The Heiress Becomes The Tycoon

Hello! This is Deep Pockets #26.

I have a confession to make. I wrote the previous two Deep Pockets stories just so I could tell today’s story, which is about Marjorie Merriweather Post 😄 

In the first story, you learned about the Battle Creek Sanitarium, the feuding Kellogg brothers, the invention of cereal, and the birth of the Kellogg breakfast empire… which made ONE of the Kellogg brothers a huge fortune.

In the second story, you learned about C.W. Post, a former Battle Creek patient and kitchen assistant who, after his life was saved by Dr. John Kellogg, repaid that debt by founding a rival breakfast empire. C.W. knocked off their best Kellogg products and proceeded to earn an EVEN BIGGER breakfast cereal fortune.

C.W. committed suicide in 1914 after succumbing to depression brought on by lifelong debilitating stomach problems. He left his fortune and 100% ownership of his cereal empire to his 27-year-old daughter, Marjorie Merriweather Post.

If you were 27 and inherited one of the largest fortunes and businesses in the world, no one would blame you for spending the rest of your life on a beach. That’s not what Marjorie did…

DEEP DIVE: The Heiress Becomes The Tycoon

Marjorie Merriweather Post was born in Springfield, Illinois, in March 1887. She would be the only child of C.W. and his first wife, Ella.

Marjorie was two years old when her father went bankrupt after a failed real estate development project in Texas. The shame and stress of this business failure, combined with severe stomach problems and the mounting pressure to provide for a young family, caused C.W. to have a major nervous breakdown. This is what led Ella to Battle Creek, Michigan, where she literally rolled her husband’s skeletal body off the train on a stretcher so he could be treated by the world-famous Dr. John Kellogg at the Battle Creek Sanitarium.

In 1891, when Marjorie was eight, C.W. “invented” the product that would make him his first fortune: a caffeine-free drink he called Postum. I put “invented” in quotes because, as you may recall from our previous story, Postum was suspiciously similar to a drink called Kellogg’s Caramel Coffee Cereal that was served at the Battle Creek Sanitarium. C.W. would go on to knock off several more Kellogg breakfast inventions, notably Granola (Grape-Nuts) and Cornflakes (Post Toasties).

By 1900, the Postum Co. was earning over $1 million per year in revenue. That’s the same as around $40 million per year today.

From the very moment he created Postum, C.W. involved the young Marjorie in the business. She helped paste labels onto the very first Postum bottles. She visited the factory to learn how the machines worked. She learned the names of every Postum employee. She attended board meetings. She learned how to run a P&L and balance a budget.

This would be highly unusual today, let alone in the early 1900s! Keep in mind women wouldn’t get the right to vote in America until 1920 and here was a pre-teen girl traveling the world attending business conferences and high-level meetings side-by-side with her dad.

Business lessons were not the only gift C.W. gave to his daughter. She also received shares in his company. By the time she turned 16 in 1903, Marjorie’s Postum Co. stock was worth $3 million. That’s the same as being worth $110 million in today’s dollars.

As the Postum Co. was booming, C.W. and his wife Ella grew apart. In her place, C.W. hired a young woman named Leila to be his secretary and Marjorie’s companion when he was absent. Little did Marjorie know that this was all a ruse. C.W. and Leila were having an affair.

C.W. and Ella divorced in 1904. One month later, he married Leila. On their wedding day, he was 50, she was 27.

Marjorie retreated from the shock and embarrassment to a boarding school in Washington D.C. called the Mount Vernon Seminary and College (which is today part of George Washington University).

Wedding bells were ringing for Marjorie as well.

On December 5, 1905, 18-year-old Marjorie married a young lawyer from Greenwich, Connecticut, named Edward Close. As a wedding gift, C.W. gave his daughter yet another large chunk of Postum stock AND an enormous mansion in Greenwich, which was known locally as “The Boulders.” Today, it’s an elementary school.

Marjorie and Ed’s marriage was… meh. They didn’t fight or hate each other, but they also didn’t have much in common. They welcomed a daughter named Adelaide in 1908. A second daughter, Eleanor, in 1909.

As you may recall from our previous story, in March 1914, Marjorie’s father went to the Mayo Clinic in Minnesota for an emergency appendectomy. This was a huge deal because his Christian Science religion strictly forbade surgeries of any kind. According to his deeply held beliefs, he should have been able to cure himself through prayer, positive thinking, and a healthy diet. But the situation was desperate, and he finally relented.

A few weeks after he returned to Santa Barbara, the stomach pain was still there.

Despondent, on May 9, 1914, C.W. Post committed suicide. He was 59.

Upon his death, C.W. left 100% of his fortune and 100% of the stock in his Postom Company to his 27-year-old daughter, Marjorie. She instantly became one of the richest women in the world.

Her inheritance was valued at $22 million in 1914. That’s the same as around $700 million in today’s dollars. But as we explained in our previous story, a simple inflation conversion doesn’t really do it justice. When compared to its relevant share of GDP, a $22 million fortune in 1914 would be like inheriting tens of billions of dollars today.

Imagine inheriting tens of billions of dollars when you’re 27. At a time when you’re not legally allowed to vote, let alone run an empire.

Unfortunately, even though she owned 100% of Postum, the world was still not quite ready for a woman to be the official head of a major company. Marjorie’s husband, Ed, served as her proxy to the company’s Board of Directors.

Over time, and with a little help from World War 1, Marjorie would become much more independent.

The United States entered World War 1 in April 1917. Ed Close was drafted a few months later. He was shipped off to Europe where he saw action in France and was even given a battlefield promotion to Major.

Speaking of sending ships to Europe, looking to contribute, Marjorie paid for an Army hospital boat to be fully stocked with medical supplies. That ship left a harbor in New York on July 30, 1917. Unfortunately, minutes later, the ship collided with another boat and sank. The crew was fine, but all the supplies were lost.

No worries! Marjorie funded another ship’s worth of medical supplies and had it loaded onto a larger Army boat just eight days later. Those supplies were used to build the “Base Hosptial #8” in Savenay, France, the largest wartime Red Cross facility in Europe. Decades later, in 1957, France recognized Marjorie’s generosity by bestowing her with its highest civilian honor, the French Legion of Honor.

These philanthropic efforts during WW1 were the seeds of two important changes for Marjorie that would impact the rest of her life.

First, she grew the confidence to be an independent person who was in charge of her own actions and life. She was forced to leave the suburbs and spend more time in New York City, directly managing both her philanthropic efforts and her business empire.

Second, she saw the power and responsibility a wealthy woman could wield through philanthropy. Around this time, she was quoted as saying:

“I’m not the richest woman in the world. There are others better off than I am. The only difference is I do more with mine. I put mine to work.”

When Ed returned from the war, they were on totally different pages. He wanted to come back to a quiet life in Greenwich with a housewife who joined him for weekend dinners at the Greenwich Country Club. Marjorie had tasted the apple. A quiet life in Greenwich was the exact opposite of what she had in mind for herself.

Marjorie and Ed divorced in 1919.

Fun fact as we say goodbye to Ed Close in this story: Ed married again and had two more children. One of his children, Dr. William Taliaferro Close, became famous in 1976 for his efforts to stop the first epidemic of Ebola in Central Africa. William had four children. His second-born child is a daughter named Glenn. Today, you know her as 8-time Oscar-nominated actress Glenn Close.

Edward Francis Hutton

Marjorie also remarried.

In July 1920, Marjorie married a recently widowed financier named Edward Francis Hutton. Marjorie nicknamed him “Ned” so as to differentiate from her previous “Ed” husband. They welcomed a daughter named Nedenia in 1923. She went by “Dina” and would later become a world-famous actress known as Dina Merrill.

Edward Hutton was not born into wealth. After his father died when he was 10, he was raised by a single mom alongside an older sister named Grace and a younger brother named Franklyn.

Edward’s first job was at the age of 15 at a gas station. When he was 17 he got a job working as a mail boy at a stock brokerage firm. He got a promotion when he was 19, but that firm soon went under. In the meantime, he studied finance and economics on his own.

The Hutton family’s fortunes changed forever when baby bro Franklyn married Edna Woolworth. Edna was one of three daughters born to Frank W. Woolworth, the dime store tycoon. Remember in our last email how we said that when C.W. died in 1914 with a fortune of $22 million, that was the same as being worth tens of billions today? When Frank Woolworth died in 1919, he was worth $77 million. Needless to say, the Woolworth fortune was ENORMOUS. Frank’s three daughters inherited that fortune in equal parts.

Using startup capital from his brother, in 1904, Edward founded his own stock brokerage firm in San Francisco. He named the firm E.F. Hutton.

EF Hutton was the first West Coast brokerage firm to have a wire between the New York Stock Exchange and his office in San Francisco. Today the company is perhaps best remembered for a series of commercials in the 1970s/1980s, which featured the tagline “When E.F. Hutton Talks, People Listen.”

EF Hutton eventually grew to be the second-largest stock brokerage firm in the US. In 1988, it was merged into Shearson Leahman/American Express. It was merged and sold and revived, then shuttered then revived a dozen more times in the decades since.

Where her first “Edward” husband was looking for a quiet housewife, Marjorie’s second “Edward” husband was excited by her ambition and drive. But the world was still not yet ready to have a woman leading a major business empire. So, soon after their marriage, E.F. became the President of the Postum Cereal Company.

In 1922, E.F. took Postum public on the New York Stock Exchange. That year, the company generated $18 million in revenue.

Acquisitions and Expansion

C.W. Post always saw Postum’s products as health food. He marketed his products as preventing ailments.

Marjorie, on the other hand, saw Postum’s products as a method of improving people’s lives—primarily the lives of moms and children.

As Marjorie would later prove, the market of moms looking to make a quick meal or fun dessert treat is SIGNIFICANTLY larger than the market of people looking to “treat” appendicitis by eating Grape-Nuts.

Marjorie started looking for acquisition targets that fit her outlook. And what better first acquisition than a cheap, easy-to-make, boxed dessert called… Jell-O.

Postum acquired Jell-O in 1925. Thanks largely to Jell-O, Postum’s 1924 revenues doubled to $47 million. Over the next few years, Postum acquired Baker’s Chocolate, Swans Down Cake Flour, Minute Tapioca, Hellmann’s mayonnaise, and Log Cabin Maple Syrup, among others.

Considering her father’s hatred of coffee, you can understand Marjorie’s discomfort in 1928 when Edward pushed for Postum to acquire the Maxwell House and Sanka coffee brands.

Revenue in 1928 was $101 million.

The (Frozen) Goose Lays A Golden Egg

In 1929, Postum made its most significant and world-altering acquisition. An acquisition that would turn the company into a global behemoth and revolutionize meal preparation forever. And the whole thing was 100% Marjorie’s idea.

One day in 1926, Marjorie and Edward were sailing their yacht off the coast of Massachusetts when their chef served them an exquisite meal of goose. She was stunned to learn that the goose had been frozen six months earlier.

Freezing foods was not a new concept—however, traditional freezing methods involved freezing a product slowly. When something is frozen slowly, ice crystals form within the cells, and when it’s thawed, cellular fluid leaks out, making the food mushy and gross.

Marjorie was told the goose was frozen AND PACKAGED using a new method called “flash freezing.” She had to know more. She learned flash freezing was pioneered by a company called Birdseye, which was founded by an inventor named Clarence Birdseye.

During a previous job doing research for the USDA, Clarence learned from Inuit people in Canada that a freshly caught fish could be instantly frozen when exposed to extremely, extremely, extremely cold air. When thawed, the fish tasted exactly as it had when it was fresh. Voila. Flash freezing.

In 1922, Clarence founded his company to perfect a commercial method of flash-freezing filets of fish. The company went bankrupt in 1924 after running out of money. But he didn’t give up. That same year, he developed a process for flash-freezing food that had already been packaged. He rebranded as the General Seafood Corporation. And this is how a can of frozen goose found its way onto Marjorie’s yacht in 1926.

Marjorie instantly grasped that flash-frozen foods were the way of the future. The same way cereal revolutionized breakfast, flash-frozen foods would revolutionize breakfast, lunch, and dinner.

Unfortunately, neither Edward nor the Postum board of directors saw Marjorie’s vision. Perhaps understandably, they were skeptical because, at the time, households didn’t have freezers. Neither did grocery stores. Neither did the trucks that would transport the frozen goods to and fro. Pleading to her husband and the board:

“I’m speaking for the housewife here. Frozen foods will reduce her work considerably. It’s an opportunity we can’t afford to miss.”

Finally, after three years of politeness, Marjorie was sick of asking. As the company’s majority owner, she did not actually need the board’s or her husband’s permission. So, in 1929, she ordered Postum to acquire General Seafood for $20 million. That was twice what it would have cost in 1927 and the modern equivalent of $370 million.

This would prove to be a stroke of genius.

Now that she was overseeing a public conglomerate with dozens of products, most of which had nothing to do with breakfast, Marjorie realized her company needed a new name. After the acquisition of General Seafood was complete, the Postum Cereal Co. was rebranded as…

General Foods

To solve the freezer problem, engineers at General Foods developed a low and wide cabinet with a glass door that could be installed in grocery stores. Stores that adopted these freezer cabinets and General Foods’ new line of frozen foods saw an immediate and major payback. And that’s how the frozen section of the grocery store was born.

The Richest Woman in the World

In the mid-1940s, General Foods was earning more than $200 million per year in revenue.

By the mid-1950s, annual revenue topped $600 million.

In 1965, General Food’s market cap reached $2 billion. Marjorie’s 7% stake was worth $140 million.

General Foods officially made Marjorie the richest woman in America from the 1930s through her death in September 1973 at the age of 86.

At death, Marjorie’s net worth was $200 million. That’s the same as $1.5 billion today. And that was AFTER she had donated huge amounts to charity (which we’ll talk about in a minute).

Philip Morris acquired General Foods in November 1985 for $5.6 billion. After acquiring Kraft Foods in 1988, Phillip Morris merged the brands into Kraft General Foods. Kraft Foods merged with Heinz in 2015. Today, the publicly traded Kraft has a market cap of just under $40 billion.

The Post cereal division was spun off in 2011 and taken public again in 2012 as Post Holdings, Inc. Post Holdings’ current market cap is a bit over $6 billion.

Philanthropy

Marjorie’s philanthropic accomplishments are arguably just as impressive as her business accomplishments.

For five years during the depths of the Great Depression, Marjorie funded a kitchen in New York City that provided free meals for thousands of women and children every day. And this was not just a modest soup kitchen. Patrons were served multi-course meals on tables decorated with white tablecloths topped with flowers. The meals were served by waiters in formal wear. She did this not only to provide nourishment to those in desperate need but, perhaps more importantly, dignity and a bit of happiness at a time when both were in very short supply.

At her direction, her company actually LOWERED the prices of its goods during the Great Depression to further assist those in need.

She donated the land that became the headquarters for the Boy Scouts of America.

She donated her former Long Island estate to Long Island University. For years, it was called Long Island University C.W. Post College; today, it’s called LIU Post.

In the 1950s, she donated to the National Cultural Center in Washington D.C. to create what became the John F. Kennedy Center for the Performing Arts. She also donated to the National Symphony. In 1955, while attending a board meeting, the Symphony’s director remarked how he wished there was a way to give free annual concerts to high school students who visited D.C. over Spring Break. Marjorie rose from her chair, said, “Excuse Me,” and left the room. She phoned her banker in another room, returned to the meeting, and said:

“I’d like to take care of that.”

Her donation continues to fund the annual concerts for students at the National Symphony.

In recognition of these donations, in 1967, the Merriweather Post Pavillion in Columbia, Maryland, was named in her honor.

She donated much of her jewelry collection to the Smithsonian. The collection includes:

• The 21-carat Maximilian Emerald in a Cartier ring

• Marie Antoinette’s diamond earrings

• Marie Antoinette’s pearl earrings

• The Blue Heart diamond

• The Post Emerald necklace

• A diamond necklace Napolean gave to his first wife

• A diamond and gold necklace/tiara set Napolean gave to his second wife

Her Washington D.C. estate, Hillwood, became a museum to house her collection of Russian and French art, as well as her Faberge egg collection.

And then there’s her real estate. I don’t have time to describe all of her properties, so I’m just going to tell you about two:

NY’s First Penthouse

Marjorie and Edward Hutton divorced in 1935. During their marriage, they bought and built a number of notable private homes.

In Manhattan, Marjorie and Edward owned a 54-room mansion on a stretch of Fifth Avenue that was nicknamed “Millionaire’s Row.” Over time, every mansion on Millionaire’s Row was torn down and replaced with large apartment buildings. Every mansion except one.

Developers pressured Marjorie to sell her home, but she didn’t need the money, so she wasn’t tempted. Then something changed. With the advent of the motor vehicle, Marjorie was disgusted and annoyed by exhaust and constant noise. In 1925, she finally relented and agreed to sell her property to a developer on one condition:

The developer had to build her a replica of her former home on the top floors of the new apartment building. That’s not an exaggeration. When the apartment building at 1107 Fifth Avenue was complete, the top three floors were a nearly exact replica of Marjorie’s former house. It was Manhattan’s first penthouse!

Just like her former house, Marjorie’s penthouse had 54 rooms (17 bathrooms), two kitchens and 12 fireplaces, a grand foyer, a ballroom, and a dining room that could accommodate 125 guests. The wrap-around outdoor terrace spanned around 5,000 square feet. She employed a full-time staff of 70 at the penthouse, which was accessed by a private elevator.

The terms of the deal allowed her to lease the penthouse for $75,000 a year for 15 years. When the lease expired in 1941, Marjorie moved out. The penthouse was empty for the next decade then it was converted into six units. Today, a single unit is worth at least $20-30 million. For example, in 2014, one of the six units was sold to a hedge fund manager for $31 million.

Winter Florida Mansion

In the winter, Marjorie and Edward traveled to Palm Beach, where, in 1921, they built a large mansion. But apparently, not large enough.

In 1924, Marjorie and Edward acquired a 17-acre property between Lake Worth and the Atlantic Ocean that was mostly jungle. After clearing the jungle growth, they began construction on what became a 62,000-square-foot, 126-room Spanish-style mansion. Construction cost $7 million in 1920s dollars, that’s the same as over $100 million in today’s money.

An estate like this needed a name.

Reflecting on the fact that from the mansion, you could see Lake Worth to the west and the Atlantic Ocean to the east, Marjorie landed on the phrase “sea to lake.”

Or, in Spanish…

“Mar-a-Lago.”

Upon her death in 1973, Marjorie donated the property to the National Park Service, hoping it would be used as the Winter White House. The Federal government soon realized the cost of maintaining such a property was too much to handle and decided to decline the gift. The Post Foundation attempted to sell the property in 1981 for $20 million. Post's daughters did not maintain the property at all, and it quickly fell into disrepair.

Around this time, a 39-year-old real estate developer from New York made an offer. Donald Trump had attempted to buy a series of properties nearby without success. Having learned of Mar-a-Lago through friends, he offered the Post Foundation $15 million, but they declined.

Trump proceeded to purchase all the land between Mar-a-Lago and the ocean for $2 million from Jack Massey, the former owner of KFC. He then announced his intention to build a large mansion on the parcel. Had he gone through with this plan, Mar-a-Lago's ocean views would have been totally obstructed. All remaining interest in the sale evaporated.

Donald Trump bought Mar-a-Lago from the Post Foundation for $7 million in 1985. He proceeded to renovate the estate at a cost of many millions of dollars. He added a 20,000-square-foot ballroom, a waterfront pool, and five clay tennis courts. And when he became President in 2016, it did finally become the Winter White House.

Conclusion

We’re at 4,000 words, which is the longest Deep Pockets story yet, so I’m gonna wrap this up. Marjorie married and divorced twice more after Edward Hutton. Through her third husband, she briefly lived in Russia while he served as the US Ambassador to the Soviet Union.

Edward married once more. In 1936, at the age of 60, he married a 28-year-old woman named Dorothy Metzger, who was his daughter Adelaide’s friend. Edward and Dorothy met when Adelaide invited Dorothy AND HER HUSBAND to spend a weekend at the family’s Long Island estate, Hillwood. Dorothy divorced the husband and she and Edward ended up staying together until he died in 1962 at the age of 86. Her daughter, from the first marriage, actually inherited a large portion of Edward’s fortune.

FINAL WORD

On the next edition of “Deep Pockets,” we’re going to talk about another iconic American food invention. A beverage that was originally concocted to cure pain addiction that went to build an empire off a VERY illegal narcotic.

Thanks for reading! Deep Pockets is brand new, and I appreciate you being part of it. I want it to be the best newsletter you’ve ever read.

So, hit Reply and let me know if there’s anything you like, hate, or otherwise just want to say. Thanks!

Bonus: EF Hutton & Truth Social

Here’s a weird bonus fact:

The EF Hutton brand basically disappeared after it was acquired in 1988.

In 2021, two bankers acquired the rights to the name. These bankers specialized in taking companies public through a process called “Special Purpose Acquisition,” AKA “SPAC.” SPAC deals were especially popular in 2021 and 2022.

By mid-2022. EF Hutton was Wall Street’s top SPAC dealmaker. Then, the SPAC boom turned to a bust.

In October 2024, the Wall Street Journal estimated that, on average, shares of the SPAC deals orchestrated by EF Hutton are down 70% from their listing price.

However, there is one EF Hutton-orchestrated SPAC deal that so far has turned out to be surprisingly successful. EF Hutton’s most famous and most successful SPAC deal was…

Donald Trump’s social media platform Truth Social.

Unfortunately, all is not well at EF Hutton. In May 2024, federal agents investigated one of the company’s two owners for fraud. The other owner ousted and sued his former partner. In the lawsuit, it was alleged that the ousted partner drained millions of dollars from EF Hutton through reimbursements of private jet flights for family vacations, IV drips to recover from hangovers, and New York Knicks playoff tickets. In a countersuit, the ousted partner claimed that on the night of a big party to celebrate the successful Truth Social SPAC, his former partner “accidentally” paid a prostitute $500 using EF Hutton money.