CHAPTER 41
FREDDY’S WILL HAD ANTICIPATED THAT HE AND HIS WIFE MIGHT die together. In that case, he left his sister everything. But no sooner had his will been read than Betty’s mother, Lucy Drage, sued Kitty and the estate.
While Freddy’s will forgave the loan he had made for Lucy Drage’s interior decorating shop, Betty had died without a will, and since all her marital assets were in her husband’s name, her mother, her brother, and her baby niece in England had inherited nothing. So the Drages improvised a uniquely outrageous legal strategy that instantly riveted Kansas City society.
Lucy Drage filed papers in the Circuit Court of Jackson County, Missouri, demanding half of Freddy’s estate—which was worth well over $1 million ($15.5 million). She claimed she could prove that Freddy had died in the plane crash minutes before Betty had. And in those last few moments of life, Betty had inherited half of the Frederick Harvey estate—because, according to his will, if he died first, his wife and his sister were to “share and share alike.”
If the lawsuit sounded crazed, it was probably because Lucy Drage was out of her mind with grief. This was, in fact, the second time she had lost a child to the recklessness of the rich. Her son David had died in a single-car accident five years earlier—the passenger of Washington socialite Elizabeth Walter Converse, the estranged third wife of powerful New York financier and AT&T heir James Vail Converse, who ran her touring car into a telephone pole. And now Freddy Harvey had taken away her precious daughter. So even though she and Kitty had been friendly for decades—long before they were relatives, they had appeared together in amateur plays (including Trelawney of the “Wells” at Westport High School) and washed dishes together at the Tip Top Cafeteria—Lucy insisted on suing her.
Judge Ben Terte ordered an immediate public hearing in the case and signed an order stating that Freddy had outlived his wife, so the claim had no merit. But Lucy Drage’s attorney, Frank Sebree, convinced an appeals court that the case law concerning simultaneous death was ambiguous, and they deserved a trial. Courts recognized several theories. There was the “weaker sex” theory, which held that if a man and a woman died together, the woman certainly would die first. But there was also a common-law theory concerning couples of differing ages—in which a younger wife was considered likely to outlive her older husband—and a standing U.S. Supreme Court ruling which held that the physical condition of each spouse before the accident could be used to determine the order of death. So Lucy Drage started hiring experts to do an independent investigation into the crash that killed her daughter and the man who was flying the plane.
THE LAWSUIT WITH Freddy’s in-laws was a mortifying public spectacle for Kitty. But it was nothing compared to the horror show taking place within her own family business.
At the age of forty-three, Kitty suddenly found herself owning all of her late father’s stock in Fred Harvey—the controlling shares of every aspect of the hospitality empire, which even in that year of economic recovery grossed nearly $10 million ($155 million). This was her Uncle Byron’s worst nightmare. Not only was control of the company still in Kansas City, but it was now in the hands of a woman. Moreover, Kitty had every intention of putting on the armor and playing Joan of Arc again, stepping in for her brother and assuming a leading role in the future of Fred Harvey.
She relished the idea of the nation’s first major employer of women finally being run by one. And while she had not spent any time in the boardroom, her desire to be the next Fred Harvey was not necessarily the pipe dream of a rich dilettante. She had the unqualified support of one of Kansas City’s most powerful and accomplished financial minds—E. F. Swinney, the elder statesman of the First National Bank of Kansas City and a legendary frontier banker who had first made a name for himself when, as a cashier in 1898, he put up the bail when his friend Jesse James Jr. was arrested for train robbery. A former president of the American Bankers Association and adviser to Presidents Taft and Hoover, Swinney had put together the deal for Kansas City Union Station, and he still sat on the boards of several major companies. The aging banker had been a friend and close colleague of Ford Harvey—who sat on his board and worked with him on the rebuilding of Kansas City’s streetcar system. He had also known Byron for years.
So, when E. F. Swinney said that he held Kitty Harvey’s business intelligence in high esteem—and that, in fact, he thought she had a better business brain than her uncle—people listened.
Of course, Swinney had his own civic reasons for keeping Fred Harvey in Kansas City. But he also had spent a lot of time with Kitty as she and Freddie worked at investing the money from their father’s estate. He was impressed with her. She was an agile, creative investor. Besides stocks and bonds, she would invest in the work of inventors and sell at just the right time. Her large art collection wasn’t just a labor of love—it showed genuine business acumen. She had taste, intelligence, wit, and sound instincts, she had confidence without any of her brother’s recklessness, and she could move effortlessly between the world of society balls and hunting, fishing, and camping trips.
Swinney had been saying for years that the Harvey System had missed a great executive when Kitty was not born a man. Her time, he believed, had finally come.
But Byron wouldn’t hear of it. The last thing he wanted was his opinionated niece, along with his oldest sister, Minnie, ganging up on him, second-guessing him, telling him what to do. Besides, he had already decided that the company should move to Chicago.
Byron told Kitty it would be absolutely inappropriate for her to own a controlling share of Fred Harvey stock, because she did not—and could not—hold an executive position with the firm. He invoked the family tradition that women not get involved with the business, noting how in 1911 her own father, Ford, had forced his sisters and mother to sell their shares. He demanded that she sell him all the shares she controlled, immediately.
According to him, it was the Fred Harvey way.
Kitty refused. She didn’t give a damn what her father had said in 1911—it was 1936, and the world had changed. Women were in the workforce, they were even starting their own companies. She was perfectly capable of being on the board of her family’s business. In fact, given her stock holdings, perhaps she should be chairman of the board.
Nor was it just a matter of whether she could help influence the company’s future. Kitty also knew that if her uncle bought her out, it would be bad for the business. The amount of cash required to purchase her shares would put Fred Harvey into debt—the first major debt in its sixty-year history—just as the company was finally making some headway after the Depression years in which, for the first time, they had actually lost money. The stock Kitty controlled could be worth more than every penny of profit that the Harvey System had generated over the past few years.
It was unclear if Byron could make her sell her controlling shares. Although private companies often had buyback provisions for their most closely held voting stock, Kitty held what she inherited from Ford for eight years with no problems. Yet Freddy had signed a buyback agreement, and the company had a life insurance policy on him for $433,749 ($6.7 million) to pay for the shares. And it is possible that once Kitty inherited controlling shares, the bylaws gave the company the ability to prevent a non-employee from having that much power (although bylaws are easy to amend).
A bit of hurried, stealthy corporate paper-shuffling several months after the crash could have played a key role. Probably as a way to protect company stock from the Drage lawsuit, some of Kitty’s voting shares and some of the voting shares in Freddy’s estate were quietly reissued by the firm as non-voting shares. That measure, obviously designed to shield the family business, may have balanced the playing field between Kitty and Byron. But, still, if she decided to sell, she could demand much more than the book value of her shares in the harsh economy of that time. She could ask for so much money that maybe her Uncle Byron would realize it made no sense to cut her—and the Kansas City Harveys—out of their own business.
DRAGE V. HARVEY was a gruesome lawsuit. The winner had to prove it was her relative who had lived the longest in that carnage, and had more time to suffer the most horrible death made possible by modern technology.
Lucy Drage’s lawyer, Frank Sebree, worked for months building a case. His team took new affidavits from anyone who had been at or near the crash site in Pennsylvania. They did their own analysis of all the forensic evidence. And they blew up photos of the cabin of a Staggerwing, as well as the devastating shots taken at the crash site. They planned to make a judge and jury feel as if they were actually inside the plane as it went down. And they believed they could prove that there was at least a minute, and maybe even two minutes, when Freddy was already dead but poor Betty was still alive and conscious, clutching her dog in her arms.
On the day of the crash, some eyewitnesses claimed they saw or heard the plane hit the side of a mountain and lose a wing before nose-diving. The local coroner had even highlighted this in his initial findings. While the government report later disagreed with that assessment, Drage’s attorney felt the local farmers and miners who had tried to save the couple would be more sympathetic than the government’s expert witness: In the small world of aviation, the safety investigator on the case turned out to be Eugene Vidal, whom President Roosevelt had appointed director of the Bureau of Air Commerce. Since Vidal and Freddy had known each other for years, there was some speculation the government was helping TWA withhold certain facts about the crash. “It was important that airline officials keep their mouths shut,” one family member recalls, “because [Freddy’s] insurance might be in some jeopardy.”
The trial started in April 1937 on the one-year anniversary of the crash. But just as the proceedings were getting under way, the judge was informed by the lawyers that their clients had settled.
Kitty had blinked.
She agreed to pay Lucy Drage about $100,000 ($1.5 million) just to put an end to the grotesque spectacle. Part of the money went into annuities that would give Lucy an annual income of $3,000 ($43,300); the rest she took in cash. Kitty also agreed to pay all the bills Betty had run up buying clothing over the past couple of years. Besides the London shopping spree, there was her tab of $7,347.56 ($110,000) at the posh Marion Dwyer dress shop in Chicago. Her five-page bill included charges for an ermine and velvet wrap, a silver muskrat coat, a Lanvin coat with nutria fur trimming, fourteen gowns with tailored slips for each, assorted designer suits, coats, skirts, blouses, handbags, and evening bags, and twenty-three pairs of gloves.
Kitty let it be known that she had always planned to give the Drages part of the estate, and that suing her had not been necessary at all. Yet Lucy and her lawyers considered the settlement a great victory over difficult odds. In Kansas City, it was rare for anyone to beat the Harveys at anything.
With the case settled, Freddy’s estate could finally be probated. It was valued at $750,000 ($11.2 million), on which Kitty had to pay inheritance tax of $105,217 ($1.6 million). She kept the family home in Kansas City, where she expected to be spending more time, and the houses in California. And when all the estate paperwork was finally finished, she turned her attention to becoming more involved at Fred Harvey.
At the same time, her uncle turned his attention to forcing her out.
Byron and Kitty did their best to keep their conflicts out of the newspaper and away from other family members, but their arguments apparently went on for over a year. Daggett Harvey, the only child of Byron’s who was not in the business at that time—he was a thirty-two-year-old corporate attorney—would always remember a screaming phone conversation he once overheard between the two of them. In Daggett’s later years, after his father was gone and he had joined the family business himself, he would sometimes bring up the incident to his son with a troubled tone in his voice. He said he remembered telling his father, Byron Sr., that he sympathized with Kitty. If his father insisted on forcing her to sell, Daggett wanted to make sure “it was done the proper way.”
Apparently, Byron was willing to pay almost anything to make Kitty back down. Family members who discussed this with her, or later had access to the records of her estate, estimate she got at least $1 million in cash for her stock, and more likely as much as $3 million ($45.8 million). And this was during the second wave of the Great Depression. While the secret deal was being negotiated, the slowly rebounding American economy actually took another nosedive in 1937 and went into another recession.
Kitty was crushed to give up her chance to run the family business, although she would never explain why she did it. “She didn’t like to speak about painful things,” recalled her closest nephew. When asked about difficult family matters, she often told him, “If it were true, I wouldn’t want to talk about it.” She was a little more direct years later when another of her nephews brought up the subject during lunch at the Ritz in Paris. “Not that it’s any of your business,” she said, “but I didn’t have any choice.” Perhaps Byron or his attorneys promised a gloves-off battle, which she knew would hurt the business and the family at a time when they could least afford it. Or maybe she came to believe that Byron had an iron-clad option to buy her shares, and the only fight left was over the price.
But while she never fully explained her decision, it haunted her. Kitty Harvey was not one to let her emotions rule her. She had little tolerance for weepy women. But whenever the subject of how it ended with her Uncle Byron came up, and how she had been forced to sell the company because she was the wrong sex, she always confessed that she was “in tears.”
Not long after Kitty sold her shares, the company’s oldest and longest-tenured staff member reached his fiftieth anniversary at Fred Harvey. Tim Cooper had been Ford’s original assistant back in 1888 and the company’s first black office employee. He had worked his way up over the years to become the chief shipping clerk at the Kansas City headquarters—which was soon to be dismantled and moved to Chicago. Byron, who had known Cooper since they were both teenagers, started planning a big banquet in his honor, which the entire family and many work friends would attend. But Cooper reportedly told Byron he “simply refused” to be part of such an event. Instead, he chose to celebrate with the remaining members of the Kansas City Harveys. He and his wife, Helen, had a private dinner just with Kitty and Minnie, in the very formal, very English dining room at Ford’s old house.
AS THE FAMILY SIMMERED, a husky thirty-eight-year-old former cigar salesman set out to make himself as famous across the country as Fred Harvey. His name was Howard Johnson.
Back in 1924, Johnson had quit his father’s New England cigar business and opened a small store in the Wollaston section of Quincy, Massachusetts, where he sold ice cream made from his mother’s recipes at the soda fountain. Within two years, he was wholesaling ice cream to stands all over Cape Cod, and had added spicy frankfurters and addictive tender fried clams to his take-out menu. In 1929, he opened his first restaurant in Quincy, which became unexpectedly popular because of a scandal in the American theater. Eugene O’Neill’s experimental play Strange Interludehad been banned in Boston because of its frankness about sex, abortion, and mental illness, and the production was mounted instead in Quincy. In addition to its challenging subject matter, the play ran four hours—such a long day’s journey into night that it was performed with a dinner break. Howard Johnson’s was the closest restaurant to the theater. A family-food star was born.
Despite the Depression, the business did well enough that in 1935, Johnson was ready to expand. He didn’t have enough money, however, so he sold a franchise to a sea captain in nearby Orleans, Reginald Sprague, who agreed to peddle the company’s signature ice cream, as well as the franks and clams. Sprague’s Howard Johnson restaurant had a sit-down dining room attached to a soda fountain where patrons could swivel on stools or order takeout—like a Harvey eating house but more middlebrow, with seashore food and a more East Coast version of Americana.
The new restaurant was so popular that Johnson agreed to sell dozens of franchises. He handpicked the franchisees, working with them closely to choose locations and build to his specifications. He also held their hands through every step of the way, setting up centralized ice-cream-making facilities and contracting for frankfurters and clams so he could completely control the quality of the food served in his name. In 1936, Howard Johnson opened thirty-nine new roadside family restaurants in New England. That was more eating houses than the dwindling Fred Harvey chain still had in the entire Southwest.
Within two years, Johnson had eighty franchises, and his ads proclaimed, “The Howard Johnson vogue is sweeping the country!” By 1940, there were more than one hundred Howard Johnsons, extending from New England down through New York (where he built a restaurant near the world’s fair site) and New Jersey, as well as pockets of new franchises around Washington, D.C., and in Florida. The new king of family dining also landed the contract to control all the restaurant stops along what would become America’s first major toll-road system, the Pennsylvania Turnpike. It was one more way for Howard Johnson to establish himself as the next Fred Harvey for the nation’s most modern form of transportation.
He did so with almost no resistance from Fred Harvey itself. After spending so much time and money getting control of the family business, Byron didn’t really have the ambition or the capital to expand into this obvious new market. And after Freddy’s death, Byron withdrew the company from all its airline contracts as well—just as Howard Hughes was taking over TWA and the commercial aviation business was having its second wind. Byron decided that Fred Harvey would stick with what it knew—union stations, what was left of the trackside hotels and eating houses, La Fonda in Santa Fe, and of course the Grand Canyon, which, amazingly, now made more money than everything else in the company put together.