Childs' War

Controversy over the management of Childs' restaurants (TIME, Feb. 11) last week closely approached the "You're another" stage. Into the newspaper advertising columns went Mr. Childs, announcing that "We Reacted in 1928, But Now, Business Is Fine!" Mr. Childs vigorously flayed William A. Barber, his deposed counsel, and Harry S. Black, Board Chairman of U. S. Realty and Improvement Co., whereupon Mr. Black bought advertising space for an open letter in which he termed Mrs. Childs' elevation to a position as Mr. Childs' secretary "most unusual and open to criticism" and sneered at the alleged Childs' policy of "meatless days and boneless nights."

Meanwhile Childs' patrons were given leaflets which exhorted stockholders to "Please Support the Founder of Our Company " and announced that "We [Childs' employes] Want William Childs."

Childs' Statement. Mr. Childs' opponents have long argued that Mr. Childs' vegetarian policies (now abandoned) have injured the company's business. The 1928 report certainly demonstrated that some malign influence has been affecting Childs' receipts. A 1927 operating income of $2,451,186 shrank to a 1928 operating income of $1,365,167, a net decrease of some $1,086,000. True the company reported a 1928 net profit of $1,002,425, but this figure was arrived at by including on the balance sheet a profit of approximately $1,060,000 in the sale of Childs' holdings in the Savoy-Plaza hotel. Minus this transaction, the balance sheet would have shown a loss of about $58,000, compared to a million-and-a-half profit in 1927. This poor showing was vaguely attributed by Mr. Childs to "general causes which no management could overcome."

Savoy-Plaza. Though it was the Savoy-Plaza transaction which enabled Childs to show any 1928 profit, yet it was over this sale that Mr. Childs drew Mr. Black into the squabble. The purchase of Childs' holdings in the Savoy-Plaza by the U. S. Realty and Improvement Co. was arranged between Mr. Barber and Mr. Black, and for his services Mr. Barber charged the Childs' interests $210,000. Pointing out that the Barber fee was about one-quarter of Childs' receipts for the year, Mr. Childs added: "And it is interesting to note that Harry S. Black is a member of the Barber committee that is now trying to put the Barber faction back into control of our company."

To this statement Mr. Black tartly replied that "if such a transaction as the Savoy-Plaza could be repeated occasionally it would be greatly to the advantage of your stockholders." Mr. Black also suggested that Mr. Childs resign, since it was "a foregone conclusion" that he would be ousted when the stockholders meet in March, and since his resignation would "put the Company in the hands of men who can certainly administer its affairs much more efficiently than you and your family seem able to do."