That the triumph of its four-bank portable saved the Remington Typewriter Company from self-destructing in 1921-22 is evident from The Wall Street Journal’s coverage of 21 months of bitter boardroom and courtroom in-fighting between the company’s shareholders and its board of directors. A group of justifiably upset investors had seized control of Remington in January 1916 with a five-year voting trust, resulting from a bond issue which had saved Remington from an even earlier demise. In May 1919 the voting trust put a finance committee in charge of operations, but the conservative “old guard”, refusing advice from this committee, had regained command by May 1920. A truce was finally settled on in mid-November 1922, following the elevation of Benjamin La Fon Winchell (1858-1942) to the presidency, succeeding Frank Nicholas Kondolf (1863-1944).
"Let's get back on track," says ex-railways boss Benjamin La Fon Winchell.
It was almost exactly 100 years ago, in mid-March 1921, that The Wall Street Journal signaled fresh “trouble at mill” at Ilion. A large part of the festering problems being experienced by Remington had been caused by four years of its board's refusal – from 1916 to 1920 – to respond to constant urging from the voting trust to bring out a portable. Unfortunately, the Journal added, by the time Remington did produce a portable, Corona was selling 120,000 machines a year. “[Corona] has the field practically usurped,” said the newspaper. “Here again, Remington’s failure to appreciate the industry’s trend is the cause.”
Remington planned an annual output of 250,000 portables, but its total production of all typewriter models in 1919 was 120,000 machines, rising to 165,000 in 1920. It earned $2.9 million in 1919 but just $1.9 million in 1920. Ultimately, of course, Remington was to win over the portable market from the three-bank Coronas and Underwoods, once production delays were overcome. And the board settlement of November 1922 had much to do with the early inroads the portable had made, stablising the company’s finances and showing that in spite of all the bickering, Remington could still get some things right.
Neither one thing nor the other.In a scathing critique of Remington’s blind obstinacy from the turn of the century to 1920, the Journal said that just as Remington had declared an efficient visible writing standard typewriter a mechanical impossibility, so too had it said the same thing about a portable typebar machine weighing under 10lb. “So [Remington] proceeded to put forth, as a great advance in typewriter design, the Remington Junior. This machine, on account of its weight, was not ‘portable’, and because of its double shift was not an office machine. Therefore, having no field, it proved a disaster.”
Calling for changes to the board of directors, the Journal said, “The same people who refused to recognise the value of the visible typewriter, and so would not buy out Underwood for $1.5 million, and who had so little mechanical understanding as to foster the Remington Junior, are in charge of the Remington company.” Earlier, the Journal said, “There was a time when Remington stood first in the typewriter field and there was no second. And there was a time also when it could have bought out Underwood. This was in 1903 when Remington shares as dividend shares were selling to 130. But sound financial management did not prevail .” The company’s shares sunk to 8⅛ in 1915. Bonds issued for new capital resulted in the voting trust being installed.
The Journal believed a fear that control of the company would not change at the April 1921 annual meeting was the reason its shares were “showing such peculiar weakness”. With earnings down $1 million on 1919-20, the newspaper pointed out Remington’s shares had gone from 105½ in October 1919 to 24½ in February 1921. Given Remington had started to sell its improved Model 10 standard (the “self-starter”) only a few weeks earlier, and was pushing production to meet huge demand for the portable - both in the US and overseas - the newspaper put the company’s share weakness down to boardroom matters. The Journal said there was apprehension in the stock exchange concerning the outcome of Remington’s annual meeting in April. It was anticipated there would be a new challenge from shareholders over the way Remington was being operated. The Journal said, “The financial district does not view an inventory increase and the borrowing of $1 million soon after the old regime regained control as indicative of the type of management the company needed in uncertain times like the present.”
The share value had dropped in December 1920 but picked up by 13 points to 37½ in January. That there was renewed weakness in February 1921 gave the Journal clues about the wariness of investors having little to do with the company’s line of typewriters. “Many attach far greater importance to certain internal factors in the situation than to the external signs of the company’s progress and renewed life [with the Model 10 and the portable],” the Journal said. “The real reason for the decline appears to be an increasingly belief that the general run of Remington stockholders do not realise what is the real weakness in the company, and that therefore at the annual meeting next month the same crowd which ran the company into the ditch in 1915 will secure control of the board and again dictate Remington’s policies.” The Journal said a lack of financial foresight and conservatism had resulted in inventories rising from $6 million to $10 million since May 1920 (in the same period Underwood increased its stock of typewriters by $250,000). Close to $1 million had been spent on buying and equipping a plant in Flushing to meet overseas orders for the portable, followed by the borrowing of another $1 million.
George Ed SmithThe Journal quoted an unnamed source, “one of the most prominent men in the industry”, as stressing that no typewriter company had succeeded without having a president thoroughly acquainted with typewriters. “Inevitably the prestige of a typewriter company begins quickly to decline as soon as those in charge of its affairs lose touch with the industry and are no longer able to anticipate the trend in its development. The whole trouble with Remington ... is that with the passing of the ‘blind’ typewriter those in charge lost completely their touch with the trend in typewriter developments.” The Journal pointed to Underwood, saying it had succeeded with something Remington declared to be impossible [“visible writing’]. Similarly, Royal’s early success was attributed to it having George Ed Smith in charge.
“The Remington company today would not have the [L.C.] Smith, the Royal … and the Woodstock machines as serious competitors had the directors, 15 years or so ago, listened to L.C. Smith and striven to develop an efficient visible writer with which to meet the Underwood competition. Because of the refusal, year after year, of the Remington directors to realise the significance of the increasing seriousness of the Underwood competition, L.C. Smith withdrew from the Remington company [the Union Trust], and with the proceeds from the sale of his shares, began to develop the L.C Smith machine, which, within a few years, became one of the best visible models on the market.
“As a result of all this blindness, the Remington company, 13 years after Underwood displaced it from its commanding position in the typewriter industry, is out with the first really efficient visible model bearing the Remington name [the Model 10]; and even now would not have it on the market had it not been for four years of continual prodding by the voting trust to modernise the company’s standard model.”