Henry Osborne Havemeyer
Henry Osborne Havemeyer was an American industrialist, entrepreneur and sugar refiner who founded and became president of the American Sugar Refining Company in 1891.
Havemeyer was the third generation of his family in the sugar business and oversaw the expansion of the family firm into the American Sugar Refining Company, which dominated the sugar industry in the late 19th century. Together with his wife, Louisine Havemeyer, he was an avid and prolific collector of art, one of the earliest collectors to bring Impressionist art to America, guided by artist Mary Cassatt. After Louisine Havemeyer's death in 1929, a large part of their collection was bequeathed to the Metropolitan Museum of Art.
Early life
Henry Osborne Havemeyer was born in New York City on October 18, 1847, the eighth of nine children, to Frederick Christian Havemeyer Jr. and Sarah Louise Havemeyer. His mother died in 1851, when Henry was three years old. He was raised with the help of his grandmothers, Mary Osborne Henderson and Catharine Billiger Havemeyer, and his oldest sister, Mary Havemeyer. The family lived in a house at 193 West 14th Street, in what was then the northern frontier of New York City.In 1854, Henry Havemeyer, age seven, and his brother Thomas, age nine, were sent to study at the Bellport Academy in Long Island, under the charge of Mr. James Cruikshank. The following year, Henry followed his older brother Theodore to Mr. Betts' School in Stamford, Connecticut. He was a difficult, short-tempered student. After a fight with the principal, he left the school. His formal schooling ended at the age of eight.
Sugar refining
Havemeyers in the sugar industry (1799–1842)
In 1799, William Havemeyer arrived in New York City, followed three years later by his younger brother Frederick Christian Havemeyer. The brothers came from a family of bakers in Bückeburg, Germany, and trained in London during the last decades of the 18th century. William Havemeyer was brought to New York under contract to Edmund Seaman to run his sugar bakery on Pine Street. Frederick followed circa 1802, and in 1805 the brothers leased land from Trinity Church on Budd Street to build their own sugar bakery, which opened in 1807.After the Havemeyer brothers retired in 1828, their respective sons, cousins William F. Havemeyer and Frederick C. Havemeyer Jr., took over the Havemeyer family business. In 1842, William F. Havemeyer began a political career, serving three terms as Mayor of New York City. In 1856 Frederick C. Havemeyer Jr. moved the business to Williamsburg, Brooklyn leasing a waterfront lot between South 3rd and South 4th Streets on which to establish a steam sugar refinery. In 1861, eldest son George W. Havemeyer, age 22, became partner, but died on November 27, 1861, when his clothes were caught in the crank of one of the refinery's large engines. In 1863, Frederick C. Havemeyer Jr. reorganized the business as Havemeyers & Elder, a partnership with son Theodore A. Havemeyer in charge of refinery operations and son-in-law J. Lawrence Elder in charge of the mercantile business.
Havemeyers & Elder (1863–1882)
When the partnership of Havemeyers & Elder was formed in 1863, Henry Osborne Havemeyer, known in the business as H.O. Havemeyer, was a fifteen-year-old apprentice and, in the family tradition, was learning his way through all aspects of the business from testing sugar at the docks to learning the complex processes of refinery operations, including the carefully guarded secrets of sugar boiling. Subsequently, he became apprentice to J. Lawrence Elder, working on the mercantile aspect of the business—purchasing, sales and record keeping. When Elder died suddenly in 1868, H.O. Havemeyer and his brother Thomas took over the mercantile business and became partners in Havemeyers & Elder in 1869. Cousin Charles H. Senff also joined the partnership to manage refinery operations and construction with Theodore A. Havemeyer.By 1868, the Havemeyers & Elder refinery had doubled in size. Known as the Yellow Sugar House, it covered the blocks on the East River waterfront from South 2nd Street to South 5th Street. Modern innovations were introduced into refinery operations, such that sugar was refined with great efficiency. By 1876 Thomas Havemeyer was no longer involved in Havemeyers & Elder, and H.O. Havemeyer became the principal partner in charge of the mercantile business.
Refinery fire and rebuilding (1882–1884)
On Sunday, January 8, 1882, the Havemeyers & Elder refinery was completely destroyed by fire, a loss of $1.5 million.The partners, Theodore, H. O. and Frederick C. Havemeyer Jr. and cousin Charles H. Senff, agreed to rebuild and constructed a large state-of-the-art refinery, the cost of which required the entire financial resources of the family, including Frederick C. Havemeyer Jr.'s personal fortune.
The new refinery was designed by Theodore A. Havemeyer, Charles H. Senff and refinery superintendent Ernest Gerbracht. It was built of completely fireproof materials—brick and iron, with cast iron columns and wrought iron beams and girders. Electric lights were installed, a new technology that was less hazardous than gas lights. The refinery reopened for business in January 1884 with a capacity to refine three million pounds of sugar daily.
Formation of the Sugar Trust (1887–1891)
In 1887 H.O. Havemeyer established the Sugar Refineries Company, known as the Sugar Trust. The late 1870s and 1880s were a time of intense competition in sugar refining, in which the growth of the industry after the Civil War led to overproduction and slim profit margins. Large refineries, such as Havemeyers & Elder, were producing sugar so efficiently and at such great quantity that supply outstripped demand. Refineries were unable to operate at full capacity and many smaller, less efficient refineries failed. In the face of these harsh conditions, the sugar refiners sought to organize in order to control production and pricing. On October 27, 1887, after two years of negotiations, an agreement was reached to combine into a "trust," called the Sugar Refineries Company.By year end the Sugar Trust included 17 of the 23 refinery companies operating in the United States. A competition between the company's refineries followed to determine which were most efficient and would remain in operation. By 1890 five refineries remained in operation, with Havemeyers & Elder as the sole New York area refinery.
The legality of the Sugar Trust came before the New York State court in a November 1890 suit, People of the State of New York versus the North River Refining Company.
This led the Sugar Trust to reorganize as a holding company, the American Sugar Refining Company, which was incorporated in New Jersey on January 10, 1891, by attorneys Elihu Root and John Randolph Dos Passos. Effectively the business practices of the American Sugar Refining Company maintained those of the Sugar Refineries Company and it continued to be known as the Sugar Trust.
Acquisition of refineries (1887–1895)
In 1887 Havemeyer sought to bring the remaining independent refineries into the Trust. His chief rival on the West Coast was Claus Spreckels, who refused to join the Trust. Using a small California plant that the Sugar Trust had acquired in 1891, Havemeyer began an aggressive price war to put Spreckels out of business. In retaliation Spreckels opened a Philadelphia refinery in 1889, intending to undercut the Trust's business in the East. A fierce price war continued for two years, until the Trust and Spreckels came to an agreement in 1891: Spreckels sold his Philadelphia refinery to the Trust and the two sides agreed to keep out of each other's territory.The years 1889-1892 were a severely competitive time for the Trust, where the margin between the cost of raw sugar and the price of refined sugar was at its lowest. Alleviation of conditions came when the McKinley Act of 1890 eliminated import duties on raw sugar. Consequently, prices of refined sugar dropped and there resulted an increase in sugar consumption. In spite of intense competition from Spreckels, the Trust saw profits increase, distributed large dividends, and continued to expand.
In 1891 Havemeyer moved to acquire the remaining three Philadelphia refineries. The acquisition of E.C. Knight Company, one of the Philadelphia refineries, was challenged by the U. S. government in the landmark case, United States v. E. C. Knight Co.. In 1895, the Supreme Court ruled in favor of the Sugar Trust, on the grounds that sugar refining was manufacture, not interstate commerce, and was therefore not under the jurisdiction of the federal government, nor covered by the Sherman Antitrust Act.
Arbuckle Sugar and Coffee War 1898-1901
In 1898, John Arbuckle, a coffee merchant and wholesale grocer from Pittsburgh, head of the Coffee Trust, entered the sugar market. Arbuckle coated his beans in a mixture of Irish Moss, Isinglass, Gelatine, Sugar and Eggs to preserve flavor which also enriched the coffee.Arbuckle had innovated in the automated packaging of his coffee beans and began to repackage sugar, which he bought from the Sugar Trust, to sell alongside his coffee beans. Arbuckle moved to produce his own sugar and built a refinery in Brooklyn. Thereafter Havemeyer and Arbuckle entered into a fierce competition. Havemeyer bought controlling interest in a coffee business, Woolson Spice Company of Toledo, Ohio, in order to undercut Arbuckle's prices. Arbuckle retaliated by lowering prices on the sugar produced at his new refinery. The price war continued for three years. In 1901 the two men came to an agreement to end their costly war.