Chapter Nine

Into the Tomato Business

ADVERTISING COMPLEMENTS a business, and sometimes even overshadows a business, but it is not the business itself. Documenting the successes of an advertising agency risks creating a distorted picture, by implying that the marketing of a product is more important to the success of that product than the product itself. Albert Lasker knew that wasn’t true. He told his clients that good advertising couldn’t rescue a bad product or a bad company.

He also understood that building and operating a thriving enterprise was an incredibly complicated proposition. Sometimes—as in the case of the Van Camp Packing Company—he was reminded of that firsthand.

The story begins in the summer of 1911, when a bumper crop of tomatoes hit the wholesale markets in the northern United States. For companies that processed and sold tomato-based products, it was a moment of opportunity and peril. The ever-ambitious Frank Van Camp—instrumental in Lasker’s rapid rise within Lord & Thomas—decided that because his company both grew and owned futures in tomatoes, it was in his interest to shore up their wholesale price. With a number of Indianapolis businessmen and a Baltimore-based consortium, he set out to buy up surplus tomatoes and establish a price floor under the crop.

It was a huge gamble, but Van Camp was, in the words of a fellow Indiana businessman, a “plunger.”¹ He liked to think big, and make big bets.

Lacking sufficient cash to accomplish this ambitious end on his own, Van Camp approached Lasker for a loan. Lasker was then worth about $600,000, mostly in the form of cash surpluses in Lord & Thomas’s accounts. “I never had a financial mind,” Lasker once admitted, “[and] I didn’t know how to invest it.”² Lasker agreed to lend Van Camp Packing $440,000 at 5 percent interest until the bumper crop could be liquidated. “It was the proudest and happiest moment of my life,” Lasker recalled.³ Barely thirty years old, he could loan a huge sum of money to an older friend who happened to be one of his agency’s most important clients.

But something went wrong. The money from the liquidation did not come in as scheduled. When Lasker asked Van Camp what was happening, Van Camp remained cordial, but he was evasive. Sometimes he didn’t respond at all.

One day toward the end of 1911, or perhaps in the first week of 1912, Lasker was returning home to Chicago on an overnight train from Toledo. At around 7:30 a.m., he stepped off the train at the suburban Englewood station, where he was astonished to see his wife waiting for him on the platform. Because of Flora’s poor health, this almost never happened. His first panicked thought: Something has happened to baby Mary.⁴ But no; Flora told him that she had received an urgent phone call from a group of bankers in Indianapolis. They had discovered that Frank Van Camp had been making false statements regarding the packing company’s financial condition and that the business was “hopelessly broke.”⁵ The bankers had called a summit conference, and they urgently needed Lasker—Van Camp’s single largest creditor—to take the next train to Indianapolis. Flora was to drive him to a station across town, where he could jump on the next train for Indiana.

Lasker thought about it for a moment. Then he turned to Flora: “‘Well,’ I said to her, ‘[if] after almost twenty years of working I am wiped clean, I might just as well take the noon train, and go home and take a bath and see the baby.’ Which I did. I mention this because I do think that my wife was prouder of me that minute than any minute in my life.”⁶

Arriving in Indianapolis that evening, Lasker went into a series of emergency meetings in Frank Van Camp’s office. It was an odd cast of characters: Van Camp and his brother Cortland, who had left the family canning business to launch a hardware-supply business; Otto N. and John P. Frenzel, the president and vice president of the Merchants National Bank in Indianapolis; and W. D. Campbell, representing the New York investment banking firm of Hollingshead & Campbell.⁷ All faced huge losses if Van Camp went down, but none as large as Lasker’s. They were, he recalled, “the gloomiest bunch of men I ever saw.”⁸

The group first agreed on a critical point: they were in too deep to allow Van Camp Packing to go under. Their previous loans to Van Camp would have to be converted to equity, and each investor would have to put in more money to give the company some running room. The disgraced Frank Van Camp had his 100 percent ownership of Van Camp Packing reduced to six thousand shares out of thirty thousand—a 20 percent position. Lasker, Cortland Van Camp, and Hollingshead & Campbell each got six thousand shares, and the Frenzels split the final 20 percent. All received seats on an expanded board of directors. The group also agreed to incorporate a new wholly owned subsidiary, Van Camp Products, to serve as the distributor of the parent company’s products. Finally, the new owners agreed not to discuss Frank’s misdeeds publicly. They liked the buccaneering executive and saw no advantage in humiliating him; it was in the new owners’ self-interest, moreover, to speak highly of their company and maintain the Van Camp name.⁹

The emergency huddle in Indianapolis marked the relaunch of what Lasker later called “a strange company,” formally organized on February 26, 1912. A group of bankers, a hardware-store owner, and an ad man set out to direct the affairs of a fast-growing enterprise of national scope and importance. But with the exception of the demoted Frank Van Camp, no one in this new group of owners knew much about manufacturing.

Nor could the packing company’s new ownership structure be kept secret. As soon as that new structure came to light, the revelation affected Lasker in unexpected ways. As he explained:

When it became known that [Frank] Van Camp was relegated to the background and only had a fifth, and as I was the up-and-coming advertising man of the country, any account I went after, [my competitors] tried to assassinate me by saying, “Look what he did to Van Camp. He gets people’s confidence, loans them money, pulls the string when it isn’t possible for them to meet their obligations, and then he goes in, owning the business.” It did me untold hurt.¹⁰

By “hurt,” Lasker meant not only professional damage, but also personal insult. (Reading between the lines, particularly in the “money-lending” theme, the whispers also conveyed anti-Semitic undertones.) Characteristically, though, Lasker shrugged off the smears and the hurt. All such talk, he said, just made him “dig my teeth in, and say we have got to be that much better than anyone else.”

But he was digging his teeth into an unfamiliar business, and tenacity alone could not guarantee success.

In 1914, Frank Van Camp sold his shares in the packing company to Columbus, Indiana, native William Glanton (W. G.) Irwin. Irwin was easily the most prominent resident of Columbus, a small city of some eight thousand residents, forty-five miles southeast of Indianapolis. Early on, he displayed a rare talent for business, parlaying a modest inheritance from his father into a much larger fortune.

His most enduring business success took root in 1919 with the founding of the Cummins Engine Company. Irwin had long been interested in new technologies, and the diesel engine seemed to be on the verge of sweeping the transportation industries. Irwin staked Clessie Cummins—a self-taught mechanical genius who had attached himself to the Irwin family as a part-time mechanic and chauffeur—to the capital needed to build diesels in Columbus. For the next nineteen years, the company lost money while Clessie Cummins struggled to perfect his innovative diesels. Today, Cummins is one of the largest manufacturers of diesel engines and power-generation systems in the world.¹¹

Irwin’s first invested in Van Camp in the fall of 1912, when he purchased some of the Van Camp Products Company’s preferred shares that were issued in February.¹² He liked what he saw, purchased Frank Van Camp’s stake in the packing company, and took a seat on the Van Camp board. Almost immediately, Irwin made it clear—for example, in a March 1914 letter to a Van Camp manager—that he did not intend to be merely a passive investor: “At the time of the purchase of the stock from Mr. Frank Van Camp, he mentioned that you got out a balance sheet each month showing the condition of both the Packing Company and the Products Company. I would appreciate it very much, if it will not be inconsistent with the regulations, to have a copy of these sheets as they are made each month.”¹³

Soon Irwin was receiving not only balance sheets but also year-over-year comparisons of sales-to-date and orders placed, as well as summaries of cash flows. Aside from raw materials, salaries, and dividends, one of the company’s biggest outlays was for the advertising campaigns that Lord & Thomas ran on its behalf. As of May 1914, for example, Van Camp was spending an average of about $23,000 a month on magazine advertising, or a total of nearly $300,000 per year.¹⁴ The advertising budget waxed and waned depending on the fortunes of a very cyclical business. In 1915—a “bum” year for the company, as Irwin confessed—the company made no profit on its condensed-milk business, and bean sales dropped off significantly.¹⁵ By mid-1916, the board had decided to suspend all advertising.

Albert Lasker believed that this strategy was shortsighted, and (in 1917) lobbied Irwin to help get the moratorium lifted: “The advertising is, to my mind, the best move we have made in two years. I feel that it was an overwhelming error ever to have been cut. We must rise or fall on good goods and acquainting the public with same. We will have a remarkable campaign that ought to make itself felt about mid-winter.”¹⁶

But involving W. G. Irwin in the specifics of advertising cut both ways. While Irwin didn’t consider himself to be expert in any aspect of advertising, he didn’t hesitate to suggest changes in ad copy or illustrations. Irwin worried in particular about Claude Hopkins’s tendency to stretch the truth, and he communicated those concerns to Lasker. Sometimes Lasker simply acquiesced—“I think your point well made,” he wrote at one point, agreeing to tone down a Hopkins claim about the wonderful pastures in which Van Camp butter allegedly got its start.¹⁷ At other times, however, he stood his ground. In the fall of 1917, for example, Irwin objected to the illustration in a proof that had recently crossed his desk: “Does it not seem to you that it would be objectionable to the fastidious housewife to see that the college cook uses the cooking kettle as something against which to lean? However, probably they will not know that it is a cooking kettle he is leaning against?”¹⁸

Lasker refused to make a change. “The chemist is not leaning up against the kettle,” he replied, “he is lifting it. It must be poorly drawn to give you that impression, but none to whom I have shown it seemed to interpret the drawing other than as it was intended.”¹⁹ At the same time, despite his inexperience on the operating end of a food-processing business, Lasker freely offered up his advice on a range of subjects. Responding to a sales slump in the first half of 1914, for example, he urged an increase in output from the factories: “I believe that the inrush of business this fall will make up for the loss of the first six months, as we were crowded with business last year in the first few months. If we get an increased business the last few months, as we surely will in handsome measure, then it means that [factory superintendent W. G.] Mann must have our factories in such shape that we can promptly fill this inrush of increased business . . .”²⁰

The “inrush of business” never materialized, and this foray illustrates the problems inherent in having Lasker actively involved in mapping the strategy of a company like Van Camp. First, it was a complicated business—or more accurately, several complicated businesses under the same roof. The canned-beans business, for example, called for shrewd purchasing of agricultural products in highly cyclical markets. Frank Van Camp was humbled when he got this aspect of the business wrong just once.

The canning of tomatoes and beans called for nailing down current orders in the early spring, and “futures” (orders today for goods tomorrow) in the fall. A skilled sales force could sign up twenty thousand new retail customers—as the Van Camp salesmen did between mid-1915 and mid-1916—but this effort could be undercut if the company cut back on its promotional activities, as it did when it suspended advertising in 1916.

Cash flow was lumpy. The company expected to lose money the first quarter of every year and make up for the deficits in subsequent quarters. The canning of foods also required significant manufacturing skills, with dire consequences (including dead customers) if something went wrong. In 1919, a botulism-tainted can of olives killed seven people at a country club in Canton, Ohio, and the entire California olive-canning industry—a Lord & Thomas client—languished for a decade.²¹ Van Camp set up branch plants to handle peak demand periods, but protecting quality levels at those plants proved very difficult.²²

Then there was the challenge of procuring cans. Without an adequate supply of cans at a reasonable price, Van Camp couldn’t get its products to market profitably—or at all. “I feel we ought to arrange to build a can plant this coming year,” Lasker wrote to Irwin toward the end of 1916. “It is ruinous to keep paying the can company a profit which I am sure would equal all the common dividend we could pay.”²³ This challenge could intensify overnight, as it did when the United States declared war against Germany on April 4, 1917, and Washington imposed controls on the national can supply. Of course, the company could set up its own can-making operation, as Lasker advocated, but that entailed a whole new set of complexities, beginning with the challenge of getting the necessary tin from the tin czar in Washington. And because beans were needed by both soldiers overseas and consumers on the home front, the bean czars in the nation’s capital controlled both production and pricing.

In April 1917, the federal government prohibited the packing of both pork and beans. In November, it prohibited the packing of pork with beans, but not beans alone. When Irwin visited the Washington bureaucrat in charge, a Mr. Bentley, he was told that the goal of the ban was to save on tin, rather than pork, and that any step-up in production by Van Camp—if it could find the necessary canning materials—would incur the government’s wrath. “I am satisfied that the best thing we can do,” a somewhat shaken Irwin wrote to Lasker, “is to stay away from Mr. Bentley.”²⁴

A letter written to Irwin a year later by a Van Camp manager detailed the difficulties of doing business in wartime. At that point, the factory had orders for forty-two thousand cases of goods that it couldn’t fill. Pork and beans were being held up for lack of cans (the American Can Company couldn’t get tin plate). Van Camp couldn’t pack peanut butter for lack of glass jars. Kidney beans were behind schedule because the company had been unable to buy enough high-quality beans. Hominy corn, tomato-based chili sauce, and chicken soup were delayed for the same reason: lack of raw materials. (The company needed between 12,000 and 15,000 pounds of chicken per week; it was then averaging about a tenth of that amount.) Worse still, the delayed 42,000 cases were holding up another 60,000 cases of goods that could only be shipped in full carloads.²⁵

One final hurdle: the canned-foods industry was populated by highly skilled competitors. Borden, Campbell’s, and Helvetia—to name just a few—were all focused on the same goal as Van Camp: to become the dominant national brand.

Despite all these obstacles, Albert Lasker had great faith in himself. This was a mixed blessing: while this trait helped him in his own business, it was less helpful when he ventured onto someone else’s turf. His predictions of crops and markets—the economic flywheels of Van Camp—were consistently off. In July 1917, for example, he predicted a “great surplus of beans,” which would be difficult to unload.²⁶ But two months later, Van Camp’s sales manager Wilkes was ruing the fact that the company had run out of beans, and wishing (in a letter to Lasker) that the company hadn’t sold off ten thousand bushels to the Atlanta quartermaster.²⁷

Lasker also believed that his far-ranging business experience had given him a good handle on the near-term direction of the national economy. “I think the present depression will clear the business up, and make it healthier than it ever was,” he wrote to Irwin in April 1918. “I am for sticking and playing the hand out pat.”²⁸ In fact, things were slowly going from bad to worse, and the real recession—the crunching postwar downturn of 1920–1922—was still two years off.

In the early months of 1919, he argued that Wilkes should build up the sales force, despite stagnant sales: “On all these things, whether it is milk, or chocolate, or salesmen, I don’t feel that we should run at the first sign of stagnation. In the earlier days, when pressed for capital, we had to, but the way to build up a permanent business, it seems to me, is, having arrived at our program, to sit tight and see it through the dark days. As a result, we will gather the harvest when bright days come—and come they always do.”²⁹

In this communication and many others, Lasker’s optimism about business shines through. Unfortunately, his inclination to “sit tight” and build the business proved misguided. In May 1917, co-owner Campbell, Heath & Co. in New York (the successor to Hollingshead & Campbell) announced that it wanted to sell its Van Camp common for $200 a share—or, alternatively, buy the shares held by Irwin, Lasker, and the Frenzels, and gain control of the company. If Lasker had accepted this offer to purchase, he would have received $1.2 million for his six thousand shares. Since his initial investment was $440,000 and he had already received something like $240,000 in dividends from the company, he stood to make a pretax profit of around $1 million on his original investment. But Lasker persuaded Irwin not to sell—and it was a decision they both came to regret.

A third reason why Lasker’s involvement worked against Van Camp’s success was that he was only intermittently available. Sometimes he was too busy to pay much attention to Indianapolis, and sometimes he was incapacitated by emotional distress.

Shortly after he was first dragged into an ownership position at Van Camp, for example, he became embroiled in the Leo Frank case. After Frank’s murder, Lasker went on a five-month sojourn of Europe for rest and rehabilitation. Upon his return he found that he still couldn’t work, and so spent the next four months in Mexico. Then World War I started, with devastating effects on Lasker’s equilibrium. “I couldn’t talk for five minutes without starting to weep,” he later said. “Finally I had to be left in a sanitarium.”³⁰

One way that Lasker dealt with the stresses of his life was to abandon Chicago early in the winter—usually around the turn of the calendar year—and move his family to a more congenial climate. In the ’teens, this meant Southern California, with Lasker using the excuse of his agency’s expanding operations in the Golden State to spend up to four winter months out west each year. Almost nothing deterred him from this schedule. In the early months of 1918, for example, the ailing Flora Lasker declined to make the trip to California; Lasker decided to go without her. “Ninety percent of my reason is, I am getting stale in my work, and dread coming to the office,” he wrote to a friend. “The other 10 percent is, we have established offices in Los Angeles and San Francisco, which I want to look over.”³¹

The following year, writing to Irwin from the Huntington Hotel in Pasadena, Lasker made it clear that he was unavailable, even for emergencies:

I have left word with all of my associates in my various interests not to communicate with me on business while I am away. I do not expect to either write or receive a letter for three months. I really need a rest, and my rest is considerably disturbed when I have correspondence to look after . . .

I am sure you will understand exactly how I feel. For instance, regarding Van Camps: I do not want to know whether we lose a million or what happens until I get back, because if I know about it, I will start worrying, and if I do not know about it, I have nothing to worry over.³²

Again in 1920, Lasker spent thirteen weeks with his family in California—this time at a bungalow he had constructed on the grounds of the Huntington Hotel—and again was in communication only when he chose to be. “I am adhering strictly to my program of loafing while I am here,” he wrote to Irwin in February. “I expect . . . to come back so benefited by the trip that I will be full of a double dose of pep on my return.”³³

It didn’t work. “Oh—this awful weather,” he wrote in a disconsolate letter to Irwin after returning to Chicago in mid-April. “It is enough to break one’s heart. It is horrible to come from glorious California to this rotten climate.”³⁴ And even when Lasker was in Chicago—only a short train ride from Indianapolis—he sometimes made himself inaccessible. A letter to Irwin in August 1917, in the wake of negotiations with the Frenzels about the possible purchase of their stock, paints the picture: “I am staying out in my country place for a few weeks’ rest. I found I had been going at a pretty stiff pace, and was accelerated beyond the safety point. It was the first time I ever felt that way, and I thought I had better take warning of the signs . . .”³⁵

Irwin generally tolerated Lasker’s long absences, nonnegotiable demands, and complaints about the weather. Occasionally, he tried to focus Lasker’s attention on the business. “I dislike very much to call upon you to cut short your vacation,” he wrote in the winter of 1921, “but it seems to me that this is a time that it is necessary that it be done.”³⁶

The issue was the proposed sale of the business: an outcome that Lasker was now eager to effect. Even so, he told Irwin that he had no intention of curtailing his vacation. He had already spent ten days of his California sojourn on business, and wasn’t yet in any shape to attend to affairs in the Midwest.

Irwin understood the value of getting away from it all. (He took long summer vacations at the family compound at Lake Muskoka, Ontario.) He also was accustomed to the extended winter absences of Clessie Cummins—the talented but mercurial president of the Cummins Engine Company—and had grown used to picking up the slack created by the absence of a creative genius. He knew Lasker well and understood that his friend had to pace himself, fending off his recurrent depressions as best he could.

And it sometimes helped to have Albert Lasker far away from the day-to-day affairs of the Van Camp Packing Company.

Irwin, who had become increasingly involved in the operation of the business, soon realized that Van Camp was playing a losing hand. In December 1919, he took a tour of Campbell’s Soup’s state-of-the-art manufacturing complex in Camden, New Jersey. The tour was conducted by Dr. John Dorrance, the MIT-trained chemist credited with the invention of condensed soups. Irwin grasped instantly just how hard it would be for his slow-moving company to compete with Dorrance’s powerhouse. Van Camp’s sales volume—about $20 million a year, at that point—was roughly the same as Campbell’s, but this Camden facility was light-years ahead of any Van Camp plant. Dorrance casually let slip the news that his company was about to begin packing in the Midwest to minimize freight costs.

“We will have to have our costs right and as low as Campbell’s,” an anxious Irwin wrote to Lasker, once back in Indianapolis. “He makes good goods.”³⁷ Even Lasker couldn’t ignore this. “I can well see the difference in our positions,” he wrote back. “We are fast getting to the point where we must do something.”³⁸

Campbell’s Soup did invade the Midwest, and—in the spring of 1920—launched a price war against Van Camp and other local producers of soups and canned foods. “It means slim profits for us,” Irwin wrote gloomily to Lasker, “for whatever length of time he chooses to continue his present plan.”³⁹

Lasker couldn’t decide what he wanted to do about Van Camp. On the one hand, he confessed to Irwin, he would gladly sell out for the $200 a share that Campbell, Heath had previously offered. On the other hand, Flora argued against selling out. “I remember that you once said you believed in woman’s intuition,” he wrote to Irwin. “She was quite bitter that I would consent to sell at all, and feels it is a mistake.”⁴⁰

Meanwhile, the other Campbell—W. D. Campbell, of Campbell, Heath—continued his overtures to the Van Camp directors. When Irwin cut what appeared to be a final deal with Campbell in April 1921, Lasker—once again in Pasadena—expressed his gratitude. “I just can’t begin to express to you how happy I am that the deal has gone through,” he wrote. “No money is worth while if worry goes with it.”

As it turned out, many more months had to pass before the new Van Camp preferred stock could be sold. The depression of 1920–1922 was in full force, and investors were sitting tight. “I WANT TO GET OUT, AND I WANT TO GET OUT QUICK,” Lasker wrote to Irwin in January 1922. He was now deeply involved in the next phase of his life—running a federal government agency in Washington—and his family was in turmoil. The week before, his six-year-old daughter, Francie, had nearly died from pneumonia—the second such dangerous episode in a year. (“She almost slipped away from us,” Lasker confided.) And now the ailing Flora was headed to Johns Hopkins in Baltimore for several months of observation.⁴¹

Ultimately, Lasker accepted a financial drubbing as the cost of disengaging from Van Camp. Exactly how severe a beating is unclear, although he later claimed that he “lost everything [he] had in,” suggesting a write-off of perhaps a half-million dollars.⁴² He also did worse than he absolutely had to: before the final deal was sealed, Lasker bought back much of the preferred stock that he had sold to various friends and family members because he didn’t want them exposed to unnecessary risk.⁴³

Lasker offered his own biting epitaph for Van Camp: “We managed to make a great failure of it, and [then] we sold out.”⁴⁴

He likened his Van Camp experience to his involvement in the Mitchell-Lewis Motor Company—a Racine-based automaker in whose affairs he had immersed himself in this same time period, and which cost him something like $1 million:⁴⁵

I learned a great lesson there, and in the Mitchell case—that not having experience in manufacturing, I could be poison to any manufacturing business where I had any say in the manufacturing end; that my specialty was publicity and distribution . . . At times when I became impatient with manufacturers because they have strong opinions on my end, I [was] constrained to remember my two great failures when I sat in their chairs.⁴⁶

Lasker’s magic definitely faded when he got “down in the weeds.” But from start to finish, the Van Camp experience was about people and relationships more than manufacturing and money. He was drawn into Van Camp through his friendship with Frank Van Camp, who severely abused that friendship. Lasker, typically, not only forgave him but continued to help him financially as Van Camp set up a tuna-packing operation on the West Coast. Lasker even asked Van Camp to accompany him on his Mexican rest cure, underscoring their close and enduring ties.

By far the biggest benefit that Lasker derived from the experience was his friendship with W. G. Irwin. He considered Irwin one of the finest men he ever encountered, and the mutual respect that they developed for each other in the early ’teens evolved into a close friendship.⁴⁷ Their written salutations grew increasingly warm (from “Dear Mr. Irwin” to “my dear Will”). They visited each other’s homes, and the Laskers made a special effort to welcome lifelong bachelor Irwin into their family’s inner circle. They exchanged gifts, went to ball games together, and helped each other enter new worlds.

As he wrote to Irwin on the first occasion when the sale of Van Camp appeared to be going through: “My profit from the transaction comes from the close contact it has brought me into with you, and the very intimate association it has given me with you. Even though we shall not meet in connection with business, I hope we shall always keep alive the friendship which has existed between us and which, to me, shall ever mean much.”⁴⁸

That friendship that not only survived but intensified, ending only with Irwin’s death in 1943.