Chocolate Wars

by Deborah Cadbury

  CHAPTER 8

  Money Seems to Disappear Like Magic

  PHILADELPHIA, PENNSYLVANIA

  The success of Bournville was not lost on one impoverished entrepreneur from Pennsylvania: Milton Snavely Hershey. In 1879, the year that Richard and George Cadbury opened their “factory in a garden,” things were not going well for twenty-two-year-old Hershey, who was getting his first taste of failure.

  The child of a broken marriage—a penniless father intoxicated by the pursuit of the American dream and a careworn mother who had long since tired of it—Milton straddled the gulf between his father’s wild ambitions and his mother’s strict Mennonite background by toiling at a business of his own. His shirt sleeves rolled high, his overall stained, his shoes scuffed, he labored over scalding mixes and gas jets to create confections of boiled sugar from his proudly named Spring Garden Steam Confectionery Works in Philadelphia.

  “Money seems to disappear like magic,” his mother, Fanny Hershey, reported to her wealthy brothers. She and her sister, Martha Snavely, dedicated themselves to Milton’s business, working through the night wrapping the sweets, but after three hard years, Milton’s candy shop was floundering.

  The venture had started in 1876, after Milton took a trip to Philadelphia with a few dollars sewn into his coat lining and a great deal of optimism. At first he had met with success, benefiting that year from the Philadelphia Centennial Exposition. But despite his fashionable cards promoting his “Pure Confections by Steam,” there were three hundred confectioners in Philadelphia and competition was intense. Within a few years, Milton was forced into making humiliating appeals to his wealthy relatives on his mother’s side. The Snavely uncles were inclined to help the young entrepreneur, but just as a real prospect of success came into view, so did Milton’s estranged father, Henry Hershey.

  Forgiving and full of foreboding in equal measure, Fanny stood back and let her husband rekindle his relationship with his son. Man and boy became friends at once. With spellbinding certainty, Henry, ever the dreamer, presented his latest moneymaking scheme to his son. Improbably it centered on cough drops displayed in elegant little cabinets. Milton put every cent he had into cough drops and borrowed more and then watched as Henry Hershey’s scheme failed, spectacularly.

  Milton ended up giving his father several hundred dollars before Henry disappeared in disgrace—to the silver mines of Colorado and another magical dream. Burdened with more debt, over the following months, Milton and his mother were drifting towards failure. The pretty sugary sweets he made himself looked so lovely in their rows of crystal jars, but he couldn’t manage to sell enough to cover his costs.

  On December 8, 1880, he begged his Snavely uncles for $600, explaining, “Otherwise I will not be able to pay my bills.” His uncles obliged, only to receive another letter from their nephew on April 28, 1881: “I am in urgent need of $500.” On December 3, Milton’s Aunt Mattie wrote and asked for $400. This was followed a month later by a letter from Milton stating somewhat charmlessly, “I must have $300 which Aunt Mattie says you are to raise and send not later than the early part of next week.” Milton Hershey pointed out that he had given his father $350. He expressed his regrets over helping his father, against his aunt’s advice: “If only I had sent father on his way . . . as Aunt Mattie told me to,” he said. The uncles once again paid up, but their goodwill was running out.

  The humiliation of the appeals, the unrelenting hard work, and the sense of obligation to his father combined to put intolerable pressure on the young entrepreneur. As his Philadelphia candy shop spiraled into decline during 1881, Milton Hershey, too, went into decline. Before long, he had become seriously ill.

  DERRY CHURCH NEAR LANCASTER, PENNSYLVANIA

  Milton Hershey had grown up trying to reconcile the inherent contradictions between his mother and his father and between the Church and the hedonistic pursuit of wealth. His mother, Fanny, was the daughter of a bishop in the Reformed Mennonite Church, a faith like Quakerism that preached simplicity and plain living—although it differed in requiring a literal interpretation of the Bible. The doctrine of hard work and self-discipline seemed crystallized in the very air his mother breathed; those plain clothes she wore and that small, strong back that bore the weight her iron will imposed. Reward, she believed, would come after years of patient, honest work, and she never failed in her duty to toil on the path of righteousness and virtue. Sacrificing any kind of wild indulgent gamble to small, purposeful steps was the creed that had helped her own family prosper. Her brothers had built up a comfortable lifestyle through their prudent endeavors.

  His mother’s background reflected the wider world in which Milton Hershey grew up. Pennsylvania was Quaker country: plain, sensible, and wholesome. By 1870 there were 7,000 Quaker inhabitants. The state owed its very existence to a Quaker, William Penn, who founded the colony in 1682 following years of religious persecution for nonconformists in England and America.

  During the seventeenth century, Quakers fleeing imprisonment in England had arrived at the ports of New England to face equally appalling treatment at the hands of Puritan leaders anxious to keep them out. In 1659 this fanaticism erupted into violence: Two Quakers who refused to leave, William Robinson and Marmaduke Stephenson, were marched to Boston Common and hanged. The following year, after two other brutal hangings, Charles II ordered the American authorities to stop religious persecution. Quakers were spared death, but just barely. There are reports of vicious punishment: ears sliced off, tongues pierced with hot irons, every brutality short of death.

  The problem eased in 1682, when William Penn, the Quaker son of a distinguished English admiral, set off for America. When Admiral Penn died, the British government owed him £15,000, and his son, William, agreed to waive the debt in return for a vast slice of land in America. He was given 45,000 square miles of rugged wilderness stretching to the River Ohio to the west, Maryland to the south, and Lake Erie to the north. William Penn gave his name to the new colony of Pennsylvania and welcomed not just Quaker settlers but also persecuted minorities from across Europe, including the Mennonites. On one of his trips to Europe, Penn visited the Innesholden Alps—a German-speaking part of Switzerland—and persuaded the suffering Mennonites to come to the New World. Among them were Hershey’s forebears.

  Penn held out the promise of liberty to those living under the threat of persecution. His colony was founded on tolerance and religious freedom. The capital city, Philadelphia, the city of brotherly love, sat on the banks of the River Delaware and was a beacon for like-minded men. The Quaker leader George Fox came to visit, and by the time of his death in England in 1691, there were 50,000 Quakers across North America, many settled in Pennsylvania. John Cadbury’s older brother Joel was among the many Quakers who put down roots in Philadelphia. Other groups in search of religious freedom also flourished in Pennsylvania, such as the Amish and Mennonite communities. Milton Hershey’s great-grandfather, Isaac Hershey, established his Mennonite family in Dauphin County near Derry Church.

  Three generations later, the young Milton Hershey came under Quaker influence. As a result of Henry Hershey’s poor management, the family moved constantly, leaving their grandfather’s homestead at Derry Church. At one stage, Milton and his family occupied a small farm at Nine Points, near Lancaster, where Milton was sent briefly to a Quaker school. The teacher reinforced the lessons taught by his mother, and he spent time improving his writing and learning to embrace discipline, sobriety, and hard work. But for the young Milton, many of the virtues encouraged by Quakers and Mennonites conflicted with a different and equally compelling message that he received from his father.

  Although Henry Hershey had been brought up as a Mennonite, the iron discipline and severe self-denial that shaped his wife’s character appear to have eluded him. He believed that there was no need for the laborious struggle that his wife advocated to claim a modest foothold on success. There were shortcuts, and he was determined to find them. But Henry’s schemes were
not blessed with good fortune. His marriage, floundering for so long on a series of disappointments that followed one wild venture after another, finally failed. The trigger seems to have been the death of Milton’s adored baby sister, four-year-old Serena. His parents, coldly distanced and weighed down by grief, went their separate ways.

  Henry Hershey could not give up his dreams. He needed them more than ever. Success, he told his son, came from exercising the imagination, from being bold, and from taking on the world. The bigger the risk and the more grandiose the idea, the more astronomical the reward. In Henry’s view, “If you want to make money, you have got to do things in a big way.” And there was plenty of evidence to support his position. The uneasy ghosts of the Civil War were gone, and America was busy making money, rushing headlong towards the promised Eldorado, with gold in the Klondike, Texas awash with oil, and the wheels of industry ceaselessly turning. It was the era of the dazzlingly wealthy—men like John D. Rockefeller and Andrew Carnegie, rich beyond imagining from oil and steel.

  In the early 1880s, as Milton Hershey virtuously applied Quaker and Mennonite principles to his Philadelphia candy shop, the unprincipled John Rockefeller was holding the world in the palm of his hand. His oil kingdom was firmly rooted in refineries across the Northeast, the geysers of black gold serving as a visible contrast to his humble origins. Rockefeller had started out with nothing in Cleveland, Ohio, sixty miles west of Pennsylvania in the 1860s; twenty years later, he was well on his way to becoming the world’s richest man. But his success had not happened without adventure and risk taking. This had not come about while Rockefeller applied Mennonite principles. Rockefeller was a true-grit American who had borrowed heavily to become the world’s largest oil refiner in Cleveland. Brave moves and bold action led to the formation of Standard Oil in 1870; he made secret deals with railways and hounded the competition until it could be either bought or crushed.

  Then there was Andrew Carnegie, the son of a Scottish weaver who came to Pennsylvania in 1848 on money borrowed to pay the fare. After changing the thread in a cotton mill for twelve hours a day, it did not take Carnegie long to find a few shortcuts. With what versatility had he moved from railroads to oil to steel mills in Pittsburgh making profit each time? Now, less than two hundred miles from Hershey’s hometown of Lancaster, Carnegie’s craggy steel works dominated the skyline of Pittsburgh. This steel provided the very bones of a new America, stretching across virgin territory—a newfound might forged in railroads, bridges, high-rise buildings, and industry. Carnegie, the industrial emperor, had the wealth of a small country. What young man could resist such entrepreneurial inspiration?

  But life had dealt Milton Hershey a different hand. In 1881, at the still-struggling candy shop in Philadelphia, twenty-four-year-old Milton tried to tackle his growing losses, only to find himself physically wrecked. The harder he tried, the more ill he became. He had given six mercilessly hard years to the business, and with failure imminent, it was taking him down, too. With true determination, his mother, head covered with prayer cap and bonnet, did what she could. Early in 1882, however, her sister Mattie returned from a trip to see her brothers to say they could offer no more funds. By March, Milton Hershey had run out of money.

  His Snavely cousins brought their farm wagon to pack up the shop and take Hershey home. Disgraced and in debt to his mother’s family, Hershey wrestled with his options. He was torn between his father’s self-confidence and his mother’s conviction that reward came only through unremitting hard work. Once his health improved, he turned his back on his mother’s puritan severity. Where had the Bible, virtue, and iron discipline got him? Milton opted for his father’s approach to business and fixed his sights firmly on the West.

  DENVER, COLORADO, AND CHICAGO, ILLINOIS

  In the 1880s, while the Cadbury brothers at Bournville were finally reaping the rewards of twenty years of hard work, their future American rival was living hand to mouth in Colorado. By the time Milton Hershey reached Denver, he was hungry and desperate. When help from his father failed to materialize, he responded to a “Boy Wanted” sign and was shown into a room out the back. Inside were several dishevelled boys. Instinct told him to leave. But he was locked in. Fearing he had been tricked into slave labor, Hershey waited until the door was opened and he drew his gun and threatened to use it unless he was released. He was learning the hard way how to be tough.

  During his travels west, it is likely he heard of an entrepreneur, Domenico Ghirardelli in San Francisco, who had recovered from bankruptcy by creating a business not too far removed from Hershey’s line of trade. The vicissitudes of Ghirardelli’s business sounded all too familiar. Ghirardelli arrived in California in 1849 during the Gold Rush. When the discovery of gold eluded him, and his business selling coffee and chocolate drinks to prospectors from a tent in the Sierra foothills proved equally lackluster, he went to San Francisco to open a coffee and confectionery shop. This got wiped out in the inferno of 1851. But the irrepressible Ghirardelli was soon back in business making a chocolate drink. He hit upon a low-tech process that enabled him to achieve modest success in defatting the cocoa bean and giving him the edge over his rivals. The chocolate liquor was hung in cloth, allowing the fatty butter to drip out while the cocoa solids were left behind. Although this approach did not deliver the purity of Van Houten’s cocoa, Ghirardelli’s drinking chocolate turned his fortunes around. In the early 1860s, he was importing just half a ton of cocoa beans per year; twenty years later, he needed almost two hundred tons. Ghirardelli’s products were so popular they were selling around the Pacific, reaching to Japan and China.

  For Milton Hershey, Ghirardelli’s success on the West Coast echoed what he knew of the chocolate business on the East Coast. It was boom time—especially for New England’s oldest firm, Walter Baker and Company.

  The business was started by Walter Baker’s grandfather, a Dr. James Baker, who rented a mill in Dorchester, Massachusetts, in 1765. Dr. Baker’s partner, John Hannon, was an Irish immigrant with experience in making cocoa, and they soon outfitted the mill with kettles, pestles, and a large iron roaster. When the unfortunate Hannon perished at sea, the Baker family continued to expand the business. Their products mirrored their English counterparts: cocoa was mixed with starch, arrowroot, or sugar to mop up the fats, and they emphasized the medicinal value of several of their brands. Walter Baker, the third generation in the business, went to London and learned from market leaders such as Fry and the Taylor Brothers. In the 1840s, he used what he had learned and introduced a new line of chocolate sticks. “I learned to make them in London,” Walter Baker wrote. “They are to be eaten raw or melted on the tongue to taste,” and he pointed out that “they are much more suitable for children than candy or Sugar Plums.” The firm’s advertising also mirrored its English counterparts. In 1883 they introduced La Belle Chocolatière, a beautiful girl who decorated the lids of Baker’s cocoas and chocolates in a range that had become known throughout New England.

  Milton united with Henry Hershey, but they had no money to rent a mill or invest in expensive equipment. Their only asset was their broad experience. Henry had travelled widely and flirted with everything from painting to gold prospecting. His son’s experience was much more focused. Milton’s mother had enrolled him at the age of fifteen as an apprentice in an ice-cream parlor in his hometown of Lancaster, Pennsylvania. For four years, he learned how to transform large boiling pots of sugar and water into colorful temptations: lollipops, boiled candies, fruit drops, and a myriad of others. Six years of running his own business in Philadelphia had honed his skills; he had confidence in making all types of candy. Most recently he had taken a job at a sweetshop in Denver, where he refined his knowledge of caramels. Instead of adding paraffin to achieve the desired texture, his Denver employer had hit on a better recipe. “I put in fresh milk,” he said. “They stay fresh for months and the milk makes them chewy too.” Milton was impressed and took note of each step of the process.

 
The summer of 1882 found twenty-four-year-old Milton working in the stifling heat with his father on the shores of Lake Michigan. Chicago was a town hurrying towards the future; a population of five hundred people fifty years earlier had exploded to half a million. Meatpackers and livestock owners, railroad and factory workers—a lawless maelstrom hungry for nourishment and all potential candy eaters. The world, it seemed, was coming to Chicago. Here a sharp-eyed entrepreneur could glimpse the new America. A network of railroads was turning the city into a key junction between east and west as well as north and south, with steamboats sailing the Great Lakes to connect by canal to the Mississippi River. From their rented premises in State Street, the Hersheys were hungry for success. With Henry’s imagination and Milton’s experience, they planned to make caramels and cough drops.

  Milton at last found there was just one drawback. It did not take him long to see what his mother had known all along. Henry was no team player or business partner. He was never there when he was needed and could be relied on for nothing. Before long, they decided to go their separate ways. For Milton Hershey, the lure of wealth and fortune remained maddeningly out of reach.

  In the autumn of 1882, Hershey returned east to his mother and aunt in Lancaster, Pennsylvania. He told them he wanted to start again. This time he would take on the largest growth market of all: New York. And he wanted to do it properly. As his mother had tried to teach him, slow, incremental steps were needed to grow a business. He knew that now.

  He paced Manhattan’s grid of streets researching the competition. America’s largest city had everything. The immigrants poured in from New York harbor, forming a ceaseless tide of humanity with hope on their faces and dust in their eyes. This was where the elusive dream started: on grimy streets, where wagons and horses mingled with dirt-poor Irish immigrants, New England Yankees, Germans and Scots from Pennsylvania, people from far and wide. The possibilities greeted you everywhere, blazoned across the billboards, and in advertisements and shop windows in a bewildering array of goods. There were new skyscrapers all of ten storeys high as well as run-down tenements, laundry strung between buildings soaking up the dirt. It was a wanting world looking hard for fulfilment.