Asa Candler

It took two men to invent Coca-Cola. The first one was John Stith Pemberton, better known as Doc Pemberton. He was a pharmacist who liked to dabble with patent medicines. In the spring of 1886, stirring up the contents of a forty-gallon brass kettle with a wooden oar, he brewed the first batch of a dark, sugary syrup meant to be served with carbonated water and sold at the city’s soda fountains. The most successful soft drink of all time was born. However, it was not Coca-Cola until it received its name from the other man: Frank Mason Robinson. Standing barely five feet tall, he was easy to overlook, as most historians did. He arrived in Atlanta in December 1885, partnered with Pemberton, and got inspired to name the new syrup after two ingredients: coca leaf and kola nut. He liked the alliteration. Robinson changed the K in kola to a C for uniformity’s sake, put in a hyphen, and then wrote out a label in longhand in the careful Spencerian script that would become the best-known trademark in the world.

Credit as the father of Coca-Cola often goes to Pemberton, but Robinson was the father of Coca-Cola’s business. When the two met for the first time, Pemberton was in his 50s, and he owned a business manufacturing French Wine of Coca for $1 apiece. Robinson was new in town, hoping to start an advertising business with his partner, David Doe. The three agreed to establish The Pemberton Chemical Company in January 1886 and produced what later became known as the Coca-Cola drink – sold as syrup then. Pemberton would make patent medicines, and Robinson and Doe would print the ads and handle the promotional part. The deal made so much sense that Pemberton’s landlord, Ed Holland, joined them in exchange for his premises, and some of Robinson’s family and friends also invested.

In May 1886, their innovative drink was launched and for sale by Willi Venerable and Nunnally & Rawson soda fountains. But Pemberton fell ill soon after their business venture began to gain traction. Doe gave up and pulled out of their business, but Robinson stayed. In the spring of 1887, Robinson helped bring Coca-Cola back to life by passing out “sampling” tickets for soda fountain customers. Robinson had logged orders for nearly a thousand gallons of Coca-Cola syrup by early summer.

Meantime, Pemberton applied to the U.S. Patent Office to register the Coca-Cola syrup. The trademark was granted, but not in the name of The Pemberton Chemical Company. It was in Pemberton’s reputation as an individual. He was still very ill and needed money, and by registering the patent outside their business venture, he could sell two-thirds of the trademark to the Willi Venerable Soda Fountain and someone named Lowndes. Pemberton had a history of mistrust and fraud. Robinson was naïve to go into business with him. Still, when he found out, he felt stabbed in the back and wanted to fight back. One day, shortly after Pemberton struck his deal, Holland introduced Robinson to John Chandler, a lawyer. Chandler agreed to fight their case but soon realised that Pemberton was too ill and poor to take anything from him. A victory seemed futile, so Chandler advised Robison to let it go.

By 1887, Robinson got to know Chandler’s brother, Asa, who was running a drugstore and offered him a job. Meanwhile, Venerable and Lowndes’ business with the Coca-Cola trademark went astray and decided to sell it. Ironically enough, the buyer was Woolfolk Walker, the salesperson at Pemberton Chemical, thus opening a new opportunity for Robinson, enticing Candler to take over Coca-Cola. Within days, Candler seized control of Coca-Cola. He bought Pemberton’s one-third share by cancelling his old debt of $550 and paid Walker and his sister $750 for half of their stake. That gave Candler a majority interest and put Robinson in charge. After a year of struggle, Robinson was back on top, while Pemberton died soon after.

Candler brought Frank Robinson into the business as if he were a family member. Robinson was named general superintendent of Asa G. Candler & Company, given a desk in the office, and put in charge of compounding Candler’s proprietary medicines down in the basement. The first order of business was to refine the formula for Coca-Cola. There was a stirring of a national debate over the negative aspects of cocaine, and since Coca-Cola’s two main ingredients were Coca-Cola, Robinson and Candler decided to cut the amount to a mere trace. Meanwhile, Candler bought the remaining one-third from Walker, thus gaining complete control of the Coca-Cola trademark.

What propelled Coca-Cola, in the end, was its ability to sell itself. In addition to advertising, Candler underwrote an aggressive sampling campaign for the drink, allowing people to try it for themselves for free. To succeed, the gambit required people to like Coca-Cola and ask for it repeatedly so that the druggist would reorder a third and fourth gallon and more and start paying Candler his $2 per gallon wholesale price. It was an expensive proposition against Candler’s grain, and Robinson had to prod him to keep accepting the front-end losses. But it worked. In the summer of 1890, Candler’s second season, sales of Coca-Cola syrup more than quadrupled to 8,855 gallons. In the soda fountains of the South, people were beginning to come in and ask for a Coke.

Early in 1891, Candler announced that he was quitting the drug business to enter his business venture with Coca-Cola full-time. In the summer of 1891, Candler and Robinson sold 19,831 gallons of syrup, more than double the year before. As he reviewed his prospects that autumn, Candler realised that he had to have more money—a great deal more money, perhaps as much as $50,000 in cash—to move the factory, expand the production facilities, hire a sales staff and pay for the exponential increases that would be necessary for the costs of advertising, sampling, inventory, and distribution.

Candler did not have that kind of money. Nor did he have enough credit to borrow it. In the fall of 1891, he decided to incorporate Coca-Cola, sell shares, and raise capital. He planned to keep half the organisation and sell the other half to significant wholesalers in cities up North who would distribute the product. The Coca-Cola Company was formed early in 1892, with Candler as president and Robinson as secretary. The corporation issued 1,000 shares valued at $100 apiece, and Candler took precisely half. He gave ten shares to Robinson and offered the remaining 490 shares for sale. The aim was to raise $49,000. But no one seemed to want to take the risk. Only 75 shares were sold, yielding a meagre $7,500. Asa Candler was stuck with the company. He would have to build Coca-Cola by himself.

With the failure of his stock offering in 1892 to go public, Asa Candler was forced to build the Coca-Cola Company slowly by word of mouth and free samples. Before long, the organisation redeemed $50,000 in tickets a year, suitable for a million free tastes. Fortunately, the customers loved the drink, and the Coca-Cola Company prospered. Except for one thing: the drink was debunked as the dope.

The nickname dope came from people’s belief that Coca-Cola had cocaine. This soft drink did have traces of cocaine, but as discussed previously, it was a mere trace. Thus, the organisation refined until the soft drink was cocaine-free. Candler insisted on keeping the coca leaf so that Coca-Cola still contained coca, but he switched to “decocainised” coca leaves, with all traces of cocaine removed. The newly formulated ingredient would be combined with kola nuts in a powder with the mysterious cover name “Merchandise #5.”

However, there was a dilemma. Although Candler wanted and managed to eliminate traces of cocaine, Coca-Cola could sell itself because of its name. The drink was successful from a patent medicine of coca and kola. In the sampling letters, Candler wrote that Coca-Cola was a “scientific combination” of coca and kola that cured headaches and provided “mental clearness.” He published a brochure saying Coca-Cola renewed “the vigour of the intellect.” He tried to have it both ways as if Coca-Cola had the effect of cocaine without cocaine. Thanks to the secrecy of the formula, no one knew what was providing the stimulation, but it was easy enough to imagine that it was cocaine. Coca-Cola’s double life, myth versus reality, was established.

This double life endangered its business when the Coca-Cola Company landed in court against the federal government for tax reasons. Candler filed suit in federal court in Atlanta seeking repayment of the tax, and the government wasted no time responding. The Coca-Cola Company was incorporated to sell medicine, the Internal Revenue Office claimed, and the product was a “medicinal preparation” with at least three drugs in it, compounded under a secret formula. It was advertised as a cure for headaches, exhaustion, and other physical ailments. Furthermore, the government argued, pointing to its sharpest dagger, Coca-Cola contained “the drug and medicine cocaine.” Eventually, Candler won the case and got back $29,502 previously paid in taxes, but the cost was high. The case speculated that a tiny portion of the Coca-Cola drink could have cocaine because Candler never denied it, even though investigations could not prove it.

Around the turn of the century, a scare over cocaine spread, so the Coca-Cola Company was not in a dangerous position. People were getting frightened. City councils and state legislatures around the country began restricting or outlawing the use of cocaine in patent medicines. And those who do are legally bound to disclose it. Dr. Harvey Washington Wiley became the top federal official to enforce this law. He also believed that Coca-Cola contained cocaine and other harmful ingredients, so he launched a crusade to drive Candler out of business. Talking with a business associate one day in 1906, Candler’s brother John described the great success and acceptable profits Coca-Cola was enjoying. “But it’s like a big balloon,” he warned. “Punch a hole in it, and it’s gone.” Indeed, in the late spring of 1907, responding to complaints that Coca-Cola contained cocaine and alcohol, the War Department banned the sale of the soft drink at canteens and post exchanges on U.S. Army bases.

This time, Candler ensured that any myth about cocaine was removed and went to great lengths to ensure that no traces of cocaine could be found in the soft drink. Wiley eventually declared that Coca-Cola contained no cocaine in his report, but he was also concerned about its caffeine, which was a health hazard, too. Still, Candler contented himself that the army ban was lifted, and he figured people would forget about the controversy soon enough. The rest of the family urged him to publicise the report’s findings and advertise Coca-Cola’s victory, but he hesitated. The less said, he explained, the more likely Wiley’s bruised feelings would be soothed and the sooner he might drop the matter. Candler could not have been more mistaken. The truth is that Wiley disdained the Coca-Cola Company for reasons coming from his past. Indeed, these battles haunted him when he wanted to retire and place a successor.

When Candler was approaching his sixties, he grew increasingly conscious of his mortality. He wanted to devote his final years to charitable works and public service, which meant leaving the Coca-Cola company. He began drawing his son Howard to take over by assigning him to New York to run the Coca-Cola Company’s business in that area. However, it did not go well.

Howard was only twenty-three years old, with a nervous disposition, and disliked commerce. “I really enjoy the office part of the work,” he wrote his father, “but I don’t like to distribute tickets and sell goods. Moreover, I don’t like to be sociable with the trade, as is demanded to a certain extent here. I mean that the salesman for an article has to go in frequently and talk to a proprietor and his help of soda men and clerks. I don’t like that.”

Candler brought his son back to Atlanta and tucked him away from the public aspects of the business, putting him in charge of the syrup factory. It was the happiest period of Howard’s career. However, it was apparent that he lacked his father’s drive and grit. Howard was shy, uncertain, and not cut for a leadership position like a CEO. Obvious, that is, to everyone except Asa Candler. As his weariness grew, Asa dreamed of turning the company’s affairs over to his son. “As soon as possible,” he wrote Howard in the summer of 1908, “I desire that you take the place I have been filling for 20 years.”

One night after supper, Asa drew out a sheet of writing paper, dipped his pen, and almost begged his son to take a more prominent role: “As soon as I can lay this Coca-Cola business on your shoulders, I intend to do it. I want you, therefore [sic], to learn it thoroughly.…” Asa promoted Howard to vice presidency, overseeing the company’s operations and pushing him to take a firmer hand, especially in personnel matters. As the months passed, Asa kept encouraging Howard to think harder about the business “so that you may thoroughly master its details & carry it on successfully.” Reading between the lines, it seemed Asa sensed his son’s limitations while refusing to admit to himself just how severe they were.

With the decision to leave a successor, there was another problem. Running the organisation was one thing, but Asa Candler also owned Coca-Cola. He was free to retire and place his son in charge of the organisation whenever he pleased, no matter what misgivings he might harbour, but that would not resolve the ownership issue. Asa had four other children. If he left the organisation to Howard, it would mean disinheriting the remaining of his children. That option was unacceptable. But dividing the organisation into five pieces was a troublesome idea, too. What if the children kept their shares and the business failed? They would be left destitute. What if the children sold their shares? Would strangers come along and gain control? Would they force Howard out of a job?

In 1908, Candler quietly told one of his acquaintances about buying the organisation. Samuel Brown was a well-to-do cotton broker and banker from Albany, Georgia. What Brown had in mind was a relatively simple, two-step plan. He wanted to buy the Coca-Cola Company from Candler and then turn around and sell shares to small investors across the South. After all, Coca-Cola’s sales were still overwhelmingly concentrated in the region, and the drink was still perceived as a “Southern” product. Brown thought people in the South would be as enthusiastic about owning part of the company as they did about drinking the product.

And in theory, at least, taking the company public promised to provide a solution to the predicament of succession within his family. The other children would receive enough cash to make them secure for life, while Howard would get to remain with the company and run it. The new owner would not be an individual or group of individuals anxious to put in their management, but instead, the public would own Coca-Cola, and the people of the South would be happy to have a Candler stay in charge. Indeed, they would insist on having a Candler at the top. Howard would be protected.

From the first moment he discovered Coca-Cola, Sam Dobbs fell in love with it. His excitement was more than that of a consumer who loved to drink it. Even as a teenager, he was inclined to its business. He wanted its soft drink and was brainstorming ideas about how it should be done. The son of Candler’s sister, he finished only six months of schooling. However, he had massive potential for the Coca-Cola Company. For example, he proposed selling ready-made Coca-Cola into glass bottles to anyone who wanted them rather than selling the syrup to soda fountain operators.

During the summers of 1889 and 1890, Dobbs did well selling Coca-Cola soft drinks to the soda fountain operators. Graduating quickly from life on the road, Dobbs was assigned a desk in Atlanta’s offices and took charge of the organisation’s shipping department. Working with Robinson, he learned every step of the business, from buying the ingredients and making the syrup to keeping the accounts and packing advertising materials for the other salespersons. The real challenge and excitement lay in selling and advertising; Dobbs felt himself tugged in that direction.

As the 1890s progressed, Dobbs gradually took over the sales manager job. Though Robinson kept the title, Dobbs eased him aside and assumed the duties of training the salespersons, arranging their trips, filling their orders, and packing their advertising supplies in the metal-bound trunks shipped ahead to the railroad stations along their routes. Asa Candler’s other nephews watched Dobbs’ rise with a mix of trepidation and grudging admiration. In part, it was a matter of personality. Robinson was known for his gentle, forgiving tone in dealing with underlings. If a secretary or a stenographer made a mistake, Robinson typically apologised and said it was his fault for not clarifying his instructions. Like a doting parent, Robinson worried about the health and welfare of his salespeople in the field and urged them to take care of themselves. Dobbs had a much harder edge. He was more demanding and got more out of the employees. Nonetheless, one of the salespersons described Dobbs as a natural leader, “an immensely attractive man—a dynamic personality and a brilliant speaker.”

Dobbs was also growing restless over the company’s marketing. Advertising was his passion, and as the years went by, he became envious of Robinson’s control over the creative end of their business. Like a gifted student surpassing his professor, Dobbs learned from Robinson and wanted to move faster, try newer ideas, and spend more money. At the turn of the century, Robinson was fifty-four years old and Dobbs thirty-one. A new era was opening – the organisation placed a $10,000 order for its first magazine ads in 1902, in Munsey’s monthly – and Dobbs longed to take charge. He bickered with Robinson about the size and scope of the organisations’ advertising. Their arguments grew increasingly hostile. Dobbs had been given a directorship of the organisation, and he began carrying his disputes with Robinson to the board, making Candler arbitrate. At first, Robinson won most of the skirmishes, but then the tide turned.

The marketing differences, however, were not the real issue. The clash between them over advertising came at the same time Candler was beginning to withdraw more from leading their organisation. Candler was creating a power vacuum, and it became apparent that Robinson and Dobbs were competing to take his place. Gaining authority over the advertising function was a sign of who was the successor.

However, Dobbs made the fatal mistake of letting everyone know how badly he wanted to make it to the top. Most of them were repelled. They found something unseemly about his willingness to climb over a man as gentle and loyal as Frank Robinson, and of course, they found something fearful in his eagerness to climb over them. His cousins saw Dobbs’ assault on Robinson as nothing but office politics and naked envy. Hence, it became a considerable surprise throughout the company when Asa Candler resolved the struggle in 1906 by making Dobbs the director of Coca-Cola’s advertising. However, Dobbs’ relatives missed that, whatever his shortcomings, he had a brilliant mind for the business and a track record to prove it.

Although Dobbs’ coup left him in charge of sales and advertising, he quickly turned his attention to the company’s other operations. Meanwhile, he teamed up with two key figures in the Coca-Cola Company: Bill D’Arcy, who was brilliant in advertising, and Harold Hirsch, who was a competent lawyer. As the first decade of the twentieth century unfolded, Dobbs continued to cement his role as Candler’s top lieutenant.

Dobbs’ rise to the top echelon of the Coca-Cola Company was remarkable, considering the lowliness of his starting position, and it was made even more dramatic when measured against the failure of Asa Candler’s children to keep pace. While Dobbs showed his facility for various executive tasks, Candler’s eldest son, Howard, was doing the opposite. Aside from his enthusiasm for the physical process of making Coca-Cola syrup, Howard proved to be inept at every other chore he was asked to perform.

Given Howard’s feebleness and the lack of aptitude Asa’s four younger children displayed for the business, it is no surprise that Dobbs came to believe he was destined to succeed his uncle and run the company. In private, Dobbs began referring to Coca-Cola as “our baby” and “my child,” he developed a protective attitude that eventually convinced him he was the only one who could shepherd the enterprise into the next generation. With sales and advertising already tucked in his portfolio and with more and more control over other operations dropping into his hands daily, Dobbs became a sort of de facto company president, lacking only the title (which Asa retained) to complete his authority. Still, his next stumble was Candler’s son.

Dobbs had no way of knowing about Candler's ambitions deep in his heart on behalf of his son Howard. Asa urged Howard to broaden his understanding of the business and prepare himself to take over. Still, those requests were passed along in the private conversations and correspondence of a father and his son, not in the open air of the office or family councils. As Dobbs saw it, he was the company’s top executive and believed he could also count on others to see it that way. For all Dobbs or anyone else knew, Asa shared the widespread view that his eldest son was, as one of the company’s salesmen tactfully put it, a “quiet, kind, and friendly man,” one who might be dedicated to Coca-Cola but lacked the talent to run the company. Despite sharing those apprehensions, Asa gradually persuaded himself that Howard should be his successor.

Nothing in the record explains in detail why Asa planned to spurn Dobbs in favour of Howard. No doubt, the thickness of the blood tie was the decisive factor. Howard wanted the job, and few fathers can inflict the crushing disappointment on a son that Howard would have suffered in losing the job to his cousin.

Dobbs was headed for a painful awakening. His lifelong goal of becoming company president was being snatched out of his hands. It was one thing to lose the prize because of an accident of birth, but an even greater cruelty was at work in Dobbs’ case. His finest successes on behalf of the company, his triumphs in advertising and marketing, his help in guiding the company through its sternest legal and political challenges, and his satisfaction at seeing Coca-Cola making more money than it ever had before—all of these things now seemed to be rubbing Asa Candler the wrong way. Dobbs had groomed himself perfectly for running Coca-Cola, only to find that Asa Candler no longer cared about the qualities that enabled a man to do well in business.

In January 1916. Candler announced that his son Howard was succeeding him as president. He also told to leave Dobbs as Howard’s chief deputy. Publicly, Dobbs played the good soldier and continued his duties on behalf of the company. But in a clear sign of his private discontent, he began spending as much time as he could away from Atlanta; within a few weeks after Howard’s accession, Dobbs notified his Coca-Cola colleagues that henceforth he would be taking his mail at the company’s New York office. And he began searching for a way to reverse his fortunes.

So long as Asa Candler owned the Coca-Cola Company, Dobbs had no recourse. When Howard became president, Asa held 391 of the 500 outstanding shares and thus maintained absolute, one-person control of a closely held family corporation. In the years since Candler chartered the company in 1892, only a handful of outsiders had ever owned stock (mostly jobbers, who distributed Coke in various territories and took a few shares instead of cash commissions). By 1916, Candler had bought all of them out. The remaining 109 company shares were owned in small lots by various members of Candler’s family and Frank Robinson’s. Dobbs held 23 shares, for instance, and Asa’s five children, including Howard, owned five shares apiece. Company lore said that Candler enjoyed dousing the occasional family disagreement by saying, “I vote my shares against that.”

Remember that Candler’s original plan was not for Howard to inherit the organisation but to set the organisation as public and assign Howard as the leading figure. This way, Howard would inherit a significant amount of money and receive a leading role as he desired. However, Candler’s plan to sell the Coca-Cola Company remained in a deep freeze due to its pending legal battles. If he lost, his organisation’s reputation would be damaged so severely that its business may collapse and lose everything. Therefore, it was safer for Candler to sell the organisation.

Candler asked for $25 million, but with legal battles pending, his plan failed. There was no way of disposing of the Coca-Cola Company to satisfy everyone in the family. So, on Christmas Day 1917, Candler divided his stock and gave it to his wife and five children, keeping only seven shares for himself. The new stakes were entered into the minutes at Coca-Cola’s annual stockholders’ meeting on February 14, 1918. Candler’s wife, Lizzie, had 64 shares. Howard, Asa Jr., Lucy, Walter, and William now owned 69 shares and controlled the company.

Dobbs got nothing. Aside from the 23 shares he already owned, he did not inherit anything from an organisation he worked so hard to grow. His children now owned the Coca-Cola Company, with Howard taking the lead. In 1919, Candler ultimately retired and spent more time caring for his wife, who was gravely ill with cancer.

While this seems like the end for Dobbs, it was the end of the beginning. Had Candler not been distracted by his grief and weariness, he might have noticed that Dobbs was now suggesting that Coca-Cola would have its books audited. Letting a tax expert ensure the organisation pays the government the proper amount is a good idea. The proposal sounded sensible, except that Dobbs’ intention was not entirely for that. Dobbs was trying to sell the Coca-Cola Company secretly, and he needed the audit to verify the financial status of the business. He also found a prospective buyer, Ernest Woodruff, who happened to be a man that Candler detested. Woodruff was the president of the Trust Company of Georgia. It was, therefore, a mutual interest for Woodruff and Dobbs to keep their plan secret and names out of the transaction.

It was not a trade Trust Company could swing on its own. At the time, the bank’s net worth was a modest $2 million, and it was clear that Woodruff would have to find backers on Wall Street. Relying on partners represented an unhappy complication for the freewheeling Woodruff. Still, he found a silver lining: The partners could be cloaked with the appearance of being the actual buyers, thereby concealing Woodruff’s role. The first order of business was to lock down the right to make the purchase, and to do that; Woodruff had to get Candler’s offspring to sign options on the ownership certificates they held in the old corporation. They would not sign in defiance of their father, and their father would not sell to Woodruff, so it was vital to suggest to the Candlers that someone else was acquiring the company. Woodruff had just the man in mind.

Eugene Stetson was a native of Hawkinsville, Georgia, who had pursued a banking career in the North, rising to become vice president of the powerful Guaranty Trust Company. Stetson helped Woodruff round up a syndicate of New York investors willing to underwrite a significant portion of the purchase, and he also agreed to handle the negotiations with the Candlers. There is no proof that Stetson openly misrepresented himself. Still, he did leave the Candlers with the plain impression that he was the head of the group of investors who wanted to buy the company and that his bank, Guaranty Trust, was the lead institution.

Dobbs did nothing to hide his role in the transaction. On the contrary, he enlisted Harold Hirsch as an ally (Hirsch was also a director of Trust Company), and together, they worked to persuade the members of the Candler family that the deal was good for them and in the best interest of the company's future.

In late July 1919, an Atlanta lawyer named Robert C. Alston made the rounds and obtained the signatures of Asa Candler’s five children on a single sheet of paper—a blank option for purchasing their stock. There is no easy explanation for the inattention the Candlers paid to the details of the transaction unless it was their comfort with the understanding that Stetson and his bank would receive the option. Howard Candler testified later that he was unsure what interests Alston represented. It may be that all of the Candlers were weary to the point of indifference after the difficult, fruitless negotiations that had been grinding on for the past several years. What is indisputable, however, is that Alston was not representing Stetson but acting on behalf of his friend and fellow Trust Company director, Ernest Woodruff, and delivered the option to him at the bank. When Asa Candler learned that his children had given Woodruff control of the company, Howard wrote later, “he was profoundly shocked and was particularly chagrined that this had been done without any of them having even consulted him, taken him into their confidence, or sought his advice in determining the details and terms of the proposal.”

The Atlanta newspapers reported that a syndicate – Trust Company bank and two New York banks, namely Guaranty Trust Company and Chase Securities Company – bought The Coca-Cola Company. Woodruff headed the syndicate. The new company almost immediately issued five hundred thousand shares of Coca-Cola common stock at $40 a share. Missing some of the fine print in all the hoopla was easy. In the prospectus Trust Company put out, there was a reassuring section that said, “The present management [of Coca-Cola], which is responsible for the remarkable growth and successful operation of the Company, will continue and will also be interested through the ownership of a substantial amount of the stock of the Company.”

However, remember that Coca-Cola was still fragile with its legal battles that could tarnish its reputation. Therefore, Howard’s cooperation was still essential. If he raised a ruckus and whispered a quiet word suggesting foul play, he would create panic among investors and disrupt the public offering of common shares of Coca-Cola. He could ruin everything. In late August and early September of 1919, after Ernest Woodruff and the directors of Trust Company exercised their option to buy the Candler family’s stock, a campaign was begun to win back Howard’s trust and convince him to join the new team and play along. Howard Candler was being brushed upstairs to chair the new Coca-Cola Company’s board of directors. The committee, however, would not have final authority over the company’s affairs. It would have very little control because the syndicate, in the interest of assuring “continuity,” had quietly vested all ownership rights in a Voting Trust. The three members of the Voting Trust would hold what amounted to a proxy for all 500,000 shares of Coca-Cola’s common stock, giving them complete power within the company. Two of the trustees were Ernest Woodruff and Gene Stetson. The third was Coca-Cola’s new president, Sam Dobbs. For the second time in his life, thirty-one years after carting its inventory across town in a dray, Dobbs was responsible for delivering the new Coca-Cola Company.

Howard had been blissfully unaware of the urgent scheming that led up to the sale of his father’s organisation. There was no question he was upset. He was the president of Coca-Cola Company, yet he had been told nothing about the transaction, nothing about the Voting Trust, nothing about the men behind the deal, and nothing, of course, about losing his job to his cousin Dobbs. “I had nothing to do with the syndicate,” he recalled later. “I didn’t know it existed until the thing was all closed up. I was told about it.” Although Howard seemed to have lost control, the plan did not work in Dobbs’ favour. The past would soon haunt Dobbs.

Woodruff had not planned to give Howard or Dobbs much authority in the new Coca-Cola Company. When the public stock was safely concluded, he set up a powerful executive committee with final control over corporate decision-making. It was the way Woodruff liked to operate. He had no desire to oversee the day-to-day operations, but he insisted on having the last word in matters that cost him money. Thus, he installed Bradley as committee president, who then took charge of the organisation’s legal and financial affairs.

Meanwhile, no one had the faintest idea that the Coca-Cola Company was on the brink of ruin. The problem was sugar. By 1919, the Coca-Cola Company was the world's largest consumer of granulated cane sugar, using nearly 100 million pounds a year. It got used to buying it cheaply for two decades, rarely paying more than four or five cents a pound. However, by the end of that year, the cost of sugar began to rise, slowly at first and then at alarming speed. It jumped to 16 cents a pound and kept going up. There was no telling how expensive it might become. The company was caught. The cost of manufacturing syrup more than doubled in a matter of weeks. Sugar purchases began eating up all of the company’s revenues. Yet public demand for Coca-Cola was at an all-time high and had to be met, no matter what. There could be no cutback in production.

As Woodruff saw it, one of Coca-Cola Company’s possible salvation was spreading the misfortune to its independent bottlers. Bottling now accounted for 40 per cent of the company’s syrup sales, and Woodruff believed the bottlers could afford to pick up the slack. He intended to make them do it.

Woodruff’s uncompromising approach, who refused to kneel bend to the bottling companies, did not go well. This eventually led to a long and fierce legal battle. It was like a civil war: the parents and their children fighting with their grandparents. Dobbs seemed especially surprised and agitated at discovering this new, harsh side to the man he’d considered his partner.

Dobbs included. Dobbs had been president of the Coca-Cola Company for all five months, and his relationship with Woodruff had already turned into an ugly battle of nerves, one he was afraid he was losing. Dobbs complained that Woodruff was guilty of “constant butting-in and interfering” with the company’s business and “seems too disposed to tell us all what we ought to do and is very much outraged when we don’t agree with him.” Dobbs was no particular fan of the parent bottlers, but he believed the clever business move was to reach an accommodation with them. Meanwhile, the bottling parents filed suit against the Coca-Cola Company.

Even by the typically belligerent language of lawsuits, the petition was notable for its bristling tone and accusations of betrayal. After years of honourable conduct, it said, the Coca-Cola Company had been taken over by some “promoters and high financiers” who manipulated the stock, duped the public and pocketed millions of dollars in quick, undeserved profits. Woodruff and his associates, the suit said, were men of “cupidity and avarice and greed.” The local newspapers picked up the story and reported the outbreak of hostilities as if the most prominent family in town were engaged in a dirty, no-holds-barred divorce, which, in a way, was precisely what was happening.

Rainwater believed the fight's outcome depended as much on public opinion as the law. He needed to maintain the allegiance of the hundreds of Coca-Cola bottlers across the country. If Dobbs and Woodruff could convince the bottlers it was in their best interest to eliminate the middleman and deal directly with the company, the parent bottlers would be in serious trouble. Rainwater calculated that to keep that from happening was to paint Dobbs and Woodruff as sly, dishonest men who would gouge the bottlers and the public with higher prices if they ever got the chance. Dobbs could see Rainwater’s strategy unfolding. The parent bottlers were “moving heaven and earth to prejudice the actual bottlers against us,” he wrote his friend and fellow director Bill D’Arcy a few days after the suit was filed. “Everything sent out … is along the line that the Coca-Cola Company [is] trying to confiscate the bottlers’ property.” Dobbs tried to calm the apprehensions triggered by the lawsuit and the lurid headlines, but he felt overwhelmed. When he gave an interview to the Atlanta Constitution claiming the Coca-Cola Company was under the same old management that had been running things for years, Rainwater answered by disclosing the existence of the Voting Trust. The public had been led to believe the Candler family still controlled Coca-Cola, Rainwater said, but all the power rested in the hands of Ernest Woodruff—the kind of man, he added archly, who “needs no introduction to this community.”

Dobbs was one of the first witnesses called, and before he knew it, he found himself answering embarrassing questions about how he had become president of the company. Under the lawyers’ prodding, Dobbs divulged all the details of the transaction that had taken place the previous fall—the clandestine meetings with Woodruff in New York, the blank option that Asa Candler’s children had signed, the Trust Company syndicate, the Voting Trust, even the existence of the $5 shares.

Harold Hirsch tried—and failed—to stem the damage. At one point during Dobbs’ testimony, Hirsch noticed that a lawyer for the parents, Ben Phillips, had picked up the company’s minutes book and taken it over to his table, where he and Sibley were leafing through its pages, reading about the activities of Coca-Cola’s executive committee in rapt fascination. When Phillips began to recite excerpts of the minutes into the record, Hirsch jumped, rushed across the room, and tried to grab the heavy leather volume from Phillips’s hands. Phillips held on desperately, and the two men began huffing and heaving in a tug of war. “It is not going in the record,” Hirsch said, “and I demand the book back. Give me my book back!” Phillips answered breathlessly but with perfect lawyerly formality, “I will have the commissioner report that Mr. Hirsch physically takes the book!” Eventually, the order was restored, and Hirsch recovered the book, but not before everyone in the room got the clear message that the Coca-Cola Company had secrets it wanted to hide.

There were further humiliations inflicted on Hirsch. One of the juiciest morsels that emerged during the hearings was the disclosure that the Candlers had been forced to honour their old contract with Bainbridge Colby and Edward Brown from the aborted sale of 1917 and had paid the New York lawyers $1 million in cash from the proceeds of their eventual sale to the Woodruff syndicate. The news had not come out before, creating quite a stir, especially since Colby was now the U.S. secretary of state. Mustering all his powers of insinuation, Sibley asked Hirsch to explain how his brother-in-law, Brown, had managed to profit so handsomely from this “manipulation.” Hirsch, who had done nothing improper in connection with the affair, was bound by his obligation of confidentiality to the Candler family. Even though his silence seemed highly incriminating, he refused to answer.

Day after day, the testimony continued as the participants explained the complicated twists and turns of the banking transactions Woodruff had carried out, where the money went, who got it and how much. The details could be numbing, but Veazey Rainwater made a very effective witness when he observed that Woodruff and his associates made a bigger profit on the Coca-Cola Company in one day than he and his bottlers had made in twenty years.

The hearings lasted two weeks, putting a fatal strain on the brittle relationship between Dobbs and Woodruff. Every detail of the company’s business appeared publicly in the worst possible light, and Woodruff was in a towering rage. “I had to tell him,” Dobbs reported to D’Arcy, “that the lawyers were trying the case and that I was not going to interfere and he shouldn’t, and if he felt the lawyers were not handling the case properly, to call a meeting of the board and I would submit the matter to them.” Dobbs was becoming increasingly contemptuous of Woodruff—the man was “as busy as a mangy dog with fleas,” he wrote D’Arcy—and he yielded to the dangerous temptation of allowing his contempt to show. He complained to W. C. Bradley that Woodruff was impossible to deal with. Bradley answered that he couldn’t understand why they were having such difficulties, except that his old friend Woodruff was an intensely demanding man. Bradley said that in all the years he had known him, Woodruff had never been satisfied with what he got. Dobbs agreed. Woodruff struck him, Dobbs said, as the sort who expected to get back $101 when he cashed a check for $100 and complained if he didn’t get it.

The two sides settled into an uneasy truce, and peace was restored to the Coca-Cola family—but only for a moment. Sam Dobbs still had a company to run and intended to keep marketing Coca-Cola to a thirsty American public. But Dobbs meant to keep the demand high year-round and proposed spending a generous $100,000 monthly on newspaper ads through the fall. Dobbs’ ambitions brought him into another unpleasant clash with Woodruff. The two men no longer pretended to try to get along.

Woodruff scuttled the advertising plan, and Dobbs threatened to convene a meeting of the entire board of directors to resolve the impasse and decide once and for all who was running the company. Before that could happen, however, another economic blow shook Coca-Cola. In early August of 1920, the world sugar market collapsed almost overnight. The price plummeted to about 10 cents a pound. The company was in a crisis, committed to spending $8 million on sugar that was suddenly worth only half that much.

The balance of power shifted decisively away from Sam Dobbs. All the company’s efforts would have to be bent toward saving money for the foreseeable future. Except for D’Arcy, no one on the board had any appetite for an expensive advertising campaign. Still, Dobbs persisted in forcing a showdown. Among other things, he badly misunderstood the practicalities of stock ownership. “Woodruff and Bradley are very fond of talking about how much stock they own,” he wrote D’Arcy. “They, however, seem to overlook the fact that Howard Candler and I represent $10,000,000 of Preferred Stock, which makes the combined holdings of the executive committee … look like thirty cents.” The preferred stock carried no voting power, a harsh fact of life Dobbs ought to have remembered since he helped engineer the deal in the first place. Further weakening his cause, Dobbs counted on support from board members he should have known would remain loyal to Woodruff.

By some woeful miscalculation, Dobbs convinced himself that he could muster a majority of Coca-Cola’s directors when, in fact, he stood almost alone. On October 4, 1920, Dobbs returned to Atlanta from a lengthy business trip visiting the company’s salespeople in the western states. As he stepped off the train, a messenger greeted him and asked him to go directly to the Candler Building to see Harold Hirsch. When Dobbs emerged from Hirsch’s office, he went to his desk and wrote his resignation as president of the Coca-Cola Company. His tenure had lasted just one year and two weeks.

In describing the chain of events to his confidant, D’Arcy, Dobbs was guarded in explaining why he quit, “other than to say to you that under present conditions as I found them upon my return here, I could not remain with the company and retain my self-respect.” The best guess is that Woodruff had gathered enough support from the board to whittle down Dobbs’ authority. During an executive committee meeting in late September, Woodruff and Bradley made a show of counting up the company’s advertising and publicity expenses, portraying Dobbs as a big spender, and it appears they planned to take away his control of the budget. They reached a checkmate to his plans for an aggressive advertising campaign. In any case, Dobbs made no secret of his feelings. He could retire comfortably. He told D’Arcy, “I am in a position where it will not be necessary for me to act either as Mr Bradley’s valet or Woodruff’s office boy.” In a stroke of wicked irony, the board asked Howard Candler to return as president of the Coca-Cola Company, thus making Dobbs’ worst nightmare a reality for the second time. Bradley stepped in to take Candler’s place as chairman of the board. And Woodruff ruled the roost.