Eric Johnston (1895-1961) was a Spokane businessman, head of the U.S. Chamber of Commerce, President of the Motion Picture Association of America, and an appointed official in the Truman and Eisenhower administrations. This biography was prepared by his friend Judge Ralph A. Edgerton and published in The Pacific Northwesterner, Vol. 33, No. 4 (Fall 1989), pp. 55-62. It is here edited by David Wilma and reprinted with the permission of the publisher. (Editor's note: Eric Johnston was an important architect of the Hollywood blacklist under which admitted and alleged Communists were prohibited from working.)
Spokane Boy Makes Good
The saga of Eric Johnston is the story of a man driven by ambition. Shrewd, intense, and innovative, he was a successful entrepreneur. He became the director of many large corporations, was an eminently successful executive, and was seriously considered as a candidate for President of the United States.
Shortly after his birth on December 21, 1895, in Washington, D.C., the family moved to Marysville, Montana, where Eric's father, a pharmacist, worked in a drug store. Marysville was a mining town, and when the gold and silver played out, the family came to Spokane in 1905. The City Directory for 1906 shows Eric's father, Bertram A. Johnson, to be the proprietor of Johnson's Drug Store. His mother, who came to be known as Ida B., also worked in the store, gaining the practical experience that led to her becoming a highly successful business woman.
After Eric would come home from Grant grade school, it was his job to start a fire in the stove, and put the potatoes on for the family dinner. He sold newspapers on street corners, carried a paper route to help the family finances, and became a salesman for the Saturday Evening Post. Eric grew up in what he was to describe as "genteel penury." He was not embittered by his family's difficult circumstances. He recognized that with courage, industry and a little luck, all this could be changed.
In June 1911, Ida B. Johnson sued Bertram Johnson for divorce, citing incompatibility, and that for many years they had lived as man and wife in name only.
Although Bertram answered with allegations of his own, apparently the only real dispute was over the distribution of the property. The terms of the divorce decree granted Mrs. Johnson the family home, and 70 shares of capital stock in the Johnson Drug Company, which Mr. Johnson agreed to buy for $7,000 over a period of years. The father was required to pay $25 per month for Eric's support while he attended high school and $50 for the next four years if Eric elected to attend college.
Bertram Johnson was no longer listed in the City Directory after 1913, and about that time Eric and his mother changed their name to Johnston. It is unlikely that the terms for child support were carried out.
In high school Eric already gave evidence of speaking ability, excelling in debate. And there, too, he first knew and associated with Lewis Schwelienbach and Richard Munter, the former to become a United States Senator, Federal Court Judge and Secretary of Labor, the latter to be President of the Washington State Bar Association and distinguished leader of the American Bar.
During these years he continued to earn and add his mite to the family support. Among other things he reported high school news for The Spokesman-Review for the munificent sum of $3.50 a column.
Unable to achieve his ambition to enter Harvard Law School for monetary reasons, he matriculated at the University of Washington. There he attended for almost four years with his mother's help and what he himself could earn. For a time he worked as a stevedore on Seattle's docks, but discontinued that when he was hired by the school law library at $75 a month. For a commission he also organized railroad specials to transport fellow Spokane students to and from Seattle, and one summer he worked as a shoe clerk.
Becoming a Marine
His uncle, John Ballinger, a Seattle lawyer, had offered to keep a job open for him in his office if he would become a lawyer. That apparently had been his ambition, but ensuing events interrupted his formal education. In 1917, just before he would have been graduated from the University, the United States became embroiled in World War I and Eric applied for a commission in all services, Army, Navy and Marine Corps. The Navy Department had opened the Marine ranks to additional officer personnel, allotting six to the University of Washington.
Eric met the stiff requirements for such appointment, won a 2nd Lieutenancy, was sent to Mare Island, and then on to Quantico, an Atlantic Coast base. In 1918, he was made ROTC commander at his university. Promoted to captain, he was sent to Siberia in 1919 where an American detachment was fighting the Bolsheviks. Next he was stationed as an attache of the American legation in Peking, China.
There he learned a bit of the Chinese language, enough to get around, traveled in Northern China, Korea, and Japan, and speculated in Chinese currency. An initial investment of $100 in Chinese currency grew to $5,000. He had observed a pattern in the fluctuations in value between American and Chinese money and was able to exploit it successfully.
He found life pleasant and interesting in China. He had his own compound, a man servant to wait on him, and a rickshaw boy who hauled him to many Chinese dinners. So well served was he that he would later say "I did not want to put on my own clothes or pick up anything I might drop on the floor." Chinese boys performed every menial duty for him.
Returned to the Marine Base hospital in California, he several times visited Spokane on sick leave and when finally invalided out of the Marine Corps, came back home to live in a healthful climate where he would avoid hot, wet weather. It was during these visits home that his romance began with Ina Hughes, culminating in marriage in 1922.
They first met at a dinner party given by Ina's sister-inlaw in 1917. As Ina tells it, when asked to attend a party with him in 1920 and 1921, "I couldn't be less interested because ... he never even remembered [that we had met previously]. So I wasn't very anxious to know anything about Eric Johnston. [But] we went and had a simply gorgeous time. He called me the next day and that was the beginning of our romance."
It had been his intention to stay in, the Marine Corps with a view to working his way to the top. He believed he could have become commanding general had he been able to stay on. Mrs. Johnston reports two of "his best pals" in the Corps reached the top.
Becoming a Businessman
While Eric was at the University and in the military service, his mother was employed variously by physicians and others. Having a spare room in her small, neat home, she rented it to J. C. Power Brown. Later in 1919, she became a clerk in his small electrical appliance retail store. The shop was located at S. 106 Howard Street, just south of First Avenue. Shortly before her son's return to Spokane, Mrs. Johnston bought herself an electric vacuum cleaner. A neighbor so admired it she sold it to her and bought another. She quickly sold this one to another neighbor, so Brown, believing vacuums a "hot" sales item, bought more of them.
When Johnston came back to Spokane, he was advised to seek active outdoor work, so he peddled vacuum cleaners from door to door for the Power Brown Company.
His ambition soon asserted itself and on July 27, 1922, the first meeting of the newly incorporated Power Brown Co. was held. The company was capitalized at $25,000, 150 shares of preferred and 100 shares of common stock. Power Brown was elected president and subscribed all the preferred and 55 shares of the common stock. Eric, vice-president, bought 18, and his mother, secretary-treasurer, the balance of 27. Their respective salaries were voted to be $125, $100 and $60 and the Spokane Eastern Trust Co. was named the company bank. Brown's and Ida B's original investments in the business accounted for their holdings while Eric put in some cash from his accumulated profits made speculating in Chinese currency and some loans.
Objects of the corporation were to be "mercantile and general purposes" including wholesale and retail selling of electrical fixtures, machinery, apparatus and anything in the electrical line that might be used for household purposes. The heading of "general" were also included securities transactions and the buying and selling of real estate.
The energy and aggressiveness of the young vice-president were early evident and effective, for January 7, 1924, at a special meeting the company amended its articles by increasing its capital stock to $60,000, being 300 shares of common, 220 preferred and 100 second preferred. It was at this time that the company bought the Doerr-Mitchell Electric Co. The price was $40,000 and was paid with $20,000 cash and 200 shares of the preferred stock. Through R. L. Rutter, president of the Spokane and Eastern Bank, and perhaps Joel Ferris, Eric learned of the opportunity.
He went to his father-in-law and said: "I think we can buy Doerr-Mitchell if I can get enough money." Mr. Hughes then loaned him $10,000. With that, some money from Brown's dentist brother and a little from Ida B, they made the deal. The business so bought had an actual value of $60,000.
Doerr-Mitchell, the largest and oldest designer and manufacturer of electrical equipment, lamps and other fixtures, also had a line of glassware and ornamental ironworks. It was a prime contractor for designing and installing electrical apparatus in homes or businesses in the area.
Since this expansion was Eric's idea, he became general manager of the manufacturing and contracting parts of the business. Principal responsibility for the retail and wholesale business fell to Power Brown and Ida B. Then at a meeting on March 6, 1924, the directors voted to increase the number of directors to five and Charles Brown and Ina Johnston were elected to fill the new positions. They voted to change the name to Brown-Johnston Co. and to move the business to N 118 Lincoln Street where it remained until 1935 when expanding operations required more space.
With his added responsibilities, Johnston went after contracts and extended the business far beyond Spokane. Then disaster in the form of a destructive fire struck the business in the middle of the night. Not only were holiday stocks spoiled and sales prevented, but other business activity was curtailed for about six months. Also blocked was the filling of orders for the Davenport Hotel, Smith & Co. Mortuary, the new Elks' Temple at St. Maries, and the Ellensburg Library. Fortunately, the loss was covered by insurance. Business as usual was fully resumed early in 1926. It may have been the ill wind blowing some good because the fire destroyed obsolete materials.
Those were the years of quick transition to electrical appliances. Advertising was used to encourage that development, and growth of the business led to disagreement between the partners. Eric would say, "Brownie, we've got to have more help." Power Brown would answer, "I don't want to do it. I want to stay right where I am." Johnston offered to buy him out and Brown accepted. Eric now owned the majority interest.
The year 1928 was good for Brown-Johnston. L. R. Hamblen was elected to its board. A 10 percent dividend was possible on the common stock and it was decided to put the surplus in securities of Johnston's selection. A plating department, necessary for the making of lamps, had been added and did special jobs such as plating the Davenport Hotel silverware and Roman Catholic church communion vessels. Eric secured contracts for installing electrical fixtures in the new Paulsen Medical-Dental Building, Chronicle Building, the reception room, Whitehouse & Price, architects, and Victor Dessert's Pacific Hotel lobby.
A basement fire in 1928 resulted in $10,000 worth of damage, but Johnston could advertise in the Spokane Chronicle: "Insurance company paid the loss -- you get the benefits."
Becoming an Orator
The one appraisal of Eric Johnston that is common to everyone who knew or heard him was that he was an excellent speaker, as smooth, colorful and articulate as any in America. Again this skill was self-taught. Many a night he spent studying speech examples, preparing and practicing his own speeches. Mrs. Johnston would make sure his daughters remained quietly in another part of the house so that he could have the privacy necessary for such work.
He gained much practice and experience delivering commencement addresses at high schools throughout the Inland Empire and is remembered by many for them. He had a remarkable memory. He could write a speech and repeat it verbatim. Seldom if ever did he use notes. Eric Johnston, the ex-marine, was becoming an orator. He still retained his slim posture and athletic appearance he had when he was in the Marines. He was speaking weekly at the Chamber of Commerce and half a dozen times a week all over Spokane, any time he could get a chance,
By 1931 he had established a successful business concern and was well recognized in business and banking circles for his financial acumen and ability. When the Washington Brick and Lime and Sewer Pipe Co., with an outstanding indebtedness of $200,000, was threatened with action by the Spokane & Eastern Bank, company directors named Johnston trustee. Not only did he forestall suit by the bank which would have thrown the company into bankruptcy, but they made a $30,000 loan to cover immediate expenses. He did not manage the corporation's successor; that was left to Neal Fosseen, president of the company, but to use Fosseen's expression, he knew the right buttons to push.
The corporation was dissolved and a new one formed and in time was in the black. Eric bought some stock, more than $2,500 but less than $5,000. Later he realized $150,000 from his investment. His salary as trustee was $400 a month, Fosseen's, $100 a month. When the company was back on its feet, payment of the first dividend on its stock was deferred to protect Eric from a hurtful taxbite.
Chamber of Commerce
The year 1931 was a milestone for Eric Johnston, for that was the first year of his presidency of the Spokane Chamber of Commerce, succeeding Ben Kizer, a prominent lawyer. This placed him prominently in the public eye and also opened the gate to many good business connections.
After serving two terms, Johnston at 37 became a board member of the U.S. Chamber of Commerce for a number of years. His next advancement came from the favorable impression he made because of his speaking ability. The president of the national Chamber asked him to speak at the national convention in San Francisco. This was his first big speech and he prepared carefully for it. Filled with humor, it made a big hit and drew national attention to the young man from Spokane.
In 1941, at the age of 46, Eric Johnston was elected president by the Board of the Chamber of Commerce of the United States, the youngest to hold that office. He held the office for four consecutive terms. The position paid no salary, but did provide a very liberal expense account and an apartment in the Mayflower Hotel.
A breaker of precedents, he immediately announced a surprise. He would seek an audience with the bane of the ultra-conservatives, President Franklin D. Roosevelt. FDR was at outs with the Chamber. He did not like that organization or anyone connected with it. Johnston's associates laughed at his naivete, saying that the President would have nothing to do with him. Eric was not dissuaded. Since the White House was just across the way, he walked over to pay his respects. He shortly returned to say he had an appointment for a half hour interview.
The Chamber people disbelieved, saying the President wouldn't keep the engagement, but Roosevelt did see him and the half hour session turned into an hour and a half while a line of others waited to get in. The first quarter hour FDR talked, enlarging on the iniquities of the Chamber and the businesses it represented. Eric finally interrupted to tell a story and say he too had something to say. Roosevelt listened, invited him back to lunch and said: "My God, Eric, how did they ever elect you president of the Chamber?"
During the Wilkie campaign for president , Johnston had been in a large group of people calling on Roosevelt. Eric was wearing a Wilkie button in his lapel and as he walked by FDR he said "How-do-you-do" and "Yes, Mr. President, I believe in supporting the submerged minority." Roosevelt roared and said "Young man, you are betting on the wrong horse this time. You had better get on the bandwagon."
In 1943, Johnston as chairman of the United States Commission on InterAmerican Development, was sent to South America officially to confer with like commissions in Brazil, Uraguay, Argentina, Chile, Peru, and Colombia. He was Roosevelt's emissary, commissioned to assure the countries visited that the United States would in essence extend a sort of Monroe Doctrine to them.
Eric had another surprise for the ultra-conservative members of his organization. Shortly after he assumed the presidency he called upon Philip Murray, president of the Congress of Industrial Organizations, and William Green, president of the American Federation of Labor. These unions and the Chamber had not been on the most cordial terms either. Surprisingly enough, even to them, the meetings were friendly and developed into relations of mutual respect.
Johnston approached them with his theory that contending parties could enjoy peaceful relations if they would simply get together and begin their discussions or negotiations with a definition and recognition of the areas on which they could agree. Having established a common ground, the possibility of cooperative effort to reach an answer to whatever the problem might be would be greatly enhanced. He reported that as a result "both Murray and Green conceded that the preservation of the American system of free management and free labor was our common task, and that most differences could be ironed out around the council table.
The time came when Brown-Johnston had to be restructured to a corporate division separating the retail from the wholesale business. Brown-Johnston continued as the retail unit. Johnston organized a new company in 1940, Columbia Electric and Manufacturing Co. to make electrical products and to serve as a wholesale outlet. It was almost totally owned by Brown-Johnston, but this fact was not generally publicized. The Brown-Johnston Company, worth $20,000 in round figures in 1922, grew to $60,000 in 1927, $90,000 in 1935, $200,000 in 1941 and $1,000,000 in 1945.
People have said that Johnston's leadership of the national Chamber was like a breath of fresh spring air. When he heard this comment he is said to have grinned and remarked, "I hope it turns out to be something more significant than hot air." He breathed new life into that organization which some at the time had typified as moribund. He became good copy for the magazines. From then on until his death he was constantly being reported, quoted, described, and interviewed in their pages. U.S. News and World Report, Life, Time, Newsweek, and Business Week, to name some, carried stories about him very often and he became a frequent contributor to Reader's Digest.
In 1943 alone there were 9,399 editorials about Eric Johnston in newspapers throughout the country. It was during his incumbency as president of the Chamber that he wrote two books, America Unlimited and We're All In It. These are now out of print, but they still make good reading for their constructive views on world politics, peace, American foreign policy, economics, and prophesies in some of these same areas.
Eric Johnston, Diplomat
In 1944, he went to Russia, invited by Stalin and as the emissary of President Roosevelt. Not wanting to be beholden to the Russians and wishing to be free to say and write his thoughts and observations upon his return, he paid his own expenses to the extent possible and told the Russians he would feel free to be frank in his opinions when back in the United States.
In Russia he visited many plants and everywhere he went he asked questions about how products were designed, their costs, prices, number of units produced, number of workers, and their future plans. Among these were airplane factories, steel mills, and a brick plant. The last he was able to evaluate by his Washington, Brick & Lime experience and to conclude that it could produce three times as many bricks per workman as did the Russian plant.
The high point in that first visit to Moscow was his interview with Joseph Stalin. His appointment was for 9:00 p.m. That was the hour when high ranking Russians began their business day. Johnston had been told to be on time and he was. He was to be accorded 30 minutes. It stretched to three hours. What had been meant to be a perfunctory, courtesy meeting was transformed into an interesting, instructive, conversational exchange ending after midnight with photographs being taken.
Averell Harriman, the American ambassador, had been unable to meet Stalin. He had his first audience with the Russian leaders when, at Eric's request, he was allowed to accompany him. That this meeting turned into a lengthy and engaging session was due to Eric's adroitness, his ability to capture the interest of his listener by story, anecdote, or wit. It was not an easy thing to do but he got Stalin's attention. To Stalin he was outspoken in making the case for capitalism. "I like your manganese," he said. "It doesn't know it's socialist. You like our machine tools. They don't know they're capitalistic." Ambassador Harriman was at the meeting but Eric and Stalin did the talking.
When he returned from Russia, Johnston had traveled 35,000 miles in the Soviet Republics and had been the first American to see and inspect the gigantic Siberian industries beyond the Ural Mountains.
Going to Hollywood
As his final term as president of the Chamber of Commerce drew to a close Johnston had to give thought to what he would do next in addition to running his own business empire and directing various other corporations. Offers made him were plentiful. A half-dozen or more large corporations invited him to be president at salaries ranging from $80,000 to $150,000 a year. While considering these and other propositions, Will H. Hays, known as the czar of the motion picture industry and a former Postmaster General of the United States, called upon Eric, told him he was ready to retire and asked him, "Would you consider taking over my job." Eric not only would but did. And so he was able to continue being the goodwill ambassador of the United States and its super-salesman.
He sang his swan song as president of the national Chamber of Commerce in 1946. During his tenure he had been its eloquent spokesman, giving expression to views tolerant, practical, and even liberal in its behalf. For businessmen he had annunciated a new social consciousness.
He accepted and embraced the responsibilities of president of the Motion Picture Association of America because it afforded the best means of communicating American ideas and ideals to the rest of the world. It could span the language barrier. He did not want to be another Will Hays and so left censorship to Hollywood, making decisions in that field only when put to him as the last resort. His big achievement for the industry was to open the foreign market for American films.
In the new office he again traveled a great deal. In 1947, on one of his return trips to Spokane, he could report that he had just completed traveling through 11 European countries. In his marketing negotiations he dealt with heads of state and high ranking governmental figures and so was given ambassadorial status. He kept well informed about top political figures of the countries with which he was involved.
Dealing with foreign exchange was a problem in the beginning. He could sell American pictures, but with the balance of trade against purchasing nations, payment in U.S. dollars was hard to get. A former associate who admired his ability to conciliate and settle matters between the movie moguls said:
"I had the privilege to sit in and listen sometimes when he (Johnston) would bring these people together to try to explain what was going on. It wasn't easy to satisfy them. They lacked compassion and I felt he took a lot of guff. I remember Jack Warner saying, 'I don't give a damn what the problem is, get that $18,000,000 out of there. I need it.' Well, how do you get the $18,000,000 out of Italy when they don't have it? One round-about method I recall he used that worked out was to use Italian lira to build two ships. The ships were then sold to Sweden for Swedish krona which were used to buy Irish whiskey. The Irish whiskey was shipped to Argentina for American dollars. Argentina had an excess of dollars from the sale of beef here. And that's the way he got $18,000,000 out of Italy. That is the kind of thing he was working with and he was excellent at it. That routine probably took a year and a half to negotiate. His success was due to his ability to communicate, a real command of the English language, and his power to persuade without pushing."
When he was in Belgrade, he was taken to Marshal Tito's home where he and Tito talked for two hours. Tito drank five glasses of Yugoslavia wine while Eric consumed five brandies. The wine was strong, he said, and so was the brandy but "the doses were smaller." He sold Tito 25 pictures.
Johnston was sensitive to the nuances of his job. When Indonesian President Sukarno posed a selling problem, he devised a scheme he thought would work. Knowing Sukarno to be a ladies' man, he was brought to Hollywood rather than Washington. There he could see some actresses, and soak up the atmosphere. This it was thought might soften him up for the sell. A dinner and reception were arranged and some movie stars invited. Among them was Marilyn Monroe. She was carefully briefed and instructed to appear at the affair in décolleté attire, to run up to Sukarno, throw her arms around him and say, "I'm so pleased to meet the President of Indonesia." The party was set for eight o'clock and Marilyn was told to be there at seven, as she was notorious for being late. As it was she arrived at 8:30. On arrival she did as she had been told. She rushed up to Sukarno in the receiving line, and embraced him. And then she said "I always wanted to meet the president of India." Sukarno said "Not India, Indonesia." And Marilyn came back, "I never heard of it!" Sukarno froze.
Eric had a memorable visit with [Soviet Premier] Khrushchev in 1958 in Russia and later acted as his host both in Washington and California. In his negotiations with the Russians he had finally sold a large order. Part of the bargain was that while they might make some cuts in the American movies they bought, they were not to make any additions. By 1959 he was able to report that American movies were being shown in 87 foreign countries, everywhere in the world, except China, North Korea, and Bulgaria. For all this he received an annual salary of $100,000.
While he was serving the motion picture industry, two presidents enlisted his services on special assignments. In 1951, at President Truman's insistence he took a partial leave of absence from his motion picture office to become Economic Stabilization Administrator replacing Alan Valentine. At the time he said to a Congressional committee that he realized in accepting the job he would find "a lot of dead cats thrown on the doorstep." Promptly on taking over he froze prices and wages.
Shortly after, before an overflow luncheon crowd at the Spokane Chamber of Commerce, he announced that he hated controls but with wages and prices leapfrogging, they were necessary. To nip inflation he listed three essentials: A more strict control of credits, more saving by the people and a balanced national budget. He had agreed to stay only nine months but continued two months longer until Truman could find a successor. Shortly after, Truman picked him to succeed Nelson Rockefeller as chairman of the International Development Advisory Board to supervise planning operations under the Point Four Program.
From the time he was elected president of the Chamber of Commerce of the United States, Johnston was a perennial presidential hopeful. Passed over in 1952 when Dwight Eisenhower won the nod over Senator Taft, Johnston supported Eisenhower. The next year the new president sent him to the Middle East with a plan designed to promote peace and thwart Russian aims to take advantage of the Arab-Israeli conflict.
Johnston left the United States in October on his mission. At first he was suspect by both Israelis and Arabs as he shuttled back and forth between Israel, Syria, Lebanon, Jordan, and Egypt. The American envoy offered a plan for a broad program of development of the Jordan Valley and asked the interested states to submit their proposals. The following summer they presented detailed engineering plans, the Arab states acting in unison. After a four-week sojourn among the participants Johnston was able to report to the President and State Department cooperative attitudes and mutual desires by the interested states in working out a practical way to develop the economy of the region.
The negotiations had resulted in agreement on these general points:
- The waters of the Jordan River water system would be shared fairly by the countries in which they rose and flowed;
- The authority supervising withdrawals of water would be neutral and impartial;
- Storage of water in Lake Tiberias (the Sea of Galilee) would be considered open-mindedly;
- The condition of the Arab refugees would be improved. The broad outlines of a whole plan were within early reach.
However these points were general, not specific, and formed only the basis for further discussion toward ultimate agreement. Participants specified that the United States Government "continue to exercise its good offices in reconciling those outstanding differences." Eric was able to report, "We reached the ten yard line!"
At the outset he had predicted his chances of succeeding in breaking the deadlock between the ancient enemies, Jews and Arabs, promoting peace and solving the Palestinian question by getting them to cooperate on use of the Jordan River waters was in the ratio of ten to one, and his estimate was right. When an agreement was virtually reached, and only the concurrence of Syria was needed for its consummation, the Syrian government fell. Eric and Mrs. Johnston were in Egypt when that announcement was made. He knew immediately all his efforts had been for nought. What had appeared would be a great diplomatic coup proved to be illusion and bitter disappointment.
Eric Johnston continued his active pace until his death in Washington, D.C. when he was 66. A brain tumor cut him down while still in his prime. His life proved the power of persistent purpose and the great accomplishments possible from the exercise of individual effort and energy.