Hard Times (12 page)

 

I LEFT CHICAGO in June of ’29, just a few months before the Crash. Chester Bowles
³¹
and I started in business with seventeen hundred square feet, just the two of us and a couple of girls. July 15, 1929—this was the very day of the all-time peak on the stock market.

As I solicited business, my chart was kind of a cross. The left-hand line started at the top corner and ended in the bottom of the right-hand corner. That was the stock market index. The other line was Benton & Bowles. It started at the bottom left-hand corner and ended in the top right-hand corner. A cross. As the stock market plummeted into oblivion, Benton & Bowles went up into stardom. When I sold the agency in 1935, it was the single biggest office in the world. And the most profitable office.

My friend, Beardsley Ruml, was advocate of the theory: progress
through catastrophe. In all catastrophes, there is the potential of benefit. I benefited out of the Depression. Others did, too. I suppose the people who sold red ink, red pencils and red crayons benefited.

I was only twenty-nine, and Bowles was only twenty-eight. When things are prosperous, big clients are not likely to listen to young men or to new ideas. In 1929, most of your Wall Street manipulators called it The New Era. They felt it was the start of a perpetual boom that would carry us on and on forever to new plateaus.

That year, the sales of Pepsodent were off fifty percent. Dentists talked about Pepsodent teeth. It was too abrasive, took the enamel off teeth, they said. None of the old-type advertising seemed to work. I was still in Chicago, with Lord and Thomas. Pepsodent was our account.

In May of 1929, I left my office in the new Palmolive Building
³²
… we were its first tenants. I walked home to my apartment. It was a hot muggy night. All the windows were open, and I heard these colored voices leaping out into the street, from all the apartments. I turned around and walked back up the street. There were nineteen radios on and seventeen were tuned to “Amos and Andy.” This is probably the first audience research survey in the history of radio broadcasting.

I went in to see Mr. Lasker the next morning and said we ought to buy “Amos and Andy” for Pepsodent right away. We bought them on the spot, and I went east to Benton & Bowles.

Pepsodent went on the air, and within a series of weeks it was the greatest sensation in the history of American show business. The only thing that’s been more famous than “Amos and Andy” was Lindbergh’s flight across the Atlantic. Pepsodent sales skyrocketed.

The Crash never hurt Pepsodent. Pepsodent sales doubled and quadrupled. It was sold to Lever Brothers at an enormous price, giving Lasker part of his great fortune. Benton & Bowles plunged into radio in a big way for our clients.

We didn’t know the Depression was going on. Except that our clients’ products were plummeting, and they were willing to talk to us about new ideas. They wouldn’t have let us in the door if times were good. So the Depression benefited me. My income doubled every year. When I left Benton & Bowles, it must have been close to half a million dollars. That’s the kind of money great motion picture stars weren’t earning. That was 1935. The Depression just passed me right over. I’m not a good man to talk to about the Depression.

I had nothing to do with the creation of “Amos and Andy,” just had the judgment to buy it. But I contributed enormously to the “Maxwell House Show Boat,” which later became the Number One program in broadcasting. The show gave a quality of illusion to the radio audiences so perfectly that in its early weeks ten thousand and fifteen thousand people would
come down to the docks in Memphis and Nashville, where we said the “Show Boat” was going to tie up.

“Show Boat” went on in 1933, really the bottom of the Depression. Maxwell House Coffee went up eighty-five percent within six months. And kept zooming. Thus, Maxwell House didn’t know there was a Depression. The chain stores were selling coffee that was almost as good—the difference was indetectable—for a much lower price. But advertising so gave glamor and verve to Maxwell House that it made everybody think it was a whale of a lot better. It doubled and quadrupled in sales.

In “Show Boat” we did something nobody had ever done before. We cast two people in one role. We’d get a sexy singer, who might not be a good actress, then we’d get the sexiest actress we could find and we’d give her the speaking lines, softening the audience up, getting it warm and ready to melt. Then the girl would come in and sing.

People in the theater never thought of such an idea. Radio made it possible. It took new men coming into radio to think of new ideas. Hollywood fought it, Ziegfeld was no good at it. The advertising men made radio. We weren’t inhibited. We didn’t know you couldn’t put two people in one part.

We went on to put out other shows like it. And they became big hits. “The Palmolive Beauty Box.” I picked up an unknown member of the Metropolitan chorus, Gladys Swarthout, and we made her a big star. We put a $100-a-week gifted actress with her to speak the lines, while Gladys sang in that seductive voice of hers. They told me I couldn’t use her because she was no soprano and the parts were too high. I just coolly said: rewrite the parts; write them lower. Nobody in opera would have thought of this…. We succeeded in radio because none of us knew any better.

These were the new techniques of the Depression. As their sales went off, the big advertisers looked around and said: Who are these new young men that have these new ideas that appeal to these new young people? We looked like college boys, and yet they paid us a great deal of money. This is why Chet Bowles and I escaped the Depression.

The type of men that largely dominated advertising, before the Depression, faded, the ones who played golf with their accounts. The Depression speeded up greatly the use of research in marketing. I developed new techniques, working for Lasker, which I took East with me. George Gallup brought in new standards. He once referred to me as his grandfather, because I pioneered in the advertising field … finding out what the consumers wanted.

The Maxwell House Coffee program was, to my eternal regret, the stimulus that changed the commercials. When we had Captain Andy drink coffee and smack his lips, you heard the coffee cups clinking and the coffee gurgling as it was poured. It put action and actors into commercials. That was a revolution, the full import of which we didn’t suspect at the time. It
inevitably led to the singing commercial and all the current excesses. As Bob Hutchins said, when he introduced me at a dinner in my honor at the University of Chicago—I invented things that I now apologize for.

I presumably lost $150,000 in the depression of 1937—on my one stock investment—because I did everything Lehman Brothers told me. I said, well, this is a fool’s procedure … buying stock in other people’s businesses. I’ll have to buy my own company. I won’t work at operating it, I’ll just own it. I’ll set the policies. I looked around and bought the Muzak Corporation. I never could have bought it except in a Depression. It was a busted, rundown company. That would be around ’38.

Muzak was then only heard in hotels and restaurants in New York. It was only thought of as a substitute for live music. Jimmy Petrillo cursed it as the Number One enemy of musicians. I said to myself: This music ought to be in other places.

I went down to see the five salesmen—we only had five then. They said to me: “We have eighty percent of all the business you can get in New York. There isn’t any other place to sell it.” I said, “Why don’t you put it in barber shops and doctors’ offices?” “Oh, you can’t put Muzak in places like that!” I said: “Do you all five think that way?” There was a young man, who had only worked there six weeks, he said, “No, I think it’s a good idea.” I said, “Well, the other four of you guys had better quit and get some other jobs, and I’ll make this young man the sales manager. We’ll take Muzak into new areas.”

Of course, this made a big wonderful business out of Muzak, now earning $2 million a year. And no extra money has ever gone into it. The Depression put me into it.

The first installation outside the customary public for music was a bank in New York. The manager said, “My people who work at night, it’s very depressing in these electric-lit offices. They wanted a radio, but I didn’t want them to have it. I told them I’d give them Muzak. Now it’s all over the bank.” There was a girl sitting as a receptionist in the personal loan department. That’s where people would borrow money in small units and never come back unless they couldn’t pay the installments. The girl said to me: “The music makes this place less gruesome.”

I invented the phrase: “Music not to be listened to.” That was my commercial phrase with which I sold Muzak. It was the first music deliberately created to which people were not supposed to listen. It was a new kind of background music. That’s why my mother, who was a fine musician, held it in contempt. She wouldn’t have it in her apartment. Anybody who knows anything about music holds Muzak in contempt.

I have a tin ear. That’s why my ear was so good for radio. Most people in the United States have a tin ear like mine. A totally tin ear. I really like Rudy Vallee and Bing Crosby and the stars that were developed by radio.

I owned Muzak for twenty years and sold it for a profit of many millions … when I ran out of my first million and needed some more.

Muzak’s habit-forming. The man who bought it from me gave me four installations for my homes and my offices. I always have it on. ’Cause I notice it when it’s not on and don’t notice it when it’s on. That’s how it’s music not to be listened to. And that’s how it’s habit-forming.

Every businessman wants a product that is habit-forming. That’s why cigarettes, Coca-Cola and coffee do so well. Even soap is habit-forming. Soaps were my biggest products when I was in the agency business.

I always thought—at Benton & Bowles—just six more months, three more, and it would all be behind me. But our business doubled every year. Every year, I would say: As soon as I get this new client, I won’t be working like this. No intelligent man would put up with what I put up with, even to get a million dollars, if he could have foreseen the six years.

In the fall of ’37, I became vice president of the University of Chicago. My day changed enormously, because I started to read and consort with economics professors, and to interest myself in educational broadcasting … to produce and guide the “University of Chicago Round Table.” However, the habits of hard work were ingrained in me. I didn’t lacerate myself in the same way. But I worked the long, hard week. My evenings, though, were different.

The Depression was very seriously affecting the University … great deficits run up by its expensive medical school and its clinics. Contributions were less.

When Mr. Walgreen withdrew his niece claiming she was being taught communism, almost every paper in this great city attacked, pilloried the University. The Depression added to the feeling about communism.

I called on Mr. Walgreen to talk to him about this. Nobody from the University had done this. The trustees were startled by Walgreen’s charges —and offended. I went to a former client, who introduced me to Mr. Walgreen. I said: “Mr. Walgreen, these great institutions live off the beneficences of people like you. Why don’t you help the University teach courses on American institutions, as you think they should be taught?” Hutchins gave me the idea. I said to him: “What can we do to fix things up with Mr. Walgreen?” He said, “Why it’s easy. Get him to give some money to the University.” The next day, after my talk, Mr. Hutchins went around and collected a half a million dollars from him. That fixed the Walgreen case up right away.

 

 

The Encyclopaedia Britannica
lives off installment buying, this is our whole business. We don’t think about credit as a problem, particularly
when we think about a Depression. With more men out of work, we’d have an easier time finding good salesmen. The more men out of work, the more applicants we have. By multiplying our salesmen, we’d have an offset to the fact that there are fewer people to whom to sell. Progress through catastrophe.

 

IN 1929, it was strictly a gambling casino with loaded dice. The few sharks taking advantage of the multitude of suckers. It was exchanging expensive dogs for expensive cats. There had been a recession in 1921. We came out of it about 1924. Then began the climb, the spurt, with no limit stakes. Frenzied finance that made Ponzi
³³
look like an amateur. I saw shoeshine boys buying $50,000 worth of stock with $500 down. Everything was bought on hope.