Kilmer House

Kilmer House salutes Richard B. Sellars, retired Johnson & Johnson Chairman and Chief Executive Officer (he served from 1973-1976), who passed away this week at age 94. Though only chairman for three years, Mr. Sellars had a 40-year career with the Johnson & Johnson Family of Companies, and he had an impact that continues to be felt today.  Two of the things we owe to him are successfully steering Johnson & Johnson through the tough economic times of the early 1970s, and committing the Company to stay in New Brunswick, New Jersey, where it was founded in 1886.  

Richard B. Sellars during his tenure as Chairman and CEO of Johnson & Johnson

Richard Sellars joined Johnson & Johnson 71 years ago, at the tail end of the Great Depression in 1939, as a junior salesman for the newly formed Ortho Pharmaceutical Division and 40 years later, he was Chairman and Chief Executive Officer of the Company.  From 1941 to 1945, Sellars was president and general manager of the Canadian Ortho affiliate company, after which he helped establish the manufacturing and sales divisions for Ortho in England and Scandinavia.  In 1949 he joined Ethicon, Inc., which had just been formed out of the Company’s historic suture business that dated back to 1887; remarkably, he was chairman of the boards of both of those operating companies at the same time.  In 1950, he was elected to the Johnson & Johnson Board of Directors (General Johnson was Chairman), and he became a member of the Executive Committee in 1957.  In 1970 he was named president of Johnson & Johnson International, the organization that oversaw the Company’s international affiliates at that time.

Mr. Sellars was a member of management when General Robert Wood Johnson wrote Our Credo in 1943, and he was a strong believer in Johnson’s ideas about the social responsibilities of business as outlined in that document, especially as they related to the Company’s responsibilities to the community.   

Richard Sellars talks with then-National Urban League executive director Vernon E. Jordan, Jr. at the 1973 National Urban League Conference

When Philip Hofmann became Chairman in 1963 – succeeding General Robert Wood Johnson – Mr. Sellars was named President and Chairman of the Executive Committee.  When Philip Hofmann retired in 1973, Richard Sellars succeeded him as Chairman.

Mr. Sellars in 1962

In the decades following World War II, New Brunswick – the Company’s home since 1886 – had suffered a visible economic decline.  Discussions had begun among members of the Company’s management about relocating the Johnson & Johnson corporate headquarters outside of the city.  Mr. Sellars, citing the third paragraph of Our Credo, which talks about responsibility to the community, guided our board of directors to make the decision to remain in New Brunswick, build a brand new world headquarters building here, and help revitalize the city. 

Richard Sellars (left), Former New Jersey Governor Brendan Byrne (center) and former Johnson & Johnson Chairman and CEO James E. Burke (right) inspect a model of the Company’s proposed World Headquarters at a 1978 press conference announcing its construction. 

Here’s what Richard Sellars said about that decision, as quoted in Robert Wood Johnson: The Gentleman Rebel:

“‘I looked at the Credo’s commitment to the communities where we work and live…and I reminded myself of General Johnson’s deep sense of loyalty to New Brunswick, his birthplace.  Those two factors influenced the decision to remain in New Brunswick, but I also knew that we would have to work to revitalize the city to make it worth staying here.’”  [Robert Wood Johnson: The Gentleman Rebel, by Lawrence G. Foster, Lillian Press, 1999, p. 614]

Among his other activities after he retired, Mr. Sellars led the revitalization effort for ten years, putting together local business, university, hospital and civic leaders to form New Brunswick Tomorrow, the organization that led and continues to be a leader in the revitalization.  This partnership between all of the various public and private groups in New Brunswick initiated by Richard Sellars came to be held up as a national model for successful revitalization in other cities.  The centerpiece of the effort was a new world headquarters for Johnson & Johnson designed by the internationally renowned architectural firm of I. M. Pei. 

Mr. Sellars at the 1976 Johnson & Johnson Annual Meeting, greeting a shareholder

Because of Mr. Sellars’ foresight, Johnson & Johnson employees in New Brunswick can still literally walk in the footsteps of their colleagues from 1886, and Johnson & Johnson remains an integral part of the city in which it was founded by three brothers over a century ago.

It’s getting towards the end of April –  time for the Johnson & Johnson Annual Meeting of Shareholders.  Since we went public in 1944, you might be forgiven for thinking that our Annual Meetings started on a spring Thursday at the end of April 66 years ago — but they didn’t.  In fact, we’ve had Annual Meetings since 1888, they used to be in the winter, and the first one was held on a Saturday.  By special request, I’m reposting a post from last year: read on to find out how much you REALLY know about our Annual Meeting.  

The Earliest Meetings:  Meet Our Shareholders, All Three of Them
Johnson & Johnson has had annual meetings of shareholders (or stockholders as they were called then) since 1888 – almost since the beginning of the Company.  At that time, the group of shareholders – the three Johnson brothers – was so small that the annual meeting could have been held in a broom closet. 

Our Earliest Shareholders – All Three of Them:  Robert Wood Johnson (L), James Wood Johnson (Center), Edward Mead Johnson (R)

Although Johnson & Johnson was founded in 1886, it was incorporated the following year (in the fall of 1887) with capital stock valued at $100,000, with the three Johnson brothers as stockholders.  Robert held 40 percent of the shares, and his brothers James and Mead held 30 percent each.  The by-laws of the new corporation stated that the Annual Meeting of Stockholders (as it was called then) should be held on the 2nd day of January, and the Secretary of the Company was required to give five days notice in writing to each stockholder to let them know there would be a meeting.  

So…When’s the Meeting?
The Company’s secretary didn’t have to write that letter for a few months.  Our first-ever Annual Meeting of Stockholders was held on January 14, 1888 at 4:00 pm in the offices at Johnson & Johnson in New Brunswick.  Oddly enough, that day was a Saturday.  Stranger still, it was just a regular workday back in 1888.  (Work weeks generally stretched from Monday to Saturday, until the passage of legislation setting a 40-hour work week during the Great Depression.)  Presumably bad weather wasn’t much of a roadblock to attendance because two of the three Johnson brothers lived in New Brunswick and could walk to work.   But they may not have wanted to walk to the first Annual Meeting: the winter of 1888 was a notably cold and snowy one (the famous Blizzard of 1888 would occur later that year in March), and our first-ever Annual Meeting took place during a bone-chilling, unusually cold January.

Undated Early Photo Showing Horsedrawn Cart Stuck in the Snow at Johnson & Johnson

When the Johnson brothers were the only shareholders, scheduling was far less formal, and shareholder meetings were held when needed to elect a Board of Directors (all internal Johnson & Johnson people at that time) or when needed to discuss or consider making an acquisition or an agreement.  That was the case in March of 1892 when Johnson & Johnson held a Special Meeting of Stockholders (all three of them) to discuss whether or not to enter into an agreement with the Papoid Company.   (They voted yes.) 

Since the three Johnson brothers were all roughly in agreement about the Company’s goals, the early Johnson & Johnson Annual Meetings were far smoother than those of Robert Wood Johnson’s previous partnership, Seabury & Johnson.  The Seabury & Johnson meetings (with only two stockholders) had been noted for the acerbic written comments made by George Seabury and Robert Wood Johnson in the margins of the meeting minutes, and for the fact that the long-suffering Seabury & Johnson treasurer was often called in to perform the thankless task of break voting ties caused by the deadlocked partners.  

The earliest Johnson & Johnson Annual Meetings were always held at the Company’s offices in New Brunswick, starting the tradition of holding them in our founding city that we continue today.

Johnson & Johnson office, 1895, with founder Robert Wood Johnson in office window (at right) next to the clock.

At the February, 1907 Annual Meeting, the date of the meeting was officially changed to the first Tuesday in February, and the meeting was held on that date until 1943.  In 1944, Johnson & Johnson became a publicly traded company and the meeting date was officially changed to the first Tuesday of March at 11:00 am. 

How the Annual Meeting Ended Up in April
So how did our Annual Meeting end up in April?  It’s because of something that happened in 1946.  And that something was the Annual Report.  The March, 1946 Annual Meeting was adjourned until May 14th because the Annual Report covering 1945 (which had to come out before the meeting) wasn’t ready yet. 

Inside cover of 1945 Annual Report with notification of new date of the 1946 Annual Meeting.

Our archives don’t record the reason for the delay, but 1945 was a busy year for the Company, which was shifting from a wartime production footing back to a civilian one, further decentralizing, expanding its research and manufacturing capacity, and adding new products.  General Robert Wood Johnson summarized the eventful year that had passed in his letter to shareholders, and concluded by thanking employees:

“The men and women of Johnson & Johnson have again made an outstanding contribution to the development of the Company.  1945 was the third successive year in which production and sales have been maintained at their present record levels, and the increasing efficiency of production is a tribute to the ability and loyalty of our men and women under difficult circumstances.”  [1945 Annual Report, Robert Wood Johnson Letter to Stockholders]

From 1947 on, our Annual Meeting has been held in April…even though our modern and always on-time Annual Report comes out in March.   

Location, Location, Location
But one thing about the Annual Meeting has never changed, right? The meetings have always been held in New Brunswick.  Well…not exactly.  From 1888 to 1957, the meetings were small and were held in New Brunswick at the Company’s headquarters.  But with the 1957 opening of the Eastern Surgical Dressings Plant (or ESDP, as we used to call it) in North Brunswick, it was decided to hold the Annual Meeting there, both to show off the new state-of-the-art facility, and because it had more space. 

The Old Eastern Surgical Dressings Plant in North Brunswick, N.J.  Home of our Annual Meetings from 1957 to 1964.

The first Annual Meeting held at ESDP had about 30 attendees.  In his role as chairman of the Company, General Robert Wood Johnson conducted the meeting — a role that has been continued by every Chairman and CEO of Johnson & Johnson since we went public in 1944. 

General Robert Wood Johnson

It was at one of the ESDP Annual Meetings that an attending shareholder gathered up his courage and asked General Johnson why he had put shareholders last in Our Credo, the one-page statement of corporate responsibility that Johnson had written in 1943, and had printed in the Company’s 1948 Annual Report.  Johnson gave the famous reply that if all of the other responsibilities in Our Credo (to doctors, patients, customers, consumers, then employees, then to the community) were performed well, then the shareholders would be well-cared for.  (And as Johnson liked to remind people when they asked that question, at the time, he himself was the largest shareholder…which probably served to end the conversation.)  

Former Chairman Philip Hofmann at the 1972 Annual Meeting.

The meetings were held at ESDP until General Johnson retired and Philip B. Hofmann became chairman.  The 1964 meeting (the first chaired by Hofmann) was held at one of the Johnson & Johnson operating company buildings in Raritan. 

Our 1972 Annual Meeting

Hofmann’s meeting theme, which he continued until his retirement, was to take the audience on virtual a trip around the world and report on the progress of the worldwide affiliate companies.  This set the stage for our current meetings, which report on the state and the progress of the Company throughout the world.  The meetings remained at the Raritan location until they moved back to New Brunswick in 1983…where they continue today after starting here on a Saturday in the dead of winter 122 years ago. 

[Many thanks to our corporate secretary’s office for digging through their archives, and a huge thank you to retired corporate VP of Public Relations Lawrence G. Foster, for digging through his memories of past Annual Meetings.]

The Origins of our McNeil Business – the Mc Neil Family Pharmacy

Retail pharmacies have been important in Johnson & Johnson history for a number of reasons.  Before the days of supermarkets, they were the places that sold our products to consumers – from medicated plasters to Lister’s Dog Soap to JOHNSON’S® Baby Powder to BAND-AID® Brand Adhesive Bandages.  But retail pharmacies are also a big part of our history in another way:  if it hadn’t been for them, Johnson & Johnson – and some of its operating companies – might not be here at all.  Why is that?  Because their founders all got their start as clerks in retail pharmacies, which gave them a lifelong interest in health care.  Company founder Robert Wood Johnson the first and Revra DePuy are two examples.  A third example is the former McNeil Laboratories, which joined the Johnson & Johnson Family of Companies 50 years ago this year, and helped establish one of one of the Company’s three business segments.

In the 1950s, the Johnson & Johnson Family of Companies was primarily centered around consumer products and hospital products (those included sutures, dressings and dental products).  The Company also had what it called “commercial products” like non-woven fabrics that were sold to be used in industry, and other products such as tapes (duct tape among them!).   In the late 1950s, the Company’s senior management concluded that in order for the Johnson & Johnson Family of Companies to continue to grow and evolve with the evolution of health care, it should expand into pharmaceutical medicines…and they started looking for a company they could acquire.  Strangely enough, General Johnson, who was usually so farsighted, initially resisted.  His resistance was due to worry that the culture of Johnson & Johnson – the emphasis on Our Credo and on responsibility to others – could be diluted by acquiring and absorbing another organization.  So the Company’s senior management began to look around for a company that not only made pharmaceutical medicines, but that had a similar value system.

The Company already had a small presence in the pharmaceutical area with the Ortho Research Foundation, starting in the 1930s.  It had led to an affiliate company managed at the time by Philip Hofmann (who would go on to succeed General Johnson as chairman and CEO of Johnson & Johnson in 1963).  Hofmann and others pointed to the success of the Ortho Research Foundation’s past director, Dr. Philip Levine, who had discovered the human Rh blood factor – a huge breakthrough that would eventually lead to RhoGAM®, the product that, decades later, is still the treatment for hemolytic disease of the newborn.  Finally, General Johnson agreed to go along with an acquisition, provided it was a good fit with the culture and values of Johnson & Johnson.

In 1959, the Company’s management found what they were looking for and acquired McNeil Laboratories Inc., a successful business that had started seven years before Johnson & Johnson was founded.  In 1959 McNeil was still family run company, specializing in medicines for sedation and muscle-relaxants.  Its most famous product would go over the counter just a year later.

Interior, McNeil’s Pharmacy

The McNeil family business dates back to March 17, 1879, when Robert McNeil, a 23 year old recent graduate of the Philadelphia College of Pharmacy and Science, bought (what else?) a retail drugstore in the Kensington section of Philadelphia for the small fortune of $167.  McNeil’s drugstore came with furnishings, an inventory of medicines and a soda fountain, a popular addition to pharmacies since the 1850s.  (Interestingly enough, soda fountains were originally installed strictly for medicinal purposes, and their original carbonated tonic concoctions – before they morphed into harmless places to get a soft drink — would be considered quite alarming today.)

A bottle from the McNeil family pharmacy, with “McNeil” embossed on the side of the glass

The McNeil drugstore did well, and by the time McNeil’s son, Robert Lincoln McNeil, took over, it had added a small manufacturing laboratory and doctors’ supply business. In 1914 both McNeils – father and son – formed a partnership called the Firm of Robert McNeil.  For eleven years they ran it as both a retail store and a manufacturing operation, but the manufacturing side did so well that in 1925, the McNeils discontinued the retail part.  In 1933, they incorporated their business as McNeil Laboratories, Inc., and in 1955,   Robert Lincoln McNeil retired and his sons took over the business.  Just four years later, the brothers and their historic business would join the Johnson & Johnson Family of Companies.

Robert Lincoln McNeil (center) and his son Henry McNeil (left) talk to an architect during construction at Fort Washington, PA

With the 1959 acquisition, the two McNeil brothers joined the Johnson & Johnson Board of Directors:  Robert McNeil:

Robert McNeil

And Henry McNeil:

Henry McNeil

Here’s what the Johnson & Johnson Bulletin said in February, 1959:

“The acquisition of McNeil is recognized as an important step in Johnson & Johnson’s long-term program for the development and marketing of medicinal, surgical, and diagnostic products for the medical profession.  McNeil’s fine management team has built research, manufacturing, and marketing organizations which greatly strengthen and complement the Johnson & Johnson corporate family.”  [Johnson & Johnson Bulletin, February, 1959, p. 7]

Early Examples of McNeil Laboratories’ Most Famous Product

That same year, the Company also acquired Cilag Chemie, a small Swiss pharmaceutical company.  And just two years later in 1961, to further strengthen its presence in this new business area, Johnson & Johnson would acquire a small Belgian firm led by one of the most creative and prolific research scientists of the 20th century: Dr. Paul Janssen.

The precedent of only acquiring companies with value systems compatible with Our Credo still remains in place today.  It’s one of the traditions started by bringing in the McNeil family’s historic business 50 years ago this year.

Today we take new technologies like high-tech videoconferencing, instant messaging, Twitter and video chats for granted.  But that wasn’t always the case.  Ninety-three years ago (on May 29th, 1916, to be exact), Johnson & Johnson took part in a demonstration of the latest cutting-edge technology:  the opening of the first transcontinental telephone line opened between New Brunswick, New Jersey and San Francisco, California.  The demonstration was such a big deal that it was held at a special Transcontinental Dinner at one of the leading hotels in New Brunswick, New Jersey. 

The Hotel Klein, Courtesy of Ken Lew’s online postcard collection

The demonstration of the new American Telephone and Telegraph Co. transcontinental line was organized by the New Brunswick Board of Trade, with the cooperation of Johnson & Johnson.  Since it was one of New Brunswick’s leading industries, and it had sales offices in San Francisco, Johnson & Johnson was chosen to participate in the event, while leading citizens “listened in” to the conversations, as Scientific Director Fred Kilmer put it, using a term so new that it was in quotation marks.  [THE RED CROSS MESSENGER, Vol. IX, No. 1, September, 1916, p. 25]

James Wood Johnson was on the New Brunswick side of the call.

Among those representing the Company were President James Wood Johnson, and — in his first public appearance representing Johnson & Johnson — Robert Wood Johnson, who was 23 years old and had become a department head the previous year. 

Robert Wood Johnson was also on the call.

There were 200 attendees, including New Brunswick mayor (and Robert’s close friend) Edward F. Farrington, and Rutgers president William Demarest – who had attended the Rutgers Grammar School (Now Rutgers Prep) as a child, graduated from Rutgers College as a student, and was now its president.

The dining room in the Hotel Klein, courtesy of Ken Lew’s online postcard collection

The tables at the Hotel Klein were outfitted with individual telephone receivers for each of the guests.  Attendees listened to local dignitaries and sat through a talk on “preparedness” by a leading speaker of the day.  Shortly after 9:00 p.m. New Brunswick time, when the speeches were concluded, the attendees picked up their receivers and put them to their ears.  There was a roll call of wire chiefs from Pittsburgh to Chicago to Omaha to Denver to Salt Lake City and on until the connection finally reached San Francisco at 6:14 pm. 

A Candlestick Telephone  – the kind of phone that would have been used at the dinner

The new transcontinental connection was crystal clear.  Fred Kilmer was amazed that the participants didn’t have to shout into the telephones to be heard all the way across the country:

“Those who talked over the telephone did not raise their voices above the usual conversational pitch, and the replies came back from across the continent clear and instantaneous.  There was no more effort, delay or indistinctness than in talking across a table.”  [THE RED CROSS MESSENGER, Vol. IX, No. 1, September, 1916, p. 25]

For the next hour, greetings were exchanged between the two cities.  Robert Wood Johnson had been chosen as one of the greeters, and he spoke with the Company’s San Francisco sales agent H. D. Dietrich, of Waldron & Dietrich fame.  Unlike the New Brunswick gathering, which was made up only of men, Mrs. Waldron and Mrs. Dietrich attended on the San Francisco side.

H. D. Dietrich, of Waldron & Dietrich, was on the San Francisco side of the call

The attendees in New Brunswick marveled at the new technological achievement.  Here’s what Fred Kilmer said:

“When Mr. James W. Johnson, president of Johnson & Johnson, at the New Brunswick end of the line, talked with Mr. H. D. Dietrich, at the San Francisco end, the most blasé of business men at the tables felt something akin to uncanniness at the thought that his voice had gone across thirteen states, shot over prairies and through forests, hurtled through cities, climbed the Rockies, skimmed across the desert and reached the Pacific coast, and the answer had come back in an eye-wink.”  [THE RED CROSS MESSENGER, Vol. IX, No. 1, September, 1916, p. 25]

After the greetings were over, the attendees in San Francisco sent the sound of the Pacific Ocean eastward, from a transmitter placed on Seal Rocks.  New Brunswick, having no natural water resource that was loud enough to be heard easily over a transcontinental phone line, did the next best thing and responded by singing “On the Banks of the Old Raritan.”  (Rutgers alumni, of course, STILL know that song by heart…but did you know it originally had five verses, not two?) 

A Victrola 

San Francisco followed that by transmitting the sound of a Victrola playing “Little Grey Home in the West” and, after taking that in, the dinner guests in New Brunswick finished the evening by enthusiastically singing the following:

“Good Night, Frisco!
Farewell, Frisco!
So long, Frisco!
We’re going to leave you now.
We’ll annex you by and by,
Do not sigh!  Don’t you cry!
We’ll annex you by and by,
Although we leave you now.”

With that, the Transcontinental banquet attendees on both coasts, New Brunswick and San Francisco, signed off and hung up their telephones.  Interestingly enough, transcontinental dinners seemed to be a bit of a mini-trend in 1916, with MIT and the National Geographic Society hosting them as well.  The MIT dinner guests included Thomas Edison, Alexander Graham Bell (inventor of the telephone) and airplane inventor Orville Wright. (The MIT gathering was not necessarily the most academic or high-minded of the transcontinental dinners: they sang a song about drinking beer as their sign-off.)   Here’s a partial transcript of the National Geographic Society’s 1916 Transcontinental Dinner, in case anyone is curious as to exactly how these things went.

Johnson & Johnson Circa 1916 — Now Just a Transcontinental Telephone Call Away

So, why was this such a big deal for Johnson & Johnson?  Because the New Brunswick, New Jersey office was now within voice distance of the Company’s San Francisco office – the U.S. office that was the furthest away.  This meant that all of the branch offices of Johnson & Johnson were now in voice contact with the home office.  That gave Johnson & Johnson the ability respond more quickly to customer requests and questions, it put the sales offices and sales agents in closer and more immediate touch with New Brunswick, and made it possible for the Company to get its products where they were most needed far more rapidly.  Before the transcontinental line was completed, communication was either by letter (which was slow) or by telegraph – which had to be brief and not very detailed.  Just ten years earlier, after the devastating 1906 San Francisco earthquake and fire, Waldron & Deitrich, the Company’s west coast sales agents, had received special permission to telegraph an urgent appeal for medical supplies from San Francisco to Johnson & Johnson in New Brunswick; just a short ten years later, through the marvels of modern technology, Waldron & Dietrich and New Brunswick were now in speaking distance.

Since August is vacation time, this post was inspired by a Johnson & Johnson Family of Companies employee who sent me these photos from her vacation:

Look What’s In the Smithsonian!

The photos are from her trip to the Smithsonian’s National Air and Space Museum, which houses, among other things, The Spirit of St. Louis, the famous airplane that aviator Charles Lindbergh used to make the first successful nonstop flight across the Atlantic Ocean in 1927.  The flight was a big deal, because though a number of very experienced pilots had tried it, until Lindbergh (who was a talented aviator but had less experience than some of those who had failed) no one had been successful. The Spirit of St. Louis was a small lightweight single seat monoplane, so it didn’t have much room for a lot of extras on it – just food, water and absolutely essential supplies.  According to this site, in order to minimize the plane’s weight and increase fuel efficiency so that it would make it from New York to Paris, these are some of the surprising items that Lindbergh had to eliminate:  the radio, parachute, gas gauges, navigation lights and all unnecessary maps (who knew that maps could be heavy?).  But he took a lightweight Johnson & Johnson First Aid Kit with him.

Alert blog readers will notice from the photo above that Lindbergh’s Johnson & Johnson First Aid Kit is prominently displayed as part of the exhibit.  I understand that The Spirit of St. Louis display is one of the most popular in the museum.  So if anyone is headed to the National Air and Space Museum, be sure to look for the Company’s First Aid Kit that made that historic flight!  (And by the way, look at the flying gloves…they look like three-fingered mittens.)

Thanks to S. G. for the photos!

Click here to watch Chairman and Chief Executive Officer William C. Weldon Ring the NYSE Closing Bell

Johnson & Johnson Chairman and Chief Executive Officer William Weldon rang the closing bell at the New York Stock Exchange this week (on Monday, August 3rd) to commemorate a big upcoming anniversary: our becoming a publicly traded company.  On September 24th, it will be 65 years ago that Johnson & Johnson went from a privately held company to a publicly traded one, with a listing on a famous institution that was started in the 1700s by a bunch of men meeting under a tree in New York City:  the New York Stock Exchange.

Pages 4 and 5 of 1944 Johnson & Johnson Annual Report – our first ever Annual Report

The year of the Johnson & Johnson initial public offering of stock – 1944 — was toward the end of World War II, the year in which the tide of the war had continued to turn, leading to the Allied victory the following year.  It was an election year, with President Franklin Delano Roosevelt decisively winning re-election for an unprecedented fourth term against Thomas E. Dewey.   Kidney dialysis and sunscreen were invented that year, gasoline cost an average of 15 cents a gallon, and a loaf of bread was ten cents.  In the U.S., people were still growing victory gardens to help ease shortages in the public food supply due to the war effort, and popular films out that year starred Humphrey Bogart (To Have and To Have Not), Edward G. Robinson (Double Indemnity) and Judy Garland (Meet Me in St. Louis).

JOHNSON’S® Baby Lotion — Introduced in 1944

In 1944, Johnson & Johnson had 31 operating companies (compared with the more than 250 that we have today), with 17 of them outside of the U.S.  We had just launched JOHNSON’S® Baby Lotion, which came in a clear glass bottle.  Earle Dickson, the inventor of BAND-AID® Brand Adhesive Bandages, was on our board of directors as vice president in charge of the Hospital Division.  The Company was still involved in wartime production during World War II in 1944, and just two years earlier had invented a waterproof cloth tape that was requested by the military, as part of the products we produced for the war effort:  that tape, believe it or not, was duct tape.  (Yes, the duct tape, which I promise will be the subject of a future post.)

Wartime packaging — cardboard instead of the familiar tin

Oh, and by the way, our iconic BAND-AID® Brand Adhesive Bandage tins had temporarily given way to cardboard packaging to conserve metal for the war effort.  In the midst of all of this, Johnson & Johnson went public with an initial stock price of $37.50 per share.

General Robert Wood Johnson, in uniform

General Robert Wood Johnson, who had led Johnson & Johnson since 1932, had served for several months during the war in Washington, D.C. as head of the Smaller War Plants Corporation, and was back at Johnson & Johnson in 1944.  That year, he published But, General Johnson, a book about his experiences in Washington.  (The title referred to the most common phrase he had heard in response to his many ideas during his tenure as head of the SWPC.)  A year earlier, in 1943, Johnson had codified his philosophy about running a business into Our Credo, which still guides Johnson & Johnson today.

Signature of General Robert Wood Johnson

At a December 12, 1943, board of directors meeting, Johnson told the members of the board (back then our directors were all Company employees) that in 1944 Johnson & Johnson would become publicly traded.  But Johnson emphasized that the Company’s management philosophy – Our Credo — would stay exactly the same under public ownership:  our first responsibility would continue to be to patients, consumers and customers, then to employees, then the community and last, to shareholders.

So in 1944, as a publicly traded company, Johnson & Johnson had to issue – for the first time – an annual report.  Here’s the cover of our very first Annual Report.

Compared to today’s full-sized annual reports, the 1944 report was small, measuring just a little less than six by nine inches and, as befits a wartime publication, a little on the plain side.  The report contained a letter to shareholders from Robert Wood Johnson, a brief description of the Company and some of its major affiliate companies, financial information and a list of members of the Board of Directors and officers of the Company.  The publication started with a letter from chairman Robert Wood Johnson, that began “During 1944 securities of Johnson & Johnson were offered to the public for the first time since incorporation in 1887.  This is the first consolidated annual report published by the Company.”   [Johnson & Johnson Annual Report, 1944] The concisely worded letter mentioned new products introduced that year and highlighted the Company’s conservative financial management (which had allowed the Johnson & Johnson to weather economic depressions in 1893, 1907 and 1929).  Finally, Johnson closed with “I express for the Board of Directors and for myself sincere appreciation for the loyalty of the men and women of Johnson & Johnson.  Their performance was the significant factor in the development of the Company in 1944, as in all prior years.”  [Johnson & Johnson Annual Report, 1944]

Our 1944 Annual Report was succinct and spare, as befitting the year in which it was published.  By the following year, the 1945 Annual Report would expand its coverage of Johnson & Johnson, talking about the Company’s business philosophy, highlighting its products, and discussing the year more in depth, features that continue in our Annual Reports today, well over half a century later.

This July marks the third anniversary of the Kilmer House blog.  The first post went up on July 12, 2006 – the first-ever blog post on the first-ever blog for Johnson & Johnson.  And now, three years later, to celebrate that milestone, I thought I’d take you on a behind the scenes tour of some Johnson & Johnson history that’s hidden in plain sight…if you know where to look.  So in honor of three years of Kilmer House, here’s my first video post:

I also want to say a huge thank you to the Kilmer House community – all of you worldwide who read the blog, and everyone who has written in with comments, questions and shared their stories from their own and from Johnson & Johnson history.  I hope you keep reading!

2009 is a big year for anniversaries at Johnson & Johnson.  For instance, it was 70 years ago (in 1939) that Dr. Philip Levine, working in our laboratories, discovered the human Rh factor.  It’s been 60 years (1949) since we opened affiliate companies in Portugal, France and Colombia.  It was 50 years ago (1959) that we formed our operating company Ethicon, Inc. out of our historic suture business.  It was 50 years ago that we acquired McNeil Laboratories.  And it was 90 years ago this year – in 1919 – that Johnson & Johnson opened its first affiliate company, and its first plant outside of the U.S. – in Canada.
 
Let’s go back to 1919.  Dial telephones were introduced in the United States, the 18th Amendment to the Constitution (Prohibition) was adopted, and in Europe, the Treaty of Versailles, officially ending World War I, was signed.  The U.S. Congress passed legislation giving women the right to vote (however, it didn’t take effect until 1920, the following year). The Chicago Black Sox scandal of the 1919 World Series was making headlines, as was the Boston Molasses Disaster.  During the war, Johnson & Johnson had dramatically increased its production capacity to meet wartime demand for its products, and in 1919 demand was still high, though the Company was starting to shift back to its regular production schedules. 

Part of the Johnson & Johnson complex of buildings, late 1800s

Although 1919 was the year we incorporated an operating company in Canada, it wasn’t the start of our presence there:  the Company had already been represented in Canada for 30 years by sales agents in Montreal called Gilmour Brothers and Company, going all the way back to 1889 – just three years after the beginning of Johnson & Johnson.

W. B. Gilmour,  from our first affiliate company in Canada

The Company shipped product from New Brunswick, New Jersey to Gilmour Brothers and Company, who then distributed the product throughout Canada.  By the Nineteen-teens, the relationship was so long and close that a 1918 issue of THE RED CROSS MESSENGER, listed the Gilmour brothers’ company as the Johnson & Johnson “Canadian Office” on the “J&J Honor Roll” of Company employees who were in the armed forces during World War I.  J. L. Gilmour, who’s pictured below, was one of four members of the Gilmour family from our “Canadian Office” on the Johnson & Johnson Honor Roll for the war.    He served as a captain in the Canadian military.  [THE RED CROSS MESSENGER, Vol. X, No. 3, 1918, p. 304]

J. L. Gilmour, from our first affiliate company in Canada

So how did we get from sales agents to an operating company?  I’ll let General Robert Wood Johnson, who witnessed the transition, describe it: 

“Trade grew steadily in volume, and by 1909 Gilmour Brothers began to manufacture certain Johnson & Johnson products at their plant in eastern Montreal.  Ten years later a further step was taken.  It was decided to establish a Canadian plant, to be operated by our old friends and associates, the Gilmours, and organized as a separate company within the family of Johnson & Johnson.  In fact, the new organization purchased the Gilmour plant for use as its factory.  John Manley and I went to Montreal to help remodel the building and install additional machines.  This company was incorporated in 1919; it bleached its first surgical gauze in 1927.  From the first there was teamwork on both sides, with the Canadian staff making final decisions while our people from New Brunswick gave all the help they could.” [Robert Johnson Talks it Over, by Robert Wood Johnson, Johnson & Johnson, 1949, p. 121]

Our Canadian affiliate company, Johnson & Johnson Inc., in 1965

The fact that the Canadian management made final decisions foreshadowed the philosophy of decentralization that Robert Wood Johnson – and Johnson & Johnson – would adopt as the Company continued expanding globally.  Our first affiliate company in Canada 90 years ago this year proved to the Company’s management that decentralized affiliate companies outside of the United States would work, and it set the stage for the Company’s later global expansion.

April usually means warmer weather and spring flowers, but at Johnson & Johnson it means it’s time for the Company’s Annual Meeting of Shareholders.   Everyone knows these three things about the meeting:  it has always been held on the last Thursday of April, it’s always had a huge turnout and it’s always been held in New Brunswick…right?   Well, not exactly.   And here’s an unusual fact:  our first Annual Meeting was held on a Saturday.

So…how much do you REALLY know about our Annual Meeting?  Read on to find out.

The Earliest Meetings:  Meet Our Shareholders, All Three of Them
Johnson & Johnson has had annual meetings of shareholders (or stockholders as they were called then) since 1888 – almost since the beginning of the Company.  At that time, the group of shareholders  – the three Johnson brothers – was so small that the annual meeting could have been held in a broom closet.

Our Earliest Shareholders – All Three of Them:  Robert Wood Johnson, James Wood Johnson, Edward Mead Johnson

Although Johnson & Johnson was founded in 1886, it was incorporated the following year (in the fall of 1887) with capital stock valued at $100,000, with the three Johnson brothers as stockholders.  Robert held 40 percent of the shares, and his brothers James and Mead held 30 percent each.  The by-laws of the new corporation stated that the Annual Meeting of Stockholders (as it was called then) should be held on the 2nd day of January, and the Secretary of the Company was required to give five days notice in writing to each stockholder to let them know there would be a meeting.

So…When’s the Meeting?
The Company’s secretary didn’t have to write that letter for a few months.  Our first-ever Annual Meeting of Stockholders was held on January 14, 1888 at 4:00 pm in the offices at Johnson & Johnson in New Brunswick.  Oddly enough, that day was a Saturday.  Stranger still, it was just a regular workday back in 1888.  (Work weeks generally stretched from Monday to Saturday, until the passage of legislation setting a 40-hour work week during the Great Depression.)  Presumably bad weather wasn’t much of a roadblock to attendance because two of the three Johnson brothers lived in New Brunswick and could walk to work.   But they may not have wanted to walk to the first Annual Meeting: the winter of 1888 was a notably cold and snowy one (the famous Blizzard of 1888 would occur later that year in March), and our first-ever Annual Meeting took place during a bone-chilling, unusually cold January.

Undated Early Photo Showing Horsedrawn Cart Stuck in the Snow at Johnson & Johnson

When the Johnson brothers were the only shareholders, scheduling was far less formal, and shareholder meetings were held when needed to elect a Board of Directors (all internal Johnson & Johnson people at that time) or when needed to discuss or consider making an acquisition or an agreement.  That was the case in March of 1892 when Johnson & Johnson held a Special Meeting of Stockholders (all three of them) to discuss whether or not to enter into an agreement with the Papoid Company.   (They voted yes.)

Since the three Johnson brothers were all roughly in agreement about the Company’s goals, the early Johnson & Johnson Annual Meetings were far smoother than those of Robert Wood Johnson’s previous partnership, Seabury & Johnson.  The Seabury & Johnson meetings (with only two stockholders) had been noted for the acerbic written comments made by George Seabury and Robert Wood Johnson in the margins of the meeting minutes, and for the fact that the long-suffering Seabury & Johnson treasurer was often called in to break voting ties caused by the deadlocked partners.

The earliest Johnson & Johnson Annual Meetings were always held at the Company’s offices in New Brunswick, starting the tradition of holding them in our founding city that we continue today.

Johnson & Johnson office, 1895, with founder Robert Wood Johnson in office window next to the clock. Our earliest Annual Meetings were held at the Company’s offices.

At the February, 1907 Annual Meeting, the date of the meeting was officially changed to the first Tuesday in February, and the meeting was held on that date until 1943.  In 1944, Johnson & Johnson became a publicly traded company and the meeting date was officially changed to the first Tuesday of March at 11:00 am.

How the Annual Meeting Ended Up in April
So how did our Annual Meeting end up in April?  It’s because of something that happened in 1946.  And that something was the Annual Report.  The March, 1946 Annual Meeting was adjourned until May 14th because the Annual Report covering 1945 (which had to come out before the meeting) wasn’t ready yet.

Inside cover of 1945 Annual Report with notification of new date of the 1946 Annual Meeting.

Our archives don’t record the reason for the delay, but 1945 was a busy year for the Company, which was shifting from a wartime production footing back to a civilian one, further decentralizing, expanding its research and manufacturing capacity, and adding new products.  General Robert Wood Johnson summarized the eventful year that had passed in his letter to shareholders, and concluded by thanking employees:

“The men and women of Johnson & Johnson have again made an outstanding contribution to the development of the Company.  1945 was the third successive year in which production and sales have been maintained at their present record levels, and the increasing efficiency of production is a tribute to the ability and loyalty of our men and women under difficult circumstances.”  [1945 Annual Report, Robert Wood Johnson's Letter to Stockholders]

From 1947 on, our Annual Meeting has been held in April…even though our modern and always on-time Annual Report comes out in March.

Location, Location, Location
But one thing about the Annual Meeting has never changed, right? The meetings have always been held in New Brunswick.  Well…not exactly.  From 1888 to 1957, the meetings were small and were held in New Brunswick at the Company’s headquarters.  But with the 1957 opening of the Eastern Surgical Dressings Plant (or ESDP, as we used to call it) in North Brunswick, it was decided to hold the Annual Meeting there, both to show off the new state-of-the-art facility, and because it had more space.

The Old Eastern Surgical Dressings Plant in North Brunswick, N.J.  Home of our Annual Meetings from 1957 to 1964.

The first Annual Meeting held at ESDP had about 30 attendees.  In his role as chairman of the Company, General Robert Wood Johnson conducted the meeting — a role that has been continued by every Chairman and CEO of Johnson & Johnson since we went public in 1944.

General Robert Wood Johnson

It was at one of the ESDP Annual Meetings that an attending shareholder gathered up his courage and asked General Johnson why he had put shareholders last in Our Credo, the one-page statement of corporate responsibility that Johnson had written in 1943, and had printed in the Company’s 1948 Annual Report.  Johnson gave the famous reply that if all of the other responsibilities in Our Credo (to doctors, patients, customers, consumers, then employees, then to the community) were performed well, then the shareholders would be well-cared for.  (And as Johnson liked to remind people when they asked that question, at the time, he himself was the largest shareholder…which probably served to end the conversation.)

Former Chairman Philip Hofmann at the 1972 Annual Meeting.

The meetings were held at ESDP until General Johnson retired and Philip B. Hofmann became chairman.  The 1964 meeting (the first chaired by Hofmann) was held at one of the Johnson & Johnson operating company buildings in Raritan.

Our 1972 Annual Meeting

Hofmann’s meeting theme, which he continued until his retirement, was to take the audience on virtual a trip around the world and report on the progress of the worldwide affiliate companies.  This set the stage for the basic format of our current meetings, which report on the progress of the Company overall throughout the world.  The meetings remained at the Raritan location until they moved back to New Brunswick in 1983…where they continue today after starting here on a Saturday in the dead of winter 121 years ago.

[Many thanks to the folks in our corporate secretary’s office for digging through their archives, and a huge thank you to retired corporate VP of Public Relations Lawrence G. Foster, for sharing his memories of past annual meetings.]

Robert Wood Johnson (seated in center) and  Employees

In my last post, I mentioned that Robert Wood Johnson, son of one of the Company’s founders, was able to put many of his ideas about running a business into practice when he became president of Johnson & Johnson in 1932.  Having grown up around Johnson & Johnson, even accompanying his father to business meetings as a child, the younger Robert Wood Johnson had very definite ideas about business and social responsibility.  What made his opportunity to implement those ideas particularly challenging was the fact that it was during the depths of the Great Depression.   Johnson didn’t let that stop him and, when his ideas worked at Johnson & Johnson, he didn’t hesitate to speak out to the press, to other industrialists and to the new Roosevelt administration.

Johnson’s first concern was to make sure the Company was able to weather the financial crisis of the Depression, and my last post talks about some of the things he did.  Although Johnson supported President Herbert Hoover, who was running for re-election during the 1932 presidential campaign, he didn’t hesitate to criticize Hoover’s economic policies, saying:  “ ‘Business can take care of itself, but until the government adopts a sound economic policy there can be no sound business revival.’ ”  [Robert Wood Johnson: The Gentleman Rebel, by Lawrence G. Foster, p. 198]

Franklin Delano Roosevelt won the 1932 election in a landslide.  Before he took office, Johnson wrote him a long letter outlining a four-point proposal for economic recovery.   In that proposal Johnson stated that the nation had to learn to live within its means; that efforts should be made to increase the prices of commodities (which had plummeted); and that wages should be increased so that employees could purchase more, while hours should be decreased so that more people could be employed.  It was that last suggestion that focused the national spotlight on Robert Wood Johnson and Johnson & Johnson.

Robert Wood Johnson circa the New Deal Era

Johnson released copies of his letter to the press, to some elected officials, to corporate leaders and others.  The Associated Press ran a summary of his letter that generated newspaper headlines across the country.  Since the U.S. unemployment rate was then a staggering 25 percent, most of the articles focused on Johnson’s call for higher wages and shorter working hours.  The President’s office said that he would review the proposals, while business leaders across the country, many of whom were struggling to meet their payrolls, kept their heads down and stayed silent.

President Roosevelt’s first 100 days in office saw the start of the New Deal legislation to lift the country out of the Depression.  This included unemployment compensation for workers, federal insurance of bank deposits, regulation of the financial sector, food stamps, Social Security, mortgage refinancing, and federal standards for wages and hours, among other things.  In April of 1933, Robert Wood Johnson wrote another letter to Roosevelt, asking him to gather industry leaders and allow them to come up with a solution to the problems facing America’s businesses.  Johnson felt that the population’s severely reduced purchasing power was at the heart of the problem, and he thought that a 10 percent wage increase would help fix it.  Five weeks later, President Roosevelt announced a plan for bringing together agricultural and industry groups, and Robert Wood Johnson was appointed a member of the executive board of the newly created Drug Industry Institute of America.  One of the group’s first objectives was (not surprisingly) a wage increase, and Johnson announced that Johnson & Johnson would give a five percent increase to all employees.  The Company’s workers were overjoyed, but the same couldn’t be said for some of Johnson’s fellow industrialists – their reactions to his enlightened approach were far less positive.

A Gauze Mill Employee, circa 1920s

The New Deal’s National Industrial Recovery Act included codes setting wages and hours for the textile industry, putting Johnson & Johnson at odds with government standards and with other textile operators (the Johnson & Johnson standards were higher).  The Company had owned the Chicopee Manufacturing Company since the days of World War I, and Johnson & Johnson was the world’s largest producer of surgical dressings, which were of course made out of textiles: gauze and cotton.  But Johnson & Johnson had higher wages and shorter hours than the new government standard, and complying with it would make it necessary to dismiss workers (as it turned out, the Company did not end up needing to dismiss anyone).

Exterior of Chicopee Manufacturing Company in Chicopee Falls, Massachusetts

So Robert Wood Johnson went to Washington and met with Secretary of Labor Frances Perkins (the first female Cabinet member in U.S. history) and General Hugh Johnson, the head of the National Recovery Administration (or NRA, for short).  R. W. Johnson felt that the New Deal proposals on wages and hours didn’t go far enough.  He wrote:  “We should have a working day short enough to re-employ those who are unable to find work.  We should have minimum wages high enough for the people to buy what they produce.”  [Try Reality: A Discussion of Hours, Wages and The Industrial Future, by Robert Wood Johnson] Robert Wood Johnson even appealed to Congress and the U.S. Chamber of Commerce, but did not find any public support for his more progressive ideas.

Battle of the General Johnsons
The future General Robert Wood Johnson and the retired General Hugh Johnson would battle over this issue for several years, with Robert Wood Johnson consistently advocating for higher wages and shorter hours – a 35-hour week as opposed to a 40-hour week, and a much higher minimum wage than the government was proposing.* General Hugh Johnson left the National Recovery Administration in 1934 and the NRA itself was dissolved the following year.  When Johnson left the NRA, he gave an interview saying that he was opposed to shorter workweeks because he thought it would increase the costs of goods.  The interview irked Robert Wood Johnson, who wrote him a letter saying:  “ ‘Your administration of NRA is one of the tragedies of the age and perhaps, due to poor execution of the principles behind that great institution, we have lost the opportunity of a century.’ ”  [Robert Wood Johnson: The Gentleman Rebel, by Lawrence G. Foster, p. 211] General Hugh Johnson became a newspaper columnist, from which position he took potshots at his nemesis Robert Wood Johnson – calling him “ ‘…about the biggest pain in the neck that the NRA encountered under the cotton textile code’ ”  – because Johnson continued to advocate for shorter hours and higher wages.  [Robert Wood Johnson: The Gentleman Rebel, p. 227] Needless to say, Robert Wood Johnson’s progressive views were not shared by many people at the time.

Johnson’s frustration at the unpopularity of his ideas about corporate social responsibility and how to help the nation overcome the Depression led him to write a pamphlet called Try Reality in 1935.  This pamphlet contained the seeds of an idea that would become the cornerstone of Johnson & Johnson:  Our Credo.

* Interestingly enough, the standard modern work week is officially 40 hours as a legacy of New Deal legislation.  If Robert Wood Johnson’s ideas had won out, our standard work week might be 35 hours.