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East Tawas, Michigan – Where Fools Rushed In
At the end of the 20th century, Michigan, a state that tied its economic fortunes to the lumber industry began to accept the reality that it was selling its heritage for pennies on the dollar. The wood, which was its economic mainstay, is gone! For sixty years loggers raged across the state from Lake Michigan on the western shore of the state to Lake Huron on the eastern shore and from Lake Erie in the south to Lake Superior at its northern end tearing down forests and leaving behind an economic depression, an ugly environment. and hopelessness.
Gradually, the heads of state became aware of a new industry that did not destroy resources but rather added resources – agriculture, especially agricultural products that included processing plants. The developing beet sugar industry fitted the bill with perfection. The Michigan Sugar Company’s new factory in Essexville, a suburb of Bay City, proved beyond doubt that farmers, industrialists, and venture capitalists alike could profit by raising sugar beets and then processing them into table sugar. Soon, the rush to build beet sugar factories developed into a full-scale mass exodus. The Michigan sugar beet industry escalated at a breathtaking rate.
Nine factories followed the successful experiment of Essexville. A burst of cyclonic enthusiasm caused a frenzy as investors, builders, bankers and farmers combined energies and skills to bring eight factories to life in one year! That was 1899 when new factories were built in Holland, Kalamazoo, Rochester, Benton Harbor, Alma, West Bay City, Caro, and a second factory in Essexville. In Marine City, investors, inspired by success in Essexville, paid Kilby Manufacturing $557,000 to build Michigan’s tenth sugar beet factory. Despite the scarcity of factory builders and the engineers to operate them, fourteen additional factories went up on the outskirts of Michigan cities over the next six years, the last of which appeared in Charlevoix in 1906. Fifteen years later, Monitor Sugar Company built the twentieth of the state -fourth and last beet factory.
Unfortunately, the unbridled enthusiasm for new beet sugar factories often resulted in the construction of factories in places that did not win the heart of the farmer. One such place was East Tawas, a lovely village on the shores of Lake Huron that would one day attract tourists who sought the sandy beaches of their Lake Huron and gently lapping waves. But until 1903, East Tawas, like most of Michigan, relied on the lumber industry for its daily fare. When the lumber barons packed their bags and left for greener pastures, investors turned to the beet sugar industry, which was burning as hot as the dot-com industry would burn almost a century later. Instead of fame and fortune, however, East Tawas earned the distinction of having in its vicinity a sugar factory that would have the shortest lifespan of any beet sugar factory in Michigan.
The total operating time during its two-year lifespan was twenty-nine days, eighteen the first year and eleven during the second and final year. The total weight of beets sliced during that period was 17,648 tons, far from enough to support the overhead costs of the factory, let alone provide a profit to the investors. Some called it Churchill’s Folly after Worthy Churchill, the president of the Bay City-Michigan Sugar Company.
With the construction of the Bay City Sugar factory in Essexville under way, Worthy Churchill wanted to secure a sugar beet growing estate somewhere north of Bay City where an inexpensive and idle forest area was waiting for someone to put it to a better purpose. Coincidentally, East Tawas was loaded with a bankrupt sawmill located at a fork in the road a few miles north of town, where, today, US 23 intersects with Tawas Beach Road. Its proximity to Lake Huron offered a convenient source of water. Railroad lines built to transport lumber from sawmills would now carry sugar equipment to the site. The residents of East Tawas, much like residents of villages throughout the state, were loathe to leave even though its gently rolling hills, once covered with magnificent white pine were now barren. Rich soils drifted from unprotected hills to settle in moss-covered swamps. Jok pine, short and crooked, and weeds grew in the dry crevices near the edges of the swamps.
Residents of East Tawas called for a sugar beet factory. The infant industry was three years old, but already legends involving sudden wealth and whole communities saved from extinction, caused a clamor for one in their community. Significantly, others who made large investments in the new industry did not heed the call. Absentees included the most successful of the pioneer sugar producers: Ben Boutell, Penoyar brothers William and Wedworth, Nathan Bradley, Rasmus Hansen, Thomas Cranage, and every other major investor in Michigan’s then existing sugar industry. That left Worthy Churchill who showed his support with a $50,000 investment and Charles B. Warren, representative of the Sugar Trust, threw $25,000 into the pot. Warren’s fellow Detroiter and good friend, Charles Bewick, a Detroit industrialist signed on for $50,000 and accepted a vice presidency while Warren added the treasurer’s title to his growing list of responsibilities. Eugene Fifield of Bay City, who had earned a reputation among investors as someone who worked well with farmers, added his name to the shareholder list and a thousand dollars to the treasury. Citizens of more modest means noticed the great commitments of men of power and dipped into meager savings to follow suit.
Churchill, eager to set the wheels in motion, and well satisfied with the performance of Joseph Kilby in building the Essexville factory of the Bay City Sugar Company, began to appoint him to the East Tawas project. Joseph Kilby submitted a bid of $598,500. Based on each thousand tons of beet cutting capacity, the price was almost fifty percent greater than the cost of the Essexville plant, indicating a shift away from the quickly built small plant to larger facilities consisting of quality engineering and equipment. However, Vice President Charles Bewick said that they hold – not so fast. He also had a candidate for the construction contract. Bewick gained some experience at Caro and Croswell where new factories were being built. He then served as the first president of the Sanilac Sugar Refining Company, owner of the Croswell factory, and had a long history in the Detroit manufacturing sector. He included among his friends Joseph Berry, a well-known varnish manufacturer who owned with his brother Thomas an eight thousand acre farm near the middle of the Michigan Thumb. The Berry brothers became significant shareholders in Bewick’s Croswell plant along with DM Ferry, the largest distributor of garden seeds in the world – all packaged in Ferry’s sprawling Detroit factory.
From Bewick’s point of view, the Oxnard Construction Company offered experience, quality, and an unbroken record of success. Joseph Kilby, on the other hand, was an upstart, a former top hand with EH Dyer who left on his own. Bewick objected to Churchill’s premature announcement and pushed through his election. Churchill countered, and won, with an objection to Oxnard’s practice of submitting cost-plus contracts. He wanted a firm offer and got it from Kilby whose offer matched dollar for dollar the offer for the Churchill’s Bay City plant built three years earlier at a cost of a thousand dollars per ton of beet cutting capacity. The contract went to Kilby who in turn assigned the job to John Shepherd, a well-known construction engineer who oversaw the construction of factories at Benton Harbor, Holland, and Carrollton.
In the short term the choice of builder made little difference. Tawas was the wrong place to grow beets. Lake Huron lay east of the factory and while it served well as a water source, beets could not easily take root among its waves. The nearby slopes, stripped of trees, would be a difficult place to grow and tend beets but even that impractical source of beet soil has already surrendered its soil to newly made swamps. Where the ground was level, stumps prevented farming. There was some arable land, however, but the farmers who owned it lacked experience with sugar beets. Those who succumbed to the persuasive pleas of Gus Carton, the factory’s agronomist and chief farmer recruiter, lost money when they didn’t produce enough beets per acre to generate a profit.
Kilby’s field staff under the direction of Jack Shepard performed better than any factory built up to that time in Michigan. Shepard, known and respected for an attention to detail that included thorough water testing—that is, running the factory with only water to find a weakness—built a factory that exceeded expectations. The factory cut five hundred and ninety-four tons of beets per day during its inaugural run, a clear record, and only six tons short of its planned capacity. Unfortunately for Shepard and his crew, there were only 10,690 tons of beets available, enough for only eighteen days of operation.
The next year, the frost stayed late, keeping farmers indoors. A late start, combined with an unprofitable crop the previous year and rumors that the factory would close, led farmers to return to traditional crops. The factory obtained only 6,958 tons of beets, enough for only eleven days of cutting. Gus Carton proved himself indomitable. He proposed a plan whereby the company would buy lands and resell them to Russian immigrants at attractive prices. He attracted the Russians and invested 25,000 USD, but did not receive the beets, the Russians proved no less independent than the peasants who were already present.
Lightning smashed the brick chimney in July 1905. The directors, all experienced investors, knew better than to add more capital. The chimney lay where it fell and arrangements were made to ship the beet crop to a Bay City beet factory. Disaster also occurred in St. Louis Park, Minnesota where a beet factory burned to the ground. The board of directors of East Tawas saw the fire as an opportunity. When the beets intended for the St. Louis Park factory went to another factory, their quality caught interest, especially the beets from Chaska, Minnesota. At the direction of the board of directors, Kilby dismantled the East Tawas plant and reinstalled it in Chaska where it remained in operation for the next sixty-five years.
East Tawas slowly recovered from the loss of the lumber industry and its failed sugar factory and today is a successful destination for tourists who enjoy the nearby Huron National Forest, Huron and Tawas Bay, and the AuSable River popularized by canoeists and fishermen and the Tawas Point Lighthouse, in operation since 1876, part of the Tawas Point State Park. It has no plans to encourage the construction of another sugar factory anytime soon.
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