The Utah-Idaho Sugar Company was a large sugar beet processing company based in Utah. It was owned and controlled by the Church of Jesus Christ of Latter-day Saints (LDS Church) and its leaders. It was notable for developing a valuable cash crop and processing facilities that was important to the economy of Utah and surrounding states. It was part of the Sugar Trust, and subject to antitrust investigations by the U.S. Department of Justice, the Federal Trade Commission, and the Hardwick Committee. Founded on September 4, 1889, by Elias Morris, the company constructed a sugar beet processing factory in Lehi, Utah, and expanded into Idaho. It later faced sugar beet blight and a decline in the industry.
Company origins
Since sugar was primarily an imported product in the late 19th century, from areas that cultivate sugar cane and sugar beets, there was support in the United States to produce it internally and prevent the more than $500 million annually that was paid out for imports. Sugar beet processing was attempted in 1830 near Philadelphia, Pennsylvania, but the first successful factory was E. H. Dyer's 1879 Standard Sugar Refining Company factory in Alvarado, California. James Wilson, the United States Secretary of Agriculture in 1898, reported that 150,000 copies of an 1897 USDA farmers' bulletin on sugar beets had been distributed and "the demand appears to be unabated." Sugar beets were cultivated in Michigan north of Detroit, among other areas.
Formation of Utah Sugar + Presidents of the Utah-Idaho Sugar Company Years Name1902–1918 Joseph F. Smith1918–1929 Heber J. Grant1929–1931 William H. Wattis1931–1945 Heber J. Grant1945–1951 George Albert Smith1951–1958 David O. McKay1958–1963 J. Arthur Wood1963–1969 Douglas W. Love1969–1981 Rowland M. Cannon
By 1888, Arthur Stayner and Elias Morris from the failed Deseret Manufacturing Company convinced The Church of Jesus Christ of Latter-day Saints apostle Wilford Woodruff, and the church, that sugar beets and processing would be a good enterprise.
Thomas R. Cutler conducted research in France and Germany, and the Utah Sugar Company was organized on September 4, 1889. The capital was $15,000, with Elias Morris as company president. Morris had helped with the 1850s attempt at sugar beet manufacturing. Notable stockholders included Wilford Woodruff and George Q. Cannon.
Experimentation from the 1850s until 1891 used free seed, provided by the U.S. Department of Agriculture. James E. Talmage assayed the resulting sugar beets, and, according to Leonard J. Arrington: "the percents of sucrose and purity were so low that it would seem to have required a heroic imagination to see potential profit in the industry." A mistaken German theory, backed up with experiments in Spain and Italy, was that irrigation was counterproductive in growing sugar beets. This predominated until 1893. This was also called the "California method", based on the belief that a long taproot would supply the beet. Once US farms began to irrigate in arid areas, yields per acre increased significantly. Utah Sugar began growing their own seed in 1895 and was producing 35 tons of seed by 1899.
In 1890, Woodruff, citing divine inspiration, called the 15 highest leaders of the church to raise money for the Utah Sugar Company. Also in that year, the McKinley Tariff (also known as the 1890 Dingley Tariff or the Sugar Bounty Act) gave a sugar bounty, replacing a tariff, which "unwittingly" gave a substantial economic boost to sugar beet refining. This gave a payment of two cents per pound of sugar manufactured in the United States, as well as a penny per pound from the Utah government. This bounty was repealed in 1894 and replaced with a tax in 1897 by the Dingley Act of 1897.
Lehi factory
A $400,000 sugar beet processing factory was constructed in Lehi, Utah. Utah Sugar had been comparing Lehi with American Fork as potential factory locations. The Lehi location was chosen because the city of Lehi offered for a building site plus of land for a beet farm, built a road to the location, bought stock in the company, gave perpetual water rights, and offered other incentives. As another benefit, the Rio Grande Western Railway and Union Pacific Railway passed nearby. "An uncharacteristically exuberant (by Mormon standards) celebration ensued", including bonfires of looted property and free barrels of beer. The location was chosen on November 18, 1890, and the cornerstone was laid on December 26, 1890. Wilford Woodruff was a speaker and a dedicatory prayer was offered by George Q. Cannon. 2000 people attended the cornerstone ceremony. 100 railcars of machinery were delivered from Kilby Manufacturing Company in Cleveland, Ohio to fill the factory, at a cost of $260,000. E. H. Dyer and Company from Cleveland was contracted to build the factory.
The factory was ready for operation on October 12, 1891. Notable supervisors and managers of the plant included Edward F. Dyer (superintendent of first season, son of factory construction contractor E. H. Dyer, from Alvarado, California) and James H. Gardner, who served a Mormon mission to Hawaii, and acted as the sugar boiler for the first season.
During the 1890s, the Utah Sugar Company was in financial distress, partly because stockholders were not making their stock subscription payments. Even before the factory was ready, the LDS Church intervened, making a $50,000 payment to the Dyers from collected tithing money.Deseret Evening News, October 22, 1900 The factory was originally expected to be built for $300,000; it was recapitalized to $1 million on October 9, 1890. Lehi locals, including John Beck, Thomas R. Cutler, and John C. Cutler backed the company, but eight of the seventeen backers went bankrupt. After being approached by Cutler, then-current LDS church president Wilford Woodruff instructed the church to invest in the company. It became "a significant stockholder", making a $50,000 payment and a $130,000 loan. Cutler also went to Chicago and New York City to secure loans from banks; he came back, via train, with a bag full of money, as he did not think any banks in Utah could have cashed the large bank draft.
The LDS church made more payments and secured more loans. In addition, George Q. Cannon and Heber J. Grant personally funded the enterprise. Joseph F. Smith, president of the LDS Church, gave a sermon in 1893 explaining that this was done to help employ Mormons. Bonds intended to cover the debt in 1893, did not sell, so the LDS church purchased them, then resold them to Joseph Banigan of Rhode Island. The church took a loss from this action but did so to keep the company afloat. The church purchased another $85,200 in shares in 1896. Joseph F. Smith made it clear that Mormons who did not support Utah sugar and instead bought less expensive imported sugar, were being unpatriotic and unwise and failing to support efforts at home.
The machinery in the factory was very dangerous, even by the standards of the time. Children played in the factory, and one six-year-old was killed in 1898. Workers were injured and killed. A visiting German sugar maker said, "If you were in Germany you would be thrown in jail. You've got exposed machinery all over the place. You've got hazards every way you turn. Why, in Germany you would be having someone killed in a plant like this every day."
Some officials wanted the company to expand into other Mormon territory, but the church did not have the finances to support it, especially when Lorenzo Snow became president of the church in 1898. Henry Osborne Havemeyer, president of the American Sugar Refining Company, was interested in the company. Wallace Willett said Colorado and Utah were good for production of sugar beets, but "Colorado... could not control its farmers as well as Utah.... the Mormons could control their people." Thomas Cutler had contracts with the sugar beet growers, which were the lowest-cost contracts, buying at 3.75 cents per pound. Havemeyer and American Sugar became the largest shareholder in the company, owning almost 50% of its stock by 1902.
American Sugar was the 1890-era reformulation of the Sugar Trust of the 1880s. Havemeyer was apparently impressed by the Mormons. He offered technical assistance, paid a good price for the stock, and was known for using predatory pricing against regional competitors, which were all factors leading to the LDS Church's acceptance of the American Sugar offer. A director of American Sugar, Lowell M. Palmer, said he encouraged Havemeyer to invest in Utah because "the LDS Church, in a measure, controlled its people."
In 1891, of sugar beets were grown by 556 farmers in the area. In 1893, production had increased to from 763 farmers. By 1895 the area was , in 1899 there were in cultivation, and by 1900 some . The productivity also increased, from 5.3 tons of sugar beets per acre in 1891 to 6.7 tons in 1893, and to 9.7 tons in 1895. Sugar content, measured as a percentage of the beet weight, increased from 11.0 in 1891 to 13.9 in 1897. During the Panic of 1896, the Lehi factory was responsible for $200,000 in payments to farmers, as well as $85,000 in wages. A U.S. Department of Agriculture report said "there is no one in [Lehi] desiring employment during the growing season", and an 1898 report to the U.S. President from the U.S. Secretary of Agriculture said that the "sugar-beet lands of Utah were very much enhanced in value... the location of a beet-sugar factory in a district causes a healthy rise in rents and values of lands." Nearly 30 businesses were founded in Lehi between 1890 and 1896, which was significant due to the national economic depression that disproportionately affected Utah.
The Lehi plant was finally "a technical and financial success" in 1897, and the plant capacity was increased in 1900. This expansion tripled its volume, allowing it to process 1200 tons of beets. Cutting stations and pipelines were installed in Bingham Junction in 1900, and then in 1904 from Spanish Fork, which had a pipeline, 4 inches in diameter.
Molasses, a byproduct of the sugar refining process, was considered waste. It was dumped into a nearby creek. The company considered developing a vinegar or alcohol plant, "but demand did not seem to warrant it", probably due to the Mormon restriction against consuming alcohol. The molasses was sometimes combined with potash and cinders from the boiler room and used to pave roads. Finally, the molasses was refined in 1903 though an "osmose process", later replaced by the "Steffen process", used to recapture the sugar content. This helped improve the efficiency of sugar extraction; in 1891, of sugar were produced per ton of sugar beets. In 1893, the ratio was per ton of sugar beets. In 1898, due to the osmose processing of molasses, the of sugar per ton of sugar beets was extracted.
The Lehi factory was developed as the Utah-Idaho Sugar Company oligopoly, following the 1907 merger of the Utah Sugar Company, Idaho Sugar Company, and Western Idaho Sugar Company. Then LDS church president Joseph F. Smith was its head. The American Sugar Refining Company retained shares in the company through 1911, when it was investigated by the United States House of Representatives. In 1914, Charles W. Nibley, who was the presiding bishop of the LDS church, bought all of the American Sugar's shares, becoming the largest shareholder. Nibley became the general manager in 1917.
Early expansion A Springville factory was built in 1899, following failed attempts by the Utah Sugar Beet Growers' Society of Springville in 1896 and the American Beet Sugar Construction Company (who built early sugar beet factories in Nebraska and the American Beet Sugar Company factory in Oxnard, California). In 1900, a cutting factory was installed in Mapleton, Utah, with a pipe running to the Springville factory. An additional cutting factory and pipeline followed in 1901, in Provo.