then I spoke to Susan and I said hey, what are you looking for in terms of somebody who's chair of the Corporation.

Of course the first thing I found was there was no agreement. There was no agreement between the bylaws or the prior incumbent or what Susan was thinking about. So it was very clear that there are a lot of degrees of freedom in the job and that it could be done in many different ways.

Then I met a number of times, probably three times, with Neil Pappalardo who was a chairman of the search committee and of person of deep ties to MIT, and I must say a great contributor at MIT. You can't go to the physics department without running into a laboratory and meeting room and everything else that Neil has made possible.

But Neil and I talked quite a bit. I had never been on the Executive Committee, and Neil, of course, has been on it for a long time. I said what's the Executive Committee thinking about, and so forth and so on. So I sort of triangulated. Then I met with the search committee and I told them, I said look, I'm not here for you to decide or me to decide, we're here to explore. What you should do is probe me to see if I'm sort of what you're looking for, and I'm going to probe you to see if your description of what you're expecting is something that I could sort of identify with.

We had a good discussion, as you might imagine, and at the end I said to myself, I could probably contribute. I love the place. I really do believe that my educational experience here at MIT had a very material impact on my life and how I think, and so forth and so on. My father had gone to school here, so it was sort of something in the family. On the other side, I'm a great believer that discourse counts. What you talk about and how you talk about things makes a difference.

I've obviously had a lot to do with running large organizations, and I have not only done it but I've been on boards and I've thought a lot about it. So I sense that I know a little bit about how large organizations function. I felt that I could come and help change the discourse a little bit. There were areas where I think at the senior level, at the Corporation level, at the senior administrative level, maybe we don't talk about things in the right way, and so forth and so on.

It wasn't that I felt that I would make decisions that would take the Corporation a different direction but I might be able to get the discourse going in a way that would cause us to make decisions that might be different than maybe might otherwise have made.

So that's my goal. I sense that what I can contribute at this particular time is to get the Corporation and the Corporation members engaged to make sure that we're talking about the right things in the right language. I sat down with a blank piece of paper and said, what are the responsibilities of a corporate member. Then I sort of said, how can we organize meetings so that a reasonable observer would suggest that the corporate members would have an informed view on these various issues, because you can't expect a Corporation to behave properly if they haven't been talking about the right sets of issues in the right sort of way.

So my thought was that my contribution might be to help change/modify the discourse, both the interface between the Corporation and administration, and I felt some confidence in terms of that area. So I said, you know, there's no time span. If at the end of a couple of years the Executive Committee were to say, John, you've really been helpful but we'd like to change, I'm perfectly comfortable, I would understand that totally. So that it isn't as if I signed a 10-year contract and MIT's stuck with me - they aren't. Any time that either I felt that I wasn't being constructive or productive, or if, for some reason, the Executive Committee thought that we'd quite happily do something else.

So that's the basis on which I came in. As I say, I can't tell you that there weren't four people who might have been better.

INTERVIEWER: Engagement is an interesting concept. You were on the Corporation for many years and then stepped up your participation at some point, and I assume that there are lots of members of the Corporation who go through similar processes at their times of their life when they can be more engaged and times that are less good in that way. How do you think about it? Do you think you can make people more engaged than they are? What are some of your thoughts?

REED: I agree with you 100 percent. I mean engagement is a function of what else you're doing. Obviously on some circumstances it's very difficult to get engaged because you are fully occupied with other things. But on the other hand it depends a lot on whether things are served up in such a way that you feel your voice makes a difference, and so forth and so on. I must say during some of my years on the Corporation my interest was the same, but the discourse was such that you just didn't feel you had much to contribute. So I didn't. I could have but it wasn't that way.

It was funny, as you mentioned, I was on the board at Phillip Morris for a long time, maybe 35 years. I don't know. I think we had seven different chairman during my period there. Joe Cullman being the first. I could remember going to one of the chairman, either the third or fourth, I forget who, and saying I've never gone to more boring, less useful meetings.

Now the company was the same, the business we were in was the same. But he simply ran the meetings in such a way that the board members didn't feel like they have much to contribute or maybe they did so after the meeting quietly in the halls. Yet, Joe Cullman, who was the first person who put me in -- I don't know if you ever met Joe, but he was a wonderful, engaging human being, now unfortunately not alive. But Joe had that wonderful facility, which Ronald Reagan had, by the way, of causing everybody to feel that you were the only person and that your views were really important and that he was just waiting to hear what your views were. He would say his board was engaged. I don't think he necessarily did everything that we talked about. But you knew you had a point of view, you were being listened to.

I once had an occasion to go to the White House, and Mr. Reagan, the President at the time, was asking a number of corporate types our opinion about some subject. He had this ability to cause each person to think that he really was listening to their point of view. Then it was funny-- at the end of the meeting he thanked us profusely for being there. He said, by the way I'm not going to do what you all have recommended.

So there we were. We felt important. We felt that we were there for a good purpose. He was kind enough -- most politicians would have let us go and then we would have discovered over time that he wasn't going to do it. But he just said, I basically haven't been persuaded.

But the point is, some of the members of the Corporation are not going to get engaged because they're busy. They have other things to do, and so forth and so on. As you know, attendance is not perfect. We have 75 members. A typical meeting will have 50 maybe. Then you've got a third that are floating around. But if the discourse is right, then you draw out that engagement.

INTERVIEWER: Does MIT look any different to you now that you're four months into the job and have led your first Corporation meeting and sat through some visiting committees and probably a bunch of other meetings?

REED: Yes it does. But not substantially. I mean it's obviously much more textured, and I have a much more detailed understanding of things. I've gotten to know an awful lot of people who I did not know before. Each one of them is different in his or her own way. I have a greater sense of how Susan and Rafael spend their time, and so forth and so on, none of which I had any reason to know before.

But the basic enterprise, no. The basic enterprise is that we're an immensely important research organization that teaches, and our teaching very much surrounds the research. I mean at the graduate level you couldn't teach without the research. At the undergraduate level we still get students amazingly involved in the actual research kind of stuff. That appreciation I had before. The quality of the place, the word excellence -- there are very, very few institutions that I've known that could use the word excellence honestly and have it resonate. That was always here. It's very visible when you're the chair.

So it hasn't in any serious way changed my impression of MIT. It has caused me to be much more familiar with details.

INTERVIEWER: How about the job as chairman? You did a lot of research, you talked to Dana, you read the small print, you talked-- does that job look any different from what you expected?

REED: Yes. I'm more engaged, to use my own word. You do get caught up in sets of things that I did not anticipate getting caught up in. There's a lot of process that needs to be worked on and a lot of talking. I've gotten into buildings to a level that I never would have imagined. I know all about deferred maintenance building by building by building. I have sheets of paper. I also, by the way, I read all of the material that's prepared for the visiting committees. That, allows me to see for each unit the level of detail that when you're on the Corporation you see for those committees on which you happen to sit, but not for the others.

There's more detail than I might have imagined. But my sense, four months into the job is I'm learning a lot, from time to time I think I'm helping occasionally. My sense is it's going to turn out to be potentially useful to the Institute, I hope, and presumably it'll turn out to be fine. I'll get a better balance. You can't say no to anything when you're new. You have to do it once before you say, I really didn't need to do that. That'll come in my second year. I'll begin to get some control.

INTERVIEWER: What else does the chairman do? How much of the job is fundraising, social events? What are the other pieces?

REED: You have ceremonial obligations. You have what I call external ceremonial and internal ceremonial. There are things, like I'm going to a black tie dinner at the end of the month, which is an external ceremonial thing where one of our Corporation members is being honored, and since he's a Corporation member and a great person, it's I think appropriate that I be there.

I have tried to duck some of the internal ceremonial on the theory that that is mainly Susan and Rafael's territory. That if one of our faculty members wins a Nobel Prize, which one did, I think it's primarily Susan and Rafael who should celebrate that, and not the chairman of the Corporation, even though I'm pleased as punch. But it seems to me that from a positioning point of view, the internal ceremonial I am less engaged in.

Fundraising I made clear from the beginning, I'm not any good at fundraising. I have from time to time asked people to give money, and I don't have that wonderful twinkle that causes people to immediately reach into their pocket. I could help organize and think about fundraising, and clearly that's going to be an important part of my job.

Two things that I'm going to have to really work on is to try to help think about how best to organize, to fundraise, and how to position. I mean fundraising's marketing to some degree, and you've got to cause people to feel good about giving and to want to give. To think giving makes sense. That's true of institutions as well, by the way. You've got to ask yourself why do some of the big corporations not feel some need to make sure that the engineers that they hire from us that are trained -- I mean Intel, Boeing, so forth and so on. They live off our product, our students. It would be nice if they would help support these students as they're being developed and formed.

We do a wonderful job for them. Through the admissions process we sort them out, we give them a wonderful education, and then they're available in the workforce and we are not short cash throughout that process. I estimate that we're cash short about $15,000 per student. It would be nice if the people who hired them and got the benefit of all the sorting and training that we've done on their behalf. So maybe we can find a way of motivating people to be supportive, because we play an immensely important role in finding and training these people.

But anyway, so I'm going to have to work to try to help. I mean we have a lot of pros and we have a lot of experienced people in this arena, but still our needs are significant, and my guess is we're not going to be able to raise the capital that we need from the sources that are well developed. We're going to have to broaden and amplify and maybe intensify.

So, helping organize, think about position, fundraising, it's not my favorite subject, but it's something that I think I should do.

The other is investment. If you look at the big research universities in the United States, most of the growth of their endowment, and hence their capacity, comes from the return on their portfolio, not from new moneies coming in. It's been the investment returns on the existing portfolio. So Seth and I have spent a fair amount of time together, because I have said to him, I have said Seth, how much money are you going to earn for us in the next 10 years? Needless to say, he doesn't have a very solid answer.

But we've got to think hard about that. It makes a big difference. If we could earn an extra percent or two, that's material. I've said to Susan, I've said, Susan, our evolutionary pathway is going to be defined by our financial position. Our financial position is derived from only two things. One is what we could earn on our existing money, and number two what we can raise in terms of new money.

We've been living off our existing physical plant and we've probably run that one out. I mean we're having to renew our plant. I would estimate that over the last 10, 15 years, we've probably extracted a couple of billion dollars worth of value out of our existing plant. When we take depreciation, we don't put that money away in a kitty that's separate from the endowment, and so forth and so on. That money disappears -- it's an accounting entry, but there is no cash. The result is that we currently have a lot of pretty well depreciated buildings that we've been living in as if they were free.

So to some extent we're living on historic investments that we've made. As you could see, on campus we've had to start making some new investments. We have a new Sloan School, we have a new Media Lab, we're about to open a new cancer center, and we have to renovate the existing buildings.

So, it seems to me that talking about investment returns, fundraising, and our capital situation, these are things that are part of my job if I like it or don't like it, it just turns out to be what's important.

INTERVIEWER: Is MIT about to start taking care of some of the deferred maintenance?

REED: Yes. But not at a pace that if you really were tough-minded, we add more to deferred maintenance each year than we take out.

INTERVIEWER: How different do you think your approach and your priorities will be from that of your predecessor, from Dana, or from his predecessors?

REED: I think we all change with time. Some of our priorities will be the same. When I talked to Paul Gray, for example, Paul said, John, your most important job is who is on the Corporation. In other words, my role as chairman of the nominating -- you don't call it nominating, it's the equivalent--

INTERVIEWER: Membership?

REED: On the Membership Committee. I chair the Membership Committee. Paul said that will turn out to be your greatest contribution, who you add to the board, and so on and so forth. If that's true, Dana had the same, and his predecessor, d'Arbeloff the same responsibility. We all have the same fiduciary responsibility, vis a vis the board and on the Executive Committee, and so forth and so on. I can't speak to what their priorities were. I think that d'Arbeloff particularly was a good fundraiser. He has extracted various large sums of money from me, so I know all about being on the other end of it.

INTERVIEWER: In a somewhat better economic climate?

REED: It was a better economic climate, but he was good at it. He liked it, by the way. If he were alive -- I'm sorry that Alex isn't -- but were he to be alive, he would judge me strictly on a number of very wealthy people who I got to support us. He was really good at it, and he enjoyed it. So his priorities and mine would be a little different in that regard.

But I would guess that the overlap of prior chairman, certainly in excess of 60 percent. Then the 40 percent is probably a function of the particular circumstances of the times. I don't know who was chairman when Howard Johnson was president and the students were running around burning the place down. But whoever it was clearly had a very different set of priorities than any of his successors.

INTERVIEWER: Besides the question of endowment return and the depreciation or maintenance, what do you think are the other big challenges facing MIT at this point, and how would you assess MIT's shape now?

REED: First of all I think we're in quite good shape. On a scale of one to 10, you'd probably give us an eight or a nine, which even in MIT is a decent grade. The thing where we stand out, our faculty is extremely good. I don't want to say exceptionally good because there are probably five institutions or seven that have faculty of a comparable sort. But there certainly aren't 10.

INTERVIEWER: Globally or nationally?

REED: Globally. I mean the US, this is still an arena in which we are pretty well situated. The faculty is really quite good. The students are exceptional. I do think the undergraduate student body is singular in its make-up. Now part of it is because we're a specialized institution, we're not a university. I think Massachusetts Institute of Technology is an important word -- there's a big difference between being an institution and being a university.

So a Yale or a Harvard or a Princeton, they wouldn't want our freshman class because it's too shaped towards mathematics, engineering, science, and so forth. They wouldn't want as the entering class in Princeton or Harvard or Yale such a concentration of talent in this one domain. But we have really an exceptional undergraduate group. When you talk to the faculty one of their joys is teaching these students, because they are exceptional.

I think that our process of renewal, that is the process by which the faculty renews itself, which is the key formula for a great university, is in spectacular shape. I give it a 10 out of 10. From everything I've been able to find our tenuring process makes very few mistakes. It's rare that people who are here who don't gain tenure go elsewhere and do exeedingly well. It probably has happened, but it is not the pattern certainly. As best I could gather, and I've probed on this, it is also rare that people who we do tenure turn out not to have the promise that was anticipated when they weren't tenured.

So, this ability of the faculty to renew itself in quality is exceptionally important, because without that you'd worry about the institution. So, students, faculty: 10 out of 10. You have to say we're in great shape.

Financially, we're poor -- we're poorer than I realized. Some of it's attractive. It's fun to see that we're not living quite as high on the hog as others. But some of it's a little painful. There are things we should do, including deferred maintenance, but more importantly than that there are academic, substantive things we should do that we don't do for money reasons. From a process point of view, we waste a hell of a lot of time making decisions that needn't be made because we're too busy counting the pennies.

We waste an awful lot of time on that kind of stuff. Decision-making is not crisp, and I don't care about that, but I know how expensive it is for a large organization to be slow and its decision-making because it means you have lots and lots of people who are fundamentally spinning their wheels. It's expensive to spin your wheels. I don't criticize the quality of the decisions taken when they're taken, it's just that we take three months to do things that most people could do in three days. You've got to say to yourself OK, what happened to the other two and three quarters months of time and effort?

So from that point of view we're capital poor, so I couldn't give us a 10 on that, but I'd give us a five maybe, which isn't too bad. We haven't thought about the future very robustly. We're much more likely to extrapolate from where we are today to where we're likely to be tomorrow and unlikely to be the day after than we are to have a vision and try to interpolate between the vision.

There are Corporation members who have said to me, I've already mentioned 20 years from now we're going to be out of business. Interesting thought. There are other Corporation members who have said to me and with good thought, that look, we're allowing maybe 1,000, 1,100 students per year in. We're rejecting, choose a number, 7,000, 8,000, whatever it is, but it's a large number. Most of us would agree that maybe a third of those being rejected, maybe half of those being rejected could, in fact, come here and be perfectly good students and contribute and so forth and so on.

So then the question is do we have some responsibility to be larger because we're short engineers, we're short scientists. MIT certainly gives a quality education -- I don't think you could get a better one. Do we have some moral obligation to be three times as large as we are? That also is a question.

Now we clearly couldn't afford it. We are the size we are in part because of history, but certainly because of money. If we had twice the endowment I think that conversation would get a little more traction than it does. There was a question about that and I couldn't give us a 10 out of 10 on that kind of issue. The whole idea of globalization, what does it mean to us, again, these are arenas where I couldn't say hey, we're in perfect shape because capital-wise some of these evolutionary things-- we're not at the standard that we would set for ourselves.

INTERVIEWER: How much do you think MIT's role in the world has changed over the last 50 years? And how much do you see it changing now and where it's going?

REED: That's a good question. An interesting question. I don't sense that it's changed a lot. I mean 50 years is a long time. We were always seen globally as the engineering school. Our existence is well-known. We have always attracted some of the most talented people from around the world. That hasn't changed. I think we've always trained people who contributed to the global economy.

I was just this morning talking about the Minister of Finance in Egypt who's a PhD from MIT, and that's not unusual. When I was in the banking business you'd be surprised at the number of economists I'd run into in Brazil or Japan or what have you, that were MIT trained. We've had a long history with China. I mean I think there have been people from China coming to MIT and going back to China. It stretches way before the communists in 1948, it goes back probably to 1900.

So our role as a place to go for a really great engineering -- in those days more engineering than science -- education I think hasn't changed. I think it exists today, but I think it did exist 50 years ago and it probably existed before that. Our willingness to take foreign students and train them, and so forth, continues. I don't think it's changed dramatically. I think what's changed is our realization that the world has changed. But I don't think our role has changed particularly. Nor, by the way, do I think that the world's perception of us has changed particularly. But I do think what has changed is our perception of the world.

INTERVIEWER: Let's talk about your life before you first arrived at MIT, which includes some time in the rest of the world. Tell us about where you were born and where you grew up and what your parents did.

REED: I was born in Chicago 71 years ago. When I was about five and a half, six years old, I went down to Argentina during the war. We were still at war during the period. The ship on which I went was blacked out. My dad had worked for Armour and Company, the meatpackers. Argentina was providing a substantial part of the beef for Europe, particularly right after the war when Europe had basically no food. I don't think people remember but in 1951 England was still rationing food.

Anyway, so my dad's job took him back down to Argentina, and my brother, I have an older brother, and I were packed up and off we went to Argentina. I started first grade there. Was in Argentina till about fifth grade, and then we went to Brazil. We went to Sao Paulo. At the time Sao Paulo was a million people, now it's about 20 million. I used to ride my bicycle down Paulista, which is the main business street in Sao Paulo, and there were nothing but big homes. You'd ride your bike in the morning and people would be cleaning the streets. Now they're all big, tall glass buildings. I lived in Brazil from '48 to '51. Came back to Argentina and then graduated from high school in Argentina.

My family came originally from Toledo, Ohio, my mother and father went to the same school. You know, the girl next door deal, it was real. I was wonderfully lucky. I had a wonderful family life and great parents and so forth and so on. So I don't have any of the modern day traumas that people talk about. I do think we went to Argentina in good measure because my parents thought that it would be a great place to raise a family, which it was.

My dad went to MIT, class of '24, electrical engineering, and got his Master's in '25. Left MIT and went to work for IT&T, which in those days was actually a telephone company. It was the International Telephone Company. For an electrical engineer, a telephone company was a normal kind of thing to do. MIT was always important to my dad. He felt that he and really gotten a great education here. So I always had MIT magazines around the house. I can remember my dad was always a member of the local MIT club in Sao Paulo and in Buenos Aires both. So the MIT connection was there.

When I was coming to the states to college, my dad said, hey kid, you're not up to just going -- you know, I never lived in the states really, and in those days we came back every third year on a ship. I mean you weren't flying back and forth. It wasn't a question. There weren't any telephones. I never once spoke to my grandparents on a telephone or anything like that. It was telex and so forth. So anyway, it was going to be what it was, a culture shock to go back to the states.

At the time MIT had a 3-2 program. The 3-2 program was with 12 identified liberal arts colleges. So I applied to the 3-2 program, and I chose Washington & Jefferson just totally arbitrarily. I didn't want to be on the east coast because MIT was on the east coast. Since I didn't know anything about the United States I sort of figured I'd go elsewhere. Reed College was part of it out in Oregon and I was thinking that would be good for my name. But Oregon seemed a long way away, and I ended up at W & J. Now no one would know why W & J, it was 600 men only at the time, small liberal arts school. It had played in the Rose Bowl in 1924.

Now my father graduated in '24. So he had heard of it. Now that's strange but that's true. Anyway, so I just arbitrarily did it. It turned out to be wonderful. I got a good liberal arts education. It was a very small school in not a wealthy part of Pennsylvania -- you know, Pittsburgh is not. So I learned a lot about a world that I had not seen as an ex-pat in Argentina. It was 100 percent American. I don't think there was anybody any place close to the school who had ever been any place else.

I should backtrack. My last part of my schooling, my high school in Argentina was an American school. It was the American Community School, as it was called. There were French schools, there was a Scottish school, a British school, a German school and stuff. So depending where folks were going to go to college you would point them because the educational systems are different. So if you wanted to go to England to go to college you went to Saint George's. If you wanted to go to Scotland you went to Saint Andrews, and so forth and so on.

We sort of collected folks who wanted to go to the states to college. There were only eight Americans in my graduating class, everybody else was foreign. Because of my age, we had a lot of Chinese from the 1948 Communist Revolution. There were a lot of refugees who ended up in Argentina. They wanted their kids to come to the states to college, so they would try to get them into the American school. We had a lot of eastern Europeans who post war had come to Argentina, and Argentina was one of these places where you could get in. People may have wanted to come to the states, but there were quotas, it was difficult, and many people ended up either in Canada, Australia, Argentina. Onassis came to Argentina after the war. People think him as a Greek ship owner, but he started in Argentina.

So anyway, my experience in the American School was the collection of international folks who were pointing their way at coming to college in the United States. By the way, the great bulk of my class did, and I'm still in touch with a lot them, and many of them have had very interesting and successful careers all over the world. But every nationality -- you could imagine, eastern European, we had one Egyptian girl in my class, but a lot of Chinese, and so forth and so on , because of this collective time which doesn't exist.

But anyway, came to the states, W & J worked well, transferred to MIT, enjoyed it. I took courses -- you had to have a minor in those days and I took course three. I decided which degree to get by where you wrote your thesis basically. I debated whether metallurgy, as it was then called, not sophisticated material science. I debated seriously in my mind whether I would stick with that, but decided no, I'd go into a managerial track. In those days 15 was industrial management. It was you were targeting to be a plant manager.

I left there, went to Goodyear. I had taken ROTC in school, and so I became a second lieutenant and served in the army, great experience. I had troops and we met as a unit, went to Korea, plugged in and replaced a unit that was there and came back. Learned a lot about Asia, which I had not been to. We had about 1,500 Koreans working in the -- it was an engineering depot rebuild operation. Tear down engineering equipment and rebuild it and so forth. We were just back of the DMZ.

I had not intended to go to grad school. I learned what I didn't know and said you know what kid, you better go back to school. There's a lot that you don't know. So I came back here and I sort of negotiated a program with Bill Pounds, who was then the dean at the Sloan School. I understood the catalog and everything. So I asked if I were to take these courses would you give me a degree? We had to negotiate around the corner. But in essence I was able to put together my own track, so to speak. I was targeting the things that I really felt that I didn't understand that I wanted to understand.

INTERVIEWER: Which were what types of things?

REED: Mainly economics and sort of mathematical analysis, quantitative things. You can learn a lot about the world by reading books. It's very hard to learn quantitative things just reading. Some people probably do, but I'm not included.

Then I went to work for Citibank. I went to work for Citibank because I thought they'd send me overseas and I'd spend the rest of my life as an ex-pat.

INTERVIEWER: Let me back you up a minute. Were you good at math and science as a kid growing up, and were you drawn to them?

REED: Not exceptionally, no. No, I wasn't exceptionally -- I was not an exceptional student. I think I was exceptionally curious.

INTERVIEWER: Were you a leader?

REED: Yes, probably. I always was enthusiastic about whatever I was doing. That was a great skill. Once I was in trouble in the Army and I spent three days washing garbage pails. I assure you no one has ever washed them as well. I spent three days, I just decided I was going to wash every garbage pail in Fort Belvoir, which I did. And they were going to be awfully clean, which they were. So I could get enthused even doing things that one might wonder why one's doing.

INTERVIEWER: Did you know what you wanted to do as a career when you were growing up? Did you have some goal?

REED: I wanted to run something. In those days I thought I'd run a factory. My idea was I'd be a plant manager--.

INTERVIEWER: Like your father.

REED: He hadn't really been a factory manager, but something like that. I sort of thought that the big thing to do was run a factory that made things. But clearly it was managerial.

INTERVIEWER: You mentioned that there was some culture shock when you came up to college. What was it like?

REED: Oh, it's just social. I mean if you're raised in a Latin-American environment, it's less harsh than the American--. The American culture is harsh. It was funny. When I was in Citibank we always had our international folks and we'd talk to them about how difficult it was to move. Coming to New York was viewed as one of the hardest moves. I mean Saudi Arabia and New York were viewed as similarly difficult for families and so forth. It's the lack of support systems, sort of the lack of warmth. In a Latin environment the people will surround you more completely and so forth. The US, particularly for teenagers, you could imagine, it was a pretty harsh environment, and I was a little shocked. I don't think I talked to a girl for a year.

So it was a different world. The US is a faster-based society, rule-based rather than relationship-based. It is notably different. I could even sense it today. If I go back to Latin America , in some ways I feel more comfortable just in the ambiance. It's nothing about being there or anything, it's just a different rhythm. France has some of that. As you know, I had a house in France for a while after I retired. It's certainly not Latin America but it has some of that quality about it.

INTERVIEWER: What was your major -- did you have a major at W & J?

REED: No. It was mainly I had to do all the math and science and engineering that was required. W & J, when I had an elective it was 20th century American literature, but I didn't have a lot of electives because we had to do all of the calculus and all of the physics and all of the chemistry. Fortunately in those days biology wasn't on the list.

INTERVIEWER: How well-prepared were you then when you got up to MIT? Did you have the equivalent of two years of math and physics, and a year of chemistry, and were they of the same rigor that you would have gotten here?

REED: The rigor wasn't the same but the learning was the same. In other words, the practice was different. I had no problem. In other words, when I came in my freshman year or my junior year here, I didn't have any particular problem. I certainly wasn't the best student, but I wasn't the worst student. The thing that was much different was the quality of the other people in the class. I mean it was just a different world, and that raised the bar. The intensity -- the problem sets, problem sets, problem sets. Thermodynamics was my first sort of 240. For some reason I took physical chemistry 5-something or other, and that didn't seem quite as bad, but thermodynamics you sort of felt like it was tougher.

But what I noticed most was the quality of the other students. I mean it was just a totally different level and that raises the bar and the intensity and so forth. But I was well-prepared. I had enough of the fundamentals so that I felt comfortable. I never felt that I was under water or anything. I probably worked harder than many in the first year trying to move myself up.

INTERVIEWER: Did you live on campus?

REED: No, I lived at 353 Mass Avenue with three other MITers, one from Argentina who I had known for a long time. By the way, the people with whom you live help a lot, because we all studied together and so forth and so on. One of my roommates, Joe Antobe, who was in course one, was in grad school while I was an undergraduate. So when we got stuck he was around to help.

INTERVIEWER: What were your first impressions of the Institute, do you remember? Had you been on campus before you moved here?