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1
Creation
May 1888, Rochester, New York
At noon on a Tuesday late in the month, twenty-eight men met for a hastily scheduled conference at the downtown Powers Hotel. They sat at tables in an ornate reception room adorned with candlesticks and chandeliers for festive occasions, but these local businessmen had convened to learn the extent of their financial loss from the sudden bankruptcy of Schlicht & Field Company. A manufacturer and international distributor of office equipment based in Rochester, Schlicht & Field somehow owed banks and creditors $301,400 it could not pay.1
Reaction among the businessmen to details about the reasons for the bankruptcy varied from astonishment to anxiety to outrage. Many men in the room owned stock in Schlicht & Field, their certificates now worthless—and because the men had pledged their company stock as surety for tens of thousands of dollars in bank loans they were liable personally for much of the debt. Several men at the meeting held promissory notes from the company, their value now zero. Some creditors attended, too, their bills for services and supplies now worth pennies on the dollar. Seven bankers also were in the room, their role to tally company assets consisting of warehouse inventory and ownership of numerous patents for various desk drawer and desktop devices essential to filing and recordkeeping for nineteenth-century businesses. Everyone knew the assets would not cover much of the debt.2
How had this happened? The only man with an answer was absent. Paul Schlicht, at age twenty-nine the president of the company, had refused to attend. His absence dismayed some at the conference; they “thought it strange,” while others there might “draw their own inferences” why Schlicht had stayed away, according to a newspaper article published the same day. So, instead of an explanation from Schlicht, whose deception and mismanagement had bankrupted the company, a bookkeeper from the nearby corporate office told stockholders, creditors, and bankers what had happened. His blunt explanation was that a subsidiary venture of Schlicht & Field—a monthly magazine, The Cosmopolitan—had bled the company dry. “The magazine had been a failure,” the newspaper reported. “It had lost $130,000.”
Not only had the magazine failed, taking with it the direct expenditure of a sizable sum, but Schlicht had given away thousands of items from the company’s inventory to induce people to subscribe. Then he had stopped paying providers of services and supplies to Schlicht & Field because Cosmopolitan needed the money to survive. However, the most stunning revelation at the May conference was that Schlicht & Field had not owned Cosmopolitan for months. A secret transaction by Schlicht in late January had transferred ownership of the magazine—without any payment to the Rochester company— to a new publisher located in Manhattan, and Schlicht had become one of the partners.
Since the debut of Cosmopolitan two years earlier as a literary magazine for the family, Schlicht & Field had supported its creation and publication of twenty-five issues. The disastrous venture began with $95,000 borrowed from banks. Stockholders authorized the bank loans for the magazine upon review of a plan submitted by Schlicht, who anointed himself publisher. According to the plan presented to stockholders, revenue from subscribers and advertisers eventually would enable Cosmopolitan to operate independently. The banks accepted surety notes signed by stockholders, the majority of them proprietors of Rochester businesses.3
All of them soon would learn that magazine publishing was more unpredictable than selling office supplies. Schlicht encountered the harsh reality of the intensely competitive magazine marketplace of the Gilded Age. Cosmopolitan’s startup proved costlier than predicted. Door-to-door canvassing for potential subscribers in cities from New England through the Midwest was expensive to organize and coordinate, fees to illustrators and writers exceeded budget, and occasional color for frontispieces inflated the original printing estimate. Despite a substantial amount of capital for its creation, Cosmopolitan required more money just months after its appearance. Schlicht persuaded several company stockholders to provide an additional sum in return for promissory notes. This supplemental investment of $67,000 did not last long either.4
Schlicht & Field was in a bind. Revenue derived from its core business of manufacturing and selling clipboards, desk-drawer organizers, desktop file boxes, file dividers, file holders, paper hole-punchers, and typewriters to office customers across the nation simultaneously financed the company’s operations and the magazine’s persistent deficit. Bills for services and supplies went unpaid.5
The first indication to stockholders of a crisis surfaced near the end of 1887. Schlicht asked them for another $50,000 to help Cosmopolitan. He assured them the magazine was popular, and that subscriptions and advertisements were increasing each month. Schlicht told stockholders that Cosmopolitan distributed 35,000 copies to subscribers and vendors, compared with an initial distribution of 20,000 copies. Stockholders at the bankruptcy conference in May remembered Schlicht then telling them “all that was needed was a little time and money.” They agreed to sign another batch of surety notes to secure the additional money from banks.6
Why these presumably sensible Rochester businessmen, including Edward Bausch and Carl Lomb of Bausch and Lomb Optical Company, continued to underwrite Cosmopolitan cannot be determined from the historical record. Perhaps it was Schlicht’s persuasive personality, or perhaps it was the unique status conferred by association with a new national magazine, one known for its quality fiction, poetry, and illustrations. Or maybe it was the prospect of a lucrative return on their investment.
Cosmopolitan survived on cash siphoned from Schlicht & Field for two more months. Schlicht then enticed several investors in New York City, including Ulysses S. Grant Jr., the late president’s son, to assume responsibility for the magazine’s finances from that point onward, leaving Schlicht & Field responsible for prior debts. Some confusion ensued at the bankruptcy conference in May concerning ownership of Cosmopolitan because stockholders were unaware of the ownership transfer and could not understand how Schlicht arranged it. Incorporation documents for the new ownership entity filed January 1888 in Albany did not list any prior connection to the Rochester company.7
Although the January transaction had relieved further financial burden on Schlicht & Field, it was too late. The company remained responsible for payments to a printer, paper producer, and ink supplier for Cosmopolitan’s final issue under its ownership prior to the secret transfer by Schlicht. Also, the lengthy subsidy for Cosmopolitan caused Schlicht & Field to default on its own bank loans and promissory notes. “The magazine was losing money faster than it could possibly be made by the business,” participants heard at the bankruptcy conference. “The entire business had been managed with the most reckless extravagance.”8
One extravagant item revealed to stockholders, bankers, and creditors at the conference demonstrated questionable judgment by Schlicht about expenses necessary for Cosmopolitan, despite its dire situation. “Considerable amusement was caused by the statement of one of the creditors that over $1,000 was spent in the way of flowers and presents on Sarah Bernhard[t] with the hope of getting her to write an article for the magazine,” the newspaper reported.9
Miss Bernhardt, a famous stage actress whose name the newspaper misspelled, never wrote for Cosmopolitan while Schlicht was publisher. Her byline ultimately appeared in the March 1896 issue, at which time Cosmopolitan was among the best and most popular magazines in the nation.
Magazine “Mania”
The appearance of Cosmopolitan, its creation by a person without any publishing experience, and its financing by businessmen unfamiliar with magazines exemplified the “mania” described by historian Frank Luther Mott in the third volume of his five-volume classic, A History of American Magazines. Mott documented the appearance of several hundred new monthly magazines during the first half of the 1880s. One hundred and fifty titles appeared during 1886, the year Cosmopolitan rolled off the presses. This surge preceded the Magazine Revolution of the mid-1890s, a period when circulation (total subscriptions and vendor sales) of top-tier monthly magazines tripled, quadrupled, or grew by multiples of ten and twelve for a fortunate few, attaining popularity and prosperity inconceivable to publishers a decade earlier.10
The final twenty years of the nineteenth century were media heaven for many new national magazines. No other national media diverted public attention or advertiser dollars from magazines. Movies had yet to become popular, and radio as a commercial enterprise and provider of free entertainment was years away. A veritable explosion in magazine popularity occurred because a dynamic American economy propelled dramatic cultural and social changes. People who wanted, and could afford, entertainment and information other than from newspapers bought monthly magazines, which differed considerably from newspapers in terms of quality and variety.
Factors fueling new magazines included higher literacy rates, a nascent middle class, migration of millions of people to cities from rural areas, development of national brand-name products, cheap postage, rapid distribution by railroads, and better printing technology. The resultant synergy produced affordable quality publications at one end of the spectrum and cheap trashy publications at the other end. Cosmopolitan was an affordable quality magazine.
An obvious prerequisite for the magazine market was a literate populace. By the 1880s, the United States had a self-reported literacy rate of 90 percent, which placed it among the top three in the world, the others being Scotland and Sweden. American public schools were not responsible for achieving this high literacy rate. Twelve states of the nation’s thirty-eight states had enacted compulsory education legislation prior to the 1880s and eight more mandated it during the decade. Mandatory classroom time ranged from a mere dozen weeks to six school years. Newspapers get much credit for contributing to national literacy because almost every community in the nation had a weekly or a daily, and reading was a spectator sport of sorts for a citizenry amused by and fascinated with politics.
During the mid-1880s, enrollment in public schools nationwide was an average 63 percent of school-age residents, or five of every eight eligible people (the mandatory maximum age for compulsory education varied from sixteen to twenty-one). Actual classroom attendance on a regular basis was 38 percent, or three of every eight school-age residents. Enrollment and attendance were highest in California, Connecticut, Delaware, Illinois, Indiana, Massachusetts, Michigan, New Hampshire, New York, Ohio, and Rhode Island; lowest enrollment and attendance were in Alabama, Georgia, Louisiana, Mississippi, and the Carolinas. These education patterns explained the concentration of magazine circulations in northeastern states and the Midwest until the 1920s.
The percentage of school-age residents who completed their education was quite low. On average, only one of every twenty-two students, or slightly more than 4 percent, received a high school diploma during the 1880s. Still, however brief their time in the classroom, millions of Americans learned basic reading and writing skills. Their teachers introduced them to the concept of literature— prose and poetry that expressed timeless ideals and ideas. Reading also increased awareness. Scholars of literacy have determined that “knowledge about faraway events and ideas was introduced through newspapers and magazines.”11
Literacy alone did not expand readership for monthly magazines of the era. A person’s income mattered. The growth of magazines published in the United States near the end of the nineteenth century correlated with the rise in the number of Americans who ascended to the middle class, a category defined by income and social standards. Most of the nouveau middle class lacked familiarity with forms of behavior, etiquette, fashion, and moral values deemed proper by arbiters of polite society. Magazines served to introduce middle-class men and women to these customs.12
The middle class emerged as an economic force during the Gilded Age, often defined as an era from the late 1870s to early 1890s. Industrial enterprises— factories, foundries, manufacturers, railroads—hired thousands upon thousands of administrators, engineers, managers, and supervisors. These men coordinated systems of delivery or production, devised mechanical improvements, kept the books, monitored inventory, and ruled the workplace. Their weekly on-the-job time was fifty-eight hours, similar to the men whose physical labor accomplished the tasks, but the men in the white-collar shirts had special status and took home bigger paychecks. Nicer furniture, prettier dinnerware, classier home décor, and other visible improvements were evidence of social status. Middle-class families enthusiastically imitated upper-class households by hiring maids and cooks, buying fine furniture, and wearing fashionable clothes.13
Aspirations for self-improvement accompanied materialistic acquisitions. Men and women joined Chautauqua forums in hundreds of communities that met weekly to discuss lessons on literature, science, religion, and the power of the human mind. Magazines purposely catered to this self-improvement impulse with quality fiction and informative articles about architecture, biology, chemistry, Christianity and evolution, geography, medical research, and world cultures.14
Industrialization had made class distinction a fixture of the American work-place. The term blue collar had originated to describe laborers in factories and foundries who customarily wore denim shirts at work; the designation white collar applied to managers, supervisors, bookkeepers, draftsmen, and others who wore a shirt with a detachable, washable white cloth on a cardboard strip. A white-collar job meant entry to the middle class. Industrial workplaces employed 190,000 white-collar workers when the Gilded Age ended compared with 80,000 when it began.15
Beyond the gates of industrial America, a legion of proprietors of cartage companies, insurance agencies, and retail stores earned a middle-class income, as did many contractors, grocers, and wholesalers. Their presence strengthened democracy. Community involvement and political awareness among this “multitude of little proprietorships continued to be socially important,” an economist remarked. The number of owner-operator businesses grew 90 percent to a total of 780,000 during the Gilded Age and the number of accountants, architects, engineers, and lawyers doubled to 89,000. Owner-operators, professionals, and industrial middle-class occupations constituted 5 percent of the nation’s workforce in 1890.16
A typical middle-class household income was $1,400 t...
