Michigan’s timber industry and the 19th century became close to one another. Lumber barons had swept through the state like a hurricane, just as they had done in New England and New York, having won the world’s last large rack of white pine forests. In their wake were dying cities, hundreds of thousands of combustible debris, erosion-drenched swamps, and amazement from those who remained that they had traded their legacy for a handful of bright coins. Timber cities across the state, one of them, Caro, named for an inexplicable reason after Cairo, Egypt, faced extinction.
If a city was to have an equal chance of finding a place in the 20th century, it needed an industry. City leaders and other leaders across the state threw around for one. In Caro, there were beets from Bay County, where an entrepreneur named Thomas Cranage constructed a sugar factory in Essexville, a suburb of Bay City, another tree town that was looking for an economic foothold to replace wood. The results of Cranage’s experiment sparked enthusiasm that quickly replaced the gloom that had settled in the hearts and minds of the leaders of dizzying timber communities.
Cranage traveled to Nebraska, Utah, New Mexico and California where he witnessed the process and talked to the technicians and then hired them. Then he set up the Michigan Sugar Company, and when he avoided the failures of many entrepreneurs, he saw that it had enough capital to survive the disappointments that so often accompany new ventures.
The Michigan Sugar Company benefits not only from good planning, but also from good weather. The first sugar beet harvest and processing season (called a “campaign” in parlance for the beet industry) in the history of the state was in every way a remarkable success. Farmers harvested an average of 10.3 tonnes from each of 3,103 acres for a total of 32,047 tonnes of sugar beet. The sugar content of the beets averaged 12.93 per cent, with a purity of seventy-two per cent, from which the mill extracted 5,685,552 pounds of sugar. A sugar content of 12.93 percent meant that every ton of beet purchased contained 258.6 pounds of sugar. Then the new sugar factory packed 169 pounds, which was equivalent to the total sugar recovery of sixty-nine percent, an excellent result for a first campaign.
Charles Montague was the chief executive among executives in Caro, the center of business operations for Tuscola County. The city was waiting to learn what Mr. Montague liked the sugar talk.
Montague was 52 years old when Michigan began to open its eyes to the prospects for sugar. He had already achieved success in many areas, including banking, agriculture, wood sorting, merchandising and manufacturing. In addition to owning and operating the city hotel, I have operated the local telephone system and an electric lighting company.
If a sugar factory was to be built in a city, it needed a prominent citizen to come on board, someone whose participation would create a basis of enthusiasm – enough to shake dollars loose from hidden places – enough to get farmers to to consider raising beets that could make urban people rich. As it turns out, Caro was one of the few Michigan communities that did not need to generate investment within the community. In Detroit, fifty miles to the south, eager investors searched for mature opportunities and closer to home in the nearby town of Vassar, lived a man whose predatory eye never stopped searching for opportunities.
Richard Hoodless lived in comfort in Vasser, a small town named after Mathew Vassar, the founder of Vassar University. He had for many years traveled Europe’s roads as a buyer of agricultural products of an English concern. He saw his first sugar beet in Germany twenty years earlier, so prosperous factories were located by cities, factories that hired workers, bought supplies and paid taxes to local governments, and generally caused a rising tide of sustained prosperity where no citizen was directly or indirectly denied a chance to dive into the treasure trove formed by scrub fields.
Hoodless looked for ways to duplicate the success of German farmers. As luck would have it, an ad appeared in a Chicago newspaper, placed by August Maritzen, a youthful architect, recently married, who had taken time out from his honeymoon to advertise a manufacturer in Germany whose name could be pronounced by most Americans only if they first filled their mouths with marble. It was A. Wernicke Maschinenbau Aktiengesellschaft in Halle, Germany. Hoodless responded to the advertisement, and in return, Maritzen offered the substantial sum of $ 4,000 (more than $ 80,000 in modern dollars) if Hoodless could generate enough interest to set up a factory in Caro.
On the one hand, Hoodless in Charles Montague, a wealthy man who lovingly loved both opportunities and technology, as evidenced by his control of the local telephone and lighting companies, had new shining characteristics of technology from the late 1800s and on the other side of Wernicke, an experienced factory builder eager to build a factory in the United States. For help, I turned to two friends, Fred Wheat attached to Montagues by marriage for many years, and John Wilsey. Wheat was an attorney whose wife was Maria Montague, a sister of Charles Montague.
Hoodless then assembled a citizen committee that became the predecessor of the Caro Sugar Company. A member of the committee, Fred Slocum, also served as editor of the Tuscola County Advertiser and helped promote the idea in his news columns. Farmers in Caro’s neighborhood, aware of the great excitement to which the Essexville experiment was signed, as was Charles Montague and his employee, banker John Seeley, who had earned his spurs in coal mining. He served as vice president of the Sebewaing Coal Company; an organization led by Spencer O. Fisher, who was also involved with Essexville’s Michigan Sugar Company and later became president of the West Bay City Sugar Company.
When Montague picked up the ball, he ran for the end zone without considering competitive offers for factory construction. In fact, it was Wernicke representative Max Schroeder who came with Montague and Seeley on an outing to Detroit one January evening in 1899. The night was blisteringly cold; the trade along the way was hot. The big fear was that another city would hit Caro for the shock and pull investment dollars away from Tuscola County. Time was the essence.
For a week, the city held its breath as the trio met important financiers in Detroit. In his 1954 The Sugar Tramp report, Daniel Gutleben reported receiving a telegram from the Organizing Committee in Caro, announcing that investment capitalists had invested in the plant and had awarded Wernicke the contract for its construction. The pandemonium “reigned supreme” according to the Tuscola County Advertiser. Seeley arrived alone on Tuesday’s evening train with a story to tell, one still alive in Caro’s memory, passed by each successive generation and recorded in the chronicles of Daniel Gutleben. It’s a story that reveals how Charles Montague persuaded some big city wheelers and dealers to invest heavily in Michigan’s second beet sugar factory.
No one questioned Wernicke’s ability to build a factory four thousand miles from its base in a foreign country where language, customs and economic conditions differed markedly from its home country. There was no one on the board who had any experience with beet sugar mills at all, nor did the board anticipate a need to engage company officers who had such experience. After all, Wernicke was a sugar expert and claimed more than 200 projects, including one just completed in Australia. Nor did it matter because Wernicke, with enthusiasm running amuck, signed a contract guaranteeing that the new plant would cut 500 tonnes of beets every day for at least thirty consecutive days at a cost of three cents a day. Pounds for sugar currently sold in Chicago for six cents a pound. pounds, retail.
That a new factory, even one built by someone who lacks the disadvantages of building a factory in a foreign country, could operate at 500 tons per day. Day during its maiden voyage was not heard. Inevitable construction problems always created delays; Fine tuning would determine full cutting ability for weeks, sometimes months. The factory crew added to the mix, more accustomed to walking behind plows or knocking down trees with axes than operating boilers, motors, diffusers, vacuum pots and evaporators all in perfect harmony. A year earlier, the Essexville factory builders had missed their guarantee of producing sugar for three and a half cents a day. Kilos by fifteen cents and paid for it with an expensive out-of-court settlement, a fact which was either unknown by Wernicke or dismissed in a moment of unwarranted confidence. Further, Wernicke agreed to fund $ 300,000 of the estimated $ 400,000 construction cost.
For Caro and the Detroit investors, it was a good deal to move on. It got better as time went on. As an additional incentive, the state government bought 100 acres of land in two parcels, one of which belonged to Charles Montague, and gave it to factory owners, one of whom was Montague. The Caro Water Company softened the deal as it offered up to 500,000 gallons of spring water daily for free.
Thus, as a result of Montage’s energy and Hoodless’s ambition and the will of a city that would not be left behind, Caro found the beneficiary of a factory largely paid for by external investors. Prior to the original name, The Caro Sugar Company, the organizers formed the Peninsular Sugar Refining Company on January 30, 1899, with a par value of $ 10. In August of that year, the capitalization jumped to $ 500,000 and jumped again in February 1902 when it rose to $ 750,000. Its last increase occurred in September 1902, when it went on to a mere one million dollars – 100,000 shares at $ 10.00 face value.
The moneyers included Detroit industrialist Charles Bewick, who a few years later invested in the sugar factory in East Tawas and Henry B. Joy, who in 1905 became president of the Packard Motor Car Company. Joy and his family members invested in a number of Michigan’s sugar mills, including those in Alma, Croswell and Bay City. His brother-in-law and co-founder of Packard Motor Car Company, Truman Newberry, also invested in Caro and, along with Joy, became one of the company’s directors. In 1918, Newberry would gain fleeting fame as the successful bidder for a U.S. Senate seat for Michigan, defeated Henry Ford, another tycoon seeking the same record. (Newberry fame lasted longer on Michigan’s Upper Peninsula, where they named a city of Newberry to commemorate his father’s thoughtful by cutting down all the hard trees he could find and turning them into charcoal.)
David Cady and Gilbert Lee, owners of a large wholesale food distributor in Detroit, controlled between them nearly five thousand shares. Gilbert Lee moved into the president’s chair while Henry Joy assumed a second presidency.
Within a few years, the Sugar Trust came to town and everything changed. The American sugar refining company featured everywhere in the Sugar Trust newspapers, moved into Michigan in 1901 and 1902, and began picking up sugar beet sugar at a rapid pace. Gone now was Charles Montague, whose energy and drive brought together the parts that made the company. Also gone was John Seeley, his friend and partner. Richard Hoodless, who started it all, never got on the shareholder list.
In 1903, the shareholder list reflected some of the top names of the Sugar Trust. Chief among them was Charles B. Warren, legal adviser to the American Sugar Refining Company, whose 22,001 shares topped the 1904 shareholder list. The other ranking shareholder was Thomas B. Washington of Boston, Massachusetts, a director of the American sugar refining company, which held 15,667 shares. He would travel to the Presidency of the Confectionery Trust four years later after the death of Henry O. Havemeyer, its founder. Third was Lowell Palmer, a director of the American sugar refining company, which had 10,126 shares. Taken together, the three controlled 48% of the Peninsular Sugar Refining Company. An interesting feature on the shareholder list was the absence of the names of Caro residents except for a couple of last-day residents, sugar factory employees.
The US sugar refining company, sheltered in the daily press for its monopolistic tendencies and harried in federal courtrooms for perceived violations of the Sherman Antitrust Act of 1890, was held high considering its 13,000 shareholders who enjoyed a steady stream of dividends, 12% annually since 1894. One under-appreciated aspect of the Sugar Trust was that it required companies under its jurisdiction to produce high-quality, low-cost products, and for that purpose provided expert advisors who traveled from factory to factory to provide technical information, monitored training and personnel and inspection of the facilities.
But in 1899, the village of Caros lay not in the area of high finance or corporate philosophy, but in the hundreds of workers in need of boarding, food and clothing, and other necessities and luxuries that made cash registers ring all over town. Men, money, equipment and building materials are poured into the village. Twenty-eight freezer equipment plus six million bricks and a thousand string stones arrived quickly in succession. Three hundred workers, including masons who earned fifty cents an hour compared to fifteen cents for ordinary workers and five cents for apprentice electricians, created a shower of activity that began when the snow melted in April and ended on October 23, when Superintendent Georg Bartsch, a noted sugar manufacturing expert with special acclaim won for expertise in crystallization and vacuum pan operation, declared the plant ready for operation.
Performance guarantees for new beet mills plagued those who dared to issue them – and would soon torment Wernicke. The factory as described by Gutleben, while avoiding some US preferences in materials, nevertheless represented the most important in factory design. It had four quadruple power evaporators made of wrought iron, provided with a combined 8,911 square feet of heat surface, two pans each 9-1 / 2 feet in diameter x 13 feet high containing 753 square feet of heat surface and centrifugals that used steam jets for the final washing of the sugar. Six 700 cubic feet spray-cooled vacuum-filled crystallizers installed on the forehead accelerate cooling, a modern feature that improves capacity. Nine water pipe boilers equipped with mechanical stokers provided an adequate steam supply. A concrete floor, a luxury by today’s factory standard in Michigan, separates the factory from the mud and clay that lay beneath.
Two marked differences between a factory of American design and one of German design caused some immediate rancor. The first was that American leadership style called on superintendents who inspired the invention of the phrase, “get on your feet, not your seat,” while the German method called for a field darkness commanding long-distance sent lieutenant rather than gathering information and giving out managerial wisdom and dictating.
In addition, the European method of governance required a great deal of secrecy between management and the administration, and in addition, technicians reserved their knowledge to themselves and shared what they knew only with sons or those who paid nicely for instruction. The departmental factory fits the European management style perfectly. For that reason, the Caro plant consisted of a number of separate rooms or departments, the effect of which was hampering communication and increasing the number of workers needed to operate the factory. Messengers scurried between rooms, delivering orders and information, not always as timely as circumstances demanded. The event in later years would make it difficult to expand the factory; expansion of one area generally occurred at the expense of another. Kilby-built factories, factories listed by Joseph Kilby of Cleveland, Ohio, who many considered the leading sugar factory engineer, provided, conversely, enough space to allow for the expansion of capacity by two and more generations of five times with only minor additions to structures or foundations.
However, Wernice’s record from the practical and fair point of view was unique. Between March 1, 1899 and October 23 of that year, the German company had shipped a good deal of the factory from Germany. It then provided for the design and construction of a complete operating facility in a relatively new industry in a foreign country of just under seven months, becoming the first of eight beet sugar mills built in Michigan in 1899, then making it the second factory to was built in Michigan after Essexville’s. By standards that existed in 1899 and more than a hundred years later, Wernice’s performance stands as a monumental achievement. Aside from ordinary disruptions, the factory had worked as well, and in some cases better than any startup that took place that year.
Due to the loss of items, especially the sugar content of the processed beets, the results of the first campaign can only be estimated. Nearby Bay City reported sugar content of thirteen percent, and eleven percent were reported elsewhere in the state. Applying an average of 12 percent on the crop received in Caro indicates that the new plant recovered 66 percent of the sugar in the beets, which compared favorably with the 61 percent recovered in Benton Harbor, but shortly after Alma , where recycling reached 72 percent.
But however encouraging the results may have been, the simple fact that Wernicke failed to reach three conditions outlined in the contract were failures that would result in a rushed walk to the woods. First, the factory does not cut 500 tonnes per hour. Day for 30 consecutive days, as guaranteed. Second, the cost exceeded three cents a day. Pounds, and third, the factory was not ready to accept beetroot on September 1, 1899, as promised. According to the company, the sugar produced was not marketable, and much of it was lost during the process. That’s when Wernicke learned the litigious nature of Michigan’s pioneering sugar producers.
It may have been possible that the company would have given something back considering Wernice’s extraordinary efforts except the directors were considering operating deficits because the state of Michigan decided to withhold payment of a promised fortune on any sugar produced after January 1, 1899. provided payment from the treasury of 1 cent for every pound of sugar produced in Michigan from sugar beet, but was declared unconstitutional by the Auditor General, a decision later upheld by the state Supreme Court. The decision represented a disaster for investors because a cent roughly equaled one-third of operating costs. The U.S. Supreme Court declined to consider the case, giving rise to the mistaken belief that the decision upheld the lower court’s decision. The non-allowable bounty money amounted to $ 40,436; a much needed offset to an approximate $ 65,000 loss.
When it came time to take Wernicke to court, the company’s directors, such as their legal counsel, Charles Evans Hughes, chose a brilliant lawyer destined to become Supreme Court justice. As he prepared for his day in court with Wernicke, Hughes learned from the bottom up the German language and beet sugar industry to enable him to cross-examine the study of German engineers who acted as expert witnesses. According to James Howell, a former Caro plant superintendent, who authored a detailed account of Caro’s factory history, Hughes spent a month at the Caro plant exploring every nook and cranny until he became an expert in its design and function.
The subsequent lawsuit, according to Gutleben, resulted in a forfeiture of the $ 300,000 bond that Wernicke signed, seventy percent of the contract price, causing Wernicke to completely withdraw from building sugar mills in the United States. Howell wrote six years before Gutleben and gave a slightly altered account. He told Wernicke surpassed $ 150,000 and forgave $ 125,000 that was still due to the construction contract.
For a short time, the Oxnard Construction Company in Caro seemed to be affecting changes in the factory, none of which were significant with respect to the original construction. American-made centrifugals, these by the American Tool Machine Company, often called “Amtool” in the industry, replaced them with German design. A major change had nothing to do with defects in the original design. It was the addition of the Steffen process for removing sugar from molasses. A major problem in this era was the high ratio of sugar that escaped the manufacturing process and ended its days mixed with molasses, the rubber syrup left over from the manufacturing process.
The second year financial results were impressive. The new centrifugals and the Steffens process (called the Steffen’s House in the industry) proved their worth. Seven million pounds of sugar passed through the storeroom, the product of 22,000 thousand beets containing 14 percent sugar. The factory extracted 243 pounds of sugar from each tonne of sugar beet, a 35 percent improvement over its first year. The new Steffen process had not only extracted sugar from the approx. twenty tons of molasses produced each day, but also recovered sugar from molasses left over from the previous crop.
Henry Oxnard founded a management dynasty in Caro
Henry Oxnard did more than just redesign a factory when he applied his efforts to the problems that then existed at Caro; he founded a management dynasty that would permanently affect not only the Caro plant but also the new U.S. beet sugar industry. Nearly ten years earlier, in 1891, Henry Oxnard had recruited from Germany and France some of the finest and best-trained technicians of the day who, upon arrival in America, formed the core of a cadre to educate Americans in the production of sugar from beets.
After forming its first management team, Oxnard went on to provide the mechanical engineering department. Regarding overall responsibility for building management, he turned to A. P. Cooper, who had served at the pioneer Ames, Nebraska plant as an assistant engineer. Cooper immediately examined the Caro plant and set out a plan to influence the changes, working with a duet of draftsmen who had accompanied him to Caro. One was Daniel Gutleben, who would one day rise in the ranks of leading factory operators and still later, as a chronicler of the history of the beet industry.
With the top two levels firmly in place, Oxnard then provided the placement of a group of promising workers who lacked adequate training but could perform with a high degree of satisfaction if given proper guidance.
Charles Sieland, a thirty-six-year-old native of Germany employed by Oxnard to oversee the changes, rejected his countrymen ‘s tendency to withhold information except for financial reward. I have adopted Henry Oxnard’s philosophy of sharing information. Animals were in his mind not only a factory but also a university. A long list of factory technicians and executives began their careers at Caro under his leadership, then brought their common knowledge to others as they moved from factory to factory. One of them was William Hoodless, son of the same Richard Hoodless who had started rolling to get a factory in Caro. Within a few years, he assumed responsibility for all plant operations and not long thereafter accepted the chairmanship of the Pennsylvania Sugar Refinery in Philadelphia.
In 1906, the Sugar Trust consolidated most of its Michigan businesses into one company, the Michigan Sugar Company, reviving the first company to build a sugar factory in Michigan. The new Michigan Sugar Company included Alma Sugar Company, Bay City-Michigan Sugar Company, Peninsular Sugar Refining Company, Carrollton Sugar Company, Croswell Sugar Company and Sebewaing Sugar Company. At that time, through the nominated shareholders, the Trust had a majority stake in Blissfield Sugar Company, built a year earlier in 1905, and East Tawas Sugar Company, a company while not operating as a business owner in 1904, had a fine Kilby-built factory , which the Sugar Trust had used for in Chaska, Minnesota, where it operated for the next sixty-six years. The Carrollton Sugar Company also included the decommissioned Saginaw Sugar Company, which owned another Kilby-built plant, destined for Sterling, Colorado, where it served from 1905 to 1985. Charles Warren assumed the presidency of the Michigan Sugar Company, a position he held until 1925. .
By 1920, the sun had set on the Sugar Trust. Following a generation of opposing attacks by various federal agencies, including the U.S. The Justice Department and the Interstate Commerce Commission, the American Sugar Refining Company gradually sold its many components to private investors, and in doing so, the Michigan Sugar Company detached itself from the Sugar Trust’s grip. Its entire board of trustees by trust was made up of Michigan residents, none of whom affiliated with the Sugar Trust with the exception of its president, Charles B. Warren, whose interest was now further afield first as ambassador to Japan, 1921-1922, and then ambassador to Mexico in 1924. I lost a bid to become a United States Attorney General in 1925 under a politically charged Senate vote influenced by a dislike of Warren’s previous affiliation with the Sugar Trust. His aspirations for public sector roles kept him away from the office of president, a role filled with William H. Wallace, who bore the title, 3d vice president and general manager. The first and second Vice Presidencies fell to a few heavy shareholders’ meetings that were not involved in daily activities.
Expensive survives time and change
Thanks to James Howell, Caro’s superintendent, beginning in 1944, who compiled a recorded history in 1948, it is learned that Caro began storing beets in the factory yard in 1937, an important step for producers who, after supplying the beets to the factory, could look out for the needs of other crops, whereas previously it was necessary to supply the beets as they were needed.
During the period 1928-1937, the Caro plant, like almost all sugar mills in Michigan, suffered the ill effects of the Great Depression. However, from 1937 to the present day, Caro reported constant improvement in terms of modernization and expansion. Centrifugals for white sugar and a new pulp house were added in 1944. A centrifugal is an apparatus designed to separate sugar crystals from syrup by filtering the syrup through a screen that rotates at a sufficient (usually about 1,200 rpm) speed to create a centrifugal force propelling the syrup through perforations in a rotating basket. The sugar crystals remain in the basket while the syrup recycles through the process to extract more of the sugar. These and other changes have meant that the average daily slice speed is expanded to more than 3,600 tonnes every 24 hours from the 500 tonnes per hour. Today in the original design, making it a relatively small factory compared to others in the US, ranging from twice the size to four times the size.
If Caro has a secret to surviving more than 100 years, it’s that the Oxnard factory rebuilt remains exactly that for many years and remains it today, meeting the challenges they face, getting support from its community and changing as the apartment and opportunity go together to force change. In this way, the oldest surviving beet factory in the United States hangs in a fast-paced industry.
HOWELL, James, A History of the Caro Plant of the Michigan Sugar Company, an Unpublished Report on the Caro Factory History, May 1, 1948
GUTTLEBEN, Daniel, The Sugar Tramp – 1954 p.182 regarding Sugar Trust’s acquisition of sugar mills, p. 177 on the organization of Sebewaing Sugar and operating results, printed by Bay Cities Duplicating Company, San Francisco, California
MARQUIS, Albert Nelson, editor, Detroiters book, pages 465-468, A.N. Marquis & Company, Chicago, 1908 – on biography of Charles B. Warren
MICHIGAN ANNUAL REPORT, Michigan Archives, Lansing, Michigan:
Peninsular Sugar Refining Company filed 1904 and Michigan Sugar Company filed 1924
MOODY, John, The Truth on Trusts, citing the comment that the Sugar Trust began buying beet sugar companies in Michigan in 1902 and dividends between 1892 and 1900.
UNITED STATES. In the United States District Court for the Southern District of New York
USA vs. American Sugar Refining Co., et al. page 1674, Petitioner’s Exhibit # 1494
Copyright, 2009, Thomas Mahar, All rights reserved