for combating the ever-increasing wave of undependable advertising, and useless if not dangerous products promoted thereby.”
Ahmanson looked to government to protect the public, but he was frustrated by both the existing body of law and the resources devoted to enforcement. “We are operating under the Food and Drug Act of 1906,” he said, “whose woefully weak provisions are even more weakly policed.” He noted that “less than one cent per person per year is spent by the Federal Government in guarding the interest of the consumer.” He also pointed out that “the average fine for the successful prosecution of a violation of [the Act] is $6.00—this amount including the value of the seized goods.” Implicitly, he argued, the government, under its duty to provide for the public safety, should do more.
From the evils of advertising, Ahmanson turned to the corruptions of interest group politics. In an allusion to Roosevelt's inaugural address, he recalled the president's assurance that “the money changers would be driven from the temple.” Roosevelt and his undersecretary of agriculture had promised “that the food and drug industries would be purged of adulterators, poisoners and quacks.” But the “sell-out of the consumer started almost immediately.” The administration's proposal had been developed with the input of industry. In Congress, it had been watered down by politicians who were cooking the bill with the adulterators. After describing in detail the painful legislative process, Ahmanson concluded with apparent disgust “that the whole problem of giving the consumer some measure of protection against fraud, trickery and dishonesty is getting exactly no place.”41
Ahmanson's speech to the Economic Round Table was hardly designed to provide a coherent synthesis of his view of the role of government in structuring markets, nor was it a call for popular revolt, but it does offer important perspectives on his values. Clearly, he supported the government's authority to intrude into the marketplace in the context of protecting public safety. Toothpaste with toxic ingredients, for example, should be banned. But Ahmanson seemed to go further. The government should also protect the consumer from product claims that were simply fraudulent—motor oil that did nothing, despite the manufacturers’ claims, to extend the life of a car's engine, or laxatives that were “doctor-recommended” when they weren't. Thus the government had a role to play in a market where buyers and sellers had unequal access to information.
Ahmanson also made it clear that government regulation should not be left in the hands of politicians. Explicitly, he expressed his support for the Progressive model of regulation by experts insulated from the political process. An effective pure food and drug law, he said, should be administered by “qualified technicians interested primarily in consumers’ welfare and safety.” Implicitly, he believed that such experts should be protected from the influence of manufacturers and other interest groups.
It's not clear from the speech whether Ahmanson believed that the government had a positive role to play in the marketplace—to promote hygiene or good health, for example. He didn't suggest that the alternative to false claims in a free market was government approval in a managed economy. He didn't outline a plan for the government to encourage manufacturers to make one kind of drug over another or reward grocery stores for selling broccoli rather than Jell-O. Likewise, his speech didn't touch on the growing number of federal programs designed to support food producers—like agricultural cooperative marketing programs or price supports—without concomitant efforts to protect consumers.
Delivered in the first year of Franklin Roosevelt's presidency near the low point of the Depression, when unemployment, labor unrest, and a collapsing financial system threatened to undermine capitalism itself, Ahmanson's remarks have to be taken within the context of the times. Nevertheless, they were his times. He was twenty-seven years old and already a highly successful entrepreneur. His audience of academics, business leaders, and “men on the make” shared in the common experience of the era. Roosevelt had equated the Depression to a war. Soon business leaders like Ahmanson and his friends Charlie Fletcher and Howard Edgerton would discover that a real war could pose an even greater challenge to the management of the economy.
BUSINESS AND HIGH SOCIETY
Fortunately for Ahmanson, the regulatory reforms of the New Deal had little impact on the fire insurance industry. The U.S. Supreme Court continued to hold that insurance was for the states, not the federal government, to regulate. In California, Ahmanson's main regulatory threat came from independent insurance agents. They complained that mortgage lenders should not be allowed to steer borrowers into buying property insurance from favored companies—like National American Insurance. They claimed that these arrangements were fraught with conflicts of interest, were “coercive” in nature, and served as a barrier to entry and competition. The independent agents lobbied the California legislature to pass an “anticoercion” law, but Ahmanson's friends in the savings and loan industry, including Howard Edgerton and Charlie Fletcher, were able to kill these proposals.42
Meanwhile, Ahmanson continued to cultivate an image of success as a critical component of his sales strategy. “He always wanted us to drive a good car so we looked successful,” remembers Robert DeKruif, who began working for the company in 1941. “And he wanted us to dress immaculately: wing-tip shoes, white shirts, blue shirts, and everything like that.”43 But while he cultivated the image of success, Ahmanson also stuck to the basics of building and sustaining relationships. Working with his secretary, Evelyn Barty, for example, he maintained an elaborate “birthday list” that included customers, friends, employees, and politicians. Every month, Barty gave him a list and he would handwrite cards to everyone on the list.44 He worked eighteen hours a day. His aunt, who lived in Los Angeles, complained that he was “a hard man to find in his office.” Howard, she said, had told her “he loses money when he's in.”45 It was far better to be out calling on customers.
But Howard also paid attention to the cost of doing business. As a manager, he found ways to stimulate productivity. He ordered desks without drawers “so people, when they got policy orders or anything like that couldn't stick them in their drawer.” When he walked around at night he could see if staff was keeping up with the work. When he hired a new typist, “he would put that typist next to the gal that typed the fastest,” DeKruif remembers. Ahmanson also didn't believe in private offices. At one point early in his career, DeKruif realized that a lot of his competitors were schmoozing potential clients on the golf course, so he suggested to Ahmanson that maybe he should join a golf club. “Bob, let me tell you,” Ahmanson replied, “while you're playing one game of golf, you can call on five agencies.” So DeKruif stuck to Ahmanson's Calvin Coolidge approach—persistence.46
As hard as he worked, Ahmanson also enjoyed his wealth. While the rest of the nation struggled through the Great Depression, he and Dottie frequented the Jonathan Club downtown, the Bel Air Bay Club in Santa Monica, and the Los Angeles Stock Club. In the fall of 1935 they began an annual tradition, hosting a spectacular champagne brunch before the football game between USC and UCLA. Howard chartered buses for his guests—many of them savings and loan clients. With banners waving and the sirens of a police escort screaming, “Southland's younger set” rode to the Los Angeles Coliseum.47
Dottie threw herself into an endless series of society luncheons and charity events. Howard participated to a limited extent. He helped organize the Boys Club Foundation of Los Angeles and served on its board. Dinners with other couples to play cards or badminton were noted in the society pages of the Los Angeles Times. The Ahmansons were regulars at nightclubs like the Cocoanut Grove, the Biltmore Bowl, and Ciro's. In addition to enjoying the high life at home, Dottie and Howard traveled widely. A year after their honeymoon cruise through the Caribbean, they went to Mexico. In 1938, they sailed on the Queen Mary to Europe for a six-week tour of the continent with screen star Don Ameche and his wife.48 In 1940, with the United States watching the path of Japanese aggression across the Pacific, Howard and Dottie impulsively visited Japan. Arriving in Yokohama in May, Howard told the Japan News-Week, "We are the only honest-to-goodness tourists in Japan.”49 Howard and Dottie toured
