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].

Social upheaval isn’t new … just look at the bumpy year of 1968

Walt Kelly’s Pogo comic strip often addressed political issues. This original 1968 Sunday strip realized $4,63 at a November 2016 Heritage auction.

By Jim O’Neal

In 1964, Martin Luther King Jr. was awarded the Nobel Peace Prize. He was on a mission that would include a march over a bridge in Selma, Ala., and he led a high-profile protest over voter-registration rules. Congress finally passed the Voting Rights Act, but it would turn out to be too late. King’s ideas about non-violence were poised for a rapid decline. The long-overdue legislation simply provoked an expression of rage, repression and frustration. Soon, riots broke out in Watts, followed by San Diego, Chicago, Philadelphia and Springfield.

The message seemed clear. This violence was not targeted against unfair laws, long-denied rights or even a new brand of segregation. It was against class distinctions and the invisible racism that deprives people of good jobs and better housing. The struggle to eat at the same lunch counters, and use the same restrooms, hotels or drinking fountains was over. This was about economic inequalities and disparities in everyday life. The voices that were speaking louder than MLK reflected the speeches of Malcolm X … belief in the purity and pride of the black race and separation from whites to obtain true freedom and self-respect.

The fever fueled urban rioting like a contagion, even after Malcolm was killed by a rival black Muslim in 1965. Eight thousand deaths or injuries occurred in 100 U.S. cities from 1965 to 1968. Malcolm’s provocative separatist ideology morphed into the hands of Stokely Carmichael and the Student Nonviolent Coordinating Committee, along with the Black Power sloganeering of Bobby Seale and the Black Panthers. Despite the efforts of broad swathes of committed people, there was a pervasive, ominous fear of a racial clash that was lurking in the shadows, ready to pounce.

In America, most years are routine… 365 days filled with weeks and months and only occasionally an event that might change the arc of history. Rarely do we experience shocks to the system that put us in a new orbit. Ironically, we’re in a classic worldwide disruption now and the path back to normalcy is filled with uncertainty. Even more critical is the simple fact that virtually everyone on this tiny speck has to join in or we all might perish. The pandemic is just one of the dangers. Climate change is a global concern and we’re also drifting back toward another Cold War with obvious parallels to the past. Nobody expected the events in 1914 to expand into a world war, yet almost everyone could see how WW2 was bound to occur.

And thus it was in 1968 when we endured a very bumpy ride.

Perhaps it began on Jan. 30 of that year when North Vietnam launched the Tet Offensive and caught everyone on our side flat-footed. A surprise attack on 100 cities was just implausible, but it did happen. Eventually, the military regained control, but in the process surrendered an enormous strategic PR advantage to the enemy. The American government had been promising that “Victory is in sight,” but was forced to retract the assertion. Walter Cronkite – the most trusted man in America – declared, “The Vietnam War is mired in a stalemate.” President Johnson took it one step further: “If I’ve lost Cronkite, I’ve lost the American people.”

This public embarrassment was followed by the astonishing Kerner Commission report in February. Established by the president, the blue-ribbon group was charged with investigating the causes of the rash of riots sweeping American cities. In a stinging rebuke, it blamed the riots on police brutality, racism and lack of economic opportunities. In siding with the rioters, the 468-page bestseller concluded with a bombshell: “Our nation is moving toward two societies, one white – separate and unequal.” It charged that white society is clearly implicated in the ghetto – “White institutions created it, white institutions maintain it and white society condones it.”

President Johnson promptly ignored it.

As the 1968 presidential primary season rolled around, Tet gave a boost to long-shot Eugene McCarthy. Running as a one-issue candidate (the war), he snagged a surprising 42% of the New Hampshire primary. Enter Bobby Kennedy, who, like most of America, was undergoing a transformation over Vietnam, civil rights and the charge America was not a moral country. However, he clung to the belief that not having a Kennedy in the White House was the missing elixir. He announced his candidacy on March 16.

Two weeks later (March 31), President Johnson made a prime-time speech to the American people. After listing the many positive things that had been accomplished, he started talking about a growing division in America and asked everyone to guard against divisiveness and its ugly consequences. He closed by saying he couldn’t afford to waste any of his precious time on partisan politics and … “I shall not seek and I will not accept, the nomination of my party for another term as your president.”

It had a somber, even sad tonality that when read today doesn’t seem to fit together.

Four days later, Martin Luther King Jr. was assassinated in Memphis and the now-familiar bright orange flames flared over Harlem, Chicago, Detroit and Kansas City. People were losing faith in our institutions and wondering who to blame.

Walt Kelly (1913-1973) seemed to be the only one with a plausible answer. Kelly was an American cartoonist and animator. He worked for Walt Disney studios until 1941, when he moved over to Dell Comics. There, he created a new lineup of animal cartoon characters, including Pogo Possum, Albert Alligator and Churchill LaFemme. The strip was layered with clever political satire. On Earth Day 1971, his son was complaining about sore feet from having to walk on all the tin cans, glass and junk that had accumulated in the swamp. This was when Pogo uttered his most famous observation … “Yep, son, we have met the enemy and he is us.”

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].

The New Yorker is perhaps the best magazine America has ever produced

Charles Samuel Addams’ original cartoon art for Sad Movie, which appeared in The New Yorker in 1946, sold for $40,625 at a March 2012 Heritage auction.

By Jim O’Neal

Conventional wisdom suggests that greatness did not come easily or immediately to the venerable New Yorker magazine. Founded in February 1925, its primary strengths were zeal and enthusiasm, derived primarily from editor Harold Ross. He had journalism in his blood and would be editor for every copy (1,339 issues) until his death in 1951.

Then there was the critical financial indulgence of principal backer Raoul H. Fleischmann, who founded the General Baking Company. Ross and Fleischmann formed F-R Publishing Company to publish the new magazine. Fleischmann was widely quoted as saying, “The very best thing about the first issue was the cover” – a Knickerbocker dandy (by Rea Irvin) peering through a monocle at a butterfly. Later named Eustace Tilley, the New Yorker dandy became a well-known icon.

The magazine “stank,” Fleischmann pronounced. That first year was dangerously precarious. By the fourth month of publication, circulation had plummeted from a robust 15,000 to a mere 4,000 … with a measly three to four pages of ads. Fleischmann reluctantly agreed to prop it up financially through the summer, and by the fall, it had stabilized … barely.

The 1925 cover of The New Yorker’s first issue, created by Rea Irvin.

But timing was favorable since New York – at least during Prohibition years – was at the peak of its gaudiest best. American writing, graphic art and musical comedy were especially lively. Soon, a host of bright, talented writers were attracted to this unconventional weekly publication. Some were already established names, like Robert Benchley and Ralph Barton, while others made the risky leap from ad agencies in the hope it was something more exciting than writing ad copy.

Gradually, the magazine morphed into a curious, almost schizophrenic publication, with parts of The New Yorker getting lighter and funnier, while its fiction, reporting and poetry got more serious. Ross banished sex in any form and scrutinized every sentence for off-color jokes and double entendres. He scrubbed the advertising to ensure it was suitable and disliked fatalistic or socially conscious pieces since they were inevitably too grim.

He was the quintessential editor who kept the copy clear and concise. In his opinion, Harry Houdini and Sherlock Holmes were the only two people in the English-speaking world everyone knew. Any lesser-known, marginal characters were quickly dispatched with a red line. Come back when they’re famous!

Well known for his extreme use of commas, one saving grace was that Ross was a true original member of the Algonquin Round Table, a group of writers, critics and actors who gathered daily for lunch to amuse each other with razor-sharp wisecracks and witticisms. Ross used his contacts with this group to help leverage the magazine since many had national newspaper columns. Also known as “The Vicious Circle,” especially after a few rounds of martinis, they delighted in sharpening their tongues. For example, someone would say “Calvin Coolidge died” and poet/satirist Dorothy Parker would respond, “How could they tell?” Or the comment about a famous actress’ theatrical performance: “Her emotions ran the full gamut from A to B.”

The group was a perfect complement to the magazine and New York’s classic elitism and charming sarcasm. In fact, a prospectus brochure announced (proudly) that it was not edited for old ladies in Dubuque. It was New York snobbery at its best (worst?).

Cartoonists Peter Arno and Helen Hokinson became regulars that first season and added to its reputation of “cosmopolitan sophistication.” One 1928 cartoon shows a mother telling her daughter, “It’s broccoli, dear” and the daughter responds, “I say it’s spinach and I say the hell with it!” (“I say the hell with it” became a common catchphrase and inspired a Broadway song by Irving Berlin). But perhaps the most reprinted cartoon in history is Peter Steiner’s 1993 gag: a drawing of two dogs at a computer with one saying, “On the Internet, nobody knows you’re a dog.”

On the serious side, after WWII, John Hershey penned a 31,000-word article in 1946 titled “Hiroshima.” It deftly conveyed the cataclysmic narrative of the 130,000 people killed through the stories of six survivors coping with the bomb’s aftermath. It was a publishing sensation and the questions it raised about humanity languish yet today. It has been called the most celebrated piece of journalism to come out of the war. This is exactly what Ross wanted. He dedicated nearly the entire issue to the article – a first for the magazine.

Another highly controversial coup was “The Lottery” by Shirley Jackson on June 6, 1948, which told a morbid, dark tale of a small town that conducts a bizarre ritual each year. It is often ranked as the most famous short story in the history of American literature (you’ll have to Google it).

Now, David Remnick, the fifth editor (starting in 1998), calmly leads the magazine to an uncertain future. The New Yorker has become the nation’s most honored magazine, with numerous National Magazine Awards and Pulitzer Prizes. Remnick’s personal awards are impressive and he has authored six important books. The New Yorker is not only the best general magazine, but perhaps the best magazine America has ever produced. At age 94, some say without it, everyone’s sights would be lower.

You decide.

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].

Department stores once played a vital role in American life

Wanamaker’s Toy World Funnies was produced in 1933 as a promotional item for the department store’s New York location. This sample went to auction in May 2016.

By Jim O’Neal

In the complicated hierarchy of Greek mythology, the Titans were the first 12 children of Gaia (Mother Earth) and Uranus (Father Sky). They ruled during the mythical period of the Golden Age of Greek deities. In astronomy, Titan is the largest moon of Saturn, the second-largest natural satellite in our solar system.

In modern times, the adjective “titanic” derives from Titan. The famous ship Titanic was one of three RMS Olympic-class ocean liners built in the early 20th century. The other two were christened Olympic and Britannic. The Titanic sank in 1912 after hitting an iceberg on its maiden voyage. Britannic went down to a watery grave in 1916 after hitting a mine laid by a German U-boat during World War I.

Titanic was on its way from Southampton (UK) to NYC after calls in Cherbourg in France and Cobh, Ireland. On board were an estimated 2,224 passengers and crew. It is believed that about 1,500 people perished. Writer/director James Cameron’s 1997 award-winning film of the same name was a blockbuster at the box office. It received 14 Oscar nominations, snagging 11. It is in second place in box-office revenues, right behind Cameron’s other big hit, Avatar.

Titanic was the largest ship in the world and built at a cost of $7.5 million. It was also equipped with the latest in wireless technology. The crew immediately sent out a distress signal that was received in Newfoundland and retransmitted to all ships in the area. Full speed ahead! Unfortunately, none was near enough to reach Titanic before it sank.

Meanwhile, in New York City, the venerable Philadelphia Wanamaker’s Department Store had set up a unique floor exhibit (with wireless) to simply attract shoppers in the highly competitive New York market. A young employee of inventor/electrical engineer Guglielmo Marconi in NYC was routinely responsible for relaying wireless messages in Morse code to anyone in Philadelphia. His name was David Sarnoff and he would become well known for becoming the head of Radio Corporation of America (RCA) and starting the National Broadcast Company (NBC).

John Wanamaker

By chance, Sarnoff had taken a position at Wanamaker’s running the wireless communication operations, which included messages, ordering material and whatever else came along. What came along was the distress message from the Titanic that the ship was sinking and then that it had actually sank! All the newspapers had quit for the night, just after the first distress message came through. Starting early the next morning, Sarnoff was receiving names of both passengers who were rescued and those confirmed dead. The fact that Wanamaker’s was receiving real-time updates from the middle of the Atlantic was a big story by itself.

Eager crowds, not wanting to wait for newspapers with old stories, rushed to Wanamaker’s. Others went to Times Square, where a flashing billboard displayed the latest news. Names kept trickling in for three days and even set off a mini-financial panic involving the insurer Lloyd’s of London and other insurance companies. This obvious coup for Wanamaker’s was not just a lucky accident

John Wanamaker had started a small men’s clothing store in 1861 and was probably the most innovative marketing genius for the next 50-plus years. As the current crop of retail gurus bemoan the decline of retail due to e-commerce and pundits predict the slow death of shopping malls, they would be better served by studying Wanamaker the Retailer and Wanamaker the Employer.

On the retail side, consider that he opened the first retail store in Philadelphia … adjacent to George Washington’s President’s House (location, location, location). He played fine background music in the stores. He introduced orchestral concerts and circular rows of counters that guided shoppers through new merchandise. Even today, the 12-story granite-walled structure known as the Wanamaker Building houses the world’s largest Grand Court Organ with six keyboards and 28,000 pipes that transformed the shopping experience. At a cost of $105,000, it required 13 freight trains to convey it for installation.

Less grandiose was the customary practice to go into a shop and haggle until you got a good price (good luck with that today). John Wanamaker started the custom of putting price tags on every single item in the store … and then boldly advertising with big signs: ONE PRICE AND GOODS RETURNABLE.

For employees, he provided everyone with free medical care, recreational facilities, profit sharing and real pension plans … benefits that simply didn’t exist anywhere! I would love to see John Wanamaker and Jeff Bezos trading philosophies on growing a successful business. It would fascinating, despite the passage of two centuries.

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].

Prohibition one of the most improbable political achievements in U.S. history

Dell in 1961 was publishing a comic-book based on The Untouchables television show.

By Jim O’Neal

In 1959, Desilu Productions aired the first episode of The Untouchables, a TV series starring Robert Stack. The storyline was from a book of the same title that recounted the exploits of an elite group of Prohibition agents working for the Treasury Department. They were battling the mafia in Chicago during Prohibition (1920-1933). “Untouchables” was a nickname for a small group of lawmen who refused to take bribes from bootleggers.

There was a real-life Eliot Ness (1903-1957), who had a career battling booze and bootleggers, but the 119 episodes on TV were generally fictional accounts. The show had a decent run over four years (1959-63) and the format used famous newspaper/radio commentator Walter Winchell as a narrator to make it seem more realistic. Winchell (who was paid $25,000 per program) and Robert Stack were the only two actors to appear in all 119 shows.

In 1987, there was a movie version starring Kevin Costner as Ness and Robert De Niro as a fictionalized Al Capone. Sean Connery played a regular street policeman, and won an Oscar for Best Actor in a supporting role.

Prohibition was one of the most improbable political achievements in American history. The idea that a democratic nation with millions of voting-age drinkers, more than 300,000 taverns and saloons (all eager to slake their thirst), and the fifth-largest industry were unable to prevent this legislation was unthinkable. However, the battle had been raging for as far back as Colonial times. A temperance movement had been fighting alcohol consumption on the basis that it would destroy the moral fiber of the nation. The effort was joined by political forces with booming voices (e.g. William Jennings Bryan) who were convincingly vociferous about the evils of John Barleycornwith only limited success.

Pragmatic business leaders discouraged the use of alcohol, pointing out the negative effects on worker reliability, job-related injuries and, importantly, productivity and quality. But the problem was gradually becoming worse as the nation’s workforce refused to heed the warnings. Perhaps the loudest and most passionate opponents of alcohol were the wives and mothers left to contend with the impact on their families if the primary breadwinner was a drunk. Gradually, it seemed that the only people who were against prohibiting alcohol were the drinkers and all the people making money providing it.

Even the government seemed supportive of alcohol since one-third of federal revenues was derived from the tax on sales. However, in 1913, the 16th Amendment replaced alcohol taxes with a federal income tax, which generated significantly higher revenues. In the 1916 presidential election, neither President Woodrow Wilson nor his opponent Charles Evans Hughes even mentioned the issue. Both parties were leery of discussing it for fear of alienating either the “drys” or the “wets” in such a close race.

But the ratification of the 18th Amendment on Jan. 29, 1919, banned the manufacture, transportation and sale of liquor – introducing a period in America’s history we still call simply Prohibition. Of course, wealthy men and institutions stocked up before the legislation went into effect. Curiously, the Act did not prohibit consumption. President Wilson moved his extensive inventory into the White House as did his successor, Warren Harding. The Yale Club in New York procured a supply that would last 14 years! Cynics were quick to point out that the president could have his martini each evening, but the working man could no longer get a beer and free sandwich at his favorite saloon.

For the less affluent, 15,000 doctors and 57,000 pharmacies got a license to supply medicinal alcohol. Drugstores were discrete sources as evidenced by Walgreens, which grew from 22 stores to over 500 in short order. Another loophole was the exemption that allowed homemade “fruit juices” for consumption exclusively in the home. Wineries in California were supplanted by millions at home. If left untended, the alcohol content in grape juice could soar to 12 percent. Grape juice production exploded.

However, a more insidious source of the banned alcohol developed. As the suburban population migrated to big cities, nightlife became synonymous with “speakeasies.” All one had to do was “speak easy,” act discreet and there was a convenient door where even women were now welcomed. The battle over alcohol shifted to the supply and distribution and there was a massive increase in organized crime as they fought over territories. Law enforcement was badly outgunned or was paid to look the other way.

Welcome to the Roaring Twenties!

As the Great Depression deepened, President Franklin Roosevelt signed legislation on March 21, 1933, that legalized the consumption of 3.2 percent beer, saying, “I think this would be a good time for a beer.”

Amen.

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].

Richard Henry Dana Jr. turned measles into an adventure of a lifetime

A Classic Comics adaptation of Richard Henry Dana Jr.’s Two Years Before the Mast (Gilberton, 1945) sold for $1,314.50 at an August 2014 Heritage auction.

By Jim O’Neal

People of my generation are well aware that measles is a highly communicable disease, with many people usually infected in grade school. In a typical year, up to 4 million became infected, resulting in up to 500 deaths. In 1963, an effective vaccine was developed and infections plummeted as vaccination rates soared. By 2000, measles was officially declared eliminated in the United States.

So it was a surprise on July 3, 2015, when USA Today reported the death of a woman in Washington. There was another rash of infections several years ago in Southern California and there is currently an active outbreak in the Pacific Northwest. Apparently, a bogus report in the U.K. linked autism with the MMR (mumps, measles and rubella) vaccine and although thoroughly discredited, some people are cutting back on childhood vaccinations. I imagine they’re depending on other people getting vaccinated rather than taking a personal risk themselves. This has been characterized as “the most damaging medical hoax of the last 100 years.”

Richard Henry Dana Jr.

One man who didn’t have a choice was Harvard College student Richard Henry Dana Jr. (1815-1882). In 1831, he contracted measles and developed ophthalmia, an inflammation of the eye that’s considered a side effect. To improve his vision problems, he became a seaman in 1834 in the hope the exposure to ocean breezes would be helpful. It’s not clear if the sea air helped, but he spent two years sailing from Boston to South America and around Cape Horn to California.

The primary purpose of these voyages was to trade goods between the United States and the Spanish Colonial missions in the ports of San Diego, Santa Barbara, Monterey and San Francisco. California’s Spanish missions were a series of 21 religious outposts founded by Catholic priests to convert American Indians.

In the early 19th century, cattle ranching was the primary industry in California. The few hundred head introduced by Spanish friars 50 years earlier had flourished and grown into seemingly endless herds that roamed California’s lush grasslands. Vaqueros on horseback slaughtered the animals, skinned them and stripped off the best meat and tallow. The remains were left for coyotes and other scavengers.

The dried hides and tallow were then traded to the various ships that traveled the Pacific Coast in exchange for a wide range of goods manufactured on the East Coast of the United States. The cowhides were inevitably known as “California Banknotes” as they were the primary medium of exchange in the lucrative hide and tallow trade.

The San Diego port became a big market since it had an excellent harbor, a climate that was ideal for drying the hides and proximity to the entire coastline. The hides were destined to become shoes and boots while the tallow was used to make candles in lieu of the whale oil lamps in the East. It seemed like an ideal situation for all (except perhaps the cattle) until Dana pointed out that Californians were trading for shoes made from their own cowhides, produced far away in New England factories. Thus the leather had traveled around Cape Horn twice before Californians got to wear it – and all the profits remained in the East.

After returning home to New England, Dana wrote the memoir Two Years Before the Mast, which chronicled his sea travels, under the heavy foot of the captain, and observed that Californians were “an idle, shiftless people and can make nothing for themselves.” West Coast ranchers shipped out well over 1.2 million hides by 1845 that decimated the herds of cattle much as the buffalo would suffer in the Midwest. As Dana would observe, “In the hands of enterprising people, what a country this California could be.”

He was obviously unaware of their propensity to build a vast network of crowded freeways where cars can zip along at 5 mph or their obsession with high-speed rail between low-density, obscure locations. However, Dana’s book became a bestseller when gold was discovered and people flocked to California from all over the world. His book was one of the few travel guides available and it was highly sought after by the Forty-Niners. It was also made into a movie, released in 1946 and starring Alan Ladd and directed by John Farrow, who married Maureen O’Sullivan and had seven children (including Mia). The film was one of the most popular films released that year.

In 1869, Dana published an update of his famous book, Twenty-Four Years After, in which he was still arguing for improved conditions for seagoing men.

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].

It’s that time of year again … thinking about taxes

An editorial cartoon by Winsor McCay, circa 1925, protesting Congress “milking” income taxes while ignoring business taxes, sold for $10,800 at a November 2018 Heritage auction.

By Jim O’Neal

U.S. Rep. Schuyler Colfax of Indiana described the issue this way: “The most odious tax we can levy is going to be a tax on land. I cannot go home and tell my constituents that I voted for a bill that would allow a man, a millionaire, who has put his entire property into stock, to be exempt from taxation, while a farmer who lives by his side must pay a tax!” Colfax (1823-1885), who would later become one of only two men (with John Nance Garner) to be both speaker of the house and vice president, had a different proposal: Put a tax on stocks, bonds, mortgages and interest. A de facto income tax.

There was ample precedent for an income tax. England imposed one in 1799 and various states – which relied primarily on estate taxes – had begun taxing income in the 1840s. By 1850, some states had income taxes with high exemptions and low rates that graduated based on the wealth of the taxpayer. They didn’t raise much revenue, but were viewed as a way of taxing any wealth that escaped common real estate taxes. Colfax prevailed and the Ways and Means Committee dropped the property tax and replaced it with “direct taxation upon personal income or wealth.”

The only issues remaining were the constitutional restrictions on direct taxes, except in proportion to population (i.e. different tax rates for different states). The solution was simple. Call the new taxes something other than a direct tax and “impose the burden on the people equally in proportion to their ability to pay.” An amendment was adopted to impose a 3 percent tax on income over $600 a year and a luxury tax on alcohol and luxury goods.

The Senate went one step further with a 5 percent tax on income over $1,000. Eventually, they compromised on 3 percent for income over $800. At last, said The New York Herald, millionaires would contribute a fair proportion of their wealth to the support of the national government. Inequality would soon be a relic of the past and every man would pay according to his ability!

The time was early 1862 and Secretary of the Treasury Salmon Portland Chase realized he had grossly underestimated the cost of the Civil War. After the embarrassment at Bull Run and a reassessment of Gen. George McClellan’s preference to train his troops rather than engage the South in battle, a new estimate of the first year’s cost was a staggering $530 million. Chase doubted that merely labeling the new income tax an “indirect tax” was constitutional. More importantly, Congress had neglected to establish any means for collecting or enforcement of the new tax. The decision was made to view the tax legislation as simply a recommendation and everyone conveniently ignored it.

However, this left the Treasury with an urgent need to start borrowing money to fund the war effort and the challenge was growing more daunting each day. Treasury funds were facing a virtual depletion in a matter of weeks and American banks were adamant that the Union raise taxes rather than expect more loans. Without new revenues, the Union was in peril and the urgency was significant. President Lincoln found it convenient to cede authority to Chase and plead ignorance whenever the issue of finance was raised.

An earlier gambit in late 1861 to raise $150 million through a consortium of banks had failed when debt instruments were only partially subscribed to and government gold supplies were totally inadequate to cover the mounting financial needs. Trapped without any viable traditional options, Lincoln and Chase broke with longstanding traditions and accepted the idea to simply print the money needed. Congress passed the Legal Tender Act of 1862, turned on the printing presses and cranked out $150 million that the government declared as legal tender for private and public debts. An important proviso of the new “green backs” was that they were not redeemable for gold or silver and not for payment of customs duty or federal bonds and notes.

Most estimates for the cost of the war (1861-65) range from $6.2 billion for the Union and at least $2 billion for the South. These little wars can become very expensive if allowed to continue … a lesson we have learned once again in the Middle East (estimated at $80 billion “tops” … to actual $3 trillion and growing). But if you own a printing press, no problem.

In 1894, Congress tried to introduce an income tax of 2 percent on earnings over $4,000, but the Supreme Court ruled it unconstitutional. Income tax would not become a regular part of everyday life until 1914. However, once it did, the battles over taxes versus government spending (and who should pay) has become de rigueur.

“Don’t tax you. Don’t tax me. Tax that guy behind the tree.”

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].

Clear Objectives, an Overwhelming Force, Exit Strategy Crucial to Any War

Korean War stories were popular in comic books published in the early 1950s, like this Two-Fisted Tales from EC Comics.

By Jim O’Neal

When I started studying the history of war in early 1962, I was surprised that so many wise military men all warned about the danger of a land war in Asia. Words like “bogged down,” “embroiled” and “mired” were liberally sprinkled around in the hope of shaping foreign policy. I knew President Eisenhower had quickly ended the “police action” in Korea that President Truman had left unfinished. As an experienced military strategist, Eisenhower knew that fighting on the Korean Peninsula could easily expand into a direct confrontation with China. He had been determined to avoid restarting the global conflict he had helped end.

The 1950s were a good time for America as we helped rebuild the world.

Then the seeds of war in Vietnam started slowly showing up on the evening news. The implications were blurred by events in San Francisco. Hippies, flower children, sex, drugs and rock ’n’ roll were far more entertaining. President Johnson started complaining about “JFK’s war” while he and Secretary of Defense Bob McNamara were quietly acceding to military requests for more troops and guns.

Eventually, draft protests grew more violent, followed by riots in major cities and MLK and Bobby Kennedy being assassinated. By 1968, the United States had 550,000 troops in Vietnam, having steadily grown from a few hundred “military advisers.” It would take another seven years and a different president to extricate the nation from an incremental war that had caused such domestic turmoil. The Vietnam Veterans Memorial in Washington, D.C., lists 58,318 names (including eight women) as of May 2017 who were “declared dead.”

The wise military officers had been right.

One hundred years earlier, a similar series of events had culminated in a civil war. In the three months following President Lincoln’s election, seven states seceded from the Union. The new president was paranoid that the Confederates would attack Washington after they forced the garrison at Fort Sumter to surrender. He urged his military advisers to preemptively attack rebel forces in Virginia, but the Union army lacked training and was too slow.

Finally, on July 16, 1861, Union General Irvin McDowell led 33,000 slightly trained soldiers toward Manassas, Va. (later better known as Bull Run). Before they arrived, spies tipped off P.G.T. Beauregard, who quickly called for 10,000 reinforcements to bolster his 22,000 troops. Rumors of the pending battle spread quickly and there was a large contingent of politicians and civilians perched on a hillside with blankets and picnic baskets, eager to see a good fight. Among them was a young senator from Ohio, John Sherman, whose brother William Tecumseh would play a key role with General Ulysses S. Grant in ending the war.

However, 10 hours of combat on July 21, 1861, changed the way a nation viewed war. Both Federals and Confederates had come to these fields supremely confident of swift, relatively bloodless victories. Even Abraham Lincoln had attended church that day after being assured of an easy Union victory. Senator Sherman was one of the first to learn otherwise. “Our army is defeated and my brother is dead,” Secretary of War Simon Cameron informed him.

They left behind more than 800 dead and 2,700 wounded. They also left behind any illusions that the war would be won or lost on a single, lazy Sunday afternoon. Confederate officer Samuel Melton wrote, “I have no idea that they intend to give up the fight. On the contrary, five men will rise up where one has been killed, and in my opinion, the war will have to be continued to the bloody end.”

Another wise man who understood war.

Now flash forward to October 1998 when official U.S. foreign policy was changed by a benign-sounding Congressional action to remove the Iraqi government: the Iraq Liberation Act. Then, four years later in October 2002, the U.S. Congress passed the “Iraq Resolution,” which authorized the president to “use any means necessary” against Iraq. At 5:34 a.m. Baghdad time on March 20, 2003, the military invasion of Iraq began. Fifteen years later, we are still in Iraq, Afghanistan, Libya, Syria and Niger. Some now call this the “long war” and there is no end in sight.

My friend Colin Powell says he did not invent the “Pottery Barn Rule” (if you break it, you own it). But he does believe that any war should have a clear objective, an overwhelming force to achieve it and a clear exit strategy.

He is a wise man.

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].

Greatest Generation was Led by Roosevelt, Churchill and Superman

Superman got his own title in 1939. This copy sold for $358,500 at a November 2016 Heritage auction.

By Jim O’Neal

Popular journalist Tom Brokaw in 1998 wrote a book about Americans who lived through the Great Depression and fought in World War II. Millions of others stayed home to support the war effort. Brokaw wrote, “It is, I believe, the greatest generation any society has ever produced,” and went on to argue they did it because “it was the right thing to do,” as opposed to doing it for fame or fortune.

The Greatest Generation became a bestselling book and a term to describe a large group of people who sacrificed in many ways, ended a war, and then came home, went to college on the G.I. Bill, and helped rebuild the world. They certainly preserved our way of life and redirected the domestic economic engine that provided jobs, automobiles, and new homes to a broad swath of our citizens.

However, it seems clear that few Americans alive in 1939 had a hint of this remarkable outcome. All the polls indicated that most were leery of another entanglement in “foreign” wars. They were still acutely aware of the tremendous suffering and loss of life in the last “war to end all wars” – WWI, an “accidental” war that is still a puzzlement today. Historians struggle to explain how or even why it started and, amazingly, how four major empires – German, Russian, Ottoman, and Austro-Hungarian – were toppled in four short years. Approximately no one would have been able to predict such a remarkable situation.

Besides, by 1939, the United States was still mired in a severe economic depression with 17 percent of the workforce unemployed and the most needy and least organized (domestic workers, sharecroppers, new immigrants, blacks, and unmarried women) unable to reap any of the New Deal benefits. On April 14 of that year, John Steinbeck’s novel The Grapes of Wrath was published and it captured the plight of many by focusing on the economic hardships of tenant farmers driven from their Oklahoma land by drought, the Dust Bowl, and bank foreclosures. The book won the National Book Award, the Pulitzer Prize, and was cited prominently in 1962 when Steinbeck won the Nobel Prize.

My family was among the many “Okies” that escaped to California in quest of the milk and honey (no, we didn’t pick any fruit).

Then on Friday, Sept. 1, Germany invaded Poland and democracy around the world was at risk. Economies were in collapse and suddenly communism and totalitarianism seemed to have appeal. There was even talk about revolution in America. When the great British economist John Maynard Keynes was asked if there had ever been anything like the Great Depression, he said, “Yes. It was called the Dark Ages and it lasted 400 years.”

Fortunately, what would become “The Greatest Generation” was led by the greatest leaders: Franklin Roosevelt and Winston Churchill. As an insurance policy, Superman #1 debuted that summer, just in time. Between the three of them, the world was saved!

Alas, only one of them is still around and all the other superheroes are untested rookies. (Sigh.)

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].