By Ray Schultz
Born in 1837, the grandson of a Baptist minister, John Wanamaker was so good a student that one of his teachers said, “It is no use to send John to me any more; I have taught him all I know.” By rights, Wanamker should have gone into the family brick-building business, but he was diagnosed as a possible consumptive, and spent months in a Minnesota rest home. Filled with the “serious thoughts of one likely to die,” he left the family faith to join the Presbyterian church, then, that matter resolved and his health restored, turned to his livelihood.
In April 1861, as the city and country were buzzing about the Confederate attack on Fort Summer, Wanamaker, age 22, opened a ready-to-wear clothing store with his brother-in-law Nathan Brown: the Oak Hall Clothing Bazaar. Each man invested $2,000.
Soon, they were sending “four-page papers containing a good deal of miscellaneous and original reading matter, sandwiched between bright, readable advertising paragraphs, for instance, ‘A sad sign—to sign your name to a note; better buy your clothes at Oak Hall and pay cash,’” one historian wrote.
In 1969, the partners tried a larger store. And in 1877, after buying a parcel of land for $500,000, Wanamaker opened one of the country’s first department stores. It was heralded in a double-column advertisement in all the Philadelphia papers: “The Inauguration of the Dry Goods Business at the Grand Depot will take place Monday, March 12, from nine to six o’clock.”
Wanamaker hired a writer named J.E. Powers to write “daily store talk in bright, catchy sentences.” And he spent $300,000 a year on this advertising in a time when, as one historian noted, it was “not considered polite to advertise.” He also sent a 148-page mail order catalog containing “a list of the goods in every department in the store.”
The lifelong Sunday school teacher was a benign employer: Every staff member received two weeks vacation with full salary every summer–unusual for that time. And the company library was free for female workers.
Wanamaker was also active in politics. In 1888, he raised more than $200,000 for the Republican presidential candidate Benjamin Harrison, asking fellow businessmen, “What would you pay to be insured for a better year?” Later, he boasted, “We raised the money so quickly that the Democrats never knew anything about it.” That fall, Harrison unseated the sitting President Grover Cleveland, and Wanamker received the prize so often tendered to contributors and political hacks: The Postmaster Generalship.
As promised, Wanamaker approached this job as a businessman. “Gentleman, you want to run your post office as if there were another fellow across the street competing with you, and you were trying to get all of the business.” he said. But then he did something that was decidedly unbusinesslike—he tried to dump his largest customer: The Louisiana Library.
Louisiana had been occupied since 1867 by federal troops, and run, one outraged Southern editor charged, “by corrupt Republicans, ignorant Negroes cooperating with a gang of white adventurers, strangers to our interests and our sentiments,” reflecting the racism rampant in the former Confederacy. Among the newcomers was a 31 year-old Baltimorean named Charles T. Howard.
Some people said Howard inflated his Confederate war record, but it didn’t matter, for in 1868 he had something in short supply in Louisiana: capital provided by the New York gambler John Morris, and he liberally dispensed it to the Republicans in the legislature. His hosts rewarded him with a 25-year charter to operate a lottery, and made it a crime for anyone else to start one. And the company was exempted from all taxes except for a $40,000-a-year contribution to the state educational fund.
At first, the Louisiana Lottery sold chances mostly through policy shops in the state: the daily drawings were “the special curse of the colored population,” one observer alleged. But this was a limited market. In 1873, in perhaps his wisest move, Howard appointed Dr. Maxmilian A. Dauphin as president.
Dauphin was born in 1837 in Alsace Lorraine, and emigrated to the United States at age 16 with a brother. But the siblings separated soon after arriving, and Maxmilian ended up friendless in New Orleans. He attached himself to Dr. Sam Choppin, “then the center of one of the most brilliant social, professional and politicial coteries.” and under his sponsorship became a physician. Then he went into business.
Dauphin knew that the lottery would never realize its full potential until it dominated the Yankee market, which it did, within a few years. Next to New Orleans, Washington was the most lucrative city. The Lottery offered tickets at cigar stores, hotels, saloons and barber shops, and through bootblacks and newsboys in the streets. And, of course, it peddled them by mail, so many that Bin “D,” in the Washington post office was assigned to Dauphin, and clerks worked into the night, using “express wagons and furniture cars to haul the outgoing mail,” one account reported.
It was similar in New York and Chicago, where lottery agents mailed tens of thousands of packages a month, containing letters, certificates, logos, entry forms and tickets, and promises of “grand” and “extragavant” prizes.” One package sent in New York in 1880 said: .“No seed, no harvest.” Altogether, the Lottery’s mailings pulled in $30,000 a day, or almost $11 million a year. And they constituted 45 percent of the entire business of the New Orleans post office.
The Lottery could usually buy off anyone in its way, but it made a mistake when it offered payments of $25,000 a year to Anthony Comstock, made out to him personally. The vice crusader yelled, ““As long as I live and have my reason and health, your company shall never have another office open in New York.” No matter: business went on.
The drawings were held in an ancient hall in New Orleans, with an alligator paddling around in a pool outside. And they were under the “personal supervision” of two venerated Confederate generals: Jubal T. Early, who had torched Montgomery Blair’s house in Maryland during the war, and G.T. Beauregard, both dressed in Confederate gray and crowned with white hair.
General Beauregard “was of large stature, but the progress of years weighed heavily upon him, and his shoulders were bent so as to throw his florid face, with its full white hirsute covering, forward towards the floor. Gray-blue eyes, fierce and penetrating, gleamed beneath bushy, overhanging brows. A suit of Confederate gray clothing, well cut and near, covered the aged man.”
Then there was Jubal, “clad in black, and a handsome face crowned by now-white closely cropped hair was poised proudly sabove an elegant, dignified form,” aided by two small boys wearing knickers.
The generals were each paid tens of thousands of dollars a year to stand on stage once a month and “preside.” The drawings featured blindfolded boys from a local orphan asylum, and were conducted before men who were “redolent of rum and tobacco and poor bathing facilities, and had no taste or money for clean raiment,” according to one eyewitness account. “With the utmost solemnity, Croupier Early proceeded to blindfold the boy beside him,” wrote another witness. “Located near the brazen drum, Croupier Beauregard, with corresponding gravity, tied a white handkerchief over the eyes of his juvenile assistant.”
The drawing began. Jubal drew the white paper from the encircling black rubber tube. In measured tones he read the number, 48,146.” The voice of General Beauregard was likewise measured and somewhat harder in is timbre when he called the figures on the white slip of paper which he drew from the little black tube: ‘200’ he said.” What it meant was the holder of ticket 48,146 had won $200.”
Several larger prizes were drawn, including jackpots of $100,000 and $300,000, but no winner came up to claim them, causing groans in the gallery. With good reason: One third of the tickets in the drum were unsold, still owned by the Lottery, which meant that the bettors were playing against the house. And the house did well. Government lotteries in Europe distributed up to 85% of their ticket money in prizes; the Louisiana Lottery kept more than half.
In 1890, Congress passed yet another law making it a crime to use the mails to conduct a Lottery. Unlike previous bills, this one made it a crime even to patronize a lottery by mail. Harrison signed it, and Wanamaker vowed to enforce it.
Dauphin decided to bypass the mails, employing private express deliverers and in this way removing he criminal taint for customers. His ads advised players to “remit currency by express at our expense. Give full addresa and make signature plain.” But the pressure and his rich New Orleans diet must have gotten to him, for in December Dauphin died at age 53 after a brief illness. Charles Howard was dead, too, having been thrown from a horse.
Paul Conrad, former chief clerk of the Lottery and part owner of an ice company, took over. As Pattee and Nathan Read had done, he opened a Lottery office in Canada, then had circulars sent over the border to advertise the fact that “recent changes in the United States Postal regulations have rendered it preferable to more closely consult the interest of our Canadian patrons by establishing a branch office in Canada.”
At this point, the Supreme Court of Louisiana was deciding whether to renew the Lottery charter or put it on a ballot referendum. The court, heavily subsidized by the Lottery, ruled to renew, and Conrad quickly got out a mailing hailing the victory. And he rubbed it in Wanamaker’s face: The pamphlet contained return express envelopes addressed to the New Orleans National Bank, again bypassing the Post Office. Worse, it was designed to look like a newspaper, and was mailed at the second class rates for pubishers.
That tore it for Wanamaker. Employing the full machinery of law enforcement, postal authorities made 153 arrests. But they rarely netted anything more than a $500 fine. Still, the bad publicity had its effect: The flow of incoming envelopes slowed down to a trickle.
Conrad had one more trick. He relocated the Lottery to Honduras, and started sending pink circulars under the name the Honduras National Lottery Company by express mail, bypassing the post office. “We use the express companies in answering correspondents and sending lists of Prizes to the U.S.A.,” they said. “Reply by Express only.”
But it didn’t work. In 1892, the U.S. Supreme Court upheld the anti-lottery laws and Conrad announced that he would close shop. Wanamaker claimed victory. Morality and sound business practices had prevailed over the rebels. In 1895, green goods were also wiped out in the courts.
Too bad not all of Wanamaker’s schemes ended in victory. He was ridiculed for his most brilliant idea: Free rural delivery. One Republican editor wondered whether Wanamaker also wanted to “have the Government present every farmer with a free telephone and a free telegraph instrument.” Free rural delivery wasn’t enacted until after Wanamaker left office.
The robber baron Jay Gould himself denounced as socialistic Wanamekr’s plan to nationalize the telephone and telegraph systems and run them through the post office. Then it was over: Harrison lost to Grover Cleveland in the 1892 election, making Cleveland the only President to serve two non-consecutive terms. Wanamaker returned to his business, and lived until 1922, despite his youthful fears of consumption.