AA Incorporated

“My God–we’re starving to death here”… Lois was earning the money, I was being the missionary, and the drunks were eating the meals. “This can’t go on.”

— Bill W. Talk, Fort Worth, Texas, 1954

Bill and Hank might have got somewhere in the service station business, Ruth {Hock} believes, if they had given as much energy, thought, and enthusiasm to it as they did to helping drunks.

— Pass It On, p. 192

The year 1937 dawned with much promise for two fallen bigshots, Bill Wilson and Hank Parkhurst. Bill was 25 months sober, and his abstinence from alcohol had been supplying some small opportunities to re-enter the working world. He had been trusted with a few assignments during the previous year. In “January 1937 Bill got a job with Quaw and Foley, stockbrokers, and did a lot of investigating for them in cities in the East and Midwest… he was away… {it} seemed to me more than half the time.” (Lois Remembers, p.107) The ever supportive Lois may have been making this position to be more than it actually was. Based on other reports, it is unlikely that he was working out-of-town even nearly that much of the time. “Not actually on its payroll, Bill was paid separately for each assignment…” (Pass It On, p. 175)

Bill’s first successful New York “sponsee” had stayed continuously sober for about 16 months. Hank had opened a little business with big ambitions. His company was surviving, though not thriving. He had an office, and a vivacious young secretary, and the two were quite fond of each other. For Hank, the dream of Honor Dealers becoming some sort of major player would soon be dead or dying, but in early 1937, there was still reason for optimism.

Unfortunately for both men, the year’s early promise did not mature into the imagined result.

The Quaw and Foley employment, although intermittent, could have led to something more substantial. However, an American economy that had been rebounding, took a severe downturn starting in mid-1937. Wilson was let go, as Quaw and Foley battled to stay afloat. Bill W.’s difficulties in reviving his career as a Streeter, may have been exacerbated by a dwindling interest in that sort of work. His new focus on alcoholism and alcoholics had become a consuming enthusiasm. The late historian, Ernest Kurtz stated that Bill had replaced his passion for alcohol with a passion for alcoholics.

Before the summer had ended, Bill could probably see that there was to be no future with his struggling employer.

Hank’s dreams were also failing to materialize. As the pages were being flipped on the 1937 calendar, Hank was moving nearer to the time when his secretary’s salary and office rent would go unpaid. Parkhurst seemed to lack the drive to take his own exceptional sales skills out onto the road, and to wear out the necessary shoe leather to build up his client base. It was far more pleasant to stay close to the office dreaming, planning, managing, romancing, and working on reforming drunks.

At some point during the summer of 1937, Bill and Hank began discussing the idea of AA Incorporated as a solution to their financial woes. As with Alcoholics Anonymous, then still nameless, the words “AA Incorporated” were not spoken–there was no official name. Nonetheless, a grand plan was taking shape. Perhaps a nice living could be made pursuing “the work” they enjoyed, rather than by trying to feign an interest in the marketing of automobile polish.

Caviar Dreams

Although Bill had only scattered luck with those he had tried to sober up personally, it did not seem to discourage this irrepressible dreamer. He began to have visions of hiring men to act as paid missionaries to carry the alcoholics’ message, of establishing chains of special hospitals to treat alcoholics, of literature about the slowly growing clusters of recovered drunks, their methods and goals.

— Getting Better–Inside Alcoholics Anonymous, Nan Robertson, pp. 67-68

A man’s got nothing if he doesn’t have a dream.

— Moe K.

If a worldwide movement was going to take millions of dollars to launch, no problem, they’d raise millions of dollars.

— Bill W., Robert Thomsen, p. 245

We don’t know which of the two men first came up with the idea of merging the rehabilitation of alcoholics with turning a profit. Twelfth Step work, even before it was given that name, was viewed as spiritual, and not commercial. Bill had recently been talked out of accepting a tempting offer to become a paid therapist at Towns Hospital. That position would have had him accepting fees for his work, while others were performing the same service without compensation.

But specialized hospitals, dry-out centers, paid missionaries and literature were a different matter, presumably.

With a sort of “Let’s cure cancer and get rich doing it” zeal, Bill and Hank set out to solicit the millions of dollars needed to fund their grand venture. Had it all come together, there can be little doubt about who would have been at the helm of Recovery Incorporated. The earliest visions of AA Inc. were far more expansive than what came after Bill and Hank’s hot air balloon was plummeted back to earth, as the result of their ultimate inability to obtain funding for these elaborate designs.

When the time came that a retrospective view of the grand schemes caused embarrassment, we get explanations from Bill that are difficult to swallow. He scrambled to pin everything on the guy no longer around.

“Years later, AA history has an innocent Bill Wilson being ‘dragged along’ in Hank’s whirlwind schemes but Bill had not fallen off of a turnip truck from Nebraska–he was a Wall Street wheeler-dealer.” (Key Players in AA History, First Edition, bob k, p. 154) “Bill had a thousand ideas. The stalled motor of his imagination had started to turn again; the old power drive was coming back full force.” (Bill W., Robert Thomsen, pp. 240-241)

The more cynical among us may be amused, as we struggle to picture Bill in a plaid shirt, suspenders, soiled boots, and perhaps a strand or two of straw in his hair.

Group Conscience

By late 1937, the number of members having substantial sobriety time behind them was sufficient to convince the membership that a new light had entered the dark world of the alcoholic.

— AA Big Book, p. xvii

The two of them immediately set to work approaching every rich man and every charitable foundation in Manhattan… After six weeks… not one cent {was} raised.

— Bill W., Robert Thomsen, p. 245

The New York drunks, mostly unemployed, were favorably disposed to Bill’s majestic plans that would have them operating as “paid missionaries” with expense accounts and fitting salaries. At some point, Bill and Hank realized that the Akronites needed to be included if the designs were to move forward to a spectacular reality. Wilson would have to pitch the plan to Dr. Bob, and then to the sober drunks of Akron. It would otherwise be extremely awkward moving forward without the support of the Ohioans.

Neither Bob, nor the other Akronites, were told that Bill and Hank were already fundraising, albeit unsuccessfully, for the as-yet unapproved enterprise.

The Big Book reports that: “By late 1937, the number of members having substantial sobriety time behind them was sufficient to convince the membership that a new light had entered the dark world of the alcoholic.” (p. xvii) The meeting where the Akron alcoholics approved Bill’s ambitious package is sometimes reported as occurring in November, but it’s more likely that Arthur S. has it right in his scholarly Narrative Timeline of AA History, where he reckons it as in October. This matches Lois’s recollection, and she was a diligent diarist.

In Pass It On, we read of Bill going to his brother-in-law, the physician Leonard Strong, to express his frustration over the month and a half spent in total failure in fundraising. New York’s wealthiest individuals and corporations could not see “curing drunks” as a cause worthy of financing. Many hands were reaching out to them as the Great Depression raged on. Drunks were viewed generally as the agents of their own misery.

Strong offered that he knew Rev. Willard Richardson, a man well-connected with the John D. Rockefeller charities. A call was placed, and Strong was both remembered and well received. Richardson consented to see Bill Wilson the very next day. Doctor Strong, ever the old-school gentleman, supplied Bill with a letter of introduction. The text of that letter appears in the conference-approved literature Pass It On. The letter is dated October 26, 1937.

Why this is interesting is that when six weeks are subtracted from that date, we have Bill and Hank out fundraising for AA Inc. in mid-September, well in advance of their approach to the Akron AA’s a month later when they sought group conscience approval for what they were already doing.

The Golden Ticket

Bill had chosen his listener well and perhaps craftily.

— Not-God, Ernest Kurtz, p. 65

We were riding high on pink cloud number 17.

— Pass It On, p. 184

The most ambitious of the dreams of hospitals, and paid missionaries had vaporized, and with them Bill Wilson’s dream of becoming “Recovery CEO.” In the end, John D. Rockefeller may have saved AA from the ambitions of its own members.

— Key Players in AA History, First Edition, bob k, p. 221

Within a short time, Wilson was invited to bring some associates to a meeting in John D. Rockefeller Jr.’s boardroom. The Rockefellers had been huge supporters of national prohibition. The disappointing failure of the Great Experiment of national prohibition left these anti-alcohol Baptists open to other approaches aimed at solving the problems stemming from America’s love of liquor. The boardroom meeting led to a decision to have Rockefeller associate, Frank Amos, investigate further and file a report.

Bill and Hank were within arm’s length of having Alcoholics Anonymous Incorporated funded by the world’s richest man. The Amos Report was extremely favorable about the work of these new crusaders against alcoholism, but only a pittance of funds were forthcoming–some short term survival money for the co-founders. After all the dreaming, and the kowtowing to the rich man through his agents, the end came in mid-March, 1938. The rich folks thought the society of nameless drunks should be self-supporting.

AA Incorporated was dead.

It seemed.

All Our Eggs in One Book

The dream never dies/Just the dreamer.
The dream never dies/If it’s strong.

— The Cooper Brothers

Bill Wilson’s dreams of paid missionaries and special hospitals for alcoholics had fizzled. The idea for a textbook to guide the membership, however, began to be seriously discussed in New York and Akron in 1937 and 1938. The members needed such a book for four very practical reasons: It could set forth a clear statement of the recovery program and prevent distortion of the methods used to help alcoholics; it could be mailed or carried among sympathetic nonalcoholics; and it could make money… the title finally chosen for the book–Alcoholics Anonymous–would also give a name at last to a little bunch of sobered-up drunks.

— Getting Better, Nan Robertson, pp. 68-69

The story of the production of the Big Book is a long one. The focus here will be on the numbers.

The idea machine that occupied Honors Dealers’ offices at 17 William St. in Newark was not idle for long. An unemployed Bill Wilson was there most days. When Jim Burwell had shown up looking for help staying sober in January, Hank recognized him as a former associate at Standard Oil. Jimmy was hired, and took to the road generating sales for Honor Dealers, but the company’s numbers were out of whack, as a head office of three–two bigshots and one secretary–were managing a single sales agent.

The “head office” focus had shifted almost totally from the automobile business to the resuscitation of the dreams of Alcoholics Anonymous Incorporated. Ruth Hock “soon realized that the Honor Dealers business was really only a means to an end… Bill began to work on the book in March or April of 1938 (more likely May).” (Pass It On, pp. 192-193) Two chapters were produced, and the AA Inc. entrepreneurs were introduced to Eugene Exman of Harper & Brothers. The editor was impressed, and a $1,500 advance against royalties was offered.

Members of the newly formed Alcoholic Foundation were delighted, but where would there be money for Bill and Hank? According to Bill’s version, and “official” AA history, mesmerized by the salesmanship of “one of the most terrific power drivers” he had ever met, Bill was dragged along with Hank’s plan to self-publish. “When he went back to see Exman… he agreed… that a society like ours ought to control and publish its own literature.” (Pass It On, p. 194)

The idea of AA owning its own book was a good one, but that isn’t what happened.

Eventually 200 shares were sold at $25 each. Bill and Hank took 200 shares each, for authoring and getting the book into print. The money from the sold shares was to finance Bill and Hank through the production phase. When that ran out early, more money was raised through the sale of some preferred shares, and through loans, most notably from old friend Charles Towns.

Bill and Hank owned a third of the book each. The other third was owned by investors. The society that would be better off owning its own book, didn’t own it at all.

“To mollify the board, it was decided that the author’s royalty (which would ordinarily be Bill’s) could go to the Alcoholic Foundation.” (Narrative Timeline of AA History, Arthur S.)

Let’s Blame the Guy No Longer Here

Sell the sizzle, not the steak.

— Business Marketing 101

Alcoholics Anonymous is, without question, one of the greatest success stories in the history of publishing… and it continues to sell at the rate of more than a million copies a year.

— Bill W., Francis Hartigan, p.113

To up the sizzle factor, the new publishers got Edward Cornwall to print the book on his thickest paper. The per unit cost on the First Printing of 5,000 (variously reported as 4,730 or 4,650) was 34 cents. To get to a retail price of $3.50, they added a markup of 900%!! Book thumpers in the modern world tell us that the book was written to prevent distortion of the methods used, to enshrine in print the life-saving program. “Here are the steps we took…” albeit there was no 12 Step program before December, 1938. Anne Smith famously remarked “What twelve steps?” But, that’s a story for another day.

With a selling price of ten times the printing cost, how can one deny the profit motive?

Later on, Bill Wilson tried to detach himself from the decision to retail the book at the ridiculously high 1939 price of $3.50. “Some members had insisted on a $1.00 book… They had turned deaf ears to Henry’s plea that we must make something on the deal or else we could never operate a headquarters office, much less pay off the shareholders. But Henry finally won through.” (Alcoholics Anonymous Comes of Age, p. 170) In 1939, $3.50 cents represented more than a day’s wages for the working poor. Inflation calculators tell us that the equivalent 2019 price would be about $65.

Hank bought the share certificates. Hank pushed the stock sale to members and friends. Hank rushed him along. Hank had an idea a minute. Hank set the outrageous Big Book price.

Bill’s tapdancing gives us an idea of his embarrassment.

In spite of diligent marketing efforts, the book did not sell well until The Saturday Evening Post publicity, in March, 1941. Thirteen months before that, at a time when AA was almost bankrupt, John D. Rockefeller Jr. hosted a dinner for the tosspots. Bill, thinking that the wealthy philanthropist had changed his mind, once more was spurred to dreams of millions. Once more there was crushing disappointment, and again the hopes of AA Inc. were drawn back to the book.

Sometime later, the Alcoholic Foundation called the AA founder onto the carpet, and ended AA Incorporated. Bill was made to turn over his 33% ownership of the book, and pressed to get Hank to do the same.

Bill was granted an author’s royalty.

“One day Hank turned up at the new Vesey St. office. Whether he was drunk, and taken advantage of as his son claimed later, or just ‘completely broke and very shaky,’ Hank was persuaded to sign a release in exchange for being paid $200 for some office furniture that had previously been his.” (Key Players, p.157) “Hank’s son said that Hank always felt he had been treated badly. He thought Bill had made a deal with the foundation that excluded Hank from any future share of the book’s profits.” (Pass It On, p. 236)

Royalties Incorporated

The Wilsons’ share of the royalties put them on easy street in the 1960s and made Lois rich after Bill died in 1971. In 1986, two years before her own death, she received nearly a million dollars from the sale of his books.

— Bill W. and Mr. Wilson, Matthew J. Raphael, p. 115

By the time of Lois’s death in 1988, royalties paid to the Wilsons totaled 10 million dollars and Lois’s legatees have received an additional 9 million.

— Key Players in AA History, First Edition, bob k, p. 157

Hank, on the other hand, received $200.

The lesson seems to be that if you’re a partner in AA Incorporated, it’s best to not get drunk.


About the Author

Bobby Beach is a longtime sober atheist in AA and with this article is making his second appearance at AABeyondBelief. His rabble-rousing contributions to AAAgnostica.org include “The Watering Down of AA,” and more recently “Freaken Big Book Fundamentalists Hate Freaken Everything!!”

Beach is a pseudonym allying Bobby with the great Jesse Beach, and a tiny stab perhaps at the late atheist-hater, Sandy Beach.

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Joe C
Joe C

The Beach, the beach, the beach is back! Untouchable flair in storytelling. Lifetime paid royalties at the time of Bill W’s death were 706,985 for all writing (all AA books). One million total big books had not yet been sold but by the time of his death, 12X12, AACA, As Bill Sees It were all chugging along. So, he died in 1971, that’s about $22,000 a year (average over 32 years). Yes, more than $200. In 1970 Bill made $58,000 in royalties. Is that a lot or a little; I don’t know. But as a dead man, Bill sold better.… Read more »

John L.
John L.

$58,000 in 1970 would amount to $1,504,520 in 2019. A million and a half dollars in one year. Poor Bill.

John L.
John L.

I meant to write “one and a half million dollars”.

Bobby Freaken Beach
Bobby Freaken Beach

Nan Robertson was in AA early enough to speak with an elderly Lois Wilson, who approved of her plan to write the book. Lois was concerned about Robertson’s plan to write it under her own name, but seemed to accept her explanation of why, as a journalist, she needed to do that. John L. has some bizarre mathematics going on. $58,000 in 1971 would be about 5 times that in 2019 dollars. On another comment, he extrapolated total royalties of $10 million to the Wilsons to $259 million, which is ludicrous. The bulk of the royalties came in the 1980s–tripling… Read more »

John L.
John L.

I did a search for “inflation converter” and took the first one that showed up: https://www.usinflationcalculator.com/ . This gave an inflation factor of 25.84. However, another converter gave a factor of about 5, that stated by Bobby Beach. I have no way of knowing which factor is better. Even so, $10 million in 1988 or $40 million in 2019 is a fortune. Bill and Lois weren’t just getting by. They had a fine house in a fine suburb, and a Cadillac, and Bill had enough money to maintain a mistress (who got some Big Book royalties after Bill’s death). In… Read more »

John S

If I understand correctly, their original idea before the publishing idea as to open up hospitals for alcoholics and publish materials of the various methods used to sober up. It’s like Bill at that time wasn’t specifying one method, but several methods. Then when they decided to get into the publishing business, one reason for having a book was to make sure they outlined their method. I can’t blame Hank and Bill for wanting to make money doing something they were passionate about, and I know that in the Depression the fear of financial insecurity was acutely painful. My grandmother… Read more »

Bobby Freaken Beach
Bobby Freaken Beach

Bill and Hank thought rich people would line up to donate money to promote AA’s “cure” of alcoholism. Prohibition had been a miserable failure. Clearly, alcohol could not be successfully eliminated, so why not target “fixing” those who caused the MOST trouble where alcohol was involved. Getting the attention of the Rockefeller people looked like the golden ticket. The grand imagined scheme included specialized hospitals for alcoholics, paid missionaries, and literature. Those things would have totaled up to an impressive AA Incorporated. Such ventures would have been headed by Caesar and Pompeii . . . I mean, Bill and Hank.… Read more »

Steve V.
Steve V.

All I can say is “wow!”. I had read some stuff, especially in Bob K.’s book about some of these shenanigans but this goes beyond that. I believe that even if Thumpers were told this stuff, they would deny and/or rationalize it. That’s coming from a former Thumper. 🙂

Donald
Donald

yes, yes. that’s the problem with fundies, thumpers as they affectionately prefer to to refer to themselves. rarely interested in new information. and when its presented: denied, ignored, mocked, criticized. exactly like xtian fundies. or economic fundies. political fundies. you name it, when folks allow themselves to get emotionally attached to something, the ability to rethink, revisit, consider new info, gets tossed out the window. the need to be right, about that which they imagine their fundie beliefs, now supersedes facts.
strange beasts, we humans.

Bobby Freaken Beach
Bobby Freaken Beach

The fundies’ defense of the ridiculously high price of the book–about $65 in today’s money–is that it’s a text book. Academic textbooks are high-priced mainly because a very low volume of sales is expected. How many tomes for Botany 204 are you going to sell? AA’s Big Book has sold 37,000,000 copies. The text book excuse is for book that might sell 370. When stock in the BB was being sold, the book wasn’t being pitched as a low-selling text–the producers were hoping for a best seller. Hank’s laid out the returns on sales of 50,000, 100,000, and half a… Read more »

John S

Thats a hilarious defense about it being a text book.

Bobby Freaken Beach
Bobby Freaken Beach

I freaken LOVE Bob K., Steve V.
Hey, what rhymes with “mucker?”

John L.
John L.

So, Bill and Lois in their lifetimes received $10 million in Big Book royalties. In 2019 this would amount to $259 million. It certainly is time to treat the AA “co-founders” more honestly — fairly, but critically. In many ways Bill W. was an unethical and dishonest man, but he was a master manipulator. He received royalties on at least three AA books (not just the Big Book). In contrast, Barry Leach asked AA for royalties on the book he wrote, Living Sober — the only really good AA book — and AA refused. To me the two most deplorable… Read more »

Bob K
Bob K

Those interested in AA history have been buzzing about for three months about a diligently researched book that came out Tuesday. In a section of comments by the “famous” folks who looked at the book in advance, the remarks by Arthur S., author of “A Narrative Timeline of AA History” address William Schaberg’s revelations of the depth of Hank Parkhurst’s role in the creation of the BB. I’ve read most of the new book, and it is FASCINATING!! In any case, Arthur wrote: “With tour-de-force exposition, ‘Writing the Big Book’ details the chapter-by-chapter authoring of ‘Alcoholics Anonymous’ and provides a… Read more »

Donald
Donald

great investigation! I’ve always bristled at the hero worship so frequently seen in aa. the photos of bill and bob in the front of some mtgs. kind of disturbing to me. Im in a secret FB group.. “Old Time AA” they are based in Tampa, have a web site oldtimeaa.com , looks like they are promoting an event. “A Day for Dr. Bob’s Home” Saturday 1/18/2020. I believe a fund raiser for the maintenance of Bob’s house in Akron. Ray Grumly (sp?), (wonderful man, but, I’ll call his approach.. “filtered by nostalgia”) recently deceased, wintered in this area, and he… Read more »

Bobby Freaken Beach
Bobby Freaken Beach

Thanks for the kind words. It’s an honor to get published on this very fine website. For those who missed my debut here two months ago, it was this:

Lordy! Lordy! Lordy!!!

Groups continue to cling to the use of Christianity’s Numero Uno prayer in AA meetings, while pretending that NO alliance or affiliation is established. Bull-chit!!