The Germans Who Built America’s Sugar Industry

Not all the early American sugar barons were German. But most of them were. If you don’t know the story of sugar, you’re missing a fascinating tale. We don’t have room to tell you that whole sweet story here, but we do offer a very interesting chapter in that story: the almost stereotypical rags-to-riches saga of a German immigrant named Claus Spreckels. He became one of the wealthiest US Americans of all time. But, despite having two US towns named for him, today Claus Spreckels is little known in the US, and almost totally unknown in his German homeland.

Claus Spreckels

Today the richest sugar barons in the United States are two brothers from Cuba whose names you probably won’t recognize either. The Florida-based Fanjul brothers, “Pepe” and “Alfy,” have amassed a fortune in the sugar business. They are the main partners in a holding company, a giant conglomerate you also have likely never heard of: American Sugar Refining, Inc. (ASR). But you probably do recognize some of the American brand names that ASR owns: C&H, Domino, Florida Crystals, Redpath, and Tate & Lyle.

Like most business people who have earned the honorary title of “Baron” in their industry, the Cuban-American Fanjul brothers have enjoyed the benefits of political influence and government subsidies in their sweet enterprise. The earlier German-American sugar barons were no different in that way. In fact today’s huge Fanjul sugar empire is built in part on foundations built by German-Americans in the 18th and 19th centuries.

The German-American Sugar Magnates
They were of German heritage or actually born in Germany. In the United States they became wealthy businessmen, some more wealthy than others, and they shaped the US sugar industry in important ways. Here’s a brief overview of the most prominent sugar magnates before we return to Herr Spreckels.

• Charles Boettcher (1852-1948) – Boettcher (pronounced BETT-cher in the US) was a successful businessman in Colorado in the hardware, mining, cement, and sugar beet businesses. The Boettcher name is well known in Colorado. Born in Kölleda, Thuringia, Germany (then spelled Cölleda), he came to the US at age 17 and worked with his brother Herman, first in Wyoming. He moved to Colorado and pursued various business projects, often partnering with John F. Campion. At age 43 Boettcher returned to Germany, discovered sugar beets and sugar refining, and founded the Great Western Sugar Company after returning to Colorado. His family fortune has funded many philanthropic enterprises in the state through the Boettcher Foundation.
• William Havemeyer (1770-1851) – The first of several generations of Havemeyers who succeeded in the sugar industry in the US, William Havemeyer left Germany at age 15 and arrived in New York City after learning the trade of sugar refining in London. His ancestors lived in Bückeburg, in the German principality of Schaumburg-Lippe. Some spelled the last name Hoffmeyer or Hoevemeyer. In 1644 Hermann Hoevemeyer formed, with 19 others, a bakers’ guild. Dietrich Wilhelm Hoevemeyer, born in 1725, was a master baker, and a member of the city council of Bückeburg. After arriving in New York William Havemeyer managed a sugar house before opening his own refinery with his brother, Frederick Christian Havemeyer, who had come to New York in 1802. Together the two brothers operated the W. & F.C. Havemeyer Company sugar refineries, before passing the business on to their sons. William’s son, William Frederick Havemeyer (1804-1874), retired from the sugar refining business in 1842 and entered politics, eventually serving three terms as Mayor of New York.
• Henry Osborne Havemeyer (1847-1907) – Henry O. Havemeyer carried on the Havemeyer family’s significant sugar refining interests in New York. By the late 1800s New York dominated the industry, becoming home to the largest sugar refinery in the world, a sprawling industrial complex in Brooklyn, the American Sugar Refining Company (ASR). Owned largely by the Havemeyer family, ASR was the largest American business unit in the sugar refining industry in the early 1900s. It had interests in Puerto Rico and other Caribbean locations. Before 1890, ASR and Claus Spreckels had been fierce competitors. By 1891, however, they had started to collude. ASR had purchased Spreckels’s Philadelphia refinery and collaborated with him in establishing the Western Sugar Refining Company. In exchange for Spreckels operating Western, he sold shares of his Philadelphia refinery to Havemeyer.
• John Hilgert (1807-1881) – Johannes (John) Hilgert, born in Traunstein, Bavaria, founded the Pennsylvania Sugar Refining Company (Penn Sugar) in Philadelphia in 1868. The company moved in 1881 to the base of Shackamaxon Street along the Delaware River in the city’s Fishtown section. There, under the leadership of Hilgert’s son Charles, the company converted a whale oil works into a sugar refinery, one of the largest in the US. The Penn Sugar refinery (after 1942, the Pennsylvania Division of the National Sugar Refining Company, and later the Jack Frost Sugar Refinery), known locally as the Sugar House, closed down in 1984. The last of the refinery buildings were razed in 1997. The Sugar House refinery’s 22-acre site became the location a new gambling casino called the SugarHouse Casino in 2010. In 2019 the name changed to Rivers Casino Philadelphia, losing the historic name connection to the former refinery.

Now let’s turn to Claus Spreckels and the sugar empire he built in the United States.

The California and Hawaii “Sugar King” Gets His Start on the East Coast

Claus Spreckels PHOTO: Wikimedia Commons

Claus Spreckels, full name Adolph Claus J. Spreckels, was born in the northern German town of Lamstedt, Kingdom of Hanover (now in the Cuxhaven district of Lower Saxony), Germany on July 9, 1828. The first of the family’s six children, Claus would live to be 80 years of age before he died in San Francisco on December 26, 1908. Over his long life, he often returned to Germany, despite the long sea voyages that required. Often it was to learn more about the sugar business, but he also visited German and Europeann spas for his health, particularly in later years.

Californians are more likely than other Americans to have heard of Spreckels, but few of them know much more than the name, if that. If you’ve ever visited Maui in what were once known as the Sandwich Islands, you may have been on the beach next to Spreckelsville. We’ll get to why that village exists later.

Spreckels grew up and got a basic education in Lamstedt, but he saw little opportunity in that poor farming community. Like many others, he set his sights on the United States. At the age of 19, Spreckels boarded a ship bound for Charleston, South Carolina. Arriving with little money and no English, the enterprising young man was soon in a position to purchase the grocery store he had been working in.

As is typical of many German immigrants, Spreckels was also able to rely on his family network in the New World. In July 1852 he married his childhood sweetheart, Anna Christina Mangels (1829-1910), who was now also in the US. They would have 13 children together, only five of which lived to adulthood. His first son, John Diedrich Spreckels (John D.), was born in Charleston in 1853. (The rebellious John D. Spreckels would later set off on his own to build his own empire in the San Diego, California area.) It was Claus Spreckels’ brother-in-law, Claus Mangels, who helped him finance the purchase of a wholesale and retail business in New York in 1855. As usual, it was a success. He then purchased another grocery business in San Francisco from his brother, Bernhard Spreckels, sold his New York City business to his brother-in-law, and moved his family to Northern California in June 1856.

Claus Spreckels Builds a Business Empire in Northern California

Reinvesting the capital he had created with his retail and wholesale businesses, Spreckels’ industrial career began with something typically German: beer brewing. Partnering with his brother Peter, and Claus Mangels, Claus Spreckels founded the Albany Brewery in San Francisco, the city’s first large-scale brewery. Although profitable, Spreckels sold his brewery shares in 1863 for $75,000 to try a new venture with quicker and higher profits: sugar.

Spreckels liked the fact that Americans consumed more sugar per capita than Europeans. (Beer was exactly the opposite.) And he did his homework. He even went back to New York City to gain experience in a sugar refinery and learn more about the sugar business. He bought machinery from a bankrupt refinery and shipped it to San Francisco. Always thirsting for more knowledge, he then returned to Germany to learn more about sugar beets – growing them and turning them into sugar.

But when he returned to California, he went back to refining sugarcane, most of which arrived in California from the Philippines. In 1867 he founded the California Sugar Refinery and built a new refinery at Potrero Point with access to San Francisco Bay. Spreckels continued to innovate, both in his refinery processing and his product offerings. Granulated and cube sugar, well-known in Europe, were not available at the time in the US. Consumers still had to buy large sugar loaves that had to be chipped away to use the sugar. Spreckels began offering low-priced, clean, white granulated sugar that was easy to use.

Soon there were almost no competitors for Spreckels’ western market, which had the advantage of protective tariffs and freight costs that kept most other sugar refiners away. But if he wanted to expand, he had to find more sugarcane. That’s when he turned to Hawaii.

Spreckels in Hawaii

Hawaii came into the picture for Spreckels in 1876, following the Reciprocity Treaty of 1875. The Treaty gave the Kingdom of Hawaii increased access to the US sugar market. Spreckels traveled to the island of Maui, where he purchased and leased land for his sugarcane plantation, and built the company town of Spreckelsville in 1878 to house the immigrant workers from Japan, Korea, China, and other countries. By 1892 Spreckelsville was the world’s largest sugar plantation.

In Hawaii Spreckels engaged in questionable political and financial business dealings with King Kalākaua. In 1883 Spreckels purchased the entire Hawaiian crop of sugar to refine at his San Francisco plant. Some would say that Spreckels was dabbling in corruption, trying to gain an advantage by loaning the king money, and working with Walter M. Gibson, the king’s adviser, to obtain more land and water rights on Maui. In 1886 Spreckels lost favor with the king, but he would go on to become a multimillionaire thanks to his Maui plantation and other business dealings.

Spreckels needed the help of this sons to run all of his new ventures, including the J.D. Spreckels & Bros. shipping line (1879, incorporated as the Oceanic Steamship Company in 1881) that was the first to establish regular service between San Francisco and Hawaii. The line’s four steamers later also served Auckland and Sydney. In 1883 the Mariposa set a record of six days between San Francisco and Honolulu.

On land in California and Hawaii, Spreckels also began running his own railroads to transport his cargo and passengers.

Back to Beets

Spreckels had shown interest in refining sugar beets back in 1874 after purchasing ranch land near Aptos, California. There Spreckels began to experiment with growing sugar beets. He encouraged others in the area to plant sugar beets, and he built a small sugar beet refinery in nearby Capitola in 1874, which operated for five years.

Sugar beet – Zuckerrübe PHOTO: Wikimedia Commons

In 1888, while still refining Hawaiian sugarcane, Spreckels established the Western Beet Sugar Company in Watsonville, California. By 1890 the main beet growing operations had shifted to the Salinas Valley, so Spreckels decided he would build the 42-mile narrow gauge Pajaro Valley Consolidated Railroad to ship his sugar beets from Salinas to Watsonville. The Watsonville sugar beet operation was the first to be commercially successful from the start in the US. But Spreckels was just getting started.

Completed in 1899, the new Spreckels Sugar Company opened an even larger factory closer to the main sugar beet fields, complete with a new company town around the plant, still known today as Spreckels, California. The world‘s largest beet sugar refinery stood in Spreckels until it was razed in 1993.

The Sugar Trust

The beet sugar success in California had a dark cloud hanging over it. That cloud was known informally as the “Sugar Trust.” The Sugar Refineries Company or Sugar Trust was incorporated in late 1887, with the third-generation German-American Henry Osborne Havemeyer as president. (See “Havemeyer” above.) It’s really more complicated than we have room for here, but the simplified version goes this way…

By the late 1880s Havemeyer’s American Sugar Refining Company pretty much controlled all sugar production and sales in the eastern half of the United States. Spreckels had the same control in the West. The Trust wanted Spreckels to become part of the Trust, allowing it to dominate the entire US market for sugar. The was the start of the so-called “sugar war.”

Spreckels wanted no part of the Trust, responding: “I am my own and only trust.” Instead he decided to spend $4 million to build his own sugar refinery, the world’s largest, in the East, in Philadelphia in 1889. The Trust did the same by buying a plant of one of Spreckels’ few competitors in California. The war got nasty when the Trust damaged equipment in the Philadelphia plant and bribed an accountant to be a spy for the Trust. But in 1891 the war came to a quiet end, with both sides opting for peaceful coexistence. The Trust bought Spreckels’ Philadelphia plant and closed their own plant in California.

But, of course, as noble as Spreckels tried to sound, behind the scenes there were monopolistic moves, corruption, and collusion in play. Critics viewed Spreckels’ charade of winning the war as nothing more than what it was: a move to preserve the US sugar monopoly. A sham 1894 anti-trust court decision (United States v. E.C. Knight, et al) dismissed the legal effort to break up the Trust. Unlike Spreckels, “Sugar Pope” Havemeyer was not one of the 22 named defendants, meaning that the the U.S. Justice Department was at a disadvantage.

Family Life

Family was important to Claus Spreckels, and his sons were heavily involved in running the various Spreckels enterprises. However, more than once the patriarch faced familial problems concerning his five offspring, including his daughter Emma, who was estranged from her father for many years after she secretly married a man he did not approve of. She and her husband left San Francisco and lived in London.

One of the most dramatic incidents occurred in 1884, when Spreckels’ son Adolph Bernard attempted to kill the proprietor and editor of the San Francisco Chronicle, Mike de Young, because of the press campaign de Young had begun in 1881 denouncing Claus Spreckels’ Hawaiian business dealings. Adolph walked into de Young’s office, pistol in hand, and without any warning, shot the victim in the arm before he could even turn around. Then Adolph took a second shot, blocked in part by a book de Young had grabbed to defend himself. Someone in the newspaper office also had a gun, and used it to injure Adolph.

The trial showed that entitlement and wealth also worked in 1884. Adolph Spreckels was acquitted due to a “neuralgic headache.” He got away with attempted murder. Reporting on the verdict, the New York Times said of San Franciscans’ reaction, “Well, money can do anything in this city.”

Alma de Bretteville, Adolph Spreckels’ wife, coined the expression “sugar daddy.” PHOTO: Wikimedia Commons

Adolph’s wife Alma de Bretteville, 24 years younger than he was, is the source of the term “sugar daddy.” After they married in 1908, she was known to refer to him as her “sugar daddy” because he was the new head of the Spreckels Sugar Company, following the death of his father. The couple’s former 1912 mansion on Washington Street in the Pacific Heights neighborhood of San Francisco is now the home of novelist Danielle Steel.

– HF