Tag: Company

No sooner had Saginaw’s lumber tycoon, Wellington R. Burt, celebrated his 70th birthday on August 26, 1901 than did he set out to employ a portion of his lumber wealth in the awakening beet sugar industry.

The mantra of real estate agents everywhere is “location, location, location.” However, in the business world in general it should be, “timing, timing, timing.” Wellington Burt’s timing so far as his interest in sugar was concerned, was poor.

Like others who had filled their days in the once fast-paced but now moribund lumber industry, he had time on his hands and money in the bank. At first, also as had others, he devoted some years to politics. He had served a term in the state senate (1893-1894) then sought a U.S. Congressional seat but had the ill fortune to run as a Democrat in 1900, the year the Republican star was rising. Ranked as one of America’s wealthiest men, Burt cast about for new investment ideas and then homed in on the sugar industry. His set his eyes on Owosso, Michigan, a village situated some thirty miles southwest of Saginaw where several holdovers from the lumber industry resided in mansions arrayed along Washington Avenue. Among Owosso’s many attributes was the influence of Joseph Kohn, a sugarbeet technologist residing in Bay City, Michigan. Kohn presided over the Michigan Chemical Company which had been put in place to purchase and then process molasses generated by that city’s growing number of sugar beet factories. His success at Michigan Chemical encouraged investors to draw close when he spoke of investing in beet sugar factories.

For Kohn it was simple, the more sugar beet factories the more molasses for Michigan Chemical, which could be distilled into alcohol, a circumstance that built enthusiasm for the construction of another factory. Fat with profits, Michigan Chemical and its parent, Pittsburgh Plate Glass, sought to build a factory in Owosso on its own and didn’t need the interference of another millionaire with time on his hands and money in his pocket. Wellington R. Burt was not invited to join in a venture with Michigan Chemical and his ambitions to go on his own languished behind a curtain of international events

The United States had agreed upon the conclusion of the Spanish-American War to reduce the import duty on Philippine sugar 75 percent of the general rate and to allow the importation of sugar from Puerto Rico, a U.S. possession, entirely free of duty. The Philippines had the additional advantage of shipping up to 300,000 tons duty free and Congress was dithering with proposed legislation that if passed, would approve a treaty of reciprocity with Cuba. The agreement would grant that country a 20 percent tariff preferential.

The nation’s newspapers devoted considerable space to the plan, dampening the spirits of those who had at first shown much excitement about Burt’s proposed factory. He could find few others to join him in a venture in Owosso, although he pledged $200,000 of his personal fortune and claimed others had subscribed another $50,000 in stock. He had convinced farmers to sign up to grow sugarbeets on three thousand acres and contracted with the experienced firm of Fuehrman and Hapke to begin construction when it fell apart because investors had not come forth with the balance of the required investment – about $600,000.

Michigan Chemical Company waited in the wings while additional investors failed to materialize. Elsewhere, excitement for beet sugar factories hardly slowed. Sixteen were built in the United States between 1900 and 1902, eight in Michigan. Burt’s attention turned to Alma, Michigan where he met more success by combining his money and talents with those of Aimee Wright, another Saginaw industrialist.

Owosso, in 1902, was as good a candidate for a beet factory as any town in Michigan, perhaps better. It had rail lines, established industry, a managerial class and trained workers in addition to an excellent farming region. Burt stepped aside, allowing the project to die stillborn. Fuehrman and Hapke went on to construct the Sebewaing factory in the next year, creating one of the most successful beet factories of the era. Michigan Chemical emerged from the shadows and picked up the reins.

Owosso was home to two families with notable achievements in American politics. Both would play various roles in the establishment of a beet sugar factory in Owosso. The Bentley family, headed by Alvin Bentley, whose grandson, also named Alvin, achieved fame at great personal expense in 1954 when as a junior Congressman, he became the most seriously injured of five victims of an armed assault on Congress while it was in session. Four Puerto Rican terrorists discharged thirty rounds from the visitor’s gallery of the U.S. House of Representatives to the floor of that chamber while the Representatives were debating an immigration bill.

The Dewey family had been engaged in Republican politics since the party’s formation in nearby Jackson, Michigan in 1854. In Owosso, in accordance with tradition, a leading representative of the political party then in power held the postmaster’s position. Edmund O. Dewey, uncle to Thomas Edmund Dewey, a future New York governor and twice an unsuccessful candidate for the U.S. presidency, held that position beginning with the presidency of William McKinley and ending with the presidency of Woodrow Wilson. His brother George, the father of Thomas Edmund Dewey, secured the appointment in 1921.

Edmund Dewey, in 1902, revived Wellington Burt’s plan for a beet sugar factory in Owosso. He arranged the purchase of a suitable 40-acre site at the west end of Oliver Street, raised $10,000 and urged the county board of commissioners to pass a bond issue sufficient to meet the cost of the land. The county denied the bond, causing the idea to fail for a second time and for the same reason – a lack of enthusiasm.

Joseph Kohn stepped forward and in doing so introduced into Michigan’s fired up sugar industry one the nation’s wealthiest families, the Pitcairn family of Pittsburgh, Pennsylvania. The Pitcairn family controlled the Pittsburg Plate Glass Company (today known as PPG Industries) headquartered in Pittsburg, Pennsylvania. The glass company had all but ended America’s dependence on Europe for large sheets of glass suitable for storefronts, display cases and mirrors. During the opening days of the 20th century, the company produced 20-million square feet of glass annually.

In seeking a source of potash for its glassworks, Pittsburgh Plate Glass turned to Kohn who made an effort to extract it from beet sugar molasses and instead found he could earn assured profits by converting molasses into alcohol. He had also served the German-American Sugar Company (later named Monitor Sugar Company) as a consultant and before that held a similar position with Kilby Manufacturing who was much involved in turnkey beet sugar factory construction projects. Kohn’s Bay City distillery, owing to the large volume of molasses emerging from three sugar factories and more promised from the German-American Sugar Company’s factory then under construction, was turning over substantial profits to Pittsburgh Plate Glass.

John Pitcairn saw America’s shores first as five-year old immigrant brought to America by his parents John and Agnes along with two sisters and a brother. Pitcairn accumulated a personal fortune in railroads, coalmines, oil, and in the founding of the Pittsburgh Plate Glass Company in partnership with John Ford. He was sixty-years old when Kohn drew his attention to the potential in Owosso and the failed effort of first Wellington Burt, then Edmund Dewey to form a beet sugar company.

Three’s the charm for Owosso. On October 29, 1902, the Owosso Sugar Company came into existence, capitalized at one million dollars. More than 75 percent of the shares were owned by members of the Pitcairn family and friends. John Pitcairn owned 62,500 of the outstanding shares outright. A handful of Owosso residents added their names to the shareholder list, including the aforementioned Alvin Bentley and the brothers Edmund and George Dewey. George Dewey’s son, Tom, the future presidential candidate, would one day spend school vacations working in the new sugar company’s packaging room.

The company presidency was turned over to Charles W. Brown, the owner of newly minted 5,600 shares of stock. Brown was also the president of Pittsburgh Plate Glass. Day to day financial duties went to 36-year old Edward Pitcairn, one of John Pitcairn’s many nephews. Edward would, by 1910, become treasurer of Pittsburgh Plate Glass, a position he would hold for the balance of his career. Carmen Smith, an attorney with a long association with Charles Brown, stemming from a period when the pair resided in Minneapolis, assumed responsibility for the general management of the new firm. In addition, he assumed the title of Secretary-Treasurer. He had recently moved his wife Isabella and three children, Margaret, Carmen, and Cedric to Bay City where he served as the treasurer of Michigan Chemical Company. Joseph Kohn accepted the role of general factory superintendent.

Educated at the Prague Institute of Technology, Kohn graduated in 1883 with degrees in mechanical and chemical engineering. Following his schooling, he was employed at Breitfeld-Danek of Prague and later gained experience at a sugar factory in Moravia, a region in what is now the Czech Republic but was then a part of the Austrian-Hungary empire, and also worked with the evaporator designer, Hugo Jelenik. In Moravia, he worked with Carl Steffen, the inventor of the molasses desugarization process that carries his name. While employed by Kilby Manufacturing Company, Kohn developed the Kilby standard factory arrangement.

Kilby Manufacturing won contracts to construct two 1,000-ton factories in Michigan; one at Owosso and another at Menominee. The two would hold the record as the largest beet factories built in Michigan until a 1,200-ton factory was built at Mount Pleasant in 1920. In addition to the two 1,000-ton factories, Kilby had an order for a standard 600-ton factory for East Tawas. It would be a busy year for Kilby who had also received orders for three factories in Colorado, one each for Fort Collins, Longmont, and Windsor with Fort Collins gaining the largest factory built by Kilby-1,200 tons a day slicing capacity. The price for the Owosso factory, at $675,000, on a per ton of sugarbeets sliced basis, was low at $675 compared $1,197 at East Tawas and $785 at Menominee. In fact, the Owosso factory cost less per ton of slice than any factory built in Michigan.

The Owosso factory came to life on December 9, 1903 without the usual fanfare assigned to new beet sugar factories which usually included marching bands, parades, and much merriment followed by speaking opportunities for local luminaries and politicians. In a quieter fashion, Charles W. Brown, arrived from Pittsburgh and brought with him as an honored guest, James Wilson, the Secretary of Agriculture. He rose to national prominence when President William McKinley appointed him Secretary of Agriculture in 1897. His stature was such that presidents Roosevelt and Taft retained him as secretary, and it was only when in 1912 in a move to sweep Republican appointees from office, Woodrow Wilson ended his tenure. He had served as Secretary of Agriculture from March 4, 1897 to March 3, 1913, the longest duration served by any American cabinet official.

After a brief ceremony, Secretary Wilson pulled the whistle cord that called forth the beets from the flumes. Unlike many of the beet factories built in Michigan, there was no central local figure that had put his money and reputation on the line for the factory. The majority ownership was far away in Pennsylvania, its officers and guiding management lived elsewhere, Bay City in the case of Joseph Kohn and Carmen Smith and the environs of Pittsburgh for Brown and Pitcairn. It was not unusual for absentee owners to overlook the obvious – input from farmers. When a lack of farmer interest made itself known, it caused no palpitations in the boardroom of Pittsburgh Plate Glass. After all, twenty years earlier John Pitcairn had forged a new American industry out of the rubble of similar but failed efforts when he wrestled the plate glass market away from the Europeans and developed one of the world’s largest and most modern factories of its kind.

Farmer apathy was a mild inconvenience, not a crushing blow to someone who had turned the making of plate glass into a unique American industry. The answer lay near at hand and Carmen Smith, his appointed emissary, had probed the possibilities even as the factory walls reached toward the sky to the amazement of Owossians who had gathered on weekends throughout the summer of 1903 to take in the breadth and dimensions of the industrial goliath growing in their midst. Clearly, the Pittsburgh Plate Glass people thought big. They thought even bigger than the factory’s sidewalk superintendents imagined, bigger than had any beet factory organizer up until that time. Not only were they building a beet factory destined to be twice the size of nearly all the sugar factories in the United States, they were at the same time on the verge of establishing the largest sugarbeet farm in the United States and the largest single farm operation east of the Mississippi River.

South and west of Saginaw, Michigan lay a vast marsh formed during the last ice age. The marsh adjoined the convergence of several large river systems that became the Saginaw River that then and now flows 22 miles northward to Lake Huron. The eighteen thousand acre marsh served as an important stopover point and brooding ground for migrating waterfowl, ducks, geese, swans. It was the largest natural wildlife habitat in the American Midwest. It was protected by characteristics that made it unappealing to farmers – frequent flooding. But that changed when Harlan B. Smith, a Saginaw buggy manufacturer who also speculated in real estate, entered into a partnership with two attorneys Charles H. Camp and George B. Brooks, to acquire and then develop approximately 10,000 acres of the marsh. Their efforts, spanning fifteen years, resulted in a large drainage ditch that extended nearly two miles across the prairie, permitting them to convert hundreds of acres of marsh into farmland.

When Carmen Smith searched for a large tract in which to install a demonstration sugarbeet farm while at the same time assuring the Owosso factory would have all the beets it would want, he quickly targeted the Prairie Farm. Smith completed the purchase on February 22, 1903 and soon, a steam-powered dredge, a monster designed for digging into mucky earth, was soon barged down the Saginaw River to the prairie. It bit into the earth in the front, forming a 20-foot high dike and creating a canal, which it used to transport itself until acre-by acre, it claimed land that had waited a half a million years for the arrival of the mechanical behemoth.

Eventually, Owosso Sugar Company created thirty-six miles of dikes, some of them eighty feet wide at the bottom, forty at the top and twenty feet high. Others were of lesser dimensions but all designed for the same purpose – draining and then keeping the land dry. Roads crowned the tops of the dikes and the sides turned to grass for use as a sheep pasture. Half the land was drained via open ditches and half was drained with the aid of large pumps that sent their burden to the nearby Flint River. Once it was dry, the reclaimed land was laid out much like a giant checkerboard in twelve lines of sixteen forty-acre parcels. Almost overnight, for a capital outlay of $400,000, Smith transformed the Prairie Farm from a losing proposition into the largest beet sugar estate in Michigan, and probably in the United States, if not the world – ten thousand acres. The new factory could now set aside worry about an adequate supply of beets.

Owosso Sugar Company’s First Campaign

The first operating campaign for the Owosso Sugar Company, as was customary with Kilby designed turnkey factories, achieved the guaranteed slice rate of 1,000 tons of sliced beets each twenty-four hours. Construction contracts typically required that a new factory meet its guaranteed rate for a specified period of time, set by negotiation, at between one and ten days and usually occurred under the supervision of Kilby’s engineers some days after the startup. The same engineers would withdraw once the new owner signed the certificate of completion, handing the factory over to the company’s management staff. The slice rate at Owosso declined after the factory reached the guaranteed rate most likely for the same reasons slice rates in most new beet factories declined – inexperienced operators.

Because the Prairie Farm was yet in its infancy, it produced fewer beets than it would in the following years causing the processing period, referred to as a “campaign” by the industry, to last only 48 days, ending on January 26, 1904. During its maiden run the new factory sliced an average of 542 tons, well short of the scheduled 1,000 tons per day. The second campaign was five days shorter but the slice rate nearly doubled, reaching 930 tons per day for 43 days.

While the Owosso factory was under construction, the Lansing beet factory, built by Benjamin Boutell, a major investor in several Michigan beet sugar factories, and others two years earlier, suffered from a lack of managerial oversight. Diagnosed with cancer early in 1902, Boutell’s wife, Amelia died on November 27 at the age of 52 despite his best efforts to discover a cure. Having no heart for his business interests, he sold the Lansing factory to the Owosso Sugar Company.

Kohn and Smith now had four major operations: two sugar factories, the Prairie Farm, and Bay City’s Michigan Chemical Company under their control whereas one year earlier they had only the chemical company to occupy their time and thoughts. The Prairie Farm employed 160 workers and 58 teams of draft horses and each of the two beet factories employed hundreds more in addition to workers at the chemical factory and in the Bay City headquarters. The two managers, each 45 years old, were in constant motion, visiting the properties, the corporate office in Pittsburgh, and attending industry conventions in addition to meeting with members of Congress and the Department of Agriculture. In 1910, Joseph Kohn was the first to reckon the cost of such a pace. He suffered a heart attack and died at the age of 52.

In the year preceding Kohn’s death, 8,500 Prairie Farm acres had been diked and equipped with gravity drainage and pumping systems and for the first time, grew a square mile of sugarbeets. Peppermint provided additional revenue (35,000 pounds of peppermint oil in 1909) while cabbage followed in importance behind sugarbeets.

For the six years following Kohn’s death, Carmen Smith continued on as before, shouldering Kohn’s responsibilities in addition to his own, until 1916 when he placed the two sugar factories under the supervision of Charles D. Bell who had served as the factory manager at Alma before joining the Owosso staff in 1907. Bell remained at Owosso for sixteen years, leaving only after Michigan Sugar Company acquired the Owosso and Lansing factories in 1924 whereupon he returned to the family ranch in Los Alamos, California where he promptly discovered oil and retired in wealth.

In 1920, at age 62, Carmen Smith, much like his friend and associate, Joseph Kohn, succumbed suddenly to a heart attack while traveling home by train from Chicago. With Carmen Smith passed a pioneering era. Joseph Kohn in 1910, Joseph Kilby in 1914, John Pitcairn in 1916, and Carmen Smith in 1920 – those who had lived the dream of building one of the world’s largest and most modern beet sugar factories and then topping it with the country’s single largest beet farm, had passed from the scene. Sadly, what they had wrought would not last.

According to Daniel Gutleben’s history of the Michigan beet sugar industry (The Sugar Tramp -1954), Pittsburgh Plate Glass, likely concerned that Michigan’s beet factories, built too small to compete with major refineries designed to process raw sugar imported in quantity, couldn’t compete against the volume of duty-free sugar entering the country. It opted to sell both the Owosso and Lansing factories to Michigan Sugar Company at a price reported in the press at $2,000,000 plus preferred stock. The Prairie Farm remained in the hands of John Pitcairn’s heirs.

Michigan Sugar Company operated Owosso for the next four years until diminishing interest on the part of farmers combined with the flood of imported sugar caused the factory to close in 1928. Michigan Sugar lacked the chief advantage once held by the former owners – the Prairie Farm thus could not command farmers to grow beets when other crops, corn and soybeans attracted favorable prices for less investment and less work. It re-opened again for one year in 1933, then shut down but was kept in hopeful readiness. Hope finally surrendered to reality that the farmers would not return. The factory and buildings were sold in 1948. Proof that the eventual failure of the Owosso Sugar Company did not rest upon the shoulders of management lay in the appointment of Owosso’s secretary, Edward Bostock, to the chairmanship of the board of directors of Michigan Sugar Company.

Sources:

DENSLOW, William R, and TRUMAN, Harry S., 10,000 Famous Freemasons from A to J Part One (in reference to Charles W. Brown career with Pittsburgh Plate Glass Company)

MILLER, Ed, and BEACH, Jean R.., The Saginaw Hall of Fame, Published by the Saginaw Hall of Fame, 2000. (In reference to Wellington R. Burt)

GUTTLEBEN, Daniel, The Sugar Tramp – 1954 printed by Bay Cities Duplicating Company, San Francisco, California

LE CUREUX, KEITH, Albee Township History, Saginaw, County, Michigan, Chapter V, Prairie Farm.

BETZOLD, Michael, Detroit Free Press Magazine, December 26, 1993, Utopia Revisited – an article describing the history of the Prairie Farm.

Copyright, 2009, Thomas Mahar – All Rights Reserved

About the Author: Thomas Mahar served as Executive Vice President of Monitor Sugar Company between 1984 and 1999 and as President of Gala Food Processing, a sugar packaging company, from 1993-1998. He retired in 1999 and now devotes his free time to writing about the history of the sugar industry. He authored, Sweet Energy, The Story of Monitor Sugar Company in 2001, and Michigan’s Beet Sugar History (Newsbeet, Fall, 2006).Contact: Thomas Mahar E-mail