The best of the Clarence Birdseye stories is the one about the heiress and the goose. The heiress was Marjorie Merriweather Post, daughter of Charles William Post, who had made a fortune in Battle Creek, Michigan, building the Postum Cereal Company. When Post died in 1973, her estimated wealth was $200 million.
According to the story, one day in 1926 while vacationing on her yacht, she sailed into Gloucester Harbor. Her cook went into town for provisions and that night served her a goose. She was shocked to learn that this delicious goose, so tender, so, well, fresh tasting, had been frozen. Who froze this goose? How did they do it? She wanted to know. In the next scene in the story she is down at the Fort touring the General Seafoods plant. She then, according to the legend, spent the next three years trying to convince her husband—in some versions it is her father—to buy the Birdseye company, which he finally does for a record $22 million.
Americans love these rags-to-riches stories, like the girl being discovered at the lunch counter and becoming a movie star. Of course, in Birdseye’s case, he didn’t exactly come from rags. The story of the goose has often been told, in most accounts of Birdseye’s life and in obituaries for Marjorie Post in the Washington Post and the New York Times, as well as in earlier books by this author. But upon close examination there is so little evidence and so many holes that it is questionable whether anything at all of the story is true.
We know that Marjorie Post did sail into Gloucester around 1926 because there is a photograph of her huge, four-masted bark in the harbor. The Gloucester Daily Times, in an August 15, 2005, article that demonstrated Gloucester’s unique sense of which facts are important, completely accepted the story except for one detail: it was always said that she sailed in on her boat called the Sea Cloud. But the Gloucester newspaper pointed out that this vessel was not launched until 1931, so in all likelihood she actually sailed in on the Hussar IV, which was launched in 1923.
No one seems to question the goose, although in 1926 the only thing the appropriately named General Seafoods Corporation was selling was frozen haddock fillets. It was experimentally freezing many other foods, and that may have included a goose, though how the Post yacht would have gotten it is a mystery. Birdseye might have sent her the goose. At the time he was looking for investors, and he often sent prospects frozen food. One Wall Street investor was sent an entire multicourse dinner frozen. Most of the items were foods that most people had never heard of being frozen.
There is a faint whiff of sexism to the entire goose story. It ignores what an accomplished woman Post was. She definitely did not go to her father, because he unexpectedly committed suicide in 1914 and left her in charge of the company, which she ran for eight years. She was the principal shareholder. Her husband, Edward Francis Hutton, an aggressive financial tycoon who had founded the E. F. Hutton brokerage house before the marriage, took over the company in 1922. Still a young man, he was a legendary Wall Street operative who dazzled the financial world in 1906 by selling off his San Francisco investments by private telegraph before news of the great earthquake had reached the East. Marjorie Post, who had been well trained by her father, worked with her husband, her second of four, and together they acquired a dozen food companies. They rarely disagreed, at least publicly.
The problem with the goose story is that it portrays Marjorie Post as a self-indulgent heiress who on a whim, because she enjoyed her dinner, was prepared to spend millions—unless some man reined her in. But the truth was very different.
Marjorie Post’s father, Charles Post, a man of Birdseye’s father’s generation always known as C.W., was born in Springfield, Illinois. He had a high-strung and restless nature and was given to depression, but he had a history of starting up new enterprises from ideas that excited him. Like Birdseye, once successful, he was eager to move on to the next idea. In 1890, he traveled with his wife and three-year-old daughter, Marjorie, to Michigan, where he checked into a sanitarium under the direction of Dr. John Harvey Kellogg, famous for a treatment of “inspirational talks” and a grain-based vegetarian diet. Kellogg and his brother, Will K. Kellogg, concocted a line of health foods for their sanitarium, including “caramel coffee,” a caffeine-free hot drink made from bread crusts, bran, and molasses.
C.W. emerged from the Kellogg diet weak and emaciated, and he finally restored his health with the Christian Scientists, who included a little meat in his diet. Still, Post was so taken with Dr. Kellogg’s operation that in 1892 he opened his own sanitarium on a ten-acre farm outside Battle Creek and called it La Vita Inn. He was clearly copying the Kelloggs with a similar treatment and a special diet. He even had his own caramel coffee, also made with molasses and bran but with wheat berries. He published a book, I Am Well!, which promoted “mind-cure,” a trendy idea popular with American businessmen that illness was not real, and the human mind could cure all. Dr. Kellogg too had been successful with several books on his health and diet ideas.
Neither Post’s book nor his inn caught on. But he had an idea that he might be able to sell his coffee substitute. He started with mail order and in 1895 began selling it to grocers, branding the beverage Postum.
The first year Post lost $800 on Postum. That was when C.W. realized that his real talent was writing advertising copy. He launched a national campaign that offered to save people from the evils of coffee, which he claimed caused heart attacks, laziness, blindness, cowardice, and stupidity. Does coffee, he asked, “neutralize all of your efforts to gain money and fame”? A lot of people were not gaining the fame and money they hoped for, and quite a few of those drank coffee. Soon Post was becoming rich from Postum sales. In 1898, he came out with a cereal named Grape-Nuts. In the process of baking this concoction of whole wheat, yeast, and malted barley flour, starch turned into dextrose, the sugar found in grapes. And so they were “grape nuts.”
Always an aggressive and inventive copywriter, Post claimed his products sent people “on the road to Wellville.” In 1903 combined earnings from Postum and Grape-Nuts were more than $1 million and continued to grow; by the time Post died, he was one of the five largest advertisers in the country with an annual ad budget of $1 million. Post had eventually lost interest in most of the company’s operations but continued to insist on writing all the advertising himself.
The Kelloggs followed Post’s example. Will, the underpaid, mistreated kid brother with no medical degree, had the job of boiling wheat dough and pressing it into thin sheets in a roller. One morning in 1894 the dough was too dry and flaked off as it came out of the rollers. From that he developed a process called tempering, which produced flakes, and the concept of cereal flakes was born. He began experimenting with other grains. Corn was particularly popular. Will wanted to do what Post had done, but his brother was a man of science who felt that selling cereal would be beneath him. Finally, in 1906, Will broke away from his brother and formed his own cereal company, Kellogg’s, which like Post’s distinguished itself by its large and successful advertising campaigns.
Kellogg and Post were pioneers of modern marketing. But while Kellogg stuck close to its founding cereal products, Post was interested in most any new industrial food idea. To him making a new product take off was just a question of finding the right advertising campaign. Under his only daughter, Marjorie, and her husband, Edward Hutton, the company made regular acquisitions. In 1925 it bought Jell-O, an ambitious company that had expanded the market in flavored gelatin through marketing innovations such as distributing Jell-O recipe books. In 1926 it bought Baker’s chocolate, one of America’s oldest and biggest chocolate companies, and in 1928 it bought Maxwell House coffee.
By the time Marjorie Merriweather Post sailed into Gloucester Harbor, she was a savvy and accomplished businesswoman who had run a major corporation by herself and was in the process of buying out promising industrial food companies. She would have done more than just visit the plant; she would have found out everything she could about its business and its ideas and the value of the company and the ideas. Train
ed by C.W., she would have considered the potential for marketing and advertising. She would have talked it over with her husband, not because he was in charge, but because he was the one with the financial expertise. And then they would have gone to Wall Street to raise the money for the deal. That is exactly what happened. Whether a frozen goose was involved is not known. The origin of the goose story has been lost. Birdseye never told this story, which further suggests that it never happened. Instead, Bob always said that he and his partners had been trying to sell the company for some time, partly because they did not have the capital to develop their ideas and partly because the original plan had always been to make money by selling their ideas. Wetmore Hodges decided to go to people he knew at the Wall Street investment firm Goldman Sachs.
But Walter E. Sachs told the story differently. He later testified to a U.S. Senate committee that both Post and Hodges had approached him. His version did not include a goose. He testified that Post had wanted to buy the company and was looking for additional capital to be able to do this. In this version it was not doubts about frozen food from Hutton or the board of directors but a lack of sufficient funds to purchase the patents that was holding up the deal. Birdseye and his investors had always seen the patents as the real value, and Hutton seems to have agreed.
In 1929, Post did buy out Birdseye for a total of $23.5 million, according to the Senate investigation. Another well-worn legend is that Birdseye was trying to sell the company in 1926 for only $2 million, which was about the value of the company. So why did Post pay so much more? It paid over $20 million more because it believed in frozen food and wanted to own his patents. The often-mentioned $2 million price probably did not include the patents, only a small, not very successful seafood company.
The Birdseye company was of obvious appeal to the Post company. It had developed the ideas and technology for an entirely new food industry, but it lacked capital and had a huge image problem that would require skilled marketing and advertising. Each company had what the other lacked, and the two fit like sodium and chloride.
Birdseye always liked to boast that he received the most money ever paid for a patent—an impressive victory considering that most of his important patents had not yet been granted and wouldn’t come through until 1930. Post bought all the patents for $20 million and then on top of that still bought the company for the remainder. The total $23.5 million deal was for the names, patents, patent applications, and all assets. Birdseye’s personal share was about $1 million.
The acquisition was announced on May 7, 1929, with the Postum Company as the majority owner. On July 27 Postum stockholders approved the purchase. Postum reorganized its company, going on the New York Stock Exchange on July 25 for the first time under its new name, General Foods. It liked the Birdseye name and the Birdseye idea of becoming the leading food company.
Goldman Sachs purchased Postum stock to provide it with the capital for the acquisition. Postum took the $10.5 million it acquired from the stock sale and used it toward a controlling 51 percent of General Seafoods. Goldman Sachs spent $12.5 million on the remaining 49 percent.
Was too much paid? In the struggling 1930s the question was periodically asked. In 1939, Fortune magazine reported that in the first few years General Foods earned only two cents for every dollar it had spent acquiring the company. The outset of the Depression was not a good time to be building a new industry, but in April 1929 no one foresaw what was about to happen to the economy. Marjorie Post probably remembered that her father had lost money on his Postum beverage its first year too.
Goldman Sachs’s eventual $12 million loss was the subject of a U.S. Senate Banking and Currency Committee investigation in 1932. Why, the committee members wanted to know, would anyone pay $23.5 million for a company valued at $1.75 million. It was pointed out in the hearings that this represented a substantial loss for Goldman Sachs’s stockholders. When a senator sneered that for its money all it got was a $1.75 million company, Sachs added, “And a process for frosted food that appeared to have great value.” The ire of the senators and the stockholders arose from the fact that Goldman Sachs sold the Postum stock at a loss in 1931, selling its 49 percent back to the company for a fraction of its original value.
Goldman Sachs was the only loser. Post and Hutton got their company and with it fulfilled Birdseye’s dream of a General Foods giant based on frozen food.
It was certainly a good deal for Bob Birdseye. The deal was signed in the spring of 1929, only months before the great market crash. A few months later General Seafoods probably would not have had a buyer or a future. While millions started the 1930s having lost everything, Birdseye went into the Depression with an extra million dollars. A million dollars in 1929 was worth $12 million in 2010 dollars. The top capital gains tax rate at the time was only 12.5 percent. In addition, he rode out the worst years of the Depression, continuing his frozen-food experiments with a comfortable salary as the director of research for General Foods’ new Gloucester-based frozen-food division. The Birdseye mind was part of the deal. Unlike for most people, for Bob Birdseye life was looking good in the terrible fall of 1929.
Birdseye, the new millionaire, did have a few ideas about how to spend it. Paul G. Seyler, who worked for Thrift Stores in Springfield, Massachusetts, one of the first self-service chains, traveled to Gloucester to meet with Birdseye to discuss carrying his frozen food. Seyler noted that Birdseye drove up to the hotel for lunch in his Model A Ford but then phoned Eleanor to bring him the Packard 8. With its long, sleek body and high radiator grille crowned with a hood ornament like a trophy and the slogan “Ask the man who owns one,” the Packard 8 was one of the premier luxury cars of the day. After lunch Birdseye took Seyler for a ride along the harbor to Eastern Point and showed him a long hill facing the opening of the harbor with a view out to sea. From his Packard, Birdseye took in the sparkling sea view and said to Seyler, “All my life I have desired a Packard 8 car and that property. Now I have them.” Seyler later said, “Despite that evidence of materialism I was convinced from my conversations with Mr. Birdseye that he was an inventive genius more interested in contriving something beautiful and useful for humanity than in monetary gain.”
Seyler may have been right, but still Birdseye’s comment was telling. Birdseye was in his mid-forties, and all his life he and his family had teeter-tottered between privilege and ruin. Now he was rich.
He did not have the eccentricity of a Hammond to build himself a medieval castle. To him a baronial mansion seemed more appropriate. He had his seventeen-room mansion built in an astounding seven months between December 1930 and the end of June 1931. When completed, it was valued at $200,000, which would be worth $2.7 million today, an impressive expenditure for the Depression.
He tirelessly shot 16-millimeter black-and-white film and documented every step in the construction of his house from excavating the foundation with shovels and pickaxes to planting shrubbery and furniture being carried in on moving day. He also shot film of his children, his dogs, snow blizzards, a whale spouting, the 1931 solar eclipse, and some of the Gloucester sights that drew so many artists: fiery sunsets, storm surges crashing waves on the rough granite coast, the tall-masted fishing fleet in Gloucester Harbor.
The furnishings betrayed no interest in the design fashions of the 1920s and 1930s, with a lot of wooden paneling and trim, mahogany and marble mantels, dark wood furniture with floral upholstery, and Oriental rugs. Birdseye imported delicate floral wallpaper from France for the dining room. There was a screened porch off the dining room, a pine-paneled study, a sunporch with a wall fountain. The five spacious bedrooms upstairs afforded stunning views of Gloucester Harbor and out to the open bay and the Atlantic. The artwork was of no real interest, which is striking because in Gloucester, even today, but especially in that period, many people collected the excellent locally produced art.
There was a shooting range in the basement, though the basement ended up being used more as a laboratory for Birdseye’s
experiments. The closest the house came to state of the art was, not surprisingly, the kitchen. Don Wonson, from an old Gloucester family who grew up next door to the Birdseyes, recalled the unusual kitchen:
The kitchen was all stainless steel. He was very meticulous about the kitchen, wiping it down with towels—stainless steel sinks, big refrigerators, big stainless steel with double doors. A big freezer in the kitchen. More refrigerators downstairs. Stainless steel counters, even the drain boards were stainless steel.
Birdseye handpicked every detail. In an age when there were no blacktop driveways, he put in an innovative tar-and-crushed-granite pavement. The garage, which housed their three cars, was so large that the top floor was a spacious apartment. The huge wooden doors to the garage resembled gates to a castle, with massive iron strap hinges.
For people known for their simplicity and straightforwardness, it was an imposing mansion on a hill. Four tall white pillars announced the front entrance. And of course he named the house Wyndiecote and finally had a home worthy of the name. Perhaps nothing better illustrated who Bob Birdseye was than the fact that the Packard he took so much pride in owning usually stayed in the garage. Bob was almost always seen in his little Ford.
One old friend from the neighborhood, Lila Monell’s sister Josephine, said, “They worked and lived under miserable conditions. All of a sudden, money at last. So let’s buy a house. They didn’t put on airs—except the house. But what do you do if you suddenly have a million dollars? Let’s build a house!”
In Eastern Point they had chosen an unusual setting. The narrow peninsula at the opening of Gloucester Harbor, with the harbor on one side and the rugged granite Atlantic coast on the other, offered stunning views. But it had never been fully developed. In Gloucester people with money had always preferred to live back from the fishy waterfront. Until 1889, when Gloucester was already almost three centuries old, Eastern Point was simply farmland. But that year a developer planned to cover it with houses, large, stately houses with spectacular ocean views. He built the first eleven houses but then went bankrupt trying to build Eastern Point’s first road. When the Birdseyes built their house, it was one of the first on Eastern Point to be fully weatherized for year-round occupancy.
Birdseye: The Adventures of a Curious Man Page 14
