The Emperors of Vice and Crime of Shànghâi‘s Yesteryear

Posted on by E Curb Nottus
Popular Culture, Regional History, Social History

This piece in the China Daily Show caught my eye recently…”the first season of CSI’s much-anticipated ‘Shanghai’ spin-off has been cancelled, after scriptwriters failed to take into account the East Coast city’s complete absence of crime”. It goes on to say, “plotlines involving corruption, sexual harassment and high-end ergotou[𝕒] were shelved after quality-control cadres for the State Administration of Radio Film and Television (SARFT) cited an ’insufficient suspension of disbelief’ for viewers”[𝕓].

🔺 The formula: the standard Shànghâi period crime series

This amused me, less for the satirical tone inherent in the piece (CSI detectives investigating “high level wok theft”), but because every time I switch on the television in China and flick through the drama offerings on China’s subscription network,  a more than healthy proportion of the fare seems to be fixated on 1930s Shànghâi noir and underground crime gangs.

Chinese television entertainment csars of course trade on the viewing public’s nostalgia for a past time where Shànghâi pulsated to a rhythm of decadence, glamorous nightspots and ostentatious ritzy opulence, counterposed against an underbelly of sin, gangland warfare and corrupt police. While these television series, such as the popular Meng’s Palace and New Bund, are pure and typically exaggerated fictions, the sources of their invention were very real.

If the Shànghâi of the 1920s and ‘30s that we visited in the preceding blog deserves it’s glowing epithet, “the Paris of the South”, then it’s other sobriquet, “the whore of Asia”, to describe the seedy and violent underbelly of the same city, is every bit as applicable. The “freebooting capitalism” of Shànghâi in the interwar years[𝕔] and it’s rewards, spawned a wave of criminal activity with underworld bosses vying for a bigger piece of the city’s stupendous economic pie. Like the legitimate commercial powerhouses on the Bund, the gangland “Mr Big’s” were very much part of Shànghâi’s “movers and shakers”.

The Big Three?
The conventional view of Shànghâi‘s criminal underworld in the Twenties and Thirties is that there were three main gang chiefs who ran most of the show. This triumvirate of crime was made up of Du Yuesheng, Huang Jinrong and Zhang Xiaolin, …of the three gang bosses (san daheng), Zhang was of lesser significance, confined to playing a secondary role to Du. The older Huang was first to attain prominence, entering the French Concession police force and rising through the ranks to become police chief. From this advantageous post the corrupt Huang could play both sides and garner a cut of the criminal profits [𝕕].

Huang—Lin—Du
Huang was eventually dismissed from the FP constabulary which led to him going full-time as a criminal overlord. The sacked cop made his fortune with a scheme involving the stealing of incoming opium from the docks, which his gang then transported into Huang’s residence by a back entrance. Huang had the opium—which cost him zilch!—distributed throughout China through his Sanxin Company [‘Murder, Mayhem and Money’, (Ni Dandan), Global Times, 12-Mar-2013, www.globaltimes.cn]. It was the pockmarked Huang’s first wife (Lin Guisheng), an influential behind-the-scene figure in Shànghâi power circles, who provided the boost to the career of the third of the crime triumvirate. Madame Huang took on the young Du Yuesheng as a partner in a French Concession operation, the start of a business empire for Du which ultimately eclipsed that of her husband’s. Du’s power base and muscle was the much feared Green Gang, which numbered as many as 20,000 members at it’s zenith [‘Shanghai in the 1930s’, World History, http://world history.us].

Du and the Green Gang
“Big-eared” Du was a complex and fascinating figure in the Shànghâi underworld scene. As zongshi (grandmaster) of the local crime operation, he was ruthless in business and intimidating in method (he would despatch coffins to the houses of gangland rivals who had earned its displeasure as a grim warning). Yet he forbid members of his Qing Bang gang to violate women, the wealthy Du was generous and wrote off many debts owed him by friends. Du’s business scope was panoramic … opium dens, gambling shacks, prostitution rings strung out across the city, kidnapping, protection rackets, labour contracting, heroin and morphine labs, as well as more ‘legit’ activities. He also founded a boys’ school in the French Connection and was president of the Chinese Red Cross during the Sino-Japanese War. And, in a perverse twist, Du, having made a ‘motza’ from his cur of the proceeds of the opium monopoly, was ultimately made president of the “National Board of Opium Suppression Bureau”! [Derks, Hans. History of the Opium Problem: The Assault on the East, Ca. 1600-1950. Vol. 105, Brill, 2012. JSTOR, www.jstor.org/stable/10.1163/j.ctv4cbhdf. Accessed 21 Feb. 2020].

Du’s political ties to the Chinese republic’s political elite
Du sided with Chiang Kai-shek and the Nationalists in the conflict against Mao’s communists, playing a role in the 1927 Shànghâi purge. After the Japanese invasion in 1937 Du fled to Hong Kong, a move which lost him goodwill in Shànghâi. After the war Du wanted to return to the city but was not welcomed back and died in Hong Kong exile [‘The three tycoons of gangsters’ Shanghai’, Timeout, 22-Mar-2016, www.timeoutshanghai.com].

It didn’t end in a happy story for the other two ‘tycoons’ either. When the Japanese army invaded, Xiaolin switched sides and aided the Japanese efforts to root out subversive (ie, anti-Japanese) elements in Shànghâi, making him a wanted man by the Nationalists. In 1940 he was executed by one of his own bodyguards. As for Huang, his ultimate downfall was the communists’ takeover in 1949. Stripped of his great wealth, Huang was forced to submit to “self-criticism” and take up lowly work as a street sweeper (‘The three tycoons’).

1932 Hochi map of Shànghâi🔺

A Mexican ‘godfather’ of Shanghai crime?
Another name—juxtaposed against that of Du—occupied a similar senior role in the gangland power structure in Shànghâi. Carlos Garcia, a Mexican who migrated to the fabled city of the east, carved out a lucrative (illicit) business shipping Mexican tequila via Shànghâi back to prohibition-hit California. He has been depicted as the closest thing the Shànghâi underworld of the day had to a “capo di tutti capi”[𝕖]…gang boss Garcia proved indispensable in his ability to adjudicate disputes and ensure that they didn’t develop into internecine gang warfare [‘The Canidrone Tower Gang’, Paul French, (‘That’s Shanghai’), 23-Sep-2019, www.thats,mag.com].

During the 1920s and 1930s it is estimated that there was some 100,000 gangsters in Shànghâi (around three percent of the city’s population at the time) [Brian G Martin, The Shanghai Green Gang: Politics and Organized Crime, 1919-1937, (1996)]. The vice empires of Du and his ilk were built on control over the city’s prostitution, gambling and drug trade, especially opium.

The law-enforcers’ role
The city’s police, tempted by tangible graft and corruption all around, were inherently weak, explaining why Shànghâi fell prone to unchecked lawlessness and gangsterhood. Irredeemable “bad apples” like the discredited Huang thrived in the tainted civil police agencies of 1920s and ’30s Shànghâi. The individual carve-up of the city constabulary into three distinct and unrelated entities, added to the police’s overall inefficiency. Law enforcement suffered hugely as a result of the absence of a single, paramount city police force, making it very difficult for the police to operate strategically and cohesively to rein in the city’s countless ’villains’ [‘The Shanghai Settlements’, Wikipedia, http://en.m.wikipedia.org].

Endnote: Gangs of old Shànghâi
Carlos Garcia’s key role in the city’s crime business is a reminder of the importance of the non-Chinese element in the Shànghâi underworld.  As well as Garcia, there were other “blow-ins”, characters like ’Lucky’ Jack Riley. Riley, an escaped convict from the US, “lucked-in” in a big way on settling in the inter-war East Asian crime capital. Riley succeeded in cornering the Shànghâi slot machine market (patronised heavily by the foreign military personnel in residence), and with a Jewish criminal associate, he ran from a business from Shànghâi servicing prohibition-era America’s habit for heroin. Roaming the mean streets of 1930s Shànghâi were a host of multicultural gangs—Portuguese gangs, Spanish gangs, Mexican gangs, Jewish gangs, etc—giving the cosmopolitan edge of Shànghâi another dimension [‘Those Rogue Foreigners Ruled the Streets of 1930s Shanghai’, (Seth Ferrenti), Vice Media, 22-Jun-2018, www.vice.com].

﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏﹏

[𝕒] a white-coloured liquor (a type of baijiu) popular in China; literally ”second pot head”
[𝕓] “’CSI: Shanghai’ cancelled due to lack of crime”, (Ping’an Jiedao), China Daily Show, 20-Feb-2020, www.chinadailyshow.com
[𝕔] Ferranti: 2018
[𝕕]  of the several territorial police forces in Shànghâi, the French was the most corrupt – according to Bernard Wassermann, Secret War in Shanghai: Treachery, Subversion and Collaboration in the Second World War (2017, 2nd Ed.)
[𝕖] ”boss of bosses”

 

Inter-war Shànghâi: A Cocktail of Espionage, Rapid Wealth Creation, Opulent Grandeur and Glamour—in a “United Nations“ of Competing Interests

Posted on by E Curb Nottus
Economic history, Economics and society,, Inter-ethnic relations, International Relations, Regional History

Shànghâi by the late 1920s, and 1930s, was an exemplar of cosmopolitanism. The city’s pluralism, including a significant interracial element, made it stand out not just from the rest of a largely homogenous China, but from just about anywhere else on the globe. A key ingredient in Shànghâi‘s cosmopolitan character at this time was the trifurcation of the city. As a consequence of the city’s vicissitudes in the 19th century, Shànghâi, notwithstanding China’s retention of sovereignty over the city, was formally divided into three sections, two of which were foreign controlled.

French Concession

The smallest section was the French Concession (Fàguó zūjiè), in the puxi (west) part of the old city (roughly corresponding to the districts of Luwan and Xuhui in contemporary Shànghâi)—best known today as a prized residential location and the stylish centre of retail fashion in the city. The French, following suit from the British, extracted a concession from the territorial governors in 1849 and engaged in extra-territorial expansion over the ensuing decades. The French Concession had a consul-general appointed from Paris and maintained its own force of gendarmes. 

(The SMC flag, with a motto which preached ‘togetherness’)

Shànghâi International Settlement

Originally both the British and the American Wàiguó rén (foreigners)—the Shanghailanders as they styled themselves—had their own separate concessions, but the two enclaves merged in 1863 to form the International Settlements. The international communities, in the main dominated by the British and to a lesser degree the Americans (but also comprising smaller communities of other nationalities, mainly Germans, Italians, Dutch and Danish) who had their own police and fire services. The British and American expats, when they felt that their highly lucrative interests were threatened (as was the case in the 1927 political crisis), did not hesitate to call in the British Army and the US Marines. Both the British/International and French jurisdictions relied heavily on local Chinese for the bulk of their forces [‘The Shanghai Settlements’, Wikipedia, http://en.m.wikipedia.org].

Chinese Greater Shànghâi

The third and largest section was the area given over to the Chinese themselves and run by the Chinese Municipality of Greater Shànghâi. Basically, this area surrounded most of the foreign concession territory (especially to it’s south and west) and comprised the parts of Shànghâi that the British et al and the French were not interested in, having already had their pick of the prime locations for themselves, close to and along the Bund [‘The Shanghai International Settlements’, Wiki].

(Cartography: Bert Brouwenstijn, VU University, Amsterdam)

 A fourth concession, the “Japanese concession”

In effect, the large and increasing numbers of Japanese living in Shànghâi by this time (including armed garrisons), had resulted in the creation of an unofficial ”Japanese Concession”. This de facto concession was located in the Hongkew (now Hóngkôu) district of Shànghâi (just north of the Whangpoo’s (Huangpu’s) confluence with the Soochew (now Suzhou) Creek). Ultimately, after the Pearl Harbour attack, the Japanese extended its hold over the rest of Shànghâi except the French Concession which Nazi Germany allowed it’s Vichy French ‘puppet’ allies to retain (until 1943 when the Vichy were forced to hand it over to Imperial Japan).

Shànghâi, the fabled metropolis

By the early 1930s Shànghâi had established itself as one of the most exceptional and distinctively dazzling societies on earth. It’s population had hit three million (making it the fifth largest city in the world[𝕒]), of which somewhere between 50,000 and 70,000 were foreigners. The Thirties also witnesses two huge influxes of refugees into the city—European, mainly German, Jews fleeing the murderous repression of the Third Reich and reactionary White Russians fleeing Bolshevik retribution in Stalin’s Soviet Union and republics. Both of these ’stateless’ exo-groups were the fortunate beneficiaries of Shànghâi’s status as an open door city…neither passports or visas were required to enter the city [‘Shanghai in the 1930s’, World History, http://world history.us].

🔺 Sassoon’s ‘Cathay’ , a Bund icon but a slightly(sic) over-the-top self-comparison (Source: P Hibberd, The Bund Shanghai: China Faces West (2007))

Economics and architecture: A modern city

The early ‘30s, the Great Depression may have been ravaging the world but Shanghai was prospering…Shànghâi’s flourishing affluence meant rapidly made fortunes and a privileged lifestyle – for some at least within Shànghâi society…most notably and obviously for the advantaged foreigners. Businessmen such as Victor Sassoon (financier and hotelier) and the Renwick brothers (Jardine Matheson), profited from cheap local labour, laying the foundation for their fabulous stores of wealth[𝕓]. Brits like Tony Renwick and Anglophile American Stirling Fessenden also controlled the Shànghâi Municipal Council ensuring that local public policy in the Internationals’ concession would be favourable to Anglo business interests [‘Shanghai Municipal Council’, (International Settlement 1863-1941), www.links4seo.com/].

A further, external factor which allowed Shànghâi to prosper was that, unlike the rest of China which was divided up between different regional warlords, the city was monopolised by the foreign merchant class (World History). The warlords (and Republic of China leader Chang Kai-shek) were not able to penetrate this localised power base.

The Bund‘s modernity

And the wealth realised was certainly of the conspicuous kind, one glance down the Bund (Wàitān), the riverfront promenade, confirmed that. It was replete with grand financial and trading houses, hotels and nightclubs, many in elegant Art Deco or Neo-Classical style [𝕔]. The Bund symbolised the city’s new wealth and modernity – and contained Shànghâi’s version of ”Wall Street”. Shànghâi, even at this time, had more skyscrapers than anywhere outside of the US (World History). In nearby Nanking Road (now Nanjing Rd), was the commercial heart of Shànghâi, housing the leading retail merchants of the city such as the Sincere Company Ltd and Wing On. Fashion in Shànghâi echoed the city architecture’s modernity, the latest in-vogue styles were all the rage for the Shanghainese [‘Shanghai History’, Lonely Planet, www.lonelyplanet.com].

Nightlife and recreational pursuits

Shànghâi’s business nouveau rich, when they weren’t celebrating or listening to jazz music at one of the Bund’s many nightclubs, Ciro’s, Casanova’s, the Paramount Dance Hall or at the Canidrome Ballroom in the French Concession (originally a greyhound racing track!), could often be found at the Shànghâi Jockey Club racecourse betting along with thousands of others, Chinese and foreigners, on “the strange little Mongolian ponies” especially imported for racing (World History).

Espionage in Shànghâi: something of a free-for-all

With so many different nationalities in Shànghâi at the same time, all with competing and vested interests, it is hardly surprising that the city was a hotbed of espionage especially as the Thirties drew on inexorably towards world war. Spies and counter-spies abounded…most of the main players were actively working on the ground (or under it) in Shànghâi at this juncture – the British Secret Intelligence Service (MI6), as well intelligence units from Russia, Japan, France, Germany and the US [Bernard Wassermann, Secret War in Shanghai: Treachery, Subversion and Collaboration in the Second World War (2017, 2nd Ed.)].

In the next blog piece I will turn my attention to the other, seamier side of the Shànghâi story of the interwar period – the city’s association, you might say preoccupation, with sin and crime, another face of Shànghâi’s decadence in the Twenties and the Thirties.

Footnote: Shànghâi, location, location …
Foreign trading powers like the British had initially preferred the port of Canton[𝕕] to Shànghâi, but by the late 19th century the latter had become the big trading nations’ principal “treaty port” in the Far East. Shànghâi‘s geographical position was fundamental to its eventual prominence: it had become by this time “the central clearinghouse of waterborne trade between the entire Yangtse River system and the rest of the world”, accounting for 50% of China’s foreign trade. It’s port comprising 35 miles of wharves could accommodate >170 ships and 500 sea-going junks at a time (Wassermann).

 

Canidrome Ballroom🔺(“canine track”)

 

⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟻⟼⟼⟻⟼⟻⟼⟼⟻⟼⟻⟼

[𝕒] behind London, New York, Paris and Berlin

[𝕓] the wealth of the Shanghai foreign elite had its genesis in the aftermath of the Opium Wars. The European and North American powers used the springboard of the “unequal treaties” to extend their existing privileges to their countries’ merchant classes. Within the designated enclaves foreigners could carry out their business in accord with their own laws, free from Chinese taxes and with the added bonus that the Chinese courts and bureaucracy couldn’t interfere with or impede their commercial activities (Wassermann).

[𝕔] the line-up on the Bund included the Jardine Matheson Building ( early opium traders), Sassoon House, (Standard) Chartered Bank, H & S Bank (now HSBC), Union Building, APC Club, the Shànghâi Club, the Cathay Hotel, Paramount Dance Hall and the French, US, German and British consulates

 [𝕕] modern day Guangzhou

 

Fred Harvey, Railway Hospitality Pioneer and Tourism Developer, and the Harvey House Network

Posted on by funambulator@live.com
Biographical, Commerce & Business, Inter-ethnic relations, Regional History, Travel


¤ ¤ ¤

English born Fred Harvey learned the basics of good food service from a lowly station in a New York restaurant and later ran a successful cafe prior to the Civil War before entering the employ of the US railroads. Working first for the Hannibal and St Joseph Railroad and later others, Harvey was required to travel a great deal as a railroad agent. This gave him first-hand experience of how dismal railroad food and service was. 

🔺 Frederick Henry Harvey (Photo: Wall Street Journal)

This was no secret to regular passengers, before Harvey came along, the railroads were serviced by local rough eateries or unscrupulous restaurant owners who would reheat the leftover dishes and serve them again as supposedly new to the next, unsuspecting train-load of hungry passengers. Some travellers wary of the dubious quality offered up, would bring their own ‘shoebox’ lunches of fried chicken and hard-boiled eggs but this didn’t prove a satisfactory alternative – after sitting in the train for a couple of days the food from home would quickly go off [‘Fred Harvey and the Harvey Girls: A Dollar, a Dream and a Dinner’, (John Koster) Historynet, www.historynet.com].

Business-savvy Harvey sensed there was a gap in the market and in 1876 he clinched a deal with the Atchison, Topeka and Santa Fe Railroad (AT&SF)ⓐ to open eating houses along the railroad. The start was modest, one small lunchroom in the Topeka (Kansas) depot of the railroad. But from these modest beginnings Harvey created a thriving railway hospitality concern and more. The prototype Harvey lunchroom has been described as “the progenitor of what (Americans) think of today as a diner” [Stephen Fried, quoted in ‘Tracing the Recipes of America’s First Restaurant Empire’, (Sara Bonisteel), Epicurious, 18-Jun-2013, www.epicurious.com].

🔺 Santa Fe railroad & Harvey hotels & dining stations

The beginnings of fast food

The key to Harvey’s success was quality of food and speed of delivery. Once the network of Harvey dining-rooms were established along the Santa Fe route, the operations were streamlined to work like clockwork…and they needed to. As the trains pulled into the stations Fred Harvey staff had 20, at most 30 minutes to feed 60 to 100 passengers. This required coordination between the train conductor and Harvey staff (to give the staff advanced warning of their impending arrival). To meet the short turnaround time, the waiting staff (“Harvey Girls”) utilised a unique signalling system, the waitress taking the order would send a signal to a second waitress, a cup turned upright on the saucer meant coffee, a cup facing down, tea. The second waitress could then immediately do that part of the order without having to wait for her colleague to return with the order [‘Watch the Cup, Please’, (Jann Bommerbach), True West, 04-Nov-2015, www.truewestmagazine.com].

🔻 Harvey’s El Tovar Hotel, Grand Canyon

No “mean cuisine” 

Harvey Houses (as they eventually came to be known) were no “Greasy Joe’s”. From the start Harvey headhunted a star head chef from back east for his first restaurant. The chef prepared top-quality cuisine for AT&SF line passengers…the food was so good that travelling salesmen and other regular travellers chose the AT&SF on that basis over rival western railroads (Koster). They were getting quality food, fresh and affordable to the middle class traveller, served on spotless Blue China with white linen tablecloths [‘Classic Harvey House recipes’, 23-Feb-2019, CBS News, www.cbsnews.com/].

Value as well as quality for money

In 1888 Fred Harvey debuted the first Fred Harvey dining-car on the Chicago to Kansas City train service. The menu for the service illustrates what a bargain it was – for the middle class—for 75¢ passengers got a mains (choice of oysters, lobster, salmon roast beef or other meats) plus dessert—often prepared by world-class chefs (Koster).

🔺 Castãneda Hotel, Las Vegas, (the ‘other’ Las Vegas – in New Mexico): the first trackside Harvey House (Image: www.castanedahotel.com]

The Harvey dining empire 

How extensive was the Harvey House network? At the onset Fred Harvey promises a depot restaurant every 100 miles between Kansas and California. At the Harvey high-point there was 25 Harvey hotels, 40 sit-down dining-rooms and 55 lunchrooms on the route (Koster), and the Harvey House concept was extended to other west-bound railroads. Harvey was a natural marketer coming up with advertising campaigns like “3,000 Miles of Hospitality” to promote tourism in the region [‘Fred Harvey—Branding the Southwest (Quality Fast Food)’, www.lib.nau.edu].

The Harvey girls’ uniform: looking a bit too similar to a WWI nurse’s outfit or something you might see in a nunnery! 🔻(Photo: Grand Canyon Railway and Hotel)

The Harvey Girls: Helping to civilise the “Wild West”

Because the male waiters employed by Harvey had a tendency toward drinking on the job and causing trouble in the houses, the entrepreneur in 1883 had the inspired idea of replacing them with single women (aged 18-30) shipped out from the East. The Harvey Girls (as they became known) were attired in demure, conservative feminine uniforms and required to not marry before they had completed six months of service. The women waitresses on the job set standards for cleanliness and decorum which had “a civilizing effect on the often rough customers in the territories” [‘Fred Harvey, the Harvey Houses, and the Harvey Girls’, https://abqlibrary.org/railroads/HarveyHouses]. Many Harvey Girls stayed in the West after their employment, often marrying their bachelor customers, earning the railroad restaurants the sobriquet of “Cupid on Rails”ⓑ.

Farm-to-table: “Meals by Fred Harvey” 

Fred Harvey Co (FHC) entered into contracts with local purveyors to ensure fresh ingredients for his meals. Fred Harvey Co also went into the farming business itself,running it’s own dairy and cattle farms (‘Fred Harvey—Branding the Southwest (Quality Fast Food).

(Photo: www.railroadmemories.com)

Business diversification: Whisky, chocolates, gifts, etc.

With success and fame came more diversification. FHC eventually manufactured it’s own whisky, sold it’s own brand of chocolates, candy, ice cream, salad dressings, as well as take-home gifts and souvenirs to passengers. Harvey’s knack for marketing put the brand everywhere. FHC gave away cookbooks of Fred Harvey recipes (‘Branding the Southwest’). The Harvey Co, as part of the tourism package it was promoting, also entered the postcard publishing field…through the Detroit Publishing Co it produced the very popular Fred Harvey Arizona ‘Phototint’ series of cards [‘Fred Harvey (entrepreneur), The Full Wiki, www.the full wiki.org/].

🔺 Menu image from the Santa Fe dining-car (Source: www.lib.nau.edu)

Menu art of the Southwest 

The railroad menus of FHC are an interesting sidelight of the company, delightfully quaint in their great diversity. Many celebrated in colourful imagery the beauty of the American Southwest or the pre-United States connexions to the region of colonial Spanish missionaries and Native American tribes (see below ‘Marketing an image of the Southwest’). The menu artwork was often of a high calibre, eg, William Deane Fausett’s humorous images. Menus like the company’s La Posada menu were instructional – including an US warplane ID chart for US servicemen using the AT&SF rail during WWII. There were menus for special occasions like Mother‘s Day and special menus for kids which doubled as clown masks (‘Branding the Southwest’). 

Marketing an image of the Southwest

Fred Harvey invented a new hospitality service for railway passengers, but he also invented (and marketed) a particular image of the country’s Southwest for Americans. Harvey, together with the AT&SF Railroad, changed the perception of Americans, filling the vast unknown void of savage desert with a new, “compelling regional identity for the Great Southwest of northern New Mexico and Arizona”. The Harvey corporation “appropriated and marketed the cultures of Native Americans”ⓒ presenting them as “colourful, tamed native peoples”. Harvey to a lesser extent also did a inventive reconstruction of the cultural impact of Spanish colonial and early Anglo-Celtic settlers. Weigle suggests that FMC’s commercial innovations such as the Indian Detours program (affording railroad passengers the opportunity to visit local native communities, represented a kind of ‘Disneyfication’ of the region [Weigle, Marta. “From Desert to Disney World: The Santa Fe Railway and the Fred Harvey Company Display the Indian Southwest.” Journal of Anthropological Research, vol. 45, no. 1, 1989, pp. 115-137. JSTOR, www.jstor.org/stable/3630174. Accessed 12 Feb. 2020].

Endnote: Founder Fred died in 1901 but the business remained in the family until his grandson died in 1965. In 1968 FHC and Harvey Houses were purchased by Amfac, Inc. (an Hawaiian hospitality industry conglomerate).

🔻 Harvey House, Seligman, Ariz.

PostScript: FH Menu dishes

Not surprisingly the FHC menus included a noticeably Latino-Mexican flavour—including Bright Angel Mexican Salisbury Steak, Guacamole Monterey, Empanadas with Vanilla Sauce, Fried Chicken Castãneda and Albondigas Soup (‘Classic Harvey House recipes’).

▁______▁______▁▁______▁______▁▁______▁______▁▁______▁______▁

ⓐ the Santa Fe line ended at Needles in eastern California, where it connected with another railroad which completed the journey west to the Pacific

ⓑ it is estimated that of the approximately 100,000-plus Harvey Girls in the company’s history, perhaps as much as ⅕ of them stayed and settled down to married life in the West, ‘The Harvey Girls, a Slice of American History’, (updated 26-Apr-2012),  www.hubpages.com

ⓒ Hopi, Navajo, Pueblo, Apache and other Southwestern tribes

Aldiland – from a Small-Town German Corner Store to World-wide Supermarket Discount Kings (Part II)

Posted on by E Curb Nottus
Commerce & Business, Retailing history

A few months ago Channel Five screened a documentary on the German supermarket giant (‘Inside Aldi: Britain’s Biggest Budget Supermarket’). The doco was laced liberally with interviews of Aldi senior managers, all waxing lyrical about their ‘enlightened’ employer and the company’s “win-win” virtues for everybody, which made the program feel uncomfortably like a commercial promotional video at times. Nonetheless, the doco did unearth an interesting back story, that of the supermarket emporium’s evolution and it’s founder-brothers who emerged out of the ruins of war-time Germany to steer their fledgling company to it’s eventual lofty perch as an much envied international discount supermarket chain.

🔺 an early Albrecht store displaying Karl’s name with plenty of Spirituosen (alcohol) and Lebensmittel (food) in the display windows (Photo: www.news.com.au)

The seed of Aldi as we know it today has it’s roots in Essen, Western Germany, in 1913. Anna Albrecht, the wife of a miner, started a small grocery store in the suburb of Schonnebeck as a sideline. After serving in the German Wehrmacht in WWII, Karl and Theo Albrecht, Anna’s sons, took over their mother’s business, which they initially named Albrecht KG. During the formative first years, Karl for a time operated some stores solo (under the name “Karl Albrecht Lebensmittel”).

The Albrecht brothers concentrated on the Ruhr area of Germany at first, and then expanded rapidly across West Germany over the next 15 years. By 1960 Albrecht KG had amassed 300 shops in the Bundesrepublik and had a yearly cash flow of DM90 million. A factor contributing to the Albrecht stores’ early popularity and success was it’s novel approach to tax rebates from purchases. Instead of following the business norm of making customers collect stamps before they qualified for the 3% rebate, the brothers subtracted the tax from the price before sale, a radical idea and an ingeniously simple one which undercut their rivals’ bottom price. Aldi, as it was soon to be known, was on it’s way to revolutionising the low-cost grocery trade.

🔻 Theo (L), Karl (R)

(Source: www.broadview.tv)

Sibling rivalry: Splitting of the ‘atom’ in two
1960 was a momentous year in the history of Aldi. The two brothers fell out, apparently over whether or not to sell cigarettes in Albrecht Discounts, and decided to divide the company into two separate entities➊. With a new, shorter, snappy name, ‘Aldi’, derived from the first two letters of their family name and the ‘Di’ from Diskont (Discounts), the company split into two – Aldi Nord (North) and Aldi Süd (South). At this time, as Aldi was an intra-West Germany operation only, the division was between the north (Theo’s domain) and the south (Karl’s domain) of the country. The geographical border separating Aldi Nord and Süd is known as the Aldi-Aquator (‘equator’). Aldi, after the schism, continued to grow, the brothers’ insistence on stocking only popular items, cut down inefficiencies and proved profitable.

🔺 Aldi’s first German store (in the “North sector”)

A store displaying both names, Albrecht and Aldi 🔻 (Photo: Getty)

By 1967 the first international growth steps were taken with the acquisition of Austrian grocer Hofer by Aldi South. As Aldi expanded elsewhere the arrangement between the brothers divied up the world thus (with a few later variations): Aldi South’s jurisdiction would entail Austria and the English-speaking countries, whereas Aldi North would operate in Germany and the rest of Europe. Netherlands followed in 1973, and in 1976 Aldi South made its first incursions into the US. The US became the only market penetrated by both arms of the Aldi empire when Aldi North acquired the US Trader Joe’s chain. Britain came into the Aldi South fold in 1990. Aldi South has been particularly aggressive in it’s drive for store expansion in both the US and Britain. The retailer has upward of 2,000 stores in 36 states across the US and in 2017 announced plans to add 900 more by 2022➋.

🔻 Trader Joe’s, Amherst, NY

Aldi found the highly-competitive (and crowded) UK grocery field initially hard to penetrate, coming up against well-established market leaders Tesco, Asda, Sainsbury’s and Morrisons. By the 2010s however it was making exponential inroads into the Brits’ grocery market…by October 2013 it had 300 stores and doubled that by 2016, with new stores opening at the rate of one a week! Aldi South’s stated goal is to reach the 1,000 mark by 2022. At this rate it is looming as a genuine threat to the above “Big Four” Supermarket chains.

🔻 Aldi Long Eaton store (int) in Derbyshire (Photo: www.nottinghampost.com)

Aldi global expansion intensified after the collapse of the Eastern Bloc system in 1989 and has experienced rapid growth in the 21st century. Since the 1990s Aldi has moved into Australia, Belgium, Denmark, France, Hungary, Ireland, Portugal, Slovenia, Spain and Switzerland. In 2019 it made another market quantum leap, opening two pilot stores in Shanghai, China➌.

🔺 The Albrecht brothers‘ carve-up of the world map (Theo plays black, Karl orange)

Counting the combined Aldi stores operating in Germany by both Nord and Süd (about 4,100 stores), there are over 8,000 stores in Europe as a whole (more counting the Hofer chain). All up, the reach of the Aldi retail tentacle worldwide accounts for 10,000 to 12,000 stores, with revenue (2010) of €53 billion. An international supermarket success story with nary a blot on it’s copybook – with one exception. In 2008 Aldi South invested an estimated €800 million in Greece but after only two years operating, it had to pull the plug on it’s 38 stores in the ancient land of the Olympiad. Nothing substantial divulged as to motive (par for the course for Aldi), but apparently the Aldi board of management was frightened off by the “informal business practices” prevalent in Greece (transparently code for government/business corruption)➍.

🔺 Theo in 1971, following his misadventure (Photo: Getty)

Endnote: The saga of the reclusive co-founders (“the brothers frugal”)
Theo and big brother Karl were never your stereotypical, über-rich CEOs, bobbing up everywhere, constantly in the media spotlight, being snapped for glossy mags gratuitously showing off their latest flashy, expensive car or girlfriend. That was not the brothers’ ‘bag’ – for in business and in personal lifestyles their thriftiness was legendary. But after 1971 the Albrechts’ customary muted behaviour reached a whole new level. That year, the brothers’ extraordinary wealth came back to haunt them➎. Theo was kidnapped at gunpoint and held hostage for seventeen days. The younger brother was released on the payment of a ransom – after Theo had haggled with his captors over the amount demanded! Theo later tried to claim the nearly US$3 million Aldi North had to fork out for his release as a tax deduction business expense! Theo’s ordeal profoundly affected both brothers, they became even more reclusive and secretive in their personal lives and movements (no interviews or public statements, hardly any photos of them together or separately after 1971 exist). Eternally vigilant thereafter, both brothers reportedly would drive home from work, separately, by different routes each day. The brothers Albrecht, having profoundly changed “German food culture and consumption mentality” forever, semi-retired to a remote island in the North Sea in their eighties to pursue the hobbies of golf, orchid-growing and collecting old typewriters (very old school typical of them).

🔺 Island of Föhr off the Holstein Coast, where the supermarket entrepreneur brothers beavered away on their personal hobbies during much of their twilight years (Photo: www.tourism.de)

∈ওওওওওওওওওওওওওওওওওওওওওওওওওওওওওওওও∋

➊ although the separation wasn’t legally finalised until 1966

➋ German supermarket retail discounter Lidl—a copycat competitor to Aldi utilising the Aldi business model as a lodestar to chart it’s own course to retail riches —followed its path into the US market in 2017

➌ with concessions made for Chinese consumer buying-preferences based on online testing via Alibaba’s Tmall

➍ no doubt to Aldi’s chagrin, Lidl stores in Greece by comparison are apparently thriving

➎ they were reputed to be the richest men in Germany

❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖

Articles and sites referred to:

‘The History of Aldi: The Tale of Two Corporations with the Same Name’, (Team S4RB), 13-Jun-2017, www.blog.s4rb.com

‘Inside ALDI’s first two pilot stores in China’, (10-Jun-2019), Shanghai’s.ist

‘Aldi founder became recluse after family kidnapping’, Albrecht obituary,

‘Aldi’, Wikipedia, http://en.m.Wikipedia.org

‘Aldi quits Greece’, German Retail Blog, 23-Jul-2010, www.german-retail-blog.com

‘Grocery chain Aldi to open another 900 stores in U.S.’, (Zlati Meyer), USA Today, 13-Jun-2017, www.usatoday.com

‘The Aldi Story – Karl and Theo Albrecht’, (2014 documentary), www.broadview.tv

‘Secrets of store success: Why Aldi is winning the retail battle’, (Alison Kirker), Sunday Post, 19-Feb-2018, www.sundaypost.com