Paymaster Corp., est. 1917

 

Museum Artifact: Paymaster Series X-550 Check Writer Machine, 1960s

Made By: The Paymaster Corp., 1811 W. Winnemac Ave., Chicago, IL [Ravenswood]

For thousands of men and women working in HR departments in the mid 20th century, a “Paymaster” was what you called a check machine, even if it wasn’t a Paymaster brand check machine. There were other check writers and check protectors on the market, to be sure, but Chicago’s Paymaster Corporation managed to cross that threshold into generic office parlance, becoming synonymous with the product they manufactured.

 

It's maybe a bit surprising then that the company was actually organized in 1917 not as the Paymaster Corp, but as the "Checkometer Sales Co.," with the Checkometer machine as its central product for the firm's first two decades. The original device was the invention of a Chicagoan named George M. Willis, but it was an experienced salesman from St. Louis, Theodore B. Hirschberg, who turned the idea into an enterprise. Over the half-century that followed, Hirschberg and his son, Theodore Jr., would lead Paymaster to some great heights, while also showing a willingness to go pretty dang low when they felt it was warranted.

 

[The promotional image above is for a Paymaster Ribbon Writer, a descendent of the early ink-based check writers like the X-550 from our collection]

 

Checks and Balances

 

The business that would become the Paymaster Corp. had been opportunistically born in Chicago during an era when check fraud was emerging as a national scourge, and new defense technology was in desperate demand. Modern bandits known as "penmen," "scratchers," or "check raisers" had figured out that America's rapid move away from old-fashioned cash transactions had created a whole new method of weapons-free criminality. By fudging the numbers on a check with some skillful penmanship, a scratcher could rob a business of thousands of dollars in broad daylight, literally smiling all the way to the bank. Better still, if he got caught, the docile nature of the robbery often led to appealingly light sentences. 

 

"If I should use a gun to steal money and get caught," a Paymaster salesman would later say, "I'd get up to to 20 years for using a weapon. If I should get caught stealing money with a pen, I'd get one to three years, with a good possibility of being out in eight months. After all, it's the safest and easiest way to steal money."

 

[1921 patent image from George Willis's design for a forge-proof check, produced by his Checkometer device] 

 

Scare-tactic sales pitches worked quite effectively on nervous business owners, and it soon began to feel like an absolute necessity to arm one's office with an advanced "check protector" device—a machine designed to punch, print, and watermark paychecks in a way that no forger, in theory, could duplicate. Early versions of these machines existed back in the late 1800s, but by the coming of World War I, a few big names—including the Todd Protectograph Company of Rochester and Chicago's rising Hedman MFG Co.—were leading the industry.

 

Entering this field behind George Willis's efficient new designs, the Checkometer Sales Company / Paymaster Corp not only had to establish itself as a viable office equipment business and machine manufacturer, but as a sort of national security operation, as well. Trust was of the utmost importance.

 

In order to build that trust with his customers, however, Theodore Hirschberg had to start by breaking the trust of his previous employer. 

 

Traitor Ted

 

Theodore B. Hirschberg Sr. (1884-1963) was born in Missouri, the son of a Jewish optician who'd immigrated from Germany to St. Louis in the 1860s—Anheuser-Busch style. In his 20s, young Ted became a regional salesman for the leading checkwriter manufacturer of the day, the aforementioned Todd Protectograph Co. of Rochester, NY; then known as G.W. Todd & Co.

 

For several years, Hirschberg learned the nuances of the trade from seasoned vets, absorbing the inner-workings of all the new fangled check protectors the firm was producing. He also used Todd's customer list to build a network of connections in St. Louis and beyond. As tends to happen in the sales business, however, Hirschberg gradually became disenchanted with life as a regional underling. He was an under-appreciated star player in Todd's expanding success, and wanted his own piece of the pie. With the Todd Company's headquarters way out in New York, they were a bit disconnected from the Midwestern market anyway. And so, at age 32, Ted Hirschberg decided it was his time to shine.

 

Despite the existence of a clearcut non-compete clause in his contract, Hirschberg broke off on his own and launched the Checkometer Sales Company in 1917, directly poaching former Todd clients and possibly even using some of the company's mechanical specs to fine-tune a new machine with George Willis. 

 

G.W. Todd & Co. countered by taking Hirschberg to the Supreme Court of Monroe County, New York, in the summer of 1917, accusing their former cadet of the fairly severe offense of "revealing trade secrets to a competitor."

  

"The defendant entered into a written contract with the plaintiff," the Todd lawyers stated, "in which he stipulated that he would not reveal any confidential information obtained during his employment and would not enter the employment of a competitor within one year after the termination of the contract. The contract was broken by the defendant and he now claims that the contract is void.


"At the very outset the defendant is confronted with his contract and with his violation thereof. If the contract is a reasonable one under all the circumstances it should be enforced. The defendant came into possession of the list of plaintiff's customers in the territory where he was assigned, and of a scrapbook containing confidential information. He was made acquainted with some new improvements in the devices which were being manufactured by the plaintiff, and generally became familiar with the plaintiff's sales system organization and trade methods. These features formed an important part of the successful operation of plaintiff's business and it was reasonable that it should seek to preserve this information for its own use."

 

 

In the short term, Todd succeeded in getting an injunction against Hirschberg and the Checkometer, but it didn't dissuade the turncoat for long. In fact, the case may have lit a bigger fire under Hirschberg, as he subsequently bought out the Willis patents for himself and organized the Checkometer Sales Co. in an official capacity in Chicago in 1920. An official press release of the time read as such:

 

Chicago, ILL—The Checkometer Sales Company, room 1119, 431 South Dearborn street, has incorporated with capital stock of $25,000. The objects are to manufacture and deal in check writing and protecting machines, typewriters, etc. The Checkometer is distributed. The incorporators of the company are Flavan Bayad, T.B. Hirschberg, Theo. B. Hardy.

 

Leading an expert sales crew and utilizing that long-established network of connections from his Protectograph days, Hirschberg swiftly turned Checkometer into a primetime player. Being the 1920s, he also rewarded himself for the effort by dramatically updating his lifestyle. Having already parted ways with his first wife Helene (mother of Theodore Jr.), Hirschberg remarried in 1923, partnering with a young proto-hippie from Colorado named Louise Talmage—future author of an obscure spiritual/meditation book called "I Am Creative Holiness." The newly minted millionaire couple threw themselves into Chicago's high society nightlife, and by the late '20s, they were spending much of their time in their second home—a Spanish Revival / Art Deco mansion in the Sherman Oaks section of Los Angeles.

 

According to a story in the Los Angeles Times many years later, "the flamboyant Theodore B. Hirschberg" was known for hosting "extravagant parties" at the house, "which many Hollywood stars attended. Some neighbors say Mae West and then P. T. Barnum lived in the 18-room mansion after Hirschberg." 

 

[The "Magnolia House" in Sherman Oaks, CA; Ted Hirschberg Sr.'s giant home away from home]

 

A less famous but more consequential guest to the mansion was Theodore Hirschberg, Jr., who appears to have come to L.A. to live with his dad for a time in the late 1920s, when he was around 20 years old. Whether he held a grudge against his absentee father or not, young Ted Jr. was probably unavoidably impressed by the swanky lifestyle those check machines had earned his papa. And when the stock market crash threatened that family empire later that same year, Ted Jr. might have found all the impetus he needed to follow in his father's footsteps—no matter what might stand in the way.

 

Dollars and Sense

 

A year after the market crash, while other businesses were folding left and right, a new era began for the Hirschbergs. As a company representing the protection of funds through security and peace of mind, Checkometer was, in some ways, well positioned for survival in the 1930s. As no small factor, they were keeping up with the rapid-fire improvements in check protector technology, too.

 

"The Checkometer makes almost impossible the criminal alteration in a check after its drawing," one newspaper ad read. "Simple in build and quick of operation, it effectually blocks a doorway through which thousands of crooks have found access to 'easy money.'"

 

With his father splitting time between the Midwest and West Coast, Theodore Hirschberg, Jr., took on an increasing leadership role in Chicago, presiding over the proceedings at the Checkometer headquarters at 754 W. Lexington Street. His father and stepmom would sometimes return to the city in the 1940s, renting an apartment in the Edgewater Beach Hotel, but it was more of an early retirement situation. It was still Senior's company, but he seemed content to let Junior take the ball and run with it.

 

T.B. Hirschberg, Jr., as you will learn momentarily, was a flamboyant character in his own right, and not in a way that necessarily endeared him to his employees. Still, as the Checkometer Sales Co. evolved into the Paymaster Corporation after World War II, it was Junior who guided the business into a 30-year run as the top name in its industry. He might not have been a fun guy to work for, but he tended to get results.

 

The change in names from Checkometer Sales Co. to Paymaster Corp., for example, was a smart, highly strategic re-branding meant to instill consumer confidence. Checkometer, as the public knew it, was an established name, but also an old one—and old, in the security business, can mean "outdated." The PAYMASTER, by contrast, was the brandname of the company's newer machines—the cutting edge of postwar check protector, complete with all the necessary bells and whistles. 

 

 

In order to increase production of the latest Paymaster machines, Hirschberg Jr. also moved the company into a new longterm home in the 1950s, taking over a factory space in Edgewater at 1811 W. Winnemac Avenue. An additional office space was maintained downtown at 224 S. Wabash Ave (later moved to 24 N. Wabash in the '70s and '80s). 

 

Like his dad, Hirschberg Jr. made sure he understood the ins and outs of the machines he was manufacturing, and Paymaster remained ahead of the curve by scooping up patents on any and all new breakthroughs in the field. Mechanical engineers including Arthur G. Rindfleisch, Alfred E. Little, Hubert Jagger, and Ardath Gopperton were all put into Paymaster employ during the '50s and '60s, tweaking everything from the ink rolls to the security of the machines themselves (including the installation of an alarm system). 

 

[Patent image from a Paymaster check writer developed by Arthur G. Rindfleisch, 1950]

 

Ironically, check protectors did sometimes pose their own security risks, since a disgruntled employee could theoretically use the machine to create a $99,999.99 payout much in the way the old-school "scratchers" used to. That's why Paymasters came with a lock and key. It was usually just the business owner and one trusted employee in human resources who had the power to pull the levers and operate the magical shiny devices.

 

Paymasters required ink rollers and they dried out quick, so you had to be sure you were well stocked before holiday bonus season. Using a machine also generally meant paying a monthly services fee (about $10) directly to Paymaster, whether you were a small business or a big bank. Those fees went to Hirschberg’s Wabash office, and were another example of his ability to sniff out a smart business opportunity. What’s better than an expensive office product? An expensive office product that you never stop paying for.

 

Ted 2: Union Buster

 

Ted Hirschberg Sr. died in 1963, leaving Ted Jr. as the unquestioned patriarch of the Paymaster Corporation. Rather than taking on a friendly father figure roll with his employees on Winnemac Avenue, however, Hirschberg Jr. started a reign of terror of sorts, going to war with his workers in a series of conflicts reflective of the divisive nature of the time period.

 

We begin with the 1965 case of “The Paymaster Corporation vs. United Steelworkers of America.” In this doozy, Hirschberg—by then in his mid 50s—was accused of “unfair labor practices” after a series of alleged attempts to block the unionization of his workforce at the Winnemac plant. The levels to which he went to achieve this goal are both twisted and hilarious, and indicate a man whose business acumen didn’t necessarily overlap into leadership skills.

 

First, Hirschberg attempted to bribe employees with the promise of higher wages and benefits if they DIDN’T vote yes on a union. When he got in hot water for that, Hirschberg wrote a letter to all workers in which he found a passive-aggressive loophole for making the exact same bribes / threats.

 

 

When the Steelworkers Union found out about THAT letter, they challenged Hirschberg again, leading to the “day in court” he’d seemingly wanted. In court proceedings, a whole lot of new insane Hirschberg antics came to light.

 

For example, there was a charge of “creating the impression of illegal surveillance.”

 

“On August 30, 1965, shortly before the end of the workday at Paymaster, Robert Christensen and another representative of the Steelworkers (Union) prepared for a leaflet distribution by stationing themselves on Winnemac Avenue, a public street on which the plant fronted. As employees emerged, they were offered these leaflets. Mr. Hirschberg, the president of the company, left the plant, accepted one of the leaflets, then crossed Winnemac Avenue and proceeded to watch further distribution while partially concealed by another building. Several employees told Christensen of Hirschberg’s presence. Hirschberg continued to observe for 20 or 30 minutes, occasionally shifting his position as the union representatives moved theirs. Christensen’s testimony on these events was not refuted. …Christensen also testified, without refutation, that on later visits to the plant, on September 14 and 20, during leaflet distributions, he observed George Williams, the plant superintendent, standing in the corridor of the plant which leads to its main exit, watching employees as they accepted his leaflets. A number of employees told Christensen about Williams’ presence.” -- Decisions of National Labor Relations Board

 

If spying from the bushes isn’t bad enough, how about straight up cursing out and insulting your workers?

 

“Employee Anna Beauprey testified that she and a group of about 35 other women employees were called to a meeting in Williams’ office sometime late in 1965. …Williams then called Hirschberg on the intercom to tell him about the meeting then in progress. Hirschberg came on and told the women that he was working on a profit-sharing plan and would let them know further in 30 days. The conference went on for almost 2 hours, until after the scheduled time for lunch. Williams then asked Hirschberg if they shouldn’t break for lunch, and Hirschberg answered with a vulgar, offensive remark about the women, repeated it, and then said, “To hell with the Union.” …That afternoon, the women who had heard Hirschberg’s unfortunate remark were recalled to the office and, again over the intercom, Hirschberg said that he had been kidding and asked them if they could not take a joke. Beauprey testified that all through the morning conference, Hirschberg’s speech sounded slurred, and although she had not seen him, it was her impression that he was drunk.”

 

Still not feeling Mad Men enough for you?

 

Well, T.B. Hirschberg also publicly threatened to “beat the [expletive]” out of one of the more vocal, pro-Union Paymaster employees (Richard Munizza), adding that he would move the tables out of the cafeteria and bring in some boxing gloves before doing so.

 

So yeah, there was some tension over there on Winnemac. A court found in the Union’s favor in '65, but punishment was light. Paymaster was basically told to stop doing all the illegal, threatening things they were doing. 

 

Just a year later, though, Hirschberg was cited in an $800,000 lawsuit, as a former Paymaster salesman claimed he was "slandered, libeled, and threatened with bodily harm" after leaving the company. The ex-employee, Thomas J. McLaughlin, had apparently tried to do what Hirschberg's own father had done 50 years earlier—leave Paymaster to start his own check writer sales business. But Ted Jr. wasn't seeing the parallels. Instead, according to a report in the Indianapolis Star:

 

"McLaughlin alleges that Theodore Hirschberg Jr., president of Paymaster; vice-presidents Robert E. Lewis and Irwin L. Schulman, and [Indianapolis agent] Walter Manning conspired to damage his reputation and drive him out of business as a competitor. Among McLaughlin's complaints are that he was forcibly held in Manning's office last January by two strongmen. 

 

The complaint alleges that McLaughlin was told by Manning that if he should try to leave, the men were being paid $50 for each finger and $150 for each arm and leg they could break. During this alleged 'imprisonment' for an hour, the suit says, McLaughlin's car was rifled of merchandise."

 

Thuggery and intimidation was nothing unusual in Chicago business, nor its government for that matter. Nonetheless, when Ted Hirschberg Jr. died in 1971, not everyone mourned the loss. 

 

The Paymaster business carried on into the 1990s, but the rise of the digital age posed a gloomy horizon, sending thousands of heavy metal check machines out to pasture. Operations appear to have officially shut down before the turn of the century. The Winnemac factory was summarily demolished, as well, replaced with some generic modern walk-up apartments. 

 

 

 

 

 

Sources:

 

Decisions and Orders of the National Labor Relations Board, Vol. 162, 1968

 

"Check Writing Machine" patent No. 2,697,981

 

"Tood Protectograph Co. vs. Hirschberg" - Supreme Court, Special Term, Monroe County, June 19, 1917

 

Sales Management, Dartnell Corporation, Vol. 71, 1953

 

"Businessman Files Libel Suits Totaling $800,000" - Indianapolis Star, May 28, 1966

 

"Hot Property" - Los Angeles Times, September 22, 1985

 

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