The Man Who Sold America: The Amazing (but True!) Story of Albert D. Lasker and the Creation of the Advertising Century

by Jeffrey L. Cruikshank

  Lasker had less and less use for politicians and their posturings. “Washington makes cowards of most,” the frustrated Shipping Board chairman wrote to a friend in December, with the fate of the Merchant Marine bill hanging in the balance.4 As if to validate Lasker’s scornful judgment, the Senate suspended debate on the controversial bill just before the Christmas recess.

  Early in 1923, the Harding administration mounted a final push to force the stalled bill through the Senate. But by this point, Senate Democrats were determined to filibuster the bill to death. As the clock wound down on the lame-duck Congress, it became clear that the Merchant Marine bill would not even be brought to a vote in the Senate. Lasker’s friends, including W. G. Irwin up in Indianapolis, began wiring their condolences:

  I regret that newspaper reports seem to indicate that it will be impossible for the Shipping Bill to pass. I trust that their prediction will not turn out that way. I know it will be a great disappointment to you and to the President. I believe that you have taken the right view of the situation and that there is no better way by which we can get out of the present shipping situation and at the same time, have a possibility of a merchant marine. There is no question but that you have made a wonderful record in the handling of the Shipping Board . . . I am hoping that there is a Cabinet position awaiting you.5

  The Harding administration formally abandoned the cause on February 28. Lasker was calm in defeat, in part because he saw a way to accomplish his and Harding’s goals without the dead legislation. He believed that because Congress had defeated a bill that was designed to get the government out of the shipping business, the only alternative was to push the government more deeply into the shipping business—but along more profitable lines. “Nobody hates government ownership and operation more than I do,” he told the Journal of Commerce. But now the federal government had to “go more forcibly than it ever has into direct operation.”6

  No doubt the subject of ships and shipping—and the behavior of certain senators—arose frequently during the monthlong vacation that the Hardings and Lasker took together in the wake of the bill’s death. On March 5, Lasker left for Florida to join the Hardings on a meandering cruise aboard an eight-person houseboat, while Flora was enjoying rest and recuperation with daughter Mary in Hot Springs, Virginia. She then joined her husband and the presidential party for their final week on the houseboat.

  The early months of 1923 presented a range of challenges to Albert Lasker: many related to his chairmanship of the Shipping Board, but others growing out of his complex business affairs. Lasker had resolved to put his business on hold during his Washington service, and for the most part, he honored that resolution. But an episode of client skullduggery made business impossible to ignore completely.

  In 1922, Lord & Thomas client Sun-Maid got into financial trouble, and approached Lasker for help. He personally loaned the company $250,000, and—from his temporary perch in the nation’s capital—ordered Lord & Thomas in Chicago to kick in an equal amount. Both loans were secured by the raisin crop.

  Meanwhile, Lord & Thomas’s Los Angeles office—unaware of the half-million dollar loan—agreed to step up Sun-Maid’s advertising dramatically, which involved extending more and more credit to Sun-Maid. Before the end of the year, Sun-Maid owed the agency an additional million dollars, and found itself unable both to service its loans and pay for its ads. Having no other choice, Lasker hammered out a new loan repayment schedule with Sun-Maid.

  But sometime in late December 1922, talking shop with his banking friends in San Francisco, Lasker made an astounding discovery: the California Associated Raisin Company (CARC), the organization behind the Sun-Maid brand, had pledged its crop as collateral twice—his collateral—once to Lasker, and again to a consortium of California banks. Lasker could no longer remain above the fray.

  In fact, as evidenced by a white-hot letter to his associates in Lord & Thomas’s Los Angeles office, he could barely contain himself:

  Their action simply constitutes a betrayal of the great confidence I imposed in them. Even the hardest Wall Streeter would not do a thing like that to a friend. In their desperation to raise money and keep their enterprise going, they were willing to see me—their trusting friend—possibly stripped of all opportunity to get anything back on the money I had loaned or credited them with . . .

  This is a blow to you boys, but not nearly so much a one as to me; it has literally made me ill. It is not the possible loss of the money and the prestige to the business, but the misplaced confidence, that upsets me . . . My confidence was misplaced in believing they were big men when they were not, for, had they been big men, they would have realized that for them to take my money in the way I gave it to them, and then pledge their assets to the bank, was doing an unthinkable thing.7

  Lasker dispatched Elmer Schlesinger—his personal lawyer, and also general counsel to the Shipping Board—to California to negotiate terms with both the Fresno-based banks and the raisin growers. Schlesinger (whom Robert Crane in the Los Angeles office described as “the coldest-blooded man I ever met”) played hardball, threatening Sun-Maid with antitrust suits and other legal actions.

  In short order, Schlesinger had extracted $600,000 in cash and another $600,000 in notes from Sun-Maid, all but some $59,000 of what Lasker and Lord & Thomas were owed. (On Lasker’s orders, Schlesinger insisted that the raisin company directors offer their personal guarantees on the money owed to Lasker and Lord & Thomas.) “Delighted you got the money,” Lasker wired Schlesinger on February 20.8 Schlesinger then immediately negotiated a deal whereby San Francisco-based banker Herbert Fleishhacker bought the notes for 90 cents on the dollar, and Lord & Thomas was out of the financial woods.9

  The agency was also out of a job at Sun-Maid, which—after paying off Lord & Thomas—went with J. Walter Thompson. And there was a very real risk that Lord & Thomas would now lose the rest of its West Coast accounts, including the treasured Sunkist. As Don Francisco, head of the Los Angeles office, later recalled:

  Schlesinger made himself very obnoxious about town, and it looked as though our whole business here was threatened. For example, the banks selected as their negotiator an attorney named George Farrand, who was the attorney for two of the clients we had then: the CFGE and the California Walnut Growers Association. Schlesinger battled with him for days. They would go together on the train, and Schlesinger would be personally obnoxious, and make Farrand very mad. As a result, [Farrand] threatened to see that we lost the walnut account and the Sunkist account . . .

  I remember I dogged [Farrand] around for weeks at board of directors meetings . . . One day at the Sunkist board meeting, he made a talk on the raisin situation, in which he said that he had been called in by the banks to settle a very difficult problem, and that basically, the trouble was that their advertising agents had talked them into extravagant expenditure of money . . . because the advertising was handled on the cost-plus-15-percent [basis], giving the agent every incentive to be selfish, and argue for an overexpenditure. Sun-Maid would have been in good shape were it not for the recommendation of Lord & Thomas—the inference being if Lord & Thomas were bad for raisins, they were bad for oranges and lemons.

  So I asked Mr. Teague, the president, for the floor, and without reference to what Farrand had said, explained what had happened at Fresno from our standpoint.10

  These were deep waters, indeed. C. C. Teague was the newly installed head of the CFGE and, as such, was in a position to change advertising agencies as he saw fit. George Farrand was not only one of the ablest corporate attorneys on the West Coast; he was also a director of the powerful Security First National Bank, which was a primary financer of the fruit cooperatives. Security’s president, Henry Robinson, was so furious with Lord & Thomas that he threatened to “ruin” the agency on the West Coast.

  Part of this fury arose, as Francisco later recalled, because Lord & Thomas had been the first player in the game to spotlight Sun-Maid’s financial difficulties, and ther
eby had provoked a literal run on the bank:

  One of the interesting and unfortunate things, from our standpoint, was that no one had the slightest knowledge that there was anything wrong with the raisin industry, until they heard that Lord & Thomas had demanded its money [from] the banks and the association. So that we broke the news not only to the industry, but to the banks, and therefore we were blamed for having demanded our pound of flesh in their hour of need, after professing to be their friends for ten years, and having made lots of money off them.

  It was even said that Lasker was trying to get control of their industry, which would be impossible unless he bought all the acreage, and would be highly undesirable anyway . . . It was also said that Lasker would “own you or break you.” The facts were that he was overly generous and overly confident in dealing with his raisin friends, and trying to help them out.

  Ultimately, despite Farrand’s threats, Henry Robinson’s fury, and the widespread unhappiness with Lasker’s allegedly ruthless practices, Teague did not fire Lord & Thomas. The walnut growers, it is true, did change agencies, although Francisco later admitted that Lord & Thomas’s own shortcomings, rather than any backstabbing by Farrand, led to that particular termination.11 And in an interesting reversal, Sun-Maid dropped J. Walter Thompson in 1929 and came back to Lord & Thomas. Although the Sun-Maid account by that point was much reduced—down from $1.5 million in 1921 to $220,000 in 1929—Francisco derived great personal satisfaction from the winning back of this account and the burying of the hatchet that it implied.

  Meanwhile, there was one more twist to the tale of Albert Lasker’s eventful two years in the nation’s capital: the rebirth of the mighty Leviathan.

  In December 1921, in response to the Shipping Board’s request for proposals, the Newport News Shipbuilding and Dry Dock Company submitted a bid of $8.2 million to recondition the Leviathan—lowest of the eight bids submitted, and substantially less than the previous estimates of around $12 million.12 The shipbuilding company also promised to have the ship completed in time for the summer 1923 tourist season.13

  An angry Representative James A. Gallivan of Boston declared in January 1922 that the nation’s private ship operators had the Shipping Board “by the throat,” and had prevented the Boston Navy Yard from getting the Leviathan contract. Gallivan then proposed the elimination of the Board, which in Gallivan’s estimation was still a disaster—despite the efforts of Albert Lasker, who had “posed as the man who is going to shake a magic wand.”14

  The aging lion from Massachusetts, Senator Henry Cabot Lodge, took up the cause in February, proposing an amendment to the Shipping Board’s annual appropriation which stipulated that without the direct intervention of the president, no money could be spent rehabilitating government ships until the Navy yards around the nation had a chance to bid on the work. His amendment was defeated, the contract was awarded, and the Leviathan left for Newport News under her own steam in April 1922, finally escaping her risky internment on the piers of Hoboken.

  The refitting and rehabilitation of the Leviathan at the Newport News Shipbuilding and Dry Dock Company was supervised by the indefatigable William F. Gibbs, who gradually transferred his professional loyalties from his employer, IMM, to the Shipping Board, which quietly helped Gibbs and his brother (described by Ralph Sollitt as “those tall cadaverous-looking fellows”) go into business for themselves.15

  Some twenty-nine hundred workmen labored on the ship for fourteen months—expending almost 6 million man-hours—gradually transforming it from an outmoded hulk into a showpiece. Its hull above the waterline, totaling three-and-a-quarter acres of steel plating, was scraped and painted with a rust-proofing red paint, making it (in the words of the New York Tribune) the “biggest red thing in the world.”16

  Inside the huge vessel, hundreds of miles of German wiring was ripped out and replaced with heavier-gauge wire—along with nine thousand new switches to direct the current. Twenty-five miles of copper tubing were required to restore the system that provided heat to the staterooms. Workmen installed eleven new elevators, five electric dumbwaiters, and an ice-making system capable of producing 6,720 pounds of ice per day. The largest anchor ever made in the U.S., weighing 33,300 pounds, was mounted on the ship’s stern. Because the ghost of the Titanic was never far from the minds of sailors and potential passengers, the Leviathan was fitted with seventy-two lifeboats capable of carrying nearly thirty-four hundred passengers and eleven hundred crew members—the ship’s full complement.

  Early on, Gibbs made the key decision to put a single design firm—the New York-based architectural firm of Walker & Gillette—in charge of decorations and fittings for the vessel. The New York designers chose all of the fabrics, carpets, furniture, china, silverware, and artworks for the Leviathan, creating a cohesive look and feel throughout. Walker & Gillette performed a monumental task, specifying (for example) twenty thousand square yards of broadloom carpet and three thousand square yards of oriental rugs.

  Admiral Benson—Shipping Board Commissioner and lifetime Navy man, and the Board’s representative to the refitting process—worried aloud that perhaps the ship had been made too luxurious.17 But most of the select few who viewed the ship as it neared completion in Virginia unreservedly hailed its $8.2 million transformation.

  On May 16, 1923, the Leviathan steamed back out of Newport News. She moved slowly, partly out of respect for the hazardous Hampton Roads crossing, but also because Gibbs didn’t want to stress the ship’s new oil-fired power plant while her hull was still encrusted with a thick accumulation of barnacles. Two days later, the ship arrived at the Boston Navy Yard, where she would be dry-docked, scraped of her barnacles, repainted, and put to sea. Her first transatlantic crossing was scheduled to begin, not coincidentally, on July 4.

  First, though, there was the matter of the shakedown cruise. Gibbs’s original specifications for the Leviathan’s refitting called for “an extended and thorough sea trial to ascertain that everything in connection with it, including the oil fuel installation, is in an entirely satisfactory condition”—a standard procedure for new or rebuilt ocean liners.18 Clearly, the trial would have to include a full complement of “guests”—to put real-life stresses on the ship’s many systems and its crew—and already, requests to take part in the Leviathan’s maiden cruise were pouring into the Shipping Board’s offices.

  Albert Lasker now saw an opportunity to reap a publicity windfall. In mid-May, he sent out personalized engraved invitations to hundreds of opinion makers—publishers, politicians, regulators (including the “Prohibition Commissioner” in the Bureau of Internal Revenue), and prominent business figures—offering them the opportunity to participate in the Leviathan’s first sea trial, scheduled for the third week of June.19

  Almost immediately, some of those invitees wrote back asking if they could bring their wives along. The answer, according to Lasker, was no:

  We have wanted, in connection with the trial trip, to use that opportunity to acquaint a large number of people with the vessel, to the end that they might, in such good and proper ways as they could, aid in fostering good will toward the ship, and thus help in the development of an American merchant marine. With this in mind, the invitations which have been issued by the Shipping Board have been confined to men only, and no ladies have been invited.20

  Starting in the first week of June, voices began to be heard criticizing the proposed “cruise to nowhere,” disparaging it as a “million-dollar joy ride” and a “stag party.” Rival shipping companies (as well as Democratic-leaning newspapers) helped fuel the opposition to the proposed trip, but at least some of the critics seemed sincere in their outrage. For example, a young House member from Manhattan named Fiorello H. LaGuardia—the future mayor of New York—had traveled twice on the Leviathan as a soldier during the war; now, in a letter to Lasker, he condemned the “joy ride,” and suggested that the Shipping Board take as its passengers veterans who had been disabled in combat. Quietly, Lasker turned
down the proposal.21

  Lasker refrained from making public statements in support of the trial run until the Democratic National Committee, chaired by an up-and-coming politico named Cordell Hull, blasted it on June 11. Lasker defended himself and his Board. Every responsible owner of a new passenger ship, he noted, tests that ship before putting it into service. The entire cost of the trial run would be approximately $120,000: a pittance when compared with the government’s $8.4 million investment to date. The marginal cost of having four hundred to five hundred passengers on board, without whom the trial run would be largely pointless, was $13,000. Lasker implored the Democrats not to “besmirch” the “great shipping enterprise” upon which the United States was now embarking.22

  Some guests quailed in the face of the controversy. The influential Senator T. H. Caraway, an Arkansas Democrat, initially accepted the invitation and also extorted from Lasker an invitation for Mrs. Caraway—a rare exception to Lasker’s men-only policy. “I want her to go,” he wrote to Lasker in no uncertain terms. Lasker capitulated. Then the tempest arose, and Caraway sent back his invitations and publicly condemned the trip. “Permit me, my dear Senator,” Lasker responded in a frosty note, “to express my further special regret that we could not have both you and Mrs. Caraway with us, as requested in your letter of acceptance of May 21st.”23

  Anxious Republicans approached President Harding directly, begging him to cancel the trip and thereby take the issue away from the Democrats. Harding declined. Rumors began to circulate about a court order to enjoin the trial run. Lasker continued to dismiss his critics, convinced that he was in the right. “I would have been criminal,” he wrote to a friend, “if we had not had [the Leviathan’s trial run] in just the way we are having it.”24 But there were definitely anxious moments at the Shipping Board. “We had a hard time getting the boat all filled,” Ralph Sollitt confessed.25