Eat the City(47)

Now Harry managed a new refinery, whose very size made it more efficient, which made it more profitable, which made it better able to withstand dips in the sugar market and the pressures of intensifying competition among the city’s sugarhouses. All of this put Henry O. Havemeyer in a position to dictate terms not only to his own family and employees, but to other refiners. In 1887, he convinced seventeen refineries in Brooklyn and beyond to merge and control prices with a Sugar Trust, patterned after the Standard Oil Trust of John D. Rockefeller. Every refiner got a share based on the value of his company, and Harry shut down the least efficient of them. At least one refiner hesitated to join the trust because of Harry: “He considered him a brute,” admitted the trust’s own lawyer. By the end, Havemeyers & Elder had consolidated with a next-door refinery to form one gargantuan factory extending five waterfront blocks, the largest of its kind in the world. The price of refined sugar immediately went up, and the trust proceeded to crush competitors. Refinery workers who labored long hours, shirtless, wet with sweat, and at risk of fainting in the terrific heat, called their job “hell.” A prosecutor called the Sugar Trust “a conscienceless octopus, reaching from coast to coast.” Harry saw it differently, saying: “I think it is fair to get out of the consumer all you can.”

Annoyingly, rivals persisted. Independent investors opened a refinery in Yonkers, and others followed suit in Long Island City, Queens. The Arbuckle brothers, the coffee magnates, also set up a refinery in the New York area, when Harry incorporated a coffee company.

Harry fought the Arbuckles “with all the enthusiasm of a schoolboy,” an observer noted. The Arbuckles, in turn, sold sugar at a loss to drive down prices. Newspapers would publish daily updates on the battle: “So far as the coffee end of the war is concerned, all is quiet to-day,” wrote the Brooklyn Eagle in 1900.

“Do you see any possible way of coming together and conducting the sugar business in harmony?” a reporter asked Henry O. Havemeyer.

“None whatever,” he replied. He thought the sheer size of his operation would allow him to outlast the competition. “We think it is best to lay to, like a ship in a storm,” he said.

Finally a truce was announced that seemed to revert to the previous status quo: Havemeyer would be left alone to regulate the price of sugar, while the Arbuckles would fix the price of coffee.

The Sugar King earned his moniker when he consolidated with all three nearby remaining competitors into a near total monopoly that controlled 98 percent of the refined sugar sold in the United States. The ground was laid for the kingdom to extend its reach on the world stage.


BY the close of the nineteenth century, the Sugar Trust was fed up with the vagaries of revolts, revolutions, and European disputes that could close one Caribbean island and open another. Mostly, the trust was fed up with the U.S. government tariff on importing foreign raw sugar. New York sugar men wanted a close and steady source of raw sugar, preferably for free.

In 1898, the United States went to war with Spain, and in July, a fleet of gray armored U.S. Navy gunships quietly floated up to the southern coast of Puerto Rico. Days later, the first Americans arrived to build a sugar company. “Every man, woman, and child in the United States is directly interested and beneficially interested as a consumer,” argued a young U.S. congressman from New York named Jacob Ruppert, advocating in the House to remove tariffs on sugar from Puerto Rico.

Soon the American desire for sweetness planted the place full of cane. Havemeyer’s corporate giant, the American Sugar Refining Company, was able to raise unprecedented amounts on Wall Street, and Havemeyer and others busied themselves with erecting mills, improving ports, and building railways right into the sugar fields.

Puerto Rico was not new to sugar production—it had opened its first grinding mill in 1523—but operations had languished as Spain, plundering Mexico and Peru, had lost interest. It took three hundred years to develop a real sugar economy, and by that time, the great market was no European power, but the United States. In the mid-1800s, New York shipped Puerto Rican planters-sugar-mill machinery and sugar-hauling locomotives, and even machetes specially made by the nearby gun manufacturer Collins & Co., stamped CALIDAD GARANTIZADA. After slavery was abolished, New York City capital also helped to renovate ox-powered sugar mills into steam-powered centrales. In return, in ever-larger quantities, New York bought raw sugar, especially after tariffs were removed in 1901.

Now New York sugar men could make more direct investments, and Puerto Rico’s annual production of sugar jumped tenfold from 1899 to 1910. Soon that single crop provided about two-thirds of the island’s income, and employed more than a third of its labor force. Other aspirations for agriculture and industry could not compete. After Cuba, little Puerto Rico became the second largest producer of sugar in the Western hemisphere.

Back in Manhattan, on Pearl Street, at the Coffee and Sugar Exchange, men huddled around a blackboard and monitored tickers, teletypes, and telephones, the air carrying the aroma of coffee roasting nearby. “These traders almost never see, handle, the food commodity they may buy or sell,” wrote one observer. “These are like mathematicians, in that they deal only in ‘figures.’ ” Yet their calculus could easily reach all the way to rural Puerto Rico. As one observer noted, any honest, astute man among them, if asked what he was doing, would say: “We’re making the price.”