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THE UNDOING OF LUTHER BURBANK, PART III

Luther Burbank was in trouble. The 66 year-old horticulturist was watching helplessly as his dreams of a secure future and assured legacy were fading, due to no fault of his own but because of the failures and scandals of other men.

“Do you think Luther Burbank is an honorable person?” Would have been an interesting question to ask on a public opinion poll in 1915 (well, except polling wasn’t a thing, yet) and the replies probably would have shown a sharp divide.

To many he was the Plant Wizard, a man with almost mystical powers to bend nature to his will, someone with integrity and nearly saintly bearing. Others viewed him with disdain; a conman, or the dupe of conmen, or at best, someone so injudicious he entrusted his reputation to men who ruined it. Which answer pollsters received was decided not only on who they asked, but also when in 1915 they asked the question.

Burbank was in the news much that year. He was being celebrated for different reasons both locally and nationally; that tale will be told in the following article. This piece wraps up the stories of the two companies which used his name – and in 1915, both companies were dragging his name through the mud. The best thing that can be said about them was that they were run by men who were not very competent, and the worst was that both companies exploited local trust in Burbank himself to peddle worthless stock to Sonoma County residents.

Both companies were founded in 1912 and introduced in previous articles here. Most prominent was the Luther Burbank Company, which completely took over the commercial side of his business selling plants and seeds. Burbank was elated. “For fifteen years at least I have been endeavoring to make some such arrangements,” he told the Press Democrat. “Henceforth I shall only engage myself in the creation of more novelties in fruits, flowers and plants.” The deal was for Burbank to be paid $30k, followed by annual payments of $15,000.

The Luther Burbank Company had problems from the start. It had little to sell except for his spineless cactus, which Burbank was already cultivating commercially at a cactus plantation near Livermore. And it didn’t help that the Company was run by an enthusiastic young go-getter and former bank teller who had no experience running any sort of business, much less a highly-specialized nursery. (For more, see part II of this series.)

What they did have to sell was corporation stock, and about $375k (equivalent to about $10M today) worth of shares were sold – which was quite a lot, considering the main asset was the intangible value of the Luther Burbank brand and faith that he would not approve any products which were not top quality. Most of the shareholders were from the usual Bay Area investor class, but a block was set aside for Burbank’s friends in Santa Rosa.

The company was never financially sound, however, and had paid Burbank only a fraction of what was agreed upon ($5,920 total for the years 1913-1914). By the midsummer of 1915 rumors were circulating that the business was failing.

To counter those rumors, Burbank may have broken the law: As the corporation was trying to sell a new round of stock, the PD and other local papers reported he gave an interview stating the company was in fine shape (the newspaper wasn’t named, and the rumors weren’t specified). Although Burbank wasn’t on the Board, he was completely dependent on the company for his income and certainly had insider knowledge that the company was headed off the cliff – after all, he had been complaining privately about their inability to pay him more than a fraction of what was owed. Keeping that info secret would be considered securities fraud today.

Then just before the end of 1915, Luther Burbank pulled the trigger and sued the Luther Burbank Company. Interviewed by the PD, his lawyer said, “Burbank has been the victim of stock pirates…They paid him the $30,000, sold stock like hot cakes and never paid him another dollar.” A few weeks later, the company declared bankruptcy and liquidated.

All of those who had invested – including Burbank’s friends in Santa Rosa – lost everything. Locals had to remember he had personally reassured everyone the business was fundamentally secure, and not too long before.

The Luther Burbank Company failed for the reasons most businesses fail: It was just badly run. Had they better management, more investment, more time, yap, yap, they might have survived, as would many companies that flop. But that comment about “stock pirates” aside, it was not a scam. The intentions of the Luther Burbank Press, however, were another story.

The mission of the Luther Burbank Press was to publish and sell an encyclopedic 12-volume set of books about Burbank’s plant-breeding methods. When the corporation was formed in 1912 those books were not yet written; it had been an on-again, off-again project since 1907, made difficult because Burbank kept few notes and hated being bothered by answering detailed questions. At least five editors churned through the job before the Burbank Press found a hack writer of popular science articles willing to cobble the thing together. (All of the background up to 1914 was covered in part I of this series.)

In the meantime, Burbank Press boasted of having some big-name investors including breakfast cereal magnate C.W. Post and beer baron Gustave Pabst. Within the first year Burbank Press had issued over a half-million dollars in stock, which might suggest it was a healthy business. Not widely known at the time, however, was that 23 of it was owned by Burbank Press President Robert John and VP John Whitson, the latter soon to become the key player in our story.

1912burbankpressad(RIGHT: Luther Burbank Press ad as it appeared in the November 2, 1912 Santa Rosa Republican)

During that first year of 1912 Burbank Press ran an ad in the Santa Rosa newspapers seeking to raise money, but not by selling stock – for one week only, residents of Sonoma County could buy $500 notes directly from their office. This was a big deal, the ad explained, because they didn’t sell shares of stock to the public (and couldn’t, legally); rather, this was a goodwill gesture to the community. In a separate interview with the Santa Rosa Republican, Whitson said Burbank Press would be a “permanent Santa Rosa institution” and about half of the money from the notes would be used to construct a building large enough to hold 400 employees. (At the time about 70 young women were working at their Courthouse Square office in the Odd Fellows hall, adjacent to the Empire Building.)

It seemed like an incredibly sweet deal. The five-year notes (bonds, really) paid a 7% return, when blue chip bonds at the time had returns in the 3-5 percent range. Even better, buyers had the option to convert the note/bond into preferred stock. So at the end of five years, instead of the measly 7% return, they would have Burbank Press stock purchased at the introductory 1912 price. With the company about to quadruple in size, the ad stated their stock “is capable of earning 40 to 100 in dividends.” (“40 to 100” what? Percent? Dollars? Cents?) In short, it was all too easy to come away from the ad believing that a $500 investment was a Sure Thing to be worth many thousands – or tens of thousands – by the time it converted into shares of stock in 1917.

And like the Luther Burbank Company stock, it was all resting on blind faith that everything was being done with Burbank’s personal approval. While there was nothing illegal about the investment deal offered by Burbank Press, it was really just a very overpriced, very high-risk junk bond.

Burbank Press made essentially the same offer again in April 1914, even recycling most of the same text – except the good deal was now called a “7 per cent Guaranteed Profit sharing investment”. Other changes included news that the manuscript was finished and the books were now at the printers (the first three volumes would be available by the end of the year), they had made over $415,000 in sales (yet still found it necessary to raise $45k from locals?) and now had 130 employees (so much for quadrupling every year).

That new ad also raise a theme the city papers had been long trumpeting – that the Burbank Press was bringing fame and fortune to Santa Rosa. A section of the ad read: “It means much to Sonoma County that this great publishing enterprise should be permanently located in Santa Rosa…Already hundreds of thousands of strangers know of Santa Rosa through the mailings of the Luther Burbank Press…Already hundreds of strangers have been attracted here, many to locate and invest.”

Thus it came as quite a surprise in early January, 1915, when a full-page notice appeared in the local papers, Everyone was fired and the executives were moving to New York City:


After three years’ work and an expenditure of $400,000, the compilation of Luther Burbank’s Records has been completed. Their publication in twelve large volumes for public sale will be completed this month. The assembly and organization of the selling force can best be accomplished in New York,…It would be too costly at least at present to duplicate such management in New York and Santa Rosa, it is therefore considered advisable to transfer activities to New York during the process of sales organization, retaining however, the quarters and mail sales material in Santa Rosa. The offices at Third Street and Exchange Place will be closed to the public, the office on Mr. Burbank’s Grounds will remain open …

pressmove1915Oh, to have eavesdropped on the party lines afterward. As there were only about 14,000 people living in or near Santa Rosa, probably everyone would have known someone who lost their job – and the post office had also hired extra staff to deal with the mail volume from Burbank Press, so many over there were likely now out of work as well. Still, it’s doubtful that Luther Burbank’s reputation was harmed by this. Not yet.

In May came other news: Robert John and John Whitson were no longer part of the business. Burbank Press was now in Chicago, where former treasurer Preston Gates was now both secretary and general manager. From hereon it’s unclear what the company really did; all we know for sure is that about a year later Burbank Press was no longer able to legally do business in California.1

Few in Santa Rosa probably knew that founders John and Whitson were forced to resign because Luther Burbank Press, like the Luther Burbank Company, was on the verge of bankruptcy that winter, even as they were setting up their ‘luxe new office on Fifth Ave. overlooking Central Park. Creditors swooped down and demanded they surrender their controlling interest via owning two-thirds of the stock. If Burbank Press still didn’t go under, they would each get $12,000. Maybe.

We only know those details because they came out in court – as did lots of other revelations about John Whitson, who found himself much in the news that summer of 1915.

Whitson’s secret past was introduced in part I of this series. He was a Russian originally named Mark David Kopeliovich who went by the aliases of Whitson and Edmund Kopple. In 1905 he began selling shares in the “Whitson Autopress Company.” Investors bought an estimated $200,000 of stock before he disappeared, either because the machine didn’t really work or because he had abandoned his wife and two children to run away with his girlfriend. He had his name legally changed and then was granted a divorce in Reno, claiming his wife had deserted him and her whereabouts were unknown (that he had children was not revealed). Whitson and the other woman then married in England.

annawhitson(RIGHT: Mrs. Anna Whitson, 1915)

Detectives hired by Anna Whitson tracked him down in Santa Rosa and in the months before the sudden move of the business to New York City, it was mentioned in the papers that he was mostly out East on “important business,” which we can now presume was negotiating with Anna’s lawyer. (He later claimed in court “…the action of his wife ‘hounding’ him was largely responsible for the financial difficulties” of the Burbank Press.) Supposedly he had agreed to pay her a settlement of $35,000 when the creditors forced him to surrender his stock. Anna then filed a $46,000 suit against him and had him arrested as a flight risk.

A wire service item about the doings was catnip to news editors, as it portrayed an over the top version of the wronged-woman-seeks-justice news story archetype (nor did it hurt that the story was often accompanied with a portrait of the attractive Mrs. Whitson wearing a sheer evening gown). The story appeared in papers large and small nationwide and they included all or part of her key quote:

“For nine years I have struggled to get to the point financially where I could humble the man who made life miserable for me. Nine years ago I was penniless and he was on the road to wealth. Now I have risen and he is down. This is a woman’s world as well as a man’s,” said Mrs. Anna Whitson. “If I win my separation and a judgment, the money will go to the children; I want nothing from him, nothing but revenge.”

The Santa Rosa newspapers spun the story by only offering a few words (Press Democrat headline: “IS BEING HARASSED BY HIS FORMER WIFE”) and ignored court developments that followed over the next six months. But Santa Rosans also read the San Francisco papers which carried the news being censored here, and you can bet that locals – particularly those who had bought the Burbank Press notes – were following events closely.

The Whitson scandal attracted press attention through the end of the year, peaking with a courtroom showdown in January 1916, just as papers were also reporting on Luther Burbank’s lawsuit against the Luther Burbank Company. (That wasn’t the first time a pair of bad stories appeared close together – the item about rumors of the Company being in trouble had appeared exactly a month after news broke about Whitson’s wife having him arrested.)

Under a previous court order he was paying her $75 a month alimony; she wanted it bumped to $500, which he claimed was impossible – he couldn’t even make the $75 payments without borrowing from his brother and friends. He had found a job “but lost it a short time ago through no fault of his own,” according to coverage in the New York Times. The court ordered him to increase the alimony to $150/mo. and pay his wife’s $600 legal fees. The whole matter wasn’t settled until 1920, when the second marriage was annulled and his divorce from Anna was declared invalid because she had not been served notice.

And remember how the Burbank Press ads had promised to make Santa Rosa famous? That came true, as Every. Single. Item. about the Whitson scandal mentioned he was “Vice President of the Luther Burbank Press at Santa Rosa, Cal.” Sure, a paper sometimes noted he was the former VP, but never did an editor forget to mention he had been living La Vida Bigamous in “Santa Rosa, Cal.” Thanks for making us a household name, Mr. Kopeliovich-Kopple-Whitson.

It’s difficult to imagine the stress that Luther Burbank was under that summer, privately knowing that both the Luther Burbank Company and the Luther Burbank Press were teetering on bankruptcy. While the travails of the Company are well covered in Burbank biographies, none mention that Burbank Press was likewise deep in financial trouble – and that’s because none of the authors looked into the Whitson affair, where details about the business were revealed in court.

Nor do any of the modern books on Burbank cover the third reason he was in deep trouble during 1915: He was losing his base of supporters – the gardeners and small farmers who had long kept faith in Burbank’s integrity even as academics and botanists were snorting that he was a huckster. Walter L. Howard’s book-length 1945 monograph on Burbank2 remains the definitive analysis of his life and work, and he spent ten pages on how his reputation was being wrecked because the public didn’t grasp that he had nothing to do with the businesses using his name:


Not one per cent of the hundreds and hundreds of people I have contacted knew that the Company was separate from Burbank. Those that had some inkling of the existence of a company thought it was organized by Burbank and that its policies and practices wer dictated by him.

A particular sore spot with his followers was The Luther Burbank Society, a non-profit set up in May 1912 to be the copyright holder of the Burbank books and to promote their sale. (Directors of the corporation were Santa Rosa’s top businessman John P. Overton, Burbank Company president James Edwards and Burbank Press president Robert John.) In reality, the “Society” was a sham that generated no small measure of ill will.

It was a huge junk-mail operation that sent out 1.8 million pieces of mail in just a single three month period to sell subscriptions to the future set of books. The letters claimed the recipient had been selected to be one of the 500 charter members; they would receive proofs of book chapters as they became available and invited to help edit and comment (none of that would happen). When the books became available they could be purchased at the (non) discount price of $15 per volume.

Howard explained that he himself was fooled by the letter at first, and wrote that others resented the trickery. A magazine for southwestern ranchers commented Burbank had “made his name largely a joke throughout the country.” Howard wrote of meeting a Missouri fruit grower who became crestfallen when he visited California and learned that his Luther Burbank Society membership was nothing special:


…He even lost his desire to visit the Burbank place, which had been his dearest wish when he left home. It was no use to remind him that Burbank had not planned or organized the “Society,” had practically nothing to do with it, and should not be blamed for everything. But he would have none of it. He said he had been deceived by somebody and thought Burbank was the man to hold responsible for the deception, which, I believe, was typical of many others. So far as I can learn Burbank never made the least effort to clear himself of charges of this kind.

Thus Burbank was also in trouble in a way he didn’t – or couldn’t – recognize. Howard wrote, “He must have been cognizant of the methods being employed but he was absorbed in his own affairs and chose to ignore them, as he did on other occasions, thus employing a sort of split personality…”

For all these reasons the future did not look bright for Luther Burbank in the autumn of 1915. To be saddled with two bankrupt companies (with debts?) and his base of supporters lost, he might have to sell his precious farms as well as the rights to every plant he still owned. It would be a crushing, utter defeat.

And then a completely unexpected letter arrived from a San Francisco newspaper: How would he like to meet Thomas Edison?

NEXT: RELAUNCHING LUTHER BURBANK


1 “On March 12, 1916, the press forfeited its charter to do business in California by reason of nonpayment of taxes…” pg. 199, “A Gardener Touched With Genius” by Peter Dreyer, 1985

2 pp. 389-398, “Luther Burbank A Victim of Hero Worship” by Walter L. Howard, Chronica Botanica, 1945-6

 

sources
(Any unattributed quotes or assertion above were sourced from THE UNDOING OF LUTHER BURBANK, PART I or THE UNDOING OF LUTHER BURBANK, PART II)

 

BURBANK PRESS SENDING OUT 1,800,000 PIECES OF MAIL
Tremendous “Ad” Is Being Given City of Santa Rosa

People who visit the Santa Rosa post office late at night are greeted by an air of bustle and stir inside the mail room. The whirring of the electric stamp canceller and the movements of the mail clerks indicate there is something doing. The activity has been in progress since January 26, and will continue until April 25th.

Between the dates the Luther Burbank Press will send out 1,800,000 pieces of mail matter, and the are being handled at the rate of 24,000 every night.

Probably not all of the people in Santa Rosa and Sonoma county realize what a big boost the Luther Burbank Press is giving Santa Rosa, and incidentally the whole county. Every piece of mail bears a small picture of Mr. Burbank and the address “Santa Rosa, Sonoma County, Cal.”

[..]

– Press Democrat, February 7 1914

 

The last annual report to stockholders, Aug. 31, 1913, of the Luther Burbank Press, Santa Rosa, Cal., shows the company has outstanding preferred stock at $415,050 and that there has been issued $120,000 of common stock. It is understood that the defunct Cree-Binner Publishing company and the Luther Burbank Publishing company were predecessors of the Luther Burbank Press and that the basis on which these companies have operated is a contract with Luther Burbank of Santa Rosa, Cal., for the publication and sale of books to be written by him relating to his discoveries in the field of horticulture. The prospect of income from the purchase of stock in a business of this nature is speculative.

– Chicago Tribune, July 8, 1914

 

PARTNERS HAVE PARTED COMPANY
Robert John and John Whitson Dispose of Their Interests in the Luther Burbank Press

It is reported here that Robert John and John Whitson, who organized and established the Luther Burbank Press in this city a few years ago, have parted company. It is understood that they have disposed of their interests in the Luther Burbank Press to a big Chicago publishing concern which will carry on the work on an enlarged scale. Three volumes have already been published and work is now in progress on the remainder.

The firm did an immense circularizing business from Santa Rosa, reaching to every State in the Union and even to foreign countries. When the field had been practically covered with this kind of work the local offices were closed and about six months ago all activities were transferred to New York City, where it was planned to establish quarters and put out a large force of subscription agents for the work.

The news that the men have parted company and the corporation has been taken over by a Chicago firm will come as a great surprise to Santa Rosans generally.

The company has met all its financial obligations and it is said provision has been made for closing up its affairs on a cash basis.

– Press Democrat, May 16 1915

 

IS BEING HARASSED BY HIS FORMER WIFE

New York, May 15. John Whitson, Vice-president of the Luther Burbank Press, of Santa Rosa, Cal., has been served with papers in a complaint by his first wife, in which she charges him with failing to provide for her and their two children and sues to recover $16,000 she has paid out of her private fortune for their maintenance.

– Press Democrat, May 16 1915

 

WORKS 9 YEARS FOR FUNDS TO SUE HUSBAND

NEW YORK – “For nine years I have struggled to get to the point financially where I could humble the man who made life miserable for me. Nine years ago I was penniless and he was on the road to wealth. Now I have risen and he is down. This is a woman’s world as well as a man’s.” Mrs. Anna Whitson, thus described her reasons for filing suit in New York for separation from John G. Whitson, one of the founders of the Burbank Press, Santa Rosa, Cal., despite the fact that her husband obtained a divorce from her several years ago at Reno, Nev. She has brought additional suit for $46,000, which she says should have been hers had not Whitson, as she alleges, deserted her nine years ago. “If I win my separation and a judgment,” says Mrs. Whitson, “the money will go to the children; I want nothing from him, nothing but revenge.”

– UPI wire story, June 15, 1915

 

WANT TO INCREASE CAPITAL STOCK
Mr. Burbank Denies Rumor of Dissatisfaction – Directors Decide on Plan to Increase Working Capital

In a published interview yesterday Luther Burbank stated positively that any rumor to the effect that he was dissatisfied with The Luther Burbank Company, sole distributors of his seeds and creations, or with its financial standing, was absolutely unfounded.

It is possible that rumors as to the financial outlook of the Luther Burbank Company may have grown out of the fact that stockholders have been asked to increase their holdings so as to provide a bigger cash reserve, thus enabling the company to give time to big purchasers who have found money collections somewhat slow, and to provide an addition to the working basis.

In a recent statement issued to the stockholders of The Burbank Company, some of whom reside here – the big stockholders being men of wealth and prominence in the bay cities – the directors said regarding the additional stock issue:

“You are hereby notified that the board of directors has authorized the sale of 1,200 shares of stock of the par value of $25. This stock is to be purchased only by the present holders of shares in the company. Payment is to be made as follows: $12.50 per share in cash the difference between the par and the cash payment amounting to $12.50 per share is to be taken out of the undivided profits…

“…The directors have determined upon this offer of stock in order to increase the working capital of the company. The experience of the last year has demonstrated that the actual cash capital of the company is not sufficiently large for the business of the company. New Burbank novelties turned over to the company by Mr. Burbank must be carried and propagated for from two to three years before sufficient quantities are available to make marketing profitable. This alone keeps occupied about $45,000 of cash capital…”

– Press Democrat, June 30 1915

 

RUMOR DENIED Persistent rumors have been afloat for the past several days to the effect that the Burbank Company is in financial difficulties and this week the reports were strenuously denied. The directors state that there is absolutely no truth to the report and Mr. Burbank, when seen by a local newspaper reporter, stated that the company is doing as nicely as he could desire and the business is being well handled and is in good shape.

– Sebastopol Times July 3 1915

 

BORROWS TO PAY ALIMONY
Whitson Protests Against Increase From $75 to $500 a Month.

The suit of Mrs. Hannah Whitson for a separation from John T. Whitson was heard yesterday by Justice Hotchkiss of the Supreme Court. Mr. Whitson appeared, not to contest the suit, but to protest against his wife’s application that alimony of $75 a month he has been paying her be increased to $500. The Whitsons were married in April, 1896, and they separated in January, 1900. They have two children, Bertram, 18 years old, and Gladys, 16. Mr. Whitson’s name used to be Kopple, but he had it changed by the courts.

Before she brought the suit, Mrs. Whitson tried to effect an arrangement with her husband by which he would pay her $35,000 in settlement of her claims against him. She said that since she ceased living with him she had spent $46,000 out of her own estate to support herself and children. The agreement was about to be signed when Mr. Whitson’s creditors began troubling him.

Mr. Whitson was the Vice President of the Luther Burbank Press at Santa Rosa, Cal. Yesterday he testified that he and Robert John owned two-thirds of the capital stock of the press company, and that last April their creditors notified them that unless they relinquished the stock the concern would be thrown into bankruptcy, but that if they surrendered their interest each of them would receive $12,000 if the plant finally became successful. The stock was given up, and Mr. Whitson said he came to this city and got a job, but lost it a short time ago through no fault of his own.

Asked where he got the $75 a month he was paying his wife, he replied that he borrowed it from his brother and from friends. He would continue making these payments if he possibly could, he said, but he was sure he could not pay any more than $75. Concerning his present means he said that he had earned only $750 since April 15, and that he had only $8 in cash.

He said that a short time ago he had a talk with his son and told him that if the plantiff did not stop bothering him he would not be able to earn anything. Asked if he did not say it was only in Cherry Street that people thought one wife was enough for a man, he replied, “No.”

[..]

– New York Times, January 12, 1916

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generalhospital

GOODBYE, GENERAL

Another landmark of old Santa Rosa is slated for demolition, so anyone wanting to say farewell shouldn’t dawdle. Newcomers to town during, say, the last forty years, probably don’t know about it; native Santa Rosans who are Baby Boomers (or older) were probably born in it. That place is the old General Hospital at the corner of A and 7th streets, and it still looks almost exactly as it did about a century ago, when it was built in 1922.

It was just the sort of hospital you’d expect to find here during the town’s Shadow of a Doubt years, before and after WWII. The general practitioner doctors patched up farmers gored by bulls and reckless drivers who wrecked their autos on the Redwood Highway. They removed oodles of appendixes and tons of tonsils. So many casts were made for broken arms and legs they probably used enough plaster of paris to plaster every ceiling in Paris.

The tale of Santa Rosa General Hospital neatly breaks down into three acts but before raising that curtain, a few words about why it’s being demolished: That entire block – Morgan to A street, 6th to 7th street – is to be torn down in stages in order to build the Caritas Village Project. The hospital is scheduled to be razed in early 2022 and replaced by one of two large affordable housing apartment buildings and a third large building on the block will be a family and homeless support center. The three buildings have a unified design and are quite attractive; they will surely be an asset to Santa Rosa for decades to come. But there are two really important reasons why the city should not allow them to be built at that location.

Thirty years ago in 1990, Santa Rosa (finally) recognized that much of its unique character had been heedlessly demolished. To save what little was left of its heritage, a few of the old neighborhoods were designated as Preservation Districts, with “St. Rose” being one of the first. New construction has to conform to stylistic guidelines in order to fit in with the overall look. To now exempt an entire block from both letter and spirit of the law is a dangerous precedent which could be used by developers to build anything, anywhere. And since the Caritas Village plans were developed long after this Preservation District was formed, the project backers began with the assumption that they could get away with violating city law.

The other worrisome aspect is the three-story, 42k square-foot building intended to provide one-stop services to the county’s homeless. It’s a noble idea except the location is three blocks from Courthouse Square, which only ensures that our grown grandchildren will still be avoiding downtown because of its vagrant problems. Look, Santa Rosa has a history of making foolish and short-sighted planning decisions – I’m in the middle of writing a ten-part series just about the 1960s screwups leading up to the mega-mistake of approving the shopping mall – but surely city planners recognize it’s not wise to build a magnet for the homeless so close to the city core. Final approval decisions on Caritas Village will be made in coming months (planning reviews start February 27, 2020) so let the City Council know what you think about the project.

In the spotlight for General Hospital’s Act I was Henry S. Gutermute (1865-1958), a man who had his fingers in many pies. We first met him in 1905 when he had the Maze Department Store in Petaluma, on the corner where the Bank of America now stands. Fast forward to 1915 and he’s now president of the Burke Corporation, the new owner of the Burke Sanitarium, which five years earlier had been the scene of Sonoma County’s crime of the century. To scrape away the scandal and relaunch the sanitarium they threw a luxe dinner and dance for 400 movers and shakers. What the store and the sanitarium have in common is that Gutermute liked to heavily advertise – a practice he would continue with General Hospital, although it was unusual to find newspaper ads for actual hospitals.

generaldevoto(RIGHT: The Devoto home at 804 Fourth st. Photo courtesy Sonoma County Library)

Meanwhile, in 1914 a large family home at 804 Fourth street, then two doors east of the county library, had been converted into a new hospital. (Compare that lost majestic home to the squat little bank bunker there now and reflect upon why it was necessary to establish the Preservation Districts.) Called the Lindsay-Thompson Hospital/Sanitarium it was similar to the Mary Jesse/Eliza Tanner Hospital, another residence turned small hospital that was a block away. Both included an operating room.

That incarnation lasted just a year before it was taken over by the Burke Corporation, meaning Gutermute and his partners. They incorporated the General Hospital Association and renamed the place “General Hospital.” Presumably their business plan was to offer a package deal with surgery in Santa Rosa and recuperation at their health resort, as many newspaper items reported patients shuffling back and forth.

For the next four years little General Hospital hummed along, with nearly daily ads in the newspapers offering “MEDICAL SURGICAL OBSTETRICAL” services. (Fun fact: In 1916, the McDonald’s and other local nabobs marched their kids over there to have their tonsils removed en masse as a preventative measure before the start of the school year.) Then came the eviction notice – the Devoto family wanted their home back in thirty days. Santa Rosa had a 1919 housing crunch because of all the soldiers returning from WWI.

Instead of renting another large house, Gutermute scrambled to construct a temporary hospital from scratch. A special session of the City Council was called to grant him permissions to build something on the corner of Seventh and A streets – and just six weeks later (!!) the new General Hospital was open for business in January, 1920.

The new hospital was composed of six “bungalow cottages.” Cecil Etheredge, the Press Democrat’s City Editor was an early patient and described the setting. (Etheredge was being hospitalized for serious injuries in the county’s first passenger airplane crash.) “The General Hospital, seen outwardly, is built of bungalows and courts, in units, connected by runways. Every part of the hospital can be connected with any other, or be entirely segregated,” he wrote. Elsewhere the “runways” were described as “covered hallways.”

Because of this design, he noted that a ward for influenza patients could be isolated from the rest of the hospital – the Spanish Flu was still on everyone’s mind, having run its course only a year earlier after killing 67 in Santa Rosa alone. “H. S. Gutermute, when he planned his new hospital, figured the only way was to build it big or capable of being made big enough for emergencies,” Etheredge wrote.

The buildings were designed by William Herbert, a Santa Rosa architect mentioned here several times earlier. (There’s no truth in the story that these were “WWI barracks” moved from somewhere else.) Four of the six cottages were patient wards; there was a separate cottage for surgery and another for the administrators and the kitchen.

Gutermute pulled out all stops for advertising his new hospital in early 1920, with a series of numbered ads in both Santa Rosa papers. The large display ads promised to give invalids better care than could be offered at home and invited the public to come down for an inspection of their new 40 bed hospital with “Automobile Ambulance at your Service.” Each ad ended with the new motto: “The hospital of the open court and spreading oaks.”

1937 ad for Santa Rosa General Hospital
1937 ad for Santa Rosa General Hospital

Work on the buildings continued for the next two years. The covered walkways between buildings were enclosed to become real hallways and make the separate cottages into a unified structure; a new wing was added which included a maternity ward and the exterior was given the stucco walls that are still seen today. It’s unknown if Bill Herbert was involved in these modifications and additions, but I doubt it – when Gutermute hired him in 1919 he was just starting his career and probably worked on the cheap. By 1922 he was a well-established architect in Santa Rosa; I suspect the design was done by C. A. McClure, who was (literally) the new kid on the block. More about him below.

While Gutermute continued to own the hospital until 1945, he was rarely mentioned in association with it anymore. In 1923 he opened Central Garage on Fifth street, which was a used car dealership as well as the main general auto repair shop downtown. He apparently retired after he sold the garage in 1931, listing himself in the 1940 census as “owner General Hospital.”

Also in 1923 the first baby was born in the new maternity ward; a new era began.

Act II showcases the days of Gladys Kay, the long-time manager of General Hospital. What set her apart was being one of the nicest people you could hope to meet – and that the General Hospital staff shared that spirit. Gaye LeBaron once quoted Dr. Frank Norman, who was sort of Santa Rosa’s medical historian: “Tender, loving care. That was General’s secret.”

All together now: So how nice was Gladys Kay? Before she left on a month-long vacation, the nurses threw a we’ll-miss-you party. Whenever the PD ran a letter from someone thanking General Hospital for caregiving of a loved one, Gladys Kay was singled out for kindness – today who can even imagine knowing an administrator, much less expressing personal gratitude to same?

She was promoted to the job in late 1945. Earlier that year Gutermute had sold the hospital for about $50k to MacMillan Properties, a Los Angeles corporation held by five brothers – four of them physicians and surgeons. Shortly after taking ownership they installed a new manager; the nurse who had steered the hospital since 1920, Bertha Levy, said she was tired and wanted to retire (she did, and died just a year later). They replaced her with Maxine Smith, an experienced hospital administrator who had managed two Los Angeles hospitals. She quit six months later and sued the owners, claiming they had broken their promise to give her 2½ of the gross receipts in addition to her salary, room and board.

Gladys was an unlikely pick to follow a woman with such a professional résumé. She had no management training but once was apparently a nurse, although it seems she never worked as one in Santa Rosa. Her experience here seemed limited to running a downtown children’s clothing store and teaching kids to ice skate (after her death, husband Harry said she was a “Pacific Coast figure skating champ in the old days”).

generalswitchboard(RIGHT: Telephone switchboard at General Hospital in 1962. Photo courtesy Sonoma County Library)

When the MacMillans took over she was already working at the hospital, but we don’t know when she began; the first mention in the paper comes from 1944, when she was the night telephone operator. That job was quite a big responsibility – their switchboard was the county Doctor’s Exchange answering service, which was the equivalent of 911 medical emergency today.

Her watchful eyes behind those wingtip glasses saw General Hospital expand to 75 rooms, with two operating and two delivery rooms. The latter was particularly important because the Baby Boomer era was booming; in August, 1948, General set a monthly record of 67 deliveries, the most to date in Santa Rosa history.

Gladys had a knack for promotion. Movie theaters sometimes ran contests or giveaways tied to what was playing, and in 1949 Santa Rosa’s Tower Theater had an unusual stunt for “Welcome Stranger” (according to reviews, a particularly hackneyed Bing Crosby RomCom). Although the plot had nothing to do with childbirth or babies, the theater got local merchants to donate a free set of baby clothes, shoes, portrait, etc. to the first child born on the day the movie began playing here. General Hospital not only made the biggest splash, but it tied in Gladys herself: “IF the first baby born Sunday arrives at the GENERAL Hospital, Mother and Baby will receive FREE “ROOM and BOARD” during their stay at the GENERAL through the courtesy of Mrs Gladys Kay manager of the hospital.” (Alas, baby Gail Elaine Franks was born at the County Hospital instead.)

Her greatest challenge was also PR related: How could General coexist with Memorial Hospital once the 800 lb. gorilla entered the playing field? Memorial was to open on New Year’s Day 1950, and a year before that she began running large newspaper ads (with her name and phone number at the bottom, natch) promoting General as additionally being a long-term care facility for the chronically ill and elderly. Then she announced their eight bed maternity ward would soon be closing because they expected most women would give birth at Memorial once it opened, and sent a letter to all 78 local practicing physicians asking if they had “further need” of General. Intended or not, this was a master stroke. From the Press Democrat:


Earlier reports to the contrary, the surgical and maternity services will be continued “if business continues on like this,” Mrs. Gladys Kay, hospital manager, said. She said the public “phoned and phoned” in answer to a disclosure by her earlier this month that insufficient hospital business in these two services might lead to their discontinuance. She said local doctors also have responded to the dilemma and that things are “picking up.”

Gladys had won the battle; not only did the MacMillans keep it open but added a new surgery and an additional 25 bed, $150k wing designed by Santa Rosa’s leading architect, Cal Caulkins.

Alas, the momentum only lasted so long; the trend in modern medicine was swinging away from General’s casual, homey approach to Memorial’s network of efficient clinicians and specialists (County Hospital, too, had become a major competitor). General Hospital really did close its maternity ward in 1957 when they were down to 20 births a month. Although Gladys didn’t retire until 1963, the hospital’s best days were in the rearview mirror.

General Hospital’s final act began about forty years ago and is still not quite over.

In 1966 the MacMillans sunk $50,000 expanding the hospital staff and adding new equipment; in 1969 the plan was to promote the place as cardiac specialists, with state-of-the-art gear such as an “external pace-maker” and a “mobile coronary rescue ambulance.” (Later they would boast of a “computerized E.C.G. machine, from which heart tracings are transferred by telephone and readings teletyped back within two minutes.”) Come 1971 and the big deal was their new 24-hour emergency room, complete with an emergency phone number (still no 911 services). Finally the MacMillans gave up and sold the whole works to Memorial Hospital in 1979.

generalor(RIGHT: General Hospital operating rooms in 1962. Photo courtesy Sonoma County Library)

Gone were the big ads with photos of smiling doctors, laughing nurses and even their orderlies and “Green Lady” volunteers; there were no more promises that the hospital was “purposely overstaffed” (“it is the hospital’s aim to make its patients feel at home during their stay”). All that the new administrator, who was brought in from Memorial, advertised was their new St. Rose Alcoholism Recovery Center with its 3-week program and AA meetings, foreshadowing what was to come.

The staff expected Memorial would eventually close the place; they watched as all their expensive medical equipment was wending its way across town, even if Memorial Hospital didn’t need it – Gaye LeBaron had an item about a resuscitator device for newborns being turned into a tropical fish tank. But it still came as a shock to the 134 employees to discover on May 31, 1984, that Santa Rosa General would be closing in 60 days – and they learned about it from reading the newspaper.

“Honk If You Will Miss Us,” read a heartbreaking banner outside the entrance as the last days ticked by and staff members struggled to find new jobs, a problem made worse because Memorial also canned 40 of its own employees at about the same time. Memorial claimed the closure and layoffs were due to anticipated lower Medicare reimbursements, but Memorial Hospital was also in negotiations with the nurse’s union over hours and an increase in pay, with the administrators being quite clear there would be major cutbacks before they made any bargaining concessions.

For about a year the St. Rose Recovery Center was the only occupant of the old hospital, but even that program was moved in April, 1985 to another building nearby which was also owned by Memorial: 600 Morgan street. For the first time in its 65 year history, General Hospital was now empty and quiet. Memorial considered putting it up for sale with an asking price of $2M; the city floated the idea of leveling the buildings for a 300-space parking lot. Can’t have enough parking meters!

The modern homeless-centric era began in 1987, when the Salvation Army wanted to use the hospital building as an emergency 250-bed winter shelter. When the charity, neighbors and members from the Sonoma County Task Force on the Homeless toured the facility, they found squatters living there. One of them, Jerry Rioux, a former carny, gave them an impromptu tour. “I am here to set your mind at ease. This is a great place.” Rioux even offered his services to repair the damage he had caused while breaking in to the building.

Although the Board of Supervisors called the county’s homeless problem “staggering,” they balked at the $20,000 startup cost at first, which caused the shelter to delay opening until February, 1988. Even with that money, the Salvation Army lost $30,000 running the shelter for four months and couldn’t afford to offer it again next winter.

And so we arrive at Santa Rosa General Hospital’s last occupant: Catholic Charities. On Christmas, 1989 they opened their year-round shelter, the Family Support Center, which is still there as of this writing.

In the thirty years since, both the city and Catholic Charities have become more invested in concentrating the homeless in that particular block. In 1992, Santa Rosa used $102k in redevelopment funds to remodel 600 Morgan street as Catholic Charities’ homeless service center. That former home and the hospital were still owned by Memorial and used by Catholic Charities rent-free until they were finally sold to CC in 2015. After the last family moved away last year, Catholic Charities now owns the whole block.

According to current plans the first notable building to be torn down will be “Casa del Sol,” the four-unit apartment building at 608 Morgan Street. Although it was built in 1922, the same year General Hospital was finished, it was never associated with the hospital, as the classified sections in the old newspapers frequently advertise the apartments for rent. The architect was C. A. McClure, who was selling blueprints of this same design to others around Santa Rosa. Also in 1922 a developer used the plans to build the two apartment buildings at 422-426 Humboldt street which are still there – in the center of that courtyard the owner had a canary aviary, since the entire nation was inexplicably going canary crazy at the time.

Should the schedule hold, General Hospital will be demolished on February 1, 2022 because as Catholic Charities’ consultant wrote in the DEIR, the place has absolutely no importance: “[It] is not associated with events that have made a significant contribution to the broad patterns of local, regional, or national history…[it] does not meet the criteria for individual significance and is therefore recommended not eligible for listing on national, state, or local historic registers nor as a contributor to the historic district.”

To that consultant all I can say is this: Do better research. Reading the old newspapers I am stunned at the affection our community expressed for that hospital over its 60+ years. If that engagement with the hospital doesn’t show “a significant contribution” to local history, I think you’ve got your criterion screwed on backwards.

But come 2022 and we find bulldozers awaiting, let’s form a caravan of vehicles down A street that morning and give that old dear a last resounding honk. Yes, General Hospital, we will miss you, deeply. Or should.

1941 view of Santa Rosa General Hospital. Photo courtesy Sonoma County Library
1941 view of Santa Rosa General Hospital. Photo courtesy Sonoma County Library

 

2020 view of former Santa Rosa General Hospital
2020 view of former Santa Rosa General Hospital

 

sources
DEVOTO HOME BEING MADE INTO HOSPITAL

The remodeling of the former David Devoto home on Fourth street, to be used as a sanitarium, is in progress. The work is to he completed about the first of October, when Mrs. Margaret Lindsey Thompson, formerly associated with a prominent San Francisco hospital, will conduct a modern sanitarium. The Devotos are at present residing on McDonald avenue.

– Press Democrat, September 15 1914

 

NEW HOSPITAL IS NOW OPEN
The Lindsay-Thompson Sanitarium, Located on Fourth Street, Admirably Arranged

The Lindsay-Thompson hospital, which occupied the former Devoto residence near the corner of E street on Fourth, has been opened, with Mrs. Margaret Lindsay-Thompson as manager. The big place has been ideally fitted up for a hospital and the large, dry and well ventilated rooms have been comfortably furnished according o the most approved methods for hospitals.

The hospital has all the latest appointments required by medical science and this is particularly noticeable in the operating room, which is equipped with automatic sterilizer and everything calculated to be of service and benefit to the sick and injured…

– Press Democrat, September 29 1914

 

ARTICLES OF GENERAL HOSPITAL ASSOCIATION FILED HERE ON MONDAY

In the office of County Clerk W. W. Felt on Monday articles of incorporation of the General Hospital Association were filed. The incorporators are H. S. Gutermute, A. G. Burns and J. C. Hardin. The two former, Messrs. Gutermute and Burns, are at the head of Burke’s Sanitarium here, Mr. Burns being the manager.

As the name of the concern indicates it is for the management of hospitals, etc. Recently it was mentioned that the Lindsay-Thompson Hospital, in this city, had been taken over by the Burke Sanitarium and in this connection the articles of incorporation were probably filed on Monday. The capital stock of the association is $25,000.

– Press Democrat, October 19 1915

 

BUNGALOWS FOR NEW HOSPITAL
Construction Work on Cottages for the General Hospital Will Be Commenced Today on Minnehan Property.

The General Hospital, conducted for several years past by H. S. Gutermute in the Devoto Home on Fourth street, will be quartered in cottages to be erected on the Minnehan tract within another month, if the plans now under way are successfully carried out.

Mr. Devoto, having decided to take possession of his property, has served Mr. Gutermute with notice to vacate within thirty days, hence the hurried decision to prepare a new home.

William Herbert, the architect, has prepared plans for a series of five bungalow cottages, and W. L. Proctor has been given the contract to erect them on the property at the southwest corner of Seventh and A streets.

The plans were approved Monday afternoon by the city council at a special session, and work on construction will be commenced at once. It is expected lumber will begin to arrive on the lots this morning and a large force of men will be put to work, so construction may be rushed to an early completion.

The plans provide for a series of six bungalow cottages of frame type. There will be an administration building in the center facing Seventh street, with a large court in front. This will give office quarters, matron’s room, reception hall and room with dining-room and kitchen.

Leading from this will be covered hallways connecting four other bungalows which will be used as hospital wards, and one which will be devoted to operation and anesthetic rooms, drug quarters and store-rooms. These will be on either side of the administration quarters and constructed in this manner all will get the sun all day and be extremely well lighted.

– Press Democrat, October 28 1919

 

General Hospital Moves To New Location in A St

The work of moving the General Hospital from its location in Fourth street to the new headquarters in A street started Thursday. It will be the middle of next week before the institution is installed in the new cottages, that have been built at A and Seventh streets.

The Devoto home, where the hospital has been established, will be remodeled and the family will occupy it after the first of the year.

– Santa Rosa Republican, December 12 1919

 

WHERE THE SICK ARE CARED FOR
By C. W. ETHEREDGE

Some weeks ago Ad-Man Banker strolled over to my desk, struggled simultaneously with his moustache and tongue, and finally asked me if ever I did any special stuff, which may mean anything in a newspaper office.

When he said he wanted me to go down and look at the General Hospital and tell Press Democrat readers what I found there. I assured him he was fishing in the wrong creek, but I’d lend him The Walrus to look things over.

In the course of some days she produced (The Walrus is a she) an article and story which was as good as anyone could do on that kind of an inspection – but now I have been here two weeks in person, and I’m glad to tell Santa Rosa people some of the nice healthy and handy things they have lying around loose, unknown or unappreciated except by those who have been in hospital.

H. S. Gutermute, when he planned his new hospital, figured the only way was to build it big or capable of being made big enough for emergencies. That day has nearly arrived, and a chain of sickness and accidents resulted in nearly every room and ward filled. One thing was certain, there were no spare nurses anywhere, and I felt pretty lucky with my chances in getting a private nurse for a couple of weeks.

The General Hospital, seen outwardly, is built of bungalows and courts, in units, connected by runways. Every part of the hospital can be connected with any other, or be entirely segregated. A “flu” ward can be (doesn’t happen to be, though) located across a court and yardway, and I wouldn’t have as much chance of getting the flu as if I were running around loose.

It is this convenience of operation. connection or segregation, which today makes life cast in happier lines, provided you have to be sick, than before Mr. Gutermute carried his plans to completion.

– Press Democrat, February 22 1920

 

MODERN APARTMENT HOUSE COMPLETED

Santa Rosa’s newest apartment house built by C. A. McClure at 608 Washington street, is completed. and waa thrown open to inspection for the first time Sunday.

The building follows the mission style of architecture, with stucco finish, and is one of the most pleasing in the city. Each apartment has four rooms, and is equipped with all modem conveniences. Hot water is furnished day and night from an electrically heated boiler, which serves all apartments.

– Press Democrat, July 25 1922

 

Building Moved Next To General Hospital

H. S. Gutermute, who recently purchased the one-story building opposite the Press Democrat office, has moved the building to his property next to the General Hospital on A street, and will transform it into a stuccoed – finish store building for rental purposes, he said Tuesday.

The fact that an attractive store building next to the hospital will hide from the view of hospital patients the sheet metal warehouses on A street caused him to place tiie building in its present location, Gutermute said. Land between the store and the hospital will lie planted with greenery.

Gutermute purchased the building from Thomas Sullivan, mover. He intends to place a new wall on the north side of the building and to renovate and plaster the interior.

– Press Democrat, November 22 1922

 

General Hospital Is Improved To Meet Increasing Demands

Santa Rosa now has a bungalow type hospital with more than 17,000 square feet of floor space, with 75 rooms and 50 beds for patients, which has been thoroughly equipped with all modern facilities and conveniences. With its medical, surgical and obstetrical wards it can care for all cases from the city and surrounding country for some time to come.

The hospital is owned and operated by H. S. Gutermute, who built up the Burke Sanitarium into a strong establishment in five years and then came into Santa Rosa, where he established the General Hospital in the old Devoto home in Fourth street. Two years later he was forced out when the war-time demand for houses made it necessary for Mr. Devoto to return to the house to reside.

At that time Mr. Gutermute erected the first unit of the bungalow type of hospital to house the General Hospital. This he has improved and added a second unit and completed the exterior with a stucco finish. The new unit in the form of a wing gives 25 additional rooms and has been set apart to include the maternity ward.

FORM OF CAPITAL LETTER

The hospital, which is in the form of a large letter “E” facing the East, is located on the old Menihan property at the southwest corner of A and Seventh streets. The lot is 300 by 125 feet, and the building is 220 feet long, with the three wings 104 feet each. The lot is large enough to allow a fourth wing to be added at any time in the future there is a demand for additional rooms. The building is nestled beneath the large live oak trees, giving it a very pleasant and inviting appearance.

The main entrance, lobby, reception room and office is between the north and middle wings. In addition there are four surgical, three X-ray, two delivery, three utility and seven staff rooms, besides the dining room, kitchen and store rooms. There are two large utility and numerous private bath rooms throughout the building.

The floors of the maternity wing are double and covered with brown battleship linoleum, while the corridor floors are carpeted with sound-proof rubber. The corridors are heated with gas radiators, and there ate electric heaters in each room. All rooms have running hot and cold water.

The furnishings are all of the best quality. The beds are of the latest adjustable type such as are used in some of the largest and most important eastern hospitals, including that provided by Henry Ford for his hospital at his factory.

The maternity wing has been added at the special solicitation of many physicians, who saw the needs of the city in that direction and the requirements of the future. It is expected the ward will be used more and more now that it is available at really less expense than cases ran be cared for at home.

Mr. Gutermute, in speaking of the hospital and its recent enlargement, said he hoped no one would misunderstand and think he was making a mint of money from the Institution, as, in fact, he said, he had been compelled frequently to take money from other enterprises he is engaged in, to meet hospital bills, as the expenses of upkeep and maintenance steadily grow regardless of the amount of business handled. With the enlarged capacity and facilities it is expected the income will increase accordingly as it becomes more widely used.

The Institution is open to all physicians, and already more than a dozen in this city, Sebastopol and other nearby points are using it in serious cases. The management assures all of the best possible care and treatment.

The new hospital will be thrown open for public inspection Thursday afternoon and evening, when all physicians and the public generally are cordially invited to call and inspect the place.

Mr. Gutermute has gathered a very efficient staff of trained workers about him for handling the work of the hospital. Several have been in his employ for five years or more, while all are loyal, experienced workers.

Miss Bertha Levy, the matron in charge, is a graduate of Lane hospital, San Francisco, and has had years of practical experience in such work. She was one of the first nurses Mr. Gutermute secured and she is considered the best in her work to be found. She is always pleasant and agreeable to all with whom she comes in contact and has proved herself an admirable executive.

Miss Elizabeth Tanner is in charge of the maternity ward. She too is a graduate of Lane’s and has proved her worth by faithful continued service in the institution.

Miss Myrna Ewing, who is head of the surgical yvard, is a graduate of the Mt. Zion hospital, San Francisco, and is faithful and efficient in her work.

Miss Mario Behrns, a graduate of the Alameda county hospital, and Miss Marie Darcy, graduate of the Idaho state hospital, have been with the hospital for several years. Mrs. Swisier is the night nurse while the Misses Naoma Pitkins and May Mendoca are two undergraduate nurses doing faithful work under instruction.

In addition the staff has a cook who has been there for several years, a maid, porter and yard man to keep the place up in proper condition.

It has been well said that a building does not make a hospital any more than a house makes a home. It is the care and treatment afforded by the staff, the kindly and courteous little attentions given patients which goes to make up the hospital as it does the home. All of these are afforded nf the General Hospital.

– Press Democrat, December 10 1922

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THE UNDOING OF LUTHER BURBANK, PART II

On September 4, 1915, Luther Burbank met his destiny – or rather, he met the man who would eventually write the book which would define history’s view of his life’s work. Had Burbank somehow enjoyed a miracle of foresight to know that, he might have spent considerably less of the afternoon grousing about how he was being victimized.

“Burbank was thoroughly angry; his resentment had been growing for months,” botanist Walter L. Howard would write some three decades later. “With flashing eyes he declared that the Company had swindled him out of everything he had, which, of course, was an exaggeration but he was crippled financially, with his normal income from sales having been cut off for two or three years.”1

“The Company” was the Luther Burbank Company, which had been formed back in 1912 to completely take over the sales wing of his business, giving Burbank a guaranteed annual income and allowing him to concentrate on plant breeding.2 “I have no time to make money,” he told the Press Democrat. “I’ve more important work to do.” (More background can be found in “BURBANK INC.” – and by the way, have you read, “THE UNDOING OF LUTHER BURBANK, PART I“?)

But by that late summer afternoon in 1915 the company had only paid Burbank a fraction of what was owed, and that only after he had repeatedly twisted arms.3 The business was on the verge of collapse; that same month, top management was replaced in a last-minute bid to save it from bankruptcy. Another clue that the company was in serious trouble during the summer of 1915 was that a letter went to stockholders offering to sell them more shares at half the $25 face value, as long as they paid for the stock in cash. But even that was too expensive, commented the San Francisco Examiner, as brokers were offering shares at $8 and not finding buyers.

Looking back, it’s no surprise the Company was circling the drain by then – the real mystery is why it was even formed; there was really nothing in its prospectus except for the exclusive right to use the respected name of Luther Burbank.

They had little to sell at first except for company stock and his spineless cactus, and that only because Burbank already had established a cactus plantation near Livermore. While breeding a new plant he normally only produced a few ounces of seed or a few feet of graft-ready branches before selling the rights to a commercial grower, who would then need a few years to build an inventory of enough stock to sell. In 1912 the Burbank Company purchased a few acres south of Oakland to start its own propagation nursery but by the time the Company produced its first product catalog the following year, descriptions of everything available fit in ten pages, with each page padded out with large photos. Later catalogs were more than three times longer, but only because the Company also began selling standard seeds and bulbs as well. (All of their catalogs can be found under the Luther Burbank section of my internet resource page.)

1914latimesad(RIGHT: Versions of this large ad appeared in newspapers nationwide during 1914)

And then there was the dilemma of the Luther Burbank Company using his name as a guarantee of quality, even while Burbank was distancing himself from anything to do with the Company and its advertising promises. Making this particularly awkward, it was Burbank who had made – and continued making – irresponsible claims about how the spineless cactus was a miraculous animal feed which would grow anywhere. As discussed in the cactus article above, Burbank’s variety was actually more temperamental than its wild forms, impractical for use as fodder and also was not completely spineless.4

Yet when it failed to live up to its promise, customers seemed to blame the Company more than Burbank. Among the complaints about the cactus which were popping up in gardening magazines during those years, a Texas farmer wrote a lengthy and bitter letter to the Houston Post bemoaning that he tried to grow a crop for two years without luck. “Some say I did not receive the best. As to that I have only the word of the Burbank company. They offered me what they called their best.”

The Company was far from blameless for its own decline, however. They wasted a terribly lot of money; while most plant nurseries sold only by mail, the Luther Burbank Company rented prime downtown locations in San Francisco and Los Angeles for retail/office space. They ran the large, costly ads such as the one shown above in newspapers nationwide and year round, not just during pre-planting seasons.

All Burbank biographers agree the Company was badly mismanaged, citing what happened to W. Garner Smith as an example. Smith was co-founder of the Company, its largest investor and secretary-treasurer. He was also their main salesman; in the early months of 1914 he traveled through parts of the East and Midwest, booking orders and signing up dealerships, such as hardware and department stores. When he returned in April, Smith found most of the deals had fallen through because the Company had raised prices without telling him. To the customers this would have looked like bait-and-switch, and Smith immediately resigned from the Company.5

Like the rest of the Company’s directors, he had no background whatsoever in the plant nursery business. He was a 29 year-old “insurance man and stock broker of San Francisco, who became so enthused with the plans that he invested a small fortune in the venture,” according to biographer Howard. His co-founder was another 30-something, Rollo J. Hough, who Howard called “a minor official of an Oakland bank” who was supremely unchallenged by not knowing anything about the plant biz – or business in general:6

Hough gave the impression of being a man who was “stepping out” after a period of enforced suppression of his talents in a sedate banking institution. Self-confident and optimistic by nature, he threw himself into the new enterprise with a bounding enthusiasm that was matched only by his driving energy. Undeterred by the fact that he had no personal knowledge of the seed and nursery business, he evidently felt that talent of this kind could be hired when needed.

Had Howard dug a bit further, however, he might have had an even lower opinion of him – it’s hard to determine if he was a scammer or delusional. In 1910 Hough updated his résumé from teller (assistant cashier) at the Oakland Bank of Savings to attorney at law. Where, when (or if) he studied for the bar is unknown; all we have is that he identified as a lawyer from that year onward, although he apparently never had a law office or joined a firm. The only references we have of his legal career come from 1910 and 1911, when he went East to counsel two nieces of the late industrialist Robert Seaman, who claimed his widow had hoodwinked him into turning over his factories to her. (That widow was Nellie Bly, the first modern investigative reporter and she of “around the world in 72 days” fame.) The suit went nowhere. His only other known case was likewise all smoke, as charges were dropped before making it to a court docket. Although he lived until 1952, the single later reference I can find to his post-Burbank years is a 1921 bankruptcy when he was supposedly an investment broker in Los Angeles.

1914readingad(LEFT: Portion of a Reading, Pennsylvania department store ad, 1914)

Hough acted as General Manager for the Luther Burbank Company and Howard wrote another reason for its failure was “his refusal to see the necessity of employing skilled help to oversee the growing of seeds to keep them true to name and type.”7 Smith saw Burbank’s sweet corn growing side-by-side with standard varieties, which would have guaranteed cross-pollination.

Hough also apparently spent much time scouting for new farmland to buy, despite his general ignorance about growing plants. His last deal was in April 1915 to acquire the Rodgers Ranch in Pleasant Hill, where he told a Martinez paper he would be building a bungalow and wanted it “distinctly understood, that he and not the Burbank company is the owner of the ranch and he plans to convert it into an ideal experimental and demonstration farm.” Whether he planned to lease it back to the Company or create his own rival business is unknown, as he was sacked/resigned a few months later. Afterwards Hough briefly remained in that area selling real estate as the Alhambra Land Company in Martinez.

Some $375k in stock had been sold by the summer of 1915, but the Burbank Company was in perilous condition. An assessment found the Company grossly undercapitalized – it claimed 60 percent of the company’s assets was the intangible value of the Luther Burbank brand. Since their stock wasn’t selling even at the discount prices mentioned above, it’s safe to assume investors didn’t agree that his name was still worth that much.

By the time Hough was replaced in September by one W. S. Pitts, the Company was in crisis. Burbank was confiding to Howard – a man whom he had just met – that the Company had screwed him out of everything. In the weeks that followed, the Board levied stockholders for $2.50 a share, which was in addition to the $1 it had earlier demanded for the reassessment. Holding Burbank Company stock was looking less like a sound investment and more like having a losing hand in a poker game and still raising the ante. But as Howard wrote, “the great majority of the stock purchasers put up their money and held on to their stock because of an abiding faith in Burbank’s products, which, in a final analysis, meant a child-like faith in the man himself.”8

The unraveling continued as Burbank’s personal lawyer apparently began threatening a lawsuit. “The Company has been badly mismanaged, and that is the sole cause of its financial difficulties,” Pitts told the San Francisco Chronicle. “We asked Burbank to give us until March 1st to make up the back payments.” By then, the directors said, the Company would be in the midst of a new sales season and would not only be able to pay Burbank what he was owed but refinance the business. But the situation deteriorated, and was so chaotic by December that Burbank’s old friend Dr. J. H. McLeod of Santa Rosa was acting as mediator between he and the directors. (Ever wilder, McLeod was appointed to the board of directors during this time without his knowledge and consent, according to the Press Democrat, which would have been an act of criminal fraud.)

Then just before New Years’, Burbank pulled the trigger and sued for $9,775.20, being the amount due on two promissory notes which had been earlier signed by Hough (not by James Edwards, the president of the company, take notice).

His attorney told the San Francisco Chronicle, “Burbank has been contemplating such a course for some time, and is now determined to stop all activities of the corporation as far as the use of his name and the exploiting of his work are concerned.” Interviewed by the PD, the lawyer added, “Burbank has been the victim of stock pirates…They paid him the $30,000, sold stock like hot cakes and never paid him another dollar. Burbank had delayed action for a year because of sympathy with the excellent people involved.” Garner Smith objected to being called a pirate and sued the attorney for $10,000 damages.

The suit ended all negotiations with Burbank as well as any talk of bailouts or possible acquisitions. The only options considered were liquidation, giving the Company to Burbank – which was the last thing he would ever consider – or bankruptcy. After a month of discussion, the directors chose bankruptcy. At the time there was only $334 in their bank account.

Luther Burbank’s lawsuit against the Luther Burbank Company garnered widespread news coverage across the country. Some of the interest was probably Schadenfreude at the Company’s troubles, particularly from those who felt misled over the cactus hype. Others apparently thought it pretty funny that a smart guy like Burbank could be bamboozled into making dumb decisions. This item appeared in many papers:


PLANT WIZARD ‘EASY;’ HIRES PRETTY GIRL TO EXAMINE SCHEMES
SANTA ROSA, Cal., Jan. 24 – Luther Burbank, the wizard of things that grow, realizes he is so “easy” for anyone who wants his money for this, that and the other (and plenty of persons do), that he employed pretty little Miss Bessie Waters to scrutinize every proposition offered him, to decide whether it is legitimate. Miss Waters attends all Burbank’s interviews and is asked to giver her advice quite frequently.

It was a gag written by someone locally, although newspaper readers in Kansas and elsewhere wouldn’t know that. Who authored it is unknown, although the Santa Rosa Republican ran it at the top of the front page with this preface: “Among the telegraphic items of news received from the United Press Monday was the following one, telling of the supposed gullibility of Luther Burbank.” It was also the only newspaper that corrected the woman’s name to be “Betty Waters” – the real name of Burbank’s secretary, who had been working for him since 1914 and whom he would marry at the end of 1916. I don’t know whether the correction is an indicator of the Republican’s guilt, or if it’s more suspicious that the Press Democrat ignored it completely.

San Francisco Examiner ad, March 12, 1916
San Francisco Examiner ad, March 12, 1916

 

 

 

1 Walter L. Howard; Luther Burbank: A Victim of Hero Worship; Chronica Botanica; Winter 1945-1946; p. 401. At the time of their meeting, Howard was a new hire at UC/Davis as Associate Professor of Horticulture.

2 Burbank earlier had sold complete rights to many plants to seed companies and nurseries, of course, but the agreement with the Luther Burbank Company was for exclusive rights to all unsold and future creations as well as ownership of the Santa Rosa and Sebastopol farms. For that the company was to pay $300,000 in annual payments of $15,000, plus $30,000 cash (the equivalent to about $780k today) at signing.

3 The Company had given Burbank promissory notes in 1914 and 1915 for only half of what was owed in each year’s annuity, a total of $15,000. But the Company couldn’t even meet that commitment; Burbank had only received $5,920 for those two years. See transcribed article below from the San Francisco Chronicle, December 30, 1915.

 

4 Burbank never declared in print that the cactus was completely spineless, only that the spicules were insignificant enough that it could be eaten by animals; Burbank reportedly used a razor or sandpaper to smooth the cactus paddles shown to visitors. In “A Gardener Touched with Genius” author Peter Dreyer wrote Company workers used wire brushes to remove spines before shipping, and this “fraud” made buyers indignant once the cacti were planted and grew new paddles which had small spicules (2002 edition, pg. 192). Dreyer strongly implied the Company was dishonestly shaving ordinary cactus to fill orders when inventory was low, and in “The Garden of Invention” (pp. 234-235) author Jane S. Smith stated that happened as plain fact while adding speculative details, particularly that this discovery destroyed customer trust in the company. Further, I was once told another variation where this resulted in the resignation of company officers. But Howard doesn’t mention this supposed deception and I find nothing in the newspapers. Neither Dreyer or Smith provide citations. Unless more information appears, I now believe there was no misconduct of this sort and the story evolved from Dreyer’s misunderstanding of a remark made by a plant inspector he quoted, who was naively expressing surprise that “spineless” cactus were not completely free of spines.


5 Howard op. cit. pg. 399. Howard interviewed Smith in 1941 and he apparently said President James Edwards resigned about the same time. This is not true, as shown in Press Democrat items below. It’s more likely Edwards left during the Sept. 1915 shakeup.

6 Howard pp. 394-395.

7 Howard pg. 399.

8 Howard pg. 395.

 

sources
W. Garner Smith of the Luther Burbank Co. arrived in Modesto yesterday to demonstrate the uses of Luther Burbank’s Spineless Cactus to the farmers of this county…

– Modesto Evening News, May 22, 1913

 

W. Garner Smith of San Francisco, who has been spending a few days in Scranton and vicinity, left yesterday for Harrisburg and New York. Mr. Smith is a Kentuckian, one of two young men who financed the Luther Burbank products in California, guaranteeing Luther Burbank $25,000 for life and controlling all the results of his experiments.

– Scranton Truth, March 31, 1914

 

JAMES R. EDWARDS HERE ON A BUSINESS VISIT

James R. Edwards, former mayor of Santa Rosa and former assistant cashier of the Savings Bank of Santa Rosa, was in town Friday on business, returning to San Francisco on Saturday morning. Mr. Edwards is the well known president of the Luther Burbank company, with offices in San Francisco.

“Business is fine,” was Mr. Edwards’ cheery response to an inquiry.

– Press Democrat, June 28 1914

 

JAMES R. EDWARDS IS A VISITOR HERE WEDNESDAY

James R. Edwards, a former well-known resident and mayor of this city and for some time president of the Luther Burbank Company, was here Wednesday and met many old-time friends. Mr. Edwards has not been here for some time. He is looking as if the world was agreeing with him. He reports that the company’s business is picking up and a big season is expected from now on.

– Press Democrat, November 5 1914

 

JAMES R. EDWARDS IN SANTA ROSA FDR VISIT

James R. Edwards, president of the Luther Burbank Company, and former mayor of this city, was here yesterday from San Francisco for a visit. Mr. Edwards reports that the year’s business for the Luther Burbank Company has opened up auspiciously and the indications are that the year’s record will be a good one. Mr. Edwards is still very much interested in the welfare of Santa Rosa and Sonoma county, his home for many years.

– Press Democrat, March 3 1915

 

LUTHER BURBANK CO. BUY PROPAGRATION TRACT
Location Near Martinez, Contra Costa County, Is Purchased on Which Plants and Seeds of the Santa Rosa Horticulturist Will Be Raised For the Market

The Luther Burbank Co., of which J. R. Edwards of this city is the president, and which is the exclusive agency for the handling of the Luther Burbank productions, has purchased a tract of land near Martinez, for seed and propagation station. The Daily Gazette of Martinez in announcing the deal says;

“The Luther Burbank Company has purchased the J. E. Rodgers ranch of 38 acres in the Pleasant Hill district near Martinez and will establish there, one of its largest demonstration farms. On this ranch which will be improved at once will be grown thousands of the wonderful Burbank floral creations which now come from Santa Rosa and it will become one of the show places of the bay region.

“The deal was closed Friday when Mrs. Mary H. Flint of Santa Barbara who bought the ranch some time ago from the well known Martinez attorney, sold the property to the Burbank interests, the deal being closed on behalf of that firm by Rollo Hough, manager of the company who is a nephew of Mrs. S. Bennet of Martinez and a former resident of Martinez.

“In some sense the establishing of the Burbank interests in Contra Costa county is the direct result of the county’s exhibit at the Exposition. Representatives of the Burbank company inspecting the county’s exhibit marveled at the products grown here. Hough was well acquainted with the land surrounding Martinez and at once got In touch with J. E. Rodgers of Martinez who, still holding an interest in the property, successfully negotiated the sale.

“The property will be improved at once. A new bungalow will be built there and Hough will make that ranch his home. The wonderful floral creations of Luther Burbank will be propagated there and the whole property will be so planted that it will become one of the greatest show places about the bay. It lies in close proximity to Martinez and is one of the greatest boosts for this part of Contra Costa county that has come in years.

– Press Democrat, April 6 1915

 

 

Burbank Co. Stock Assessed.

The Luther Burbank Company has levied an assessment of $1 a share on its capital stock, payable on or before August 2…Accompanying the notice of the assessment, mailed to the stockholders, is a document, which the directors of the corporation call a “reappraisal of the assets of your company.” In this reappraisal, among the alleged assets stated, appears the following item:

“Value of the exclusive right to use the name of Luther Burbank and to distribute his horticultural productions – $287,500.”

The total assets as stated, including this item, are $487,700.28.

The current liabilities, including notes payable to Luther Burbank of $10,380 for “novelties yet to be delivered” and mortgages payable on real estate, total $73,023.58.

– San Francisco Examiner, July 20, 1915

 

BURBANK SUES NAMESAKE CO. FOR $9,775.20
Desires to Sever Connection With Corporation Bearing His Name
SUM DUE ON TWO NOTES
Present Manager of Concern Admits Financial Difficulties in Business

A sensational climax to the affairs of the Luther Burbank Company, a corporation organized three years ago to exploit the work of the Santa Rosa horticulturist, was reached yesterday, when Burbank, through his attorneys, Otto Irving Wise and Richard O’Connor, filed suit in the Superior Court to collect $9,775.20 from The Luther Burbank Company.

This amount is alleged to be due on two promissory notes given Burbank by the company and signed by R. J. Hough, vice-president, and Leo V. Belden, secretary. The first note was for $7500. The first was dated July 1, 1914, for ninety days at 6 per cent interest. The principal was unpaid and interest was paid only to May 1, 1915, leaving a balance of $7800.

The second note was dated January 1, 1915, for sixty days at 6 per cent interest. On this note $5620 was paid, leaving a balance of $1975.20.

Yesterday’s action was the second step taken by Burbank in a plan to sever himself, his work and his name from the Luther Burbank Company, the first having been taken last Monday, when he served on the company a notice of termination of contract.

According to Attorney Wise, Burbank has been contemplating such a course for some time, and is now determined to stop all activities of the corporation as far as the use of his name and the exploiting of his work are concerned. The company is in arrears to Burbank, Wise said, for from $20,000 to $24,000.

“Burbank has been tied hand and foot for the last three years,” said Wise, “and he has decided to cut loose. The Luther Burbank Company was organized by a group of promoters who made a contract with him under the terms of which they agreed to pay him $300,000 for his property in Sonoma county and for his work.

CAPITALIZED AT $375,000

“They formed a corporation capitalized at $375,000, sold the stock at par and made an initial payment to Burbank of $30,000. They then agreed to pay him $15,000 a year until the balance was paid. The concern was promoted on the strength of some of Burbank’s wonderful productions such as the spineless cactus and the thornless blackberry.

“Burbank has never had any direct interest in the company and owns no stock in it. Some of the best people in this city have been interested in the business, and for them Burbank has a deep feeling of sorrow.”

The promoters of the Luther Burbank Company were R. J. Hough, former assistant cashier of an Oakland bank, and W. Garner Smith, at present an insurance broke of this city. The directors include R. J. Tyson, president of the Seaboard National Bank; George U. Hind, of Hind, Rolph & Co.; I. A. Beretta, of the Chinn-Beretta Optical Company; J. R. Edwards; W. S. Pitts, manager; Dr. E. J. Overand and Harrison S. Robinson of Oakland, and Dr. J. A. McCloud of Santa Rosa.

At the company’s store at 301 Market street it was learned yesterday that Hough has not been connected with the business since last September. He was said to be engaged in the real estate business at Martinez.

MANAGER’S EXPLANATION

W. S. Pitts, who succeeded Hough in the management of the business, said he had no knowledge of the filing of the suit, and that the company had been making a desperate effort to make satisfactory arrangements with Burbank.

“The company has been badly mismanaged, and that is the sold cause of its financial difficulties,” said Pitts. “We asked Burbank to give us until March 1st to make up the back payments, and this action is a surprise to me. We have just levied an assessment of $2 50 [sic] a share in an effort to keep going until we get on our feet.

“Dr. J. A. McCloud of Santa Rosa, one of the directors, is acting as intermediary between the company and Burbank, and we hoped he would succeed in reaching satisfactory terms. If we can hold out until spring we shall be on a sound footing.

“I cannot say that Burbank has been unfair in bringing this suit, for he could have started it last October had he wished. But it is a hard blow to the men who hoped, by legitimate business methods, to make the company a success.”

– San Francisco Chronicle, December 30, 1915

 

MISMANAGEMENT IDLES UP THE BURBANK COMPANY
Compelled to Enforce the Provisions of the Contract, Mr. Burbank Brings Suit – Meeting of the Directors Has Been Called for Next Monday — Statement is issued

After having: waited and waited for The Luther Burbank Company, the concern which look over his seed and other productions, to pay him what he had been owed for a long time, Luther Burbank has commenced a suit against the company in the Superior Court of San Francisco to recover the sum of $9,775 due on promissory notes. Otto Wise of San Francisco is the attorney for Mr. Burbank. Further than this Mr. Burbank has notified the company of his cancellation of the contract which bound him to turn over his creations to the company. In other words, the expected has happened, and what was once one of the most golden opportunities upon which any concern had to build up a tremendous business has been allowed to dwindle owing to gross mismanagement of its affairs.

WILL HOLD MEETING

From San Francisco Thursday came word that Manager Pitts and the directors will put forth every endeavor to get Mr. Burbank to reconsider the course which he has decided upon and for which he cannot be blamed in the least, for his experimental ground expenses do not cease as his great work proceeds. There is to be a meeting between the directors and Mr. Burbank on next Monday, and Mr. Wise will also be present, it was also learned from the company’s offices Thursday. In the event of Mr. Burbank deeming to adopt the course he has outlined and refuses to allow his name or his products to be handled by the company, then there will be nothing to do but to liquidate the concern. It is well known that Mr. Burbank has been willing to do most anything to keep the company in operation if the contract was lived up to. Among the stockholders in Santa Rosa, and there are a number, and elsewhere, there are some of his most intimate friends.

ATTORNEY WISE SPEAKS

“Burbank has been the victim of stock pirates,” said Attorney Wise. “This company was formed three years ago. He has no stock in it and no interest in it. Some of the best men in town have also been made victims.

“The men who secured the contract from Burbank and who promoted the company were R. J. Hough and W. Garner Smith. Stock to the amount of $375,000 has been sold to the public at par.

“The company agreed to pay Burbank $300,000, in terms of $30,000 cash and $15,000 a year. They were to have exclusive rights to sell all his experiments.

SUITS FOR ARREAGES

“They paid him the $30,000, sold stock like hot cakes and never paid him another dollar. Burbank had delayed action for a year because of sympathy with the excellent people involved. He has now cancelled the contract, forbidden use of his name and has brought suit for $10,000. Another suit will be brought, for $15,000. These suits are arrearages.

The directors of the Luther Burbank Company are Pitts, J. R. Edwards, vice-president; I. A. Beretta, optician: George U. Hind, of Hind, Rolph & Co.; Harrison B. Robinson, Oakland attorney; Dr. E. J. Everand of Oakland, and Dr. J. H. McLeod of Santa Rosa. Among the prominent stockholders are R. J. Tyson of the Seaboard National Bank, M. J. Brandenstein and I. W. Hellman.

NAMED WITHOUT CONSULTATION

Dr. McLeod of this city was appointed a member of the board of directors only three weeks ago, and then without his knowledge and consent. He had no connection whatever with the directorate during the mismanagement of the business or during the time when it became involved. This statement is made out of fairness to Dr. McLeod and to avoid any misconstruction of his relationship with the previous management of the company.

THE MANAGER’S STATEMENT

Manager Pitts is still hopeful that with a reduction of the running expenses that the business can be rehabilitated. On Tuesday the stockholders received a notice of their assessment of $2.50 per share. Pitts was named manager after Hough et al. had left. Here are some extracts from his letter sent to stockholders Tuesday:

It was hoped that this assessment might be avoided, the necessary money being raised by re-financing our company along lines as suggested in my recent circular letter. Just at the present time, however, I find it a hard matter to interest prospective buyers of stocks. Money is urgently needed, and hence this request for your cooperation.

At the present time the stockholders’ liability amounts to approximately $5 per share, therefore in payment of this assessment you are in any event simply reducing your liability that much.

It is my belief that by the first of March our finances will be in better shape and it will then be a much easier matter to re-finance the company by interesting outside capital.

We have on file at the present writing unfilled orders to the amount of $20,000. These orders are for shipment from January 1 up until February 15 next. We have shipped already $8,000 worth of business, although it was late when we got started to selling. We have three salesmen on the outside at the present time working the eastern territory. These men are turning in business each day and there is every reason to expect that these three men wall turn at least $25,000 worth of seed agency business between now and March 1 next. In addition thereto we will commence to receive our nursery orders, as this business is usually placed during January, February and early March. This business should amount to at least $10,000.

Figuring, then, that our seed and nursery selling campaign will close by April 1, our total business up to that date should amount to at least $53,000 to $55,000.

At that time the cactus campaign will start, and it would seem that at least $10,000 should be expected from that source, which will give us a year’s turn-over of approximately $65,000.

We have every reason to believe that no difficulty whatever will be experienced in making collections when accounts are due, inasmuch as the trade being sold small quantities of seed with the result they will feel in better humor. The business is likewise being built up for a permanent future.

In securing this future business of approximately $35,000 there will be very little expense. The seed has been harvested and is in our salesrooms being packeted at this time. The growing and harvesting expense has already been taken care of, therefore this future business, basing it on our operating expense alone, should show a profit of approximately 75 to 80 per cent.

SMITH’S MISSTATEMENT

Garner Smith’s statement that in addition to $25,000, Mr. Burbank had been given $75,000 worth of stock is a misstatement. The $75,000 worth of stock was turned back to the promoters for stock bonuses, and it is said that Hough and Smith got a share of the stock themselves. Mr. Burbank did not benefit by the stock whatsoever. At this time it looks as if the liquidation of the company will ensue.

– Press Democrat, December 31 1915

 

ANOTHER PLAN OF THE BURBANK CO.
Proposition to Have Mr. Burbank Take Over the Company Has Been Submitted for Consideration

Another tentative plan for the reformation of the Luther Burbank Company has been proposed and submitted to Mr. Burbank. It is that instead of the company undertaking liquidation, all of the business of the company be turned over to him, whereby he would own and control the company and its business and take over all the unfilled orders and the immense quantity of seed and nursery stock on hand. With new management it is urged the orders on hand and to be filled would make a good beginning. It is probable that a suggestion to liquidate may be abrogated, as it does not represent the opinion of many of the stockholders. It is also urged that with Mr. Burbank at the head of the company personally, new capital could be induced and what is considered, with proper management, could be made one of the greatest businesses of the country, could be refinanced. Mr. Burbank’s decision is awaited with considerable interest.

Manager Pitts’ Statement

“A meeting was held.” said Pitts, “for the purpose of devising ways and means of refinancing and to that end a statement of the company’s business and an inventory has been prepared. Prior to this meeting of the stockholders the board of directors of which I am a member, met and decided to submit a proposal to Mr. Burbank. That is to be presented to Otto Irving Wise, his attorney, and be expect an early consideration from Mr. Burbank.

“The plan is that Mr. Burbank take over the company and run its business from Santa Rosa. An inventory of seeds, novelties and Burbank creations has been turned over to Mr. Wise, and it will be left for Mr. Burbank himself to decide what the future of the business will be. The stockholders have all been apprised of his plan and personally I have gone so far as to state that I would mange the affairs in Santa Rosa. The stockholders have appointed a committee of three to work with a similar committee appointed by the board of directors. The report that liquidation had already been decided upon is untrue and will do the company considerable harm. There are salesmen at work throughout the country, and these reports that the company is preparing to go out of business will naturally put an end to their work.”

Burbank has preferred to leave the business affairs of the company to others and look after his experimental work, according to Pitts. The general manager stated that some of the biggest stockholders have approved of a financing plan, claiming that it would be a pity to abandon much of the early work.

The story in the Press Democrat Thursday morning to the effect that it had been definitely decided to liquidate the company, was published in absolutely good faith. upon information furnished the paper by one of the stockholders who had been told of the proceedings at the meeting in question by another Santa Rosa stockholder who was present the information being believed to be absolutely reliable as to fact.

– Press Democrat, January 21 1916

 

SAYS REPUTATION IS HURT; SEEKS $10,000 DAMAGES

A suit charging libel and demanding $10,000 damages from Attorney Otto Irving Wise was filed in the Superior Court in San Francisco, Thursday, by W. Garner Smith, a stock salesman, who accuses Wise of publishing statements derogatory to his reputation and his business. The suit is the outcome of an action filed by Wise three weeks ago on behalf of Luther Burbank.

The deal by which the Luther Burbank Company was formed was promoted by Smith and Rollo J. Hough. In an interview published at the time of the filing of his complaint. Wise was quoted, It was alleged by Smith Thursday, as mentioning Smith and Hough, and declaring that, Burbank had been “made the victim of stock pirates.”

It is this alleged assertion which Smith resents, and for which he demands damages. Meantime the stockholders will watch the proceedings with interest.

– Press Democrat, February 5 1916

 

Burbank Company Claims Bankruptcy
Notes Given to Horticulturist Are Part of Liabilities Which Firm Cannot Meet.

SAN FRANCISCO, Feb. 7. – The Luther Burbank Company, formed three years ago to sell Burbank’s products, filed a voluntary petition in bankruptcy today. Assets were given as $108,559.56, much of which was said to be intangible, and liabilities as $73,372.02.

Luther Burbank filed suit against the company December 29, 1915, to collect $9775 on two notes given him. Burbank’s attorneys said the company paid the horticulturist $30,000 and agreed to pay him the remainder of the contract price of $300,000 at the rate of $15,000 a year, for the exclusive right to sell his products.

The directors decided upon bankruptcy at a meeting February 1, it was said, when it was shown that there was $334 in bank and $70 cash on hand in the company’s exchequer.

Listed among the liabilities were Burbank’s notes, $32,000 due the Seaboard National bank of San Francisco, and about $1400 due twenty employees for a month’s wages.

The assets included real estate valued at $24,000 and stock valued at $41,398.

– Sacramento Union, February 8 1916

 

Stockholders Sued For Overdue Rent

The Enright Estate Company filed a stockholders’ liability suit in the Superior Court yesterday against W. Garner Smith, J. R. Edwards and R. J. Hough to recover a total of $5,250 which it is alleged the Luther Burbank Company owe for the ground floor premises at Beale and Market streets.

[Smith owned 1,186 shares of stock in the Luther Burbank Company, Edwards owned 540 shares, Hough owned 806 shares]

– San Francisco Examiner, November 18, 1916

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