Alfred Lee Loomis - Military Service and A New Career in Finance

Military Service and A New Career in Finance

After the United States entered World War I, in 1917 Loomis volunteered for military service. He was commissioned as a captain, and rose to the rank of lieutenant colonel. He worked in ballistics at the Aberdeen Proving Ground in Maryland, where he invented the Aberdeen Chronograph, the first instrument to measure accurately the muzzle velocity of artillery shells, and portable enough to be used on the battlefield. At Aberdeen he met and worked with a Johns Hopkins physicist, Robert W. Wood, under whose influence Loomis's long-standing interest in inventing and gadgetry evolved into the serious pursuit of experimental and practical physics.

In the 1920s, Loomis collaborated with his brother-in-law, Landon K. Thorne, rather than returning to the practice of law. They acquired Bonbright and Company and brought it from the verge of bankruptcy to becoming a preeminent U. S. investment banking-house specializing in public utilities. They became very wealthy by financing electric companies as these began to establish the electrical infrastructure of rural America, and Loomis sat on the boards of several banks and electric utilities. Loomis and Thorne pioneered the concept of the holding company, consolidating many of the electric companies that operated on the East Coast of the United States. Loomis further increased his fortune via insider trading practices that now are illegal.

In 1928, anticipating the coming Wall Street Crash of 1929, he, his partner, and his firm had converted their investments into cash--having determined that the market had risen so dramatically that it was unsustainable and a crash was inevitable. Once the stock market crash had bankrupted the majority of speculators, while Wall Street floundered, he and his firm became even wealthier as a result of purchasing stocks cheaply after they had plummeted in value and few people had the cash to reinvest. While Senatorial hearings sought to tar him for the success of his prudent strategy, no substantive charges were ever brought, and he actually worked closely with FDR and his administration in preparing the country's technological base for war, using his many contacts in New York finance, as well as generous sums from his own considerable fortune, to finance the early developments in radar, before government money could be provided.