The Freeman Orientation, Part 5 (Houghton Freeman)

By Nancy Smith

Houghton Freeman '43 lived through different decades and fought different battles in China and Japan, but, like those of his father, his years in East Asia have shaped his life.

Houghton Freeman ("Buck" to his friends) abandoned his studies at Wesleyan in the middle of his sophomore year to join the U.S. Navy. The Navy, desperately short of personnel who could speak, read or write Japanese, sent him directly into a one-year immersion course with Japanese professors at the University of California at Berkeley. "They heard I'd been born and raised in China," he says, "and they believed that anyone who knew one Oriental language could easily pick up another-which isn't true.


"When I was in the Navy, Dad was fascinated with my Japanese education," Freeman continues. "Every time I went home on leave, he wanted me to go over the characters with him and check the differences between Chinese and Japanese pronunciation."

Assigned to Naval Intelligence in New Caledonia, under Admiral Halsey's command, he worked with Japanese prisoners and captured documents. This was followed by a posting as assistant naval attaché to the U. S. Embassy in Chunking.

When the Japanese occupied China, they didn't take over the entire countryside but concentrated their troops in selected cities and populated areas. Freeman was sent from Chunking to Fu Chow, the only major city on the coast that the Japanese had not taken, where he and a radio operator set up an intelligence station in the former U.S. consulate. Working in tandem with the British vice consul (Murray MacLehose, later Sir Murray, governor of Hong Kong) they provided weather reports and kept an eye on shipping, on agents in Japanese occupied areas and on the activities of a Japanese garrison located about 10 miles away on a small island that commanded the approach to the Min River.

"MacLehose had a motor launch and we shared agents and intelligence," Freeman recalls. "It was kind of fun until the Japanese finally decided to take Fu Chow.

"They didn't actually take Fu Chow," he adds. "An American submarine had sunk an unmarked Japanese hospital ship, and two or three hundred survivors swam ashore. They just walked into the city, foraging for food. The Nationalists, whose morale was low, fled - probably six or seven thousand of them.

"MacLehose and the radio man and I put our equipment on the launch and moved up river. They shot at us for a few hours (I think it was actually the retreating Chinese), but we had only sidearms and couldn't return any fire."

The Japanese took over control of the railroads, and Freeman and his friends were effectively cut off. "It was perfectly safe, but isolated. We carried on for a year providing information and moving back and forth to Chunking."

Most of his time was spent in the interior of China, in the northern part of Fukien Province, where he maintained contact with guerrilla forces and helped with the rescue of downed American pilots.

After the war, when he was serving out his time in Washington, D.C., he made one further trip to East Asia, this time as part of a mission going to Shanghai to donate some obsolete U.S. vessels to the Chinese Nationalists.

Back at Wesleyan, Freeman picked up more or less where he'd left off-halfway through his sophomore year. Because the University granted him credits for his language training in the Navy, he changed his major and became the first Wesleyan student to earn a degree in Japanese.

After graduation in 1947, he joined American International Underwriters and was sent to England to be trained at Lloyds of London. When he sailed home a year later on the Queen Elizabeth, he brought with him an English bride, Doreen.

Their first posting with the company was in Shanghai, Freeman's boyhood home, but his tour of duty there was cut short when the Communists took over the city in 1949.
Most of the company's staff was transferred to Hong Kong, but Freeman and a small crew stayed on in the hope that business could be done with the Communists. It soon became apparent that the Communists wouldn't let them sell insurance in Shanghai, but the company had other interests-a bank, a newspaper (the city's only English-language newspaper, the Shanghai Evening Post), a real estate company, an apartment building and franchises for both General Motors and Chrysler automobiles.

The first thing to go was the newspaper. "It lasted about two days," Freeman says. "Gradually they moved in on all our other enterprises and we had to close shop."

The Freeman's daughter, Linda, was born during these uncertain days. "When Doreen went to the hospital, it was being managed in true Communist style, with the costs of the hospital borne each day by those patients who happened to be in it. If there were 100 people in it on a given day, the costs incurred were divided by 100; if there were three patients, the costs were divided by three. Linda was a $10,000 baby, a lot of money in those days."
Freeman secured passage for himself, Doreen and the 10-day-old Linda on a refugee ship headed for Hong Kong, but they came very close to missing the boat. "A claim had been made against the company in the Peoples' Court," he recalls, "and no one was allowed to leave the country if any litigation was pending.

"The ship was due to leave on a Friday. On Thursday, the summons arrived. We were assured that only our testimony was required, and once it was given in court, we could leave."

The proceedings started about 6 p.m. The judge, who had never before been in a big city, began with a panegyric to the Shanghai skyline, asking Freeman if there were any buildings in America taller than those in Shanghai. "In Shanghai, the tallest buildings were about 13 stories high," says Freeman, "so I told him that in New York City probably two-thirds of the buildings were at least twice as high. He didn't believe it. He said, 'In America, your problem is that your workers are all oppressed.' I said, 'Yes, if owning their own homes and automobiles is what you call being oppressed.' By then he was frowning, and he said, 'You have a great deal of difficulty in the United States with the Ku Klux Klan.' I finally realized what I had to do and I said, 'Yes, we certainly do.' Then he beamed; we'd found a topic we could agree on. So then we talked about the case and we gave him the information he needed and he gave us permission to leave.

"It was 10:30 before I got home that night-but what a relief!"

When they boarded ship the next afternoon, nobody could bring much baggage, but, Freeman says, "Everyone brought booze - the best scotch and brandy they could find. There were a lot of young men from the oil companies, like Texaco and Standard Oil; they all got tight that night and, up on deck, they began singing the Nationalist anthem, "San Min Jui." That made the Communists on shore absolutely furious, of course; they stormed onto the ship and refused to let it sail until the captain found the perpetrators.

"You never saw people sober up so quickly. The hero of the occasion was the captain, who hustled all the singers below and told them to stay out of sight, then somehow managed to appease the Communists and calm them down."
The ship took the Freemans to Hong Kong and then, to Japan, their home for the next 20 years.

This was September of 1949 and, in that postwar economy, everything revolved around the military. "General MacArthur wanted an American company there to service the insurance needs of the military, and that's primarily what we did.

"It was a fascinating era. Japan was just beginning its reconstruction. There were no factories making automobiles, there was no electronics industry, they hadn't even started malting transistor radios. Taxis were running on charcoal. The only vehicles people could get were those discarded by U.S. military personnel. The Japanese patched up heaps that we would have considered total writeoffs."

American International Underwriters wanted to get into the Japanese market and, after many years, made a breakthrough with automobile insurance. In those days, under a typical Japanese policy, the owner of a car had to bear 25 percent of any loss from an accident. "Japanese companies didn't have claims departments," says Freeman, "so the driver, after he ran over somebody, would have to jump out of his car and negotiate with the victim.

"Like everybody else, the Japanese preferred to have someone else do such talking for them, and we provided that service. We became the most popular company in Japan for automobile insurance and they soon began to copy us. Now they have overtaken us in the automobile field, but we're still the largest foreign company for general insurance in Japan, far and away."

As he watched the Japanese economic renaissance, Freeman became aware of cultural differences between the ways the Japanese and the Chinese conducted business.

"The Japanese are very well-organized, they work beautifully in groups, which is why they excel in producing large corporations, great cartels. Mitsubishi, Mitsui, Sumitomo-they are models of efficiency and power.

"The Chinese all work as individuals. Our image of China today is of unindividualized crowds, all looking alike under Communism. I'm not saying they can't be disciplined, but in terms of business there are no great lasting Chinese corporations.

"The Chinese are brilliant as individualists, but you will find they all work essentially alone. They usually have family working with them-son, wife, sister-in-law-but as soon as the central character dies, the whole thing tends to collapse. That's the history of Chinese business."

Differences between Japanese and American managerial styles sometimes caused confusion. "The Japanese operated on a strict seniority system, like the army. We perplexed them because we would promote people on the basis of their talent."

Conversely, the Japanese system of administration through consensus wasn't always easy for Freeman. "It was one of my headaches," he says. "In Japan, you'd hire a man and five minutes later he'd need an assistant. They feel more secure if they have someone to bounce ideas off and consult with.

"They don't leave meetings until everybody agrees on an answer or a solution. It can take forever, and sometimes it drove me mad. I had to go through the motions of patience, making sure we had everybody's thoughts on every aspect of a problem.

"Of course one good result of the process is that you know you have everyone behind you." Would it work here? Freeman thinks not. "The Japanese method doesn't fit our psychology. Americans are superb administrators. Our style is to place executives in positions of responsibility and expect them to make decisions. And when we work through committees, we may not be in full agreement, but after we hear all sides of a question, someone makes a decision on which way to march. It's a quicker process.

"But the Japanese system works well for them, and they've certainly proved it can be competitive."

Home base for the freemans was Tokyo where they enjoyed the advantages of big-city living and the small-town social amenities of a closely knit foreign commuuuy. Their son Graeme was born in 1955. He and Linda were educated in Catholic schools in the city until they were sophomores in high school. Linda was sent back to the States to attend the Emma Willard School in Troy, N.Y., and then to Pitzer, one of the Claremont Colleges, in California. In 1970, when the family came home, Graeme attended the Dalton School in New York City before he matriculated at Wesleyan-where he majored in East Asian Studies and graduated in the Class of 1977.

When he returned to the United States in 1970, Buck Freeman was first put in charge of all the American Insurance Company's operations in the Far East and Japan; later he took over direction of all overseas operations, which account today for 40 percent of the company's business. Today, as president of American International Underwriters and senior vice president of American International Group, Inc., he presides from his Wall Street office over a global empire that does business in 135 countries.

A member of Wesleyan's Board of Trustees since 1982, Freeman returns to Middletown at least five times a year for meetings. As chairman of the Facilities Committee, his considerable managerial talents are helpful as he studies plans for a new field house and swimming pool, slogs through muddy terrain to check out additional playing fields and listens to the desires of the many different constituencies that want a say in the final designation of the future sports complex.

A few years ago, he returned to the campus to talk to a class in the East Asian Studies Program about his experiences as a businessman in China and Japan. He found the students eager, but not so well-versed in the basics of international economic theory as they should be. "You can't understand China and Japan without understanding their economies," he says. "You also must have some grounding in the language, and a sense of the peculiarities of national culture and character. This is the nitty-gritty of international relations."

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