Walter Paul Paepcke

Introduction

On January 14, 1938, Walter P. Paepcke (born June 29, 1896 in Chicago, IL; died April 13, 1960 in Chicago, IL), the son of a Prussian immigrant and the President of the Container Corporation of America (CCA), found himself sharing a stage and microphone with Secretary of Commerce Daniel C. Roper, Senator Claude Pepper of Florida, and Florida and Georgia governors Fred P. Cone and E.D. Rivers. With a crowd numbering some four thousand and a NBC radio audience listening in, the politicians trumpeted the job-creating efforts made possible by the scientific achievements of Dr. Charles H. Herty, an chemist, who in large part developed the process of turning the plentiful pine trees of the deep South and Everglades into the paper pulp needed to make packages and containers. Full of economic bravado, Secretary Roper identified the paper pulp industry as fostering a “new spirit in the industrial south.”[1] But for the businessman behind Fernandina, Florida’s new nine-million-dollar paper pulp mill ($139 million in 2010 dollars) that was the point of the celebration, the achievements of his corporation in the South represented both an immediate triumph and the midway point in a personal story ready to begin a new chapter.[2]

Incorporated in 1926, Paepcke had guided his Chicago-based company to aggressive vertical and horizontal acquisitions throughout the Midwest, Northern, and later the Southern United States. By 1938 his course had charted CCA through the Depression so as to emerge strong rather than bankrupt. Such a moment of corporate triumph, however, would soon give way to Paepcke’s larger and lifelong work of creating a process of human transformation structured to enlighten individuals through engagement with a new design aesthetic. Paepcke’s life arc reveals a paper maker, an innovative marketer, a hands-on manager, an ideologue concerned with the blend between art and function, an advocate for national and international enlightenment, and also a philanthropist whose legacies extended through the Cold War and beyond.

Family and Ethnic Background

In many ways, America began anew in the second half of the nineteenth century thanks to the arrival of wave after wave of European immigrants.[3] Especially in the region now called the Midwest, the Germans transformed the demographic and cultural makeup of cities, towns, and farms.[4] Walter Paepcke’s father, Hermann Paepcke, was one of these immigrants. However, Hermann’s migration, like the journeys of so many Germans, complicates the smooth and simplistic push-and-pull narrative in favor of a more nuanced personal story.

Born to August Wilhelm Paepcke and Johanna Luise Hanckon on February 12, 1851, Hermann Paepcke was educated in his hometown of Teterow located in the duchy of Mecklenburg-Schwerin.[5] After gaining early business experience both further south in Magdeburg and in the Baltic seaport town of Wismar, Hermann entered military service in time for the Franco-Prussian War.[6] Serving with distinction in the Ninth Army Corps, Ninetieth Fusilier Regiment, Hermann was awarded the Iron Cross and a signed photograph of Prussian army chief of staff Helmuth von Moltke in honor of his service.[7] Following the end of the war and German unification in 1871, Hermann received his discharge papers and promptly moved to America, seemingly not part of a family group, but as a young man eager for moneymaking opportunities he believed to be unavailable in his family’s grain business.[8] While he may have traveled without close family, Hermann did rely on those who had gone before him. His destination was Indianola, Texas—a gulf city of Germans for Germans. Through the administrative and sponsoring efforts of the Adelsverein (Society for the Protection of German Immigrants in Texas), German settlers moved en masse to the coastal towns before either staying put or fanning out to various counties, all the while creating a booming economy thanks to a population upswing of skilled workers and farmers unrivaled by areas of Texas not receiving these settlers. Mecklenburg was a particularly notable source of emigration to Texas.[9] By the late 1840s, financial difficulties prompted the Adelsverein to cease its efforts to assist Germans in moving to Texas; nonetheless, the work of this organization blazed trails for a following decade or two of immigrants.[10]

The prosperity of towns like Galveston, Cuero, and Indianola would not continue uninterrupted. A hurricane smashed into Indianola in 1875, and while the devastation seemed unprecedented, a second tropical storm in 1881 left little of the once prosperous town. While Hermann had made a name for himself through shipping cotton, wool, hides, and other goods to New Orleans, the Northern seaboard markets, and eventually on to European cities, the second storm forced him to realize that continuing to live on such an exposed peninsula would only bring further hardships.[11] Three years earlier, he had married Paula Wagner, the daughter of Indianola’s postmaster, Julius Friedrich Ludwig Wagner; Wagner and his wife, Emilie Marie Schneider, were both from Baden. Deciding not to weather another Gulf storm, Hermann found booster claims of Chicago’s economic ascendency mesmerizing, and the couple moved to Chicago where Hermann would work quickly to establish himself in the city’s lumber industry.[12]

While boosters may have talked up Chicago, many of the people actually walking on the streets were “double immigrants,” who migrated once again, like Hermann Paepcke. He apparently moved back to Germany after less than two years in and around Indianola, only to leave Germany after about one year, returning to Texas in 1875. Then he migrated again to a new destination, Chicago, where he settled permanently.[13] In a city made by immigrants, few ethnic groups proved more influential than the Germans who would call Chicago their home. Writing in the 1890s, a contemporary observer noted from a strictly numerical perspective, “‘only two cities in the German Empire, Berlin and Hamburg, have a greater German population than Chicago.’”[14] Far more than force of numbers, however, Germans brought culture to the city: the Chicago Symphony Orchestra, as well as theatres and operas; athletic associations and Turner societies; beer gardens and Sunday family picnics; all such cultural expressions proved constitutive of a proud German heritage and purposefully constructed cultural identity.[15] Hermann Paepcke joined a number of clubs and associations to strengthen the professional and social ties helpful in furthering the necessary business connections for his growing lumber empire; however, he was also very active in ethnic organizations such as the Germanistic Society of Chicago and Deutscher Krieger Verein (German Veterans Association). Hermann’s willingness to retain a degree of his Old World ethnic identity—he continued his Germanistic Society membership during World War I—remained constant throughout his rise in Chicago’s business and social life.[16]

With its strategic location between eastern markets, burgeoning prairie towns, as well as northern and southern forests, the railroad and waterway center of Chicago had become both the country’s largest processor and distributor of lumber by the 1850s.[17] Somewhat of a latecomer into the world of Chicago lumber, Hermann Paepcke’s business grew steadily from its inception in 1881. Securing enough cash and credit, Hermann purchased a small lot on Fifth Avenue and Harrison Street where he opened a planing mill and box factory. After several years of modest growth, Hermann relocated his business proximate to a major railroad terminus. Called H. Paepcke & Co., the business began retail sales of wooden boxes while continuing aggressive wholesale production furthered by both the acquisition of a major North Pier yard and purchase of the Peshtigo Lumber Co. and its pine lumber reserves.[18] Hermann did face setbacks as when a conflagration in the fall of 1892 ravaged the company’s buildings, threatening to consume the entire lumber district near Illinois Street and the North Pier, and ultimately amounting to roughly $100,000 worth of damage to his firm ($2.47 million in 2010 dollars).[19]

While many Chicago lumber companies struggled to find the north woods trees once so plentiful, Paepcke’s business, renamed the Chicago Mill & Lumber Co., flourished because of strategic purchases of major cottonwood and red gum timberlands throughout the Deep South and Arkansas.[20] The wood from these forests was planed and milled close to the logging camps, shipped on railroads either owned or leased by the company, and brought to market in a diversity of forms—the most profitable being the box shook produced by the Chicago Box Co. A box-centric business proved extremely profitable given Chicago’s ascendency as the country’s premier shipped-good marketplace thanks to the rise of retail mainstays such as mail-order businesses, department stores, and chain stores.[21] Hermann continued aggressive diversification and expansion, eventually controlling the Paepcke-Leicht Lumber Co., Chicago Mill & Lumber Co., Chicago Packing Box Co., Helena Lumber & Box Co. American Box Co., Helena and Southwestern Railroad Co., and Blytheville, Leachville and Arkansas Southern Railroad Co., as well as other smaller holdings such as the local mills that fed into the major production facilities.[22] The Paepcke-Leicht Company’s various holdings expanded to the point where upper-management—often native-born Germans, occasionally relatives, or alternatively men like Edward A. Leicht who had traveled and studied in Germany—needed new offices, first occupying space in the Tribune building before finally settling in an expansive suite on West Chicago Avenue and Sangamon Street in 1906. From these offices, Paepcke coordinated all six of his major companies and their subsidiaries to create the “largest box manufacturing concern in the world,” holding greater “cottonwood stumpage” than anyone in America, as well as servicing accounts throughout America, Western, and Central Europe. The Paepcke-Leicht Lumber Company had its European headquarters in Hamburg, Germany.[23]

Hermann’s household was also growing during these years. His family now included Sophie, born in Indianola on September 3, 1879, and married to Dr. Alexander Pflueger in Chicago in 1901; Lydia, born in Texas on March 24, 1881, and married to William Wilms in Chicago in 1904; Alice, born in Chicago on March 28, 1885, and married to Louis Guenzel in Chicago in 1909; and the youngest child, Walter, born in Chicago June 29, 1896, the boy Hermann would groom to take over the growing interests of the lumber business.[24] Living well, the family divided their time between a mansion located at Pearson Street and Lincoln Park Boulevard (now Michigan Avenue) and a twenty-acre lakeside estate at Glencoe named Indianola, after the town where Hermann and Paula Paepcke had met, complete with a stately home, coach-house stable, and guest cottage on grounds planned by the famed Prairie School landscaper Jens Jensen.[25] The estate provided a weekend and summer retreat from the heat of the city; however, spending time away from their 140 Pearson Street residence proved disastrous, on at least one occasion, when house-sitters held a party, drinking the wine, smoking the cigars, and making off with roughly $3,000 worth of purloined possessions.[26] The family also encountered far more personal hardships when Paula Paepcke, who had been sick for some time, died in the summer of 1909, leaving Walter motherless at the age of thirteen.[27] A few years later, Hermann married the widow Elizabeth Julia Meade of Greenville, with the couple living together until Hermann’s death in Chicago on July 22, 1922.[28]

Like his father before him, Hermann’s only son Walter showed an early propensity for learning. Walter’s father was a voracious reader and his large collection of German-language books passed down to Walter and his sisters following their stepmother’s death.[29] Excelling in his classes at the University School for boys before advancing to the Chicago Latin School, Walter exercised a quick wit comparing his expansive vocabulary to those of the poets Virgil and Cicero. Noting in a school yearbook, not so humbly, that only one college would benefit from his attendance, he declared Yale as his choice and left for New Haven in 1913 to begin his studies.[30] Walter excelled in his coursework and received special permission to graduate early, foregoing final exams altogether—an accommodation requested by Hermann and granted by the dean because Walter’s scholastic “accomplishments are so much higher than that of the ordinary boy.” Walter’s returned to his father’s business roughly a month after the United States declared war on Germany in April of 1917, arriving just in time to help fill vacancies in the workforces of the Chicago Mill & Lumber Co. and the Paepcke-Leicht Lumber Co.—labor shortages owing in part to Hermann’s policy of paying full wages to employees throughout the duration of their military service.[31] Retaining loyalty to his home country throughout the War, Hermann Paepcke also recognized the reality of anti-German sentiment in America. Measures such as his supportive wage policy for draftees and volunteers were effective ways to keep his business strong during wartime.

Starting as an assistant treasurer for the Chicago Mill & Lumber Co., Walter worked one year before, undoubtedly with his father’s permission, volunteering for the United States Navy on May 31, 1918.[32] Advancing from Seaman Second class to Quartermaster Third class, and receiving an Ensign appointment in March of 1919, the navy released him from active duty with an honorable discharge the following month.[33] Returning to Chicago, the twenty-two year old Paepcke promptly resumed the treasurer position at his family’s business and was also appointed to the board of directors of the Chicago Mill & Lumber Co.[34]

Over the next couple of years he learned the inner workings of the various companies and developed a hands-on management style in order to actively direct the production of these companies. With his father advancing in age, the firm soon came under Walter’s charge a year before his father passed away in 1922. In 1921 and 1922, the twenty-five-year old executive moved quickly to float bonds and securities to investors in order to shore up holdings while also starting to nudge the company “to manufacture paper goods.”[35] Walter never forgot how much of his future business success he owed to the industriousness of his German immigrant father, admitting that he never could have found his “lifework” without his father founding the Chicago Mill & Lumber Co.”[36] The vocation of Walter Paepcke would extend far beyond the business successes of his father, however, integrating more companies and founding new ones, redefining corporate advertising, and building entire settlements, both imagined and out of mountains, for the cultivation of mind and body.

Entrepreneurship

Only four years into his directorship of the lumber empire, Walter Paepcke broke from a business past that had proved profitable through manufacturing wooden crates meant for large purchases in favor of the consumer-led trend toward “smaller purchases” best serviced through “prepacked” paperboard containers. (His father had experimented with paperboard containers in a small way in 1912 to meet the increased demand of retailers who sought to move away from wood boxes.)[37] Meeting consumer demand through a ‘“merchandising revolution,” Paepcke formed the Container Corporation of America (CCA) in 1926 and it would rise quickly, at times unsteadily, but ultimately growing significantly from twelve plants and sales of $15,000,000 in 1926 (roughly $150,000,000 in 2010) to the company’s 1959 apex of $332,000,000 (roughly $2,000,000,000 in 2010) sales when it encompassed 76 US plants and 48 international facilities present in six European and Latin American countries.[38]

The company’s initial surge in profits resulted from Paepcke’s key early insight as to the necessity of moving foodstuffs from “barrels and boxes and put them in bags.”[39] But as the boom years of the 1920s gave way to the Great Depression, New Deal policies, and wartime production, repackaging the package would require a purposeful construction of seamless corporate image, aggressive domestic and multinational expansion through mergers and personnel practices, as well as a marketing campaign melding avant-garde art with company iconography. By designing and marketing a new corporate image that emphasized both cost-effective production and high-style, Paepcke and CCA would grow to become the largest producer of paperboard packages by 1960. Paepcke’s firm made the case that a partnership between high art and industry was a profitable proposition for corporations to consider.

Paepcke took the first major step toward more efficient production when he consolidated the Chicago Mill & Lumber Co. and Mid-West Box Co. with the recently acquired Philadelphia Paper Manufacturing Co. and Cincinnati Corrugated Box Co., forming CCA on July 1, 1926. CCA’s first announcement promised its products would include “Test Liners, Light and Heavy weight Chipboard, Solid Fibre Containers and Corrugated Fibre Containers”—boxboard products brought to market at a competitive price through control of timberland, water, and the mills needed to mash the wood into pulp suitable for paperboard.[40] In total, the company controlled over a dozen mills and factories stretching east from Chicago along railroad lines to Cincinnati, West Virginia, and Philadelphia.[41] These facilities helped turn a profit of roughly $400,000 (roughly $4,000,000 in 2010) in the first year of operation, bolstering CCA to a listing on the New York Stock exchange in 1927. In order to encourage investors, Paepcke emphasized the primacy of sound investments towards turning profits rather than “simply piling up assets for the sake of spending money.”[42] In particular, Paepcke made clear to investors CCA’s ability to secure “economies in operation, savings in freight and better service to the customers” by locating facilities in “metropolitan areas” so as to maximize coordination between “mill properties,” major sources of paperboard raw materials (80 percent of boxboard material came from waste paper), delivery services, and its clients—“manufacturers of many diversified staple commodities,” such as Proctor & Gamble, Firestone Tire, General Electric, Lever Brothers, Montgomery Ward, Sears Roebuck, R.J. Reynolds Tobacco, National Biscuit, and Owens Bottle among others. Emphasizing streamlined production, economies of scale, and adding large order accounts, CCA stock boomed as Paepcke was able to boast that the now publicly-traded company made a daily output of approximately 1,000 tons of boxboard creating a yearly income of roughly $2,000,000 in 1927 (roughly $21,000,000 in 2010).[43] Then the Depression hit.

About a year after the stock-market crash, the still young company posted losses of $1,000,000 (roughly $11,000,000 in 2010). Management disagreed over how best to shore-up the balance sheet. Paepcke continued to endorse a company policy of “geographic divisions” which he argued allowed for the corporation’s various local plants to retain the right degree of autonomy from centralized management—flexibility he understood as crucial to most efficiently meet production and sales challenges specific to each plant’s location. Some managers disagreed with an approach that favored limited management control over an expanding number of plants. Executive Vice President John Paul Brunt mutinied, appealing to stockholders to halt CCA’s loss of “a number of very valuable men” thanks to Paepcke’s “lack of conception of the proper method of building and maintaining good will for the company among the consumers of this products.”[44] Inexperience, poorly-made goods, and abhorrent account service were the charges Brunt leveled against Paepcke—accusations culminating in what Time magazine called the “bitterest corporate war of the year.” Through a series of letters addressed to shareholders, Paepcke persuasively argued that the company’s financial losses were attributable to the general downturn in the economy rather than specific management decisions. Furthermore, his writings convinced stockholders that he was neither stubborn nor out of touch with the inner workings of the company. Paepcke retained his Presidency, and he emerged from the March shareholders’ meeting with an overwhelming mandate to continue with his strategies of slimming the budget, decentralizing management control, and keeping prices competitive despite a “sharp rise in raw material costs.”[45]

While he might have retained his control of the company, Paepcke continued to face financial and personal challenges. Writing to his sister Sophie’s husband in Germany, Paepcke detailed CCA’s loss of nearly $700,000 in 1931 (roughly $8,500,000 in 2010). The financial outlook stayed poor in early 1932 with the Chicago Mill & Lumber Co. barely avoiding the receivership that had already claimed so many competitors. Such company woes affected Paepcke’s personal life: his personal income plummeted to one-tenth of what it had been in 1928; he and his family sought out a smaller apartment; and he withdrew from several of the elite Chicago clubs he had previously attended to establish professional and social connections.[46] On the business side, CCA continued to slide in 1932, and Paepcke worked nonstop to foster confidence in his employees and his investors. Never overtly self-deprecating, Paepcke struck the right balance between attributing the company’s underperformance to the faltering of the greater economy while suggesting his management practices as the solution to stave off impending financial calamity: “Every Nation and Corporation within a Nation must balance its budget or come to disaster sooner or later. Our budget in Container Corporation at the present time is not in balance. This must and can be done.”[47] Such shows of outward confidence combined with well-timed praise for employees’ “courage and ability to go through a time of severe readjustments” exemplified precisely the type of personalized leadership the company needed—that is, a manager able to explain both his empathy with and faith in his employees.[48]

The following year, CCA finally emerged from its downward spiral, reporting a profit of $140,000 in 1933 and a larger profit the following year of nearly $1.7 million (or from $2 million to $23 million in 2010 dollars).[49] The shift from red back to black ink resulted from several separate but mutually beneficial developments enacted under Paepcke’s leadership. First, the company could undercut competitors’ prices because of the varied geographic holdings of manufacturing facilities specifically tailored to take advantage of specific varieties of native or readily available “paperboard plants” concentrated in forests scattered across different regions of the country.[50] Second, low prices with an emphasis on customer service brought about an upswing in new customers and large sales which in turn allowed Paepcke to quickly pay down the fixed debt his company had accumulated.[51] Third, believing the possibility of beauty lay intransigent in all manufactured commodities, Paepcke and his team decided that while art might not make someone buy a product, shoddy art could attract negative attention whereas “palatableness of design, color, composition, printing” could help differentiate goods and capture market share—an especially important insight given the traditionally unexciting box CCA sold. Addressing a meeting of the Art Directors Club of Chicago in May of 1936, Paepcke shared that for the last couple years his company recognized that all “merchandising corporations” should work to enhance the “eye value” of their product because “almost every product has by its very nature either form, shape, color, design, composition, printing, or something which can generally be grouped as a subdivision of art.”[52]

Most important of all, the emphasis on sharply styled products extended to and was reinforced by a streamlined corporate image that integrated a unified design aesthetic from corporate offices down to individual business cards. Speaking frankly on the rarity of what his corporation had created, Paepcke described an osmosis of artistic “sensibility” where “reprints of Van Gogh, Cezanne or Dufy” hung on the walls, commissioned furniture reflected the management hierarchy, and every cog of the corporation contributed to the overall design effect.[53] Because CCA sold its paperboard products primarily to other businesses, the self-apparent consistency of matching architecture, chairs, and cards exemplified a competency in the corporation that bolstered an impression of a smartly managed and detail-oriented company. Profits followed with sales reaching $22.5 million in 1936 (roughly $300,000,000 in 2010 dollars)—a doubling of the sales realized a decade before.[54] With his corporate house literally in order, Paepcke would work relentlessly in the following years to raise investor and public awareness of the new ways CCA was approaching capitalism.

As the Depression continued into the latter years of the thirties, corporations pursued new investor relations approaches to build trust between their businesses and the public. Paepcke pioneered one of the most innovative strategies for attracting new shareholders by commissioning and releasing a thorough survey profiling CCA’s 1938 stockholders in the hopes of attracting the highest possible number of future investors. Nearly half of CCA’s roughly seventy-five hundred stockholders responded, providing a startling portrait of the eclectic people behind the company: about a quarter of investors were women; most had not attended college but graduated from high school; fifty was about the average age; every state except Wyoming had an investor; and just over half of the investors owned their own homes and an automobile. In short, the highest number of investors were upper- to upper-middle class. Paepcke understood this demographic as the archetypical investor the company wanted to seek out by making it appear that everyday people—juxtaposed to professional investors—thought CCA a good stock to own.[55] Realizing potential middle-class investors might shy away from speculation bloated with accounting jargon, Paepcke alleviated these uncertainties by designing and printing an uplifted, stylized, and easy-to-read version of the generally drab company earnings report. On more than one occasion, shareholders praised CCA’s stockholder update as “models of what an annual report should be,” as “an example to many other corporations,” with the effect, one businessman wrote, that “Its format, its content, and the results all show extremely able management.”[56] As experiments in the use of graphics and colors to convey not only information but positive emotion, Paepcke’s internal marketing such as the investor surveys and stylized earnings reports proved widely successful with shareholders and helped provide CCA with the additional equity necessary to reach out in new ways to potential consumers.

The latter half of the 1930s marked CCA’s initial effort to advertise to a broader consuming public and inaugurated the first of several wildly successful promotional campaigns that succeeded in stimulating Paepcke’s, soon to be realized, pecuniary and cultural interests by increasingly downplaying the company’s visibility in their own advertisements. At first glance, CCA’s 1936 and 1937 campaign appears as rather commonplace corporate advertisement emphasizing, in a “forthright statement,” the features of the product and in some cases the benefits to the consumer attainable through purchasing the product. With an eye towards keeping the packaging products to a minimum, CCA partnered with the advertising firm N.W. Ayer & Son who in turn commissioned artists such as Toni Zepf, György Kepes, and Leo Lionni to create work whose very composition as “fine art” rather than advertising copy exemplified the two corporate characteristics Paepcke most wanted associated with his company—those being, “creative” and “leadership.”[57] The importance of CCA holding these associations lay in the structure of the paperboard industry: purchasers for large corporations needing packaging to move their products to retail sites where the buyers, and poster advertising directly to these agents, seemed an insensitive approach to closing million dollar sales—or so thought experts such as former advertising executive William Benton who corresponded with Paepcke about CCA’s unique marketing approach. Responding to Benton’s skepticism as to the validity of advertising in the paperboard industry, Paepcke claimed that paperboard buyers could only be encouraged to purchase CCA packages indirectly through the quality of the product produced, and even more obliquely by the gentle urging or offhand comment of a friend who noticed a pleasing and thought-provoking piece in national magazines like Time, Newsweek, or the New Yorker—news and culture magazines believed to be read by people of talent, taste and influence. Designers like recent graduates of MIT, scientists and inventors, and financial brokers were thus the most targeted eyes as Paepcke understood the work these individuals would do as the ultimate pitch piquing purchasers’ interests in CCA.[58] Having said this, responsibility for the companies’ unprecedented growth in the 1940s came from forces much larger than individuals. A world shaking event was needed to fully bring CCA to the position of paperboard dominance.

World War II made the paperboard industry in America and CCA. Prior to the start of the War, a great deal of paper pulp came from Europe—in particular Scandinavian countries. With shipping disruptions starting in 1939, the companies like CCA, who had already taken steps toward large-scale domestic production of pulp, positioned themselves to benefit from a growing awareness amongst the public, industry insiders, and Washington politicians that “no matter how fast commodities rolled off the assembly line they were very useless unless they could be transported, and they could not be transported unless they were packed or had package protection of some sort.” CCA was well positioned at the outbreak of the war as it required unprecedented scale, the new style of warfare which stressed speed and mobility as well as improved logistical capability; Paepcke secured the lion’s share of government orders, in part, through his development of improved solid fiberboard—the material of choice for the US military’s shipping program.[59]

The war years also marked the second of the company’s highly influential advertising campaigns. Starting in 1942, CCA commissioned artists such as William de Kooning, Jean Varda, and Rufino Tamayo to create advertisements highlighting the culture of their native counties, which, when aggregated, created a mosaic emphasizing the freedom and diversity of Allied countries when juxtaposed to the narrow-mindedness of the fascist cause.[60] A series featuring full-color paintings from artists of each the 48 states complemented the “United Nations” series. Though minimizing mention of the firm to a small phrase about packaging and the standardized black box logo at the bottom of the poster, together these campaigns did a great deal to raise the company’s profile during the war years because the perception of a “public interest” was promoted along with the company’s balance sheet.[61] All in all, at the close of the war CCA boasted assets of $43 million (roughly $521,000,000 in 2010): such strong figures placed Paepcke’s firm in the dominant position in an industry that would grow 5 percent per year over the next decade.[62]

Much of this growth occurred abroad. Beginning during the war and continuing through the early 1950s, CCA looked to developing countries such as Venezuela, Colombia, and Mexico as both sites for production and potential markets for paperboard products. These locations offered little competition and great potential for large profits: CCA was well positioned to bring capital, research, and experienced employees, capable of sharing technology and management practices, to the emerging markets of Central and South America which held abundant natural resources, low wages, and non-unionized work forces. After seeing the successes of the European Recovery Program, Paepcke reversed his previous hesitation in European investment, undoubtedly drawing on his longstanding ethnic business connections to develop new plants in West Germany—investments that by 1958 paid off in $20,000,000 in yearly sales (or $151,000,000 in 2010 dollars).[63]

Paepcke’s move into foreign markets partially resulted from his longstanding frustration with New Deal policies designed to aid workers and prevent discrimination by employers, which he viewed as government meddling in business.[64] Writing to his relative Alexander Pflueger in Germany, the Republican Paepcke related his personal and perceived “general dissatisfaction” with FDR’s administration that seemingly stymied “business from taking normal risks” through “policies” and potential “regulations” responsible for creating an “uncertain” business environment.[65] Such frustration also stemmed from specific experiences, when, for example, between 1943 and 1945 after having just “satisfactory settled” a dispute over hiring practices at a Philadelphia plant, the fairness of CCA’s employment procedures were once again called into question through a complaint filed by the American Jewish Congress. Allegations were directed at plants in Indiana and Baltimore—specifically company applications required job seekers to list religion, race, and lineage, which violated the Fair Employment Act. The subsequent government probe—an investigation that occurred quickly given CCA’s enormous military and treasury contracts—determined that despite the autonomy of individual plants to hire who they chose, the corporate headquarters in Chicago did utilize standardized employment forms to all facilities. Officials visited CCA plants, and letters were addressed to Paepcke directly. Initially reticent to cooperate with the committee but after roughly a year and a half, the company finally “satisfactorily obliterated” all discriminatory material from their applications, and by all known measures, succeeded in blunting further charges of alleged discrimination.[66]

Paepcke’s weariness of government bureaucracy also came from experiences that affected his family. The story of his brother-in-law and sister stands as an example of how federal politics reached Paepcke in a very personal way. Paepcke’s eventual brother-in-law Alexander Pflueger was born in Hawaii to German parents in 1869, and a few years later the family returned to Germany, retaining their sugar properties on the islands. Pflueger became a naturalized American citizen in 1900 after the annexation of Hawaii. On one trip to the United States, Pflueger courted and married Paepcke’s sister Sophie, and the couple moved back to Germany where Pflueger accepted a post as professor of physics at the University of Bonn. Following World War I, Pflueger petitioned for monetary compensation for his Hawaii holdings that had been seized as German property by the U.S. government during the war. He successfully demonstrated he was an American citizen so as to receive full restitution rather than the 80 percent guaranteed to aliens. With World War II looming, Pflueger was sued retroactively by the US government who, in short, claimed his status as a university professor at a German institution disqualified him from U.S. citizenship and required him to repay the compensation he had received. After initially fighting the case, one of the first of its kind, the climate preceding the looming war between Germany and the U.S. prompted Paepcke to settle on Pflueger’s behalf. This ruling also restricted the option of returning to America during the war—a possibility Pflueger seemed unwilling to entertain in 1941 but was more amenable to in 1945. Detailed wartime correspondence between Paepcke and Alexander and Sophie Pflueger in Germany shows a growing desperation and deterioration of the couple’s health as wartime shortages took their toll. Immediately following the war, through a friend and lawyer, Paepcke was able to smuggle Sophie and Alexander out of Germany and into the Netherlands and then Switzerland. There the process of securing visas to travel to the United States stalled. Paepcke grew more and more frustrated with a United States government he saw as unjustly punishing family members who had nothing to do with supporting the German war effort. Alexander died in Switzerland in 1946 and Sophie waited there for another year before the U.S. government finally issued her the necessary documentation for her to return and passed away soon after.[67] The best efforts of a manager accustomed to solving problems had not been enough to save Alexander and Sophie.

Following the darkness of the war, Paepcke increasingly tried to instill a humanistic sensibility in his employees. Graduates of liberal arts colleges were his most prized new management hires because he believed specific job training would come easier if an individual already held a capacious education.[68] From the famous artwork hung throughout CCA’s buildings to free Ravinia Festival and Chicago Symphony Orchestra tickets, CCA employees were exposed to high culture.[69] Paepcke’s tactics to keep his employees happy extended to both highbrows and philistines, however, as both groups benefited from an emphasis on internal promotion, company-wide pension plan, and stock option opportunities for salaried employees. CCA’s hourly employees belonged to some seventy-eight local unions and fifteen international unions, and these wage earners’ labor comprised between a fifth and a quarter of the company’s cost of sales.[70] Keeping his workers content proved to be a good deal for Paepcke and his management team who could direct their focus towards product design, customer service, and creating corporate image.

CCA’s third advertising campaign was its longest-running, most thought-provoking, and paid huge dividends—but did not cost Paepcke very much—because of the unique contributors he called upon to create these advertisements. “The Great Ideas of Western Man” series officially began in 1950 but reflected CCA’s earlier advertising campaigns commissioning both established and rising artists to paint company posters; however, unlike earlier campaigns which would, at times, feature a minute facet of the paperboard industry, in the new ads the box logo and company name in tiny type were the only linkages to the corporate world.[71] Replacing commercialism were the philosophical underpinnings of Western society—timeless moral perspectives Paepcke believed to be the antidotes for what he called “the feverish rainbow-chasing and disillusionment characteristic of American life today.” Paepcke thought his business could help make available the classics of the Western Canon as powerful content capable of enlightening the masses too long subsumed by consumer culture. To meet these ends, once a month CCA would run advertisements interpreting quotations from the Syntopicon—that is, the indexed companion to Britannica’s multi-volume Great Books of the Western World. A committee overseen by Paepcke would select—sometimes after considerable debate—choice lines illustrating the “moral, philosophical, and political.” Respected modern artists such as Ben Shahn, György Kepes, Leo Lionni, Honoré Sharrer, and Hans Moeller were then given absolute freedom to represent the idea in any manner they chose; however, on occasion, the artist’s original submission was rejected by the committee.[72]

While it is impossible to deny that Paepcke conceived of the campaign as his business’s “effort to contribute modestly to the realms of education and good taste,” one also finds an underlying economic hope for the experiment.[73] “Great Ideas” became CCA’s mature and unique reaction to three main challenges the company had faced: first, the paperboard industry was large and highly competitive but mostly “obscure” to the public; second, paperboard companies on the whole did not advertise much in national magazines because their products were mainly sold to buyers and not directly to consumers; third, as a growing company CCA did not have the advertising budget to pay for an expensive campaign so it needed to maximize the attention each dollar bought.[74] In this the company succeeded in turning the modest sum of $350,000 a year (roughly $2,500,000 in 2010) in advertising into numerous industry awards for excellence in promotion, hundreds and hundreds of letters a year praising CCA’s pioneering work, thousands of requests for portfolios of the campaign, several overseas exhibits sponsored by the U.S. State Department, and traveling exhibits in galleries throughout the United States.[75] Over time, even the most skeptical critics of the “soft sell” approach admitted the widespread success of Paepcke’s campaign in securing the positive attention for the company—publicity potentially transferable into sales.[76]

As the most understated, abstract, and longest running of its advertising efforts, “Great Ideas” became CCA’s penultimate marketing achievement. CCA’s campaign succeeded by being subtle, emphasizing contemplation rather than direct consumption, and by promoting the joys of thinking—what today might be called guerrilla marketing. CCA’s success in the print medium did not carry over into film, however, and the inability to fully embrace this new media likely played a significant role in the company’s creative stagnation during the 1960s and 1970s. The scene of a “stream of containers piling up or going by on belt,” or a “shot of containers twisting rapidly into camera” created a frenzied effect rather than the elegant and stable posters that had been the company’s hallmark.[77] Nonetheless, the pathbreaking design, advertising, and shareholder services Paepcke initiated continued to play a role in the company’s profitability in the decade after his withdrawal in 1960.

Social Status and Cultural Projects

Always on the lookout for profitable and pleasing innovations in design, Paepcke’s business interests often overlapped with an ever more purposeful mission toward cultural elevation. Reaching its fullest expression in the famed Goethe Festival, the creation of the Aspen Institute, and the executive seminars offered in the ski resort town he developed, Paepcke filled his later years with clubs, charities, and speeches where he espoused the linkages between elevating the human condition and raisings profits.

Initially unaware of the German Bauhaus’s concern with utilitarian high art and architecture, Paepcke’s corporate aesthetic connected with the work of Bauhaus designers in the United States. Founded by Walter Gropius in 1919, Bauhaus expanded and contracted over the years until the rise of the Nazi Party finally forced designers such as Gropius and Ludwig Mies van der Rohe to leave Germany and settle in Chicago.[78] Lamenting that companies produced undifferentiable products and “advertised in the same way everywhere,” Serge Chermayeff, the New Bauhaus designer and former director of the Illinois Institute of Design, implied that Walter Paepcke’s company was one of the few corporations to have achieved some “variety of the kind which you find in great art.” Furthermore, Chermayeff’s admission that Paepcke’s “advertising became a model really of art in advertising” demonstrates the close links between the New Bauhaus designers and Paepcke because the “art side” of CCA “rubbed off [on] the Institute for Design.”[79]

From the earliest days of the New Bauhaus in Chicago, Paepcke saw potential in the designers fleeing Europe. Drawn to these architects’ creed “that art and industry could work together,” Paepcke offered major financial support and close personal friendship to the school’s first director, László Moholy-Nagy, after his move to Chicago in 1937.[80] Furthermore, as architect Harry Weese shared, Paepcke figuratively if not literally “imports” the architects from Germany who understood “Beaux-Arts was petering out”—designers who recognized the “factory-made” buildings dominating commissions needed a new high stylistic dimension conveying money saving, cosmopolitanism, and most importantly progress in business.[81] The New Bauhaus architects trumpeted the ways their designs benefited business because they needed men like Paepcke to infuse corporate cash into their school to replace the state sponsorship they had previously enjoyed in Germany. Paepcke’s German heritage likely influenced his initial fascination with the New Bauhaus. However, as one former architect points out, Paepcke also gained a great deal financially from designers like Moholy-Nagy and Herbert Bayer whose collaborations in creating “new color standards” for the paperboard industry made money for all parties, and, more significantly, ultimately fashioned “sensitivity of a new art form to the industrialists.”[82] The industrialist Paepcke and the designers of the Bauhaus partnered so that both parties benefited and industry and art grew closer than ever before.

In the paperboard industry, emphasizing function proved particularly profitable because the product packaged is the object desired rather than the container itself. In a speech to the Art Directors Club of Chicago, Paepcke claimed “simplicity, conciseness, unity of design and thought and line” as both the essentials of quality “art” and the stylistic features of the packages CCA produced.[83] Starting in 1937, to make sure all their products left with this sensibility, Paepcke—in large measure thanks to the suggestion of his wife, a former Marshall Field’s display-window designer named Elizabeth Nitze—established art departments in each of CCA’s facilities, granting the various art directors unrivaled influence in the production of CCA’s boxes.[84] Influential directors and in-house designers such as Egbert Jacobson, Walter Grenville, and Maria Bergson, as well as outside German-American consultants like Walter Gropius and Herbert Bayer, earned the firm recognition and profits by establishing CCA’s reputation as the corporate authority for color schemes, creative advertising, interior office design, as well as factory space planning that synergized the “functional” and “artistic” design perspectives.[85]

No matter how important the collaborations with some of the biggest names in design, his family heritage influenced the deepest-seated cultural tendencies in Paepcke. His father is reported to have regularly quoted Goethe and Schiller, taken his children to the Chicago Symphony Orchestra, and developed friendships with scholars such as University of Chicago Romantic Languages Professor William Nitze—who became Walter Paepcke’s father-in law.[86] Elizabeth Nitze graduated cum laude from Foxcroft finishing school in 1921 and married Paepcke shortly thereafter. The couple had one son, Walter, Jr. (1923–1926), and three daughters: Anina, born in 1926; Paula, born in 1928; and Alice, born in 1936. While she studied drawing and painting at the Art Institute of Chicago, Elizabeth worked as a costume and set designer for operas in addition to working part-time for the C.E. Swanson & Co. architectural firm. By 1937, these pursuits, along with her close friendships to humanists like Mortimer Adler, helped Elizabeth convince her husband of the value an art department could add to business.[87] Thanks in no small part to her involvement in noted Chicago cultural institutions, CCA’s design work moved from corporate corridors to museum walls. In 1945 and 1946, the Art Institute of Chicago hosted the first exhibit of “Modern Art in Advertising” exemplifying CCA as, in the words of the Institute’s director Daniel Catton Rich, “the most creative programme in today’s advertising.”[88] Later traveling to twenty more museums across the country, the exhibit engaged approximately 200,000 people with CCA’s design aesthetic. The free publicity generated by and the popularity of this exhibit inspired similar displays of CCA’s work such as its “State Series” and “Great Ideas Series” shows—all of which eventually found their way to the National Museum of American Art.[89]

Elizabeth also introduced her husband to the Chicago intelligentsia who would profoundly shape his cultural and philanthropic endeavors. Starting around 1943, Elizabeth and Walter participated in the Great Books classes at the University of Chicago—in particular the seminar taught by the series’ co-founders Mortimer Adler and Robert Hutchins.[90] Through these classes Paepcke gained exposure to the philosophical underpinnings of the “great conversation”—to use Adler’s and Hutchins’s term—held between important thinkers from every epoch throughout the entire course of Western history.[91] Adler and Hutchins also benefited from their association as they gained a firm partner in the business world whom they would later call on to finance and manage a number of their nationwide educational projects.

In addition to sharing art and culture with her husband, Elizabeth also introduced Paepcke to the mountain they would build into a world-renowned ski resort. A booming silver-mining town in the late 19th century, Aspen, Colorado had gone bust by the time Elizabeth first visited in 1939. Greatly impressed by what she saw, Elizabeth suggested to Walter that Aspen deserved attention—advice halted by World War II. In the summer of 1945, the Paepckes visited Aspen together, and Walter moved quickly to make the contacts necessary to secure as much property as possible.[92] He also met with former members of the Army’s 10th Mountain Division—most notably the Austrian immigrant Friedl Pfeifer—who had trained in the area and returned to the mountain to develop the skiing. The two formed the Aspen Ski Company to secure the investments needed to build both facilities in the town and especially the two ski lifts required to attract the growing number of novice skiers in the country. Leaving others to manage the development of the ski trails, Paepcke focused his efforts toward generating Aspen’s cultural possibilities.[93]

The most edifying institution Paepcke helped to make a reality was the Goethe Bicentennial. At a lunch in 1947, Hutchins asked Paepcke to serve on the board directing the ambitious plan of taking the Chicago Great Books curriculums nationwide.[94] Quick to agree, Paepcke initially hesitated to fulfill the second request: Hutchins wanted Paepcke as the business backing for a bicentennial celebration of the German polymath Goethe’s musicianship, philosophy, writing, and scientific achievements to take place in 1949.[95] Undoubtedly drawing on Paepcke’s German heritage and affinity for high culture, Hutchins might also have played on a lingering guilt Paepcke held regarding the death of his sister and brother-in-law in Germany at the war’s conclusion. Irrespective of the rhetoric, Paepcke became a believer in the festival’s potential “to reestablish at least a cultural relationship between the Teutonic peoples and the rest of the world, following the natural hatred, misunderstanding, and dislocation caused by the last war.” Goethe’s cosmopolitanism had forged a man of the world rather than a slave to “nationalistic tendencies,” thus making him the ideal candidate to remind Americans of the profoundly positive legacy of the German people. And Paepcke considered no location better suited to host this rehabilitation than the serene mountain retreat under his development.[96]

Paepcke initially served as a host for and broker of the Bicentennial. His involvement in the festival resulted in a further cultural awakening in the executive that would influence many of his subsequent commercial and philanthropic projects. Attending the seminars and conversing with the likes of José Ortega y Gasset and keynote speaker Albert Schweitzer, Paepcke became convinced that just as scholars and civic leaders had praised the serene mountain setting, so too would business leaders.[97]

With the Bicentennial’s seminars, music programs, and outdoor events as a model, Paepcke spent late 1949 and early 1950 establishing the Aspen Institute to promote what he called “the cross fertilization of men’s minds.” The people targeted for this training were corporate executives, and those who attended one of Paepcke’s two-week symposiums experienced daily routines of exercise sessions, spa treatments, musical performances, and Socratic seminars discussing topics such as democracy, freedom, and capitalism.[98] The sessions proved a resounding success with the business community, in large part because Paepcke personally accepted the financial losses, pouring his stock from the Aspen Company into the nonprofit institute to maintain its seminars throughout the fifties.[99] The executive always adamant to balance the budget had become the cultural philanthropist whose top priority had shifted from moving boxes to enlightening the individual. As Paepcke shared, the antidote to the “bad ideologies” of fascism and communism was to be found in the education of “whole men” comprising the “strongest bulwark of a free and enlightened society in which private enterprise can prosper.”[100] Nurturing this ideal in America’s leaders was the vocation he pursued until his death in April of 1960.[101]

Conclusion

Around the time of Paepcke’s death, Americans consumed over 170 billion paperboard containers a year, “approximately 2 ½ packages for every man, woman, and child everyday of the year,” a CCA brochure proudly declared.”[102] Profiting from the demographic boom and prosperity of the postwar years, the paperboard industry became a twenty-billion dollar growth sector during the 1960s. Reflecting on Paepcke’s work in the late 1920s, CCA reported that in the subsequent three decades, “U.S. population increased 50 per cent,” while “packaging expanded 500 percent.”[103] In a little over thirty years, Paepcke grew his company into the dominant force in the global paperboard market with $332,000,000 in reported sales in the year before Paepcke’s death (roughly $2,000,000,000 in 2010).[104] While enjoying some prosperity in the years immediately following his death, CCA’s growth would stall over the coming decade until an eventual merger with the Montgomery Ward Co. brought two canonical Chicago businesses together under the parent corporation Marcor. Ward’s profitability offset the declining fortunes of CCA for a few years before Marcor was folded into the massively diverse interests of the behemoth Mobil multinational.[105] Whereas under Paepcke, CCA had innovated new forms of merchandising, marketing, and production to stay on top of a growingly competitive marketplace, the departure of the company’s founder left CCA primed for the consolidation and globalization characterizing the last several decades. But like the tiny boxes on their museum piece advertisements, today’s culture and business bear the small mark of Walter Paepcke.

Notes

[1] “We Got to the Party,” Jan. 13–17, 1938, privately printed scrapbook of “The Fernandina Odyssey” prepared by Dunning and Davis. This memory book is one of three copies and located in folder 1, box 13, Elizabeth H. Paepcke Papers (Special Collections Research Center, University of Chicago Library, Chicago). This collection is hereafter abbreviated EPP. The quotation comes from a reprint of a Florida newspaper article, most likely the Florida-Georgia News or the Nassau County Leader which later merged into the Fernandina News-Leader, reprinted in Susan Black, ed., The First Fifty Years, 1926–1976 (Chicago: Container Corporation of America, 1976), 15.