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.)

(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.

(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.

NEXT: THE UNDOING OF LUTHER BURBANK, PART III

 

 

 

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.

 

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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If only we could send messages to the past: Skip the play, Mr. Lincoln; double-check your navigation, Amelia Earhart; Elvis, dump the pills; Luther Burbank, beware the men running operations in your name because they are about to destroy your reputation.

Burbank drifted through the years 1913-1915 unaware, for the most part, the people he trusted were undoing everything he had struggled to build for over thirty years. The root of the problem was the same weakness Burbank had shown before; he wasn’t paying attention because he just wanted to work with his plants (his similar tribulations with the Carnegie Institution and the years 1905-1910 are covered in the four part “BURBANK FOLLIES” series). “I have no time to make money,” he told the Press Democrat in 1912. “I’ve more important work to do.” Add in his complete lack of any executive management skills and it’s no great surprise that things went so wrong.

(RIGHT: Color photograph of Luther Burbank, 1913. Frontpiece for volume 1, “Luther Burbank: His Methods and Discoveries”)

This article covers just 1913, the year Burbank turned 64, and the issues with the Luther Burbank Society and Burbank Press. The problems of the Burbank Company – which sold seeds and live plants – first became apparent in 1914 and will be covered in a following essay. The 1915-1916 crash of the entire empire will be the final part of this series.

First, a note on sources: The most common reference about Burbank is Peter Dreyer’s 1985 biography, “A Gardener Touched With Genius” (sold at the Luther Burbank Home & Gardens). Dreyer drew upon unpublished correspondence, the manuscript of a critical biography which never made it to print and Walter L. Howard’s book-length 1945 monograph, “Luther Burbank A Victim of Hero Worship.” A professor of botany at UC/Davis, Dr. Howard knew Burbank (who respected him as a colleague) and also interviewed many in Burbank’s sphere. After reading “Victim” front-to-back this week, I came to realize Howard’s research – and often his exact words – can probably be found on every page of Dreyer’s book.

I am not starting a bonfire and calling out Dreyer for plagiarism, but he should have identified Howard as a primary source in the text and footnotes to a far greater degree. This is not simply a matter of academic etiquette; Dreyer’s work also mirrors those parts of Howard’s book which were weak. For example, both authors dismissively called Oscar Binner a “professional promoter,” unaware he had a storied career as a top Madison Avenue ad man. It was Binner who transformed “Luther Burbank” into a nationally-known brand name, an important part of the Burbank story glossed over in Howard’s work and an omission inherited by Dreyer. (For more on Binner and Burbank, read “SELLING LUTHER BURBANK.”)

Binner and Burbank had a fractious relationship stretching back to 1908. Burbank loathed the grubby chore of making money; a profile in “The County Gentleman” magazine said his friends agreed he was “simple as a child” when it came to business affairs and was resigned to depending on others to market his name and works for him.¹ Binner believed Burbank was a genius in need of the kind of handling he could uniquely provide. In a private letter to Nellie Comstock, he wrote: “I do not misunderstand L. B. not a bit of it. L. B. misunderstands himself. When he finds himself, then he will see what is best for him and best for all time and all the world.”²

Binner abruptly disappeared from the picture in the spring of 1912. An item in the Republican newspaper reported he became an invalid because of an enlarged heart; he returned East and a couple of years later resumed his ad agency on Madison Avenue, dying in 1917. But before leaving Santa Rosa he undoubtedly played a role in setting up the Burbank Society, which was formed the month after he left, and the Burbank Press which was created shortly thereafter. The money to buy him out and fund the new startups came from an investment group formed by William M. Abbott, a Solano county land developer and litigation attorney for a San Francisco railway. (Among the more interesting investors were C.W. Post of breakfast cereal fame and beer baron Gustave Pabst.)

“From the beginning everything was planned on a grand scale,” Walter Howard wrote. “The essential advertising of Burbank had already been done, for he had been publicized as few men have been during their lifetime. He had a legion of followers whose admiration was based on sentiment, and his name already was becoming a legend. The time seemed to be ripe for cashing-in on his popularity.”³

The Burbank Society was the non-profit parent of Burbank Press, both aimed at promoting the encyclopedic work about his plant-breeding methods. Of course, that multi-volume set did not yet exist in 1912, despite five years of writing by a string of editors hired by Binner and an earlier publisher. Even though there was no foreseeable completion date, they began selling subscriptions for the books immediately.

“Advertise before you start to manufacture your article,” Robert John, one of the three directors of the Society told the San Francisco Advertising Association that August. “I am of the opinion that goods may be sold much easier before manufacture than after.”

In a few short months, the Society/Press ramped up a massive direct mail marketing campaign sending out 170,000 advertisements, making it the largest operation of its kind on the West Coast. Taking over the old Odd Fellows’ building on Courthouse Square, they had 75 employees, mainly young women, typing and filing and mailing correspondence and the Santa Rosa post office had to be upgraded to handle the volume. For more, see the Press Democrat articles transcribed below and read “LET’S ALL WORK FOR LUTHER BURBANK.”

While the PD was thrilled about all those envelopes being mailed, some recipients were less than happy about the junk mail. A magazine for southwestern ranchers commented, “The Luther Burbank Society has been conducting a campaign for funds and membership throughout the United States for a number of months in a manner which has placed Mr. Burbank in a very equivocal position and has as a matter of act made his name largely a joke throughout the country.”⁴

“One End of the Correspondence Room” Press Democrat, November 2, 1913

One pitch was an invitation to be a charter member of the Luther Burbank Society which supposedly would be limited to a roster of 500. Members would receive proofs of book chapters as they became available and invited to help edit and comment (none of that would happen). In gratitude this elite corps would be allowed to purchase the books as they became available for the low, low price of $15 per volume. Walter Howard told the story that he was a junior instructor in the botany department in the University of Missouri at the time. “My own invitation stressed the importance of quick acceptance as it was pointed out that only a few of the most important people of the United States were being invited and that I had the honor of being one of the number. To empahasize this point the invitations bore serial numbers. Mine was somewhere in the seventies,” he wrote. Howard threw it out, believing it had been sent to him by mistake. Then a few weeks later the same offer appeared again, and with an even lower serial number. So this was what kept their large office pool so busy.

There was still the matter of finishing and publishing the Burbank books – which were, of course, supposedly the main reason for the Society/Press to exist. When Binner abruptly exited, Prof. Edward Wickson, the esteemed head of the U/C Agricultural College was plowing away on the task; one of the few in the scientific community who had always championed Burbank, he was at least the fifth editor to work on the project.

The Burbank Press dismissed him, refusing to pay or even acknowledge his contributions – while still using his name in advertising literature. Wickson begged Burbank for help in resolve these affronts but Burbank demurred, telling his old friend he didn’t want to get involved. This incident did much to sour Burbank’s relationship with any remaining sympathetic academics. When Howard stopped by to Santa Rosa in 1915, Burbank seemed puzzled by his isolation. “Why is it you people don’t vist me oftener? Professor Wickson used to come to see me and now even he doesn’t come any more. What have I done[?]”⁵

In Prof. Wickson’s place they hired Dr. Henry Smith Williams, a prolific author of popular science magazine articles and books. His most prominent work to that date was a five-volume series, “A History of Science” which reviewers found heavy on imaginative writing concerning the discovery of fire and smelting but quickly skating past events like Lavoisier’s development of modern chemistry.

On the Burbank project Williams continued to embellish and play fast and loose with facts. “Even though Burbank furnished him with tens of thousands of words – in answer to questions – the insatiable editor did not find this enough for his purposes. In discussing the scientific aspects of plant breeding he interpolated paragraphs and sometimes whole pages of his own ideas, palpably not Burbank’s,” Howard remarked, adding Williams would also fluff up descriptions so “the most commonplace incidents in a gardener’s life, such as budding and grafting, were made to appear marvelous.” And here’s the worst of it: Since the entire set was supposedly written by Luther Burbank in first person, the result was that Burbank came off as an idiot to educated readers. But hey, at least Dr. Williams worked fast and the first volume was ready for the printers before the end of 1913.

Until those books started selling – and in great quantity – Burbank Press needed income; its payroll was $6,000 per month (about $150k today) and Luther had been promised an advance of $30,000 plus royalties on every book.

To raise money, Burbank Press announced an unusual $300,000 bond issue in late 1912, only a few months after the company was formed. Full page ads appeared in both Santa Rosa newspapers that November offering a five year $500 coupon note, with $125 of Burbank Press stock thrown in to sweeten the deal. The bond promised a seven percent return at a time when blue chip bonds had returns in the 3-5 percent range. It was, in short, a high-risk junk bond.

The bond advertisement mentioned Burbank as often as possible, trying to make appealing the sizzle of his name instead of the financially risky steak. To Burbank followers this pitch was familiar; almost exactly a year before, the Oscar E. Binner Co. had tried to sell stock in exactly the same way, right down to the 7% return. (Copies of both ads are shown below.) Binner’s stock offer has a strong whiff of fraud; we now know even the writing was far from finished at the time, but his ad promised the books would be available for sale by May 1912. There’s even correspondence between himself and editor Wickson from that January showing the work was mired in delays because Burbank was “in conflict with himself.”⁶

It would take a Wall street historian to say whether all of this was legal at the time (today there are consumer protection laws to prevent the sort of bond-stock deal offered by Burbank Press from being sold directly to the general public). But another player in our story had already made a fortune through promoting junk stock: John Whitson, the vice-president of Burbank Press. He was also a fugitive, but nobody in Santa Rosa apparently knew that.

The Luther Burbank biographers are almost completely silent on the managers of the Burbank Press. President Robert John – the sell’em before you make’em speech guy – was mentioned elsewhere as a former New York reporter. He was working with Binner in 1912 and was apparently the creator of the impressive color photographs which appeared in the complete “Methods & Discoveries” set (an article about that work is still being researched). After Burbank Press crashed he became involved with motion pictures.

It’s very doubtful anyone involved with Burbank – with the possible exception of Oscar Binner or Robert John – knew much of John Whitson’s past. He was a Russian originally named Mark David Kopeliovich who went by the aliases of Whitson and Edmund Kopple. Starting in 1905, ads began appearing in New York City newspapers advertising shares in the “Whitson Autopress Company,” which supposedly had developed a revolutionary new kind of printing press capable of printing up to 5,000 sheets an hour with no human operator. It looked like a Sure Thing and stock was being sold direct to the public with a promised return of – wait for it – seven percent.

From sources currently available online we only know that in 1906 investors lost their money and Kopeliovich-Whitson walked away with an estimated $200,000. The company may have failed because he couldn’t deliver real, working machines – or maybe it fell apart because he went on the lam with his girlfriend, having abandoned his wife and two children.

In January 1906, Dr. Dicran Dadirrian, an Armenian-born pharmacist, sued John Whitson AKA “Edward R. Copple” for alienation of his wife’s affections, asking the court for $50,000 in damages. The chemist said that a “stout dark man” started popping up every time he and his wife were in public. Sometimes she and the man would steal away for hours in his automobile. Meanwhile, Mrs. Copple finds a note in her husband’s pocket from Mrs. Dadirrian and discovers the pair were about to flee to Europe.

A few weeks later, a Reno, NV paper reported Mr. Kopeliovich showed up and asked to change his name to John G. Whitson. He told the court he had been using that name since 1900 and had also used “Kopple” as a shortened form of his Russian original. But now he had decided Kopeliovich was just too lengthy and there was “a notorious or reputed crook” using the name “E. A. Kopple” (without mentioning it was himself). The name change to Whitson was granted because, you know, Reno.

After the pair spent most of the rest of 1906 in California, Whitson returned to Reno just before Christmas to seek a divorce from the wife he abandoned. He claimed she had deserted him and her whereabouts were unknown; their children were not mentioned. A notice of divorce was published in a Nevada weekly paper. Whitson and his fiancee – who may or may not still have been married to Dr. Dadirrian – were off to London for their nuptials. Not to get too far ahead of the story, but it turned out the Reno divorce wasn’t valid and Whitson was finally arrested shortly after Burbank Press collapsed.

And so Burbank’s year of 1913 ended with the celebrated horticulturist unaware the VP of Burbank Press was a bigamist who had no apparent background in publishing but experience selling chancy stock. The books he hoped would establish his legacy as a great scientist were being ghost-written by a hack. And on the edge of Courthouse Square, a platoon of young women were churning out an ocean of envelopes sent on his behalf, almost all destined to be soon crumpled in the wastebaskets of distant gardeners.

November 9, 1911 Chicago Tribune –  November 2, 1912 Santa Rosa Republican

 

 

 

¹ “Luther Burbank–Limited” by Barton Currie in “The County Gentleman”, reprinted in the Press Democrat, July 26, 1913

² Oscar Binner letter to Nellie Comstock, February 25, 1910; Luther Burbank Home and Gardens archives

³pg 388, “Luther Burbank A Victim of Hero Worship” by Walter L. Howard, Chronica Botanica ,1945-6

⁴pg 390, ibid

⁵pg 316, ibid

⁶pg 185, “A Gardener Touched With Genius” by Peter Dreyer, 1985

 

 

 

The Luther Burbank Press delivered the first 20,000 letters to the Santa Rosa Postoffice on Wednesday Night of a 300,000 consignment which will go through the mails within the next fifteen days.

This means that 20,000 letters per day for fifteen days will have to be handled by the postoffice employees. A force of seven men was put at work at 7 o’clock Wednesday night and with the assistance of Postmaster H. L. Tripp and Assistant John Pursell, themselves, the entire batch will be worked up and sent off in the Thursday morning main at 5:50 over the Southern Pacific.

This consignment of mail alone means $6,000 receipts for two-cent stamps sold by the Santa Rosa office. The letters are all being routed by States and tied up in packages for each town by the clerks before they are placed in the mail sacks and will not be touched again until they reach the State to which they are directed.

In addition to this batch of 300,000 letters the Luther Burbank Press has notified the office that it wants 25,000 ten-cent stamps of the Panama-Pacific Exposition issue for immediate use as well as about the same quantity of postcards in sheets of forty eight cards each. These cards will be printed and enclosed with other matter in envelopes which will require between 10 and 12 cents postage each. All this is to be furnished the office within a very short time, a portion of it while the present big order is running.

 

In line with its policy of building a large and permanent organization in Santa Rosa, the Luther Burbank Press now announces the arrival of Dr. Henry Smith Williams of New York, who is to assume the position of Chief of Editorial Staff.

Dr. Williams, perhaps better than any other living author, is known as foremost in the field of popular science writing. Almost every issue of such magazines as Cosmopolitan, Everybody’s and the other standard high class periodicals contains something from his pen, as well as the scientific journals which are eager for his lucid and interesting presentations of scientific and technical subjects.

Dr. Williams enjoys the distinction of having first placed himself at the head of his particular division in the medical profession, after which, at an age at which most men are content with their laurels, he entered a new field and became the greatest living popularizer of natural science and history in America.

In addition to his voluminous current writing, he numbers among his books such works as “The Historian’s History of the World”, in 25 volumes, of which he was the author, “The Story of the Nineteenth Century Science”, “The History of the Art of Writing”, “The Effects of Alcohol”, “A History of Science”, “The Science of Happiness”, “Race Conquest”, “Every Day Science”, and many other single volumes and sets of which he has been the author, which give him unmistakable range among the great educators of the generation.

The Luther Burbank Press, in its quest for a head for its Editorial Department, found that eleven out of twelve of the foremost editors consulted referred instantly to Dr. Williams as the best obtainable man for the place, and the twelfth editor said afterward that he had suggested another only because he believed Dr. Williams could not be persuaded to give up his work in New York.

Dr. Williams brings to his present task in Santa Rosa the fullest equipment as scientist, as historical investigator and as a popular writer. He has the rare faculty of being able to write entertainingly on scientific subjects, and has done more, perhaps, than any other living writer to popularize the many branches of science.

Mr. Burbank after more than ten years of labor is now finishing his manuscript, and Dr. Williams first work will be to assist Mr. Burbank in the final arrangement of these writings. Dr. Williams will live at the Overton Hotel for the present.

“Here,” said the General Manager of the Luther Burbank Press, to a Press Democrat writer, as he picked up a letter which had just been opened, “is an order for a set of the Burbank Books in the $81.00 edition.

“It comes, as you see, from a small town in Iowa, and is but one of something over one hundred orders in this day’s mail, the average volume of the present business being about $5,000 per day.

“This order, like the others, was received in response to the advertising sent out by the company, and I should like to show you how quickly we can find for you its whole history.

“In the next room,” he continued, handing the order to a young woman, “we have more than a million separate cards, filed alphabetically by state, each card bearing the name, address and correspondence record of some inquirer after the Burbank Books–more than a million names of interested prospective purchasers who have been attracted by the advertising which the Burbank Press has sent out from Santa Rosa.”

Almost as the manager had finished speaking, the young woman returned with the original inquiry card of the purchaser, together with all of the correspondence in the case–giving not only the full name and address, but the occupation of the inquirer and the source through which the inquiry was received, and a complete record of all letters and printed matter which had been sent.

[…description of the bookkeeping and inventory systems…]

By a simple method the work of each employee is tabulated in such a way that, whether the duty be typewriting, hand addressing, carding, listing, checking, filing, or what not, the whole record of the employee, day by day, is evident at a glance.

While no piece-work is done, yet the salaries paid are based upon these actual day-by-day counts of the quantity and correctness of the work done.

Quantity, in fact, is secondary to correctness in advancement, a complete system of demerits, penalizing each mistake having been adopted. The employees thus vie with each other not only in seeing who can accomplish the most work, but also in seeing who can make the fewest mistakes. Both the quantity of work done and the mistakes charged against each operator are charted on blackboards prominently displayed in the large work room, and the daily task is thus given the added zest of competition.

In order that no overstrain may result from this competition, the working day is broken up into four periods instead of two, the first period being from eight until ten minutes of ten, the second from ten until noon, the third from one till twenty minutes of three, and the fourth from three to five. During the recesses, one in the morning and one in the afternoon, the employees are urged to dismiss work from their minds, and, in fair weather, to leave the building…

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