Welcome to the History of Michigan's Beet Sugar Industry where you will discover the detailed history of many of the sugar companies that once dotted Michigan's landscape and of those that continue to add value to Michigan's economy. Much of the credit for what became one of Michigan's enduring industries is owed to Thomas Cranage who formed Michigan Sugar Company in 1898. Read his story and others in this blog.

Saturday, April 17, 2010

East Tawas, Michigan - Where Expectations Met Reality

By the turn of the 20th century, Michigan, a state that had pegged its economic fortunes to the lumber industry began to accept the reality that it had sold its heritage for pennies on the dollar. The lumber that had been its economic mainstay was gone! For sixty years lumberjacks had raged across the state from Lake Michigan on the state's western shore to Lake Huron on the eastern shore and from Lake Erie in the south to Lake Superior at its northern end ripping away forests and leaving behind economic depression, an ugly environment and hopelessness.
Gradually, the state's leaders became aware of a new industry, one that did not tear down resources but rather added resources – agriculture, especially agricultural products that included processing factories. The developing beet sugar industry fit the bill with perfection. Michigan Sugar Company's new factory in Essexville, a suburb of Bay City, proved beyond question that farmers, industrialists, and venture capitalists could profit equally by raising sugarbeets and then processing them into table sugar. Soon, the rush to build beet sugar factories developed into a full scale stampede. The Michigan sugarbeet industry escalated at a breathtaking pace.
Nine factories followed Essexville’s successful experiment. A burst of cyclonic enthusiasm caused a mad scramble when investors, constructors, bankers, and farmers combined energies and skills to bring to life eight factories in a single year! That was 1899 when new factories were built in Holland, Kalamazoo, Rochester, Benton Harbor, Alma, West Bay City, Caro, and a second factory in Essexville. In Marine City, investors, inspired by success at Essexville, paid Kilby Manufacturing $557,000 to build Michigan’s tenth sugarbeet factory. Despite the paucity of factory constructors and the engineers to operate them, fourteen additional factories rose on the outskirts of Michigan towns during the next six years, the last of which appeared in Charlevoix in 1906. Fifteen years later, Monitor Sugar Company built the state’s twenty-fourth and final beet factory.
Unhappily, the unbridled enthusiasm for new beet sugar factories often resulted in the construction of factories in places that had not won the farmer's heart. One such place was East Tawas, a lovely village on Lake Huron's shore that would one day attract tourists who sought its Lake Huron's sandy beaches and gently lapping waves. But until 1903, East Tawas, like most of Michigan, had relied on the lumber industry for its daily fare. When the lumber barons packed up their money bags and departed for greener pastures, investors turned to the beet sugar industry that was blazing as hot as the dot com industry would blaze nearly a century later. Instead of fame and fortune, however, East Tawas earned the distinction of having in its environs a sugar factory that would have the shortest lifespan of any beet sugar factory in Michigan.
The total operating time its two-year life span was twenty-nine days, eighteen the first year and eleven during the second and final year. The total weight of beets sliced during that period was 17,648 tons, far from enough to support the factory’s overhead expenses, much less provide a profit to the investors. Some named it Churchill’s Folly after Worthy Churchill, the president of the Bay City-Michigan Sugar Company.
With the construction of the Bay City Sugar factory in Essexville underway, Worthy Churchill wanted to secure a sugarbeet growing estate somewhere north of Bay City where inexpensive and idle timberland awaited someone to put it to better purpose. Coincidentally, East Tawas was burdened with a bankrupt sawmill situated at a fork in the road a few miles north of the town, where, today, U.S. 23 intersects with Tawas Beach Road. Its proximity to Lake Huron offered a handy source of water. Rail lines built to haul lumber from sawmills would now carry sugar equipment to the site. The residents of East Tawas, much like residents of villages throughout the state, were loathe to depart even though its gently undulating hills, once covered with magnificent white pine were now barren. Rich soils drifted from unprotected hills to settle in moss covered swamps. Jack pine, short and crooked, and weeds grew in the dry crevasses near the edges of the swamps.
East Tawas residents clamored for a sugarbeet factory. The infant industry was three years old, but already legends involving sudden wealth and entire communities saved from extinction, caused an outcry for one in their community. Significantly, others who had made substantial investments in the new industry did not heed the call. Absentees included the most successful of the pioneer sugar manufacturers: Ben Boutell, Penoyar brothers William and Wedworth, Nathan Bradley, Rasmus Hansen, Thomas Cranage, and every other major investor in Michigan’s then existing sugar industry. That left Worthy Churchill who showed his support with a $50,000 investment and Charles B. Warren, a representative of the Sugar Trust, tossed $25,000 into the pot. Warren’s fellow Detroiter and good friend, Charles Bewick, a Detroit industrialist signed on for $50,000 and accepted a vice-presidency while Warren added the treasurer’s title to his growing list of responsibilities. Eugene Fifield of Bay City, who had earned a reputation among investors as someone who worked well with farmers, added his name to the shareholder list and one thousand dollars to the treasury. Citizens of more modest means took note of the large commitments of men of power and dipped into slender savings to follow suit.
Churchill, eager to get the wheels in motion, and well satisfied with the performance of Joseph Kilby in constructing the Bay City Sugar Company’s Essexville factory, set about to appoint him for the East Tawas project. Joseph Kilby handed in a bid of $598,500. Based on each one thousand tons of beet-slicing capacity, the price was nearly fifty percent greater than was the cost of the Essexville factory, indicating a shift away from the quickly built small factory to larger facilities consisting of quality engineering and equipment.
Nevertheless, Vice-president Charles Bewick said to hold on–not so fast. He too had a candidate for the construction contract. Bewick had gained some experience at Caro and Croswell where new factories had been constructed. He was then serving as the first president of the Sanilac Sugar Refining Company, owner of the Croswell factory, and had a long history in the Detroit manufacturing sector. He included among his friends Joseph Berry, a noted manufacturer of varnish who owned with his brother Thomas an eight thousand acre farm near the middle of the Michigan Thumb. The Berry brothers became significant stockholders in Bewick’s Croswell factory along with D. M. Ferry, the largest distributor of garden seeds in the world–all packaged in Ferry’s sprawling Detroit factory.
According to Bewick’s point of view, the Oxnard Construction Company offered experience, quality, and an unbroken record of success. Joseph Kilby, on the other hand, was an upstart, a former top hand with E. H. Dyer who had gone off on his own. Bewick protested Churchill’s premature announcement and pushed forward his choice. Churchill countered, and prevailed, with an objection to Oxnard’s practice of submitting cost-plus contracts. He wanted a firm bid and got it from Kilby whose bid matched dollar for dollar the bid for the Churchill’s Bay City factory built three years earlier at a cost of one thousand dollars per ton of beet-slicing capacity. The contract went to Kilby who in turn assigned the job to John Shepherd, a noted construction engineer who supervised the construction of factories at Benton Harbor, Holland, and Carrollton.
In the short run the selection of a builder made little difference. Tawas was the wrong place to grow beets. Lake Huron lay east of the factory site and while it served well as a water source, beets could not easily take root among its waves. The nearby slopes, stripped of trees, would have been a difficult place to grow and tend beets but even that impractical source of beet ground had already surrendered its soil to newly made swamps. Where the ground was level, stumps interfered with farming. There was some arable land, however, but the farmers who owned it lacked experience with sugarbeets. Those who succumbed to the persuasive entreaties of Gus Carton, the factory’s agronomist and chief recruiter of farmers, lost money when they failed to produce enough beets per acre to generate a profit.
Kilby’s field staff under the direction of Jack Shepard performed better than any factory built up to that time in Michigan. Shepard, known and respected for attention to detail that included running thorough water tests--that is, operating the factory with only water to locate weakness--constructed a factory that exceeded expectations. The factory sliced five hundred ninety-four tons of beets per day during its inaugural run, a clear record, and only six tons short of its planned capacity. Unhappily for Shepard and his crew, there were only 10,690 tons of beets available, enough for a mere eighteen days of operation.
The next year, the frost stayed late, keeping farmers indoors. A late start, combined with a profitless crop the previous year and rumors that the factory would close, caused farmers to return to traditional crops. The factory acquired only 6,958 tons of beets, enough for a mere eleven days of slice. Gus Carton proved himself indomitable. He proposed a plan whereby the company would purchase lands and resell them to Russian immigrants at attractive prices. He attracted the Russians and invested $25,000, but didn’t get the beets, the Russians proving no less independent than were the farmers who were already present.
A bolt of lightning shattered the brick chimney in July 1905. The directors, all experienced investors, knew better than to add more capital. The chimney lay where it fell and arrangements were made to ship the beet crop to a Bay City beet factory. Disaster had also struck in St. Louis Park, Minnesota where a beet factory burned to the ground. The East Tawas board of directors viewed the fire as an opportunity. When the beets destined for the St. Louis Park factory went to another factory, their quality captured interest, especially the beets from Chaska, Minnesota. At the direction of the board of directors, Kilby dismantled the East Tawas factory and re-installed it in Chaska where it remained in operation for the next sixty-five years.
East Tawas slowly recovered from the loss of the lumber industry and its failed sugar factory and today is a successful destination point for tourists who enjoy the nearby Huron National Forest, Lake Huron and Tawas Bay, and the AuSable River made popular by canoeists and fishermen and the Tawas Point Lighthouse, in operation since 1876, a part of the Tawas Point State Park.
It does not plan to see another sugar factory anytime soon.


GUTLEBEN, Dan, The Sugar Tramp-1954- Michigan, Printed by: Bay City Duplicating Co, San Francisco, 1954

HENLEY, ROBERT L., Sweet Success . . .The Story of Michigan's Beet Sugar Industry 1898 – 1974, Michigan Historical Center, Department of History, Arts and Libraries
©2009 Thomas Mahar – all rights reserved