Sunday, July 29, 2012

On Beyond Holcombe: Hall & Lyon

Editor's Note: Malcolm Goldstein is a contributing blogger for 1898 Revenues. This post is part of a continuing column on the companies that used proprietary battleships.





Hall & Lyon Co. of Providence, Rhode Island, advertised its new flagship store, circa 1907, as the largest drug store space in the United States, and featured it on a postcard. The predecessor building itself had been a marvel. It had contained six floors, each 25 feet by 130 feet. The soda fountain and cigar stand were on the ground floor along with the retail shelves for prepared and proprietary medicines. A fully equipped photography department occupied the second floor, and the top floor, blessed with the best light, served as the photography studio. Staff druggists filled prescriptions on the third floor. On the fifth floor, the business offices split the space with a fully staffed manicure salon. The fourth floor, which extended over the roof of an adjoining building, was the stockroom. The basement housed a soda making plant and an electric generator which provided the power to run the whole building. The business employed 150 people in 1906, including a force of uniformed youths who manned bicycles between 7 a.m. and 11 p.m. and could be dispatched to deliver medicine any place in the city at a moment’s notice. The company flourished as one of the earliest regional drug store chains, operating outlets in Rhode Island as well as Massachusetts, and utilized two wagons to transport goods among the branch stores. Its separate laboratory building manufactured 125 proprietary preparations, toiletries, ice cream and confectionary goods.


Hall & Lyon was known for its innovation and flair in advertising as well. In 1906, it gave away a Cadillac to the customer who submitted the most Auto Purchase Coupons. The various store branches gave away one such coupon for any purchase of ten cents or under, and another for each additional ten cents of the purchase price. Contestants were instructed to tie their coupons in bundles of 100 and submit them during a specified redemption period. The person who turned in the most coupons received the car. The sixty-five contestants who submitted the next highest amounts of tickets each received one dollar, and every 1000 coupons were valued at one dime. One wonders how many coupons it actually .took to win a Cadillac in 1906!






Henry C. Hall was the senior member of the partnership. He was born in Waltham, MA in 1842 and seems to have been a natural leader. At the outbreak of the Civil War, he enlisted in Company H of the 16th Massachusetts Regiment as a private, saw action for three years, later was prominent in GAR affairs on behalf of his regiment, and was forever after referred to as Major Hall. Returning to Waltham, he opened a drug store in 1867. He resided in Waltham his entire life, kept expanding his business, held local office in Waltham, and served in the Massachusetts Legislature in 1891.

George Lyon was the junior member of the firm. Born in Lawrence, MA in 1855, he apprenticed into the pharmacy industry at an early age and joined with Hall in 1886. By 1898 - as the revenue cancels show - the company’s main office was in Providence, RI. Lyon took personal charge of the main store, and also seems to have been the much more adventurous businessman. While serving as treasurer and general manager of Hall & Lyon, he also found time to become President of the Calhoon-Lyon Drug Co of Buffalo, NY, treasurer of the National Cigar Stands Co. and treasurer of the United Drug Co, the predecessor of the Rexall Drug Co.




In 1907, Lyon engineered a takeover of New York City’s upscale drug chain, Caswell-Massey Co, (a company which also cancelled 1898 revenues, has already been mentioned in an another article in its earlier incarnation as the Caswell, Hazard Co., and whose entire story will ultimately unfold in the course of this study). Lyon intended to fold this venture, which one of the local trade papers denominated a “colossal undertaking,” into Hall & Lyon’s growing empire, but luck was not with him in this particular undertaking. He fell ill and had to withdraw from active involvement in the reorganization of Caswell-Massey. When the Panic of 1907 temporarily froze Hall & Lyon’s assets, depriving Lyon of the ability to financially nourish the new organization, the new project went into receivership and drifted away from him. At the same instant, Lyon’s health declined precipitously and he died of heart failure, apparently completely exhausted at age 53. Although slated to sit on the new corporation’s Board of Directors, Hall immediately announced that the Caswell-Massey venture was entirely Lyon’s idea, and that only Lyon, and not Hall & Lyon Co., per se, was involved.




Hall & Lyon survived Lyon’s demise, but Hall, by this time fairly elderly, apparently seems to have removed himself more and more from the active management. A year before, Lyon’s death, Hall had joined Lyon in investing in the United Drug Co. This company was the brainchild of Louis K Liggett, a brash young man whose name will hereafter crisscross these articles, and whose corporate endeavors represented an attempt to build an integrated vertical pharmaceutical industry monopoly after the initial horizontal drug industry trusts were defeated. Liggett will be treated in detail in the future, but it is enough here to say that Liggett gradually took control of Hall & Lyon and folded it into his empire, which ultimately emerged as Rexall Drug Co, another story saved for another day. Hall lived until 1918, finally passing away at age 76 in Waltham.



The company’s name figures in at least one legal case whose ruling has echoed down the years. In the course of the Caswell-Massey reorganization, Lyon, as treasurer of Hall & Lyon, issued a guarantee for a letter of credit that J. P. Morgan & Co issued to one Miss Emily Alpers, a female relation of Dr. William Alpers whose New York pharmacies were part of the that transaction, when she traveled abroad. When J. P. Morgan sued Hall & Lyon several years later, after Miss Alpers left her debts unpaid, Hall & Lyon defended on the principle the guarantee given by Lyon, now deceased, although given on Hall & Lyon’s letterhead was personal to Lyon and not binding on the corporation itself. The Supreme Court of Rhode Island had no trouble holding Hall & Lyon responsible for the action of its corporate treasurer, saying that since Lyon signed the note on the corporation’s paper with his corporate title and J. P. Morgan accepted it from him as a corporate document, Hall & Lyon was responsible for the debt even if it had not specifically authorized Lyon to make that particular guarantee on its behalf. Ever since, courts all over have deemed such corporate “apparent authority” to rest with a corporate officer who exercises it.

1 comment:

  1. Thanks very much for this narrative. George Lyon was my great grandfather.
    --Janet Lyon

    ReplyDelete