Document mrNr9BGBJOykZ0m8gx0xJVKB

fre9fr00000-<3MS-4000 98SIIN r'AOil: Au-jU, --oS issue of FGa-Tj W magazine. 18,500,000 Gallons Of Paint . . . last year came from the factories of the Sherwm-Williamsfpo., brought it a . ' '. .. .' . . ........ . ... .' gross of $56,000,000. For in good times you paint; in depression, you rqjauni. ' . * >1 'HERE was once a time when paint was .1 just paint--pigments ground fine and suspended in linseed oil, with a little tur pentine as a thinner, and a chemical drier, in those days the Sherwin-Williams Co. was the undisputed leader of the paint business. Then, in the early tgso's, a technological revolution burst upon the paint business. It caught the Sherwin-Williams Co. off guard and fast asleep. And where is Sher win-Williams today? It is still the undis puted leader of the paint business. With just about 1,399 companies competing against it as hard as they know how, Sher win-Williams sells 16 per cent of all the paint that is sold in the U.S. And no longer merely paint, but all the host of those new "industrial finishes" which the techno logical revolution started while SherwinWilliams was dozing. The red circle in the green field that distinguishes billions of packages of Lucky Strike cigarettes is executed in colon made by.the Sherwin-Williams Co. You will find other Sherwin-Williams colors on thousands of signboards advertising Coca-Cola, Shell gasoline. Maxwell House coffee, Goodyear tires, and Sunkist oranges. Sherwin-Wil liams supplies the glossy yellow finish on the .tubes of Ipana toothpaste, and it furnishes the paint tor the Brooklyn Bridge and the streetcars of Cleveland. Sherwin-Williams finishes are on the Philco radio cabinets, and the New Haven Railroad's streamline Comet, and the Ivers & Pond pianos; Sher win-Williams lacquer is the bright skin on Packard-automobiles. This paint company, which was once concerned only with mak ing paint, is now concerned with making every kind of protective and decorative finish that a supertechnical era has been able to devise. And with making; every kind of color in an increasingly color-conscious civilization. The biggest single customer of the paint industry is not the building trades; even in good times--it is the automobile industry. The second biggest is the railroads. The Ctlor pitupsHi ft Fo u b h i hir Aituu HOW PAINT AND ENAMEL ARE MADE The crux of the process is the "mill'' shown above. It consists of a heavy grindstone revolving be neath another fixed stone. The paint paste is finely ground between them and serves at the same time as a lubricant for the stones. The whole process, of which this is a part, is described on the opposite page. building trades some third. The Sherwin'Vyilliams laboratories havjC formulas for use on 40,000 specific industrial products. On the inside of canfSberwin-Wiiliams finishes prevent fruit and-,yi:getables from getting a metallic taste. Inside buildings,, they in crease heat radiation--a light-enameled ra diator is about 15 to so per cent more efficient than one finished with bronze or dark shades. They prevent evaporation in oil and gasoline storage tanks--a lightpainted tank loses about a third less in this way than a dark tank. They help, surgeons who have discovered that!;tinted operating rooms are more restful to work' in than dazzling white rooms, and they stop, by color and poisoning, the growth of sea life on the bottoms of ships moving in tropical waters. They mark sheep on the range. And Sherwin-Williams pigments are sold to manufacturers of all kinds of colored prod ucts from printing inks to rubber bathing suits. For convenience's sake, we shall have to use "paint industry" and "paint com pany" in talking about Sherwin-Williams. But, as we have hinted, they are really very .inadequate; termsftp describe the business in which Sherwin-Williams and similar companies are engagitd. The SherwhiSWilHarns trademark is not notable for its modesty. It shows a can of bright crimson paint spilling generously over the terrestrial globe, and the slogan --that accompanies it avers that "SherwinWilliams Paints Cover the Earth." They don't. But at least they come closer to cover ing the U.S. than; any other, for against the Sherwin-Williams output of 16 per cent of all U.S. paint, its nearest competitor--Pitts burgh Plate Glass--makes an estimated 10 per cent. As a matter of fact, a good case can be made to prove that Sherwin-Williams is just about the paint maker's idea of what a perfect paint company should be, and that the paint business, as Sherwin-Williams con ducts it, is just about any businessman's idea of a big, sound, depressionaffiof en terprise, As for'its size, ' ` annual U.S. paint'bill is 000,000. Paintirpne of those 1___. _ modities that areao common as to bealmost cosmic; it is norapntythe great embellisher but also a prime protector of civilization. Remember -also jfchat the paint market is theoretically unlimited. Any given tiay-- and few paint salesmen are ever allowed to forget the fact--it is theoretically conceiv able that every property holder in the 70 0007-SWP-000004635 PAINT BATCHES ARE'TPStOED ^O^COLORyAGAlN^^AND'Aai) s a mh c e s ^s In making paint, the dry.pigments-(coloring matter) and aOt ary combined '' urg^b/centkfiig*l force toward the pdM^Kttjiu revolving itone, where to form a thick pute in vatt'on an upper floor of the painbfictqry.In.these * it u^qraped'offny a metal arm and ooieidownStounki on thefloorbelow vau thepaste is stirred by a mechanical. arm.Then itoozesddwn a'.trough into, ' . that. Here mare-oils are added- and tintingqphamasthey are required, and mills on the floor below (you: can see the trough at the top of the!picture on - the mixture is churned until it has the propervpaint consistency. Then the opposite page). As the paste is ground between the stones of the mill, it is samples are drawn off:and sent to the testingrooms, .as shown above, nation might be persuaded to repaint his was due to the fact that prices and volume property. As {or the soundness of the busi fell very rapidly before the company could ness, consider the following history. cut expenses. In 1933 expenses were cut and, as you can see, the new prices of the THIS neoperfect Sherwin-Williams com New Deal helped to bring the net income pany (an explanation of the neo will up again. Sherwin-Williams shows an exshortly appear) went into the depressiontremely strong position with current assets after a record year, 1939, in which gross of $38,000,000 (of which $8,700,000 are in sales were $76,000,000-and net income was cash and U.S. Government securities) as $6,000,000 and the company earned $39.13 against current liabilities of only $4,000:000. on its preferred and $8.26 on its common. The first reason for Sherwin-Williams'* And here is what has happened since, neoperfection is its size. Its annual gross is >9933t 1>>999333a34 Grose idlts -- .. $75,000,000 .. 64,000.000 .. .. 47,000,000 ., 47,700,000 .. 55,800,000 Net intomt; .$3,600,000 $,200,000 703,000 3,200,000 4,300,000 'Suited per share 4-4Preferred Common $13.86 $ 4 519.6s -* ...20.78 28.44 0533---.4653424* * ' Deficit. around $60,000,000. Yet here is no monopoly. Sherwin-Williams achieves this gross in the face of competition from Du Pont (Duco, etc.), the Pittsburgh Plate Glass Co. (Sun-Proof, etc,), Devoe & Baynolds, the Glidden Co., and other high- Through the depression the company has grade paint companies in every section of paid its regular $6 preferred^dividend and the country. The selling of paint is, and common dividends varying between $4.50 always has been, a competitive scramble. and $i. The.1932 slump in: net earnings The more significant aspect of Sherwin- Williams's size is its; diversification. This is geographical as well as technical, and it is unique. No.other company sells so many., different kinds of paints and finisher in- so many different places. Sherwin-Williams is ready for any kind of business, anywhere in the U.S.--despite its`temporary doze in-the early tgso's. It has s)|complete lineof products not only in'the did established tradepaint field bur.'also in the nev^-aad*fa*t burgeoning field-ofi industrial finishes.' By trade paint we mean the vast fannliarjffeld of outdoor ami indoor house- pidi^^varnishes, and enamels. By industrial' finishes we mean the new1 quick-drying^ihequers. such as those used on automobiigb- theivarnishes and enamels applied to radio cabinets and refrigerators and a host oljother in-: dustrial products, the dyes and! pigments used in industrial coloring. The next-big- gest companies after Sherwin-Williams, Pittsburgh Plate and Du Pont, do the large . 71 0007-SWP-000004636 THE LATE HENRY ALDEN SHERWIN THE LATE EDWIN PORTER WILUAMS majority of their business in the industrial another reason for Sherwin-Williams's neo field. The depression record of Sherwin- perfection. Sherwin-Williams has the best Williams is partly due to its diversity. Al of reputations today and. as vyou will con- though painting falls ofE in a depression. repainting increases, It is estimated that s_sionTlcdJeha19* 2b9eeanbofuotr 9_re0_ppaeinrticnegn,t of the paint whereas dur Sistantly pany, it you hanj around the comnever hadi to live down any other kimnd of fsame Which brings us to the late Mr. Sherwin and the late Mr. Williams. ing the boom not more than 75 per cent Henry Alden Sherwin was bom hi Balti was so used. This would mean that the more, Vermont, in 1842. When he was amount of repainting has been greater than eighteen he went out to Cleveland and the amount dming boom years.The haggard began clerking in a drygoods store. In 1866 country can at least rouge itself--which is he got in on a retail paint store, and in why paint executives often congratulate 1870 he took over the store with a partner themselves on being in a good business. named Edward Porter Williams. Mr. Wil During fiscal 1934 Sherwin-Williams and liams was a Clevelander who had gone to its five main subsidiaries produced a total Ohio's Western Reserve College (now Uni- of 125,000 tons--18,500,000 gallons--of vmrily). had fought in the Civil War, and paints and varnishes and lacquers, 80,000 had had some luck with a small glass tons of pigmepts and dry colors and linseed business. Messrs. Sherwin and Williams in oil and other chemicals, 20,000 tons of in tended to become paint makers as well as secticides, and 5,500 tons of tin cans--which sellers. Mr. Williams was willing to put in is 22,000,000 tin cans. Broadly speaking, most of the |2,ooo with which they set up about a third of this production goes into in in business. He was a hearty, jovial man dustrial uses and two-thirds into trade uses. who felt sure that he could sell paint, partic Sherwin-Williams's .central plant, is smack ularly the good quality paint that he was in the middle of the industrial soot of positive the scrupulous Vennonter.Mr.Sher- Cleveland, on.-the snaking Cuyahoga River win could and would make. And there was and under the Van Sweringens' new Union plenty of use for good quality paint--very Terminal- Tower; In the adjoining Mid few people had bothered to make it. They land Building, Sherwin-Williams President took in a bookkeeper named Sereno .Peck George A. Martin and his executives have Fenn from Ohio and three years later, in their offices and: they often gaze down 1873, they set up a small paint factory in a sentimentally from ``the big house on the two-story, brick, cooperage shop on the hill" (company term) at the grimy paint Cuyahoga River, exactly where the Sherwin^ factories on the riverbank. There is an even Williams plant is today. Their first year's bigger plant in Chicago-rthe biggest paint outputwas 225 tons of paint mixings. plant in the world--and Sherwin-Williams When Henry Alden Sherwin said that and subsidiaries have a dozen smaller plants "nothing but the best paint that can. he, from Newark to Oakland, California, plus made is good enough for this company" he foreign plants in Montreal, Winnipeg, was not making a conventional sales talk. Havana, and Cowley, England. There is a He was not the kind of man to-deal in guff, Sherwin-Williams warehouse -in almost even the ritual guff of the business world. every U.S. city of more than 100,000 people. He was a quiet, meticulous gentleman " * V . ; , ' who liked to collect books and go fishing SHERWIN-WILLIAMS has been able to with Mr. Williams, and his New England follow out its policy-of diversity because conscience was evident in everything about it is rich, and its wealth is largely a tribute him including his paint. The success of to its reputation in the industry--which is Sherwin-Williams has been the gradual ex pansion of ,i;f ihle, p'uctging m im.irshiip a la Edwuicj Pcrrei Vulliair- mu ot superrautious hnan.ial pnct.ce a la Seioio Peck Fenn--all this being ba^ed on conscientious paint a la Henry Alden Sherwin. I'niie t \as a good policy when Mr. Sherwin began to make paint and shortly : kerward it became an evi I tt-- policy. If vou know voar paint primer, vou know that, whereas a few paintei i still mix some of their 0*11 paint, most of the paint that is-ioid todavis oreparsd paint--heavy, readymixed liquid in a can, read, for the paint brush. But when Mr. Sherwin began in the late sixties the-e was no such thing as go.od prepared paim.--that is, no one had devel oped a satisfactorysuspension ofpigmentsiin liquids that would stay suspended in a can. Painters bought the mixings and made their own suspension by mixing them (or having the store mix them) and did their painting before the mixture had time to settle. The paint business of Reconstruction da\si.swas not onlv piddling by present standards (pel haps a* gross of $20,000,000 as against 193 l's gross of $350,000,000; out it was also rudimentary, with no general standardswof raw materials and all the hazards and chicanery of mixing in the hands of in numerable jerkwater paint stores and indi vidual painters. So what Mr. Sherwin did first was to sell honest mixings. His lead pigments weren't weighted with crushed stone. His oils were good oils, not diluted. But prepared paint was the grail that was gleaming before the paint business in those years, and it was in this chase that Mr. Sherwin's honesty became an even better policy. Back in 1867 his friend D. R. Averill had patented the first poor approximation of a good prepared paint. He showed Mr. Sherwin his paint and his formula and Mr. Sherwin saw that both were bad. The quickprofit boys began cashing in on Averill type paints, and in so doing they gave prepared . .** " :,, h* fr * oJBseirirh - -' ' - PRESIDENT GEORGE A, MARTIN 72 0007-SWP-000004637 . paint, or "patent paint" as it was called at that time, a nationwide black eye. Mean while Mr. Sherwin researched. One of the problems was to grind good-bodied pig ments finely enough and evenly enough so that they would '-ispend. In 1876 Mr. Sher win developed a new grinding machine, substantially the fame as those still in use which, are described in the captions on pages 70 and 71. And in 1880, with the help of this grinding mill, the ten-year-old company produced a prepared paint, which was per haps the firstt1,high-grade prepared paint in existences , v . - *. . i.... In 1881 Sherwin-Williams heid its first convention. This original caucus consisted of Messrs. Sherwin-Williams, Fenn, three other executives, and the company's total traveling sales force of eight men. The company decided to wind up its retail busi ness and turn its whole effort to the whole sale marketing of ns paint mixings and its canned, preprred paint. In 1884 Sherwin-1 Williams hired one of the first chemists in an industry that made its paint by rule of thumb and to hell with 1 jualitv Mso in 1884 the company was incorporated with 3,000 shares of $100 par common stock closely held by the executives. In its first year of incorporation the company sold about $539,000 worth of paint and dis tributed a net profit of about $36,000. Audi then the process of expansion really got. under, way., , Williams bravura. It is true that SherwinWilliams conducts a steady export business mainly from Newark in the East and Oak land, California, in the West, and that Sherwin-Williams products dribble all around the earth reaching such remote parts as Aruba, Cyprus, Java, Macassar, and Su matra. But Sherwiri-Williams's foreign busi ness has run up against such obstacles as: "buy at home" movements,' the in surance problem in shipping inflammable articles (and many docks forbid paint un loadings), the reputation of English var nishes in the West and the prices of all Japanese paint products in the East, the problem of national import quotas (Ger many and Denmark admit paint only on a barter basis, for instance, and Italy can im port only 25 percent'of .the paint she uses). Faced with these1 difficulties, Sherwin-Wil liams has made no very vigorous, driving attempt to build up its foreign business. Out of last year's gross of $56,000,000 only about $1,000,000 came from export sales. SACK in the'nineties the addition of a line of varnishes and enamels. cont: 'buted toward .a distinctive Sherwin-Williams policy. As Mr. Sherwin's line increased in this way he naturally had to buy a wider variety of raw materials. In making his products he had learned what every paint maker rapidly learns--that the quality of a paint product depends very -much less on its formula than it does on the care with which the formula is mixed and the quality of the raw materials used. (Sherwin-Wil liams has 135 patents valued at a dollar HPHIS was fifty years ago. During the next J. thirty years, up until the World War) the company's development "was largely physical. The company soon added a line of conventional varnishes and enamels. Varnish is a cooked mixture of resins (the body of the varnish film) and oils, without pigment. When you add pigment to var nish you get enamel. But during thes^ years there were no major changes in chem istry or manufacture. In 1888 SherwinWilliams moved into Chicago with the purchase of the Calumet Paint Co., which, made most of the paint for Pullman. This Calumet plant was the forerunner of Sherwin-Williams's largest unit which today turns out about a third of all SherwinWilliams products. To manage the Calu met plant, Mr. Sherwin picked the young Chicago paint maker, George A. Martin, who is today President of Sherwin-Williams. In 1890 the company hired its first publicity manager, George Ford, and began gen eral advertising. One day Mr. Ford picked up a pencil and drew a picture of the world being inundated by a can of paint on the cosmic scale. He wrote the slogan "Sherwin-Williams Paints Cover the Earth" and then he put the scheme in his desk drawer as being an extravagant conceit. But in 1895 he took it out again and it was adopted as the official trademark, although at that time Sherwin-Williams was just be ginning to think about foreign business. But the phrase "Cover the Earth" has never been more than a piece of Sherwin- 73 0007-SWP-000004638 WHITE LEAD BY THE DUTCH PROCESS: THE BUCKLES AND POTS (SEE OPPOSITE PAGE) 74 0007-SWP-00004639 apiece, and most oiiits formulas are printed oil its cans.) Mr. Shenrin could see to it .that his own,mixers were virtuosos, but Incould not be certain o! setting'-the grade of raw materials he warned--besides which. . raw nilterials'Cpstrldeutt.1 In 1H9M lie <:< i ided that it Typultjj'jihe '$ smart; step, both Imanciaily and technically, for SherwinWilliams to make ns many of its own raw materials^ at, was feasible. 1 tie cotnpanv would sate money and it could rigidlv con trot thefgjIad^bfiniatjirialSic stlfrfs'was macie touaid this policy with the building ot a new linseed-oil factory in Cleveland in 1902. This policy is in operation today. Sherv. in-Williams makes all but a minor frac tion of its raw materials and is the onlv U S paint company to do so. It usually bins m the outside marker only when the prices are favorable, or when a new process sud denly calls for new raw materials. You can get an idea of the importance of this policy by considering the role of lead in the paint industry. Lead and zinc are;, generally speak ing* the basis of all white pigments, and the paint industry uses about 55 per cent of all the lead and 45 per cent of all the zinc WHITE LEAD Lead and zinc are great sine qua nans of the pamt industry, which buys 55 per tent of the lead mined in the L S. Lead is the sourre of whit leicl .1 white pigment used extensivelv in outdoo white paint and mixed with other pigments in " door paint pf manv light tints .Sherwm Will makes a good dea) of its,whi|tc lead `blvMlhe Dutch process. Bars of lead are melted d poured into molds which produce the waffL buckles shown on the opposite page. 7 then stacked in pots which contain ao The pots are covered with tanbark and The acetic acid corrodes the lead buckles, basic lead acetate. The acid also ferments bark, giving off carbonic acid gas. The action of the lead acetate and this gas resu in a precipitation of fine white powder whi is white lead-or. to the chemist, basic lead car bonate. This powder is ground, mixed with oils in tubs that are churned by revolving rakes(righi), and the resulting mixture is the white pig ment. There is also a thirty-day quick--and less satisfactory--process of making white lead, 1 which the lead is blown into a powder and mixe with corroding chemicals in a revolving ` as shown on page 73. Sherwin-Williams many provisions against lead poisoning and other; occupational diseases of the industry. Workers in dangerous processes are examined regularly, must bathe every night, and are given a fresh suit of working clothes each morning. LITHOl'ONE, AN INDOOR WHITE PIGMENT: THE CRUSHER Lithopone is the most widely used white pigment for indoor paints. It is chemically derived by. precipitating zinc sulphide .on barium sulphate. Litho-1 pone making starts with barytes ore, which is crushed in a revolving drum filled with metal balls. The crushed ore is roasted, put into an acid solution, and goes through a series of filtering operations, which results in a liquor con taining barium sulphate. This liquor is mixed in w ooden vats with a zinc liquor containing zinc sulphide. The esulting white* powdery precipitate is roasted, crushed again in another drui: (as shown above), and then ground into the final pigment. Lithopone is 1 it to be confused with litharge--lead which has been roasted at such high 1 mperatures that it has combined with oxygen from the air and turned yellow Roasted litharge is "red lead"--a pigment in most of the red paints which a: used to protect metalwork. * 75 * 0007-SWP-00004640 VARNISH: THE COOKING KETTLES The bases of varnish are resins (which form the varnish film). These may be natural resins obtained from the fossilized gum from tree barks of Africa: New Zealand, and other parts of the earth. Or they may be synthetic resins: chemically manufactured. The lumps of resin are put into large kettles of copper or stainless steel, as shown above, together with an oil such as linseed or tung, and a drier. I c mixture is cooked lover a gas or coke fire at temperatures between 411 ' and 600 Fahrenheit. Then 11 is cooled, and thinners are added as ner sary. The mixture may be cooked again. The final product is filtered and pi, aped into large storage tanks, where it ages indefi nitely. Like whiskey, the mger a natural gum varnish ages, the better it is. mined in the. U.S. Except when the market favors outside buying (as it did last year) Sherwin-Williams gets all its lead and zinc from its own mines in Magdalena, New Mexico. Started in 1904, the Magdalena property now includes 245 acres of mineral ground with four miles of underground passages, and 320 acres of non-mineral ground with a plant capable of processing 4,000 tons of ores per month, Sherwin-Wil liams has its own patented white pigment called Ozlo, a combination of zinc oxide and lead sulphate. These chemicals, together with other pigmentary elements, are made in a twenty-nine-acre Sherwin-Williams smelter plant at Coffeyville, Kansas. Pig ments of colors other than those already mentioned are made from various combina tions: umbers and siennas and ochers from various low-grade ores, yellows from a mix ture of bichromate of sulphur and lead, blues from iron and potash mixtures, greens by mixing blues and yellows, blacks from carbon (bought outside), and reds from iron oxides and toluol compounds. The finished dry colors are made mostly in the Chicago and Philadelphia plants, and Sherwin-Wil liams makes 90 per cent of all the pigments it uses (in Chicago it makes white lead by the famous Dutch process--see caption on page 75). The oils and driers are largely made in Cleveland and Chicago. The Sherwin-Wil liams idea has always been to confine its rawmaterial production to just those products that were necessary to support the company's paint business, but certain byproducts have been both inevitable and profitable. Out of the use of Paris green (now obsolete as a paint pigment) Sherwin-Williams devel oped its insecticide business, which last ear grossed $1,500,000. While this raw-material policy was beng developed,,Sherwin-Williams got to be : he biggest U.S. paint company. Having uarted largely as a midwest nn and north. astern concern, its warehouses and sales Dices reached into the West at San Franisco (1900), Los Angeles (njoi), Portland 1905), Seattle and Spokane 1(1908), and; .nto the South at Savannah'/1905),;Houston md New Orleans (1909). The company ould not have grown much more respec-' able than it already was, but its reputation 1 or that quality grew. It was one of a few !>ig companies whose respectability forced up the standards of the entire industry. Also [Continued on page 7#] 76 0007-SWP-000004641 [Continued from page 76] tar industries began to get well-established during those pre-War years, the founders in their own specialized hands, Sherwin- ' grew to be old men. The jovial Mr. W'il- Williams began to make retrenchments in liams, who had built up the Sherwin- these lines. Today Sherwin-Williams spe Williams sales organization, died in 1 903 at cializes in the bright dves, particularly the the age of sixty, emptying directors' chairs reds, which are the hardest to make. It deals in several Cleveland banks. In 1909 when ini only those coal-tar products that are the he was sixty-seven, Mr, Sherwin retired more or less direct result of its dyemaking. from the presidency to become the com Last year' Sherwin-Williams's dye business, pany's first Board Chairman. He was sue-, and the byproducts, accounted for about ceeded by Walter Horace (Nottingham, S2.500.000 o l the S5fi.000.000 gross. Sher whose Canadian paint company was merged win-Williams is sharply dye-conscious, and withSherwin-Williams.Mr.Cottingham was ready to jump at any special opportunity. a driving President, a plump, hard-working But the technological revolution, which Ontarian who had started his career as a got up speed at the beginning of the War, hardware clerk and who covered a stiff de reached a fearful acceleration in the years termination with a chilly British politeness. right after the Armistice. It got going much He was the company's chief expansionist. too fast for Sherwin-Wdliams. In the early He had a lakeside estate outside of Cleve twenties occurred the biggest single devel land where he was met each night hv a opment that has ever happened in the paint butler and where he worked on the lawn on industry--and it is the everlasting shame of summer evenings, with a small lamp, and a Sherwin-Williams, acknowledged leader of fan in one hand to shoo away the bugs. the paint industry, that its leadership dis During all these years Sereno Peck Perm mally failed at this crucial instant. When remained as Treasurer, During his long we say that Sherwin-Williams is only a neo term SherwinAVilliams never;did any pub perfect paint company, the neo refers largely lic financing, was entirely owned by its to nitrocellulose lacquers. The story has executives, directors, and their families (in been told in Fo r t u n e (Du Pont II, Decem 1920 there were only about 400 common ber, 1934), but it needs recapitulation from stockholders), and never issued an earnings the Sherwin-Williams angle. It involves the statement. Certainly the large part of the biggest money with which the paint in earnings went back into the company. Most dustry has ever been acquainted. of the increases in capitalization represented The biggest single customer of the paint stock dividends; the original 3,000 common industry, as has been noted, is tire automo shares of 1884 were gradually increased to bile industry. Last year the U.S. automobile 25,000 by 1902, and in 1903 Sherwin- industry bought about 10 per cent of the Williams created 10,000 shares of $100 par paint industry's gross sales. Now in die last preferred. In 1913, with gross sales of Si 1, ten years the finishing of automobiles has 000,000, Sherwin-Williams earned 8930,000. been entirely revolutionized. They used to be painted--and in that antique process no WHEN the War began, painting history less than twenty-one days were consumed entered' anew era. The industry:, which m. the painting (several coats) and drying for thirty years had been occupied witohf an automobile. physical expansion, began to feel the pres There was one man who kept insisting, sures and: opportunities of technological with special vigor, that there must be some revolution. Right away the products of the way of avoiding this outrageous waste of great German dye monopoly were cut off time. That man was Charles Franklin Ket from most of the rest of the world. The L'.S. tering, the engineering brains of General had to develop its own dyes. Naturally, the Motors. Every time he thought of those paint industry jumped at the chance, and twenty-one days, he winced. He wanted a Sherwin-Williams:was one of the first jump coat of automobile finish that could be ap ers. Sherwin-Williams got:into the dye bus plied and dried in a couple of hours. And iness as soon as the War started. The finally he had an idea. It was nitrocellulose company had already done some experi lacquer. This lacquer had been developed menting with aniline and coal-tar lives. from the knowledge that chemists gained This was extended, and for a short while about nitrocellulose, an important element Sherwin-Williams enjoyed a virtual moiiop- in many high explosives, during the War. oly of the L'.S. dye business. The lacquer was made from nitrocellulose The making of coalstar dyes also gave and pigment in a bath of butyl alcohol, amyl Sherwin-Williams an entry in the vast field acetate, and other solvents. It dried by the of coal-tar byproducts. But both dyes and evaporation of the solvents, leaving a glossy coal-tar products are of course so ramified nitrocellulose film, And it dried in about as to be industries in themselves. And two hours, as against eighteen to twenty- Sherwin-Williams was not so ambitious four hours for one coat of the old automo as to wish to be three industries in one. bile paint. It was estimated that the several The Sherwin-Williams management is coats of lacquer required would take up less more elastic and chancy today than it was than two days of total drying time. then (we shall shortly seewhy), but it would Two big obstacles had hitherto balked probably never be willing to depart lar the use of this lacquer as automobile finish, enough from a fundamental conservatism to First, it could not be used without a success undertake any such multiple, Hydra-headed ful paint spray gun (the lacquer had to be industrial activity as, say, the Du Pouts tire sprayed on, because it dried so fast that engaged in. So as soon as the dye and coal the slower process of brushing left a streaky 78 . job). This obstacle i had been overcome by the time Mr. Ketterjing got busy: spray guns had been built that! would spray the object and not waste their substance on the sur rounding air (Fo r t u n e, March, 1933). But the second obstacle remained; to plague Mr. Kettering. Thie tantalizing fact was that this lacquer was not:, Hardy enough to stand rough, outdoor automobile wear, Mr. Kettering kejpt tinkering in:, his lab oratory and running up against this di lemma. But he felt that he was on the right track and, finally, he took his ideas to Gen eral Motors' intimates, the Du Fonts. Their laboratories got to work. And in 1923 Gen eral Motors put out its Oakiands with a Du Pont lacquer finish. It was a thick ro bust coating; it was not only more robust than previous lacquer* it was even more dur able than paint and varnish. This was a /oievneosity lacquer. It utilized forty ounces of cotton per gallon of solvent; despite which it was just as fluid: as the previ ous lacquers, which used only six ounces. It saved 15 per cent in labor and seven cents i n material on each (automobile to which it teas applied. It became the standard auto mobile finish (except for Henry Ford, who uses a synthetic resin enamel of a type shortly to be discussed) and an important lurniture finish. It was this lacquer that made:: it possible for the automobile, indus try to step up production to the 5,000,000carsrper-year level :of 1929. SHERWIN-WILLIAMS can be squarely blamed for its failure to produce this sensational product from its own labora tories. You might suppose that the leaders of the paint industry would have seen the need for quick-drying automobile finish diemselves, and would have done some thing about it. Sherwin-Williams had even had nitrocellulose advocates on its staff. But it did not listen to them. Sherwin-Williams v. as prosperous, self-satisfied, and dozing. Sherwin-Williams has learned its hard ' lesson; that it must put emphasis on new research, that it cannot plume itself on its past achievements unless it is prepared to anticipate the markets of a chemically com* plex future. The Du Pont lacquer which supplied the need, and which has since be come so famous that its name is wrongly used as a generic term for all low-viscosity lacquers, was Duco. Today Sherwin-Wil liams and many other companies make the same type lacquer. (Sherwin-Williams's is called Opex and it goes on all Packard cars.) And Sherwin-Williams leads the huge automobile refinishing field. But the company is not likely to forget its bitter lesson, because every day it continues to pay for that lesson in hard cash. Let alone the business it missed by not being the first manufacturer of low-viscosity lacquer; it also has to pay royalties to Du Pont on its Opex. In 1928 Du Pont got a patent on Duco and three years later sued its com petitors in the field. Sherwin-Williams, among others, made a friendly royalty settlement. Du Pont won in 1933 and it [Continued on page 80] 0007-SWP-000004642 [Continued,pom page jS] (the one and only employees' purchase plan istrv as their salesmen--who knew nothing gets six ceiiis a gallon: on all'low-viscosity the company lias allowed). at all. Mr. Martin did so well in this ram lacquers (which sell front Ss to.S3 a gallon). In 1920 also> Sherwin-Williams did the shackle trade that! he attracted the attention Last year Du Pont got around S 100,000 biggest financing job in its history. This was ot Sherwin-Williams when they bought trout Sherwin-Williams. the sale: of 150,000 shares of S100 par 7 per Calumet in i888JHerose tinough Sherwin- The newest phase of the technological cent preferred through Cleveland Trust Williams as manager of the Calumet plant, revolution is ill the synthetic resins, the for the purpose of retiring previous issues, then of the western district, then of all basis of the,enamel on Henry Ford's auto expanding plant, and buying the Acme auxiliary departments. In 1916 he was made mobiles. Hitherto, the resins* used in var White Lead & Color Works, centered in Vice President in Charge of Manufacturing, nish makingihave been natural resins, aged Detroit (biggest subsidiary). The last shares and in ig2i First: Vice President and Gen fossil gums such as Manila. Zanzibar and were sold just as business sufFcred the price eral Manager of the entire company. kauri copals. They have come mostly front collapse of 1920, and the following year His presidential, manner is informal, with the Malay Archipelago, Africa, anil New Sherwin-Williams reported its only deficit-- a constant helloing of everybody around his Zealand and those sources have recently 52,300,000. The next year earnings were big paneled office|on the twelfth floor of the been approaching exhaustion. During the back to $2,700,000, but this 1920 experi Van Sweringens': Midland Building (the past decade, however, the paint industry ence prevented Sherwin-Williams from clerks halloo him if he doesn't get it in has developed synthetics that are actually making any vainglorious financial gestures first). He avoids imaking speeches because much better than natural resins. The two during the Coolidge boom. In 1927 the 7 . he doesn't like to [hear other men sound off, most common types are the glycerophthalic per cent preferred was called in, and a new won't go to business lunches because he (made from phthalic anhydride and glyc issue of 150,000 shares of $ 100 par 6 per cent wants to relax when he eats, and never erin) and the phenol: (made from fonnalde- preferred was sold through the Cleveland writes a personal letter that is not absolutely ltyde). They dry in a: few hours--in lacquer Trust Co. In 1929 Sherwin-Williams sold necessary. He has, a lake-front home east of time--instead of the few days required by 40,000 shares of common and 37,000 shares Cleveland and heiis the joint owner with his previous varnishes. They have a higher of $100 par preferred, using the proceeds to good friend Thomas Wilson (head of the gloss and greater durability than previous buy the Lowe Bros. Co., centering in Day Chicago packing house of WiJson & Co.) of varnishes. They do the job with.oijjy one ton, Ohio (second biggest subsidiary). In a 6,000-acre New .Mexican cattle ranch, 123 coat instead of the three or four FormeHy 1930 Sherwin-Williams bought for $500,000 miles northwest of El Paso. Every spring he required. In fact the synthetics have not control of John Lucas & Co., centering in hunts and rides the range there, sleeps out only made the old-type varnishes obsolete, Philadelphia, and the following year ob doors in a sleeping bag, and has no com but they also; threaten the existence of the tained, through exchange of stock, control munication with'Sherwin-Williams except lacquer business (as Mr. Ford's choice would of Sherwin-Williams Co. of Canada. Today in extreme emergencies. In Cleveland he indicate). About: 501 per cent of all Sher it has about 145,000 shares of Si00 par likes to play golf and watch baseball. He is win-Williams varnishes and enamels are preferred and 636,000 shares of common a director of the Cleveland Indians, as well notv made on a synthetic base, and last year outstanding among some 3,000 preferred as of Goodyear, Wilson & Co., Erie Rail-, Sherwin-Williams synthetics grossed Sa .000, and 3,500 common stockholders. road, Cleveland Trust Co., and others. 000. Sherwin-Williams does not agree with The stock, which was once concentrated some of its competitors that synthetics are in very large batches, is now widely scat I 'HERE are oply three members of the likely to challenge ordinary outside bouse tered and it is doubtful whether there are -L Sherwin-Williams Board of irectors paint in the near future. But owing to many holdings that are larger than 2,500 who are not company officers--Cyrus Eaton, synthetics, the day is past tvhen enamel was shares. Sherwin-Williams is traded on the Harris Creech, President of the Cleveland regarded as primarily an indoor paint. It is New York Curb and listed on the Cleveland Trust Co., and George T. Bishop, retired used extensively now on the fanciest trucks Stock Exchange and during the last six utilities exeeutivepand the hoard leaves Mr. and the newest streamline trains. Notwith months the $100 par preferred has varied Martin pretty much to his own executive standing, Sherwin-Williams believes that between $106 and $113, while the common decisions. After forty-seven years he knows for the immediate future, at least, the con has varied between $84 and $100. his company and 'its men. He is a master at stant stress of weather on the outside of a delegating authority and at checking the Shouse will still require conventional house paint of the best quality. INCE the War began the oldest Sher delegates. He himself spends a good twowin-Williams faces have all disappeared. thirds of his time on the road looking over Mr. Sherwin died in 1916 at seventy-four. Sherwin-Williams from coast to coast. He THE years of the technological revolu Mr. Fenn retired as Treasurer that year and runs the company through a Board of Oper tion have also included Slierwin-Wil- died in 1927 at eighty-two. Mr. Cottingham ators. This board consists of the leading liams's greatest physical expansion. Duringbecame Board Chairman in 1922 and re operating, purchasing, sales, and research tnese years Sherwin-Williams has become a tired to England, where he died in 1930 aL officers of the company and it meets once a public interest. In 1917 there were 15,000 sixty-four. The oldest faces have been suc week in Cleveland. It greu out of the late shares of $100 par -preferred and 70,000 ceeded by younger men whose faces, how Mr. Cottingham's Board ol Managers. But shares of common outstanding. That year ever, are old enough in the company's an while Mr. Cottingham sat w ith the Board of Sherwin-Williams ended fifty-one years of nals. Mr. Cottingham was succeeded as Managers as Chairman, Mr. Martin does private ownership by the public sale of 20, President in 1922 by George A. Martin, not sit with the Board of Operators. He says: 000 shares of Si00 par preferred stock who is very much in office today. "With all respect to those boys, there is a through the Cleveland Trust Co. In 1918 Tall, gray-haired, pince-nezed Mr. Martin natural human tendency to lean toward die the company raised $2,000,000 by extending is the sixty-nine-year-old dean of the U.S. boss's side of the argument If I leave them rights to common stockholders to buy new paint industry by virtue of his position, but alone I get their real opinions when the re stock up to 30 per cent of their holdings at he also happens to be a natural for the role. port comes in." The mimeographed report par. These new fundswere used to develop He is as warm, expansive, and paternal as comes in each week. If Mr. Martin is con the company's dye manufacturing in Chi his predecessor, Mr. Cottingham, was bleak cerned about any of the items (for instance, cago. In 1920 the common stock was ex and formal. Born in Montello, Wisconsin, he may think Sherwin-Williams has paid changed on the basis of four new S25 par in 1865, he went to public school there and too much for raw materials or is getting toe shares for one old Si00 par share, a stock to Chicago night schools, worked as a mes little for its research outlay), he will per dividend of 50 per cent was declared, and senger boy at twelve in the Chicago stock sonally investigate the point. Otherwise he some 30,000 new common shares were is yards. In 1886 he formed his own small keeps his hands off. Mr. Martin also gets sued for sale to Sherwin-Williams employees paint company. Those were the days when reports from weekly meetings of a Pur *.Vo( to be confused with rosin, which is a resin back rooms were paint factories and paint chasing Pool, which buys on requisition left after distilling off the volatile oil of turpentine. makers knew almost as little about chem- [Continued on page 83] 80 . 0007-SWP-000004643 [Continued from page So] win-Williams sales are made under reci Group's program featuring Paul Whiteman from the Board of Operators, and of a Sales procity agreements. Trade sales are an end and His Paini Men| on the NBC blue net and Advertising Committee (the; Vice Presi less plugging contact with some 50.000 work Sherwin-Williams regarded this pro dent in Charge iof Sales does; not sit with hardware, paint, department, and lumber gram as primarily a goodwill builder rather this Committee for the same reason that stoies that have been picked as Sherwin- than a sales stimulant. But one year of it was Mr. Martin avoids the board meetings). Williams agents, and with thousands of expensive enough, 'and Sherwin-Williams prospective agents, and with every possible SHERWIN-WILLIAMS subsidiaries do business enterprise that is likely to have a not report through the Board of Opera demand for ordinary trade paints. Sherwintors. Their Presidents report direct to Mr. Williams sets as its aim a trade sale of $1 no longer builds1 goodwill in this way. To day Sherwin-Williarna itself does no radio advertising. But Acme has gone on the air plugging a single product--its Lin-x var - Martin. Purchasing is central for all the a year per capita in every Sherwin-Wil nish. And Sherwin-JVilliams may do-more companies. Formulation and research are liams district. This aim is rarely realized, ot this in the future. The next few years central; all the companies use a common re but it exists as a spur to the salesmen. And will probably also see an increase in the ad search laboratory; inChicago, and n common so do a series of sales contests, such as last vertising budget forlmtensive campaigns on testing station in Miami, where the hot year's "Pot of Gold" sales derby, in which industrial products. southern sun gives a painted surface about the company may pay as much as $60,g o o six months of average "experience" in one month. For advertising purposes, SherwinWilliams and its biggest subsidiaries (Acme, in prizes during the year. The more specialized industrial sales re quire a salesman who has some knowledge JLL told. S ten. in-Williams and its sub . isidiaries employ S.ooo people. Em ployee relations are agreeable. There have Lowe, Lucas, Martin-Senour) are known as of paint chemistry. Here the problem is to beens1 small s l -ikes in Nev ark, Cleveland, the Allied Quality Paint Group Also, the convince industry of the number of new andi Chicago during the past five years; but treasury activities of all the companies are services that paints and finishes can perform. nothing approaching a ma|or upset. During more or less centralized; their financial re The industrial salesmen can route some the depression there hav a been two or three ports are consolidated with Sherwin-Wil- 200 Sherwin-Williams technical consultants general pav cuts. But 5her.vui-Williams em iiams's. But, on the other hand, just as each to places where large industrial orders seem ployment and Sheiwn-Wiliiams pav have of the subsidiaries keeps its own name, so likely. The current boom is for "plant in general held up well. So, appa,ently, has does each keep its own most famous brand conditioning"--that is, the bright repaint employee satisfaction The company follows names. And these brand names compete ing of industrial plants with Sherwin- the; usual U.S. methods of maintaining this with each other and with Sherwin-Wil- Williams Savelite to give more agreeable, satisfaction. There is a benefit association liams's brand names all tbe time. This does efficient, and esthetic working conditions. and a long-service pension plari.Twenty-five- not mean that a Sherwin-Williams subsidi Sherwin-Williams has already modernized year men, of which there are 436, get gold ary .will knowingly try to steal the customer some hundred major plants, and the com watches from ihe companv. Fitty-vear men, of another subsidiary or of Sherwin-Wil-' pany is especially proud of the gleaming of which th `re are three, get a diamond liams itself. But it does mean that the same white Beech-Nut packing factory in Canajo- pin and a bon as. There are social clubs for city will have agents of Sherwin-Williams harie. New York. Finally, Sherwin-Williams the girls the 3righten-Up Giro in Cleve and agents of its subsidiaries in the same has almost a hundred retail stores of its own. land, Wil-Shei-Win Girls in Chicago,; and region. The point is that Sherwin-Williams Some are newly established, others have Covei-The-Eatth Girls in Newark. There., estimates that the market will take all tlie been bought from bankrupt agents. The is a Junior Club for the younger executives, production of Sherwin-Williams and sub individual stores seldom pay for them which has been running a dummy paint sidiaries, and that the competitive stimulus selves, but as a company operation the concern on paper called the Coverwell Paint is valuable in selling, and, especially, that group is successful. It assures Sherwin-Wil Co. And there are numerous other com the old popular brand names are valuable. liams of good representation and volume in pany sodaliues. All in all, labor has been Mr. Martin feels that more paint is sold in places where local agents have been un one of the lea;t of the company's worries. this;way than if Sherwin-Wil liams were to ap satisfactory. Today it is hard for Sherwin-Williams ply its own brand names (although Du Pont, executive-, to take a short view of events. Sfor instance, follows the opposite policy). Sherwin-Williams allots about 26.percent of its total expenses to sales. It divides the HERWIN-WILLIAMS allots 4 per cent The depression has not brought them any-, of total expenses to advertising, and is where near a crisis. They have been thank firmly convinced that more does not pay. ful for the pi ice raising of the New Deal, country into thirteen districts, these be The big thing in paint selling, according to and lor the as vet small but potential ing in turn divided into thirty divisions. Sherwin-Williams, is the constant contact benefits of the Federal Housing Administra There are about 500 salesmen all told (the with agents and advisory salesmanship in tion and the Home Owners' Loan Corp. subsidiaries have another 500). Sheru in the industrial field. Even so, Sherwin-Wil They do nof miss the Paint Code, which Williams's First Vice President in Charge liams does more advertising than most paint had* verv little effect on Sherwin-Williams - of Sales is H. D. Whittlesey, a gray-haired companies. In 1907 it ran one of the first or any othe- high grade paint company (al veteran who stands six feet three and is colored advertisements that ever appeared though, by forbidding sales below cost it noted in the company for his extreme poli te in the Saturday Evening Post and it still did prompt some careless companies to learn ness, his long and formal written sentences, uses full pages in national magazines. It cost accounting). But the fact is that today and his paradoxically short and informal- also uses billboards, and it goes fifty-fifty the Sherwin-Williams executives have their sales appeals: "Get your sights upl We're with its agents in the annual distribution of eyes on the long perspectives. Physical ex through handing out the bananas!" He is some 2,500,000 painting pamphlets, mostly pansion has become something for a paint one of the.best-known men in American on home decoration. It gets out 15,000,000 manufacturer's memories and hopes. But sales circles; last year he was President of seasonal broadsides each year. Three years they are not depressed, because the paint the American Society of Sales Executives. ago the company realized that it had been business is exciting today. Excitement gets And inside the company, sales is only neglecting its famous trademark and today, into the paint business when techniques one of his concerns:, he is Mr. Martin's whenever sales fall; off unaccountably in a begin to multiply. And the Sherwin-Wil closest associate in the management of Slier- division, a rash of trademark cards breaks liams men are busier than ever with tech win-Williams. The sales activity under h im out in the store windows. Sherwin-Williams nological revolution, You hear that we are is divided into trade and industrial sec has cooperated with the industry in general passing out of a mechanical era and into a tions. In both, the old industrial game of in various national advertising campaigns, chemical era. The Sherwin-Williams men reciprocity is played--Sherwin-Williams such as that of 1919-23 under the famous believe it. And they look beyond immediate agrees to use the products of companies that slogan "Save the Surface and You Save possibilities to a glaring and comforting will buy Sherwin-Williams paint, and vice All." Three years ago radio listeners were fact: that the world needs, and is beginning versa. But less than 5 per cent of all Slier- familiar with the Allied Quality Paint to want, a new coat of many colors. .83 0007-SWP-000C04644 S