Animation Art – The Intelligent Collector Magazine

Behind the Scenes of Opening Disneyland and the Discovery of Doritos

Disney Poster — “Enchanted Tiki Room” Disneyland Park Entrance Poster (Walt Disney, 1967). “At the Gateway to Adventureland”. This poster sold for $19,200 in a 2018 HA.com auction.

By Jim O’Neal

On Sunday, July 17, 1955 the first Disneyland opened in Anaheim, CA. The $17 million theme park fit nicely on 160 acres of orange groves, and the 13 attractions were designed with the whole family in mind. Opening day was intended for special guests and a crowd size of 15,000. However, the $1 admission tickets were heavily counterfeited and over 28,000 people overwhelmed the Park.

Ronald Reagan, Art Linkletter, and Bob Cummings co-hosted the ABC TV coverage of the event and 70 million people tuned in from home. It was an unusually hot day and Harbor Blvd. had a line of cars seven miles long, filled with parents and kids yelling the usual questions and in need of a rest stop. Later, the Park inevitably ran out of food and water (the plumbing wasn’t finished). Pepsi Cola was readily available, and the publicity was not good (some even implied it was a conspiracy). The day grew in notoriety and soon became known inside Disney as “Black Sunday”. But, within a matter of weeks all the start-up kinks were resolved, and it has been a crowd pleaser ever since.

Although the details are sketchy, 33 local companies (e.g. Carnation, Bank of America, Frito-Lay, etc.) were charter members which helped Disney with the financing and infrastructure involved. Eventually, this evolved into a “Club 33” which included access to an exclusive fine-dining restaurant that serves alcoholic beverages (the only place in the Park). Today there’s a 5-10 year waiting list for companies or individuals eager to pony up $25,000 to have the privilege of paying 6-figure annual dues. There are several versions of the origin of the Club 33 name. One is rather obvious and another involves the California Alcohol Beverage Control regulations that requires a real address in order to have alcohol delivered. Go figure!

Irrespective of the fuzzy facts, when I joined Frito-Lay in 1966, F-L operated Casa de Fritos, a delightful open-air Mexican food restaurant. Visitors could enjoy a family friendly sit-down lunch/dinner or get a Taco Cup to go. The Cup served as a one-handed snack and was easily portable while strolling around the park. Casa de Fritos was managed by a pleasant man named Joe Nugent, who had only one obvious weakness. Casa de Fritos was too profitable!

Let me briefly explain.

Once a year the Flying Circus from Dallas came out to the Western Zone to review our Profit Plan for the next year. President Harold Lilley – who was very direct with few words – would publicly berate poor Joe. ”Dammit, Joe, I told you we didn’t want to make any money at that Mexican joint. We want to promote Fritos corn chips so people will buy them at their local supermarket!”. When I asked Joe about it, he said he had tried increasing the portion sizes and also lowering the menu prices. But, whenever he did even more people would line up to get it. This man may have invented volume price leverage and never had a clue what he was doing!

Soon the VP/GM for SoCal – George Ghesquire – finally convinced the wise men in Dallas to let us test market restaurant style tortilla chips (RSTC). He had grown weary of seeing bags of Fritos over in the Mexican food section. It was proof that someone had initially purchased Fritos, then changed their mind and swapped it for a bag of restaurant style tortilla chips. Dallas had previously been concerned that RSTC would cannibalize sales of Fritos and they were absolutely right. However, the delicious irony was that it was being done by our direct competition!

So our version of RSTC was finally being authorized and would have a brand name of Doritos (you may have seen it). It was to be a 39 cent 6 oz. bag and everyone was eager to get started. To ensure a fast start we loaned some money to Alex Morales the owner of Alex Foods – the supplier of the Taco Cup – and a contract to co-pack. It started with one truckload a week, but they were soon running around the clock. The product was so popular in the West/Southwest that a line had to be added to a plant in Tulsa and the new plant in San Jose. The world of Frito-Lay would never be the same.

To compensate for the lack of salsa, we made a quick trip to a local Vons supermarket and bought some bags of Lawry’s taco seasoning (used in homes to season the meat while preparing homemade tacos for dinner)…voila Doritos Taco flavored chips. Roy Boyd “Mr. Fritos” from Dallas helped us equip Alex Foods with 2 cement mixers from Sears and a handheld oil sprayer to keep the taco powder adhering to the chips.

Now flash forward to 1973 and I was entering my office on the 4th floor of the Frito-Lay Tower near Love Field in Dallas. I noticed a large plastic bag filled with tortilla chips. When I asked Roy, he explained it was a new flavor being evaluated for test market. After tasting 2-3 chips I remember saying “Naw…too dry”. Soon it would become Doritos Nacho flavored tortilla chips, one of the most successful new food products in the later quarter of the 20th century!

Looking back, I now realize that’s probably when I became one of the wise men in Dallas.

The next year (1974) Harry Chapin would sing about the “Cat’s in the cradle” which would earn him a Grammy nomination and eventually a place in the Hall of Fame (2011). I’d nominate the obscure, long forgotten, George Ghesquire for the Frito-Lay Hall of Fame, but I don’t think we have one. So until we do, maybe just “Father of Doritos “. The Crown that now rests with Arch West who absconded with it when he left the Company in 1968.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

‘Sesame Street’ inspired by the simple idea of making the world a better place

The original illustration for the July/August 1980 cover of *Sesame Street Magazine*, by Rick Brown, sold for $2,390 at a December 2017 Heritage auction.

By Jim O’Neal

Can you tell me how to get to Sesame Street?

It’s a question millions of children have been asking every day for the past 50 years. In a single television season, 1969, Sesame Street became the most famous street in America, eclipsing Wall Street, Madison Avenue and even (every town has one) Main Street. So how did we get here in the first place?

Television producer Joan Ganz Cooney recalls a “little dinner party” in 1966 with her husband, Tim Cooney, and Lloyd Morrisett – an executive as the Carnegie Corporation – who asked an innocent but sincere question: “Do you think television can be used to teach young children?” In his book Street Gang: The Complete History of Sesame Street, author Michael Davis writes about Morrisett watching his young daughter sitting in front of their TV watching a test pattern, but who also knew popular TV ad jingles from memory. That sparked a lightbulb question: “What else could she learn and remember?”

Joan Ganz Cooney (b.1929) had already become interested in working for educational television through her work as a documentary producer for WNET, New York’s first educational TV station. She thought about Morrisett’s dinner-party question and answered, “I don’t know, but I’d like to talk about it.” As it turned out, they did a lot more than simply talk.

She claims none of them had any idea when they started that Sesame Street and the Children’s Television Workshop (CTW) would grow into the international institutions they are today. Or that Sesame Street, winner of more Emmys than any other show (167 Emmys and eight Grammys), would also become the longest street in the world, benefiting more children in more countries than any program in history. None of them had any idea that the characters – wonderful, zany and vulnerable Muppets that taught children about letters, numbers and getting along – would become an integral part of American culture, or that they were creating a family that every child watching would feel a part of.

They only knew for sure that they wanted to make a difference in the lives of children and families, particularly low-income children. When they began their work in the late 1960s, this seemed imminently possible. It was a time when many believed they had the responsibility and power to make the world a better place, even if only just a little better. Note: Some of us are still absolutely certain this will happen. For any doubters, just be aware that for the first time in recorded history, more than 50 percent of the world’s population is now living above the poverty line!

Sesame Street’s goal was more modest (and only in retrospect, revolutionary): to use television to help children learn (full stop)!

They knew children watched a great deal of television in the years before pre-school. They were well aware that they loved cartoons, game shows and situation comedies; that they responded to slapstick humor, music with a beat and, above all (sadly), fast-paced, oft-repeated commercials. If they could create an educational show that capitalized on some of commercial television’s most engaging traits – high production values, sophisticated writing – they could attract a sizeable audience that included, most importantly, low-income children.

There was a lot of betting against them because of the number of UHF stations in the public television system, especially in pre-cable days. But their basic instincts were almost impeccable. The wasteland was too vast and the yearning for something better too great. Sesame Street was an instant hit and remains so yet today.

On a personal note, I don’t recall ever watching it (I was 32 when it debuted), but I recall that Big Bird is 8-foot-2 and I knew Joan Ganz’s second husband, Peter G. Peterson, who she married in 1980. He was an absolutely remarkable man who was CEO of Bell & Howell and co-founder of the Blackstone Group with Stephen Schwarzman in 1985 when I was heavily involved in minority business development for Frito-Lay. He was the one who first made me aware of the implications of the national debt and the cruel burden we are passing to the next generation. Peterson’s book, Running on Empty, is still a classic, even as the situation has only gotten worse. The only one who doesn’t seem to get it is New York Times columnist and Noble Prize-winner Paul Krugman, who could easily be a character on Sesame Street if he ever learns his multiplication tables.

JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

Withholding Created 75 Years Ago – Giving Us a ‘Charge It’ Government

A preliminary sketch Norman Rockwell did for a 1945 *Saturday Evening Post* cover, titled *Income Taxes (Beating the Deadline)*, sold for $59,375 at a November 2014 Heritage auction.

“Our new Constitution is now established, and has an appearance of permanency, but in this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin, 1789

By Jim O’Neal

I suspect Benjamin Franklin would be pleased that our Constitution has become the most revered document of our United States, but mildly surprised that the U.S. Internal Revenue Code – while undoubtedly much more prosaic – now symbolizes the highly intimate relationship between the people and their federal government. Detailed IRS regulations guide the filing of federal tax returns, an activity that is the most universal civic act in our history. Its 14,000 pages and 4 million words represent a remarkable achievement unparalleled by any government on earth.

As the size and cost of government have grown, so has the size and difficulty of the tax return itself. In 1913, the first year the modern income tax was levied (an emergency income tax levied during the Civil War was allowed to expire in 1872), the top rate was 7 percent and then only for incomes over $500,000. The rate for people between $3,000 and $20,000 was just 1 percent, and below that zero. All but 1 percent of Americans were exempt from taxes. This was by design since advocates wanted a tax directed only at excess corporate and personal profits, not the wages of ordinary people. It was a way of reasserting the values of the early republic – now focused principally on equality – in reaction to gross inequities brought on by industrialization, and a way to force millionaire industrialists to share their wealth with society.

But WWI and the Great Depression increased the responsibilities of the federal government and rates took a quantum leap with the demands of WWII as the government took advantage of American patriotism. The number of tax filers rose to a point that what had been a “class tax” became a “mass tax.” The April 15 deadline is now a national rite, dreaded as much as it is observed. The complexity has become so pervasive that most filers require the aid of professional tax preparers. Looking back, it still seems remarkable that the income tax could have been extended to include so many people without creating a backlash. The wars helped, as did the success of government in defeating our enemies and the post-war economic growth. But the primary reason was that a new way had been devised to collect it.

For that, the IRS can thank Beardsley Ruml, a mid-century Macy’s executive who came up with a plan to institute what is politely called “withholding.” Until 1943, income tax was paid each year in a lump sum and filers were expected to put aside the money to make the payment. Yet that year, when the number of wage earners included under the tax grew by nearly 35 million and the Treasury Department became nervous about how many were actually prepared to pay, Ruml offered an idea. Aware that customers in his store were comfortable buying big-ticket items when they could pay in installments, he suggested the government get businesses to collect the tax in small increments and report that amount to the employees and IRS each year for future reconciliation.

To get the public’s endorsement, he also suggested a tax amnesty for the previous year. Congress did just that by forgiving 75 percent of the previous year’s tax liability while they installed the machinery for the withholding that has operated ever since. To appreciate the profound shift that a broad-based income tax brought to the Treasury, just consider that in 1910, tariffs and excise taxes brought in more than 90 percent of federal monies; by the end of the century, income tax had replaced tariffs, providing 90 percent of the nation’s revenue, or $2 trillion! More importantly, it changed the debates – from regional tariffs or whiskey producers versus cattle growers, to which income levels should be taxed more. Class versus class and a “soak the rich” is always the first reaction to feed the insatiable appetite at every level of government.

As an elastic source of revenue, the income tax became a fundamental part of statism, a tool to be used in the interest of creating a more democratic social order. Look to Washington, D.C., today to see what this has wrought: a city bursting at the seams with lobbyists, industry organizations, tax lawyers and political advocacy groups. Any tall building will have a group with the word “tax” in its title, all working to shape policy and regulations. Yet despite our best efforts, we have become addicted to spending more than our revenue and simply saying “charge it.”

I suspect even Mr. Ruml would be surprised about the success of our “buy-now-pay-later” system that so closely resembles his Macy’s secret sauce.

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is president and CEO of Frito-Lay International [retired] and earlier served as chair and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].

After 400 Years, Trade Issues Still at Center of American Politics

this-is-america-charlie-brown-mayflower-voyagers-production-cel-setup — Mayflower voyagers head to the New World in this production cel from 1988’s *This is America, Charlie Brown*. This lot went to auction in July 2014.

By Jim O’Neal

In the early 17th century, people in England were legally required to worship as prescribed by the Church of England. However, although the church had broken from the Catholic Church, many people felt the rituals and prayers were Catholic features that should be dropped.

Puritans, so-called because of their religious purity, wanted to make these reforms from within the church. Other groups called “Separatists” set up their own congregations, but their leaders were imprisoned so they moved to the Netherlands, which was more tolerant.

In 1620, the Puritans set sail across the Atlantic to begin a new life in America. They started in two ships, but one was not seaworthy so they had to continue in just one, the Mayflower. Winter storms ravaged them during the 66-day voyage, but they managed to craft the Mayflower Compact, a document which pledged their loyalty to the Crown while asserting their right to make their own laws.

As the French, Dutch and Swedish arrived in North America, Britain decided to restrict their colonies by enacting the Navigation Acts, which required that all commodity trade take place in British ships crewed by British sailors.

Naturally, the colonists came to see these measures as willful suppression of their trade and manufacturing. Tensions rose on both sides of the Atlantic that would lead inexorably to the American War of Independence that we are so familiar with.

Free trade is still being debated yet today – almost 400 years later – as we see both major political parties arguing over new trade agreements with Asia. President Obama’s Trans-Pacific Partnership (TPP) involves the Pacific Ocean this time. Some things never seem to change (much).

Intelligent Collector blogger JIM O’NEAL is an avid collector and history buff. He is President and CEO of Frito-Lay International [retired] and earlier served as Chairman and CEO of PepsiCo Restaurants International [KFC Pizza Hut and Taco Bell].