When Sibley officially replaced Harold Hirsch as general counsel in 1935, he conducted an intensive, year-long study and decided that Coca-Cola was in jeopardy from “an organized and insidious effort . . . to seriously impair or ultimately destroy this company’s trade-mark.” Half of the logo, he said, was in peril. “Cola” was well on its way toward becoming a generic part of the language. In the past, Hirsch had attacked only those imitators that most closely resembled Coca-Cola—usually, like Chero-Cola, beginning with “C” and mimicking the familiar script. Sibley felt that such a lax attitude was a huge and perhaps fatal error. He believed in “the ultimate . . . assertion” that “Coca-Cola” was “an aggregate word consisting of two inseparable parts, and that each part is so linked and riveted to the other part in the public mind that when one is used the other is drawn to it.” In other words, said Sibley, all other soft drinks using the word “Cola” should be regarded as infringers. He was particularly alarmed that a judge had ruled Roxa-Cola a valid trade-name in 1930. Also, Nehi had recently come out with the twelve-ounce Royal Crown Cola and was doing very well with it. As his final recommendation, Sibley, regarding it as too dangerous to sue Pepsi in the U.S., proposed aggressive litigation in foreign countries while instituting domestic suits against RC Cola and “the most flagrant infringers” with similar names such as Cleo-Cola.
In 1938, The Coca-Cola Company simultaneously brought suit against Pepsi all over the world, with the most conspicuous case right across the border in Canada. In July, the Canadian Exchequer Court found in favor of Coca-Cola. Still in charge at that point, the embattled Guth immediately appealed and launched a two-pronged counterattack in the United States. In a bold stab at the heart, Guth filed an interference suit in the Patent Office, claiming that “coca” and “cola” were descriptive terms and could not be trademarked. At the same time, he sued in Queens, New York (Pepsi headquarters), charging that Coca-Cola had resorted to “illegal and fraudulent” methods, including intimidations, threats, and “trap orders” to deter Pepsi sales in New York City and elsewhere.
Goaded into action, Sibley took the Queens bait and countersued Pepsi for trademark infringement. The circle of worldwide litigation was complete. With so many lawsuits hanging fire, it is little wonder that one of Sibley’s colleagues, considering the coming year, wrote that “1939 may well be the most critical year to date in the history of the Legal Department.” Sparing no expense, Sibley sought the best trademark lawyers in the country, including Edward S. Rogers and Harry D. Nims, to defend the sacred name of Coca-Cola. He also hired Judge Hugh Morris, who had ruled in the Bottler Case and had now returned to private practice. Such was the volatile legal situation that Walter Mack inherited.
Described by a contemporary journalist as “a long-limbed, sad-eyed man who in looks, zeal, and tenacity bears a . . . resemblance to a bloodhound,” Mack immediately set about mastering the far-flung court cases, as well as plotting the further sales of his soft drink. He forced himself to attend the pretrial hearings every day at the Queens courthouse when they started in 1941. “Every morning,” he remembered, “a big Coca-Cola truck would pull up in front of the courthouse and all these Coca-Cola men in livery would march in carrying volumes of books showing all the court cases they had won. It seemed overwhelming.”
One morning, Mack received a phone call from Mrs. Herman Smith, a Coca-Cola imitator widow. She wanted to commiserate. “Coca-Cola is going to put you out of business. . . . My husband thought he was right too, but they still put him out of business. And I still have a photograph of the check they gave him.” His bloodhound pulse quickening, Mack asked if he could borrow the picture, which indicated that Coca-Cola had bribed its way to victory to the tune of $35,000. Confronted with this evidence in court, Coca-Cola’s lawyers hastily requested a three-day recess.
The next day, Robert Woodruff phoned Mack, asking him to lunch at Woodruff’s apartment in the Waldorf Towers. The two had become friendly acquaintances in 1934, before Mack had ever heard of Pepsi, when they happened to share the same transatlantic ocean liner. Now, after a few drinks, the Coca-Cola magnate said, “You know, Walter, I’ve been thinking. This lawsuit between us isn’t doing anybody any good. . . . Don’t you think we ought to settle it?” On a piece of Waldorf stationery, Mack penned an agreement stipulating that Coca-Cola would henceforth agree to acknowledge Pepsi’s trademark in the United States, and Woodruff signed it. When Sibley found that Woodruff had agreed to settle, he felt betrayed and attempted to quit the Queens case. Woodruff refused to hear of it. At the end of 1941, Sibley wrote a bitter memo outlining his “fundamental disagreement” with Woodruff. “The responsibility of the position I occupy is heavy and the work is very taxing. Under the existing situation, I am unwilling to continue except on a temporary basis.” In 1943, he finally relinquished his position as general counsel to Pope Brock, a fellow King & Spalding lawyer, but Sibley remained concerned with Coca-Cola matters for the rest of his life.
Sibley was even more unhappy when the British Privy Council ruled in favor of Pepsi-Cola in March of 1942 (the Canadian trademark case had ended there after the Canadian Supreme Court reversed the Exchequer’s ruling of 1939). The poor Coca-Cola lawyer must have been nearly suicidal two months later, when Woodruff and Mack settled all litigation over the trademark forever. Coca-Cola promised never to assail Pepsi’s trademark rights again, dropping suits worldwide. Coca-Cola had irrevocably lost the exclusive right to “cola.”* Afraid of this possibility, Sibley had decided in 1941 to protect the first part of the name. In the Koke Case decision, Oliver Wendell Holmes had virtually ruled that “Coke” belonged to the Company. Now, in a deliberate campaign, Coca-Cola reversed its long-held policy and actually encouraged the use of the nickname “Coke,” intending to patent that trademark after establishing use.
While the court battles raged, Walter Mack arranged for the Pepsi-Cola Company to swallow Loft. In order to spread Pepsi bottling franchises, he hit upon an ingenious system. “In my travels around the country,” he wrote, “I found that there was always a wealthy bottler in each area, and that was the Coca-Cola bottler. . . . So I went out and found the best of the little bottlers and tried to seduce them into taking Pepsi-Cola.” Mack bought a huge quantity of secondhand beer bottles and sold them to franchise owners for a quarter cent per bottle. Filled with Pepsi, the bottles brought a two-cent deposit, providing instant start-up capital. Later, when his franchises were established, Mack designed standard bottles that cost four cents each but could be amortized over many refills. Baked onto the new bottles, the Pepsi logo was red, white, and blue, making blue the distinctive color in contrast to Coca-Cola’s red and white.
With a minuscule advertising budget, Mack achieved maximum impact. While Coca-Cola had been permanently soured on skywriting by the Cuban fiasco of the twenties, Mack had no such reservations. He sent pilot Sid Pike up and down the Eastern Seaboard, starting in Florida in the winter and slowly moving north. With a patented mechanism, Pike scripted the Pepsi logo over city skies, prompting one cartoonist to draw Coca-Cola antiaircraft gunners trying to shoot the skywriter out of his Pepsi cloud.
Mack’s real triumph, however, was the jingle. Two offbeat writers named Alan Bradley Kent and Austen Herbert Croom Johnson played a phonograph record for Mack one day in 1939. To the tune of “Do Ye Ken John Peel,” they had written lilting doggerel. “Pepsi-Cola hits the spot,” Mack heard, and began to tap his toes. “Twelve full ounces, that’s a lot. / Twice as much for a nickel, too, / Pepsi-Cola is the drink for you.” Mack liked the jingle so much that he ordered his advertising agency to cut the surrounding hard-sell verbiage and run it alone as a thirty-second radio spot. Although no major radio station would accept his jingle—too short in an era when ads lasted at least five minutes—Mack found small New Jersey stations that needed money badly enough to run anything. The jingle, the first of its kind, was an immediate hit. Soon the big stations were begging for it. When Mack pressed an orchestrated version, it sold a hu
ndred thousand copies. The music was adapted as a march, waltz, rumba, and country song, becoming “the scourge of the continent,” according to one disgusted commentator. In 1941, the jingle played nearly three hundred thousand times over the airwaves. Mack had started a trend.
THE DIE IS CAST
While Robert Woodruff constantly warned against becoming too rigid to shift with the times, he refused to abandon his single-size drink in the face of the twelve-ounce colas. In public, Harrison Jones loudly defended this official viewpoint, but in private, he urgently confronted Woodruff with the need to act. “Every day’s delay . . . aggravates the situation and makes the fort harder to hold,” he wrote in an August 1941 seven-page memo reviewing the situation. Although Coca-Cola retained 46 percent of the entire soft drink market, other colas, which he designated “X drinks,”* had climbed to 14 percent, while ginger ale, grape, orange, root beer, and the rest had the last 40 percent. “The bed has been erected by us,” Jones said, “and the bed-bugs just crawl in.” The solution, according to Jones, was to give the bottlers “a definite revelation . . . of the true picture,” which “should have been done long ago instead of now, and it is not being done now.” He recommended a daring diversification in which the Company and the bottlers would set up a separate corporation to produce a twelve-ounce cola, under a completely different trade name, and to experiment with other flavors as well. Ultimately, Jones hoped, the competition would be “snuffed out or eliminated.”
Woodruff ignored the warning. Instead, he tried in vain to bribe Walter Mack away from Pepsi by offering him the White Motors presidency at $250,000 a year. But it was too late to buy off Pepsi, setting the pattern for what Mack termed “a fundamental American struggle.” The competition ultimately benefited Coke, however, as one prophetic journalist observed in 1938: “Pepsi, if it survives the courts, may prove to be a good thing for Coca-Cola; the latter’s sales have surged ahead in the places where Pepsi’s campaigns have been the hottest.”
Pepsi posed as the brash upstart, willing to indulge in questionable taste in order to grab attention. As if to prove the point, Walter Mack attempted to buy the rights to Popeye so that he could replace that hero’s magic spinach with magic Pepsi. Failing that, he created Pepsi and Pete, two cops who careened through adventures in a comic strip, always overcoming evil by drinking the right stuff at the last moment. Implicit in all Pepsi advertising was a competitive jab at Coca-Cola; otherwise, “twice as much” would mean nothing. Coke remained the measure of success.
As proof of the soft drink giant’s central place in American culture, Coca-Cola was the first firm awarded a contract for the 1939 New York World’s Fair, where the public could view a real bottling operation, a huge mural, and a color version of the film Refreshment Through the Years. The next year, a bottle of Coke was interred in a Georgia “crypt of civilization” to be exhumed (and presumably drunk) in the year 8113. Even a woman complaining about the drink’s health effects to the FDA wrote that “‘Coke’ nowadays is synonimous with a ‘Date.’” When veteran editor William Allen White, the voice of middle America, was featured in Life on his seventieth birthday in 1938, he insisted on having his picture taken sipping a Coke at a soda fountain in Emporia, Kansas. “Coca-Cola,” he wrote soon afterward, “is . . . a sublimated essence of all that America stands for, a decent thing honestly made, universally distributed, conscientiously improved with the years.”
Coca-Cola men might display a sense of humor about other things, but never about their sacred drink. On the brink of World War II, Robert Woodruff addressed his own troops just before Pearl Harbor. “We have the greatest product in the world,” he said. “I can never divorce myself, my affections, my life from Coca-Cola, and neither can any of the rest of you.” He warned against complacency, reminding the men of Sapolio, once a household word as a cleaner and now forgotten. “Whom the gods would destroy they first make fat. . . . Never let it be said of our business, ‘This is a Nice Highclass Old Business.’” The Boss called for “young, virile, ambitious men” to spread the Coca-Cola gospel.
Woodruff couldn’t have known it at the time, but the Japanese were about to give his virile young men the chance for the Coca-Cola adventure of their lives.
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* Even as Coca-Cola prospered during the Depression, a nervous Harrison Jones suggested to Robert Woodruff that the Company produce Coca-Cola Beer when “near beer” became legal. The Boss nixed the idea.
* The religious overtones of Woodruff’s “beacon” reference may have come from Dick Gresham, a Baptist minister known as the “Coca-Cola Bishop” because he wrote customized sermons for the Boss. In the mid-thirties, Gresham urged Woodruff to “banish forever a narrow nationalism,” since Coca-Cola’s saturation point was “the last man in earth’s last country.”
* Stanley and Al Barbee, identical twins and Lupton relatives, operated the Los Angeles Coca-Cola Bottling Company with their older brother Cecil. The twins were obsessed with sex and the glitzy Hollywood lifestyle, while Cecil was all business. Stan collected expensive art (Van Gogh, for instance) while Al spent his money on world travel and yachts.
* Long before Bailey’s efforts, Southerners had been using Coca-Cola to baste ham, make date-nut bread, or produce a distinctive barbecue sauce.
† The Uncle Remus display caused quite a stir, though not, as it might today, because of racial stereotyping. African Americans never appeared in Coca-Cola ads of the period except as servants, though they were already a major consumer group. The 1930s flap was over copyright: Joel Chandler Harris’ widow sued the Company and lost.
* A greenhorn Coca-Cola rep’s first “crown count” often commenced as a nasty practical joke. His supervisor handed him the bag of used bottle caps, telling him to spread them out on his motel bed, where assorted roaches and silverfish hiding in the caps darted for cover. The sidewalk was a more appropriate place for crown counts.
* The parent bottlers traded their stock for Coca-Cola shares, which left Whitehead’s widow, Lettie Pate Evans, with so much Coca-Cola stock that Woodruff named her to the board, making her one of the few women in the 1930s to have such a seat of power.
* Hughes Spalding, the founder’s son, was a partner at King & Spalding. A tight Atlanta network evolved in which King & Spalding, the Trust Company of Georgia, Emory University, and The Coca-Cola Company were virtually one vast concern.
* Coke supported Anslinger during negotiations that culminated in the 1961 United Nations Single Convention on Narcotic Drugs, which made cocaine illegal worldwide but contained a provision specifically allowing Coca-Cola to use coca leaves. “The smooth and economical operation of our process demands an ample and constant supply of Coca,” wrote the head of Maywood Chemical Works to Anslinger in 1959, “and I am happy to note that you realize the importance of liberal stocks of Coca for medicinal needs and for our special purpose.”
* While Walter Mack was the titular head of Phoenix Securities, financier Wallace Groves, known as the “silent man of Wall Street,” owned most of it. Ironically, Groves was a protégé of Ernest Woodruff, who had dated Groves’ mother. In October 1938, Groves wrote Woodruff that he planned to take a “very active interest in the Pepsi-Cola Company,” and in December 1939 he wrote again, hoping to see Woodruff, “provided we will not discuss any business, that is Pepsi-Cola/Coca-Cola.” By that time, Groves was under indictment for mail fraud, for which he was convicted and briefly imprisoned in 1942. He then moved to the Bahamas, where he developed Freeport as a major resort and gambling area.
* As a result of the settlement, Coca-Cola cases around the world were reassessed, and only those with a “phonetic similarity” to Coca-Cola were continued.
* Even as Harrison Jones issued a clarion call to face reality, he refused to designate Pepsi or Royal Crown by name, a practice common to Coca-Cola men for years. In a form of magical thinking, the Company men apparently thought on some level that if they didn’t name Pepsi, it would go away and leave the
m alone.
~ 12 ~
The $4,000 Bottle: Coca-Cola Goes to War
Today was such a big day that I had to write and tell you about it. Everyone in the company got a Coca-Cola. That might not seem like much to you, but I wish you could see some of these guys who have been overseas for twenty months. They clutch their Coke to their chest, run to their tent and just look at it. No one has drunk theirs yet, for after you drink it, it’s gone; so they don’t know what to do.
—Private Dave Edwards, 1944, in a letter to his brother from Italy
By the time America entered World War II, Coca-Cola was over fifty years old, so well-entrenched in the nation’s culture that a 1942 ad for the U.S. Rubber Company asserted that among “the homely fragments of daily life” American soldiers fought for were “the bottles of Coke they’ll soon be sipping in the corner drug store.” Outside the United States, however, was a different story. True, Woodruff had tried to spread the drink worldwide, but in most places it was quite thinly spread. While Coca-Cola had established a strong presence in Canada, Cuba, and Germany, it barely had a toe-hold elsewhere. The Japanese didn’t realize that by bombing Pearl Harbor they were indirectly giving The Coca-Cola Company a worldwide boost that would ensure the soft drink company’s unquestioned global dominance of the industry. It’s unlikely that the Japanese were thinking about soft drinks at all, though four Hawaiian Coke coolers were martyred that day at Hickam Field. Nonetheless, the war would be a pivotal point for Coca-Cola, validating the wartime claims for the drink as “the Global High-Sign.” Already sacred to Coke men, the fizzy drink would assume an almost religious significance to the American soldier as well.
For God, Country, and Coca-Cola Page 30
