Economic Influencers between 1900 and 1929 - Milton S. Hershey

           This blog focuses on the economic, financial, and business experience of Milton S. Hershey from 1900-1929. Hershey was an entrepreneur who changed the candy industry through the business that continues to bear his name – the Hershey Company. To take care of his workforce, he created a town that also still bears his name - Hershey, Pennsylvania. His vision for his legacy led to the creation of the Milton Hershey School. Originally a home and school for orphan boys, it continues to serve children in need.

     Corporate financial records were not found for the entire period from 1900-1929, so detailed quantitative analysis was impossible. This drove the primary research method to be a historical analysis of Hershey’s actions and impacts from 1900-1929, with available statistical data added.

     Primary and secondary sources focused on Milton Hershey and the Hershey Company. Most of the primary sources are from the Hershey Community Archives (https://hersheyarchives.org/). They include newspaper articles and company reports. Other primary sources include Company Annual Audit Reports from 1920-2004, found on InternetArchive.org (https://archive.org/details/hersheycompanyannualreports/hershey1920/page/n1/mode/2up). These types of documents are right for this project as they provide contemporary information about Milton’s economic, financial, and business impacts.

     In the video “Don't Mistake Leadership for Management,” the speaker described key differences between leaders and managers. These included that leaders think big, set goals, and arrange their organizations to accomplish those goals, while managers ensure team members have the resources needed to accomplish their tasks.[1] Milton’s leadership is reflected in his decision-making. He started working in the candy industry when he was 14 years old. After multiple failed businesses, he found success with his Lancaster Caramel Company in the 1880s. He saw a chocolate-making demonstration in 1893 while attending the World’s Columbian Exposition in Chicago, which made him interested in chocolate. At the time, milk chocolate was considered a luxury item - a new creation by Swiss candy-makers, who added powdered milk to chocolate. Milton spent years working on a formula to use fresh milk to make milk chocolate while also making it shelf stable. He created the Hershey Chocolate Company in 1895 and sold the caramel business in 1900. He introduced his milk chocolate product as the Hershey’s Bar in 1900. The company’s earnings in 1900 were $622,000.[2]


                         Milton S. Hershey in 1905 (Photo https://commons.wikimedia.org/wiki/File:Milton_S._Hershey_c1905.jpg)

 

     Hershey’s released multiple new products in the company’s first 29 years. In 1907, Hershey’s introduced a small, conical shaped, individually wrapped version of its milk chocolate called a Hershey's Kiss. Machine wrapping began in 1921, which sped up the manufacturing process. Over seventy million Hershey’s Kisses are produced daily today. Other new products included milk chocolate with almonds in 1908, milk chocolate with peanuts (called Mr. Goodbar) in 1925, Hershey's Syrup in 1926, and semi-sweet chocolate chips in 1928.[3] According to the company’s 1929 financial report, Hershey’s had a net sales of over $41 million.[4] Even after the first year of the Great Depression; Hershey’s had a net sales of over $38 million in 1930.[5]

     Not all its business efforts were successful. For example, a $125,000,000 deal to form the International Quality Products Corporation - a food conglomerate to include Hershey’s, Campbell’s, Heinz, and other brands - collapsed after the stock market crash in October 1929.[6]

     In a review of The Visible Hand: The Managerial Revolution in American Business, David Landes described the evolution of corporate leadership from company/family leaders to professional managerial staffs outside the board of directors.[7] This was the case for the Hershey Company. Initially led by Milton, he turned over management to William Murrie when the company was incorporated in 1908. This allowed Milton to focus on other projects, like setting up the town, orphanage, and school. Professional management continues today, with a major milestone being the reorganization into the Hershey Chocolate Corporation which began public trading on the New York Stock Exchange in 1927.[8]

     The town of Hershey grew out of rural Derry Township in 1903. Built to support company workers, it was not a stereotypical company town for its time. The town had readily available public education and public transportation. Residents had an amusement park, swimming pool, golf courses, community center with a theater, grand hotel, zoo, and sports arena available. Houses included new features like indoor plumbing and electricity.[9]

     Milton and wife Catherine, unable to have their own children, set up the Hershey Industrial School for orphan boys in 1918 through a trust that started with 486 acres of farmland. Uninterested in publicizing this, few beyond locals knew about these efforts until news outlets reported on his $60,000,000 contribution in 1923.[10]

     Milton Hershey’s chocolate company endures as a global industry. But his influence and legacy go beyond the company, through his work in creating the town of Hershey and the Milton Hershey School.

  ____________________________

     [1] “Don't Mistake Leadership for Management,” https://canvas.liberty.edu/courses/628434/pages/watch-dont-mistake-leadership-for-management?module_item_id=67063006.

     [3] “A History of Goodness.” Hershey. Accessed June 13, 2024. https://www.thehersheycompany.com/en_us/home/about-us/the-company/history.html; Michele Buck, “The CEO of Hershey on Turning a Candy Company into a Snacks Empire,” Harvard Business Review November-December 2022, https://hbr.org/2022/11/the-ceo-of-hershey-on-turning-a-candy-company-into-a-snacks-empire.

     [4] Arthur Andersen and Company Accountants and Auditors, “Hershey Chocolate Corporation and Affiliated Companies: Consolidated Balance Sheet – December 31, 1929,” March 1, 1930, https://archive.org/details/hersheycompanyannualreports/hershey1929/page/n1/mode/2up.

     [5] Arthur Andersen and Company Accountants and Auditors, “Hershey Chocolate Corporation and Affiliated Companies: Consolidated Balance Sheet – December 31, 1930,” February 26, 1931, https://archive.org/details/hersheycompanyannualreports/hershey1930/page/n1/mode/2up.

     [6] “Hershey Chronology,” Hershey Community Archives, accessed June 13, 2024, https://hersheyarchives.org/online-resources/chronology/.

     [7] David S. Landes, “Review Essay,” of Alfred D. Chandler, Jr., The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA: Harvard Belknap, 1977), https://eh.net/book_reviews/the-visible-hand-the-managerial-revolution-in-american-business/.

     [8] “William F.R. Murrie, 1873-1950,” Hershey Community Archives. September 7, 2018. https://hersheyarchives.org/encyclopedia/murrie-william-f-r-1873-1950/#:~:text=Murrie%20became%20President%20of%20the,His%20frugality%20was%20legendary; Michele Buck, “The CEO of Hershey on Turning a Candy Company into a Snacks Empire,” Harvard Business Review November-December 2022, https://hbr.org/2022/11/the-ceo-of-hershey-on-turning-a-candy-company-into-a-snacks-empire.

     [9] Michael D’Antonio, Hershey: Milton S. Hershey’s Extraordinary Life of Wealth, Empire, and Utopian Dreams (New York: Simon and Schuster, 2006), 106-126.

     [10] “M.S. Hershey Gives $60,000,000 for an Orphanage,” New York Times, November 9, 1923, 1, https://www.mhskids.org/blog/milton-hershey-history-new-york-times/.



SOURCE LIST

Primary Sources

Arthur Andersen and Company Accountants and Auditors. “Hershey Chocolate Corporation and Affiliated Companies: Consolidated Balance Sheet – December 31, 1929.” March 1, 1930. InternetArchive.org. https://archive.org/details/hersheycompanyannualreports/hershey1929/page/n1/mode/2up.

Arthur Andersen and Company Accountants and Auditors. “Hershey Chocolate Corporation and Affiliated Companies: Consolidated Balance Sheet – December 31, 1930.” February 26, 1931. InternetArchive.org, https://archive.org/details/hersheycompanyannualreports/hershey1930/page/n1/mode/2up.

Buck, Michele. “The CEO of Hershey on Turning a Candy Company into a Snacks Empire.” Harvard Business Review. November-December 2022. https://hbr.org/2022/11/the-ceo-of-hershey-on-turning-a-candy-company-into-a-snacks-empire.

“M.S. Hershey Gives $60,000,000 for an Orphanage.” New York Times, November 9, 1923, 1. https://www.mhskids.org/blog/milton-hershey-history-new-york-times/.

 

Secondary Sources

“A History of Goodness.” Hershey. Accessed June 13, 2024. https://www.thehersheycompany.com/en_us/home/about-us/the-company/history.html.

D’Antonio, Michael. Hershey: Milton S. Hershey’s Extraordinary Life of Wealth, Empire, and Utopian Dreams. New York: Simon and Schuster, 2006.

“Hershey Chronology.” Hershey Community Archive. Accessed June 13, 2024. https://hersheyarchives.org/online-resources/chronology/.

“Milton S. Hershey.” Harvard Business School. Accessed June 11, 2024. https://www.hbs.edu/leadership/20th-century-leaders/details?profile=milton_s_hershey.

“Milton Snavely Hershey, 1857-1945.” Hershey Community Archives. September 6, 2018. https://hersheyarchives.org/encyclopedia/hershey-milton-snavely-1857-1945/.

Stanwick, Dave. “Milton Hershey: Chocolate King, Confectioner, and Creator.” Profectus, February 29, 2024. https://profectusmag.com/american-original-milton-hershey

“William F.R. Murrie, 1873-1950.” Hershey Community Archives, September 7, 2018. https://hersheyarchives.org/encyclopedia/murrie-william-f-r-1873-1950/#:~:text=Murrie%20became%20President%20of%20the,His%20frugality%20was%20legendary.

 

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