CHAPTER 17
EVERYTHING FRED HAD BUILT SEEMED IN DANGER OF FALLING apart. Relations with the Santa Fe continued to deteriorate, business was stagnant, and, adding to the strain, the Harvey family suffered a devastating loss. Byron Schermerhorn died suddenly in California at the age of fifty-six, leaving a wife and two teenage daughters. Fred received the news in New York, just before heading to Washington, D.C., to lobby several senators with railroad backgrounds for support in his battles with the Santa Fe.
He took some consolation in memorializing his friend, arranging to have a collection of Schermerhorn’s poems typeset and published in a handsome hardcover book. But the grief was exceedingly difficult to process: Best friends for over two decades, they had spent the past few years preparing for what would happen when Fred, inevitably, died first.
Soon, however, there was some joyful news. Ford’s wife, Judy, gave birth to a baby girl, Katherine—who was nicknamed Kitty—in July 1892, and the next Fred Harvey generation had begun.
The baby came just as Fred, Dave, and Ford were starting to formulate backup plans for their business—other ways to deploy what had grown into a veritable army of loyal employees—since the disputed contract with the Santa Fe was set to run out in less than two years. Thinking big, they put in a bid for the largest job in U.S. culinary history—the catering contract for the Columbian Exhibition, the world’s fair to be held in Chicago to commemorate the four hundredth anniversary of Columbus reaching America. Its success was a matter of civic pride and national honor, since Americans had made a decidedly anemic showing at the last world’s fair in Paris, where they couldn’t compete with the French exhibit: the Eiffel Tower.
Fred had some “ins” at the Chicago world’s fair. He had known architect Daniel Burnham—the driving force behind the fair and the mastermind of the urban fantasy of a classical “White City” in the middle of gritty Chicagoland—for years, since he redesigned the Montezuma. And Fred had several other friends on the ways and means committee, which was stacked with Chicago railroad executives. So nobody was surprised when Fred’s company was selected as one of two finalists for the massive job, along with the catering department at Chicago’s Wellington Hotel.
Instead of holding a bake-off for the contract, the committee decided to have the two companies audition together—by serving the biggest catered lunch in American history. It was the grand finale of the “Dedication Day” ceremony in October 1892—which, because of endless delays, was the only event of the world’s fair that actually took place during the anniversary year of Columbus’s voyage. In fact, the lunch was served in two of the only buildings in the White City that were actually finished, in part to placate creditors and doubters. After President Benjamin Harrison read a proclamation, there was a parade to the fairgrounds, followed by performances, speeches, and lunch. The caterers were charged with preparing and serving a sit-down meal for 4,500 invited guests in one building and then providing “a nice lunch” for everyone else who attended the parade, regardless of the number.
Ford made a bet with his father over how many of those “nice” lunches they would have to serve. He wagered a hundred Imperial cigars that it would be more than 100,000, a bet Fred recorded on one of the Leavenworth Bank scratch pads he carried in his jacket pocket.
The sit-down lunch was in the Manufacturer’s and Liberal Arts Building, a massive Corinthian-style structure that covered forty-five acres and required sixty tons of paint to make it white enough for the White City. The service for the meal was as complex and precise as any major military operation. There were 120 waiters, and 6 chefs who did nothing but brew fresh coffee: 150 gallons of it. All the other food was prepared ahead of time: 9,000 sandwiches of assorted meats, 120 gallons of chicken salad, and, for dessert, 300 pounds of cake, 80 fruit custard tarts, and 80 wine-jelly rolls, all presliced.
Sixty thousand people showed up for the public lunch, so Ford lost the bet. They dined in the Electricity Building, at rows and rows of tables that would have extended a mile and a half if laid end to end. There were 350 waitresses serving eight tons of ham sandwiches, 240,000 doughnuts, and 120,000 cups of coffee. Just outside the kitchen, the fifteen-hundred-member children’s choir who had sung during the ceremony ate sandwiches and bananas.
The lunch was a great success and received high praise from the directors of the fair. Since Fred Harvey and the Wellington Hotel caterers had worked so well together, they decided to team up to bid on the multimillion-dollar contract to feed the entire world’s fair. The Chicago Tribunereported that they were expected to get the job.
But at the last minute a well-connected New York firm was allowed to put in a competing bid. In the shoot-out of underbidding, Fred lost the single biggest job of his career. It wasn’t until six months later, however, that he discovered just how great a loss it really was—for as the entire American economy went into free fall, the Chicago world’s fair was virtually the only place left in the country where business was any good.
MOST AMERICANS TODAY have never heard of the Panic of 1893, and the subsequent four-year financial bottoming out that many economists still believe was every bit as bad as the Great Depression of 1929. That’s probably because in 1893 the economy didn’t succumb to a single huge heart attack, but was instead devastated by a series of strokes over many months.
Only weeks after Fred lost that catering contract, Jay Gould, who was believed to be the richest man in the world, died of tuberculosis at the age of fifty-six. His death in December 1892 was not a surprise, and elaborate preparations had been made to prevent a negative impact on financial markets. Unfortunately, Wall Street soon was rocked by a series of company failures in industries as diverse as railroading, banking, and rope making, all of which put more pressure on what was considered a glaring weakness in the nation’s monetary policy: Gold reserves were being depleted to artificially prop up silver prices for western miners.
The first visible symptom of the economy’s ill health was the bankruptcy of the Philadelphia & Reading Railroad in February 1893. It wasn’t an especially large railroad, and was considered a chronic underachiever, but it left millions in unpaid debt and sent a signal that other struggling railroads might not survive.
Five days later, Fred’s combative boss at the Santa Fe, Allen Manvel, died. He was only fifty-five, but had been suffering from Bright’s disease, a then-untreatable kidney ailment, and his death raised the specter that the Santa Fe was in financial trouble as well.
In the late spring, the World Columbian Exhibition opened in Chicago to great fanfare (even though many of the exhibits still weren’t finished, including the first-ever Ferris wheel). But while there was glee at the fairgrounds—and Fred’s eating houses along the Santa Fe route were packed to and from Chicago—much of the country was in a panic. Two days after the fair began, there was a massive sell-off on the New York Stock Exchange, and one of the most-traded companies—the National Cordage Trust, a combination of twenty-five rope and cord manufacturers that controlled 80 percent of its market—went bankrupt. Cordage yanked the rest of the market down with it, setting off further panic selling and bank failures across America.
Many called on Grover Cleveland—who was president again, after being voted out of office in 1888 and then reelected in 1892—to respond to the financial disaster. But the president had just been diagnosed with oral cancer, and to keep his condition out of the papers, he disappeared on a “fishing trip” when he was actually having major surgery to remove part of his upper jaw—an operation that was performed on a yacht floating off Long Island Sound to maintain the ruse. As he recuperated, the economy seemed to do the same, until the Erie Railroad declared bankruptcy on July 25. Two days later, banks across the country announced they would not allow large cash withdrawals, leading to widespread hoarding of currency and even more bank failures. Congress acted to change the controversial law that had depleted the nation’s gold reserves. But the move came too late—and it also caused the silver markets to crash. While employment estimates for the volatile time period vary, economists agree unemployment had at least doubled by summer’s end, and perhaps tripled. At least one million Americans were out of work, and the number kept climbing.
The world’s fair, however, continued to attract visitors; the Ferris wheel, with cars as big as Pullmans, was finally up and running, causing a sensation. It seemed as if the fairgrounds at Jackson Park were the only place in America shielded from the failing economy. By October, nearly twenty-seven million people had paid admission to see the fair, a number equal to roughly half the population of the United States.
As the fair wound down, the railroad industry was rocked by the news that the Union Pacific, which had built the first transcontinental railroad, was going bankrupt.
The Santa Fe managed to hold on, largely due to the efforts of its chairman of the board, George Magoun. A powerful international investment banker, Magoun was the American representative of Baring Brothers bank in England—which controlled most of the Santa Fe’s foreign-owned stock. He was trying to buy some time for the railroad, which had run out of money to make payroll and was facing a $5 million ($123 million) interest payment due on the first of the year.
By November 1893, Magoun was under enormous pressure. Besides the Santa Fe’s problems, he was a major player in the difficult reorganization of the failed National Cordage Trust—and he was struggling with his own health, which had been ravaged by diabetes. In late December, George Magoun died at the age of fifty-three.
As Christmas Eve approached that year, the worst yet in the American economy, fifteen somber, well-dressed men crossed a platform at St. Louis station at 2:00 a.m. to board a special private train—consisting of an engine, a baggage car, and one Pullman coach—headed for Little Rock, Arkansas. When they arrived the next day around lunchtime, they took carriages to the U.S. Court of Appeals for the Eighth Circuit, filing into the chambers of Henry Clay Caldwell, the last judge appointed by Abraham Lincoln.
They emerged at 5:30 p.m. with the sorrowful news. The Atchison, Topeka & Santa Fe—a railroad that in its thirty-four years had gone from being a local laughingstock to the largest, most expensive, and, unfortunately, most indebted carrier in history—was no more.
More than one hundred American railroads failed in 1893, as did five thousand U.S. banks and ten thousand other companies. Unemployment reached double-digit figures and kept rising. The devastation was evenly distributed between the cities and the countryside.
As Americans wondered why this was happening to their country, a relatively obscure academic paper was published in the Proceedings of the State Historical Society of Wisconsin. Prepared for the World Columbian Exhibition by historian Frederick Jackson Turner, the paper examined the role of the frontier in U.S. history. Turner boldly suggested that frontier spirit—and the drive farther and farther west for free land—was what defined America and Americans. And he dared to wonder aloud what would become of the United States now that there was no more frontier, nowhere else to expand.
It is “to the frontier the American intellect owes its striking characteristics,” wrote Turner:
That coarseness and strength combined with acuteness and inquisitiveness; that practical, inventive turn of mind, quick to find expedients; that masterful grasp of material things, lacking in the artistic but powerful to effect great ends; that restless, nervous energy; that dominant individualism, working for good and for evil, and withal that buoyancy and exuberance which comes with freedom—these are traits of the frontier … Since the days when the fleet of Columbus sailed into the waters of the New World, America has been another name for opportunity, and the people of the United States have taken their tone from the incessant expansion which has not only been open but has even been forced upon them. He would be a rash prophet who should assert that the expansive character of American life has now entirely ceased … the American energy will continually demand a wider field for its exercise. But never again will such gifts of free land offer themselves … What the Mediterranean Sea was to the Greeks, breaking the bond of custom, offering new experiences, calling out new institutions and activities, that, and more, the ever retreating frontier has been to the United States directly, and to the nations of Europe more remotely. And now, four centuries from the discovery of America, at the end of a hundred years of life under the Constitution, the frontier has gone, and with its going has closed the first period of American history.
While the validity of Turner’s “frontier thesis” would be discussed for decades to come, there was no question that the year it was published, at the height of the worst depression in American history, it was a scary prognosis.
MUCH TO FRED, FORD, AND DAVE’S AMAZEMENT, the Panic of 1893, while destroying businesses all over the country, probably saved their company. It was clear before the stock market collapsed and the railroads went bankrupt that the Santa Fe was planning to dump Fred Harvey as its eating house concessionaire when the contract ran out in mid-1894. Fred probably would have retired with his substantial savings, and Ford and Dave would have looked for new jobs. Instead, the Santa Fe’s receivers welcomed Fred back with open arms. They were dealing with engineers, brakemen, conductors, and switchmen who had not been paid in months, so Fred’s arrangement, which didn’t cost the railroad any cash, was the least of their concerns. Instead of firing him, the receivers were thrilled to extend his contract indefinitely—or at least until the reorganization was complete.
Yet business remained challenging. In addition to the financial crisis, 1894 turned out to be a year of freak occurrences. The weather went biblical. The winter storms were among the worst in recorded history. A massive belt of snow and sleet buried so much of the country that there were actually snowball fights on the streets of Tucson, Arizona. Fred lost many head of cattle to the unrelenting cold.
After the freeze came a big spring thaw, heavy rains, and massive flooding, especially near the Rocky Mountains. AT&SF railroadmen working in Pueblo, Colorado, watched in disbelief as the Arkansas River—which flowed past the depot—kept rising and rising until it flooded its banks, carrying in its torrent everything from the carcasses of horses, sheep, cows, and dogs to hundreds of homes torn from their foundations.
And then, just as the western rivers were receding, the workers in George Pullman’s plant went on strike in May 1894. Within weeks, they triggered a monumental national work stoppage—and turned Pullman into the most hated man in working-class America.
Pullman had created a “company town” not far from Chicago where his employees built customized cars for his many American and European railroad clients. But the residents of tiny Pullman, Illinois, were outraged when their wages were cut in response to the depression. Their wildcat strike closed Pullman’s plant, but he refused to negotiate with his workers. Then the new American Railway Union, over 100,000 members strong, held its long-planned first annual convention in Chicago. The union’s president, Eugene V. Debs, convinced his members to call for a boycott of all trains carrying Pullman cars until Pullman himself agreed to negotiate with his employees. Within a week, the front-page headline of the New York Times proclaimed the work stoppage the “Greatest Strike in History.”
While Chicago was the epicenter of the strike, the hardest-hit railroad was the Santa Fe. Union protesters halted trains in every station between Illinois and California. When local law enforcement proved ineffectual, U.S. marshals were sent to ride the trains and protect the depots. On Independence Day 1894, President Cleveland ordered troops into the stations.
Just weeks before, a group of wealthy businessmen from Michigan and California had met at Fred Harvey’s eating house in Williams, Arizona, for a banquet to kick off their hunting and camping trip to the Grand Canyon. They dined on diamondback terrapin soup, frogs’ legs, brook trout, spring chicken cutlets with asparagus, tenderloin of beef, orange fritters à la crème, meringue pies, sabayón custard, and bottle after bottle of champagne and claret.
Now that same Williams depot was a war zone. Strikers had removed some tracks near the station, causing one of the engines to run aground. In nearby Winslow, a company from the army’s Whipple Barracks was camped on the railroad right-of-way near the Harvey House, with sentinels posted all around the depot.
At Las Vegas, New Mexico, a Santa Fe train from San Francisco with 250 passengers on board was taken hostage by union protesters. The travelers weren’t even allowed to cross the picket line surrounding the depot to go into town to buy food. For the first few days, there was enough in the eating house refrigerators for the cooks and Harvey Girls to feed everybody. Then, with no resolution in sight, Dave Benjamin sent a wire from Kansas City telling them to serve just two meals a day. A week passed with the train still captive, so Dave got permission from the Santa Fe to let his chefs rummage through the freight cars trapped at the depot for food. When protesters announced their intention of running the Pullman porters out of town at gunpoint, soldiers helped the train pull out of the Las Vegas station. But when it arrived at Raton, the protesters there held the train for another two days.
There were riots at train depots across the country. American troops were ordered to shoot civilians. In Chicago, seven strikers were killed and dozens more injured while hundreds of train cars were destroyed. Several of the White City buildings from the world’s fair were torched. Eugene Debs and other American Railway Union officials were arrested, charged with ignoring a federal injunction to stop striking, because the work stoppage was interfering with interstate commerce and the delivery of the U.S. mail.
After eleven harrowing days, the Pullman strike finally ended and train travel resumed. The issues raised by the strike, however, did not go away. Outraged by the actions of the government and the railroads, a young lawyer at the Chicago & North Western Railway, Clarence Darrow, quit his job to switch sides and represent Debs and the union. They lost the criminal case, and Debs spent a year in prison, but Darrow also challenged the right of the government to file an injunction and bring in troops to stop the strike—and that case went all the way to the U.S. Supreme Court. In May 1895, the high court ruled against Debs and Darrow again, in a unanimous decision to “ensure the general welfare of the public.”
BY THE SUMMER OF 1895, the economy was starting to show signs of recovery. Fred, now back in England, was feeling well enough to entertain company at his small hotel in the Putney section of London. He even wrote to Ford that he might welcome a visit from “mamma”—his wife, Sally, who had never come to England with him.
Among Fred’s guests that summer at 23 Carlton Road was J. J. Frey, recently hired by the receivers of the Santa Fe to be general manager during the corporate reorganization. He had come all the way from Chicago to discuss a touchy subject. The railroad now wanted Fred to manage the very dining cars they had built to drive him out of business.
Fred entertained the executive lavishly—he is “having a very good time here, certainly he has received a great deal of attention,” he wrote to Ford—and they talked for the better part of two days. Frey found out that no matter how sick he had been, Fred Harvey still knew how to ask for everything. Because it was impossible to break even on dining cars—railroads ran them as loss leaders—he insisted the Santa Fe reimburse him 25¢ ($6.61) for every meal served that cost more than a quarter: prix-fixe meals at that time being 75¢ ($19.84). Fred also claimed, as his lawyers had during the lawsuit, that the addition of dining cars would render some of his eating houses superfluous, impossible to run even at an acceptable loss. So he wanted the railroad to agree, in writing, to make him whole for the value of any depot restaurants or hotels he would have to close.
J. J. Frey left England several days later to tour the Continent for three weeks before heading back to talk to his superiors. If they agreed, it would almost seem as if all the legal battles and heartaches of the past seven years had never happened. Almost.