In the most nontraditional departure of all, Gilman began to advertise massively. The company’s first known advertisement appeared on May 27, 1863, in The New York Herald, announcing, “The Great American Tea Company’s New Wholesale Tea House no 51 Vesey street, N.Y.” That initial foray into marketing promised that Great American would sell to wholesale customers at a profit of two cents per pound. Three days later, Gilman took out three separate advertisements in a single column of the Herald. “The organization of the Great American Tea Company of New York, created a new era in the history of retailing tea,” one proclaimed, as if Great American were a brand-new undertaking rather than an ongoing concern. The advertisements promised teas at “old prices, without the duty,” and repeated a phrase that was to become a staple of Great American’s advertising for years to come: “ALL TEAS sold at TWO CENTS PER POUND PROFIT.”18
Unbranded tea, sold loose by the pound as “black tea” or “imperial tea,” was one of the most profitable items sold by grocers all over the country. Gilman’s new strategy was to go directly after that market. By July 1863, Great American was advertising in newspapers outside New York, soliciting both wholesale and retail purchases and—in a frontal assault on the established distribution system—publishing the prices at which it would sell various grades of teas and coffees. The days when the sales representatives of New York merchants could hope to extract an extra cent or two per pound from customers ignorant of market conditions were numbered; Great American touted roasted coffee for thirty-five cents per pound and best-quality young hyson tea for a dollar. “The Company are determined to undersell the whole TEA trade,” one advertisement declared.19
* * *
George H. Hartford had the good fortune to have signed on with a man who possessed not only big ambitions and ample capital but also a remarkable flair for marketing. Gilman was a promoter in the mold of P. T. Barnum, the showman whose famed American Museum, located in lower Manhattan from 1841 to 1865, was a veritable laboratory for testing methods of persuading Americans to part with their money. Drinking tea and coffee was a long-established custom, but no one had ever promoted it quite as aggressively as Great American did. Teams of coal-black horses with white harnesses crisscrossed New York, pulling delivery wagons bearing the sign “An organization of capitalists for the distribution of teas and coffees at one small profit.” Even as the Civil War was at its height, Great American advertisements proclaimed, “SIGNS OF PEACE! THE WAR SOON WILL BE OVER!” and shamelessly thanked the police for maintaining order in the company’s crowded stores.20
Exaggeration was fundamental to Great American’s promotion from the beginning. A September 1863 advertisement casually ended with the line “Great American Tea Company, Importers and Jobbers,” as if the company were bringing its own teas directly from China; in reality, Great American almost certainly had no agents abroad and imported nothing. The company “will open a large assortment of Teas by the Benefactress (the latest arrival from China),” another 1863 advertisement stated, implying that Great American had access to unique products when in fact it was buying the same varieties and qualities of tea and coffee its competitors did. As George Gilman discerned, what distinguished one dealer from another was not the merchandise but the way in which its products were promoted and sold. In April 1864, Great American announced its relocation from 51 Vesey Street to the “larger and more commodious Marble Stores” at 35 and 37 Vesey Street, a move, it explained, that was necessary to handle its large trade.21
The marketing task was to persuade consumers in New York and around the country that this tiny tea company was “Great,” and Gilman never missed an opportunity to do so. On March 6, 1865, one month before Robert E. Lee surrendered at Appomattox, Gilman secured a prominent place in New York City’s Civil War victory parade. Tens of thousands marched down Broadway, past City Hall, then up the Bowery and Lexington Avenue to Thirty-fourth Street before circling back to Union Square. The business division included a float sponsored by the Great American Tea Company. Ten white horses pulled a wagon decorated with the symbols of the thirty-six states of the soon-to-be-restored union. From atop the float, thirty-six tea-store clerks waved to the crowd, while men on horseback rode back and forth alongside. Shortly thereafter, Gilman took retail showmanship to a new level by locating his coffee roaster at Broadway and Bleecker Street in a frenzied shopping and entertainment district. The cost of renting space at this prime location left others wondering about Gilman’s sanity. They need not have worried. As Abram Wakeman recalled, “Thousands of dollars could have been spent on advertising and would not have been nearly as productive as the aroma from the fresh roasted coffee at so prominent a locality.”22
Another stroke of marketing genius followed quickly: the buying club. Advertising heavily in religious weeklies such as The Methodist, farm journals like American Agriculturist, and professional publications such as New York Teacher, Great American urged readers to form “clubs” and submit bulk orders by mail. Prices were one-third cheaper than competitors offered, the ads promised, and the organizer of the order would receive a free gift of tea. Great American sent a club’s entire order in a single express shipment, so even after customers paid shipping costs, they could expect a fresher product at a lower cost than their local stores could offer. The ads even illustrated just how orders might be written out, easing timid consumers into the novel task of ordering their tea and coffee all the way from New York City. The company sometimes reproduced these club orders in its advertisements, both to serve as examples and to demonstrate the breadth of its customer base.23
George H. Hartford’s role in these unusual developments will never be known for certain. The version of history long promoted by his sons credited him as the marketing genius behind the Great American Tea Company’s early success, but this was likely not the case at all. Hartford described his profession successively as “clerk,” then “book-keeper,” then “cashier,” then “treasurer,” strongly suggesting that he focused on collecting money and paying bills, not on promotion. He was described later as “a quiet, dignified, gentleman, somewhat reserved in manner,” “progressive, but never aggressive,” “kindly, courteous, and affable”—in short, as a sober businessman, not as a close student of P. T. Barnum’s.24
The credit for turning an obscure tea dealership into a company people noticed thus rests solidly with the founder, George F. Gilman. Gilman’s drive, imagination, and flamboyance distinguished Great American from the dozens of other tea companies in New York. His unique approach to marketing made the company grow very fast. But as it expanded, with new locations, new products, and a growing volume of mail-order sales, Great American would soon outrun its founder’s abilities. George H. Hartford’s managerial and financial skills would become critical.
3
THE BIRTH OF THE GREAT A&P
By the end of the Civil War, the Great American Tea Company was flourishing. Sales and profit figures have not survived, but tax records show that George Gilman paid 1866 federal excise tax on an enterprise valued at more than $1 million—a considerable valuation for the time. Great American had five retail stores in New York in 1865 and had expanded to fill three buildings on Vesey Street with offices, shops, warehouses, and a plant for grinding coffee.1
The Vesey Street location indicates Gilman’s aspiration to market to the great, and rapidly growing, middle class. In this he followed his competitors. Rather than pursuing the carriage trade, which tended to concentrate in more fashionable precincts farther uptown, he was going after the largest, most sought-after market. “Vesey street is almost filled from end to end with tea, coffee and grocery houses,” the New York World told readers. “The competition is so brisk that some of the stores employ solicitors, who stand on the sidewalk and urge passers-by to step in and purchase, pretty much as the retail clothiers do in Chatham street. For the same reason, goods are generally sold cheaper in Vesey street than in other parts of the city.” The prices were good, but the deals of
ten were not: a professor hired by the newspaper found that Great American sold short weights of tea, adulterated its tea with willow leaves, and mixed chicory into its ground coffee—practices followed by most of the other merchants on the street as well.2
Gilman was a believer in what modern executives would call “image.” His ceaseless promotion aimed at portraying Great American as a substantial company worthy of the consumer’s trust. In April 1865, to celebrate the opening of its first shop in Brooklyn, Great American filled the entire front page of The Brooklyn Daily Eagle with advertisements, a practice unheard of at the time. In May 1867, the Shipping and Commercial List, the bible of New York importers, reported, “The recent large purchases of the GREAT AMERICAN TEA COMPANY have taken the trade by surprise.” According to the paper, Great American had, in a single week, purchased two cargoes of tea worth $1.5 million, which “indicates the extensive nature of the company’s business.” The article shows every sign of being a plant: the name Great American appeared in uppercase letters; the newspaper’s own reports showed no arriving tea cargoes corresponding to the ones Great American supposedly bought; and the purported value of the purchase was improbably large for a firm with only half a dozen stores. Those details were meant to persuade potential suppliers and customers that Great American had an “extensive” business. Gilman then reprinted the Shipping and Commercial List article in a fake newspaper, The Commercial Enterprise, which Great American handed out to customers. The front page of The Commercial Enterprise carried the prominent line “Entered according to an Act of Congress, in the year 1867,” crafted to make the publication seem as if it enjoyed government approval. The front-page article discussed Chinese matchmaking, but the remaining three pages were pure advertising, promising “Customers can save from 50¢ to $1 per pound by purchasing their Teas of THE GREAT AMERICAN TEA COMPANY.”3
George H. Hartford prospered along with the company. He married in July 1861, shortly after his arrival in New York. Hartford and his new wife, Josephine, moved to 52 Powers Street in Brooklyn, a short ferry commute from Manhattan. Their first daughter, Maria Josephine, called Minnie, was born a year later, their son George Ludlum in 1865. When he was called for military service in February 1865, the thirty-one-year-old Hartford, like almost all Union conscripts, avoided service by paying one of the many intermediaries that arranged substitutes; Peter Bruin, a Scottish-born merchant seaman with a “florid” complexion, joined the U.S. Navy in Hartford’s stead. Hartford stayed with Great American, winning a promotion from clerk to bookkeeper and then, in 1866, to cashier, a position of responsibility. His promotions brought pay raises. Hartford reported annual income of $688 in May 1864 and $800 one year later, wages well above what a simple clerk would make, but far short of a manager’s pay. In 1866, Hartford moved his family to Orange, New Jersey, nestled at the foot of the Orange Mountains eighteen miles due west of New York City.4
Orange was then a bustling and diverse suburb of Newark, New Jersey’s largest city. It suited Hartford because, riding the Morris & Essex Railroad to Hoboken and then catching a ferry across the Hudson River, he could reach his office on Vesey Street in under an hour. In addition to convenience, Orange had glamour and gentility. The women’s rights advocate Lucy Stone had made it famous in 1857 when she declined to pay her property tax bill because women had no representation in government; the tax collector promptly sold two of her chairs, four tables, one stand, and two pictures at a widely publicized auction. Orange’s leading citizen, Samuel Colgate, owner of the fast-growing New York soap and starch company started by his father, occupied a redbrick mansion called Seven Oaks on twenty-nine acres on the south side of town, and many other New York bankers and merchants called Orange home. In the summer, there was a modest resort business as families from the city came to enjoy the cool heights of nearby Eagle Rock. Yet Orange was not simply an elite suburb. It was becoming an important manufacturing town, its hat factories providing work for thousands of Irish and German immigrants. The town had a small African-American population as well. This ethnic mix would be the dominant factor in the town’s political life for decades to come.5
The Hartfords soon moved into a sprawling house with stained-glass windows on Ridge Street, directly across from the new St. John’s Roman Catholic Church. Ridge Street was on the unfashionable northwest side of town, in between the south-side estates occupied by local aristocrats like Colgate and the suburban villas going up in the carefully planned development of Llewellyn Park, a few blocks west. Shortly after moving there, George H. converted to Catholicism in the first baptism at St. John’s. The Hartfords were affluent enough to have an Irish-born live-in servant, Mary Hughes. An eighteen-year-old named Mary Ludlam—perhaps Josephine’s sister—also was living with the Hartfords at the time Edward, George and Josephine’s third child, was born in 1870.6
As the cashier of one of New York’s many tea companies, Hartford was not counted a particularly distinguished personage during his first decade in Orange. He does not seem to have been involved in any local civic organization. His time apparently was devoted almost entirely to the tea business, which was expanding by leaps and bounds. By the end of the 1860s, Great American had eleven shops in addition to its thriving mail-order operation. No photographs survive, but it may have been at this time that Gilman’s Barnumesque showmanship was introduced into the retail stores. The Brooklyn Daily Times, perhaps with financial inducement, described the store at 133 Grand Street in Brooklyn as “new and magnificent,” reporting that it “was literally run down with customers, and thronged until the hour of closing.” The company now had more than 175 employees, and George H. Hartford, one of the earliest employees, had taken on an important role in its management.7
* * *
On May 10, 1869, the ceremonial placement of a “golden spike” in Promontory, Utah, completed one of the most difficult engineering feats of the age, the transcontinental railroad. America went mad with enthusiasm. Previously, the trip from the East to California meant months of uncomfortable travel by wagon train from Missouri or by sea around the tip of South America. Now the journey took only a few days by rail. George Gilman, never one to miss a marketing opportunity, figured out how to profit from the nationwide celebration of the new link between the Atlantic and the Pacific. In 1869, he launched a new business, the Great Atlantic & Pacific Tea Company. It was destined to become the biggest retailer in the world.8
The Great Atlantic & Pacific Tea Company was a most unusual sort of venture. It presented itself in its first advertisements, in the autumn of 1869, as an entirely new business, “an organization of capitalists for the purpose of Importing Teas and distributing them to Merchants throughout the country at Importer’s prices.” Its connection to the Great American Tea Company was a closely guarded secret. Great American solicited mail orders at 31–33 Vesey Street, Great Atlantic & Pacific at 8 Church Street—and it took a bit of detective work for the historian Roy Bullock to ascertain that these were two different addresses for a single corner building. George H. Hartford maintained the charade for decades, contending that he became associated with the Great Atlantic & Pacific when it began in 1869, when in fact Great Atlantic & Pacific was simply a front for an enterprise with which he had worked much longer. Someone in Hartford’s household told a census taker in 1870 that he was “with Great American Tea Company,” one more indication that Great Atlantic & Pacific was not a distinct company. Nor is it true, as A&P later claimed, that the Great American Tea Company was renamed the Great Atlantic & Pacific Tea Company in 1869. Coffee and tea drinkers continued to order by mail from Great American until well into the twentieth century.9
The Great Atlantic & Pacific Tea Company was what was later called a “banner,” not a company. Gilman’s motivation for starting it is uncertain. One reason may have been to fend off imitators. The Great United States Tea Warehouse at 30 Vesey Street, directly across the street from Great American, initiated advertisements much like Great American’s, promising low pr
ices to customers who formed buying clubs and ordered by mail. Bertram, Bradford & Company at 26 Vesey Street advertised the fixed prices at which it would sell tea to small-town wholesalers, just as Great American did. Gilman’s marketing strategy, which had been distinctive in the early 1860s, was routine by the end of the decade, and he needed to find a way to stand out in a crowded marketplace. He also seems to have believed that his firm could generate more sales by appearing in various guises. Two further Gilman fronts, Consumers’ Importing Tea Company and Centennial Tea Company, were soon soliciting mail orders. None of the four Gilman tea dealerships ever disclosed its link with any of the others.10
The widely advertised creation of the Great Atlantic & Pacific Tea Company threatened established interests in the tea trade, and they reacted strongly. On September 15, 1869, within a few weeks of the new entity’s birth, one Professor John Darby launched American Grocer as a newspaper for the grocery business. Almost immediately, the publication went on the attack against George F. Gilman’s supposed dominance of the tea business. “One man in particular, with a dash of intellect, has broken through the conventionalisms of contracted ideas which fast bind others in the line, and has far outdistanced all competitors,” American Grocer wrote. This individual, who was not named by the newspaper but was almost certainly George Gilman, “has purchased in one morning no less than thirty-six thousand chests of tea for his parcel agencies and retail counter trade.” This claim is highly improbable, implying that Gilman acquired 9 percent of all U.S. tea imports for 1869 in a single day, but exaggeration served the purpose of raising alarm. The newspaper declared itself on the side of “the masses of the trade,” and promised to teach readers how to do a better job of selling tea so families will not “send to monster establishments in order to suit their requirements.”11
The Great A&P and the Struggle for Small Business in America Page 3
