"'Past It': The Case of Borax Limited"

During World War II, Borax Limited faced a major crisis. A British company whose chief operations were in the United States (mining borax), it had arrangements with competitors to control the market. In 1944, the Antitrust Division of the American Department of Justice filed suit, demanding not only that Borax Ltd. abrogate these agreements but also sell off key assets. Another factor further complicated the situation. At Borax Ltd., almost all authority resided in the hands of two elderly executives who were, to put it bluntly, “past it.” One required around-the-clock nursing care, and the other had a failing memory.
Fortunately for the company, it generated $1 million a year in foreign exchange that Britain badly needed. The legal staff of Britain’s Washington embassy, working with the company’s lawyers in San Francisco, managed to resolve the case on terms that left the company (and its revenue) largely intact. This process was fraught, not the least because the company’s top managers kept changing their stories and withheld information and key documents from their lawyers.
These events make a good story—the closest business history gets to comedy—but they also pertain to larger questions. The legal staff of the British embassy in Washington and lawyers in San Francisco salvaged Borax’s operations despite confusion among the company’s leaders. The case is a good example of, if not “co-creation,” at least “co-preservation.” The experience of Borax Limited also feeds into the larger discussion about the relative decline of the British economy. Some scholars—most notably Alfred Chandler—have attributed this development to the weakness of industrial management, including the tendency of British managers to remain in place long after their powers had faded. This case represents an extreme example of the phenomenon.