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

  These organizational shortcomings eventually convinced Mary to look for another context in which to exert her growing influence. Before leaving the family-planning fray, however, Albert and Mary made a final gift of $50,000 to Planned Parenthood. It was the largest donation the organization had ever received up to that point.

  The next few years of Albert’s and Mary’s marriage coincided with World War II, and the war necessarily took precedence over all other causes.

  Early in 1942, Mary came across a copy of a best-selling book called Victory Through Air Power, written by Major Alexander de Seversky. The author—a colorful Russian immigrant who had served in Czar Nicholas II’s naval air service and later invented the first gyroscopically stabilized bombsight—contended that control of the air had become all-important in modern warfare, and argued that the United States was woefully underequipped along a number of critical dimensions: the number of planes as well as their range, speed, weaponry, and altitude capability. Nothing in the U.S. arsenal, Seversky argued, remotely compared with the sophisticated fighter planes then being manufactured by the nation’s enemies.33

  Mary became a convert, but when she tried to convince Albert of the book’s thesis, the two had what Mary later described as a “knock-down, drag-out discussion about the whole matter,” with Albert refusing even to read Victory Through Air Power. Mary persisted, however, and when Albert finally read the book, he also was won over, and set up a meeting with the author. Seversky turned out to be even more persuasive in person, and the Laskers resolved to do whatever they could to advance his cause.

  First they took him to meet Secretary of the Navy William Franklin “Frank” Knox, and subsequently introduced him to the influential Rear Admiral Forrest Sherman. Mary distributed some two thousand copies of Victory Through Air Power to members of Congress and other major opinion makers in the United States. The Laskers tried to get Seversky an audience with President Roosevelt but, as Mary recalled, the president was very “Navy-minded,” and thought of air power only as an adjunct to naval power.

  In this particular battle, the Laskers joined forces with another private citizen: Walt Disney. When the influential Hollywood mogul decided to make a film version of Victory Through Air Power, he asked Albert to serve as a “consultant” on the picture. In that vaguely defined capacity, Lasker hosted an elaborate dinner in the Grand Ballroom of New York’s Waldorf Hotel on February 14, 1943, for the first semipublic screening of the film. Mary described the evening as “a large and astonishing private party of about 1,000 people at which Albert made one of his rare public speeches.”34

  The movie was an awkward combination of animation and on-camera exposition by Seversky, aimed at persuading Americans to demand that their government build up its air power. “If Victory Through Air Power is propaganda,” the New York Times wrote in a generally positive review, “it is at least the most encouraging and inspiring propaganda that the screen has afforded us in a long time.”35 Disney’s distributor, RKO, declined to release the odd film, and he was compelled to use United Artists to get it into theaters. According to one account, Winston Churchill insisted that Franklin Roosevelt view Victory Through Air Power—after which, allegedly, Roosevelt embraced the concept of long-range bombing.36 At the end of the war, the Disney studio removed the film from circulation, and it wasn’t released again for more than half a century.

  Seversky later received the prestigious Harmon Aviator Trophy for his stubborn personal crusade.

  Albert Lasker had a hard time letting go of Lord & Thomas. But after the false start of 1938, he dissolved the agency once and for all in December 1942.

  This was in part a decision driven by other people’s decisions. Lasker knew, finally, that there were no family members in line to succeed him at Lord & Thomas. His son Edward, increasingly immersed in Hollywood and film production, had no interest in taking over the business. Daughter Mary had been fired. At the same time, the agency’s senior ranks were thinning. Ralph Sollitt had retired in the mid-1930s. Don Francisco—once the heir apparent—had departed in 1940 for government service. Sheldon Coons had launched his own business. David Noyes had left advertising to run a ranch out West. If Lord & Thomas were to go forward, it would require a substantial rebuilding on Lasker’s part, and now, at sixty-two, Lasker was feeling his age. “I am tired,” he told Fairfax Cone, head of the Chicago office. “I go to bed tired, and when I wake up I wake up more tired than when I went to sleep.”37

  One reason, he told Cone, was that he was bored. For many years, changes in the industry had been making the job less fun for him, and the strange new world of advertising—now dominated by marketing vice presidents and account reps—no longer played to his strengths. The pioneering days of advertising, he believed, were over. In an eloquent letter to the head of Lord & Thomas’s London office, Leonard “Mike” Masius, Lasker looked back on his career, and on the state of the industry:

  I was connected with the first advertising ever done on canned pork and beans, canned soup, canned spaghetti. When I with my associates conceived and financed the first advertising of tires; when I was of that group who first advertised automobiles; when with associates I defined advertising so that it became a force of social good to introduce to the people new and better ways of life, I could work inspired, because I was fulfilling myself. But now the social frontiers that advertising could open have been crossed, and advertising is merely an instrument for competitive expression. As such it becomes only a money-making device, and since one cannot keep the money, there is nothing left in advertising itself which is inspiring to me.38

  In addition, the business model that had served Lasker and Lord & Thomas so well over the years was now a hindrance to growth. When Don Francisco first considered moving to New York in 1933 to take over that office and thereby position himself to succeed Lasker as head of the overall agency, he wrote a powerful letter to Ralph Sollitt explaining why he thought the agency was in trouble:

  My impression is that Lord & Thomas heretofore has wanted to be an agency with a few big accounts controlled by two or three men at the head of the agency; accounts held largely through the personal contribution of those top executives to the success of those advertisers, plus perhaps a personal investment in the business, close personal relations with the heads of those advertisers, etc. With such accounts held at the top this way, there is no need for a lot of special service, window dressing, or wasted motion. A fine job can be done and the maximum profit per million of billing yielded to the agency.

  However, there comes a point where the capacity of this kind of an organization is reached. Then it either stops growing or expands too far and the business starts to break up. This type of business finds it difficult to grow when the capacity of the top men is reached because up to that point it has not really been on a competitive basis. Its accounts are held at the top as above referred to. The agency has not found it necessary to add or hold the number of strong men that other agencies have or to do some of the things that other agencies have found it necessary or worthwhile to do. Therefore, for the most part, its business-getters come home empty handed.

  If they do bring home accounts, they are not likely to be kept very long because the major effort of the organization is directed to serving those clients in whom the heads of the business feel the most personal interest. Other clients suffer because the energies of the staff are commandeered for the principals’ clients.

  That, I think, is, roughly, the kind of an agency that Lord & Thomas is. The heart of our business has been . . . accounts secured very largely through Mr. Lasker’s extraordinary influence and amazing capacity . . . But when you get beyond his influence . . . the record is quite appalling.39

  Nothing much had changed in the ensuing nine years. Lasker still remained the essential ingredient in the agency’s success—but now he was tired and bored and had no allies.

  The final compelling reason to shut down Lord & Thomas was financial.40 By 1942, as a result of h
is opulent lifestyle, his real estate purchases, his philanthropic efforts, his settlement with Doris Kenyon, and his generous gifts to his children and Mary, Lasker was running low on cash. His taxable income—mainly consisting of his Lord & Thomas salary and dividends—amounted to just under $200,000, down from nearly $900,000 in 1936.41 He still owned about $1.5 million in marketable equities, principally Pepsodent and Cellucotton stock. But most of his wealth was tied up in Lord & Thomas’s cash reserves.42

  For much of the previous year, Mary and his son Edward had been encouraging Lasker to begin taking capital out of Lord & Thomas, but Lasker couldn’t bring himself to cut the cord. If the payout came in the form of dividends, moreover, it would be subject to a tax rate of close to 80 percent.

  There was a loophole, however: the federal tax code specified a flat tax rate for businesses in liquidation. That rate had been 12.5 percent until 1941, when it was raised to 15 percent. Then, in the fall of 1942, the tax rate went up again—to 25 percent—and the liquidation that would have cost Lasker something like $800,000 in taxes in 1941 would now cost between $1.2 million and $1.3 million. Lasker’s legal and financial advisers warned him that the rate was likely to be raised again in 1943, perhaps to a level that would make liquidation unfeasible.

  Lasker returned from lunch one day and told his wife that he had decided to give up the company.43 Surprised at this sudden turnaround, Mary asked him to think the matter over for forty-eight hours, but Lasker had made his decision, and now he would not look back.

  Word went out to the senior executives in New York, Chicago, and Los Angeles: Emerson Foote, Fairfax Cone, and Don Belding, respectively. These three met intensively with Lasker during the third week of December 1942, and worked out a plan to dissolve Lord & Thomas. At the same time, the group laid plans to create a new agency—Foote, Cone & Belding—with three equal partners. For legal and tax purposes, it would be a complete break.44 Nevertheless, Foote, Cone & Belding would open its doors with some significant competitive advantages. It would have some one hundred employees in five floors in Chicago’s Palmolive Building, about sixty at 437 Park Avenue in New York, about forty in two floors of Los Angeles’s signature Electric Building, and a slightly smaller number in San Francisco. It would not have international branches; Lasker decided to “give” the Toronto, London, and Paris offices to his managers in those cities.45

  For turning over his preferred and common stock in the agency’s liquidation, Lasker would gross some $3.7 million. After setting aside $1.2 million for taxes and contingencies, he would net $2.3 million.46

  Lasker took several steps to get the new agency off on the right foot. First, by assigning the January 1943 profits of $260,000 to the new firm, he gave it sufficient cash flow to get going. Second, he turned over the old agency’s furniture and equipment (including its two engraving and typographic plants in New York and Chicago) to the new one for the token sum of $68,000. Most important, he convinced all but two of Lord & Thomas’s clients—the two exceptions being relatively unimportant accounts in California—to stick with the new company.

  Public reaction was generally disapproving. Time, not always friendly to Lasker, lamented the death of a legendary agency. “To the advertising world,” its writer sniffed, “it was almost as if Tiffany had announced that from now on it would be known as Jones, Smith & Johnson.”47 But Fairfax Cone understood Lasker’s motivations: “He had turned full circle from hectic business to a calm and consoling life filled with endless unexpected wonders, and he was using his large fortune to seed a growing list of projects in the public interest. He had traded what he saw as a life of repetition for one of new exploration and discovery, and he wanted to make the closing of the first so complete and so unequivocal that it could never impinge upon the second.”48

  Lasker granted one of his rare interviews in mid January 1943. The timing was not accidental; he sought to dispel any notion that he had lost faith in the economy in general, or in advertising in particular. “With the tremendous backlog of new products waiting to be marketed, the period after the war may well be the golden age of marketing,” he told a reporter. He talked enthusiastically of plastics and planes. “There will be new products, new impetus to stimulate advertising in the post-war world, as new industries and new firms offer new wares to the people.”49

  Lasker saw into the future, contradicting those who already were predicting a postwar economic collapse. But from that day on—although he and Mary maintained close ties with all three of the new agency’s principals—Albert Lasker no longer had any direct say in the business he had spun off, or in the industry he had helped to reinvent.

  Chapter Twenty-One

  Finding Peace

  WITH LORD & THOMAS gone, where would Albert direct his still-formidable energy and invest his newly liquid financial resources? One answer was the Lasker Foundation, which Albert and Mary established with the goal of supporting medical research. Lasker put only half the proceeds from the sale of Lord & Thomas into the Foundation, but he added money from time to time and through his will provided the Foundation with another large infusion of cash.

  One of the initial activities of the Foundation was to establish awards to recognize outstanding contributions in the field of medical research. The first recipient was William Menninger, who received the award from the National Committee for Mental Hygiene in 1944. The awards were Mary’s inspiration; she was drawing up a will at about this time, and this spurred her to think about her legacy: “When thinking aloud with a lawyer about how I wanted to dispose of my funds, I thought that I would like to establish awards, similar to the Nobel Prizes, in medical research only or in the field of health and medicine. And when the idea struck me, I was so emotionally moved by the idea that I might be able to do this after I died, that I thought, ‘Well, why don’t I do it while I’m alive, if this is all so exciting to me?’”1

  Albert was less enthusiastic. He didn’t relish the idea of having his name attached to so public a gesture. Mary understood his reticence—acknowledging her husband’s “absolute passion for anonymity in anything he did”—but strong-armed him into going along with her.2

  The fields of medicine and health had preoccupied Mary since she was a child. She vividly recalled her own sickly childhood, as well as a deeply upsetting childhood visit to the sickroom where the family’s laundress lay dying. When Mary’s mother told her that the woman had cancer and her breasts had been removed, Mary was shocked. “I thought this shouldn’t happen to anybody,” she recalled. “I was absolutely infuriated, indignant, that this woman should suffer so and that there should be no help for her.”3

  Cancer seemed to lurk on the periphery of Mary’s life. The mother of her close friend, Kay Swift, died of breast cancer. In 1943, the Laskers’ cook was diagnosed with cancer. Mary arranged for the woman to be seen by a doctor and receive radium treatments, but the disease had progressed too far. Mary was shocked to find that almost no progress had been made in the field in the previous two decades, especially when she came across a pamphlet published by the New York City Cancer Committee, which asserted that if a hospital or research group was given $500,000 a year for a few years for cancer research, great progress could be made. Mary was “infuriated” that nobody had come up with this kind of money, especially in light of the “vast economic resources of the people of the United States.”4

  At about this same time, the Laskers were vacationing with their friends Dan and Florence Mahoney in Palm Beach, and Mary discussed her outrage with Florence. Florence jumped into the cause, taking over the annual fundraising drive for the Cancer Society in Miami. That year, instead of the typical total of between $800 and $900, the Mahoneys managed to raise $35,000 for cancer-related work in Miami. Mary was thrilled, and the two women became staunch allies in the fight to support cancer research.

  Albert Lasker initially steered clear of direct involvement in this cause. Although willing to help financially, he didn’t want to become deeply engaged in the deta
ils of the work. “He wasn’t interested in health,” Mary later explained. “Medical problems and illnesses frightened him, and he knew absolutely nothing about them and didn’t want to learn.”5

  Her summary wasn’t entirely accurate. In 1922, in memory of Albert’s younger brother, who had died of cancer a year earlier, the Laskers had established the Harry M. Lasker Memorial Fund as a permanent endowment of the American Society for the Control of Cancer. Albert added $25,000 to this fund the following year; together, these two gifts represented almost the entire endowment of the Society in its first decade of operations.6 Then, in 1928, Albert and Flora made a $1 million gift to the University of Chicago to establish the “Lasker Foundation for Medical Research” to support research into the “causes, nature, prevention, and cure” of degenerative diseases.7

  So Albert had a history of supporting medical research. He also fully understood the importance of seed money, and leverage, to pursue Big Ideas. It was Albert, for example, who gave Mary the crucial suggestion to seek public funds for her crusade. “You need federal money,” he said, “and I will show you how to get it.”8

  Lasker was constitutionally inclined to think big. From his stint on the Shipping Board, moreover, he understood both the “mechanics of legislation, and the psychology of politicians” (as Mary later phrased it). His broad vision and insider know-how, coupled with Mary’s tenacity, proved a formidable combination.

  Their first target in Washington was Senator Claude Pepper, Democrat from Florida. Pepper was Chair of the Senate Subcommittee on Wartime Health and Education, which funded the Office of Medical Research (OMR): the only federal organization that then controlled significant medical research funds. By this time, OMR had spent between $10 and $15 million on diseases related to military service, and had made great strides in the fight against typhus. But in the summer of 1944, the war appeared to be nearing its end, and there was no impetus in Washington to transfer these funds to research into civilian-oriented health issues.