Kappel, Frederick Russell

(b. 14 January 1902 in Albert Lea, Minnesota; d. 10 November 1994 in Sarasota, Florida), president and chairman of AT&T who presided over the unprecedented expansion of the Bell Telephone System in the post—World War II period.

Frederick R. Kappel (rhymes with “apple”) was the eldest of five children. His father, Frederick Albert Kappel, whose Swiss ancestors had been among Minnesota’s pioneering families, owned a barbershop that doubled as a cigar emporium. His mother, Gertrude May Towle, was a homemaker. While an undergraduate at the University of Minnesota in Minneapolis, Kappel was a serviceman for the Southern Minnesota Gas and Electric Company; he also worked as a waiter. An accomplished musician, Kappel was a drummer in the University of Minnesota band and, to generate income during the school year, he moonlighted as a drummer for a dance band. An electrical engineering major, he earned a bachelor of science degree in 1924.

After graduation Kappel embarked upon a career in the communications industry and literally worked his way up the ladder a step at a time. His first position as a $25-a-week groundsman with the Northwestern Bell Telephone Company led, in the course of one year, to jobs as a lineman, splicer’s assistant, circuit tester, switchman’s apprentice, and interference engineer. In 1925 Kappel advanced to the position of inductive coordination engineer. Three years later he moved to the company’s division of foreign wire relations. In the meantime, on 18 August 1927 he married Ruth Carolyn Ihm, whom he had met during their undergraduate days at the University of Minnesota. The couple had two children.

Following his marriage, Kappel’s career continued to advance steadily. By 1929 he was a transmission and protection engineer. In 1933 he became a building and equipment engineer for Northwestern Bell. A year later Kappel was transferred to Omaha, Nebraska. After serving initially as regional engineer for the Nebraska and South Dakota service area, he was promoted to plant operations supervisor in Omaha in 1937. Two years later he became assistant vice president in charge of operations. After six years as vice president beginning in 1942, Kappel accepted a position with Northwestern Bell’s parent company, American Telephone and Telegraph (AT&T).

In 1949, his first year at AT&T headquarters in New York City, Kappel advanced from assistant vice president for operations and engineering to vice president of the long lines department to vice president for operations and engineering. Five years later he was named president of Western Electric, AT&T’s manufacturing subsidiary, which produced not only telephone equipment in its nearly two dozen plants but also components for the U.S. government’s Nike missiles, a key element in the nation’s cold war defense arsenal. Under Kappel’s leadership, Western Electric also provided communications equipment for the Distant Early Warning (DEW) radar stations established in the Arctic to alert the U.S. military in the event that America’s cold war foe, the Soviet Union, launched nuclear weapons. A hands-on manager, Kappel personally inspected Western Electric’s work in the Arctic and paid regular visits to the company’s far-flung plants. Approximately 50 percent of his time was spent in the field.

Beginning in 1956, when he was elected president of AT&T, Kappel supervised a $10 billion expansion of the Bell Telephone System necessitated by the insatiable post-World War II demand for phone service. To finance the expansion, an enormous bond issue and a major increase in the number of common stocks were required. The number of AT&T shareholders jumped from 1.5 million to more than 3 million during the time Kappel served as company president and then, beginning in 1961, as chairman. He also presided over the development and launching of TEL-STAR communications satellites, something his daughter has called his most important achievement. The utilization of phone lines for data transmission, the expansion of direct distance dialing, and the laying of new overseas cables to Europe, the West Indies, Bermuda, Panama, the Philippines, Guam, Japan, and Hawaii also occurred during his tenure at AT&T.

All the while Kappel never lost sight of the fact that the company he headed was essentially a “people” business. In an address made at the annual meeting of the American Bar Association in 1964, he stated that the goal of AT&T was “to make your service always more personal, more closely suited to your individual needs, more simple and easy for you to use.” Two years later, when he received Pace University’s Man in Management Award, Kappel shared his thoughts on business leadership. “I think leadership in a large organization must be exercised by many people, not by just a few,” he said. “You cannot articulate goals in an ivory tower.… You have to get around, try things out, test, listen, and learn. If you want people to share your values, you have to share with them.” Even before his retirement from AT&T in 1967, Kappel devoted time to public service and in the process imparted his philosophy of business leadership. In 1963, as chairman of the Business Council, an influential organization providing economic advice to the president of the United States, he called upon corporations to increase their number of minority employees. Appointed chairman of the Commission on Postal Organization by President Lyndon B. Johnson in 1967, Kappel also served as special mediator in a railroad conflict during the Johnson administration. Kappel was a governor of the United States Postal Service during the administration of President Richard M. Nixon and chairman of the Postal Service from 1972 to 1974. In the late 1960s Kappel returned to the corporate world. He served as chairman of the International Paper Company’s board from 1969 to 1971. In 1971 and 1972 he was chairman of the company’s executive committee. During his lifetime, Kappel was honored by the Economic Club of New York, which conferred its Gold Medal for Management upon him in 1959. Other awards included the Cross of Commander of the Postal Award of the Republic of France in 1962 and the Citation for Leadership in the Conquest of Space from the Salvation Army the same year. In 1963 Kappel was the recipient of the Silver Quill award from the National Business Publications Association. He received the Presidential Medal of Freedom in 1964 and the Hoover Medal in 1972. Kappel, who for many years lived in Bronxville, a suburb of New York City, died of Alzheimer’s disease at the age of ninety-two. He is buried in Lakewood Cemetery in Minneapolis. He was predeceased by his first wife, Ruth, who died in 1974, and survived by his second wife, Alice McWhorter, whom he had married on 2 December 1978.

In the course of his long career in the communications industry, Kappel witnessed many changes, a considerable number of which he initiated, particularly during his tenure at Western Electric and AT&T, and presided over the unprecedented expansion of the Bell System during the period after World War II. That he accomplished as much as he did was not surprising, according to William G. Sharwell, vice president of administration and planning at AT&T, because “Frederick Kappel’s most outstanding qualities were his drive and persistence. He was also a good motivator.”

Kappel discusses his business philosophy in two books he wrote: Vitality in a Business Enterprise (1960) and Business Purpose and Performance: Selections from Talks and Papers (1964). Substantial biographical articles about Kappel appear in Current Biography 1957 (1958) and Nelson Lichtenstein, ed., Political Profiles: The Johnson Years (1976). Kappel’s business career is discussed in Business Week (28 Nov. 1953), U.S. News and World Report (28 Sept. 1956), Newsweek (1 Oct. 1956), and Time (1 Oct. 1956). An obituary is in the New York Times (12 Nov. 1994).

Marilyn E. Weigold