ABOUT

On Beyond Holcombe

THE PROPRIETARY REVENUE STAMPS OF 1898

ScottRB19Z-0a1RV(RB20-31)

ScottRB19Z-0a2RV(RB20-31)

An examination of the companies producing the countless variety of cancels appearing on the battleship series of proprietary revenue stamps offers a fresh opportunity to explore the contradictions of a complex American society, where the fortunes of men, eventually exposed as among the most ruthless of the “robber barons,” were molded into the benevolence of philanthropic organization that today bear their names. In sanctioning battleship revenues to evidence payment of tax imposed to finance the Spanish-American War, Congress elected to tax patent medicines because they were profitable. The men who led the industry became unimaginably wealthy. As their histories unfold, strange and juicy tales emerge.

*****

     KembleEdwardWindsor-PatentMedTrust3RV

THE PATENT MEDICINE TRUST – DEATH’S LABORATORY

COLLIER’S WEEKLY MAGAZINE COVER JUNE 3, 1905

DRAWN BY EDWARD WINSOR KEMBLE

*****

The patent medicine industry story has been approached in two different ways. In the compilation Patent Medicine Tax Stamps, Henry Holcombe (1897-1973) created the definitive history of private die proprietary stamps and Prof. James Harvey Young (1915-2006), in his Toadstool Millionaires, recounted the social implications of the patent medicine era in American history. Yet, to a collector of battleship revenue cancels, while each book tells a unique and memorable story, even taken together, the two stories reveal only part of a vast and fascinating legacy of good and evil that patent medicines and the fortunes they created have bestowed upon society as their legacy.

HolcombeHenry2

HENRY HOLCOMBE

YoungJamesHarvey-1

PROFESSOR JAMES H. YOUNG

Holcombe’s book dealt with companies that ordered private dies. He was not recounting the history of patent medicines per se and ignored virtually all of those companies that did not place orders for their own stamps. The taxes on proprietary medicine and cosmetics had originated during the Civil War and lasted for more than twenty years until they finally expired in 1883. The great bulk of private die proprietary stamps date from that period. Between 1880 and 1898, the drug industry expanded enormously. During the Spanish-American War period, since printing procedures had changed and the tax was repealed entirely within four years (three years for patent medicines), very few companies had time to order their own stamps, so Holcombe’s book does not cover the younger group of companies. Young was not a philatelist, and did not mention revenue stamp cancels in his cautionary tale concerning the over-reaching, death-inducing claims the patent medicine proprietors often indulged and the sinister pressures they exerted to keep their industry flourishing. Proprietary battleship cancels provide a window through which to examine the companies that Holcombe did not feature (and perhaps to amplify upon some the companies he did), while Young’s social history of the era provides the context for re-examining the contributions as well as the excesses of the patent medicine industry.

*****

PuckCartoon-AgeOfDrugs3

PUCK MAGAZINE CENTERFOLD CARTOON

“THE AGE OF DRUGS”

DRAWN BY JOSEPH DALRYMPLE

PUBLISHED OCTOBER 10, 1900

(THE BARTENDER AT THE LEFT CANNOT COMPETE WITH THE DRUGGIST)

*****

1898 is an excellent year to examine the entire drug industry in the United States for it was then at the height of its influence and power. Taking the measure of the drug trade, in preparation for a meeting of the wholesale drug dealers association in New York City in October, 1894, a reporter for the New York Times wrote: “With the possible exception of the National Bankers’ Association, there is not another organization in the country that represents as much wealth in the aggregate as the druggists.” Yet, the industry’s decline was already foreshadowed, for by the end of the century, scientific inquisitiveness had developed tests allowing for clear and certain identification of the secret compounds contained in patent medicines. Within a few years after the end of the Spanish-American War, a series of exposes printed in Collier’s Weekly Magazine (gathered into the volume The Great American Fraud by Samuel Hopkins Adams (1871-1958)), instigated the first serious examination of the patent medicine industry’s excesses. These articles, in turn, led to the Pure Food and Drug Act of 1906. This Act made the first incursions on the industry’s outsized and unsubstantiated claims to positive cures. Nevertheless, the medical profession was still forced to relentlessly hammer for the next 30 years, with notice after notice to physicians (Nostrums & Quackery vols. 1-3: 1912, 1921 and 1936), before it successfully winnowed from the marketplace the blatant poisons, and strange decoctions (often featuring alcohol, but sometimes nothing more than plain water, as the undisclosed principal ingredient) which masqueraded as absolute cures for implacable diseases like cancer.

*****

PuckCartoon-7AgesOfDopeRV

PUCK MAGAZINE CENTERFOLD CARTOON

THE 7 AGES OF DOPE

DRAWN BY SAMUEL D. ERHARDT

PUBLISHED MARCH 28, 1906

*****

This column introduces a series of articles dedicated to re-examining the companies comprising the drug industry following the natural contours of the industry itself. That drug industry divides into three branches: 1) Manufacturers: 2) Wholesalers; 3) Retailers. These branches fought as often as they cooperated and the trail of lawsuits strewn in their wake is one previously unexplored source of insights into the nature of patent medicine company operations.

Philatelically, while it is not readily apparent, these divisions are subtly reflected in the cancels applied to the battleship proprietaries, and have influenced the present state of the cataloging of proprietary battleship cancels. The re-categorizing proposed here will supplement the excellent existing cancel compilations. The Chappell-Joyce compilation – itself now in the process of revision through the columns of the 1898battleshiprevenues.com blog – painstakingly focuses on the variety of printed cancels applied to these stamps. However, by constraining itself to printed cancels, it selects against important segments of the drug trade. On the other hand, the very exuberance of the listings in the Battleship Desk Reference book compiled by Robert Mustacich and Anthony Giacomelli, does not leave room for studied consideration of the nuances and variety of the histories while underlie the companies set forth in its exhaustive table. This study proposes to add anecdotal muscle to articulate the skeleton created by these two cancel compilations.

The center of the drug trade was the manufacturers. These companies produced their own goods and usually had their own networks of traveling salesmen, or “drummers,” to arrange for sales and distribution as well. Manufacturers had a natural wish to expedite the flow of their products and fairly quickly incorporated the entire collection of the tax into the process of packaging their products. The most creative manufacturers, who realized (as had their Civil War predecessors) the advertising value that government mandated stamps might add to their product, immediately placed their orders for the group of stamps that became the Spanish-American War addendum to the Scott RS list. Other large manufacturers, such as J.C. Ayer, Lydia Pinkham and C.I. Hood, created printed cancels to regularize the tax collection process. Ayer was an old enough company to have created RS stamps, and, had the new tax continued longer, might have done so again. The Pinkham and Hood companies, which made extensive use of printed cancels, became a manufacturing giants too late to have needed their own Civil War private dies, and thus were not included by Holcombe. Lydia Pinkham has accounted for several books in her own right, but her story is not widely told in philatelic circles. While the Pinkham and Hood cancels are common and well-known to battleship revenue collectors (and are found in the Chappell-Joyce listings), the stories of these companies also legitimately fall within the ambit of the new study proposed here.

PRINTED CANCELS UTILIZED BY DRUG MANUFACTURERS

AyerDrJC&Co-2-RB28-1898-07-13

J. C. AYER & CO.

    Pinkham-2-RB28-2-1898-11(p)

LYDIA E. PINKHAM MEDICINE CO.

     HoodCI&Co-2-RB28-2-1898-10

C. I. Hood & Co.

However, there are a great many more large or influential manufacturers within the drug trade itself who relied solely on hand stamped cancels. The proprietors of these companies, some later as notorious as William Radam and Frank Cheney, and others as diverse as W.W. Gavitt, Frederick Stearns and Leslie Keeley, never bothered to try to cash in upon the advertising value of creating a product label out of a tax burden.  This study proposes to recount their stories which are as varied and interesting as any set forth in Holcombe.

HAND STAMPED CANCELS USED BY MANUFACTURERS

RadamsWMMicrobeKillerCo-2-RB28-1a

WILLIAM RADAM’S MICROBE KILLER CO.

CheneyFJ-2-RB28-t1-1898

CHENEY MEDICINE CO.

 GavittWW-2-RB23

W. W. GAVITT

StearnsFrederick&Co-2-RB28-1b

   FREDERICK STEARNS & CO.

KeeleyInst-2-RB28a(TheLeslieEKeeleyCo)

THE LESLIE E. KEELEY CO.

Wholesale druggists tended to supply their local regional druggists, although some of them competed on a national level. The largest, like Charles Marchand, actually did produce RS stamps during the Spanish-American War period. Others, like E. Ferrett of New York, who distributed the Wright product line, opted for printed cancels. Many prominent companies, like Meyer Brothers of St. Louis and George C. Goodwin of Boston, however, stuck with hand stamped cancels, and have not been scrutinized as carefully as the others. For example, Meyer Brothers catalogues provide much information about the state of the drug business at the turn of the Twentieth Century.

CANCELS USED BY WHOLESALERS

MarchandChas-2-RB28-1898-1101

HAND STAMPED CANCEL USED BY CHARLES MARCHAND

      MarchandChas-1-RS298

PROPRIETARY STAMP PRINTED BY CHARLES MARCHAND

Wright-2-1-RB23-1(EFerrett)

PRINTED CANCEL USED BY E. FERRETT

MeyerBrosDrugCo-2-RB28bRV

HAND STAMPED CANCEL USED BY MEYER BROS. DRUG. CO.

GoodwinGeo&Co-2-RB28-6(ex-Orton)

HANDSTAMPED CANCEL USED BY

GEORGE C. GOODWIN & CO.

Retailers tended to have a single location or a group of locations around a single city, although there were a few regional affiliations and even the first, faint stirring of a national chain. They mainly had to account for tax to be paid on products already in stock on the effective date of collection, July 1, 1898, or had to stamp small batches of their own generic or home-brewed products or other miscellaneous goods. For this reason, most retail cancels appear on low denominations and are virtually all hand stamped. They remain largely obscure and are most often identified only if the entire name is given or the location is identified. Armed with that information, it is generally easy to match the cancel to known drug industry outlets. While most were small town druggists, the stories of retailers as varied as R.H. Macy (a large enough operation to have invested in printed cancels), J.N. Adam & Co., and L.O. Gale, form the tributary streams of information which ultimately lead to the vast, still largely unexplored, ocean of patent medicine knowledge.

CANCELS UTILIZED BY RETAILERS

MacyRH-2-RB23

PRINTED CANCEL USED BY R. H. MACY & CO.

AdamJN&Co-2-RB22-1899-09-27RV(BuffaloNY)

HAND STAMPED CANCEL USED BY J. N. ADAM & CO.

GaleLO-2-RB20(MitchellSD)(ERA1905,FussellCornP316)

HAND STAMPED CANCEL USED BY. L. O. GALE

This ocean of knowledge exists on the same Internet which makes this blog available, for just as it has made the archives of the New York Times readily searchable and readable, it has made reachable, through scanning, obscure local histories, numerous dusty trade publications and other source material such as patent medicine company catalogues. In addition to these reproductions of older written materials, websites promoting study of family genealogies, and local points of interest, as well as hobby websites in neighboring fields like bottle and postcard collecting, have also contributed to widen the field of inquiry into patent medicines. This article argues that we should all take another plunge into the vastly improved ocean of knowledge.

 

© Malcolm A. Goldstein 2011, 2014

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Standard
N, S

Sterling Remedy Co. (III.1)

Sterling Remedy Co., Manufacturer
Chapter 3.1 – Purchase By Neuralgyline Co.
(William E. Weiss and Albert H. Diebold)

1932c PORTRAITS OF WILLIAM E. WEISS and ALBERT H. DIEBOLD

In 1909, H. L. Kramer sold his Sterling Remedy Co. to the Neuralgyline Co. of Wheeling, WV. The principals of the new owner were William E. Weiss and Albert H. Diebold.  Because of the dizzying course of corporate growth and acquisition that they pursued, many serious students of the late Twentieth Century giant Sterling Drug, Inc. actually date its inception to the founding of the Neuralgyline Co. rather than Kramer’s Sterling Remedy Co.

SterlingRemedyCo-Neuralgine-4-1910c-1

1910c STERLING NEURALGINE AD

World-girdling institutions, such as Sterling Drug, Inc., like great nations and empires, engender founding myths.  Rome had Romulus and Remus.  Sterling Drug, Inc.’s Romulus and Remus were Weiss and Diebold. Instead of being suckled by a wolf, Weiss and Diebold grew up in Canton, OH ostensibly as childhood friends and classmates. After they graduated high school together, Weiss had matriculated at the Philadelphia College of Pharmacy, and, following his graduation in 1896, had gone to work in a drugstore in Sistersville, WV, a small town lying approximately 50 miles southwest of Wheeling on the Ohio River.  Diebold meanwhile joined his father’s safe and lock business. One of them happened upon an effective pain relieving medicine called Neuralgine and in 1901, they decided to form the Neuralgyline Co. to market Neuralgine in the more metropolitan Wheeling, WV.  Their oft-repeated tales continues that in two cramped and dark rooms on the second floor of a ramshackle building in Wheeling, which then constituted the offices of their fledgling company, they labored three days a week compounding their analgesic, Neuralgine, while spending another three days bouncing over rutted roads in rented buckboards hawking it to neighboring druggists. They even had to call special board meetings to authorize the expense of hiring of a stenographer, or installing a safe or telephone.  From such long days of hard work and humble beginnings did Sterling Drug ultimately soar forth.

RW-NeuralgylineCo-3a(Ad-NARDJourn(1910-v10)

1910c STERLING NEURALGINE TRADE AD

The truth is difficult to tease out from the myth, and true stories are often embellished to make them more thrilling.  Weiss and Diebold were indeed genuine businessmen with a particular genius for purchasing and exploiting popular patent medicines.  Both were born in Canton, OH: Weiss in 1879 and Diebold in 1873. Weiss did train as a pharmacist, but different sources attribute the original ownership of Neuralgine differently, and all sources agree that there is no record presently extant that attests to Neuralgine’s original composition.  One source says that Weiss first compounded  and marketed it in the Hill drugstore where he was employed in tiny Sistersville.  Others suggest that Diebold brought the product to the partnership.  While Weiss appears to have been a truly self-made man, Diebold may have had the funding and the connections necessary to create a new business. His family was already wealthy and well-known in Canton in the safe and lock business, and today, Diebold Nixdorf Corporation, originally founded by Albert Diebold’s grandfather, Carl Diebold and still headquartered in North Canton, OH, remains prominent not only in its original areas of expertise in bank vaults and fiscal security, but also in the related fields of equipment and software for all manner of self-service sales transactions and related financial services.

1886c NEURALGINE MFG. CO. ADS

What slightly muddies the tale of Weiss and Diebold toiling long hours in dark offices are ads for a patent medicine called Neuralgine dating from around 1886, some fourteen years before Weiss and Diebold appeared on the scene.  These ads were placed by a New York City based company, the Neuralgine Manufacturing Co. They followed the great patent medicine tradition of attributing the miraculous discovery of the remedy to a folk figure, such as an Indian medicine man or a wise and savvy Westerner taught firsthand by such a medicine man, who was both cognizant of the secrets of nature yet far away removed in a romanticized locale, such as the Old West, for they stated that the formula had been discovered a mere six months prior by the “celebrated physician Dr. Walter Hendricks of Montana.” Diligent Google searches reveal no such “celebrated physician” in the Old West.

 SterlingRemedyCo-Neuralgine-6-ReproAd-1

1886c NEURALGINE MFG. CO. AD (REPRODUCTION)

However, patient searches of the Neuralgine Mfg. Co. show that in Trow’s New York City Directory for 1904, its address was 24 Vandewater Street in Manhattan and its registered owner was one Henrietta Munro.  Its 1880s ads ran in the back pages of novels printed by a Norman L. Munro, whose address happened to be 24 and 26 Vandewater Street.  Norman Munro had been a publisher who became rich enough printing dime novels to afford a custom-built 48 foot luxury steam yacht (called the Henrietta) in 1886, and to replace it subsequently with an 84 foot steam yacht in 1887 and a 132 steam foot yacht in 1888. He had died at age 51 in 1894 after an emergency appendectomy undertaken within the same week after his eleven year old son had successfully survived the same operation performed by the same physician.  Henrietta Munro had continued Norman’s businesses, one of which apparently was a side line in patent medicine.

RW-NeuralgylineCo-6(1887Ad-HolyRose[The])

1887 COVER OF A NORMAN L. MUNRO BOOK CONTAINING NEURALGINE AD

One significant distinction between Munro’s Neuralgine and Weiss and Diebold’s Neuralgine must be flagged.  The former was an external remedy, perhaps a liniment, while the Neuralgine marketed by Weiss and Diebold was a pill for internal ingestion. Also, oddly, the Neuralgine Mfg. Co. of New York City was still advertising in 1905 to the trade, four years after the Neuralgyline Co. of Wheeling, WV was founded.SterlingRemedyCo-Neuralgine-10-1

STERLING REMEDY CO.’S NEURALGINE

The reconciling conclusion that emerges from these somewhat puzzling contradictory facts seems to be that Weiss’s and Diebold’s Neuralgine was a new formulation applied to a remedy acquired by, rather than invented by, Weiss and Diebold.  Two small clues in the remaining readily available extant records seem to support such a conclusion.  First, when Neuralgine was trademarked in 1907 as an internal remedy by the Neuralgyline Co. of Wheeling WV, the date of 1879 was listed as the date of its first use in trade. Had either Weiss or Diebold actually invented Neuralgine the date of first use would have been much closer to 1901.  Second, in 1902 there appeared in the columns of the drug trade publications a provocative teaser news item/ad heralding a change about to take place in Neuralgine.  The statement affirmed that despite not being advertised for several years Neuralgine was a trusted “oldtime” remedy that had maintained a steady demand because of continual medical recommendations, but alerted retailers that they must now stock up their supplies because the Company was ready to “boom” it that Fall with a new and well-funded advertising campaign.  This “item” suggests that by 1902 the widow Munro was ready to jettison some of her late husband’s minor interests and the real “manufacturers” were now Weiss and Diebold.

1902 NEURALGINE AD

RW-NeuralgylineCo-1a(Ad-20Yrs-PharmEra(1902)

 Whatever the truth of the origins of Neuralgine – whether they sweated in a dark room to formulate Neuralgine completely from scratch, or whether they applied their new formulation to a previously known patent medicine which they acquired -Weiss and Diebold quickly came to appreciate the value of unrelenting advertising, and scrupulously plowed their profits back into further advertising.  However, they soon realized that a wider line of products would produce even greater profits.

1910 STERLING REMEDY NEURALGINE TRADE ADS

Certainly the modified origin story of Neuralgine proffered in this column neatly corresponds to Weiss’s and Diebold’s later pattern of building their business. To expand their product line, Weiss and Diebold early came to the conclusion that it would be easier to purchase established products rather than try to develop their own. Their first acquisition took place in 1906 when they purchased the Knowlton Danderine Co. of Chicago, a hair tonic manufacturer.  As outlined in the prior column, Sterling Remedy Co. was acquired in 1909 principally for two of its patent medicines, a laxative, Cascarets, and its product advertised to break smoking addiction, No-To-bac. To give their company additional heft, Weiss and Diebold also bought three smaller local West Virginia patent medicine companies, the J. W. James Co. which produced an entire line of patent medicines, the J. G. Dodson Medicine Co. which marketed a product called Liver Tone, and the Drake Co., which manufactured Drake’s Palmetto Compound, and at the same time, absorbed a Cincinnati-based company called Pape, Thompson & Pape Co. whose featured commodity was Diapepsin, a remedy allegedly to treat kidneys and urinary problems.   In 1912, Weiss and Diebold purchased the California Fig Syrup Co. which brought in another laxative, Syrup of Figs, to provide additional relief for the constipation that No-To-bac seemingly produced.

SterlingRemedyCo-4-1910c-1a

SterlingRemedyCo-4-1910c-1b

1910c STERLING REMEDY CO. POSTCARD RE AD SIGNAGE

Relentless advertising kept all of these products before the public and producing profits.  By 1912, the company was worth $4 million. Fearing that the Neuralgyline name was too difficult for people to grasp, Weiss and Diebold decided to simplify it by adopting the Sterling name they had acquired from Kramer, and re-dubbed their company Sterling Products, Inc.  Eventually, the transactions that Weiss and Diebold masterminded catapulted them on the world stage and carried consequences with national implications, which is why they are generally regarded as the true founders of Sterling Drug, Inc.

The Four Smaller Companies Acquired By Weiss & Diebold In 1909

1) J. W. James Co. Cancels

1898 Revenue Stamps

JamesJWCo-2-RB21-1-1898-2R(SterlingProductsIncSucessor)     JamesJWCo-2-RB21-1-1899-1R(SterlingProductsIncSucessor)

JamesJWCo-2-RB21-1-1900-2R(SterlingProductsIncSucessor)

JamesJWCo-2-RB23-1-1900-1R(SterlingProductsIncSucessor)     JamesJWCo-2-RB23-1-1901-1R(SterlingProductsIncSucessor)

TYPE 1 CANCELS

JamesJWCo-2-RB21-2-1899-12-31-2R     JamesJWCo-2-RB23-2-1899-04-14-1R(SterlingProductsIncSucessor)

TYPE 2 CANCEL

1898 Cover and Trade Advertising Material

JamesJWCo-3-1898-1a

JamesJWCo-3-1898-1b

JamesJWCo-3-1898-1c

1904 Invoice

JamesJWCo-6-1904-1

Products

JamesJWCo-10-0a(HairTonic)

HAIR TONIC

JamesJWCo-10-2(SterlingProductsIncSucessor)

“MINATURE’ HEADACHE POWDERS

JamesJWCo-10-5(SterlingProductsIncSucessor)

LATER PACKAGING

—–

2) J. G. Dodson Medicine Co.

1915c Cover

DodsonJGMedCo-3-1915c-1(laterSterlingProductsInc)

1920 Ad

SterlingRemedyCo-DodsonJGMedCo-6a-1920-1(HoustonInformer)

Product

SterlingRemedyCo-DodsonJGMedCo-10-1

SterlingRemedyCo-DodsonJGMedCo-10-3

SterlingRemedyCo-DodsonJGMedCo-10-2

1914 Doctor’ Complaint Re Druggist’s Sale Of Dodson’s Liver To Retail Customers

SterlingRemedyCo-DodsonJGMedCo-6a-1914-1a(ComplaintReDodLtr-NARDJourn-v17)

SterlingRemedyCo-DodsonJGMedCo-6a-1914-2a(ComplaintReDodLtr-NARDJourn-v17)

—–

3) Drake Co.

1910 Ad

SterlingRemedyCo-DrakesPalmetto-6a-1910-1(BiloxiHerald)

Product

DrakeCo-10-1

—–

4) Pape, Thompson & Pape Co.

1910 Trade Ad/News Story Promising Ad Blitz (just like 1902 Neuralgine Ad)

SterlingRemedyCo-PTPCo-6a-1910-3a(ArtReDiapepsinTradeAd1-PharmEra-v43)

1910 Additional Trade Ads

SterlingRemedyCo-PTPCo-6a-1910-1a(DiapepsinTradeAd-PharmEra-v43)

—–

SterlingRemedyCo-PTPCo-6a-1910-2a(DiapepsinTradeAd-PharmEra(v43No2)

Product

Knowlton Danderine Co. and the California Fig Syrup Co. each possess histories prior to their acquisition by Weiss and Diebold that echo this story of the Neuralgyline Co. Perhaps that is why Weiss and Diebold were attracted to them.  They will subsequently each receive their own separate treatment in this column.

©  Malcolm A. Goldstein 2018

 

 

 

 

 

Standard
S

Sterling Remedy Co. (II)

Sterling Remedy Co., Manufacturer

Chapter 2 – Formation & H. L. Kramer

STERLING REMEDY CO. CANCELS

TYPE 1

TYPE 1 BLACK CANCEL

SterlingRemedyCo-2-RB21-1g

TYPE 1 GREEN CANCEL AND GREEN CANCEL INVERTED

 SterlingRemedyCo-2-RB21-t1-1898-2(gc)     SterlingRemedyCo-2-RB21-2a(gc)

TYPE 1 GREEN CANCEL INVERTED

SterlingRemedyCo-2-RB23-t1-1898

TYPE 1 GREEN CANCEL AND BLACK CANCEL INVERTED

SterlingRemedyCo-2-RB25-t1-1898-1a     SterlingRemedyCo-2-RB25-t1-1898-2(i)

TYPE 2

BLACK CANCEL AND GREEN CANCEL

SterlingRemedyCo-2-RB21-t2-1901-03-07-1     SterlingRemedyCo-2-RB21-t2-1901-04-07-1(gc)

TYPE 2 BLACK CANCELS INVERTED

SterlingRemedyCo-2-RB23-t2-1900-12-10     SterlingRemedyCo-2-RB25-t2-1901-06-03

SterlingRemedyCo-2-RB28

H. L. KRAMER

SterlingRemedyCo-50-1(HLKPortrait)

          The Sterling Remedy Co. blossomed around 1896 under the guidance of H. L. Kramer. Kramer was yet another of those self-made men businessmen that abounded in 19th Century America. His mature photo shows him to be a man of ample girth as these titans of industry all seem to have been. On the scale of potential harm to the public, he falls somewhere between the alpha of the distantly-profiled Frank Cheney of Hall’s Catarrh Cure fame, who:  1) proclaimed all diseases, including heart disease and cancer, to be forms of “catarrhs” curable by his liquored infusion;  2) actively blocked efforts to regulate patent medicines; but  3) grew rich enough to be a patron of the arts to his locality – even while drawing continuous fire from the medical establishment; and the omega of the recently profiled George Presbury Rowell, who:  1) molded his fortune by devising the modern form of advertising, then 2) calculatedly and deliberately coupled this new art with the reliably popular selling gimmick of a miracle “patent medicine” elixir; but 3) at least calibrated his “medicine” to do no harm.

1898c STERLING REMEDY CO COVER

SterlingRemedyCo-3-1900c-1     SterlingRemedyCo-3a-1900c-1b

H. L. Kramer was born in Keokuk, IA on August 25, 1861. At age 24, in 1885, he moved to Lafayette, IN where he apparently formed a publishing and advertising company, but also held interests in, or positions with, the Humane Remedy Co., which was manufacturing a cure for opium addiction and operating a sanitarium, as well as the Universal Remedy Co., which was manufacturing No-To-bac, a cure for tobacco addiction. That he began his career by hawking addiction cures marks him as a man willing to live by the caveat emptor ethic of his time.

1892 STERLING REMEDY CO. AD

SterlingRemedyCo-6a-1892-1

           Kramer became involved with the Sterling Remedy Co. through one of his advertising clients, one John W. Heath, a local banker who owned the company and employed Kramer to investigate whether he should invest in the development of a local healing spring. Kramer made a favorable assessment and Heath invested. Kramer took charge of the development of the project, but Heath soon brought litigation to have him replaced, claiming that Kramer was wasting or misappropriating the development company’s funds. Heath’s motion to replace Kramer was denied, but when other creditors also complained they were not getting paid, the court tossed out Kramer. When it looked like Kramer’s career in nostrums had been cut short and he would leave Indiana for greener pastures, Heath’s own financial management of the health resort project brought on “nervous prostration” that – fortuitously for Kramer – caused Heath to drop dead at age 50.

1895 MUDLAVIA COVER

SterlingRemedyCo-MagnoMud&LithiaCure-3-1895c-1aSterlingRemedyCo-MagnoMud&LithiaCure-3-1895c-1b

          Kramer found a new financial backer in the person of Ambrose L. Thomas, a senior partner in the advertising agency Lord & Thomas of Chicago (some of whose history was recounted in the article concerning the B. J. Johnson Soap Co.) and bought out Heath’s widow’s interests in both the medicinal springs and the Sterling Remedy Co. The health spa operation was soon renamed the Indiana Springs Co. By mid-1891, Kramer had finished the planned hotel and successfully launched it as a fashionable Midwestern health resort. Over the generation that it remained prominent and popular it became known as “Mudlavia,” because the springs specialized in mud bath cures. Kramer married in 1892 and soon installed his wife and their two sons on the fourth floor of the hotel. They continued to live there until a fire destroyed the building in 1920, at which time it was estimated that the Kramers suffered a personal loss of $25,000 in jewelry and furniture.

1895 CASCARETS COVER

SterlingRemedyCo-Cascarets-3-1895c-1a     SterlingRemedyCo-Cascarets-3-1895c-1b

          As well as overseeing the Mudlavia resort, Kramer also became the general manager of the Sterling Remedy Co. He combined No-To-bac from the Universal Remedy Co. with the two products that Sterling apparently had already been producing. One was Cascarets, a natural laxative made from bark of the buckthorn shrub, a plant long recognized to possess such cathartic properties. The other was Dr. Hobb’s Spargus Kidney Pills. Among these products, Cascarets soon emerged as the big seller. A story that circulated was that No-To-bac tended to make people constipated, so Kramer introduced Cascarets to relieve the problem. However, the impetus behind this sudden surge of popularity of Cascarets was an enormous infusion of advertising money, and when the Sterling Remedy Co. incorporated in 1896, not surprisingly its President and Vice-President were the self-same Daniel M. Lord and Ambrose L. Thomas of the Chicago advertising agency Lord & Thomas. By 1900, Kramer boasted he was spending $400,000 per year to advertise Cascarets and predicted that he would soon be spending $1,000,000. While (like George Presbury Rowell), Lord and Thomas, already advertising millionaires, owned a large share of the Sterling Remedy Co., by 1898, at age 37, Kramer had joined them as a fellow millionaire.

AD POSTCARD FOR DR. HOBB’S SPARGUS KIDNEY PILLS 1900c

Some sources claim that the true genius behind the advertising for Sterling Remedy Co. was George Ade (1866-1944), later recognized as a journalist, writer and playwright, whom it is said Kramer lured into Sterling’s advertising department by doubling the salary he was earning at a local newspaper. If that story is true, it is not reflected in a 1896 article that reviewed Kramer’s management team at Sterling in Attica, IN, which was headed by one Major A. B. Schanz, the company’s secretary, a civil war veteran. (Perhaps because his aide was a civil war major, Kramer, although he was far too young to have participated in the Civil War, was also often referred to by his contemporaries as “Major” Kramer.) By then, the company was operating “branch offices” in Chicago, New York City, Montreal and London. Among the dazzling numbers thrown about in this article praising the company were the fifteen million Cascarets tablets given away by the company as samples every year, the $30,000 spent on postage every year by company corresponding with 40,000 retail druggists and the 4,000 checks written every month, not including employees’ salaries (which were paid in cash). There was a full printing department with two printing presses turning out 30,000 “impressions” per day of circulars, booklets and other advertising material serving a mailing department of seventy-five “young ladies” who addressed the envelopes.

1905 MUDLAVIA COVER AND LETTER

SterlingRemedyCo-Mudlavia-3-1905-1a

SterlingRemedyCo-Mudlavia-3-1905-1b

          Once established as a millionaire, Kramer invested extensively in mining, publishing and other ventures. Eventually, he became a member of the Board of Directors of Lord & Thomas. He ran Sterling Remedy Co. flamboyantly until 1909 when he sold the company to a group from Wheeling, WV. In 1916, he turned active management of Mudlavia over to one of his son to concentrate on his other holdings. The resort never recovered from the fire in 1920, and his fortune began to wane. In the late 1920s, Kramer ran into legal difficulties, including allegations of mail fraud, in connection with oil lease speculation on land holdings both in California and outside St. Louis, MO. The stock market crash in 1929 diminished his fortune further, and he retired to Lafayette, IN where he lived modestly until he died suddenly of a heart attack in 1935 at age 74 in its auto license registration bureau.

Sterling Remedy Co Products

Cascarets

Showing 1919 Proprietary Revenue Stamp

Showing Canadian Proprietary Medicine Stamp

Cascarets Transferred To The R. L. Watkins Division Of The Company

Chocolate Flavor Added

Another Version

SterlingRemedyCo-Cascarets-10b-7(Cocorets)

Modernized In The 1950s

SterlingRemedyCo-Cascarets-10c-1a(CascaretsIncHewlettNY)

Comic Postcards 1900 to 1910

SterlingRemedyCo-Cascarets-4-1905c-1a     SterlingRemedyCo-Cascarets-4-1905c-2a

SterlingRemedyCo-Cascarets-4-1909-1a     Cascarets, Sterling Remedy Company Chicago, IL

Trade Cards and Signs

Ads

SterlingRemedyCo-Cascarets-6a-1900-1a

SterlingRemedyCo-Cascarets-6a-1920-1     SterlingRemedyCo-Cascarets-6a-1906-1

Novelties

Mirrors

Pillboxes

SterlingRemedyCo-Cascarets-25-6a(PillBox)

SterlingRemedyCo-Cascarets-25-6b(PillBox)

Coins – Heads I Win, Tails You Lose

 

Radio Show Puzzle

SterlingRemedyCo-Cascarets-25-5a(Puzzle)

SterlingRemedyCo-Cascarets-25-5b(Puzzle)

Mudlavia

Contemporary Views Of Hotel

SterlingRemedyCo-Mudlavia-3-1913-1a

SterlingRemedyCo-Mudlavia-4-1910c-1

SterlingRemedyCo-Mudlavia-6-2     SterlingRemedyCo-Mudlavia-6-3

SterlingRemedyCo-Mudlavia-4-1910c-4

SterlingRemedyCo-Mudlavia-6-6

Brochure And Complementary Pass

SterlingRemedyCo-Mudlavia-6-1

Treatment Regimen

SterlingRemedyCo-Mudlavia-4-1905c-2a

SterlingRemedyCo-Mudlavia-6-5

SterlingRemedyCo-Mudlavia-4-1910c-1a

1945 Hotel Rebuild With Ruins Of Original In Background

SterlingRemedyCo-Mudlavia-4-1945-1a

Current View Of Original Hotel

SterlingRemedyCo-Mudlavia-6-7(Bldg-2017-05-05 at 9.08.55 AM)

No-To-Bac

Trade Card And Advertising  Material

SterlingRemedyCo-NoTobac-5-1a     SterlingRemedyCo-NoTobac-5-2a

Dr. Hobb’s Spargus Kidney Pills

Ad

SterlingRemedyCo-DrHobbsSparagusKidneyPills-6a-1899-1b

©  Malcolm A. Goldstein 2018

 

Standard
S

Sterling Remedy Co. (I)

Sterling Remedy Co. , Manufacturer

Chapter 1 – Introduction

SterlingRemedyCo-2-RB21-1g

STERLING REMEDY CANCEL ON BATTLESHIP REVENUE

The history of the American pharmaceutical industry is one of ceaseless expansion achieved by a handful of companies relentlessly gobbling up their competitors.  Fully recounting the story of the Sterling Remedy Co. demonstrates this pattern of growth, for, by the time its successor, Sterling Drug Inc., was itself dismembered in 1994, it had through its acquisitions come to enfold within its ambit some 130 other companies – patent medicine, drug, cosmetics and otherwise.  Often these engulfed companies had themselves formed through mergers of even smaller patent medicine businesses that had also cancelled battleship revenue stamps.  Thus, while there were thousands of entities that cancelled proprietary revenue stamps to comply with the 1898 tax regulations, there were only about ten major drug companies in the United States in the year 2000.

An Overview Of The Companies Absorbed

Below is a display of those patent medicine companies that both cancelled proprietary revenue stamps and were ultimately assimilated by Sterling Drug, Inc.  It is arranged in chronological order to show the manner in which Sterling evolved.  Where necessary, to explain particular twists in its evolution, the chart includes other patent medicine companies that formed either before or after the Spanish-American War period. Depending on when they had begun to sell patent medicines, some of these companies themselves had cancelled earlier or later proprietary revenue stamps which will also be displayed.  To add an additional complicating factor to this study, Sterling did not always buy an entire patent medicine company, but rather only its single most popular product.  On one occasion, it first purchased one brand and then later bought the remainder of the company.  Some of the companies that sold only a product line to Sterling continued on their own as pharmaceutical companies, and on one major occasion, Sterling also divested itself of some of the very companies it had assimilated. All of these diverging pathways also will be noted.  Most of the companies and patent medicines  purchased by Sterling continued to exist and be marketed under their own names, but products sometimes shifted from division to division within the company.  Where evident, these changes will be noted as well.  In fact, because of the way Sterling grew, it became a model for the conglomerate corporation, a type of company popular in the late Twentieth Century which consisted of many successful businesses in varying and often unrelated fields strung together like beads on a single senior corporate management necklace.  This study does not attempt to exhaustively list every company that became part of Sterling, nor does it include any of the various different companies in more remote fields, such as floor wax, that Sterling came to encompass in its far-flung conglomerate divisions.

Subsequent chapters of this Sterling Remedy Co. column will discuss the peculiar wrinkles of the various patent medicine companies, and their products, that were consumed by Sterling, as well as displaying the colorful propaganda and product packaging used to persuade the public to buy these products.

CHRONOLOGICAL FORMATION OF STERLING DRUG, INC.

1890c – Sterling Remedy Co. – launched by H. L. Kramer

1901 – Neuralgyline Co. formed – principals William E. Weiss, Albert H. Diebold

1906 – Knowlton Danderine Co. purchased by Neuralgyline Co.

KnowltonDanderineCo-2-RB23-1R(ChicagoIL)

POSSIBLE KNOWLTON DANDERINE CANCEL ON BATTLESHIP REVENUE

1909 – Sterling Remedy Co. purchased by Neuralgyline Co. and combined with J. W. James Co., J. G. Dodson Medicine Co., Drake Co., Pape, Thompson & Pape Co.

JamesJWCo-2-RB21e-1R(SterlingProductsIncSucessor)

J. W. JAMES CO. CANCEL ON BATTLESHIP REVENUE

1912 – California Fig Syrup Co. purchased by Neuralgyline Co.

CalifFigSyrCo-2-RB25-1R

CALIFORNIA FIG SYRUP CO. CANCEL ON BATTLESHIP REVENUE

1917 – Neuralgyline Co. name changed to Sterling Product, Inc.

Sterling Products I – Companies Purchased

1918 – Farbenfabriken Bayer (American Assets)

Bayer-2-RB25(FarbenfabrikenOfElberfeldCo)

FARBENFABRIKEN BAYER CANCEL ON BATTLESHIP REVENUE

1920c – Wells Richardson & Co.

WellsRichardson-2-RB23-1R

WELLS RICHARDSON & CO. CANCEL ON BATTLESHIP REVENUE

1923 – The Charles H. Phillips Co.

PhillipsChasH[The]-2-RB24

THE CHARLES H. PHILLIPS CO. CANCEL ON BATTLESHIP REVENUE

1925c – Bovinine Co.

1925c – The Centaur Co.

CentaurCo-2-3-RB21-1R

THE CENTAUR CO. CANCEL ON BATTLESHIP REVENUE

1926 – American Home Products Co. formed encompassing parts of Wyeth Chemical Co. (John Wyeth & Brother), W. H. Hill Co.’s Cascara, O. H. Jadwin Co., Kolynis Co., Pepsin Syrup Co., St. Jacob’s Oil Co., Whitehall Pharmacal Co. (including Manhattan Medicine Co. and its Atwood Bitters)

Wyeth-2-RB20-t0-1898-06-29R(p-rc)

JOHN WYETH & BROTHER CANCEL ON BATTLESHIP REVENUE

     HillWH-2-RB23-1R

W. H. HILL CO. CANCEL ON BATTLESHIP REVENUE

         KolynosCo-2-RB48-1R(laterWhitehallLabs)

KOLYNIS CO. CANCEL ON 1914 PROPRIETARY REVENUE ISSUE

          PepsinSyrup-2-RB21-1R(WBCaldwell)

PEPSIN SYRUP CO. CANCEL ON BATTLESHIP REVENUE

1928 – Antidolor Manufacturing Co.

1928 – Scott & Bowne

Scott&Bowne-2-RB21-1R

SCOTT & BOWNE CANCEL ON BATTLESHIP REVENUE

The Major Merger And The Formation of Drug, Inc.

1928 – United Drug Co. encompassing the Louis K. Liggett Co., Owl Drug Co., Rexall Drug Co. and the English Boots Drug Store chain

UnitedDrugCo-2-RB46

UNITED DRUG CO. CANCEL ON 1914 PROPRIETARY REVENUE ISSUE

LiggettLK-2-RB66-1R

LOUIS K. LIGGETT CO. CANCEL ON 1919 PROPRIETARY REVENUE ISSUE

         OwlDrugCo-2-RB20-1R

THE OWL DRUG CO. CANCEL ON BATTLESHIP REVENUE

          RexallDrugCo-2-RB65-1R(TheRexallStore)(SeeAlsoUnitedDrugCo)

A REXALL DRUG STORE CANCEL ON 1919 PROPRIETARY REVENUE ISSUE

1928 – Drug, Inc. merger which brought together Sterling Products, Inc., United Drug Co., the outside pharmaceutical companies Bristol-Myers Co. and Vicks Chemical Co. and the outside candy maker Life Savers Co.

1933 – Drug, Inc. “unmerged” back into its constituent parts

Sterling Products II – Acquisitions

1934 – R. L. Watkins Co. including I. W. Lyon & Sons

Lyon IW-2-RB23-101-1R

I. W. LYON & SONS CANCEL ON BATTLESHIP REVENUE

1937 – American Ferment Co.

Am FermentCo-2-RB28-1cR

AMERICAN FERMENT CO. CANCEL ON BATTLESHIP REVENUE

1942 – Sterling Products, Inc. name changed to Sterling Drug, Inc.

Sterling Drug, Inc. – The Later Acquisitions

1944 – Frederick Stearns Co. including Nyal Co.

StearnsFrederick&Co-2-RB20

FREDERICK STEARNS CO. CANCEL ON BATTLESHIP REVENUE

NyalCo-2-RB45-1R

NYAL CO. CANCEL ON 1914 PROPRIETARY REVENUE ISSUE

1946 – Fairchild Bros & Foster (which has already been profiled in this column)

FairchildBros&Foster-2-RB23-1898-07-07

FAIRCHILD BROS. & FOSTER CANCEL ON BATTLESHIP REVENUE

1966 – Lehn & Fink including A. S. Hinds

Lehn&Fink-2-RB21-1R[laterSterlingDrugCo]

LEHN & FINK CANCEL ON BATTLESHIP PROPRIETARY REVENUE

HindsAS-2-RB20a

A. S. HINDS CANCEL ON BATTLESHIP REVENUE

1988 – Sterling Drug, Inc. Purchased By Eastman Kodak, Inc.

1994 – Assets Of Sterling Drug, Inc. Sold To Various Other Drug Companies

©  Malcolm A. Goldstein 2018

Standard
R

Ripans Chemical Co.

Ripans Chemical Co., Manufacturer

4 RECOGNIZED TYPES OF RIPANS CANCELS

Type 1

RipansChemCo-2-RB20-t1-1898(rc)-1 RipansChemCo-2-RB23-t1-1898(rc)

RipansChemCo-2-RB25-t1-1898c(rc) RipansChemCo-2-RB28-t1-1898a(rc)

Type 2

RipansChemCo-2-RB20-t2-1899-01-21(rc) RipansChemCo-2-RB23-t2-1899-04-17(rc) RipansChemCo-2-RB25-t2-1899-02-21(rc) RipansChemCo-2-RB26-t2-1899-06-08(rc)

Type 3

RipansChemCo-2-RB20-t3-1900-10-15(rc) RipansChemCo-2-RB23-t3-1900-02-17(rc)

RipansChemCo-2-RB25-t3-1899-02-21(rc) RipansChemCo-2-RB26-t3-1900-03-08(rc)

Type 4

RipansChemCo-2-RB20-t6-1899-10-24 RipansChemCo-2-RB28-t6-1901-05-09 RipansChemCo-2-RB31-t6-1900-10-17(hs&hw)

COLLECTION OF RIPANS CHEMICAL CO. CANCELS

RipansChemCo-2z-Coll4b

The ubiquitous red Ripans Chemical Co., “R. C. Co.,” cancel, usually seen on the 1/8 cent value, Scott RB 20, appears in revenue stamp lots about as frequently as the Thomas Dunn cancel discussed in an earlier article. At least one copy turns up in every revenue stamp collection, but often there are multiple copies. Since they are as unavoidable as mosquitos, this article explains the cancel’s origin.

RowellPortrait-1905-2(Book)

Ripans Chemical Co. was the creation of one man, George Presbury Rowell. Like most of the Nineteenth Century personalities profiled in this series of columns, Rowell was a self-made man who ascended from humble origins to shape his own fortune. Unlike the dedicated scientists, who genuinely intended their benevolent remedies to relieve the word’s pain, or the monomaniacal zealots who wrongheadedly believed their exotic elixirs might actually relieve the world’s suffering, Rowell’s chosen profession had nothing to do with the science of medicine. More akin to – but hardly the same as – the calculating cheaters who slopped their phony alcohol laced concoctions together in their hotel bathtubs in the afternoons before siphoning them into bottles to hawk at their medicine tent show revival meetings at night, Rowell was, in fact, the advertising man who cashed in on the patent medicine boom. He stands as the diametric opposite of the previously profiled Charles Austin Bates, whom studious readers will recall went bust with his nostrum, Laxacola.

RipansChemCo-3-1896-1(RowellAdAgncy)

1896 ROWELL AD AGENCY COVER

As a pioneer ad man, Rowell knew how to craft words, and the juiciest of his experiences are best recounted in his own voice. He did publish his memoir – Forty Years An Advertising Agent – in 1905, but it was not a conventional biography in any sense. Rather, it was a collection of fifty-two extremely loosely organized vignettes about the newspaper and advertising businesses as he observed them develop during his life and the personalities of his contemporaries (living and mostly dead – men like the now largely forgotten newspaperman and political satirist David Ross Locke, who wrote under the pseudonym Petroleum V. (for Vesuvius) Nasby and entertained the likes of Senator Charles Sumner and Abraham Lincoln). Part reminiscence, part how-to book, part advice, he printed these articles originally in his own magazine, Printer’s Ink, the first advertising trade journal, which also he originated.

PrintersInkCover-REV

10/19/92 PRINTER’S INK COVER

While concentrating on sly, acidic, penetrating observations of his acquaintances, he treated his own family as nonexistent, only teasingly and fleetingly interspersing biographical hints about his own life. For example, as a keen observer of newspapers and their markets, he identified his birthplace only by stating that his father was a Whig and he was born somewhere within the area reached both by the Caledonian, a Whig newspaper printed in St. Johnsbury, VT, which his father read, and the North Star, a Democrat newspaper printed in the nearby, smaller Dansville, VT, which his nearest neighbor followed. In another place he described the entire area as “a primitive forest region.” Once, on a passport application, Rowell called his birthplace “Vermont,” and an obituary fixed his birthplace as Concord, VT. Other documents, like a census document filed by another for the building he was living in, identified it as “New Hampshire,” as do many current web sites. In his reminisces, the only other clue he gave about his impoverished birth circumstances was that his and the neighbor’s families shared a “single log cabin.” Similarly, although prominently identifying his father’s political predilection, he actually mentioned his father’s name only in an explanatory footnote over two hundred pages later in the course of relating an anecdote about his distant relationship to a man from Hawaii who was described to him as his twin and who identified himself as bearing the same last name when the two met at the Philadelphia World’s Fair of 1876. He never discussed his schooling, or gave any detail of his family life, mentioning only in passing that his wife (apparently the first of two women, both unnamed and un-described in his book, and identified only from other sources) accompanied him when he moved from Boston to New York City.

RowellPortrait-1856

1856 ROWELL PORTRAIT

While Rowell devoted several chapters of his book to his hunting and sporting hobbies, and used these discussions as a springboard to describe the vivid personalities he met and social connections he made in the course of pursuing these hobbies, he never talked about his family. Perhaps the fact that he had no son, a circumstance that he mentioned in his last article while discussing the steps he took to conclude his business career before he retired, deterred him from addressing this subject more fully. The closest he came to delving into his personal life was a chapter devoted to Willow Brook, his estate in Tarrytown, NY, on property adjoining Washington Irving’s Sunnyside that had been owned by Irving’s brother, but even that discussion was more a listing of the kinds of trees found on the estate than the personalities that inhabited the manor house.

RowellAgencyAd-1869-PutnamsMag

1869 ROWELL ADVERTISING AGENCY AD

A time line of Rowell’s life can be constructed from the stories he related. Born on July 4, 1838 (elicited from various scattered asides by Rowell and independently confirmed from genealogical data), his description of his childhood is framed largely in terms of recollections of patent medicine ads:

Insert-1A-RowellsEarlyMems

In 1858, he moved permanently to Boston, after an earlier attempt in 1856 was thwarted by the economic depression of 1857. There he found a job in the advertising department of the Post newspaper, where he began as a bill collector, but soon realized that his talent lay in soliciting ads and persuaded his superiors to use him in that capacity as well. During his tenure at the Post, he undertook his first independent advertising project when he arranged to prepare for the Boston theaters a playbill similar to the one that he saw being distributed in the New York theaters. Even though he turned a profit on the single transaction, he decided this venture would not support him. However, the experience showed him that he had to open his own business.

RowellPortrait-1865

1865 ROWELL PORTRAIT

After seven years with the Post, he purchased a small magazine which printed updates of railroad timetable once a week, and, with another young colleague, opened his own office in Boston in 1864. His initial idea was to make his money by expanding the number of subscribers to his magazine, but he soon evolved a larger plan. He began to gather the names of newspapers and pair them with advertisers who wanted to buy advertising space in them. As the medium of exchange between advertisers and newspapers, he unwittingly launched himself into the advertising agency business. He was not the very first to open such an agency, nor was he the only one to do so, but he was among the most innovative and successful.

1870c EXTERIOR IMAGES AND PICTURE OF ROWELL’S AD AGENCY

The manner in which Rowell collected his fee was to charge the advertiser a pre-arranged price per line, have the newspaper print the ad as submitted and bill him at the quoted rate. When Rowell paid the newspaper, he took a negotiated “rebate” from the billed amount. For example, if the ad charge was 20¢ a line and the ad was five lines long, Rowell would charge the advertiser $1. The newspaper would run the ad and bill Rowell $1, which he, in turn, billed to the advertiser. The advertiser would pay Rowell’s invoice. If Rowell’s negotiated rebate with the newspaper was 10%, he then remitted 90¢ to the newspaper and pocketed the other 10¢ as his commission. Rowell claimed that as an organized agency handling only newspaper advertising space, he could apply economics of scale to benefit both large and small advertisers to negotiate better rates than the advertisers themselves could obtain directly from either large or small newspapers. Rowell even advertised that he acted as proprietor for a group of select small papers across the country in which he could guarantee even lower rates by supplanting their individual need for their own advertising departments.

RipansChemCo-4-1891-1a(RowellAdAgncy)

1894 ROWELL AGENCY POSTCARD DEMANDING COPY OF PAPER DEMONSTRATING AD PLACEMENT

Recognizing that New York was an even busier commercial city than Boston, Rowell soon opened a branch office there, and within a another year or two, after buying his partner out, he moved there himself. In New York City, he grandiosely set up his office in the New York Times Building, then on Park Row across from City Hall. By 1868, he claimed he was earning over $54,000 a year, which he noted wryly earned him a separate dining table for “his family” in their boarding house. “His family” was never further described nor mentioned again.

RowellOfficeInterior-NewYork(1869)

1870c INTERIOR IMAGE OF ROWELL’S OFFICE

Shortly thereafter, he made his first big innovation in advertising. He undertook to organize and issue the first printed listing of every newspaper in the country, Rowell’s American Newspaper Directory. While drawn upon an English model, Rowell went beyond just setting forth the names of papers. He also compiled and printed other information useful to advertisers: publication frequency; political inclination; number of pages; size of pages; subscription cost; names of editor and publisher; and, from Rowell’s standpoint most innovatively, circulation information.

RipansChemCo-3-1886c-1(RowellAdAgncy)

1890c RETURN ENVELOPE FOR ROWELL’S AMERICAN NEWSPAPER DIRECTORY

Rowell admitted that his directory supplied his advertising competitor’s with useful information, but he determined the risk was worth it. He also acknowledged he could not sustain compilation and publication of the volume merely on its $5 annual subscription fee. His way of offsetting that cost was listing on his books an advertising charge against each of the papers listed in the directory. With larger papers, Rowell stated such charges were “as good as money in the cash drawer” for him, but with smaller papers the charge was often bartered in return for free advertising space granted to Rowell by those papers. As will be discussed further below, Rowell denied that the availability of such free advertising space ever benefitted him in any material way, and also denied that his listings of the circulation figures of the various newspapers were in any way influenced by the amount of advertising space they bought in his directory. He even lamented, at some length, the amount of enmity engendered by allegations that he used his estimates of papers’ circulation as a means of blackmailing them, and emphatically denied all such charges.

RipansChemCo-6a-1899-1a

1899 AD

Around 1870, Rowell authored one of the early guides to conducting an advertising business, which is apparently still read in schools that teach advertising. As an advertising agent, Rowell operated by his own strict set of practices, which he expounded in an 1875 brochure that he reproduced over twelve pages of small print in his recollections. He caused that reproduction to be set in special smaller type so that knowledgeable readers could skip it, if they so chose, but felt obliged to include it in his memoirs because advertising was a relatively new industry. He showed that early newspapers relied upon subscriptions for their revenue and regarded advertising revenue purely as an incidental source of income. Because of the great number of newspapers springing up all around the country, within Rowell’s lifetime, advertising agents began to represent newspaper publishers, negotiating the price of advertising for the publishers, and, as he pioneered, accepting their negotiated commission as their fees. Through Rowell’s influence, advertising rates gradually came to be measured in terms of cost per line and agents’ commission percentage came to be fixed by custom. To potential advertisers, Rowell stressed, the ad agents could offer a list of newspapers and their per line advertising rates, but could then negotiate on behalf of the advertisers additional discounts from these rates to boost the effectiveness of the advertising by reducing its per line cost while broadening its spread. Competition kept ad agency commissions in line.

RipansChemCo-6a-1899-3a

1899 AD

In Rowell’s time, the art of the advertising agency came to be the fit it could negotiate between its advertisers’ budgets and the effective scope of advertising these budgets would buy in order to produce a return to the advertisers sufficient to induce them to advertise again. Rowell elaborated upon the differences between general advertising agents who arranged advertising for a great number of papers, and special advertising agents who arranged advertising for only a few newspapers, mainly in large cities. Curiously, at this time, the content of the ads did not seem to be the primary focus of advertising agents. Only later, largely after Rowell’s time, did the agencies assume the role of developing and executing the ad campaigns themselves, which seems to indicate that modern advertising agencies appear to have evolved from the general advertising agents, as Rowell was, rather than the specific agents, as the quality of the advertisements which filled the advertising space became increasingly important.

RipansChemCo-6a-1900c-1a

1900c AD

Rowell also described the origins of the Associated Press as a pooling of news reporting services among American newspapers for the gathering of foreign news for distribution in America, but regarded it, in his time, as a closed fraternity controlled by big city newspaper publishers, either in New York or Chicago, and opined that if the great Nineteenth Century financial manipulators, like Jay Gould, had gained control of the newspapers, as he thought they had unsuccessfully attempted to do, American society might have developed much differently. He contrasted the Associated Press with its competitor, the English newspaper association Reuters, and attributed American sympathy for Japan in the then very recent Russo-Japanese War, to the influence of Reuters because it supplied American newspapers with much of their coverage of that War. Perhaps because of his unremitting focus upon the monetary aspects of the newspaper business, Rowell seems to have held a remarkably jaded view of the mechanics of newspaper reporting itself.

RowellsNewpaperPavillion(1876WorldsFair)

1876 DRAWING OF ROWELL’S PAVILION AT CENTENNIAL EXPOSITION

In 1876, Rowell accepted an invitation from the chairman of the Centennial Exposition (who also happened to own a particularly influential newspaper in Hartford, CT) to organize a newspaper exhibit at the fair in Philadelphia. Rowell was then listing no less than 8,129 newspapers in his Directory and he undertook to have a copy of each paper available for inspection the exhibit’s large tent. The newspapers were arranged on the tent’s shelves in the order listed in the Directory and visitors to the Exposition were invited to come in to the tent to read their local news while away from home. Rowell claimed the exhibit cost him $20,000 and that he never directly received any advertising contracts in return for his effort, but drew his satisfaction as he traveled around the country from overhearing people recount to their friends how they had caught up on the local news at the Centennial Exposition at his exhibit. Rowell also claimed that he gave his complete set of newspapers collected for the exhibit to the Library of Congress after selling two other sets to the Vatican and to a collector in Tasmania.

RipansAd-1898Ad

1898 AD

In 1880, Rowell decided to indulge his desire to become a gentleman farmer. For approximately the next seven years, he claimed that he relinquished daily oversight of his advertising agency to his colleagues while he purchased and managed a farm back in his native Vermont. Although he employed the latest agricultural techniques and the finest livestock, he found the endeavor a constant financial drain. He also dabbled and lost as a local Republican politician, and tried his hand, he averred most comically and unsuccessfully, at being the publisher of a local weekly newspaper. He returned to New York in time for the great blizzard of 1888, which – by virtue of securing a promise from the cabbie who drove him to work to return to pick him up and deliver him back to his lodging – he claimed not to notice the magnitude of until reading the next day that the noted Republican politician Roscoe Conkling died after contracting pneumonia while trying to walk to work the same day.

RipansChemCo-6a-1900c-3a

1900c AD

In 1888, Rowell began to publish his own advertising industry trade journal, which he called Printer’s Ink. Although this publication was the first to be devoted specifically to the trade of advertising, and Rowell allowed that he had envisioned such a publication for several years and even thought of naming it for himself, he treated its actual innovation as a largely casual event, averring that he authorized its founding at the precise moment he did because he happened to own an interest in a printing firm and needed to create a job for a promising young acquaintance. He off-handedly provided the young man with a dusty bunch of his privately scrawled thoughts about advertising that he had amassed over several years and turned him loose. He then bragged off-handily that the paper “was more quoted for a time than any other paper published, and to this day I find myself able to identify wise paragraphs about advertising floating through the columns of the press, that, if they could speak, would proclaim themselves children of my – shall I say brain?” He further modestly claimed that once launched, Printer’s Ink thereafter had more than two hundred imitators.

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1897 AD

Turning to Rowell’s connection with Ripans Tabules, Rowell claimed that he was neither the first nor the most successful advertising agent to own a proprietary medicine. He identified several notable and popular medicines that were owed by his contemporaries:

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Still, Rowell’s story of the creation of Ripans Tabules remains the most complete and dispassionate account of how a completely non-medical person calculated the pros and cons of entering the patent medicine business and shaped his actions to maximize his monetary benefit.

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Rowell then recounted his early attempts to find a suitable product. He promote a competitor of Redding’s Russia Salve, a product from the Civil War era (its proprietary stamp is RS 198), but since that balm had already passed its peak of popularity, the advertising campaign did not generate much interest. He tried advertising a skin cream originally owned by Samuel C. Upham. (As an aside, Upham was a Philadelphia dealer in patent medicine, perfume and notions whose principal present claim to fame is the fifteen million dollars worth of fraudulent Confederate money and stamps, including twenty-eight different note designs and fifteen stamp designs, he generated and circulated during the Civil War – claimed by a Confederate senator to have done more damage to the Confederate cause than Gen. McClellan and his army – which are now collected as “Upham facsimiles.”) However, Upham’s cream too had already played out its popularity. He experimented with promoting a product duplicating the popular remedy Fellows’ Hypophosphites, but dropped it when a lawyer warned him that the name he had picked for his elixir was owned by someone else. He tried to purchase a half interest in Dr. I. W. Lyon’s extremely popular Tooth Powder (still available on the Internet today) only to have Dr. Lyon call off the sale at the very last moment. He even went so far as to advertise in the New York Herald and his own Printer’s Ink seeking an appropriate proprietary article.

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1901 AD

Many innovators submitted samples of their concoction for Rowell’s approval, and he finally found the characteristics he deemed just right:

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Rowell used his acquaintances who were doctors as medical advisors to assist him in creating the product he desired. The only doctor to whom he ever gave credit by name for his input was Dr. John McGaw Woodbury, even then more acclaimed as the reforming Commissioner of the New York City Department of Sanitation than as a physician, although he relied much more upon Woodbury’s assistant, referred to (and pictured in Rowell’s book) only as “Fred” for aid in the actual development of his medication. Rowell thought he had found what he was looking for when Fred suggested he use as his medicine a fairly humdrum, generic kind of mild laxative formula, composed principally of rhubarb and soda, that had been prescribed by doctors for a hundred years. Rowell immediately had a batch of the formula mixed up, but it looked awful and stained anything it touched.

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Rowell rejected the product, but kept the bottles around to show his physician friends. Finally, the pieces all fit together one day when Fred suggested that the required ingredients could be now be compressed into a tablet. Rowell immediately ordered a hundred tablets delivered to his then New York residence (which Rowell slyly mentioned was the former mansion of Frank Tilford (of Park & Tilford, previously chronicled in these columns)). The pills entirely suited his purpose, and having determined the identity of his product, he plunged immediately into naming it. The solution he arrived at rivaled the ingenuity of George Eastman’s Kodak:

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Rowell was also careful to select his own individual name for the pill itself that he was selling, which differentiated it from every other tablet on the market. He explained the distinction in an exchange which he recorded with Dr. R. V. Pierce of the World’s Dispensary Medical Association of Buffalo, New York (a subject for future study, described by the New York Times in 1894 as looking more like a “poet and dreamer” than like “one of America’s shrewdest businessmen and among its most remarkable advertisers” that he really was):

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Having worked so hard to find the right product to offer and to create a unique identity for it, Rowell could truly bring his expertise to bear in the area of marketing Ripans Tabules to the public. Although he claimed never to profit directly from the space he reserved in the various newspapers in return for listing them in his Directory, when he was ready to market his Ripans Tabules, he had readily available to him, and was able to devote to such advertising, some $125,000 of such free space in various newspapers and journals all over the country. In other words, his opening advertising campaign on behalf of Ripans Tabules, which cost him nothing out-of-pocket, in today’s dollars would be worth over $3.2 million. Such an advertising launch hardly seems to match Rowell’s claim of never using his position to further his own interest, but he was characteristically modest about the achievements such advertising ultimately achieved:

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Even though Rowell claimed his Ripans Tabules were the first patent medicine to be marketed in tablet form, the correct pricing of the product seemed always to cause Rowell some difficulty (as it did many others as well). Rowell applied his own twist to the problem by mining the very bottom of the market. Over the criticism of no less a figure in the wholesale drug trade than Charles Crittenton (previously profiled in these columns) who was extremely reluctant to handle that small a size, Rowell decided to market his Tabules at five cents a package. The tax on such a package is reflected in the 1/8 cent value of the RB20.

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While Rowell could never get doctors of the caliber of John McGaw Woodbury to endorse his product, he did receive an endorsement from John H. Woodbury, whom readers of this column have already met in connection with his tussle with Andrew Jergens over the purchase of Woodbury Facial Soap, a product itself still selling well into the 1950s.

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1899 AD

Ultimately Rowell felt he had established Ripans Tabules well enough to cease advertising entirely by 1905. He pronounced the residual return entirely satisfactory:

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Albeit his humility about his patent medicine achievements, Rowell closed his book by quoting all of the glowing encomiums, testimonials and tributes rendered to him at an industry dinner given to him upon his final retirement from the advertising business in 1905.

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Rowell boasted that he represented “American newspapers – not only the newspapers in the city of New York and of all other American cities, Religious, Agricultural and other class newspapers – but also the small country journals.” But he confined himself to newspapers only and accepted no advertisements for “books, signboards, posters or job printing.” He represented newspapers only in the United States and Canada with the sole exception of acting as agent “for the Levant Herald, published at Constantinople.” Unfortunately, Rowell omitted the origins of that representation which might have made a colorful and unusual anecdote. Actually, because he limited his advertising business to representation of newspapers exclusively, Rowell probably picked the right time to retire. Even by the turn of the Twentieth Century, national magazines had supplanted local newspapers as the trend setters for public taste in America. One example of that newly found influence was that it was the series of articles about patent medicine in the national magazine Collier’s that finally spurred the passage of the Pure Food and Drug Act of 1906.

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1896 AD IN SAN FRANCISCO, CA SWEDISH NEWSPAPER

The testimonial dinner in 1905 was Rowell’s last hurrah. He died on August 22, 1908 at Poland Springs, ME, itself a health resort and the source of Poland Springs Water (which may – if this column lasts long enough to finish the over one thousand identifiable battleship proprietary stamp cancelling entities – some day get its own profile in another series of columns devoted to the wider scope of the quasi-health industry encompassing sanitariums, health spas and mineral springs). His legacy had a mixed afterlife. Rowell detailed the arrangements he made for the disposition of his advertising businesses in his book and had no direct involvement in the advertising industry after 1905. His American Newspaper Directory was absorbed in 1909 by the American Newspaper Annual & Directory published by the advertising agency N. W. Ayer & Sons, a former competitor of Rowell’s, but his trade journal, Printer’s Ink, in other hands, continued to be published until 1967.

RIPANS TABULES

Ripans Tabules seem to have hung around as long as Printer’s Ink. Because he knew the business so well, Rowell revealed the entire story of the advertising aspects of Ripans Chemical Co. However, although he was the inspiration for Ripans Tabules, and went so far as to admit in his book that by the late 1890s he was more interested in the Ripans Chemical Co. than his advertising agency, he wrote nothing of the actual inner operations of that company itself or its ownership. He did not indicate that he had divested his interest in the company when he retired from the advertising business, and after his death, the company returned to advertising its product and continued to manufacture Ripans Tabules. Because of their inoffensive, perhaps even mildly helpful, nature, Ripans Tabules flew beneath the radar of the patent medicine reformers’ wrath and never became the subject matter of the flaming diatribes so frequently hurled at patent medicine makers by the popular national weekly magazines or the American Medical Association.

1930C CHOCOLATE RIPANS TABULES

By the 1920s, the Tabules were being formulated in a chocolate version and, in fact, they were still being advertised in a publication called The Colored Americans Magazine as recently as 1969. One web commentator suggests that Ripans ultimately became the property of the Wyeth drug company interests, which, as the conglomerate American Home Products Co., was one of the major survivors among the shrinking group of larger and larger consolidated drug companies formed during the Twentieth Century, until it was purchased by Pfizer in 2009. Ripans Tabules are not presently available.

© Malcolm A. Goldstein 2017

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J. J. Quarry

 

J. J. Quarry, Retailer

QuarryJJ-2-RB21(James)(AnnArborMI)

POSSIBLE QUARRY CANCEL ON PROPRIETARY REVENUE

Measured by the sheer number of users, retailers probably cancelled proprietary battleship revenue stamps more often than either manufacturers or wholesalers. Yet identification of most of the proprietary cancels employed by retailers is extremely difficult and illusive.  This paradox occurs because of the vagueness of the governing Spanish-American war tax regulations and the circumstances under which the retailers encountered the regulations.  As they applied to proprietary products, the regulations stipulated that covered products sold after the effective date of July 1, 1898 display a cancelled stamp on the product as proof of tax payment, and further specified that this cancel identify the user, but then deemed the mere use of initials sufficient to make that identification.

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QUARRY CANCEL ON DOCUMENTARY REVENUE

Moreover, despite their numbers, most retailers had only minimal contact with the proprietary tax regulations and the required stamps.  To comply with these regulations, many retailers engaged in a one time act of stamping their stock on hand on June 30, 1898.  Since each retailer’s stock consisted of a variety of different products in various sizes, there was no uniformity concerning the values of stamps used by these retailers or the manner in which the retailers cancelled the stamps.  Most retailers used whatever hand-stamping devices they happened to have at hand to cancel the stamps, so most of the cancels produced are merely an undifferentiated jumble of letters and a date.  Only in cases where the retailer printed its entire name or its location as well as its initials, or where the retailer itself sponsored a product and thus had incentive to produce a consistent group of cancels over some period of time, is a positive identification possible. The proprietary Quarry cancel shown above is at best a probable match, but then only because of the unusual combination of letters of Quarry’s initials.

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BRITISH STAMP ACT ONE PENNY REVENUE STAMP

On the other hand, manufacturers and wholesalers had different concerns with respect to complying with the proprietary tax regulations.  First, because their products came in specified sizes, they had only to cancel the one, two or three of the twelve possible proprietary values that represented the retail prices of the size of the bottle or package of their goods.  Second, because they wished to continue the uninterrupted sale and distribution of their products, in most cases, they assumed the obligation of applying the proprietary stamps to the goods during the manufacturing and distribution process before they reached the retailers.  They could order cancels printed on the values they needed and apply these stamps to the goods while they were still together in bulk before separation and display on retail shelves.  Printing also served to standardize the arrangements of initials that manufacturers and wholesalers used as cancels. For all these reasons, the proprietary cancels of manufacturers and wholesalers are usually easier to identify than those of retailers.

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BRITISH STAMP ACT HALF PENNY AND FIVE SHILLING STAMPS

The second cancel shown above is also a Quarry cancel, but it is completely different from that on the other stamp because it was cancelled with a different stamping device that contained both the company’s full name and location, which makes identification certain.  While, at first glance, this stamp appears virtually identical to the other one, it actually comes from a different series of stamps, and its use arises from a different set of regulations that applied equally to pharmaceutical retailers, manufacturers and wholesalers, as well as to virtually every other business in the United States.  These regulations taxed not a particular product or industry, but rather the documents which memorialized specified classes of business transactions, and collectively, therefore, are referred to as a “documentary” revenue tax.  The idea of collecting revenue by taxing documents first arose in the 17th Century in the Netherlands and spread from there to France, England and the rest of the world.  In the earliest settlements of North America, the English colonists themselves had often used such tax on documents to raise revenue. It was also the same kind of tax which those same colonists labeled the hated “Stamp Tax” when the British imposed it on the colonies in an attempt to recoup their expenses after the French and Indian War ended.  The difference between that earlier tax and this one was that those required “stamps” were impressed either onto the paper with an inked device or crimped into the paper with a seal.  Stamps – in the form of postage stamps – were not invented until 1840 and were first devoted to revenue collection in the United States in 1862 during the Civil War.  In Quarry’s case the documentary tax stamp was probably originally affixed to a check, since payment of money by check was one of the classes of business transactions that were taxed under the 1898 Act.

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1901 QUARRY AD

The stories of retailers, in general, are less complicated to tell than those of the manufacturers or distributors, since these latter groups sought to build financial empires either by wild, flashy promotions of their products or by the earnest practice of sharp-elbowed capitalism.  In this era (with notable exceptions whose stories will appear in this column in due course), the typical retailer owned a single drug store. In larger towns and cities, the proprietor of this store was often a trained pharmacist. In more rural hamlets, the local general medical practitioner rolled the drug store into his medical office, or the local general store merchant stocked drugs “cheek by jowl” with dry goods, staples, farm implements and various and sundry other merchandise.  Because of their single locations, retailers tended to build their lives and reputations in one city, and their histories are entwined with that of their locale.  In fact, in this particular case, the details of the personal histories of the retailers are overwhelmed, and largely obscured, by this images they left behind.

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1905c DOWNTOWN ANN ARBOR POSTCARD

Quarry’s store was in the center of Ann Arbor, MI.  A Flickr user compiling the history of a later establishment whose existence stemmed from Quarry’s store spotted it in the background of a postcard entitled Downtown Ann Arbor.  She excised it and enlarged the image.

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DETAIL OF POSTCARD

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ANOTHER VIEW OF THE QUARRY STORE

Precise records about James J. Quarry are lacking. He was born somewhere in Ontario, Canada on a date listed variously, but imprecisely, between April, 1861 and 1866.  An 1883 graduate of the Ontario College of Pharmacy, he emigrated to the United States in either 1884 or 1885.  By 1893, he was working in Ann Arbor as an employee of Goodyear & Co, a drug store operated by Dr. J. J. Goodyear, himself an 1877 graduate of the Cincinnati College of Medicine and Surgery. When Goodyear bought the business in 1880, he was continuing a drug business that had operated in Ann Arbor on Main Street at the same location since 1836. It remained there, even after Quarry went off on his own, for another forty years.

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1902 TRADE PUBLICATION PHOTO

After acting as the head prescription clerk in Goodyear’s drug store, as well as serving as the Secretary and Treasurer of the Goodyear Drug Co., which was incorporated in 1897, Quarry opened his own drug store in 1898 a few blocks away in a newer shopping district closer to the campus of the University of Michigan.  To remain competitive in a town filled with drug stores, Quarry apparently specialized in retailing surgical tools to physicians as well as carrying supplies for the University’s hospital and graduate schools. He also advertised that he was a so serious a specialist in compounding drugs that he removed his soda fountain in order to have a larger area to devote to filling prescriptions.

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1908 QUARRY AD

From the time he opened his business, Quarry employed one G. Claude Drake as his head clerk.  He was born in Dryden, MI, a small town roughly 50 miles northeast of Ann Arbor, in 1872 and spent his entire adult life in Ann Arbor.  Drake appears to have had a flair for advertising because he arranged four times within two successive years to have Quarry’s store and his window displays featured in drug trade journals.  He even got one of his Christmas displays reproduced in a 1910 book instructing pharmacists how to do window displays.

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1902 DRAKE WINDOW DISPLAY ARTICLE

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1903 DRAKE WINDOW DISPLAY ARTICLE

One of the journals, published by Parke, Davis & Co. of Detroit, showed Drake’s display of its tooth care products.

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1904 PARKE, DAVIS & CO TRADE PUBLICATION PHOTO

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DRAKE DISPLAY IN 1910 WINDOW DISPLAY BOOK

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When Quarry died in Ann Arbor in 1921, Drake continued the drug business under Quarry’s name and tirelessly promoted the store as “The Quarry.”

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1922 TRADE PUBLICATION PHOTO

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1928 QUARRY AD

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1936 Quarry Ad

In 1927, Drake also opened a sandwich shop which, after 1935, operated under his manager and successor until 1993, and is fondly remembered in the Flickr posting.

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1928 DRAKE SANDWICH SHOP AD

Drake died in Ann Arbor in 1950.  In 1978, his daughter donated his papers to the Bentley Historical Library of the University of Michigan.  Contained in these files is the photo shown below of the interior of Quarry’s drug store picturing Quarry and Drake among others.

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© Malcolm A. Goldstein 2017

 

 

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John D. Park & Sons

John D. Park & Sons, Wholesaler

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PARK CANCEL ON BATTLESHIP REVENUE

 

FREEDOM OF CONTRACT VS. MONOPOLY

John D. Park & Sons was a middleman in the drug industry. As a mid-west wholesaler located in Cincinnati, OH, it bought goods – mostly in the form of patent medicines – from national manufacturers and resold them to local retailers. Yet it holds an outsized place in the history of the pharmaceutical business in the United States because it waged a legal battle over approximately twenty years that permanently linked its name with the creation of a significant principle of American antitrust law that endured for almost one hundred years.

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PARK CANCEL ON GOVERNMENT ISSUE REVENUE 1880c

After the Civil War, as business in America grew and thrived overall, such industries as oil, steel and sugar, which dealt in fungible goods, consolidated to the point where the linked corporate boards of the producing companies, referred to as an “interlocking trust directorate,” controlled, by means of a “horizontal” monopoly, the entire supply of that particular product available in the United States market. While admired for their efficiency in delivering commodities cheaply, quickly and uniformly, these trusts engendered public fear that industry monopolies would lead to unchecked and abusive retail prices. At the height of the Gilded Era, between 1890 and World War I, the trusts and their detractors fought a pitched battle to shape the continued growth and development of American business.

     PARK POSTCARD TO CUSTOMER – 1877

Patent medicine manufacturers, wholesalers and retailers admired the efficiency and uniformity of the trusts and wished to emulate the trust structure within the pharmaceutical industry. However, because of the separate “patents” (meaning, in this case, secret and private formulae, rather than formally registered patents) for the manufacture of each medicine, the patent medicine business was not amenable to the same rigid domination as oil, steel or sugar. In 1876, drug wholesalers from eleven Midwestern states gathered in Indianapolis, IN to fashion a strategy which would allow them to maintain uniform resale prices across the industry in order that every member of the wholesale association, large or small, be able to compete on a level playing field. The organization that grew out of that meeting was called the Western Wholesale Druggists’ Association. In 1882, it changed its name to the National Wholesale Druggists’ Association (NWDA).

TRADE CARD FOR PRODUCT DISTRIBUTED BY PARK

Over years, the NWDA along with similar organizations of manufacturers and retailers, designed, developed, imposed and policed various contractual schemes to insure that all wholesalers followed the same rules in dealing with retailers. At first controlled by having manufacturers refund part of the wholesalers’ purchase price in the form of rebates after the wholesalers certified that the goods had been resold at the fixed resale price, these strategies ultimately evolved as far as to require manufacturers to individually mark and track goods package by package (or bottle by bottle, as it were). That these contractual plans had the additional benefit of ensuring maximum retail sales prices for the participants did not offend these manufacturers, wholesalers, retailers or their sponsoring organizations in the least.

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PARK COVER TO A PATENT MEDICINE MANUFACTURER – 1889

The efforts by the NWDA, and the associations of manufacturers and retailers, can be viewed two different lights. On the one hand, most businessmen thought the NWDA and the other trade organizations were simply vindicating one of the oldest principles in commercial law: the legal doctrine of “freedom of contract” which holds that parties are free to sell only to those customers with whom they choose to do business and only upon such terms as they desire to set in the contract. They also believed that the inverse also held true: parties could not be forced to sell to those with whom they did not wish to conduct business nor could such sales be coerced upon terms that interfered with the sellers’ freedom to condition sales as they chose. In the Gilded Era, this doctrine, wielded both as an offensive and defensive weapon, seemed ingrained as deeply as capitalism is itself, and was always the first position argued in litigation. Moreover, businessmen regarded Park’s actions as ungentlemanly, rude and sharp business practice when it purchased goods from wholesalers and retailers who had made contractual promised to the manufacturer to resell the goods at the prices the manufacturer specified. In addition, because the nostrums were prepared from privately held formulae, the drug industry always asserted the additional claim that there was a legitimate element of secrecy in the manufacture of these concoctions that earned it an extra cloak of limitations, such as setting the price the wholesaler could supply retail customers. While patent medicines are now largely extinct, such claims of additional protection for items developed from specific processes, thoughts and ideas still exist and are now fought over in modern litigation under the rubric of “intellectual property” rights.

     

PARK PRICE LIST – APRIL 1892

Opposed to the notion of “freedom of contract” was an older common law doctrine, developed over hundreds of years, that a businessman could not unfairly manipulate the market to do deliberate injury to his competitors. Claiming such unfair market manipulation, the pleas of two constituencies opposed the trust defenders’ arguments of efficiency, speed, scale and uniformity (as buttressed by claims of special reward attaching to the generation of the underlying idea). First, there was the public outcry from those who had to truckle to the high prices set by the trusts for the goods that they manufactured, processed or even moved. For example, a particular sore spot was agrarian anger at the railroad trust over charges for carrying farm products to market. Second, and to a lesser degree, there were the complaints from the businesses squeezed out by the trusts, who decried the unfair methods of competition deployed against them to drive them under. These pleas, when combined with a general public skepticism of centralized economic power wielded by an elite class of “robber barons” routed in the old common law doctrine, became so constant and so poignant that they led to the passage of the Sherman Antitrust Law in 1890, which was intended to curb the worst abuses by limiting the monopoly power that any one company could wield within a single industry. Since, as noted above, the nostrum business operated differently from the big trusts, like oil, sugar and steel, it was not immediately apparent that the Sherman Act even applied to it. Park ultimately proved that it did.

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PARK COVER TO ANOTHER WHOLESALER – 1894

Within the drug industry, the NWDA, through its restrictive contract systems, acted as the surrogate for the trust structure that other industries created. John Park & Sons emerged as the company that bucked these constrictive schemes by price-cutting and underselling its competitors. Park insisted upon its right to determine itself the price at which it re-sold goods purchased from the manufacturers. Because of Park’s stance, NWDA blacklisted Park by ordering its members not to sell goods to Park. No matter who initiated the litigation nor was actually named as the opposing party in the litigation, it was really the NWDA that Park was fighting. Park soon became a pariah within the drug trade, although it had begun in much the same way as other wholesalers had.

     EARLY NWDA CIRCULAR AIMED AT PARK – 1887

PARK’S HISTORY

In fact, the firm of John D. Park & Sons had existed for nearly half a century before it began its struggle with the NWDA. Its founder was John D. Park, who was born in 1816 in the hamlet of Livingston Manor, Sullivan County, in the Catskill Region of New York State and spent his youth there farming and learning medicine. In 1841, he moved to Cincinnati and opened a retail drug store with Benjamin F. Sanford, another New Yorker, born in 1818 in the town of Camden, Oneida County, northwest of Rome, N.Y. To expand the scope of their business, Park and Sanford soon became the local agents for the eastern patent medicines they were selling.

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SANFORD & PARK AD – 1842

One of Park’s patent medicines was Wistar’s Balsam of Cherry. In or around 1843, Sanford and Park apparently obtained the right both to manufacture and sell this nostrum west of the Allegheny Mountains from L. Williams & Co., a Philadelphia firm, which had purchased the formula for the medicine from Henry Wistar, a Virginia doctor, himself a scion of a famous glass and bottle making family. As was often the case with nostrums, Williams later dealt its remaining interest in the formula to another party, in this case one Isaac Butts, who, in turn, quickly sold it in 1845 to Seth W. Fowle (1812-1867), himself an ambitious Boston retail druggist with the same desire as Park to expand into the manufacturing and wholesaling business.

TRADECARD FOR WISTAR’S BALSAM OF CHERRY (SETH W. FOWLE)

Unlike Park, Fowle’s company issued its own private die proprietary stamp to pay the earlier tax on patent medicines imposed during and after the Civil War, and was therefore profiled by Holcombe, although the material mostly describes the Fowle stamp, and reveals little about Fowle himself. Also, unlike Park, Fowle concentrated heavily on Wistar’s Balsam of Cherry as its principal product.

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SETH W. FOWLE PRIVATE DIE PROPRIETARY MEDICINE REVENUE STAMP

After the Mexican-American War, about 1850, the shape of the United States changed with the formal annexation of the western third of the country. Park and Fowle both continued to manufacture and market Wistar’s Balsam of Cherry, occasionally competing for the small volume of sales in the newly acquired territory. As later alleged by the Fowle company, in 1869, finally recognizing the potential for growth in the western region of the country (as well as Canada and Mexico), Fowle negotiated an agreement with Park which: 1) clearly defined Park’s territory as lying between the crests of the Alleghenies and the Rockies, Park’s former traditional central region of the country; 2) set a uniform minimum price per dozen for volume sales of the Wistar’s Balm of Cherry manufactured by either company; and 3) compensated Park for accepting these limitations. However, according to Fowle, Park continued to sell its Wistar Balsam both in New York City and on the West Coast as well as to undercut the agreed upon volume sale price to retailers. After doing a slow burn for years (as well as meticulously collecting evidence of Park’s clandestine sales), in 1886, Fowle sued Park in Cincinnati to enjoin its continuing encroachments on Fowle’s territory. Perhaps because of Park’s home town connections, the suit appears to have been summarily dismissed without a formal opinion. Just as strangely, Park submitted no argument and made no appearance when Fowle appealed the case to the Supreme Court, and that Court, noting both Park’s non-appearance and the lack of explanation by the lower court of its reasoning for the dismissal, in a decision, aptly titled Fowle v. Park, just as summarily reversed the lower court and, in 1889, entered judgment for Fowle.

    

PARK’S WISTAR BOTTLE

Fowle v. Park marked Park’s first major engagement in the courts. The dispute was of a fairly common variety in this period. Infringement claims often arose between manufacturers and wholesalers over territorial rights to market a product, or copying of medicine bottles or labels too closely. Perhaps because of the outcome of the case – which appears to have been a resounding defeat for it – Park both learned how to conduct business as an outsider in the industry and how to employ the grit and determination to stay the roughly twenty year course it took to ultimately prevail in the later dispute over resale price control, which, while only a subsidiary issue in Fowle v. Park, became the dominant matter in subsequent litigation.

FOWLE’S WISTAR BOTTLE

However, long before the battle concerning Wistar’s Balsam of Cherry concluded, Park had enlarged his scope of endeavors by cementing a formal alliance with an eastern drug wholesaler. After Sanford had dissolved his partnership with Park in 1850, Park went into business with the major New York City drug wholesaler Demas Barnes (1827-1888) . Through Barnes, Park also for a time was involved in a San Francisco partnership, called Park and White, with one Thomas White (1825-1902).

PARK & WHITE AD IN HONOLULU NEWSPAPER “THE POLYNESIAN” – 1861

As an aside, Barnes, whose business flourished in the 1850s and 60s before he left its active management to pursue careers in politics and publishing, was an adventurous entrepreneur who acquired a number of nostrums from earlier proprietors, and, like Fowle, exploited the advertising value of issuing his own private die proprietary stamps to pay the tax imposed during and after the Civil War. According to Holcombe, at its peak, Barnes’s business had subsidiary offices as well in San Francisco, Montreal and New Orleans. Later, he used his fortune to finance a variety of other companies whose stories in the Civil War period have been explored by Holcombe. In due course, these stories will be explicated and further enlarged in subsequent columns.

              

    

SELECTION OF PRIVATE DIE PROPRIETARY REVENUE STAMPS USED BY DEMAS BARNES

Through his partnership with Barnes, Park leveraged himself into a major position in the pharmaceutical industry, for Park, as recounted by Holcombe, had a hand in the direction and guidance of a number of other smaller firms in the industry: A. L. Scoville & Co., a wholesale druggist with offices in Cincinnati and New York City; S. N. Smith & Co., a wholesale druggist in Dayton, OH; the Lyon Mfg. Co. a drug manufacturer and wholesaler in New York City; and D. H. Seelye & Co. a manufacturer in Freeport, IL. With the sundry products manufactured and sold by these different companies, Wistar’s Balsam of Cherry became a much smaller part of Park’s focus. For his part, Park was able to channel patent medicines manufactured in the Midwest to Barnes and also supplied Ohio Catawba wine to Barnes for sale in his New York City drug depot.

SAMPLE OF PRIVATE DIE PROPRIETARY REVENUE STAMPS

OF OTHER COMPANIES ALLIED WITH BARNES & PARK

    

A. L. SCOVILLE & CO. AND DR. D. H. SEELYE & CO.

    

S. N. SMITH & CO. AND LYON MANUFACTURING CO.

Although Park seems to have officially ended his business partnership with Barnes in 1861 (and, according to one source, not particularly cordially, since Barnes advertised in 1862 that Park was selling a counterfeit version of another of his products) the web of connections with so many other manufacturers and suppliers which Park was able to form through the association with Demas Barnes in this era appear to have sustained the Park company throughout the years of fighting with the industry after its break with NWDA over retail pricing took place. Park was somehow always able to obtain sufficient goods through its connections with firms that operated in large cities, such as St. Louis, Chicago, and, in particular, New York City, where the market was so fluid that competition was always too keen for NWDA to effectively impose its price control schemes.

     PARK AD – 1854

***

PARK AD – 1877

Over the years the Park firm endured ups and downs. In 1877, as it moved into new quarter in Cincinnati, it discontinued its retail trade entirely in order to concentrate totally on the wholesale pharmaceutical market. While that action also might have been taken in conjunction with a reorganization in bankruptcy (which drew an extremely rare mention of a Cincinnati firm in the New York Times), a trade magazine later implied that the 1877 move was the natural outcome of the continued growth of the wholesale business, and reported that when the Park firm incorporated in 1891, its stated capital was $2,000,000 which had only grown thereafter.

    

PARK AD – 1895

Park also developed the commercial model during this period which allowed it to differentiate its pricing from the others in the trade. The firm made no secret about how it was able to undersell its competitors. The usual method for wholesalers to solicit orders was to send their traveling salesmen to the retailers. Park simply employed no “travelers;” retailers mailed in their orders. The firm estimated it saved about six to eight percent of its overhead, which it gladly passed on to the retailers. To the rest of the industry, Park’s pricing method became known as “cutting.”

EXHIBITS TAKEN FROM PARK’S TWENTY YEAR DAMAGE LAWSUIT

    

NWDA MEMBERS REGRETFULLY COMPLYING WITH NWDA CUTOFF

THE BATTLE JOINED

When NWDA took as its mission the stamping out of “cutting” and “cutters,” it found it had its hands full with Park. In 1894, Park opened its attack on retail price control by suing NWDA and the four other wholesale drug firms in the Ohio Superior Court in Cincinnati claiming that they were all part of a “combination” formed “for the sole purpose of maintaining excessive rates and charges for certain proprietary articles or medicines throughout said United States,” and asking for an injunction both barring them from placing Park, and those companies which chose to do business with it, on a national “cut list” and from interfering with sales made to Park. However, when the case came on for hearing, NWDA’s lawyers argued simply that the defendants were exercising their freedom of contract. The court agreed and Park’s lawsuit was summarily dismissed.

    

MORE REFUSALS BY NWDA MEMBERS TO DEAL WITH PARK

A month after the failure of the Ohio state lawsuit, in September, 1894, John D. Park died at age 78. The dual nature of Park’s role both as an important western wholesaler and as an industrial provocateur is captured in the tribute paid to him after his death. Although the lawsuit remained on everyone’s mind and was discussed in his obituary, a special gathering of his colleagues in Cincinnati drafted memorial resolutions to send to his family and to “the principal trade papers” in the country.

TRADE MAGAZINE PUBLICATION OF JOHN D. PARK MEMORIAL RESOLUTIONS

Park had traversed the Nineteenth Century trajectory from rags to riches. He had amassed a fortune, a handsome city house and a country estate. Married in 1845, he was survived by seven of his ten children, five of whom were involved in the business. The mantle of leadership passed easily to his eldest son, Ambro R. Park. Ambro was born in 1849, joined his father’s firm right after graduation from Berea College in Kentucky, and was quoted as saying about the Ohio lawsuit: “All we want is our rights.”

    

GREATER PRESSURE APPLIED BY NWDA UPON MEMBERS – 1894

The firm continued its campaign to undermine the NWDA contract scheme. Its actions weighed heavily on the organization’s deliberations. In 1895, after a meeting of a special Proprietary Committee appointed at its annual meeting in New York in 1894, an NWDA representative “admitted” to a New York Times reporter that Park was “the only conspicuous backslider among 300 wholesalers and jobbers, and all measures of control and punition [sic] were aimed at that firm because its system is inimical to the interests of all. “

“EMBARRASSED” MANUFACTURER REJECTS PARK’S PURCHASE ATTEMPT

Ambro Park kept his father’s fight going next by filing two huge complaints in New York City. In the first suit, the Park firm again sued NWDA and other large wholesalers alleging they cooperated together through the NWDA to blacklist Park. The firm sought a court order to bar this practice. In second lawsuit, filed in 1897, Park did not name the NWDA but rather approximately twenty of the largest wholesalers and manufacturers in New York City, together with their partners individually, asking for the monetary damages it had suffered as a result of their joint action against it. Because of the complexity of the issues the suits raised, together with the sheer number of persons, business and specific transactions they touched upon, the complaints were complicated. While modern legal pleading style requires discrete and succinct statements of facts individually alleged, even in their more stylistically and linguistically convoluted times, these complaints were considered “voluminous.” The second complaint, occupying some 120 single spaced pages of a later appellate record volume, stretched to 378 discursive and prolix allegations, sought damages in the enormous amount of $500,000, and was accompanied by 156 exhibits, mostly letters received and compiled by Park from various companies specifically citing the NWDA blacklist as the reason for its declining to do business with it. The complaint in the first action was slightly larger and longer.

MORE NWDA MEMBER REJECTIONS OF PARK ORDERS

Considering the sheer bulk of these complaints, defendants first successfully moved to strike out parts of the both complaints as irrelevant and redundant. The trial court granted defendants’ motions, beginning a saga, not unlike Dickens’s Jarndyce v. Jarndyce in Bleak House, that continued for no less than 18 years, for Park immediately exercised its right to make an intermediate appeal of these rulings. Naturally, prosecution of an appeal touching upon the appropriate scope of the subject matter of the lawsuit necessitated delays in the actual prosecution of the claims made in the suit. The next year the reviewing courts required Park to restate its claims in fresh complaints in both suits, so Park was forced to begin again.

After several more years, the parties agreed to have the court hear the issue directly involving the NWDA first. Since the issue of stopping the blacklisting of Park, was considered a matter of equity, or a judgment the court could itself make by its study and application of the appropriate law, it made sense to determine this issue first. If the court found in Park’s favor, the issue of the monetary compensation due to Park for the injury, if any, considered a matter of common law damages requiring elaborate proof of facts, could properly be left for determination by a jury in the trial court after complete and final resolution of the equitable issues. If defendants won, the lawsuit would be over, or, at least, so the parties thought.

     On the pure legal question of whether NWDA and its members could blacklist Park, all the defendants simply entered a legal “demurrer;” they took the legal position that the court could accept the facts as stated by Park, BUT EVEN IF [the BUT EVEN IF being the “demurrer”] the court accepted the facts as stated by Park, the court possessed no power under law to compel them to do business with Park. Relying essentially on the “freedom of contract” argument, they asserted simply that Park had pleaded no claim that the court could act upon to grant Park’s wish. In 1900, the trial court agreed and dismissed Park’s equitable claims. Park again appealed to the intermediate level court which affirmed the trial court’s decision.

In 1903, the Court of Appeals of the State of New York, New York’s highest court, affirmed the lower court’s rulings in NWDA case. The ruling was a split decision. Of the seven judges ruling, two judges entered two opinions upholding the NWDA’s rights, with which four judges in total agreed, and two judges entered two opinions upholding Park’s claims, with which three judges in total agreed. The principal opinion favoring the NWDA stressed the fairness of the NWDA’s plan of uniform distribution and profit protection for small wholesalers, as well as NWDA’s lack of coercion of Park, and applauded the NWDA for protecting the little distributors against predation by larger unscrupulous wholesalers like Park whose capacity for bulk purchases might force the smaller distributors out of business. The secondary opinion supporting NWDA stressed that the NWDA’s scheme did not directly impact the retail price of goods offered to the public because it was merely an agreement among manufacturers and wholesalers, and that because neither party to the suit was attempting to aid the public, no public interest was involved, thus depriving the court of the authority to intervene in one merchant’s rules about its sales to another merchant.

On the other hand, the principal dissenting opinion, holding that the NWDA’s plan effectively placed pricing of goods in the hands of the customers rather than the manufacturers, and pointing to the number of manufacturers and wholesalers who had previously dealt with Park who declined to sell to it only after the adoption of the NWDA’s pricing plans, found in such actions the requisite coercion of Park to constitute an improper attempt at monopoly sufficient to sustain Park’s charge of a boycott against it. The second dissenting opinion, agreeing with the first, sharpened the nub of the dissenters’ disagreement with the pro-NWDA judges by finding that the public was perniciously impacted by the requirement of resale at a fixed retail price placed on the those who endorsed the NWDA plan.

    

Even without the goad of the federal Sherman Act, the final vote of the New York court was a razor-thin 4-3 margin in support of the NWDA and against Park. However, only one dissenting judge articulated the growing trend of both legal and public opinion to focus upon the potential harm to the public inherent in fixing the ultimate price retailers might resell their goods to the public. While times were beginning to change, Park still had not prevailed and both New York State lawsuits should have ended at this point, but, by means of a legal manoeuver, Park’s attorneys managed to preserve the damage suit (the one not naming the NWDA) even though the Court of Appeals ruling in the injunction suit had cut off its legal rationale for proceeding.

A SECOND FRONT OPENED

THE PERUNA DRUG MANUFACTURING CO. COVER – 1901

For a time, though, other litigation came to dominate Park’s concerns. One of the hottest sellers of the first decade of the Twentieth Century was a beverage known as Peruna, classified as a “bitter,” but, in reality, so prized for its “medicinal effect” that many bars sold it in individual “doses” by the shot glass. Its manufacturer, the Peruna Drug Manufacturing Co. of Columbus, Ohio, owned by a figure named Samuel B. Hartman (1830-1918 – a character who, in due course, will receive his own column) governed Peruna’s distribution through its own individual contract system which resembled the NWDA’s because its terms pledged wholesalers who purchased from Hartman to sell only to retailers: 1) with whom Hartman specified had signed an agreement with Hartman to retail Peruna at the price Hartman had set; 2) who adhered to Hartman’s coded system for tracking its bottles; and 3) who reported their adherence to Hartman’s pricing schedule back to Hartman. Hartman alleged that Park was buying Peruna from some of its wholesalers or retailers, and sued Park to enjoin Park both from purchasing Peruna from such wholesalers or retailers and from attempting to induce such wholesalers or retailers to sell Peruna to it in breach of their agreements with Hartman.

SAMUEL B. HARTMAN

This time the litigation “shoe” ought to have been on the other foot. In the prior litigation, Park had tried to force others to do business with it, and the courts simply would not exercise their injunctive power to “mandate” (coerce) parties to enter into business transactions if one side was unwilling. The courts kept finding that “freedom of contract” allowed such resistant parties simply to decline to do business. In this lawsuit, however, Hartman was trying to have a court use its injunctive power to “enjoin” (prevent) Park from entering into contracts with parties that Hartman itself had alleged were willing to sell Peruna to Park. Since injunctions preventing defined acts judged to be improper are much easier to police and enforce than those directing or compelling some undefined form of proper conduct, the court was being asked to make a much more traditional kind of ruling and, in the area of business relations between parties, apply well-worn rules against unfair competition. Yet even against that background, the local federal district court had no trouble finding that Park was interfering in a most unsavory way with the appropriate contractual arrangements Miles had put in place. The “freedom of contract” rationale once again prevailed and Park had chalked up another litigation loss.

EARLIER HARTMAN REJECTION OF A PARK ORDER

Park appealed to the federal Circuit Court, the intermediate court between the district courts and the Supreme Court. In this forum, it received a more sympathetic hearing. This Court began its analysis from the perspective that age-old common law, tracking public suspicion against monopolies, acts to keep commerce unfettered and to prevent one business from gaining an unfair or improper advantage over its competitors. The Court measured Hartman’s complaint both against this old common law bias against monopolies and restraints of trade as well as the provisions of the new and still developing federal anti-trust law stemming from the Sherman Act of 1890. Having set a legal framework much more cordial to Park, the Court then centered its analysis on whether Hartman could assert some palpable legal grounds to use its contract system to trump the usual prohibition against monopolistic practices.

NWDA CIRCULAR LISTING COMPANIES THAT DO BUSINESS WITH PARK

AND DIRECTING ITS MEMBERS NOT TO SELL TO THEM

     

     

Hartman argued that its rights derived from the proprietary nature of Peruna’s medical formula, likening its secret nature to a patent or a trademark.  In such patent or trademark cases, the government recognizes the uniqueness of the invention or marketing device by issuing to the person holding a patent or trademark an exclusive license – a monopoly – to condition its further use by others who make contracts to license the patent or trademark (often called grantees or licensees) as the grantor of the license wishes, in recognition of the effort expended by the grantor in devising the patented product or trademark. A part of the protection such a license carries is that the grantor also is permitted to place restrictive conditions upon its subsequent use by a sub-licensee or subsequent licensee who derives its rights from the original grantee or licensee.

JUDGE HORACE LURTON

In its decision, Hartman v. Park, the Circuit Court, speaking through Judge Horace Lurton, drew a distinction between the mere secrecy protecting the formula of a patent medicine and an actual patent or trademark, which is issued only after the unique or innovative nature of the object patented or trademarked is demonstrated. The Court held that the mere secret formula used by Hartman to prepare Peruna was not a patented and did not warrant the protection of a patent. In addition, the Court found there was a difference between a contract involving actual manufacture of the underlying formula, which might be enforced to the extent of preventing disclosure of that formula by a party contractually bound not to disclose, and the kind of sale of the already-bottled medicine involved in the present suit. By drawing that distinction, the Court could discuss and “distinguish” – avoid being bound by the reasoning of – both the earlier decision in Fowle v. Park, and the 1903 New York Court of Appeals Park opinions discussed above, saying that in the former the court had credited the assertion that the challenged contract involved the actual improper use of the formula by a contractually restricted party, and in the later, that Court believed that the NWDA’s contract system was bottomed on protection of patented or trademarked formulae.

NWDA MEMBERS’ LETTERS REFUSING TO SELL TO

COMPANIES ALLEGED TO DO BUSINESS WITH PARK

ORDER REFUSAL LETTER FROM HARTMAN TO CHICAGO COMPANY

ISSUED UNDER DIRECTION OF NWDA CIRCULAR

The Court then bowled over seriatim Hartman’s remaining arguments. It disposed of any separate trademark claim, since it found Park was not attempting to fool the consumer by insinuating a look-alike product in place of Hartman’s. As for any other potential contract claims, not only did it reiterate that Hartman had not even alleged any direct contract relationship with Park, it also disposed of other contractual relationships that Hartman attempted to allege. It found that Hartman could not claim that Park was interfering with his “agents,” since it found Hartman’s sales to its wholesalers to be completed transaction, and commented that Hartman was merely attempting to “juggle words” when it argued that the wholesalers or retailers were acting as Hartman’s agents. It also found that Park, as a buyer from parties who had purchased from Hartman, had assumed none of those parties’ contractual obligation to Hartman, even if Park were aware that those parties were not complying with the terms of their contracts with Hartman. The court noted that Park’s purchase transferred absolute title to the medicine to Park and that any obligations which had run between the seller and Hartman remained entirely with that seller.

Thus, using the common law tests concerning business relationships, the Court found that Hartman could assert no patent or trademark restrictions to block Park, could demonstrate no direct contractual relationship with Park, and could impute none of the limitations it imposed upon its contract-holders to Park. Moreover, the Court found that several other courts had begun to apply the Sherman Act prohibitions against monopoly to contract systems resembling Hartman’s. It ruled that Hartman was entitled to no relief. In March, 1907, Park had finally achieved its first legal victory.

THE TIDE CHANGES

Within two months after the Hartman decision, another significant case reached its conclusion as well. President Theodore Roosevelt had energized his Justice Department to seek out and prosecute Sherman Act violations. Among the industries it had sued was the pharmaceutical industry. As discussed previously in the article on the United States Pharmacal Co., the government prosecuted a single action against associations representing manufacturers, wholesalers and retailers in the United States District Court for Indiana sitting in Indianapolis, IN. The “Indianapolis Decree,” issued in May, 1907, required the scrapping of all of the proprietary medicine industry’s contract systems on the grounds that because two or more manufacturers, wholesalers or retailers, acting as  “horizontal” classes, had joined together to sponsor them, they were “conspiracies in restraint of trade” as defined in the Sherman Act. Among the systems proscribed by the Indianapolis Decree was the NWDA’s scheme.

Now that the NWDA’s plan was officially dead, could Park collect for the damage it had suffered at the hands of the NWDA? There might yet be a chance. Notwithstanding the loss of the lawsuit against the NWDA in its New York lawsuit in 1903, Park had thereafter filed yet another amended complaint in its second New York lawsuit seeking damages against the individual defendants in the original 1897 litigation, apparently with the permission of defendants. Simultaneously, Park had filed an action in the federal district court of New York seeking the same injunctive relief under federal law, including the kind of injunctive relief it had just been denied by the New York state courts. Because the Hartman case and the government’s case in Indianapolis were both pursuing the same questions, the parties held both this new complaint in Park’s state damage action and the new federal injunction action in abeyance pending those rulings. Eventually Park also filed a damage suit in federal court as well to complement the injunctive relief it was seeking. Such federal Sherman Act damage suits had the additional bonus of permitting the injured party to ask that its damages be tripled as a penalty for the defendants’ violation. While also held in abeyance, Park’s damage claim was pleaded now at $2,000,000.

In 1909, Park filed two different motions in its dormant New York state lawsuit. First, it asked the New York State court to permit it file a new complaint embodying the facts of the favorable Hartman ruling and the favorable Indianapolis Decree into its original state lawsuit while upping its damage claim to $3,500,00. Although the trial court agreed with Park that the new circumstances were germane to the issue, the intermediate reviewing court disagreed and the parties returned again for a final ruling to the New York Court of Appeals. In another written opinion, that Court ruled that Park could not incorporate subsequent events into the original complaint. That litigation proved to be another costly, time-consuming paper blizzard leading to another defeat for Park.

Second, Park moved to conduct discovery – that is, it asked the trial court’s permission to formally collect the evidence it needed to prove its damage claims in the 1897 litigation by taking the testimony of defendants under oath, particularly those not readily available within the New York Court’s jurisdiction. Since the trial court believed that the current state of affairs, rather than the original circumstances, ought to govern the final outcome of the litigation, that court appeared inclined to allow Park to collect the accurate facts it needed to prove its damages. Because of the appeal of the other motion amending the complaint and the twisted history of rulings on that issue, the litigation surrounding this discovery motion seems yet again to have remained pending for a number of years.

DR. MILES MEDICAL CO. COVER – 1898

Even with the Hartman decision and the Indianapolis Decree now looming in its face, NWDA was not willing to concede the injunction issue and Park still faced challenges to the principle that manufacturers and wholesalers could not control the retail price of their goods when resold. After the Indianapolis Decree, another major manufacturer, the Dr. Miles Medical Co., promptly filed suit against Park under its own individual contract system. It contended that unlike the NWDA’s system, Miles was a single manufacturer acting by itself to protect its own business. As a single manufacturer, it argued that it simply set the price at which the goods would be sold at retail, that intermediate wholesalers and retailers were merely its agents and, therefore, it conspired with no one to fix any price Twenty years before it began marketing Alka-Seltzer, the name which carried its fame into the modern era, Miles was then selling as its principal product Nervine, an effervescent pre-cursor of Alka-Seltzer claimed to soothe nerves and headaches. Specifically because the suit was filed after the Indianapolis Decree, the industry hailed it as the vindication of the individual manufacturer’s right to impose its will upon retailers, and dismissed Hartman as an aberration.

    

JUSTICE CHARLES EVANS HUGHES IN 1911 AND AS HONORED BY THE U.S.

THE MILES V. PARK DECISION

The federal District Court and Circuit court (again speaking through Judge Lurton) quickly disabused the industry of its pipe dream that the old way could continue by adopting the reasoning of the Hartman decision. Still, it is the Supreme Court that has the final say as to what becomes the law of the land. At the very beginning of January, 1911, the Supreme Court (with the now appointed Supreme Court Justice Lurton not participating because it was his ruling being appealed) heard the parties’ arguments. Very much like the Hartman case, Miles required wholesalers and retailers who offered its product for sale to sign individual “agency” contracts pledging themselves to market to the public at pre-determined retail prices, and Miles similarly sought an injunction prohibiting Park from interfering with its contractual relationships with its wholesalers and retailers. Applying the reasoning of Hartman, the Court, this time speaking by Justice Charles Evans Hughes, found in April, 1911 that the transfers of the bottled medicine were completed sales rather than transitory placements with “agents,” were therefore properly classified as attempts to control the retail price of Peruna, and thus constituted a monopoly in restraint of trade. Rather than finding a traditional “horizontal”conspiracy in the concerted activity of multiple manufacturers, wholesalers or retailers acting together with each other to fix prices, in this case, the Court found for the first time that the conspiracy was “vertical,” encompassing not only the manufacturer but also the wholesalers and retailers. It judged these wholesalers and retailers not to be the manufacturer’s “agents” but rather separate entities who “conspired” with the manufacturer by signing the manufacturer’s contracts. Moreover, in the Miles case, the Supreme Court pronounced a hard and fast rule that any attempt by a producer or manufacturer to control the retail price of its product after that product was sold in commerce was “per se” – by itself – a violation of the federal anti-trust law. Such “per se” violations do not require the party alleging the violation to engage in a complicated economic analysis to demonstrate the existence of a monopoly in the market where the price of an article is being fixed; proof of the act of price-fixing by itself – per se – serves as proof of the violation.

    

JUSTICE OLIVER WENDELL HOLMES IN 1911 AND AS HONORED BY THE U.S.

No less a judge than Oliver Wendell Holmes, voiced a lone dissent in Miles, finding that wholesalers ought to be regarded as agents of the manufacturer and that retailers could be converted into such legal agents with a few changes in the contractual language. Stressing one last time the businessman’s freedom of contract (by now a minority notion) and claiming that an overemphasis was being placed upon price competition for items not necessities, Holmes found Park’s conduct in inducing breaches of the Miles system of contracts to be distasteful. He warned that the majority’s decision was “reached by extending a certain conception of public policy into the public sphere.” This new public policy, embodying Theodore Roosevelt’s crusade against conspiracies to control retail prices, remained the law of the land for nearly one hundred years.

With the law now firmly fixed in its favor, Park now finally attempted to set the trial of its New York damage case. In 1915, the New York Times reported that it had secured an order requiring Dr. William Jay Schieffelin (1866-1955), the chief of one of the most important drug wholesalers in New York City and himself head of the New York City Citizen’s Union, then, as now, a political watchdog organization supporting good municipal government, to give testimony about the manner in which the NWDA attempted to blacklist Park. Curiously, while the original complaint had named Schieffelin and his company as defendants, none of the exhibits attached to the original complaint had demonstrated wrongdoing by the Schieffelin firm.  The Times summarized the history of the litigation in the following paragraph:

         

NEW YORK TIMES ARTICLE FROM 1915 AND DR WILLIAM JAY SCHIEFFELIN

Perhaps because of the potential embarrassment of having the chief advocate for good government forced to testify about a conspiracy of businessmen agreeing to block Park’s attempts to do business, thereafter, the historical record concerning that 1897 New York state damage litigation ends. Usually, such silence means that the parties had reached a voluntary accommodation of their differences. However, drug industry trade magazines reported in January 1916, that Park filed yet another Sherman Act case against the individual wholesalers and manufacturers in the New York federal court. This complaint seems to have been a single lucid restatement of all the damage claims Park had already filed in its earlier federal court action. Once set forth in a single manageable statement, the parties could address these claims seriously, and the same publication shortly thereafter reported that the case finally was settled when defendants paid Park $125,000 in the spring of 1916. Perhaps this amount was not a large monetary return for claims once alleged to be as much as $3,500,000, but Park had stayed the course and vindicated its position.

From beginning to end, John D. Park & Sons, acting through Ambro Park, was clear about its willingness to keep fighting against retail price-fixing and its goal to prohibit such practices. Park also was forced to fight in the legislative arena as well. In 1914, when Representative Raymond B. Stevens of New Hampshire introduced a bill to legalize retail price maintenance agreements, Park sent his attorneys to testify against the bill at Congressional hearings. They re-confirmed Park’s business model in testimony which led to the passage of the Clayton Act that refined and sharpened the Sherman Act. Thereafter, Representative Dan V. Stephens of Nebraska re-introduced the bill several times, ultimately to no avail, but Park was still railing against the Stephens bill and the legalization of price-fixing it permitted in 1916 even as he was discussing the favorable conclusion of his twenty year litigation.

THE AFTERMATH

Perhaps it was the 1919 ruling by the Supreme Court in U.S. v. Colgate & Co., which finally confirmed a manufacturer’s “freedom of contract” right simply not to deal at all with any wholesaler or retailer it chose to decline to do business with, that allowed the Miles v. Park ruling to endure for so long and put an end to the need for the Stephens bill which Park had decried. In Colgate, the government charged Colgate & Co. (which, like Fowle and Hartman, we will meet again at some future time in this column for a greater examination) with maintaining the same kind of contract scheme that Miles had outlawed. This Supreme Court skated around the holding in Miles by finding that Colgate executed no pieces of paper with its wholesalers or retailers actually binding them to charge a set retail price. The Court found that Colgate simply made widely known its policy that it would conclude no subsequent sales with any party who did not sell its goods to the public at the prices it wanted them retailed. The Court endorsed the finding of the lower court that: “The retailer, after buying, could, if he chose, give away his purchase at any price he saw fit, or not sell it at all, his course in these respects being affected only by the fact that he might by his action incur the displeasure of the manufacturer, who could refuse to make further sales to him, as he had the undoubted right to do.” So long as it exercised no legal hold on a subsequent seller’s price, a manufacturer could do as it pleased. If wholesalers and retailers felt the need to offer that particular manufacturer’s products, like the very popular Colgate brands, then they would have to bend to the manufacturer’s policy. If not, the manufacturer lost the sales. As long as the market itself governed the parties’ choices, the Court believed no party could be injured by its own voluntary choices.

Having created a loophole in the Miles rule against vertical price-fixing, the Court was content to let all parties – manufacturers, wholesalers and retailers – conduct business as they saw fit. Over the years, as parties bounced between the extremes of the Miles rule and the Colgate exception, as well as some federal and state legislation which, for a while, allowed some “retail price maintenance” under defined limited circumstances, a certain degree of confusion ensued in the state of the law, particularly as the Supreme Court gradually began to use a “rule of reason” test to determine whether other kinds of monopolistic practices violated the Sherman Act. Rather than simply declaring a particular class of practices per se illegal, the Court came to determine that most business practices ought better be judged in terms of whether they were “unreasonably” restrictive. Making such judgments often required a great deal of expert testimony as to what was the appropriate market a product was competing within and how much of a restraint the challenged rule placed on the parties’ ability to transact business within that market, but the Court came to believe that such evaluations yielded a more realistic economic picture of the circumstances the parties were really facing, and a keener judgment of whether parties were competing fairly with one another.

Finally, in 2007, the Supreme Court decided to take another look at the entire question of how vertical price controls should be evaluated in a case called Leegin v. PSKS. PSKS, a retailer, sued Leegin, a manufacturer of leather goods for women who refused to sell to it because it would not resell Leegin’s goods at the prices Leegin was insisting its other retailers maintain. At trial, Leegin tried to introduce expert economic evidence that its policy actually made its goods more valuable and competitive by creating an upscale retail environment that differentiated Leegin’s goods from those sold by discounters. The trial court refused to hear the expert evidence on the grounds that, applying Miles, it found Leegin’s policy concrete enough to constitute a per se violation of the Sherman Act. On appeal, the Circuit court agreed with the District Court, and Leegin appealed to the Supreme Court. While agonizing over a number arguments that supported retention of the per se rule (not least of which was its general rule about adhering to its own prior decisions known as stare decisis), the Supreme Court nevertheless determined that the Miles per se rule no longer served the business community well, that it was grounded in a rote application of old-fashioned, out-of-date economic assumptions, and that modern economic theory required the “rule of reason” approach to apply to vertical price-fixing situations just as it had come to apply to other Sherman Act violations. The lower court decisions were reversed, the case was sent back for further proceedings. The Miles per se rule was overruled and consigned to its place in history.

The Park company did not last as long as the law it made. It was a family business, and while Ambro Park, its strong voice, stood at the helm, it persevered. He died in 1925 at age 76, and by the close of 1934 all five of John D. Park’s children who had been involved in the business were dead. While there were Park children in the subsequent generations, none had the first-hand experience of the first two generations in running the company, and, moreover, the will of the last second generation survivor, John D.’s daughter, Susan R. Park, who had initially acted as company secretary and after 1930 had led the company, required that the company be disposed of within two years after her death in August, 1934. While early in 1935 there were preliminary negotiations for the company to be continued under the Park name after purchase by some unspecified eastern wholesalers, John D. Park & Sons was liquidated in September, 1935. By early 1937, its former company headquarters had been leveled and the materials sold as used building material. The Park name was gone from the pharmaceutical business, but lives on so long as “vertical price control” remains a subject of anti-trust law.

©  Malcolm A. Goldstein 2017

 

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E. A. Osterhout

E. A. OSTERHOUT, MANUFACTURER

Chances are the hand-stamped initials “E.A.O.” appear, in one of several varieties, on at least one 5/8¢ blue, or RB23 as they are otherwise known, in any lot of battleship proprietary revenues offered for sale.  The ubiquity of the cancel on the RB23 belies the scarcity of information concerning the owner of the initials.

REPRESENTATIVE 1898 PROPRIETARY REVENUE E. A. O. CANCEL VARIETIES

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HORIZ. INITIALS AND YEAR DATE

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HORIZ. INITIALS, MONTH, DAY, 4 DIGIT YEAR DATE

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HORIZ. INITIALS, MONTH, DAY, 2 DIGIT YEAR DATE

One, and only one, significant fact emerges from countless searches seeking knowledge about this person: E. A. Osterhout was a woman.

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VERT. INITIALS AND YEAR DATE

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VERT. INITIALS, MONTH, DAY, 2 & 4 DIGIT YEAR DATE

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VERT. & HORIZ. INITIALS AND DATES (ERROR?)

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RB25, 1¼¢ VALUE (UNUSUAL FOR OSTERHOUT) – HORIZ. CANCEL AND YEAR DATE

While their presence in the patent medicine business was not entirely unknown, women were identified almost exclusively with products treating “female complaints.”   The face of the most famous woman, Lydia Pinkham, actually served as the trademark image for her line of goods for more than one hundred years and appears at this distant remove on the watered-down version of the product bearing her name still sold today.  On the other hand, Osterhout never attempted to use her own image to promote use of her products and they were not restricted to curing “female complaints.”

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NOT E. A. OSTERHOUT (LYDIA PINKHAM)

Osterhout marketed soaps and products derived from the mineral waters of Medical Lake, Washington.  In the male-dominated Nineteenth Century, she seems to have tried never to use her first name.  Possibly she meant to leave her gender ambiguous.  Even after she married, the only name she ever attached to her advertising was E. A. Osterhout.  Even a personal letter from her to a member of another Osterhout family inquiring about possible kinship – the crucial link, which unambiguously establishes both E. A. Osterhout’s identity as well as her connection with the patent medicine business – is signed E. A. Osterhout.  It now resides in the archives of that other Osterhout family (apparently notable in its own right in the Southwest), and is misidentified in that collection as written by a male because of her signature using initials in place of her first and middle names.  In the ambiguous fashion of identifying herself as “E. A. Osterhout,” she managed to conduct her business in Chicago for a very long time.

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E. A. OSTERHOUT’S 1890 LETTER

There are only two occasions when she may have permitted herself to be identified as Mrs. E. A. Osterhout.  In the records of the Columbian Exhibition of 1892 and 1893 held in Chicago, the Osterhout exhibit of toilet soap is identified as being sponsored by Mrs. E. A. Osterhout.  Although there was a separate Woman’s Exhibit at this World’s Fair (duly assembled by the wealthy wives of the worthies of Chicago), E.A. Osterhout’s soap display definitely was not part of the Women’s Exhibit.  It stood in the manufacturing exhibition hall.

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COLUMBIAN EXPOSITION LISTING

The only other extant possible evidence of E. A.’s femininity is a single 3/8¢ value, RB22, which appears to be cancelled “Mrs. E A O.”  To be completely accurate, one is obliged mention its existence, but it proves nothing, since the “O” is cut off and there were other druggists whose names began “Mrs. E. A.” who might have used a 3/8 ¢ value, an RB22, to prove tax payment on a product sold in one of their drugstores.

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MRS. E. A. OSTERHOUT (?)

The statistical record comprising E. A. Osterhout’s life is stark.  It consists of three notations in her father’s census reports (two federal and one state) and one entry of her marriage.  None of these documents registers identities consistently.  Her father was William H. Osterhout who was born in “New York” in 1810 (or 1811).  Her mother was Sarah A. Gardner, two (or three) years younger than her husband.  William reported that he lived in Watervliet, N.Y. in the 1850 U.S. Census and the 1855 New York State Census and in Cohoes, N.Y. in the 1860 U.S. Census.  E. A. Osterhout was born near Albany, N.Y. in 1841 (or 1843).  In 1850, Emily was age 9, and was listed as the fifth of six children: one older brother, three older sisters and one younger brother.  In 1855, Emily is listed as age 12, and is the fifth of six children: now four older sisters and one younger brother.  In 1860, Emila is listed as 19, and is the middle child of an older sister and younger brother living with her parents.  Emiley A. Osterhout’s only independent listing is the record of her marriage on July 26, 1891 in Milwaukee, WI to one Thomas Wight, son of Eli Wight and Mary Kellan.

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E. A. OSTERHOUT 1889 AD

In addition to the mysteries about the identity of E. A. Osterhout, the exact nature of the business relationship Ms. Osterhout had with the remedies she advertised, which originated at Medical Lake, WA, is somewhat unclear in historical retrospect.  Ms. Osterhout described herself in her advertising sometimes as the “sole manufacturer” and sometimes as the “sole agent” of “Medical Lake Soap,” and often mentioned that the Medical Lake salts incorporated within the soap cured indigestion, headaches, rheumatism, kidney troubles and catarrh.  Because of the local or territorial nature of most Nineteenth Century businesses, ownership rights to the Medical Lake salts and contract arrangements for their use appear to have always remained divided among many different companies. Yet, the modern histories of the Washington locale itself never once mention Ms. Osterhout in the story of Medical Lake.

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The wonders of Medical Lake, WA, a lake in eastern Washington State close to Spokane, WA, appear to have sprung upon the collective consciousness of the country in approximately 1880.  At that time, as reports of murders by Indians of local white families near Spokane, WA – by then classified as “unconfirmed” – were beginning to subside in national newspapers, new stories touting the medicinal properties of a strange lake in its vicinity began to circulate.  Among the earliest such articles was a paragraph labeled “A  Mighty Queer Lake” that showed up at the bottom of a column in a St. Louis paper, ostensibly reprinted from a Springfield, MO paper1.  It describes the Lake as one where “the water is clear and of a dark color … [and the] “slightest breeze … lashes the water into foam which makes a superior soap” and boasts about it that “besides curing skin diseases of men, [it] lays out nervous troubles, rheumatism, paralysis and similar ailments.” After morphing into a column, the same article came to be reprinted time and again over the next fifteen years in papers all over the nation.  The embellished article adds a sentence near the top “There is hardly a disease it will not master,” and bulks out with anecdotal paragraphs concerning an adventurous shepherd who had taken his sheep for a bath in the lake and then noticed that not only were the sheep cured of the dreaded sheep disease “scab,” but that he had recovered feeling in the “useless” arm with which he had bathed his sheep. No matter when reprinted, the article always indicated that these medicinal properties had come to be recognized “some two years ago.”  Since advertising was undifferentiated from news in those days (as, it seems, it is again these days), these articles always materialized in the news columns, were unsigned, and were usually attributed as being reprinted from an article originating with another paper at some distance removed.

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By 1882, several different people in different cities were advertising as agents for Medical Lake salts, soaps and remedies, and one article even suggested that Medical Lake had emerged as the Saratoga Springs of the West, already attracting 5000 visitors a year.  By 1884, various states were chartering Medical Lake remedy companies of one sort or another, and rival Medical Lake agents were publishing ads denouncing each other’s falsity.

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CHICAGO MEDICAL LAKE MFG. CO. 1885 AD

In November, 1884 a single cryptic sentence appeared in the Portland, OR Morning Oregonian: “A Chicago company will control the curative waters of Medical lake, Spokane County, for the coming fifty years.”  There was no attribution for this pronouncement, nor was there any identification of the “Chicago company” itself, nor was any subsequent explanation of its meaning offered.  However, this statement followed by only a month the incorporation in Illinois of the Chicago Medical Lake Manufacturing Co., a company which then engaged in a burst of advertising of Medical Lake salts, soap and remedies.  One of the incorporators of this company, a man named McComas, was soon also advertising land for sale in the vicinity of Medical Lake.  A puff book of Chicago’s leading industries from 1885 states about the company that “Mr. E.S. McComas, the secretary of the company, is held in the highest estimation in Chicago for his business ability and his sterling integrity, while he leaves nothing undone to bring before the public the unexcelled qualities of the Medical Lake salts.”  Thus, at least at the beginning of 1885, not only was there some authentic Washington State money potentially involved in the incorporation of this company, there was also a tie-in between the remedies to be manufactured and land ownership in the vicinity of Medical Lake, WA from which the bona fide medicinal salts could be obtained.  At this point, the intentions of all involved in this particular Chicago company might actually have been genuine and honest.

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CHICAGO MEDICAL LAKE MFG. CO. 1885 AD

Over the next three years, at least five more companies were chartered in Illinois alone to exploit Medical Lake remedies.  Perhaps out of deference to the name of the first company, the next company was called the Tipso Manufacturing Co, although the stated purpose was the same as the first.  The remaining companies all had “Medical Lake” in their given names: the Medical Lake Toilet Soap Co., the Medical Lake Salt Co., the Medical Lake Remedial Co., the Medical Lake Institute, and the Medical Lake Salt & Soot Co.  Another member of the McComas family was part of the Tipso incorporation as well, so someone with some link to the Washington State area still had some involvement in that transaction. A character named Frank Johnson was the second of the customary three named incorporators of the Tipso company, and was an incorporator in all but the last-named of the other Medical Lake companies.  He subsequently purchased McComas’s share of the Tipso Co. and used it as the basis for his Medical Lake remedy empire.  Despite the flurry of charters of Medical Lake remedy companies, Frank Johnson served as the operating chief of the single office that all but the last-named company apparently maintained together.

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FRANK JOHNSON’S MEDICAL LAKE SOAP MFG. CO.  1886 ADS

E. A Osterhout enters this story through Johnson, for he employed E. A. Osterhout as his clerk.  While she later downplayed her involvement, she may have had a larger role in Johnson’s dealings, since she also is listed as an incorporator, along with Frank Johnson, of the Medical Lake Remedial Co. in August, 1886.  Yet, most significantly for her, she was also an incorporator, in January, 1888, of that last company listed above, the Medical Lake Salt & Soot Co. of Chicago, which did not include Johnson as an incorporator.  The distinction in incorporators later became relevant because it eventually transpired that Frank Johnson was not an honest man. In March, 1888, he was dragged before a Chicago magistrate by one of his unhappy investors, for Johnson, who had come to Chicago from St. Louis in 1884, raised his venture capital for his Medical Lake companies in a singular manner.  Covering his trial for the Chicago Tribune, a reporter wrote: “He has proved himself quite a Lothario among several Chicago ladies.”

His modus operandi seems to have been to first select a boardinghouse where there were at least two or three marriageable ladies possessed of a desirable little sum in the way of dowry. On the strength of a fair appearance and a suave address he soon managed to bring his toilet soap under the notice of his intended victims. A judicious bestowal of one or two cakes of soap, which by the way was highly scented, led the conversation to the point of soapy adulation where an avowal that without the lifelong companionship of the gentle recipient of his soap-cake [,] himself and his company would vanish into thin, frothy bubbles. After giving himself away in this open-handed fashion his next move was to influence his fiancée to invest her little capital in the stock of the company. (Chicago Tribune, March 1, 1888, p. 5)

One of the many ladies jilted by Johnson sued for the return of her money, and Johnson’s house of cards collapsed. He wound up jailed for about three weeks until he returned enough of the plaintiff’s money to free himself, but then permanently disappeared from the Medical Lake remedy history.

OSTERHOUT BUSINESS LISTINGS

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CHICAGO BUSINESS DIRECTORY 1887

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 NATIONAL MEDICAL DIRECTORY 1896

Yet, even as Johnson was being brought to trial, the same newspaper account cited above cautioned: “Since the execution was levied on him, Johnson has been doing business under the name the Medical Lake Company, which should not be confounded with a Medical Lake goods establishment .. managed by E. A. Osterhout.” Since E. A. Osterhout, who by this time was “managing” her own remedy business apparently under that last corporate charter issued, was also at the same time employed as Johnson’s clerk, she actually testified at one of the court sessions of Frank Johnson’s trial. It is her only first person appearance in the historical record, and it illuminates nothing about her. She was described by one newspaper as a “young attractive business lady” and by a second as “a business-like young lady.” Other than faintly damning Johnson, the gist of her testimony was:

she was engaged as general clerk by Johnson in his palmy days, when a new style of company was a matter of every day occurrence. … that Johnson tried every artifice to persuade her to invest in one or other of his Medical Lake ventures, but that she refused to subscribe a cent… Her suspicions were aroused at the absence of business … there being hardly enough money coming in to pay for the ink consumed in writing the names of Frank’s many titles and companies … [She eventually] resolved to go into the soap business on her own account, still believing the product had some intrinsic value.” (Chicago Tribune, March 3, 1888, p. 12)

The reports of her trial testimony leave more unexplained than they reveal.  While emphasizing her youth and smart appearance, they fail to disclose how Ms. Osterhout first met Mr. Johnson or how she came to be his clerk, and stress her cleverness at avoiding his clutches while apparently overlooking the possible implications of her involvement as an incorporator of one of Johnson’s ventures.  Most strikingly, they leave remarkably unclear how she disentangled her Medical Lake “goods” operation from Johnson’s so quickly and so definitively that no shadow of blame ever fell on her. Further, while such information might strictly have gone beyond the boundaries of courtroom reporting of Johnson’s trial, there is no explanation of when or how she had acquired the money that she evidently invested in the Medical Lake remedies, whether with Johnson or by herself, or how she had emerged fully grown with office skills in Chicago, so far from the Albany, New York area where she had been born.

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E. A. OSTERHOUT 1906 TRADE JOURNAL AD

Nevertheless, after Johnson’s hurried exit in March, 1888, Osterhout continued her business, advertising her remedies occasionally in trade journals and periodically soliciting for territorial agents in the “Male Help Wanted” column of local newspapers.  Her firm impressed its distinctive “E. A. O.” cancel on both the 1898 and 1914 revenue issues.  A last indirect indication of her continuing presence can be gleaned from a federal census record that shows a Thomas and Emiley Wight (now listed as born in 1853) still living in Ward 3 of Chicago in the spring of 1910.  While state death records show that a Thomas Wight living in Ward 3 of Chicago (whose occupation was listed as a “mail order clerk”) died in Chicago on November 12, 1910, E. A. (Emily, Emila, Emiley) Osterhout/Wight thereafter vanishes from all extant official records, and no clear date can be established on which either her business or her life ended.

REPRESENTATIVE 1914 PROPRIETARY REVENUE E.A.O. CANCEL VARIETIES

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HORIZ. INITIALS, MONTH AND YEAR DATE

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HORIZ. INITIALS, MONTH, DAY AND 2 DIGIT YEAR DATE

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VERT. INITIALS, MONTH, DAY AND 2 DIGIT YEAR DATE

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HORIZ. INITIALS, ALL NUMERICAL DATE

Curiously, the histories of Medical Lake, Washington credit only one person as operating a factory to manufacture Medical Lake salts and soaps.  He was a local resident named Stanley Hallett who lived from 1851 to 1926.  Hallett’s career makes him a local notable.  He emigrated from England as a titled English noble, but dropped the appellation “Lord Hallett,” in the United States.  After working as a merchant in California, he settled in Medical Lake, WA in 1877, where he soon became the biggest land owner and town booster as well as the town’s first mayor.  He later served as a Spokane County commissioner, and a Washington State senator.  In 1900, he built himself a grand manor house, Hallett House, complete with towers and crenellations that still stands as an attraction today.

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PICTURE AND PAINTING BY ZAMA HELDER OF HALLETT HOUSE

He was also instrumental in arranging that the Eastern Washington Asylum for the Insane be built on the shores of Medical Lake, WA.  As an enormous and imposing building, it boosted the reputation of the area as a medical resort, and helped the region to flourish in this capacity until the end of World War I, when the growing availability of automobiles and the depletion of the Medical Lake minerals made other destinations more popular.

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Hallett’s company was the Medical Lake Salts Manufacturing Co.  It maintained offices in Spokane, WA and New York City, and exhibited at the Lewis and Clark Exposition of 1905 in Portland, OR.  Because it appears to have directly advertised to the public much more than did Osterhout, its ads did not discuss who had the rights to, or proprietorship of Medical Lake’s medicinal waters, but rather, assured that the Medical Lake salts were “nature’s remedy” not a patent medicine.

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HALLETT’S MEDICAL LAKE SALTS MFG. CO. 1900c AD

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HALLETT’S MEDICAL LAKE SALTS MFG. CO. 1903 AD

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HALLETT’S MEDICAL LAKE TABLETS

While E. A. Osterhout is still listed in the major druggist trade directory issued for 1917 as operating Medical Lake Soap & Salt in Chicago, a 1916 article in the National Druggist magazine indicates that Medical Lake Soap was then being manufactured by Dwight T. Sprague & Co. (which also produced Medical Lake (“Skookum Chuck”) Salts as well as Marvello Beauty Crème and Beau Monde Face Powder).  Perhaps this article shows that Hallett had sold out to Sprague, but, more likely, simply demonstrates that Sprague was yet another Medical Lake competitor.  Yet, considering that both Osterhout and Hallett were attempting to cash in on the medicinal properties of Medical Lake, it is perplexing that they, as major Medical Lake product producers, never clashed in the manner that Andreas Saxlehner did with his competitors.  Such a record would illuminate how the Medical Lake waters were actually exploited and by whom. At this remove of time, one can only speculate that the terms “medical, lake, soap and salt” even then were regarded as so generic that none of the principals of any of Medical Lake remedy companies ever felt the urge to try to legally bar others advertising the same kind of products from mining the same rhetorical terrain.  Therefore, sadly, E. A Osterhout remains a historical enigma.

x———-x

¹     The article appears one column over from a prescient article entitled “Cigarette Smoking – A Vice That Is Sapping Out Young Manhood” which postulates       that because of smoking cigarettes “[t]he next generation will be born of puny-chested, slim-legged, small-necked chaps” who are nothing but “idiots or monkeys.”

© Malcolm A. Goldstein 2017

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