Frederick C. Austin founded the Austin Scholarships. Austin was a manufacturer of road machinery equipment (dump wagons, scrapers, etc.)that incorporated the most advanced technology at the time and played an important part in building the pre-automobile highway system of the United States and several other countries. Austin sold his prosperous business in 1920 and invested the bulk of his fortune in Chicago real estate, notable a "skyscraper" (11 stories high!) in the Chicago Loop.
Two of Austin's closest friends were William A. Dyche and James A. Patten, whose substantial benefactions to Northwestern University had created Dyche Stadium and Patten Gymnasium. Impressed with their example, sometime in 1927 or 1928 Austin consulted with Walter Dill Scott, president of Northwestern, on the possibility of making a substantial gift for a purpose important to the University. Scott, a psychologist, had headed the Army's committee on personnel classification during The Great War, and in that capacity had introduced advanced methods for the selection of commissioned officers. From this experience, he had developed a keen interest in possibilities for improving the selection and training of future executives for American business.
This struck a responsive chord in Austin. He had sold his thriving business in part because he was unable to find anyone in his own organization, or elsewhere, whom he deemed suitable to succeed him when he retired. He had concluded that "the college of hard knocks" was no longer capable of providing the number and caliber of leaders required for the increasingly exacting requirements of the business world. Scott could not have agreed with him more, and thus, between them the educator and the businessman developed the broad outlines of what became the Austin Scholars Program to train future leaders of American business. The Program Launch
On January 23, 1929, Austin turned the F.C. Austin Building, then valued at $3,000,000, over to Northwestern University and made an oral commitment, which he later honored, to leave the entire remainder of his estate, after some bequests, to the University at the time of his death. In return, the University contracted to pay Austin $160,000 a year for life and to assume the obligations made by Austin in his will.
The program was launched in September 1929 with the enrollment of 10 Austin Scholars. It was a remarkable program in many ways. It provided full room, board, and tuition for four undergraduate years, plus a year of all-expense paid study and travel abroad. An equivalent program today would come to over $200,000 per Scholar in 2005 dollars.
Even more remarkable were the innovative educational features built into the program, including courses especially designed for the Austin Scholars, and the establishment of uniquely close relationships between them and selected faculty. It was a rich educational experience, greatly rewarding to both the University and the Scholars. But it was too good to last. The Great Depression
Ten new scholarships were awarded in each of the years 1930-32, but an atmosphere of mounting economic gloom developed as the Great Depression fastened its grip on the country. Austin financed the program personally during his lifetime, but upon his death in 1932 the entire burden passed to the University. By that time the assets provided by Austin had shrunk to a fraction of their 1929 value. What had looked like a good deal for all concerned in 1929 turned into a bad deal for a long time for the University. Northwestern had assumed responsibility for the benefactions granted by Austin's will in more prosperous times; this, together with the continuing costs of the scholarships, placed the program in precarious financial condition. Only the first class of Scholars enjoyed the benefit of the year of study and travel abroad. No new scholarships were granted after the 10 in 1932 and the whole program was placed on indefinite hold after their graduation in 1936.
By supporting the first four classes of Scholars and honoring the provision of Austin's will, the program became deeply indebted to the University. By the end of the 1930s, the program's chief asset, the Austin Building, cost more in taxes and maintenance then it produced in revenue. Efforts to dispose of the property were unavailing until it was finally sold in 1959; the net proceeds were sufficient to pay off indebtedness and reestablish the scholarships. The New Program
The first of the new Austin Scholars enrolled in the fall of 1959. Like the original, this was a four-year undergraduate scholarship program. While definitely superior to other undergraduate scholarships, it fell considerably short of the "full room, board, and tuition" standard set 30 years before. Also, because of progress made in business education during the intervening period, no need was felt for the kinds of special educational experimentation that had characterized the earlier effort.
In all, 54 Austin scholarships were awarded between the years 1959 and 1966. They not only insured high quality additions to the student body, but competition for them aided the University materially in its recruiting efforts. The number of superior applicants always exceeded the number of Austin Scholarships available, and many of those not fortunate enough to be named Austins enrolled at Northwestern anyway. Like their predecessors a generation earlier, the new Austins made their mark in the classrooms and on campus. They played valued leadership roles in undergraduate student affairs, and established excellent records of academic achievement. Despite the long hiatus, they further strengthened the traditions of excellence they had inherited. The School of Business
In 1966 the School of Business, as it was then known, decided to convert to an all graduate institution, and in that year enrolled its last incoming undergraduate class. That one, and those already enrolled, were allowed to complete the four-year program, but from 1967 on all new entrants, including Austin Scholars, enrolled at the graduate level.
The Austin Scholarships played a key role in enabling the school (named the Graduate School of Management) to achieve its stated aim: "to establish a position of leadership in graduate business education." This required, among other things, an increase in total enrollment from around 200 to at least 600, the minimum number of students necessary to justify the size and diversity of faculty essential for a first-class graduate school. To this end, a major effort was mounted not only to triple the size of the student body but to significantly raise its level of capability.
Competition among the graduate business schools for topflight students was keen, but the Austin Scholarships gave Northwestern an unusually effective recruiting edge. No other graduate business school had anything comparable to offer. At a time when Northwestern's reputation was still being built, this made it possible to bring exceptionally talented individuals who might not otherwise have had this school at the top of their list. The appeal of the Austin Scholarships lay not only in the financial stipend - although that alone put the scholarship in a class by itself - but in the aura which surrounded them. In the 39-year period, 1967 - 2005, 770 Austin scholarships were awarded.
The course set over 75 years ago by Fredrick C. Austin and Walter Dill Scott has been achieved in large part. They would be proud of what their vision accomplished and the promise it holds for the future of business leadership