As noted below, for Modigliani the spark was attendance at a 1950 conference organized by the National Bureau of Economic Research, at which he heard David Durand present the paper that became Durand 1952. As discussed in the text, Durand explored, but ultimately dismissed, the idea that capital structure might be irrelevant. Modigliani felt the proposition might hold despite Durand's belief that it did not. (Modigliani's own contribution to the meeting-Modigliani and Zeman 1952 was further from his eventual position than Durand's paper.) It took Modigliani several years of occasional reflection on the problem to come up with "a really convincing proof" that the proposition held (Modigliani interview). When he did, lie described the proposition that capital structure was irrelevant to a class lie was teaching at Carnegie that Miller was also attending. "Merton Miller said `I have the evidence for you."' (Modigliani interview) Miller had set his graduate students the task of finding empirically the best capital structure from the viewpoint of minimizing a corporation's cost of capital, and they had been unable to do so: "They couldn't find any optimum." (Miller interview) 7.

Donald MacKenzie, An Engine, Not a Camera, loc. 1425