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Archive for September, 2015

HersheyArchives@30-26: Why Did Hershey Sell Its Cuban Assets?

List of Hershey Cuban assets acquired by the Cuban Atlantic Sugar Company. Page from Cuban Atlantic Sugar Company Notice of Stockholders meeting, 3/5/1946

List of Hershey Cuban assets acquired by the Cuban Atlantic Sugar Company. Page from Cuban Atlantic Sugar Company Notice of Stockholders meeting, 3/5/1946

 

In 1921, Milton Hershey hired Percy Alexander (P.A.) Staples to manage his Cuban operations. For the next 23 years Staples resided in Cuba. As part of his work, he became very knowledgeable about Cuba: not only its sugar industry, but also with its people, culture, economy, and politics.

 

In 1944, Milton Hershey selected Staples to succeed him as president and chairman of all of the Hershey Entities. Staples relocated to Hershey and quickly settled into his new responsibilities. Though Hershey’s Cuban properties had been consistently profitable, Staples recommended to Mr. Hershey that the Cuban properties should be sold. Staples’ long residence in Cuba provided him with a unique understanding of the country and perhaps created some concerns about its future.

 

P.A. Staples wrote to the Securities and Exchange Commission to explain some of the details of the sale of Hershey’s Cuban assets. 4/6/1946

P.A. Staples wrote to the Securities and Exchange Commission to explain some of the details of the sale of Hershey’s Cuban assets. 4/6/1946

 

Trust001B44F23.1B

Staples to SEC, page 2. 4/6/1946

 

Selling such a sizeable asset required months of due diligence and documenting all aspects of the business. Naturally, there were questions about why Hershey might want to sell a business that had expanded and been profitable for years.

 

Staples outlined his reasons for selling Hershey's Cuban properties. 4/6/1946

Staples outlined his reasons for selling Hershey’s Cuban properties. 4/6/1946

 

Mr. Staples outlined some of the reasons for selling Hershey’s Cuban properties in an April 6, 1946 letter to the Securities and Exchange Commission (SEC):

 

“The desire of the Trustee to change its position from that of 100 percent owner of the Hershey Cuban enterprises to that of an owner of only half of the Preferred Stock, and less than 100 percent of the Common Stock, of the Company arises from the fact that, except for the Hershey Cuban enterprises, the only operating properties controlled by the Trustee are located in or near Hershey, Pennsylvania. The individual members of the board of trustees of Hershey Trust Company are men living in and around Hershey, Pennsylvania. Of them the writer (P.A. Staples) is the only one experienced in the operation and supervision of properties in Cuba and the only one having the specialized knowledge required for such purpose.

 

In the light of these circumstances, the late Milton S. Hershey, founder of the Hershey Industrial School, explored the possibilities of a transaction of the general character which is about to be effected and the proposed transaction with the Company is one which was approved in principle by Mr. Hershey before his death last fall.”

 

#HersheyArchives@30

 

 

 

 

 

HersheyArchives@30-25: Hear Mr. Hershey

 

Milton Hershey poses  with a kitchen employee at a Hershey Industrial School picnic held at Hershey Park. 1938

Milton Hershey poses with a kitchen employee at a Hershey Industrial School picnic held at Hershey Park. 1938

 

In the 1920s, American households had a new choice in home entertainment—the radio. The first commercial radio station was established in 1920 and by 1922 over 600 stations were on the air. Radio programs in a variety of formats and genres were broadcast including radio plays, variety shows, news, and interview programs. One such program was “It Can Be Done” hosted by Edgar A. Guest, an English-born American poet who was popular in the first half of the twentieth century.

 

On June 8, 1938, “Milton S. Hershey, ‘The Builder,’” was featured on the radio show, “It Can Be Done.” At the time of the interview, Mr. Hershey was eighty years old. His voice had aged and his speech was slow as he was inexperienced with public speaking and was reading from a script. At the end of the interview, Guest read his poem, “Compensation,” in tribute to Mr. Hershey.

 

The audio below is the only known recording of Mr. Hershey’s voice. Click on the link to listen to Milton Hershey.

 

 

[Transcript of audio]

 

Announcer:      So Milton S. Hershey, the builder of an ideal town continues to build, to build happiness into the hearts of boys, happiness that is the foundation for sturdy, worthy, useful citizenship. The unconquerable, unselfish spirit of Milton S. Hershey has brought fulfillment of his most fantastic dreams. And proves once more, “It can be done.”  We present now, ladies and gentlemen, Milton S. Hershey,” the builder.”

 

Mr. Hershey:   Thank you, Eddie Guest. Good evening, ladies and gentlemen.

 

Mr. Guest:       Mr. Hershey, how many years have you been in the candy business?

 

Mr. Hershey:   Sixty years.

 

Mr. Guest:       Are you still active in the business?

 

Mr. Hershey:   Indeed I am.

 

Mr. Guest:       You know, it seems to me that as long as I can remember I’ve seen your chocolate bar on candy counters.

 

Mr. Hershey:   Yes, the Hershey Bar has been on the market thirty odd years and we were the first to introduce the almond bar.

 

Mr. Guest:       Now, you must use an unbelievable amount of cocoa beans.

 

Mr. Hershey:   We use as much cocoa, raw cocoa beans, as France, Switzerland, Italy and Spain put together.

 

Mr. Guest:       Hmmm.

 

Mr. Guest:       How large is your town Hershey, Pennsylvania?

 

Mr. Hershey:   Hershey, Pennsylvania, has a population of 2500. In that total of 2500 we have 3200 students. The Hershey Township High School is the largest township high school in the United States.

 

Mr. Guest:       How long has the Hershey Industrial School been in operation?

 

Mr. Hershey:   Since 1909.

 

Mr. Guest:       Can you tell me what has happened to some of the boys you’ve trained there?

 

Mr. Hershey:   Well, one is treasurer of the Trust Company, two are in the bank, and there are others in responsible positions. You see, we follow the boys through until we see that they have jobs.

 

Mr. Guest:       Tell me, just how do the opportunities for the boys today compare with those of your day? That is, these boys coming out of your school?

 

Mr. Hershey:   Most of them have better chances for character building and education than ever before. Perhaps they don’t have the chance to make as much money as some individuals have made, but they will lead to happier lives.

 

Mr. Guest:        Milton S. Hershey, Household Finance and I humbly salute you and your courage which carried you through to success and we add our tribute to that of thousands of others for the great work you are doing with boys. Congratulations, Milton S. Hershey.

 

Mr. Guest:       Mr. Hershey, I’d like to think, when life is done,

That I had filled some needed post,

That here and there I’d paid my fare

With something more than idle boast.

That I had taken gifts divine,

The breath of life and manhood fine,

And tried to use them now and then

In service for my fellowman.

 

I’d hate to think when life is through

That I had lived my round of years

A useless time that leaves behind

No record in its vale of tears;

That I had wasted all my days

By treading only selfish ways

And that this world would be the same

If it had never heard my name.

 

I’d like to think when life is done

That here and there, there shall remain

A happier spot which might have not

Existed had I toiled for gain,

That someone’s cheery voice and smile

Shall prove that I had been worthwhile

That I had paid with something fine,

My debt to God for life divine.

 

#HersheyArchives@30

HersheyArchives@30-24: Made in Hershey, So It Must Be Good: H.B. Reese Candy Company

While most confectionery companies regard other candy-making businesses as their competitor, Milton Hershey was different.  Hershey Chocolate limited its definition of a confectionery competitor to those businesses that produced solid chocolate bars. In fact, Hershey Chocolate sold chocolate to a wide range of companies manufacturing enrobed, or chocolate-coated, candy.

 

Harry Burnett “H.B.”Reese, a one-time employee of the Hershey Chocolate factory shipping department, was inspired by Milton Hershey’s success and decided to start his own candy business.

 

In 1921, H.B. Reese began making candies in the basement of his home at 18 E. Areba Avenue in Hershey. Reese produced a wide range of confectionery products. During the company’s first 20 years, the product line featured a variety of candies made and sold by weight. Most of the candies consisted of different centers that were hand-dipped in chocolate. H.B. Reese’s son, Ralph remembered:

 

We used Hershey’s chocolate.  I guess we were a nuisance for a while, buying fifty pounds at a time.  But I remember the little express wagon I used for hauling papers.  [I’d] go down to the [Hershey Chocolate] office and buy fifty pounds of chocolate, haul it back to the house.

 

Day Book; H.B. Reese Candy Company, ingredients purchased. 1929

Day Book; H.B. Reese Candy Company, ingredients purchased. 1929

 

The Archives holds a number of ledgers related to the early years of the H.B. Reese Candy Company. The index page of a 1929 ledger lists a variety of ingredients, including cocoanut (coconut), peanuts, butter, raisins, cherry pieces, dates and chocolate. An early employee, Rena Renshaw recalled in a 1993 oral history interview:

 

I think [until] ’41 they made the assortment, maybe about twenty different kinds, sixteen to twenty different kinds of candy.  And after the war came along, of course, they couldn’t get the coconuts and some of the sugar and butter…[all of]the products that he used in the different kinds of candy. 

 

Time Book; H.B. Reese Candy Company. 1932

Time Book; H.B. Reese Candy Company. 1932

 

For many years the number of employees remained small. Renshaw started working for the H.B. Reese Candy Company on September 1, 1926. She remembered:

 

I got paid twenty cents an hour for the first two weeks, and the next raise we got was twenty-five, about two weeks or so later. 

 

By 1932, she was making 30 cents an hour coating candy centers with chocolate.

 

H.B. Reese Candy Company; pounds of beans picked. July-August 1933.

H.B. Reese Candy Company; pounds of beans picked. July-August 1933

 

H.B. Reese’s path to success was not direct. The 1930s were filled with financial ups and downs. In summer months, when it was too hot to work with chocolate, Reese had his employees can beans and tomatoes that he had grown to generate income. Renshaw recalled her summer work at the factory:

I worked in the canning.  We snipped beans and we’d put labels on cans. That was when it was too warm and we didn’t work in the chocolate.  That they did down in the basement in the summertime.  Well, of course, when the beans came in, they had to can the beans.  We put the labels on the cans by hand. Well, then they canned tomatoes, too. Tomatoes and beans.  That was only in the summertime when it was hot. Didn’t have air-conditioning then, so it was too hot to make candy.

 

By the end of the 1930s, the H.B. Reese Candy Company was emerging as a successful candy company. One of the most popular items in its product line was the peanut butter cup. When sugar rationing was imposed during World War II, H.B. Reese made the decision to eliminate every item in the product line except for the peanut butter cup. The peanut butter filling took less sugar than most of the other Reese candy items and peanuts were readily available from southern states.

 

Customer Sales Brochure, H.B. Reese Candy Company. ca1950

Customer Sales Brochure, H.B. Reese Candy Company. ca1950

 

After the war, Reese continued to build his company based on the success of a single product: Reese’s Peanut Butter Cups. Instead of selling the product by weight, peanut butter cups were packaged for retail sale. And every package carried the slogan: “Made in Chocolate Town, So They Must Be Good.”

 

#HersheyArchives@30