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Archive for the ‘Lancaster’ Category

Accession 200608: Snavely Family Papers

While the Archives is best known for managing the archival records of Milton Hershey’s corporations, we also collect and care for the records of  many individuals and local organizations.  The finding aids for these collections are available online on the Archives’ website: www.HersheyArchives.org.

 

These collections contain a wealth of materials documenting many different aspects of Hershey’s past.

 

Milton Hershey, 1887

Milton Hershey, 1887

 

There are very few materials that shed light on Milton Hershey’s early adult years. Milton Hershey spent his early adult years struggling to make a living. While his life and accomplishments are well documented once he achieved business success, little remains to tell the story of those early years.

 

We are very fortunate that the Snavely Family papers are part of the Archives’ collection.  This collection includes several letters from Milton Hershey to his Uncle Abraham Snavely, written between 1880 and 1882.

 

Sometimes personal letters paint a different picture than the one presented in published sources.

 

In 1894, Lancaster County (PA) published the Portrait and Biographical Record of Lancaster County, Pennsylvania, Containing Biographical Sketches of Prominent and Representative Citizens. . .Together with Biographies and Portraits of All the Presidents of the United States.

 

I’m not certain who was responsible for researching and writing the brief biography of Milton Hershey. The entry begins with a brief genealogy, since both of his parents were born and raised in Lancaster County. The entry then continues:

 

 In 1876 our subject went to Philadelphia, where he engaged in the manufacture of confectionery, and there continued six years, after which he traveled in different states in the Union, and finally engaged in business in New York as a caramel manufacturer. He deemed it wise to remove his plant to Lancaster, where he has increased his business and employs a large number of men.

 

If this was the only documentation that existed for Milton Hershey’s early business years, we might have a very different understanding of his early life.

 

Business card; 1879-5/1881

Business card; 1879-5/1881

Business card; 1879-5/1881

Business card; 1879-5/1881

]

 

Fortunately for the historian, the Snavely Family Papers provides a slightly different view of those early years. As the finding aid notes, the collection is:

 

Largely comprised of correspondence and land records. The correspondence contains several hand written letters from Milton S. Hershey to his uncle, Abraham B. Snavely, requesting financial assistance.

 

The letters were written between 1880 and 1882, during the time that Milton Hershey operated a candy shop in Philadelphia. The letters reveal that Milton Hershey’s business was struggling at that time, and cash flow was not sufficient to support the business. Hershey turned to his Snavely relatives for financial loans, unfortunately, without much success. You can read more about these struggles here.

 

Interested in learning more? Visit the Archives and review all of the letters in the collection to gain a better understanding of Milton Hershey’s early business struggles.

HersheyArchives@30-4 Selling the Lancaster Caramel Company

150 shares of American Caramel Company stock owned by Milton S. Hershey.

150 shares of American Caramel Company stock owned by Milton S. Hershey.

 

What’s the story behind this American Caramel Company stock certificate?  Milton Hershey’s caramel business was called the Lancaster Caramel Company.  So why did Milton Hershey own stock in a rival company?

 

The Lancaster Caramel Company dominated the United States confectionery market.  Lancaster Caramel products were distributed nationally and internationally. Even though Lancaster Caramel Company dominated the market, there were competing firms.   The American Caramel Company had been organized in 1898 following the merger of three smaller caramel businesses.  It had offices in Philadelphia and New York and its managers were very aggressive businessmen.

 

American Caramel felt that Lancaster Caramel was their only serious rival and the owners tried to persuade Milton Hershey to merge with them. American Caramel Company knew that a merger would allow them to control 95 per cent of the caramel market.

 

However, Milton Hershey was not interested in the idea of the merger. At first, American Caramel threatened to put Milton Hershey out of business, but Hershey was not intimidated.

 

Finally, the owners of the American Caramel Company approached Milton Hershey with an offer to buy his business. Milton Hershey responded with interest. Though caramels were a very popular confectionery product, Hershey believed that the caramel market was reaching the end of its popularity. “Caramels are just a fad,” he said.

 

Negotiations to sell the Lancaster Caramel Company stretched on for months. Finally, in Spring, 1900, the price was finally agreed on: Milton Hershey would sell the company for one million dollars.

 

John Snyder, legal counsel to Milton S. Hershey. ca.1915-1930

John Snyder, legal counsel to Milton S. Hershey. ca.1915-1930

 

Negotiations were not yet concluded.  The matter of how the price would be paid needed to be resolved.  Milton Hershey’s representative, his lawyer John Snyder, wanted an all cash transaction. Daniel Lafean, the American Caramel Company representative, had other ideas.

 

Throughout the spring, representatives of the two companies held negotiations.

 

Our knowledge of the negotiations comes from a 1955 oral history interview with John Myers, who was the stenographer during the talks. John Myers related:

 

The negotiations took place in Mr. Snyder’s office, 120 East King Street [Lancaster, PA]. There were present Mr. Hershey, and John Snyder; representing the other people was Congressman Lafean of York [PA] and a representative of the Providence Trust Company of Providence, Rhode Island.

                The first offer of the [American Caramel Company] people was $500,000 in cash and an equal amount in stock.  The agreed on price was a million dollars. The price was understood.  I know. I was there. I was the stenographer.

                The second offer was $750,000 in cash and $250,000 in stock.

                The third offer was $900,000 in cash and $100,000 in stock.

                Hershey had left it to Mr. Snyder because he trusted him with anything at all. But when Snyder refused that last offer, Mr. Hershey became quite angry.

 

Milton Hershey wanted to sell and he felt that $900,000 cash and $100,000 in stock was a good offer. He didn’t want the American Caramel Company to pull out at this point. And he also wanted to keep the good will of Lafean whose company might very well be customers in buying Hershey Chocolate coatings for their caramels. However, he knew that Snyder had set his heart on receiving one million dollars in cash and he wanted somehow to save Snyder’s pride.

 

So the discussion between Milton Hershey and his lawyer lasted a long time and when it was over Snyder had his way. Lafean’s third offer was refused, and the American Caramel Company agreed to pay cash for the full amount.

 

150 shares of American Caramel Company stock owned by Milton S. Hershey.  Sold 10/4/1900

150 shares of American Caramel Company stock owned by Milton S. Hershey. Sold 10/4/1900

 

But although it appeared that Hershey and John Snyder had driven a hard bargain, it was not Hershey’s way to let his opponents feel that they had been taken advantage of. Quietly, he agreed that after the one million dollar check had been handed him, he would spend a large part of it to purchase American Caramel Company stocks and bonds.

 

The sale of the Lancaster Caramel Company was finally completed on August 10, 1900. Milton Hershey surrendered the factory, the machinery, the stock in hand, his formulas, and the “Crystal A” trademark. He also agreed not to make caramels in Lancaster. But he retained the ownership of the Hershey Chocolate Company and he kept all his chocolate-making machinery. He also rented a wing of the caramel factory from the new owners in which he continued to make chocolate.

 

On October 10, 1900, Milton Hershey sold 150 shares of his American Caramel Company stock to Weeden & Co.

Reverse side of stock certificate. On October 10, 1900, Milton Hershey sold 150 shares of his American Caramel Company stock to Weeden & Co.

 

While Milton Hershey agreed to purchase American Caramel Company stock with sale monies, he had no intention of keeping the stock as a long term investment.  He directed John Snyder to sell the American Caramel stock as soon as was prudent.  Just a few months later, the first of Milton Hershey’s American Caramel Company stock was sold.*

 

*It turned out Milton Hershey was right in his assessment of the future of caramels in the confectionery market.  By the 1920s, the American Caramel Company was faltering and a few years later collapsed in bankruptcy.