The Milan News-Leader
A Heritage Newspaper
Weekly Publication
So-called tests promote electric sugar
PUBLISHED: April 17, 2008
Editor's Note: This is the third in an eight-part series on the Great Electric Sugar Co. Scandal that rocked Milan in the 1800s.
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Emily Burnham Howard and her daughter, Olive Friend, both of Milan, found themselves in New York in 1883. Together with their husbands, the two women were promoting a new international company.
An attorney in New York, William H. Cotterill, had caught the Electric Sugar bug after talking to the Milan group. He collared his friends and acquaintances, urging them to serve on the board of the new Electric Sugar Refining Co.
And, by all means, he urged everyone to invest.
The company was up and running in just a few weeks. Cotterill brought in some people who could help sell the stock, and hired another attorney to draw up a contract. Oddly enough, the contract was not just between the company and professor Henry C. Friend, the "inventor" of the wonderful sugar refining machine. The contract was between the company, Friend and his wife, Olive.
A few years later, while in jail, Olive Friend would argue loudly that she knew nothing of her husband's "wonderful secret." But in the beginning, when the new corporation was set up, she gladly picked up her pen as a co-owner of the secret sugar refining process.
Before signing any contracts, Friend had to bring in the one person he felt he could trust, William E. Howard. The signing was delayed briefly so Howard could travel to New York with his wife, the former Emily Burnham. Their arrival was like a family reunion at the Friend home because Howard's wife was the mother of Friend's wife.
When Friend introduced Cotterill to Howard, he made it clear that Howard would be his business associate. Soon Cotterill realized that Howard was more than just a business associate to the so-called inventor. The Howards and Friends lived together as a family. The contract was officially signed Jan. 20, 1884.
Stock in the Electric Sugar Refining Co. didn't sell as fast as they wanted it to, so Howard arranged for a demonstration of Friend's "wonderful machine," as they called it. The event took place at the New York home of the Friend and Howard families on E. 108th St. It was February 1884 and Friend was under pressure to make a good impression.
To keep his machine secret, he covered it with a cloth, in the middle of the room where he was about to refine the sugar. Someone brought in a barrel of raw sugar. It was just a small room in the house, completely bare.
The prospective stock-buyers and some company officials came to the demonstration, but all they could do was walk through the bare room and look around. Friend said very little; Howard did almost all the talking. Then the onlookers were herded out to wait for the refining process to be completed.
It took almost two hours because Friend had to scoop all the raw sugar out of the barrel and hide it. A clean barrel sat ready for the newly-refined sugar. Friend just had to fill the new barrel with the pure white sugar he had bought.
When the fresh barrel was filled with beautiful white sugar, Friend could roll it out to the audience in the other room and proudly show them how well his process worked. Some stock promoters were sprinkled in with the audience, to ensure the success of the demonstration.
The people attending this type of demonstration were hoping the new invention would work. They were eager to invest in stock that would make them rich. They wanted to believe. Surrounded by others who apparently felt the same way, the wonderful feeling of success was infectious.
Unfortunately, the onlookers had little knowledge or training to help them smell a rat. So, that wonderful feeling spread like a bad flu, causing many of them to lose their life savings.
The investors never asked Friend about the use of electricity to refine the sugar. The machine sitting on his table, covered by a cloth, had no batteries attached, no visible wires, no generator. For some reason, this was overlooked. No one cared.
Friend gave several demonstrations of this type every year. They were held at the so-called "manufacturing" facility on Hamilton Avenue in Brooklyn. Friend used a bare room on the third floor. In the middle of the room, the cloth-covered machine sat on a table. His wife, or Howard, was upstairs, ready to pour the refined sugar down a hole in the floor so Friend could fill a clean barrel with the new stuff. Friend had a sink where he flushed down all the raw sugar.
Miraculously, he never got caught. He came close, though. Once, a person in the audience asked Friend what happened to the "refuse" from his refining process. Usually, when you refine sugar, there are by-products or leftovers such as cane syrup or even dirt. Raw sugar actually has some dirt in it.
Faced with this unexpected question about the byproducts, Friend had to think fast. He turned to his wife. "Ollie, have you taken that out of the oven?" Mrs. Friend then produced about 15 pounds of cooked sugar, which she referred to as the refuse. The people in the audience were stunned because they had never seen byproducts that looked like raw sugar. However, no one grew suspicious.
Friend had another close call when George Moller sat in the audience. Moller was a refining industry insider, and could easily spot something suspicious. To make things worse, Friend was faced with a barrel of raw beet sugar, not cane sugar. Friend went through the same performance as before and then rolled out the barrel of beautiful, white, refined cane sugar, the same as he always did.
Moller leaned over the barrel, jabbed his arms into the sugar, and took a deep breath. "By Jove! That's it. I can detect the faintest trace of the beet in this sugar."
Apparently, Moller was hoping and wishing for a good result to the demonstration, so he convinced himself that he could smell sugar beets in the refined sugar. Soon after his "By Jove" remarks, a sample of the sugar was sent to a chemist and it turned out to be cane sugar, not beet sugar.
When the investors and business big-wigs heard the sugar was from cane, not beet, did they yell and scream? Did they call the police? Did they demand their money back? No, they were just happy that the so-called professor could handle a refining job so well, he could turn beet sugar into cane sugar.
After one of the demonstrations, Friend actually pulled the cloth away and let the company president, William H. Cotterill, take a look. As Cotterill described it later, the wonderful machine was about the size of two typewriters, and had a copper trough with four wires. No one asked how a machine like that could refine raw sugar.
Surrounded by excitement, the Electric Sugar Refining Co. sold stock like crazy, in the United States and even more in England. Olive and Emily, with their husbands, took a sea voyage to Liverpool, England, in late 1885, to sell sugar stock. They found plenty of buyers in both Liverpool and Manchester. In fact, the English investors outnumbered those in the United States by more than 2 to 1.
While the company grew, corporate officers must have regarded the Howard and Friend families as part of a group by themselves. They never connected the group to Milan. Soon after the corporation started, Olive and Emily brought in more Milan people to help with the project.
First, Emily brought in her brother, Lyman Burnham, to do carpentry work. Then she brought in Lyman's son-in-law, Oren "Gus" Halstead, and Gus' brother, George, for heavy lifting and light maintenance. They all gladly left their homes in Milan for the prospects of high pay in New York City.
In about 1886, Howard swore out an affidavit, and signed his name, under oath, that he had personally helped Friend convert raw sugar to refined sugar, and assisted him. After the whole thing blew up, and Howard was being prosecuted, he tried to say he never saw Friend processing sugar.
In the company's heyday, Cotterill paid the Milan contingent handsomely. The company paid Friend about $120,000 for factory equipment and for his services. That was nothing to sneeze at -- the equivalent of $120,000 in today's dollars is nearly $3 million.
Friend made out like a bandit, and so did the others in the Milan "gang." The company paid Howard more than $50,000. It paid another $15,000 total to the Halstead brothers. Reports say that Olive Friend sold a chunk of her stock, giving her perhaps $50,000 more in cash. Emily's brother, Lyman Burnham, picked up a pile of loot, also, but I don't know how much exactly.
Company officers made out pretty well, too. The first president of the company, Mr. Woodworth, sold 561 shares of company stock at $100 each. That's $56,100 or more that he stole from the company. The later officers, including Cotterill, also sold some stock and kept the money. So the Milan members of the sugar company weren't the only ones thieving and stealing in this case.
There was a lot of money at stake in the Great Sugar Scandal. But there was even more at stake -- freedom. Being rich is no fun when you are behind bars.
Thanks to the archived newspapers of The New York Times Jan. 6 and 8, 1889; Detroit Tribune, Jan. 8, 1889; New York Times, May 24, 1889; New York Times June 14, 1889.
Martha Churchill is a member of the Milan Area Historical Society. She can be reached at milanhistory@yahoo.com.
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