The Milan News-Leader
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Sugar company trial captured the business world
Martha Churchill
PUBLISHED: May 15, 2008
Editor's Note: This is the seventh in an eight-part series on the Great Electric Sugar Scandal that rocked Milan in the 1800s.
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William E. Howard was no slouch when it came to manipulating the newspaper reporters. The date was June 3, 1889, the place was a New York courtroom and he was charged with taking money from stock investors on two continents.
Early in his trial, during a lunch break, he sat down with his wife, Emily, and his stepdaughter, Olive E. Friend, both Milan natives. They started singing hymns -- anything to give himself a good image while being tried for grand larceny.
The music probably sounded more like battle hymns than religious songs. For example, he chose the defiant "Dare to be a Daniel," written by Phillip P. Bliss in 1873. Here is the chorus: "Dare to be a Daniel; Dare to stand alone! Dare to have a purpose firm! Dare to make it known."
Obviously, Howard was not sorry for anything he'd done.
He knew a New York Times reporter was nearby, and sure enough, his singing turned into a news story. Howard wanted the jurors to think of him as a clergyman singing hymns in the church choir, not as a cold-blooded swindler stealing the life savings of stock investors.
One thing about Howard was that he loved getting attention. While working with professor Henry C. Friend to sell stock based on a fake sugar-refining machine, Howard sometimes took off on a Sunday morning to sing hymns and preach a little gospel in New York. What cozy corner did he pick for this activity? The front steps of the New York City Hall.
Anyhow, after the jury was picked, witnesses could come to the stand and tell their stories of the sugar fraud. Investors in the Electric Sugar Refining Co. hoped for a conviction in the New York court system.
No one hoped for a conviction more than Lawson N. Fuller. At age 65, he was sitting in the courtroom, praying for justice. He had a background working in the sugar refining business, as there were a number of them clustered in Brooklyn at that time. But he was unprepared for the electric sugar "gang."
When the Electric Sugar Refining Co. was started, Fuller was swept up by the promises he heard from Friend and Howard. So swept up, in fact, he mortgaged his home to dig out $35,000 as an investment. That is about the equivalent of $800,000 in today's dollars. His wife, Frances, was 49. He had at least six children -- the youngest 11 years old. Now, thanks to the sugar fraud, Fuller was just inches away from being homeless.
The first witness, William H. Cotterill, testified how he started with the Electric Sugar Refining Co. as a board member, and took over as president. He explained how he met Friend and how he met Howard. He had heard some of the stories circulating around town about Friend having a con game, but the stories seemed to be untrue, as Cotterill explained.
As Cotterill remembered it, Friend was supposed to be buying machinery that could be used with his secret process, so the company could start refining sugar. He never seemed to get the machinery in place and, instead, was constantly asking for more money.
Finally, Cotterill described what happened when he and the other company officers realized they had been duped. They went to the factory and discovered everything was set up for the fake sugar refining process, so people would think Friend's system worked. Friend and his group from Milan were just replacing raw sugar with refined sugar they had bought ahead of time.
When Howard took the stand, he insisted he was an admirer of Friend. Howard had a sugar granulating machine he operated, and so he had nothing to do with what Friend and his wife were doing in the secret room.
If you believed Howard, he was an innocent bystander who never came near Friend's secret process and had no idea it was a fake. With Friend safely in his grave for over a year, it was OK for Howard to pin the blame on him.
To get sympathy from the jury, Howard made sure to tell everyone he supposedly had been "out west" to Illinois in August 1885, working as a preacher. I don't know if he was wearing a big conspicuous cross around his neck while he testified, but I wouldn't put it past him.
The chief prosecutor in New York, Col. John R. Fellows, stepped forward to cross examine Howard, the ringleader of the Electric Sugar Co. scandal. Explaining how pure white sugar showed up at the "demonstrations," Howard claimed the company president, Cotterill, had ordered bags of refined sugar be brought in and poured down the chute for the benefit of would-be investors.
There is an old saying among lawyers: "Never get into a smelling contest with a skunk."
There's no doubt Cotterill learned that lesson in 1889 as he was trying to bring Howard to justice for faking a sugar process. Cotterill had to sit in the courtroom while the culprit pointed the finger at him, accusing Cotterill of running a fake sugar refinery.
The prosecutor got in his licks. Howard was forced to admit he had left his first wife in Rhode Island, along with a baby, without a divorce. Howard had drifted into Saline and hooked up with Emily Burnham Van Ness, not knowing if his Rhode Island wife was alive or dead.
Howard testified that perhaps he married Emily, but he wasn't sure where or when, perhaps in Joliet, south of Chicago. Perhaps a justice of the peace, Howard testified, but he couldn't remember the name of the man who married him. To top it off, Howard was forced to admit he didn't know if Emily had a living husband when he "married" her.
I can just imagine the prosecutor, blasting out his closing statement at the Great Sugar Scandal trial. "Gentlemen of the jury, this man, Mr. Howard, claims to be a preacher, a man of God. But he probably isn't even married to the woman he is living with; either that, or he is married to more than one woman."
The newspapers made lots of headlines during the Sugar Scandal trial, including The New York Times, the Detroit papers and papers across the country. The story must have spread around Liverpool, England as well, since the majority of stockholders came from that city.
The jury returned its verdict on June 19, 1889. William Eaton Howard was found guilty of grand larceny. In reporting this fact, one newspaper at the time commented it took Howard just four months to receive $50,000 in cold cash by scamming the sugar company. As a clergyman, by contrast, he got only $1 a week.
The sentence came just two days later. The judge, referred to as "Recorder Smyth," gave Howard a nasty lecture before pronouncing the sentence.
"You have been on this stand for days, and have sworn to things you must have known were not true," Smyth said. "You have shown that perjury is not below you, and I am firmly convinced of your sanctimonious hypocrisy."
Then Smyth gave him nine years and eight months of hard labor in the state prison.
Howard's freedom under bail came to an end. Uniformed officers led him away from Smyth's courtroom to Sing Sing, a New York state prison, where he remained until 1895. Upon release, he went to live in Milan.
The Electric Sugar Refining Co. wasn't done arresting people and trying to recover its lost money. A few weeks after Howard's conviction, the company sent Peter Coss to Chicago to round up a machinist, Samuel B. Leach. The company felt Leach must have known of the fraud and was in on the deal.
Coss met with Leach in Chicago, and the terrified machinist offered to turn over his house to the company in settlement. Coss refused. Then Coss arranged to have Leach arrested for being a fugitive from justice.
The courtroom scene in Chicago didn't turn out well for the sugar company. Leach's attorney asked Coss to admit there was no grand jury indictment against the machinist. Then he accused Leach of having the man arrested just to extort money out of him. By the time he was finished, the judge in Chicago agreed to issue an arrest warrant against Coss.
Thanks to The Republic of St. Louis, Missouri, June 16, 1889, for information on Howard's testimony at trial. Thanks to the Philadelphia Inquirer, Jan. 7, 1889, about the psalms at New York City Hall and to The New York Times, May 22, 1889, for information on hymns in court. Thanks to the Dallas Morning News of June 6, 1889. Thanks to the New York Times, June 22, 1889, for the Smyth quote at sentencing and New York Times July 4 and 9, 1889, for the Leach story.
Martha Churchill is a member of the Milan Area Historical Society. She can be reached at milanhistory@yahoo.com.
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