Joseph Fairchild Knapp was the second President of the Metropolitan Life Insurance Company, 1871-1891.
By instinct he was a learner and a doer, having gone to work at age 16 as an apprentice for the lithographing and engraving firm of Sarony & Major. At 21 he was made general manager; at 22 a partner. By 1868 the firm's name was Major and Knapp, its business the largest in its line in the country, and Joseph Knapp was a wealthy man. Having made his money in printing and engraving, he had begun investing and serving on the board of the directors of several insurance companies, including a company which twice changed its name before reorganizing and restarting in 1868 as the Metropolitan. One of these predecessor companies was the National Union Life and Limb Insurance Company whose original objective was to insure Civil War soldiers and sailors. Later, Joseph Knapp was honorably mentioned in the History of the Ulysses S. Grant Post #327 for his commitment to veterans and to the Grand Army of the Republic.
With the founding of the Metropolitan, Joseph F. Knapp, as a director, chairman of the finance committee, and the company's largest stockholder, came to the forefront taking an active interest to safeguard his holdings, buying additional shares from retiring investors, and mastering the insurance business. When the first President, Dr. James R. Dow, died in 1871, the board turned to Knapp to lead the company. It was a fortuitous choice because scores of new insurance companies were started in the years following the Civil War and most of them went bankrupt because of poor management and the long financial depression that afflicted the United States starting in 1873, but Joseph Knapp's actions preserved the Metropolitan and his great idea bore fruit allowing the Company to grow and to eventually become the leading life insurer carrier in the United States.
Knapp's great idea was to sell life insurance not only to the rich and well to do but also to the working classes, and he had a plan to turn his dream into reality. In 1879, the same year that Frank W. Woolworth opened his store where every article for sale was priced at five cents, Metropolitan began selling working class or industrial life insurance to the masses. This meant issuing policies for small amounts at a small cost and collecting those pennies and nickels on the spot once a week. For this he needed a trained sales force who could handle the myriad of administrative details in such an arrangement and here Knapp's plan was both daring and imaginative. Industrial life insurance was being sold successfully in Great Britain, and hence, Knapp dispatched a Metropolitan employee to England to round up as many experienced men as he could induce to immigrate to the United States, and to embark them and their families at company expense. In a relatively short time 544 men and 757 dependents came across the Atlantic to train native Americans in the details of selling industrial life insurance. Metropolitan's business exploded as the company expanded swiftly into new areas of the country, and a record numbers of policies were sold in the years 1880-1885.
Paradoxically, the very success of the Metropolitan brought with it serious financial difficulties. The establishment of many new offices, the setting up of reserve funds to support the new sales, and the expenses and payments of commissions to agents entailed an outlay of considerable money. In 1883, the high flush of prosperity brought the Company close to insolvency and its capital stock was impaired. In the past Joseph Knapp had often bought shares of company stock when a nervous investor wanted out and had also given Metropolitan money from his own fortune to smooth out a rough patch in the business cycle, taking a receipt in its place. Now facing company insolvency Knapp set about to increase Metropolitan's capital. He solicited his friends, and even mortgaged his own home to bring in $400,000 in new money. Notwithstanding the increase in capitalization, the increased new business wiped out the new capital by the end of 1885. The Actuary, James M. Craig, wrote, "How long can this thing last – when is the tide to turn?" Joseph Knapp reportedly confided in a friend that over the years he had sunk $650,000 in the Metropolitan and "it has probably gone up in smoke." But in the years 1886-1891, the tide turned quickly as premium income exceeded expenses and claims in each of these years, allowing policyholder surplus to grow significantly. Metropolitan had conquered the industrial field and emerged as a strong and leading company.
Knapp's sagacity, grit and money had won the day, and his achievements were recognized, accepting places on the boards of large corporations including banks. The Republicans begged him to accept their party's nomination for mayor of New York, but this he refused. The maker of Metropolitan had become a very prominent citizen and on Memorial Day 1889 Benjamin Harrison, President of the United States, skipped Manhattan and arrived the day before to dine at Knapp's Brooklyn mansion at 554 Bedford Avenue, which contained a well-stocked library and a billiard room. President Harrison spent the night there and greeted invited guests the next morning. He was the fifth President to enjoy the hospitality of Joseph and Phoebe Knapp, the others having been Grant, Garfield, Arthur and Cleveland. The Knapp's were active in their church and with their philanthropies; they shared a lively interest in art and music, and Mrs. Phoebe Palmer Knapp composed several hymns that found their way into the Methodist hymnal. One hymn "Blessed Assurance" became a classic and is still sung in churches today.
There was one other quality about Joseph Knapp that made his involvement with Metropolitan Life important and long lasting; namely, his ability to attract and retain talented individuals. In 1870, he hired a young man, John R. Hegeman, as the Company Secretary. Hegeman served as Knapp's Vice-President and when Joseph Knapp died in September 1891, John Hegeman became the third President of the Metropolitan (1891-1919). In 1889, Knapp urged the attorney, Haley Fiske, to join the company. Haley Fiske became the fourth President of the Metropolitan (1919-1929). In 1883, a 16 year old mail boy, Fred Ecker, was hired. Knapp spotted him in his duties, and the youth told him that he might go to night school and take up accounting. The President was unenthusiastic. "There will better openings here than that." He made Fred a clerk in the real estate department. Fredrick H. Ecker became the fifth President of the Metropolitan (1929-1936) and then its first Chairman of the Board. It was these later men that made the Metropolitan a huge financial powerhouse in the first half of the 20th century, but all of them owe their careers at the Company in part to the foresight of Knapp and built on the foundation he established. Today, in 2010, with the industrial line of business long gone, MetLife remains the largest United States life insurance carrier in terms of in-force amounts and employs over 52,000 people world wide.
In 1909, Metropolitan, using its industrial base and having rejuvenated its ordinary life line of business and with innovations into annuities, group contracts and public welfare on the drawing boards, built the tallest building in the world on Madison Avenue between 23rd and 24th streets, on land that had been acquired by Joseph Knapp before his death and which subsequently served as the Company's home office for over a century. The Metropolitan Life Tower at 700 feet would remain the tallest building 1909 to 1913 before being supplanted by the other company that started a nickel and dime business in 1879; namely the Woolworth Building in downtown NYC at 792 feet. Both companies made their fortunes selling products for pennies and erected skyscrapers but there is at least one difference: Woolworth is a household name and Americans know what he accomplished, but virtually no one knows the name of Knapp, the man who made the Metropolitan Life Insurance Company.
(1) Marquis James, The Metropolitan Life, A Study in Business Growth, The Viking Press, New York, 1947.
(2) Louis I. Dublin, Ph.D., A Family of Thirty Million, Metropolitan Life Insurance Company, New York, 1943.
(3) Green-Wood Cemetery Civil War biographical dictionary.
Joseph F. and Phoebe along with other family members are buried in Section 176/177 Lot 27752, Green-Wood Cemetery Brooklyn, New York