Appetite for America

by Stephen Fried

  However, since he couldn’t cancel the contract, the Santa Fe’s new president tried to make Fred’s life miserable by exploiting what he believed to be a loophole in the agreement. Strong had given Fred exclusive control of Santa Fe restaurants and hotels west of the Missouri River; there was no mention of dining cars, since at the time the railroad had only a couple of them, servicing the “airline” between Chicago and Kansas City. Manvel decided he would buy dining cars for his western trains and stop making thirty-minute meal stops at depots with Harvey eating houses. His excuse was that he wanted to cut travel times on competitive western routes.

  Manvel quietly fired Fred from the dining car service on the Chicago-to-Kansas City train, and the Santa Fe ordered a fleet of new dining cars to be built, which the company announced it would run itself.

  Fred was outraged. So was George Pullman, who believed that if Harvey didn’t control the Santa Fe dining cars, then he should. Pullman reportedly threatened to sue the railroad, but then pulled back. Fred consulted with his local lawyer, William Hook, and they decided to hire a high-powered Chicago attorney, George Washington Kretzinger, a former railroad general counsel who had argued in front of the U.S. Supreme Court, to represent his interests. Kretzinger’s negotiations with the railroad continued for more than a year. While they argued, the railroad waited to deploy its new dining cars in the West, so it was nearly business as usual for the Harvey eating houses—except that Dave Benjamin and Ford Harvey were changing roles and taking on more responsibilities.

  Now that Ford was married and living in Kansas City, he spent almost every day with Dave, who remained Fred’s second-in-command. Dave was only eight years older than Ford, but the gap was significant. He was thirty-three, long married with two children, and already well established as a businessman and budding civic leader. In his personal life, he and his siblings were becoming active in Kansas City’s expanding Jewish community—particularly his brother Alfred, who now had a position similar to Dave’s with Fred’s friend Colonel Abernathy, whose furniture company had also relocated there from Leavenworth.

  Ford and Dave had been in an unusual situation for some time. Both had grown up revering Fred Harvey, whose success and vision had brought them wealth and prestige. Now they were in the same plush foxhole together, faced with the complex dynamics of family business. Dave had to respect Ford not only as the boss’s son but as someone who was one Fred health crisis away from becoming his boss, too. Yet Ford still looked up to Dave, in part as the older brother he never had but also as a substitute for the father he didn’t see very much. It was not surprising that when Ford marked his adulthood with facial hair, he grew a full mustache like Dave’s rather than copy his father’s Van Dyke. But it was also a sign of the times: As American men became more civilized, they preferred to be less hairy.

  Dave and Ford shared one other thing: They were the only ones who realized the full impact of Fred spending so much time away from his family and his business. While he still made all the major decisions—many via coded telegram from England—it was amazing how many day-to-day choices each of them was making for, or rather as, Fred Harvey.

  Ford was gaining confidence in his increasing independence. He no longer needed a mentor to travel with him to inspect the eating houses or the ranches. Mostly, he took the long train rides only with his assistant, Tim Cooper, the company’s first black office employee—who had started as a messenger for the bookkeeper and worked his way up.

  While the daily pressures of handling the eating house business were unchanged, emotions ran high at the Kansas City office as Fred’s lawyer wrestled with the Santa Fe’s attorneys. Everyone knew what was at stake: At any moment, they could go to war with the railroad or be forced to close the entire Fred Harvey system overnight. The fear could be seen in the telegraph codes that Dave added to Fred’s pocket cipher book whenever the boss left for England—to cover every possible worst-case scenario. According to the cipher book, the word “Quandary” meant “Indications are that Company are getting ready to put [dining] Cars on the road but can get nothing official,” “Quarrel” meant “Mr. Manvel declines to delay the matter until you can get back.”

  And “Quench” meant “Kretzinger advises us to bring suit at once.” When Fred read that word in a telegram he received in London at the end of July 1891, he immediately booked passage back to the United States. As he sailed home on the City of Paris, his lawyers filed suit against the railroad with which he had risen to greatness.

  FRED HARVEY V. AT& SF RR CO. was the talk of the railroad industry and the restaurant business. People had been wondering for years just how Fred Harvey did it, how he ran what were essentially marketplace restaurants in remote, arid locations using a train refrigerator car as his greengrocer. While the Fred Harvey name was well-known, Fred himself was a mysterious figure—“a peculiar character,” according to the Chicago Herald, who “always keeps his whereabouts a secret, and is liable to jump from a train at one of his eating houses at any moment and without warning.” He did not like people knowing his business. Now his relationship with the railroad was national news, splashed across the pages of major newspapers in New York, Chicago, and Los Angeles.

  The papers were especially taken by Fred’s frontier saga, which they gobbled up like any great cowboy yarn. His lawsuit told the story of how, for the past fifteen years, he had run his company “at great risk and loss and with many disadvantages,” because his eating houses were “frequently invaded by desperate desperadoes” and “constantly menaced by incursion of hostile Indians and infested by gamblers and other dangerous and lawless persons.” His employees were “subjected to indignities” and often found themselves at the wrong end of a gun, driven from the eating houses “and at times from the town at the point of revolvers.”

  The lawsuit revealed the full scope of Fred Harvey’s very private business. He now ran Santa Fe eating houses, lunchrooms, and hotels in twenty-four towns across five states. He had a huge cattle ranch in Granada, Colorado, where he had also started raising milk cows and chickens for his eating houses. And he had recently bought a second farm in Emporia, Kansas. He had four hundred employees and an annual payroll of nearly $250,000 ($6.1 million). He was serving five thousand meals a day. He had a lot to lose.

  But Fred was well connected in Chicago. He had many prominent friends there, and he had comped meals and hotel rooms for many a Chicago politician and businessman venturing out to see the West. His attorney was also influential, and they were able to find a sympathetic judge. The day after the lawsuit was filed, a temporary injunction was issued against the Santa Fe. The railroad challenged it, but the judge denied the appeal and made the injunction permanent.

  The railroad appealed again, claiming that the local courts had no jurisdiction and the Interstate Commerce Commission should get involved in the case. That challenge was also denied. The judge left it to Fred and Santa Fe president, Allen Manvel, to work out their differences. In the meantime, the railroad was not allowed to replace Fred Harvey meal stops with dining cars.

  It was an embarrassing defeat for the Santa Fe. The largest railroad in the world, with reported annual earnings of nearly $25 million ($610 million) and stock valued at over $200 million ($4.9 billion), was being held hostage by its small, privately held food concessionaire. The caboose was wagging the train.

  CHAPTER 17

  THE BIGGEST CATERED LUNCH IN AMERICAN HISTORY

  EVERYTHING FRED HAD BUILT SEEMED IN DANGER OF FALLING apart. Relations with the Santa Fe continued to deteriorate, business was stagnant, and, adding to the strain, the Harvey family suffered a devastating loss. Byron Schermerhorn died suddenly in California at the age of fifty-six, leaving a wife and two teenage daughters. Fred received the news in New York, just before heading to Washington, D.C., to lobby several senators with railroad backgrounds for support in his battles with the Santa Fe.

  He took some consolation in memorializing his friend, arranging to have a collection of Sche
rmerhorn’s poems typeset and published in a handsome hardcover book. But the grief was exceedingly difficult to process: Best friends for over two decades, they had spent the past few years preparing for what would happen when Fred, inevitably, died first.

  Soon, however, there was some joyful news. Ford’s wife, Judy, gave birth to a baby girl, Katherine—who was nicknamed Kitty—in July 1892, and the next Fred Harvey generation had begun.

  The baby came just as Fred, Dave, and Ford were starting to formulate backup plans for their business—other ways to deploy what had grown into a veritable army of loyal employees—since the disputed contract with the Santa Fe was set to run out in less than two years. Thinking big, they put in a bid for the largest job in U.S. culinary history—the catering contract for the Columbian Exhibition, the world’s fair to be held in Chicago to commemorate the four hundredth anniversary of Columbus reaching America. Its success was a matter of civic pride and national honor, since Americans had made a decidedly anemic showing at the last world’s fair in Paris, where they couldn’t compete with the French exhibit: the Eiffel Tower.

  Fred had some “ins” at the Chicago world’s fair. He had known architect Daniel Burnham—the driving force behind the fair and the mastermind of the urban fantasy of a classical “White City” in the middle of gritty Chicagoland—for years, since he redesigned the Montezuma. And Fred had several other friends on the ways and means committee, which was stacked with Chicago railroad executives. So nobody was surprised when Fred’s company was selected as one of two finalists for the massive job, along with the catering department at Chicago’s Wellington Hotel.

  Instead of holding a bake-off for the contract, the committee decided to have the two companies audition together—by serving the biggest catered lunch in American history. It was the grand finale of the “Dedication Day” ceremony in October 1892—which, because of endless delays, was the only event of the world’s fair that actually took place during the anniversary year of Columbus’s voyage. In fact, the lunch was served in two of the only buildings in the White City that were actually finished, in part to placate creditors and doubters. After President Benjamin Harrison read a proclamation, there was a parade to the fairgrounds, followed by performances, speeches, and lunch. The caterers were charged with preparing and serving a sitdown meal for 4,500 invited guests in one building and then providing “a nice lunch” for everyone else who attended the parade, regardless of the number.

  Ford made a bet with his father over how many of those “nice” lunches they would have to serve. He wagered a hundred Imperial cigars that it would be more than 100,000, a bet Fred recorded on one of the Leavenworth Bank scratch pads he carried in his jacket pocket.

  The sitdown lunch was in the Manufacturer’s and Liberal Arts Building, a massive Corinthian-style structure that covered forty-five acres and required sixty tons of paint to make it white enough for the White City. The service for the meal was as complex and precise as any major military operation. There were 120 waiters, and 6 chefs who did nothing but brew fresh coffee: 150 gallons of it. All the other food was prepared ahead of time: 9,000 sandwiches of assorted meats, 120 gallons of chicken salad, and, for dessert, 300 pounds of cake, 80 fruit custard tarts, and 80 wine-jelly rolls, all presliced.

  Sixty thousand people showed up for the public lunch, so Ford lost the bet. They dined in the Electricity Building, at rows and rows of tables that would have extended a mile and a half if laid end to end. There were 350 waitresses serving eight tons of ham sandwiches, 240,000 doughnuts, and 120,000 cups of coffee. Just outside the kitchen, the fifteen-hundred-member children’s choir who had sung during the ceremony ate sandwiches and bananas.

  The lunch was a great success and received high praise from the directors of the fair. Since Fred Harvey and the Wellington Hotel caterers had worked so well together, they decided to team up to bid on the multimillion-dollar contract to feed the entire world’s fair. The Chicago Tribune reported that they were expected to get the job.

  But at the last minute a well-connected New York firm was allowed to put in a competing bid. In the shoot-out of underbidding, Fred lost the single biggest job of his career. It wasn’t until six months later, however, that he discovered just how great a loss it really was—for as the entire American economy went into free fall, the Chicago world’s fair was virtually the only place left in the country where business was any good.

  MOST AMERICANS TODAY have never heard of the Panic of 1893, and the subsequent four-year financial bottoming out that many economists still believe was every bit as bad as the Great Depression of 1929. That’s probably because in 1893 the economy didn’t succumb to a single huge heart attack, but was instead devastated by a series of strokes over many months.

  Only weeks after Fred lost that catering contract, Jay Gould, who was believed to be the richest man in the world, died of tuberculosis at the age of fifty-six. His death in December 1892 was not a surprise, and elaborate preparations had been made to prevent a negative impact on financial markets. Unfortunately, Wall Street soon was rocked by a series of company failures in industries as diverse as railroading, banking, and rope making, all of which put more pressure on what was considered a glaring weakness in the nation’s monetary policy: Gold reserves were being depleted to artificially prop up silver prices for western miners.

  The first visible symptom of the economy’s ill health was the bankruptcy of the Philadelphia & Reading Railroad in February 1893. It wasn’t an especially large railroad, and was considered a chronic underachiever, but it left millions in unpaid debt and sent a signal that other struggling railroads might not survive.

  Five days later, Fred’s combative boss at the Santa Fe, Allen Manvel, died. He was only fifty-five, but had been suffering from Bright’s disease, a then-untreatable kidney ailment, and his death raised the specter that the Santa Fe was in financial trouble as well.

  In the late spring, the World Columbian Exhibition opened in Chicago to great fanfare (even though many of the exhibits still weren’t finished, including the first-ever Ferris wheel). But while there was glee at the fairgrounds—and Fred’s eating houses along the Santa Fe route were packed to and from Chicago—much of the country was in a panic. Two days after the fair began, there was a massive sell-off on the New York Stock Exchange, and one of the most-traded companies—the National Cordage Trust, a combination of twenty-five rope and cord manufacturers that controlled 80 percent of its market—went bankrupt. Cordage yanked the rest of the market down with it, setting off further panic selling and bank failures across America.

  Many called on Grover Cleveland—who was president again, after being voted out of office in 1888 and then reelected in 1892—to respond to the financial disaster. But the president had just been diagnosed with oral cancer, and to keep his condition out of the papers, he disappeared on a “fishing trip” when he was actually having major surgery to remove part of his upper jaw—an operation that was performed on a yacht floating off Long Island Sound to maintain the ruse. As he recuperated, the economy seemed to do the same, until the Erie Railroad declared bankruptcy on July 25. Two days later, banks across the country announced they would not allow large cash withdrawals, leading to widespread hoarding of currency and even more bank failures. Congress acted to change the controversial law that had depleted the nation’s gold reserves. But the move came too late—and it also caused the silver markets to crash. While employment estimates for the volatile time period vary, economists agree unemployment had at least doubled by summer’s end, and perhaps tripled. At least one million Americans were out of work, and the number kept climbing.

  The world’s fair, however, continued to attract visitors; the Ferris wheel, with cars as big as Pullmans, was finally up and running, causing a sensation. It seemed as if the fairgrounds at Jackson Park were the only place in America shielded from the failing economy. By October, nearly twenty-seven million people had paid admission to see the fair, a number equal to roughly half the populatio
n of the United States.

  As the fair wound down, the railroad industry was rocked by the news that the Union Pacific, which had built the first transcontinental railroad, was going bankrupt.

  The Santa Fe managed to hold on, largely due to the efforts of its chairman of the board, George Magoun. A powerful international investment banker, Magoun was the American representative of Baring Brothers bank in England—which controlled most of the Santa Fe’s foreign-owned stock. He was trying to buy some time for the railroad, which had run out of money to make payroll and was facing a $5 million ($123 million) interest payment due on the first of the year.

  By November 1893, Magoun was under enormous pressure. Besides the Santa Fe’s problems, he was a major player in the difficult reorganization of the failed National Cordage Trust—and he was struggling with his own health, which had been ravaged by diabetes. In late December, George Magoun died at the age of fifty-three.

  As Christmas Eve approached that year, the worst yet in the American economy, fifteen somber, well-dressed men crossed a platform at St. Louis station at 2:00 a.m. to board a special private train—consisting of an engine, a baggage car, and one Pullman coach—headed for Little Rock, Arkansas. When they arrived the next day around lunchtime, they took carriages to the U.S. Court of Appeals for the Eighth Circuit, filing into the chambers of Henry Clay Caldwell, the last judge appointed by Abraham Lincoln.

  They emerged at 5:30 p.m. with the sorrowful news. The Atchison, Topeka & Santa Fe—a railroad that in its thirty-four years had gone from being a local laughingstock to the largest, most expensive, and, unfortunately, most indebted carrier in history—was no more.