Chocolate Wars

by Deborah Cadbury

  After publishing Poverty, Seebohm had toured the country promoting a new vision of social responsibility. His research inspired prominent politicians such as Lloyd George, the chancellor from 1908, and Winston Churchill, a Liberal MP. “This festering life at home,” Churchill wrote of the British poor, “makes world-wide power a mockery, and defaces the image of God upon earth.”

  Such influential thinking coincided with another forceful voice coming from the workers themselves. Still laboring under the harsh regimes of the previous century, the vast majority of laborers felt alienated. Many endured low pay and poor working conditions that had scant regard for health or welfare. Across Britain, workers were waking up to their own power. Enlightened employers like the Rowntrees had voluntarily set up their own pension scheme in 1906 and provided a host of benefits including free medical care and education, but they found their workers joining unions and making more demands. For Joseph Rowntree, who had put up £10,000 of his own money to start the pension fund, it was an unsettling time, reflecting an uneasy shift in the relationship between an employer and his staff. But his sons joined the growing number of employers who believed union membership was the way forward. Across England, the Labor Party was gaining support, and membership in the new trade unions reached 2.6 million in 1910. All this reflected a widespread recognition that the Victorians’ tolerance of poverty had no place in twentieth-century Britain.

  This momentum for change led to a series of groundbreaking Liberal reforms. After vigorously lobbying in the Daily News, the National Old Age Pensions League, and the Anti-Sweating League, it was rewarding for George Sr. and Edward to see that change was finally possible. The Old Age Pension Act of 1908 provided a means-tested income of between one and five shillings per week for people over seventy. The majority of those eligible in the first year were women earning less than £31.50 a year. The Trade Board’s Act of 1909 created boards that could set minimum wages in trades that were notorious for sweatshop labor such as tailoring. That same year saw Lloyd George’s revolutionary “People’s Budget,” which set out a redistribution of wealth, with higher rates of tax for those earning above £2,000 to fund further reform. With the National Insurance Act of 1911, the state had to provide a basic level of unemployment and sickness benefits. At last, the law of the land decreed that those struggling at the lowest economic rung would be recognized and supported. By today’s standards, the amounts they received were modest—but the ambition for reform was huge.

  In time these sweeping Liberal reforms would pave the way for abolishing the Poor Laws, which carried the shame of miserly welfare dispensed by the parish under laws that had their origins in Tudor times. Workhouses, thought by many to punish people for poverty, survived until 1930; even then many remained—renamed as Public Assistance Institutions—until 1948. But the grinding poverty and pittance for a wage on which a family could not possibly survive was relegated to the past.

  The specter of a Dickensian world, of a large and downtrodden underclass for whom there was no way out other than debtor’s prison or workhouses, would become a thing of the past. The need for charitable Quaker businessmen like Joseph Rowntree to provide for workers out of their own pockets became less urgent. The Liberal reforms helped to forge a framework for modern social welfare. What was once the domain of men of God was becoming the official business of the state. It was a step along the road that helped to distance the world of business and religion.

  Hostility to Cadbury’s and Rowntree’s “Cocoa Press” may have been exacerbated by the resounding success of the chocolate firms in the early part of the twentieth century. Far from being damaged by the court case, Cadbury was an increasing threat, even to its Quaker friends and rivals at Fry in Bristol. In 1905 Cadbury’s sales of £1,354,948 were only just behind Fry’s at £1,366,192 while Rowntree had sales of £903,991. For Cadbury’s staff, overtaking their old ally and rival became a realistic goal.

  Cadbury at last had a chocolate bar that was a fitting contender in the chocolate wars. The titanic struggle between the Swiss and British milk chocolate producers was being fought in confectioners and grocers throughout the country. The weapons were irresistible chocolate confections backed by travellers in motor cars, poster campaigns, price wars, and publicity stunts. Swiss chocolate was so prized that at first George Jr.’s Dairy Milk had trouble meeting the board’s target of two tons per week. Word spread and by 1910, it was the clear favorite among the British chocolate brands and well on its way to becoming Cadbury’s best-seller as chocolate sales began to catch up with cocoa. It was a wonderful vindication for George Jr. as sales approached twenty tons a week. The taste proved so popular that Cadbury introduced the same Dairy Milk chocolate in other lines such as the Fancy Box and as a coating on Easter eggs. George Jr. supervised the creation of a dedicated milk-condensing plant at Knighton in Staffordshire to satisfy demand. His Bournville Cocoa was also a great success, overtaking their long-established brand Cocoa Essence by 1911.

  Cadbury’s export trade was also growing exponentially under the meticulous supervision of George Jr.’s older brother Edward. According to his colleagues, Edward worked “at high pressure, made swift decisions and was not always easy to work with.” Yet there was no doubting his business acumen. When he took over the export department, entire continents were managed by a single traveller. In just a few years, after extensive trips around the British Empire, Edward established sales forces in China, South America, Canada, and the West Indies. Shrewdly exploiting the potential of the British Empire, with its colonies serving as a convenient catalyst for commerce, exports soon made up 40 percent of Cadbury’s total sales.

  After a chase that lasted half a century, the Cadbury giant finally overtook Fry in 1910. Cadbury’s sales reached £1,670,221 with Fry lagging behind slightly with £1,642,715. Even Rowntree was becoming a threat to Fry with sales climbing to £1,200,598. The efficiencies gained by the company in moving to Haxby Road, combined with the continued success of their gums, pastilles, and Cocoa Elect, had spurred a period of sustained growth.

  Despite this news in Bristol, eighty-four-year-old Joseph Storrs Fry II, battling against deteriorating eyesight, held on to his power as company chairman. He had an aversion to change, and his nephews and cousins were powerless to break the mold of his thinking. He failed to inspire his development team to come up with a satisfactory competitor to Dairy Milk. Ignoring the evident rewards that had come to both Cadbury and Rowntree by moving to modern sites outside Birmingham and York, he repeatedly opposed any move from the center of Bristol.

  For him, the awkward conglomeration of factories in Bristol was sacrosanct, hallowed by centuries of Quaker tradition, “beautiful” in his eyes. But his eyes were growing dimmer, always attuned to that inner vision of his youth when those in charge at Fry had “waited upon the Lord.” New buildings, new products; the modern generation, obsessed with change, missed the point. “Unless the Lord build the house, they labour in vain that build it.” The sickly scented busy world of chocolate-making faded. His religious interests became more focused. And at last, sight finally gone, his world lit by faith alone, he met his maker on July 7, 1913, at age eighty-seven. He remained a man of God first; chocolatier second.

  Although Cadbury had overtaken its chief British rival, the Swiss were still beyond reach. The merger of Peter-Kohler in 1904 and their marketing agreement with Nestlé had precipitated exponential growth. Swiss interests converged further when, in 1911, the family firm of Cailler approached Peter-Kohler and another deal was signed. Nestlé held a 39 percent stake in the united firm of Peter-Cailler-Kohler, and the Swiss giant that emerged was a colossus, apparently unbeatable. More than half of all chocolate consumed worldwide was Swiss.

  But the bitterly fought battle among the European chocolate empires was about to be eclipsed by a far more dangerous conflagration. On June 28, 1914, a bullet in Sarajevo triggered the chain of events that would see the boundaries of Europe—and the commercial empires within them�
�totally redrawn.

  CHAPTER 15

  God Could Have Created Us Sinless

  In Britain in the summer of 1914, the appetite for war was palpable, but Barrow Cadbury, now vice chairman of Cadbury, joined a delegation bent on persuading the Kaiser against war.

  Such pacifist idealism seems otherworldly, even naïve in the face of the mighty German and British military industrial machine. But pacifism was central to the Quaker movement and echoed back to its earliest years. It had its roots in George Fox’s rejection of violence in the face of hardship and suffering. “Turn the other cheek,” Christ had said. For over a century, Quakers had campaigned for the disarmament of all nations. Yet now the impetus for war was unstoppable. Peace movements were overwhelmed. The tide was at the flood.

  On August 1, 1914, Germany declared war on Russia. Two days later, Germany was at war with France. On August 4, Germany invaded Belgium, and Britain declared war on Germany. When Britain joined the conflict, Lord Kitchener, the commander during the Boer War responsible for the policy of herding women and children into concentration camps, was named Secretary of State for War. He launched his legendary poster—“Your Country Needs You”—and hundreds at the garden factory in Bournville answered his call.

  At the Daily News, Alfred Gardiner saw that George Cadbury Sr. “had never faced so searching a test” of conformity to Quaker doctrine. Unlike the Boer War, which George viewed plainly as unjust and which failed to challenge his religious beliefs, this conflict brought him “face to face with the fundamental tenets of religious persuasion.” Pacing the large wood-panelled rooms of the manor house, a set of Quaker rules devised in the English shires during the seventeenth century seemed remote.

  The war split the Quaker community in two. For some there were no circumstances, regardless of the outcome, under which a Quaker could deviate from the doctrine of nonresistance. For others like George Sr., this was no longer a simple issue. Although he acknowledged that the causes of the war were complex, and he found fault on the British side, he believed that the prime mover in this world calamity was German militarism. While he remained “a very strong believer in Peace,” he insisted that German militarism “must be crushed.”

  The issue was critical since his children with his second wife had recently reached adulthood. George and Elsie knew their three sons would make their own decisions. Despite the long-standing family commitment to pacifism, their headstrong youngest son, twenty-one-year-old Egbert, known as Bertie, left the Quaker movement immediately to sign up with the Admiralty. In his words, he and his friends “were all in a desperate hurry to enlist because we thought the war would be over by Christmas and unless we were quick we might miss all the fun.” His brother, twenty-four-year-old Norman, had trained as an engineer and started work in the Electrical Mechanical Brake Company in West Bromwich. Soon he was swept up in a most un-Quakerly activity: manufacturing bomb parts, shells, artillery hubs, gears, and track links for tanks.

  George’s oldest son by his second marriage, twenty-five-year-old Laurence, was keen to volunteer for the army but remained committed to the Quaker movement. “I strongly urged—as I am a well known advocate of Peace,” George Sr. explained later, “that Laurence should join the Ambulance Section.” On August 21, Arnold Rowntree and others had launched an appeal in the Quaker magazine the Friend asking young Quakers to form a Friends Ambulance Service to rescue the wounded on the front lines. Laurence left with the first unit, one of forty-three volunteers.

  As soon as they reached France, they learned that wounded from the Battle of Yser in southwest Belgium were in need of help in the sheds of the Dunkirk railway station. According to the Friends Ambulance Unit records, when Laurence and his Quaker friends opened the door, “a terrible sight met their eyes.” Light filtered through the windows revealing thousands of men lying where they had been left with appalling injuries. Many had been there for three days and nights, “practically untended, mostly even unfed, the living, the dying, and the dead side by side, long rows of figures in every attitude of slow suffering or acute pain, of utter fatigue or dulled apathy, of appeal or despair.” Gangrene was the terror quietly poisoning torn flesh; the air was thick with the sickening smell of it. Working day and night, the Quaker volunteers treated the wounded and organized transport for 6,000 to be transferred to hospitals.

  By early November, the Quaker ambulance convoy was on the road again. The next stop: An ancient town in west Belgium caught under intense bombardment: Ypres.

  HERSHEY, PENNSYLVANIA

  During the autumn of 1914, as the prime of European manhood faced the horror of warfare in the industrial age, Milton Hershey’s forty-three-year-old wife, Kitty, was also struggling to survive. Her assailant was unseen, an enemy unknown to modern science but just as deadly.

  With each passing day, Kitty seemed a little more diminished; her smile fragile, her breathing difficult. Swaddled in the most expensive furs, she was still cold; pampered with every conceivable diversion, she did not have the strength to lift a book. Slowly her mysterious nervous ailment robbed her of her last vestiges of dignity; despite her husband’s devotion, she was utterly helpless. On a trip to Philadelphia in March 1915, Milton Hershey, forever attentive to the woman he could not do without, left to get champagne to cheer her. When he returned, he was too late. Kitty had died.

  Milton was utterly distraught. Here was a man who apparently could do anything, who had built a nationwide brand, a multimillionpound business, and a celebrated town—but his massive wealth could not save Kitty. With his wife lying in a bronze casket, fresh flowers ordered to decorate her vault for years into the future, he returned to Hershey and threw himself into what he knew best.

  Work was his world. In the months after Kitty’s death, he cut a mercurial, frenetic figure, with an occasional unpredictable streak that made employees worry about getting on his wrong side. At times, a complete stranger was the recipient of his unexpected goodwill, such as a cripple he spotted from the window of his car who suddenly found himself with sufficient funds to pay for the necessary surgery. At other times, a committed and long-serving employee might find himself on the firing line over something that was not his fault. Hershey’s Chocolate Company continued to mint money with sales approaching $10 million by 1915. The queue of vehicles waiting to load up with goods was unending; some four hundred a week. Hershey’s influence over the district was spreading as his farms extended to almost 9,000 acres. Appreciative visitors arrived by the hundreds to gaze at the wonderful sights of the famous chocolate town.

  It was not enough for Hershey. In early 1916 he removed himself from the many poignant reminders of his life with Kitty and found a retreat in the Caribbean island of Cuba. Cuba had recently been liberated from Spanish control, and America was flexing its own imperial muscle, seeking colonies of its own and bringing American style and commerce to the island. Hershey seized the opportunity. With the war posing a threat to Atlantic shipping, he feared a sugar shortage might sabotage the comforting routines of his chocolate money machine. As Hershey settled into a luxurious hotel in Havana enjoying distant ocean views over Havana Bay, he forced himself to focus on business: Was there a way he could control his own sugar production?

  What began as a modest trip with a Cuban guide through the sugar plantations culminated in a gamble on a typical Hershey scale.

  Milton toured the northern coast between Havana and Matanzas with the boundless enthusiasm of a young man. Tirelessly he trekked through fields of sugarcane, not noticing the heat, viewing the growing green, the vigor of the canes, the flowing water, the rich earth. The whole glorious fecund island was growing money. Hershey was in a buying mood: 10,000 acres thirty-five miles east of Havana were a start. It was like beginning anew and required all his energy, and he had energy to squander while trying to blot out memories.

  Hershey raised the funds for his venture by selling securities and creating a new company, the Hershey Corporation. This put him in a position to proceed simu
ltaneously with a giant sugar mill, a grand hotel, and of course, another model town, Hershey Cuba, with over 180 cottages with their own gardens. He wanted his workers to have the best of the new technology. His model houses would boast such extravagances as taps with running water and electric lights. He continued to buy land—eventually some 65,000 acres—and made plans for an electric railway that would cross it from Havana to Matanzas: the Hershey Cuban Railway. While eyebrows were raised back in Hershey, Pennsylvania, at the incredible extravagance of the venture, Milton felt invincible as sugar prices continued to climb.

  Milton Hershey became a familiar figure in Havana: He was the very image of wealthy benevolence as he strolled through the tropical landscape in his white suit and panama. His mother sometimes accompanied him on trips, when they stayed in old-world haciendas and enjoyed the view of Havana Bay. Milton continued to spend his way through his grief, and gradually the isolated, expatriate society in Cuba afforded him some relief. Millionaires he had long admired, such as Henry Ford, also relished the privacy of the Caribbean island. These were Havana’s boom years, when exotic luxuries were always available to the super rich, and the tropical air was fragrant with the scent of money.

  Milton’s business continued to expand exponentially, and he was now in a position to control the price of one of his main raw materials. The very rich Mr. Hershey, almost cursed with the Midas touch—widowed, childless, as he drank champagne, smoked fine cigars, and gambled in Havana’s nightclubs—had no one to whom he could bequeath his vast wealth, and all the while his chocolate money machine grew daily.