When, last fortnight, J. P. Morgan & Co. announced a merger of three potent New York State power companies (TIME, June 24), only New York Staters were deeply interested. When, last week, final approval of the long-pending merger of Continental Oil and Marland Oil companies was interpreted as first step in a national Morgan oil corporation, public interest was wider but still quiescent. But also announced last week was a Morgan-managed merger of Fleischmann Co., Royal Baking Powder Co., and E. W. Gillett, Ltd.* At that the country sat up and took sharp notice.
Everyone knows Fleischmann's yeast, everyone knows Royal baking powder, everyone knows Chase & Sanborn coffee. The coffee company was indirectly included in the merger because Royal Baking Powder has large holdings of its stocks. The holding company which will control Fleischmann and Royal is expected to purchase Chase & Sanborn control. Many another food company was mentioned as likely to join the Fleischmann-Royal combination, especially Campbell Soup, Gold Dust, Postum Co., Inc., Kraft-Phoenix Cheese Corp. Securities of the three companies already merged had last week a market value of about $430,000,000.
The merger was arranged by a committee consisting of Morgan-Partner Thomas Cochran, Fleischmann President Joseph C. Wilshire, Board Chairman Max C. Fleischmann, Royal President William Ziegler Jr. Mr. Wilshire will be president of the new company. The directorate will include Morgan-Men William Ewing and Henry P. Davison. The Morgan interest in the merger was accented by the personal friendship long existing between Morgan-Partner Cochran and Major Fleischmann, and by the Morgan ownership of a considerable portion of Fleischmann stock (estimated at 400,000 shares) purchased in 1926.
When Morgan-Men first discussed the food merger, the Fleischmann distributing system was an important consideration. The only rival for speed and regularity admitted by Fleischmann in daily national distribution is the U. S. Post-Office. The only foodstuff rivals are the various milk companies, none of which are nationwide in scope. Fleischmann's yeast is delivered fresh every day to more than 30,000 bakeries and to 250,000 groceries, delicatessens, hotels and other retail outlets. No jobbers are used—delivery is direct from 900 Fleischmann agencies. Fleischmann's operates a transportation subsidiary which has 200 railroad cars, 2,000 trucks, 5,000 employes. Every Fleischmann retailer knows that his scheduled quota of yeast will arrive as certainly as his morning paper, his morning milk, his day's mail.
Justly proud of its distribution system is the Fleischmann company. "The Yeast Must Go Through" is the watchword in every Fleischmann office. During the New England floods of November 1927, Fleischmann chartered all the airplanes at the Boston Airport, even newsmen and news services could get planes only through the Fleischmann Traffic Department. First arrivals from afar in the flooded districts were airmen carrying Fleischmann yeast. Nor is Fleischmann service limited only to yeast deliveries. When a Fleischmann baker died suddenly, leaving a distracted widow with several small children, one Fleischmann man took charge of the funeral, another Fleischmann man ran the bakery until the widow was able to operate it again.