Walkabout: Professor Friendly and the Electric Sugar Company, Part 2

Read Part 1, Part 3, and Part 4 of this story.

In the old Grimm’s fairy tale, the boastful miller told the greedy king that his daughter could spin straw into gold. Against all reason, the king believed him, and locked the girl in a room full of straw and told her to get busy, or she would die.

Thanks to the magical help of a little man named Rumplestilskin, the proud boast came true, and the next day the straw was gone and the room was filled with gold.

Surely the men who invested in Professor Friend’s marvelous invention must have had Rumplestilskin in mind, because with the help of his mysterious machine, the Professor could turn raw sugar mash into pure refined sugar. It had to be magic, and that magic came from the power of electricity.

In the first chapter of this story, we met Professor Friendly and his wife Olive, who hailed from the Midwest. In the 1870s, the Professor boasted to Chicago commodities traders that he could cut production time for refining sugar from weeks to hours, with the help of a secret process that he had developed.

By feeding raw sugar into his machine and subjecting it to his secret electrical treatments, the end result after a few hours would be pure refined white gold.

The Chicago men howled with disbelief and sent them packing, so they came to New York, and enlisted the help of Olive’s stepfather, a charismatic and forceful street preacher named William Howard.

He was familiar with the investors and traders on Wall Street, because that was his territory, the field upon which he sowed his seeds of faith, and harvested his souls for the Lord. Before long, he had convinced people to invest, the money allowing them to move to better housing, and start recruiting overseas.

In a short amount of time, they had two English allies: the new President of the newly formed Electric Sugar Refining Company, William H. Cotterill, and the Secretary-Treasurer, a man named J. U. Robertson.

Cotterill was a lawyer, living in New York, and Robertson had been a successful shipping company owner in Liverpool. They also recruited an architect for their project, one Elisha Sniffen.

Thanks mostly to Robertson, who was a member of a British religious sect called the Christadelphians, the money started rolling in. The Christadelphians were a growing, but insular group originating in the Birmingham area, but spreading throughout Great Britain.

With the zeal of the converted, Robertson had been pushing the Electric Sugar Refining Company in person, and in the sect’s newspaper, and they responded by investing in the company, many spending their hard earned pennies to buy just a share of common stock.

But pennies add up, and with the addition of Robertson’s rich relatives and friends also investing heavily, the ESRC soon had more than enough money to start production in Brooklyn.

Architect Sniffen had been charged with converting an enormous old flour mill on the Red Hook harbor into the new sugar refinery. He had been told to build a special room of a certain size on the top floor, where the secret technology would be kept under lock and key.

The only people who had keys to this room were Professor Friend and his wife, and Reverend Howard and his wife. Not even Cotterill or Robertson were allowed in there.

This was home to the magical machine, and, as the Professor and the Preacher would explain to would-be investors, this process would never be revealed, or sold.

If Big Sugar, such as the giant Havemeyer Sugar Refining Company, wanted to use this technology, they would have to bring their sugar here, and the ESRC would refine their sugar for them, and return it to them for further sale.

In fact, they said, the Havemeyers had heard about this machine, and had come to the Professor, offering him over a million dollars to sell him the machine and the technology, but he had refused. He knew that paltry amount of money could be made in a matter of months, and smart investors could share in that money, too.

The investors may have been incredibly gullible, but they weren’t born yesterday, they said. The preacher’s little bags of sample refined sugar could have been bought at a grocery store, they didn’t mean anything. They all wanted to see the machine in action.

The professor was ready for them. Groups of investors came to the Red Hook factory. They stood in front of the machine and watched the professor feed a large load of raw sugar materials into a hopper in front of a strange iron contraption.

He then turned it on, and after a warming up period, electricity crackled along its length. The smell of ozone was in the air, along with the stench of strange chemicals.

Gears started moving and the sugar disappeared into the machine, which huffed and puffed and made a lot of noise. The men watched it for a few minutes before being escorted out of the room and the door was locked.

The professor told them that it took a few hours to process the raw sugar. He and the reverend talked to them, showed them around the large factory space, and told them how they envisioned the factory to look in the near future.

There would be plenty of room to process other people’s sugar, which could be barged in right here at the piers, and shipped right out. The Havemeyer plant was just a couple of miles around the harbor.

Think how easy it would be for them to move their goods to and from here. And in fact, if they got enough money, ESRC could build a sugar refinery right next door to Havemeyer. There could be Electric Sugar Refineries all over the world. Anything was possible.

They all went back to the locked room, and the professor went to the rear of the machine. He reached in and pulled out handfuls of some of the finest refined sugar the men had ever seen. It was even still a bit warm, right out of the miracle machine.

It was incredible, and the checkbooks came out. The preacher declared that this was a gift from heaven, and a blessing from Almighty God. The choir of investors said “Amen,” and another successful demonstration had just been made.

The investors were given the sugar to take with them, and told to spread the word. “You didn’t just hear it from us,” the preacher said, “You saw it happen for yourself.”

By 1888, the exciting new Electric Sugar Refining Company was one of the hottest stocks around. In spite of that, many nay-sayers still cried, “bunkum,” refusing to invest or encourage others to do the same.

But there were so many who ignored that advice, and gladly paid to have a part of such a potentially lucrative venture. They were fortunate to be there at that time, poised at the edge of success and genius, with a piece of the Greatest Invention of the Century.

All this money coming in allowed the Friends and the Howards to live it up. They moved further downtown, and were seen dressed in the finest clothing, eating fine foods in fancy restaurants, and being driven around in the finest of carriages, drawn by the finest horses.

But then, one day in the winter of 1888, Professor Friend, who was quite old, suddenly died. Everyone missed him, of course, that eccentric genius, but the biggest question was “Had the secret of electric refining died with him?” A lot of money was riding on the answer.

“No!” the grieving widow and the Howards cried. The professor had left the secret in the hands of his widow and her step-father. Olive and the preacher would carry on; the Professor would have wanted it that way.

By this time, they had collected over half a million dollars, which would be the equivalent of over $12 million, today. But with the professor dead, the investors were getting nervous.

What could a woman and a preacher really know about sugar refining? They wanted to see more than just demonstrations; they wanted to see the factory producing something. They wanted to see their investment producing dividends.

Although ESRC continued to try to assure investors that the secret process was understood by Howard and Olive, their affirmations were having less and less success. Several investors threatened to sue, and everyone wanted to see not only the factory, but now wanted to examine the machine. They threatened to get the law involved.

Although coal was delivered to the factory, and a lot of people were moving around, not much else was going on, and workers and the architect, Mr. Sniffen, were in the dark.

No one had been there to start manufacturing. Investigators went to the factory and found…nothing. There was no machine, no secret process, no sugar, and no active company. There was only the whooshing sound of large amounts of money disappearing into thin air.

In the first week of 1889, Mrs. Friend, the Reverend and Mrs. Howard, and William Cotterill left New York City, in the dead of night, and disappeared, taking whatever cash they had in the bank with them.

The great Electric Sugar Company love affair was over. The Electric Sugar Refinery Company Scandal was about to begin. Or as the New York Herald put it, “Sugar Plums Soured.”

Investigations began on everyone involved. The newspapers found out that Professor Friend had been arrested in Chicago for bilking a man out of $1,500, convincing him to invest in a new invention.

But the case had been thrown out, because the court said that the alleged victim had threatened Friend, and tried to blackmail him. His allegations of a swindle were not believed. Reporters thought perhaps they should have believed him.

William Cotterill also had a shady past. Investigators found out the he had been under investigation for misuse of client’s funds. In 1876, the New York Sun had printed an article suggesting that Cotterill was guilty of unfair practices involving his handling of a client’s business.

He had come to America from England and set himself up as an expert in English mercantile law. He soon had a great many clients among the ex-pat British community, including accounts from poor English sailors and others who needed a trusted solicitor to send precious money back home.

Cotterill started using his clients’ money to invest in stocks, and then lost the money in the market. When angry pensioners and ship’s captains wanted their money, he didn’t have it, so he fled for Boston. He had to be brought back, where he then had to repay every penny, which caused him much financial distress.

When the ESRC appeared, he needed to make quick money, but soon realized that he was at home among even better confidence men than he was himself. Well, that’s what the papers were saying. Cotterill would soon be speaking for himself. All of the players involved would soon be doing a lot of talking.

Next time: Of course Olive and the Howards couldn’t hide for long. There were arrests, trials, confessions, and all kinds of embarrassing details to come. As for the many investors — how could so many smart men be so stupid? We’ll find out in Chapter Three.

(Machine from Charlie Chaplin’s “Modern Times.” Photo via voila.bz)