The advent of travel and entertainment (T&E) credit cards in the 1950s was instrumental in sparking a renaissance in luxury restaurants that hadn’t been seen since pre-Prohibition days.
Nowhere was the effect felt more strongly than in NYC, birthplace of the Diners’ Club.
On February 8, 1950, Frank McNamara paid for his lunch at a steak house called Major’s Cabin Grill in NYC with a Diners’ Club card numbered 1,000 (i.e., #1). With his little paper card he made the very first charge on a nationwide credit card.
The timing of the Diners’ Club launch was perfect. During World War II expense accounts had proliferated as a way companies could use income for entertaining clients rather than hand it to the government as a tax on “excess” profits (profits greater than those before the war). Now, in 1950, the excess profits tax lifted at the end of WWII was only a few months away from reinstatement for the Korean War.
The growth of T&E credit cards went hand in hand with the growth of expense accounts. As one publication put it, credit cards were spinoffs of expense accounts. And, each time the IRS tightened up its requirements for itemizing deductions, more credit card applications came in.
Unlike the nationwide bank cards that would eventually swamp T&E cards, the latter required high financial standing, an annual membership fee, and full payment of balances within 30 days. Having one of these cards brought cachet.
Following quickly on the heels of the Diners’ Club launch came many others: Dine ’n Sign, National Credit Card, Your Host, Inc, Duncan Hines’ Signet Club, the American Hotel Association’s Universal Travelcard, Hilton’s Carte Blanche, the Esquire Club, and the Gourmet Guest Club (the last two linked to Esquire and Gourmet magazines). A smaller Diners’ Club continues today, but the only other survivor is American Express, which inaugurated its credit card in 1958, then quickly rose to the top of the T&E field.
Traveling salesmen and men (rarely women) in industries such as public relations, advertising, publishing, manufacturing, and wholesaling were fans of the convenience of charging business meals. And, of course, in the early days of T&E club cards it was a status factor to simply dash off a signature on a slip, particularly if the lunch took place in a top restaurant.
Expense accounts and credit cards were a boon to restaurants. There were estimates that in the mid-1950s 50% to 80% of meals in high-priced restaurants were “on the company.” Vincent Sardi admitted that a big chunk of his NYC business was made up of men on expense accounts. Peter Canlis, of Seattle’s first-class Canlis Restaurant, said in 1953 that he decided to establish a restaurant there because “a lot of good expense account money wasn’t being spent because there was no place fancy enough to gobble it up – and I was happy to fill the gap.”
But not all restaurateurs were enamored of the cards at first. For one thing, Diners’ charged a 7% fee on transactions. Restaurant owners felt that they spent too long waiting for their payments and that they had to raise prices to make up for the fees, thus punishing cash customers. Some restaurants refused Diners’ Club cards or added surcharges for meals paid with them. The Diners’ Club lowered its transaction fees in 1966.
By 1965 the three biggest T&E cards, Diners’ Club, American Express, and Carte Blanche claimed a total of about 3.15M cardholders, a small fraction of the number of cards starting to be doled out then, often unsolicited, by nationwide bankcards.
© Jan Whitaker, 2013
What could be more starkly different from the somber coffee shops of today with their earnest and wired denizens than the beatnik coffeehouses of the 1950s? Could Starbucks be anything but square to the beat generation?
Although the word beatnik came into usage around 1958 (inspired partly by Sputnik), the phenomenon of dropping out of the “rat race” to lead an existentialist, non-consumerist life was part of the aftermath of World War II akin to the “Lost Generation” after World War I. The first coffeehouses sprang up in Greenwich Village in the late 1940s, but the beats weren’t averse to hanging out in cafeterias either — their “Paris sidewalk restaurant thing of the time.” When coffeehouses began levying cover charges for performances, beatniks tended to drop out of them too.
The heyday of the coffeehouse was the late 1950s into the early 1960s. Few did much cooking so they weren’t restaurants in the true sense, but many of them offered light food such as salami sandwiches (on exotic Italian bread) and cheesecake, along with “Espresso Romano,” the most expensive coffee ever seen in the U.S. up til then. Of course the charge for coffee was more a rent payment than anything else since patrons sat around for hours while consuming very little. Other then-unfamiliar food offerings included cannolis at La Gabbia (The Birdcage) in Queens, Swiss cuisine at Alberto’s in Westwood CA, Irish stew at Coffee ’n’ Confusion in D.C., les fromages at Café Oblique in Chicago, “Suffering Bastard Sundaes” at The Bizarre in Greenwich Village, and snacks such as chocolate-covered ants and caterpillars at the Green Spider in Denver.
Since the 35th anniversary of Richard M. Nixon’s 1974 resignation from the presidency was commemorated this past weekend, it’s as good a time as any to focus on his brother Donald’s brief career as a restaurateur in Southern California. In the short span of five years in the 1950s, Don managed to go out of business while doing some serious damage to brother Richard’s political fortunes.
The chain of five Nixon’s restaurants began modestly in 1943 when the Nixon family’s grocery store, established in 1922 by father Francis Nixon in Whittier, added a coffee shop. Although Don was involved in running the coffee shop, his first real business venture took place in 1952 when he opened a drive-in on East Whittier Blvd. (shown above). Two years later he opened Nixon’s Family Restaurant, also on East Whittier, home of the “Nixon Burger” whose unfortunate, opportunistic name would be used to taunt Richard Nixon during his two terms as President. Next Don opened a drive-in near Disneyland, in Anaheim, and a restaurant and bakery in Fullerton. In 1957, despite the Hughes loan and proceeds from the sale of Nixon’s Market to a supermarket chain, Don Nixon put all five restaurants up for sale to settle the chain’s debts.
We eat in restaurants several times a week and yet know very little about their history. I plan to dip into my archive of research and images every so often to present a little tidbit that highlights aspects of our American restaurant culture. Let me know your thoughts.
