For God, Country, and Coca-Cola

by Mark Pendergrast

  The trial had an impact on Dr. Wiley as well. His superiors, looking for any excuse to ditch the bullheaded chemist, accused Wiley of having illegally paid Dr. Rusby too much for his testimony. A special Senate investigation was launched, and the papers were filled with cartoons and editorials about Wiley. He was finally cleared, but by 1912, he realized that he would always be frustrated in the government bureaucracy. He resigned in March of 1912, at the height of his national popularity. It is impossible to overestimate Wiley’s fame and influence. The Wiley seal of approval was all-important, even after he left the Bureau, which explains why the president of Dr Pepper sent him the drink’s formula (since it contained no caffeine), invited him to visit the Waco, Texas, plant, and assured the chemist that he was behind Wiley all the way. When the sixty-seven-year-old Wiley became the father of a boy in May of 1912, the infant was promptly labeled the Pure Food Baby.

  If the Candlers hoped that the elderly gentleman would quietly retire, they were soon disappointed. Wiley commenced a grueling regimen of speeches all over the country. It must have galled Candler no end when Wiley delivered a speech entitled “The Advantages of Coffee as America’s National Beverage,” considering all his experts’ recent insistence on caffeine as a poison. At the same time, Wiley joined Good Housekeeping as a regular columnist, using the magazine as a national platform to assail Coca-Cola. In September of 1912, he published “The Coca-Cola Controversy,” in which he recounted his version of the trial. He portrayed the scientists for Coca-Cola as mercenaries whose opinions had been purchased. An accompanying cartoon showed a smiling scientist observing Coca-Cola through a magnifying glass emblazoned with a dollar sign. Another portrayed the good Dr. Wiley warning a gullible public against gremlins—labeled nervousness, habit, and indigestion—crawling inside a giant glass of Coca-Cola.

  Even though Coca-Cola had won the case, the national publicity hurt the drink, attracting the attention of a moralistic young filmmaker named D. W. Griffith. In 1912, Griffith’s enormous success with Birth of a Nation was three years away, and he was still working anonymously at the Biograph Studios in New York, churning out two short silent films every week. One of these was an anti-Coca-Cola epic called For His Son in which the inventor of “DOPO-KOKE” watches his son fall prey to the drink’s cocaine. “The drink no longer satisfies,” reads one caption, as the young man goes on to hypodermic injections, eventually dying of an overdose. It didn’t concern Griffith that Coca-Cola no longer contained cocaine. He delighted in creating a soda fountain scene in which his nervous, addicted heroine, played by Biograph regular Blanche Sweet, pushes a young boy aside to get her Dopo-Koke, then smiles and sighs in relief. Instructed by her boyfriend, she learns to doctor her drink by pouring cocaine powder into it (a common practice then, even with dopeless Coca-Cola).

  RENDERING UNTO CAESAR

  The Barrels and Kegs Case was appealed to the district court level. Before a decision was handed down, though, the U.S. government struck from another direction. The first corporate tax had been passed in 1909, but it hadn’t amounted to much. Reformers cried for more: “The corporation is becoming more and more a centralized industrial power,” wrote one critic in 1909. “It must therefore more and more be regulated by a centralized political power.” In 1913, the reformers’ prayers were answered by the accumulated earnings tax, a penalty tax imposed on corporations that hoarded cash “beyond the reasonable needs of the business.” In effect, the law forced corporations to pay dividends, which were then taxable to the individual stockholders but were not deductible at the corporate level, amounting to double taxation.

  The new tax law meant that harried accountants had to separate Asa Candler’s personal affairs from his Company’s—not an easy task. “In a very real sense,” Howard Candler wrote, “The Coca-Cola Company was Asa G. Candler and the line between his personal property purchases and those of the company was frequently thinly defined.” By the time the law went into effect at the end of 1914, The Coca-Cola Company showed a surplus of over $10 million. Candler deeply resented the tax. He had earned the money, he reasoned, and it was his to spend or keep as he pleased. Besides, he regarded a “war chest” as a necessity for any unforeseen contingencies, particularly given the hostile environment of that time. “He felt strongly on this point,” his son remembered, “and often remarked that Moses . . . had tried such a [tax] system in Biblical times and saw it fail.”

  Nonetheless, Candler was forced to declare whopping dividends, disbursing over $10 million in cash and $6.4 million worth of real estate to shareholders in the next two years. There were about 530 shares outstanding, of which Asa Candler owned 400. Consequently, Candler’s taxes must have been staggering for those years. The 1914 million-dollar gift to Emory University was undoubtedly a partial attempt to reduce his tax burden.

  JUSTICE HUGHES’ LAST ACT

  After the government had lost its district court appeal in 1914, it took the case to the nation’s highest court. Two years later, on May 22, 1916, Charles Evans Hughes reversed the decision at the Supreme Court level, in his last opinion before leaving the bench to run for president against Woodrow Wilson.* Hughes, the son of a Baptist preacher, had thought of entering the ministry himself; his decision in the Barrels Case reflected his puritanical attitude. To the government’s delight and Coca-Cola’s chagrin, Hughes said that the word “Coca-Cola” was not a distinctive name, but simply the conjunction of two common words. More important, he ruled that caffeine was indeed an added ingredient, and he sent the case back to Sanford in Chattanooga for a retrial to determine whether caffeine was harmful or not.

  As soon as the Hughes decision was issued, Harold Hirsch commenced negotiations to avoid a new trial. Both the Company and the Bureau of Chemistry frantically experimented—Coca-Cola’s scientists assessed the drink’s taste and flavor with reduced caffeine, while Dr. Alsberg, the government’s chemist, attempted to prove that caffeine was harmful. Failing to come up with anything definitive, Alsberg asked for more time.

  In the final event, the case was settled out of court on November 12, 1918. Coca-Cola consented to a plea of “no contest,” allowing the government a technical victory. In return, the Company agreed to reduce the caffeine content by half, to no more than 0.61 grains per ounce of syrup, while doubling the amount of decocainized coca leaf and kola nut that went into Merchandise No. 5. Though Judge Sanford’s notice of settlement did not specify it, there was a tacit agreement that the government would now leave Coca-Cola alone. Wiley was no longer at the Bureau to push the issue, and everyone was sick of the case by this time, eight years after the initial seizure. In later years, however, Howard Candler implied that a federal attorney had accepted a bribe in return for the settlement.

  Having spent over $250,000 on the case, The Coca-Cola Company apparently got nothing out of it other than a reduced kick and the return of forty barrels and twenty kegs of very stale syrup. But all of that was beside the point. As Harold Hirsch later wrote, “It was a serious litigation and involved the possibility of the entire destruction of the company’s business.” In essence, Hirsch had won a major victory: Coca-Cola survived.

  INTERNECINE STRIFE LOOMS

  The settlement of the Barrels and Kegs Case did not, however, signal the end of Coca-Cola’s troubles in the courts or tangles with government bureaucrats. The turmoil took its toll on an aging Asa Candler, who regarded it as unjust persecution. When he left the Company in the care of his children, Candler set off a chain of events that led to a graver threat to the Coca-Cola system. It did not come from a competitor, politician, or reformer. This time the trouble, like a latent virus, came from within.

  __________________

  * Cocaine was made illegal by the Harrison Narcotics Act of 1914. After intensive lobbying, Coca-Cola succeeded in having a loophole written into that law, allowing the importation of coca leaves if they were decocainized under government supervision.

  * During the trial, Harold Hirsch made much of Coca-Cola’s hyphe
n, which, he argued, rendered the trademark a single word unrelated to the two substances, coca and kola.

  * The Bureau’s scientist testified that rabbits on a Coca-Cola diet had died—little wonder, since he had run the feeding tube into the rabbits’ lungs instead of their stomachs, thereby drowning them.

  † The trial also had another immediate effect. The decorative border of coca leaves and kola nuts gracing Coca-Cola trays and syrup barrels disappeared.

  * Hughes—vociferously supported by Harvey Wiley—lost the presidential election by a narrow margin.

  ~ 8 ~

  The Sinister Syndicate

  Complainant now shows to the Court and avers that some time in the summer of 1919 a number of promoters conceived a plan to get control of the stock of said Georgia corporation. By reason of the inflated condition of the currency growing out of the war and the willingness of the people to speculate . . . said promoters did so get control. . . .

  —Bill of Complaint, The Coca-Cola Bottling Company vs. The Coca-Cola Company

  When Charles Evans Hughes delivered his devastating opinion in the Barrels and Kegs Case in May of 1916, it was just one more indication to sixty-four-year-old Asa Candler that the United States government was persecuting him. It would bleed him with taxes, pursue him in court, plague him with inspectors.

  In addition, J. C. Mayfield, Pemberton’s last partner, reappeared as a thorn in Candler’s side. As much of a hustler as Candler, Mayfield never quite succeeded in his numerous ventures. Besides soft drinks, he had speculated in real estate, oil wells, and a vinegar factory. In 1909, his Celery-Cola was seized under the Pure Food and Drug Act for containing cocaine. Nothing kept the irrepressible Mayfield down for long, however. He resurrected Koke, one of the first names he had used, bought the rights to another Coca-Cola imitation called Dope, and was soon selling both drinks across much of the United States as the Koke Company of America. In 1914, as part of his crusade to protect Coca-Cola’s trademark, Hirsch had sued. Unlike most imitators, however, Mayfield had enough money to hire lawyers for a rigorous, prolonged court fight.

  In Koke Case testimony, many of the questionable activities during Coca-Cola’s early years came to light. On the stand, Mayfield told the story of John Pemberton’s morphine addiction, the reappearance of Charley Pemberton, and his own 1888 days of manufacturing Yum Yum and Koke. He asserted, with some authority, that he had the original formula for Coca-Cola, legally and directly, from its inventor. In addition, his lawyers found Mrs. Dozier, who insisted that her signatures on two crucial chain-of-title documents were forged. Asa Candler must have been extremely disturbed to have all of this material re-emerge after it had been buried for over a quarter of a century.

  The Koke Case was replete with ironies. While Candler and Hirsch had fulminated for years against the use of slang terms for Coca-Cola (particularly those that implied cocaine content), now they found themselves calling pharmacists to the stand to prove that “Koke” and “Dope” were universally recognized calls for Coca-Cola, not Mayfield’s drinks. One Atlanta druggist, J. B. Pendergrast,* testified that “when a man asks for ‘dope’ at my soda-fountain I understand that he means ‘Coca-Cola.’” Pendergrast also served Coca-Cola in response to an amusing array of nicknames, including A-Shot-in-the-Arm and Another-Brick-in-the-Candler Building.

  While the decision on the Koke Case was pending for most of 1916, Mayfield stirred up more trouble for Coca-Cola by complaining to the Federal Trade Commission, created in 1914, that Coca-Cola’s harassment of imitators constituted illegitimate business practice. A special agent for the Department of Justice asked pointed questions of Coca-Cola bottlers and their competitors in the fall of 1915 and the following spring. That summer, Asa Candler received a letter from the chairman of the FTC officially notifying him of complaints and asking for a response. When irritated, Candler often scribbled his rebuttals on letters, and he wrote “not so” next to most of these 1916 allegations:

  1.Refusing to sell Coca Cola to dealers who handle competing cola drinks.

  2.Intimidating customers of competitors by threats of legal suits.

  3.Maliciously instituting litigation against competitors.

  4.Using rebates based on total annual purchases combined with excessive advertising, thereby, it is alleged, in practical effect compelling dealers to purchase exclusively of your company.

  5.Slandering the character and business of competitors.

  6.Using premiums in the sale of Coca Cola, such premiums being given only to customers who will handle no other cola drink.

  7.Shutting off competitors’ supplies of bottle caps by threats of litigation against bottle cap manufacturers.

  8.Maintaining a system of espionage to discover names of customers and other business secrets of competitors.

  9.Procuring cancellation of orders and breach of contracts secured by competitors.

  Candler can hardly be blamed for feeling persecuted. He must have believed that the American government had gone mad, abusing him for being an astute businessman who employed aggressive promotion and reasonable concern to protect his prod-uct’s good name and integrity.

  ASA CANDLER, MAYOR

  At almost the exact moment that he received the FTC’s official notice, Candler was approached by a group of Atlanta businessmen and politicians, urging him to run for mayor. The city was in poor financial shape, with impoverished schools, a $150,000 debt, and streets badly in need of repair. The police chief had been fired and was suing for his job back, and the streetcar conductors were threatening a strike. At first, Candler refused to run—he was a businessman, not a politician—but his ego soon overcame his doubts, and on July 19, 1916, only four days after he received the letter from the FTC, he agreed to become a candidate. The mayoral race clearly gave him an excuse to retire—Candler had a “willingness, sometimes amounting almost to anxiety, to get out of Coca-Cola,” according to his son.

  Having declared his candidacy, Candler promptly departed for a mineral springs spa in Michigan, intending to remain there until the election was over, but his political advisers finally convinced him that it appeared arrogant for the multimillionaire to remain in Michigan without even pretending to mount a campaign. With only eight days left before the primary, he returned to Atlanta for a vigorous week of stump speeches. “I am not here to tell you I think so little of this office as not to want it. I do want it,” he told his supporters. “If I can discharge my duty to all of you, I will get a crown that will reach far beyond the grave.” His opponent, a union linotype operator, was not interested in immortality as much as appealing to the poor as “the people’s candidate,” calling Candler “capitalism personified.”

  Capitalism personified is apparently what Atlanta wanted. Easily nominated, Candler was swept into office in the December 6 election. Most citizens of Atlanta rejoiced, regarding “Uncle Asa” as the savior whose millions would solve the city’s problems. When he donated his $4,000 annual salary to charity, they were heartened, but aside from that, Candler spent none of his own money during his term except for an improved waterworks. One cynic commented after the election, “Seems funny that as soon as some ordinary gink makes a fortune out of flivvers, soft drinks, liver pills or safety pins, he is always right in line for political office.”

  As mayor-elect, Candler served as the head of the Law and Order Committee, which helped to break the streetcar workers’ strike. Atlanta’s first serious labor unrest, with dynamited trolleys, gunshots, and cries of “Scab! Scab!” unsettled the status quo. The workers demanded union recognition, shorter hours, and higher pay. In the end, the remaining drivers were granted a slight pay increase, but the union was disbanded and its organizers fired. Now the man of the hour, Candler waxed eloquent in his condemnation of labor unrest: “The demagogue whose radical measures threaten the stability of the commercial system . . . is a political parasite sprung from the feculent accumulations of popular ignorance and fattened upon the purulent secretions of popular prejud
ice.” He went on to defend the capitalist system, explaining that “commerce is not the selfish and groveling thing which many esteem it. On the contrary, it is the means of the world’s progress and the instrument of boundless blessing to the race of man.”

  After a year of Mayor Candler, many of his supporters were disillusioned. His cabinet had suggested raising water rents, which would have hurt the poor. Others wanted to impose higher taxes on the rich, which Candler rejected out of hand. “Did the Asa boomers last fall really think that the old gentleman would furnish the money as a free gift gratis for nothing to pay the town’s deficits?” asked one editorial. Atlanta Civics, a tract written and published by Mrs. Bessie Linn Smith, appeared briefly in the fall of 1917 and was devoted almost exclusively to Candler-bashing. “During Candler’s campaign,” wrote Mrs. Smith, “we were promised . . . almost that our souls would be purged of sin, our debts wiped away with a stroke of his genius hand. . . . To date, if he has accomplished a thing for the betterment of Atlanta, a single thing except Candler glory and profit, our highest powered microscope fails to see it.” Mrs. Smith pointed out that while Candler urged civic-minded citizens to declare high property appraisals to swell the city’s tax coffers, the mayor himself reduced his personal tax returns by $108,000. She also gleefully reported that Candler was so cheap that he had taken a paper from a newsboy, scanned the headlines, and then given it back instead of paying the three cents.

  Candler’s parsimonious ways did have some positive effect, however. By the time he left office, he had balanced the city’s budget. On the whole, he appears to have been a conservative, decent, honest mayor, even if his priorities sometimes seemed odd. One of Mayor Candler’s accomplishments was to pass an “Ice Cream and Soft Drink Ordinance” to make sure that soda fountains were “properly lighted, ventilated, and kept free from rats, flies, or other insects.” He also insisted on the virtue of idle Sundays, the violation of which was “a more alarming peril,” he wrote, “than the success of the German Kaiser in the pending war struggle.” Of course, his critics had a ready answer for that: What about the soda jerk who dispensed Coca-Cola during the Sabbath?