Milton S. Hershey – The Chocolate King

 

Milton S. Hershey was born on September 13, 1857 to Mennonite parents in Pennsylvania approximately one mile from where he would later establish the town of Hershey.¹ His Mennonite upbringing would instill within Hershey values of modesty, social justice and perseverance that would be foundational to his success as an entrepreneur, businessman, and philanthropist.² Hershey quit school at the age of 12 and became an apprentice to a candy maker after being fired as a printer’s assistant. When Hershey turned 18 years of age, his family provided him with the financial backing to open up his own confectionary shop in Philadelphia, however, his lack of education and experience in the competitive business world would lead to the failure of his candy store after his horse-drawn delivery wagon was wrecked. His family would assist him financially in setting up another confectionary business in New York and by the time he turned 28 he would fail once more due to legal issues and financial losses. Hershey would return to Pennsylvania in 1888 where would open up a caramel factory which would be ultimately successful such that he would sell the company for $1,000,000 in 1903. Hershey’s Mennonite characteristic of hard work would lead him to come out of retirement. During a trip around the world, he was quoted by the New York Times as saying to his wife, “I can’t stand this; I’ve got to get back to work!”³

Hershey’s next business venture would exemplify the leadership vision described as important for entrepreneurs in the video, “Don’t Mistake Leadership for Management.”⁴ Hershey had been experimenting with the manufacture of chocolate candy bars in the decade before he sold his caramel factory. During this period, he had also developed a vision for an industrial and agricultural utopia in which the candy factory would be established in rural dairy land which would provide a plentiful supply of milk for the production of chocolate. The factory would also be situated in a company town in which the factory workers could live happily, educate their children, and avail themselves to parks and golf courses.⁵ Hershey would begin bringing his vision to fruition by purchasing 1200 acres of rural property near his birthplace with the proceeds of the sale of his caramel factory.⁶
 
The initial chocolate factory and the town of Hershey, Pennsylvania would be completed in 1904. The business model was simplistic with an initial single product of chocolate and almonds wrapped in foil that sold for a nickel, such that chocolate could be purchased by all socio-economic classes of people. Sales were good and the company tripled the size of its factory by 1910 with annual sales of 1.2 million dollars. Hershey used the profits from the soaring chocolate sales to improve the company town with electricity, central heating, and indoor plumbing in newly constructed houses sold to company employees. Notably, these new house features were considered luxuries at that time. Hershey also focused on city infrastructure with the establishment of schools, churches, parks, swimming pools, a library, and a trolley.⁷
 
Hershey and his wife, Catherine, were unable to have children due to a debilitating disease that would claim her life in 1915. Realizing that he and his wife would be childless, Hershey decided to focus his efforts on an industrial school for orphans that he established in 1909 on the site of his childhood homestead.⁸ The Hershey Industrial School was open to all needy boys and orphans between the ages of 4 and 15 and was thought to serve as a replacement for the children that the Hersheys would never have. The boys would be housed in small groups with a house mother and educated with academic, vocational, and professional programs. The boys would leave the school when they turned 18 with a job, clothes for a year, and $100.⁹ In 1918, Hershey would divest most of his wealth in the Hershey Chocolate Company and place $60,0000,000 into an endowment for the Hershey Industrial School for Orphans. Hershey would not publicly disclose his endowment of the school until 1923 as he did not want his philanthropy to be misconstrued as an advertising tactic of his company.¹⁰ Hershey would also invest earnings after dividends from his chocolate factory into improving the town of Hershey and funding for the industrial school. The Hershey Industrial School remains in operation today with an estimated endowment of $5 billion dollars in 2000.¹¹
 
The Hershey Chocolate Company was one of few companies that thrived and earned profits during the depression largely due to his vision of a chocolate bar with a low cost that could be afforded by all and through the establishment of the company town for his workers and steady business for the dairy farmers in the local area. The evidence of Hershey’s ability to remain viable during the depression can be seen in a 1937 article in the New York Times stating that the Hershey Chocolate Company had annual sales of $40 million since 1929 and had paid out $30,000,000 in dividends for the seven-year period from 1929 to 1937. When sales dropped during the depression, Hershey simply made corresponding cuts in manufacturing costs to ensure a minimum annual profit of 7.6 million dollars to ensure that his workers were paid, and the town and school were funded.¹²
 
Hershey would continue his philanthropic efforts with a $100,000 contribution to pay off the debts of the churches in the town of Hershey followed by the creation of the M. S. Hershey Foundation and an endowment of $400,000 to establish the Hershey Junior College in 1936. The Hershey Chocolate Company would receive the Army-Navy “E” production award in 1942 for delivery of chocolate rations to service members during World War Two.¹³ His philanthropy was so much a part of his life that at the time of his death he didn’t even own his home as he had given it to the town of Hershey to be used as a country club years before.¹⁴
 
Milton S. Hershey epitomized the characteristics of an entrepreneur through his vision of a product that could be enjoyed by all people regardless of socio-economic status. Hershey’s vision of an industrial and agricultural utopia for his chocolate factory, its employees, and local community was realized through his work ethic. His philanthropy would be the objective of his business endeavors with social justice based upon his Mennonite upbringing. Hershey would die at the age of 88 on October 14, 1945, memorialized by the New York Times in his obituary as the Chocolate King.¹⁵

 

Notes

                                                                                                                       

¹"M.S. Hershey Dead; Chocolate King, 88: Founder of Corporation and Model Community Donated Millions to Charity Made Army 'D' Ration Established Industrial School for Orphans-Won Success After Three Failures Town Of 4,000 People Gase Fortune to Philanthropy Once Printer's Devil How Model Community Came Unaware of Depression Defeat of Sit-Down Strike," New York Times (1923-), Oct 14, 1945. 44, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/m-s-hershey-dead-chocolate-king-88/docview/107245684/se-2.

²David J. Ginzl, "Industrialist and Idealist: Milton S. Hershey, the Chocolate King: Business Acumen and Idealistic Values Defined the Life of Milton Hershey," Commercial Lending Review 21, no. 5 (2006): 38+. https://link.gale.com/apps/doc/A152374323/GBIB?u=vic_liberty&sid=summon&xid=4e38945b.

³"M.S. Hershey Dead; Chocolate King, 88: Founder of Corporation and Model Community Donated Millions to Charity Made Army 'D' Ration Established Industrial School for Orphans-Won Success After Three Failures Town Of 4,000 People Gase Fortune to Philanthropy Once Printer's Devil How Model Community Came Unaware of Depression Defeat Of Sit-Down Strike," New York Times (1923-), Oct 14, 1945. 44, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/m-s-hershey-dead-chocolate-king-88/docview/107245684/se-2.

⁴Big Think, "Don’t Mistake Leadership for Management,” (Video lecture in HIUS 713 at Liberty University, Lynchburg, VA, 2023).

⁵David J. Ginzl, "Industrialist and Idealist: Milton S. Hershey, the Chocolate King: Business Acumen and Idealistic Values Defined the Life of Milton Hershey," Commercial Lending Review 21, no. 5 (2006): 38+. https://link.gale.com/apps/doc/A152374323/GBIB?u=vic_liberty&sid=summon&xid=4e38945b.

⁶"M.S. Hershey Dead; Chocolate King, 88: Founder of Corporation and Model Community Donated Millions to Charity Made Army 'D' Ration Established Industrial School for Orphans-Won Success After Three Failures Town Of 4,000 People Gase Fortune to Philanthropy Once Printer's Devil How Model Community Came Unaware of Depression Defeat Of Sit-Down Strike," New York Times (1923-), Oct 14, 1945. 44, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/m-s-hershey-dead-chocolate-king-88/docview/107245684/se-2.

⁷David J. Ginzl, "Industrialist and Idealist: Milton S. Hershey, the Chocolate King: Business Acumen and Idealistic Values Defined the Life of Milton Hershey," Commercial Lending Review 21, no. 5 (2006): 38+. https://link.gale.com/apps/doc/A152374323/GBIB?u=vic_liberty&sid=summon&xid=4e38945b.

⁸Ibid.

⁹Lawrence E. Davies, "An Orphan School-Home: Hershey Unit, Now Being Enlarged, Gives the Boy A Training, A Job And $100, New York Times (1923-), Nov 04, 1934, 1, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/orphan-school-home/docview/100942416/se-2.

¹⁰Special to The New York Times, "M.S. Hershey Gives $60,000,000 Trust for An Orphanage: Pennsylvania Chocolate Manufacturer Transfers His Entire Wealth. Kept Deed Secret 5 Years Industrial School Which He Founded In 1909 Will Be Greatly Expanded. Institution At His Home He Was a Poor Boy on The Farm Where He Has Developed a Great Industry. $60,000,000 Trust for An Orphanage," New York Times (1923-), Nov 09, 1923, 1, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/m-s-hershey-gives-60-000-trust-orphanage/docview/103176470/se-2.

¹¹David J. Ginzl, "Industrialist and Idealist: Milton S. Hershey, the Chocolate King: Business Acumen and Idealistic Values Defined the Life of Milton Hershey," Commercial Lending Review 21, no. 5 (2006): 38+. https://link.gale.com/apps/doc/A152374323/GBIB?u=vic_liberty&sid=summon&xid=4e38945b.

¹²"Philanthropy Gets Hershey Millions: Nearly $5,000,000 A Year Goes into Benefits for The Town And 2,400 Workers School Has $60,000,000 Man Who Began as Printer's Devil and Was Fired, Then Started Making Candy Created $60,000,000 Trust Earned $36,000,000 Since 1929," New York Times (1923-), Apr 08, 1937, 16, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/philanthropy-gets-hershey-millions/docview/102248787/se-2.

¹³"M.S. Hershey Dead; Chocolate King, 88: Founder of Corporation and Model Community Donated Millions to Charity Made Army 'D' Ration Established Industrial School for Orphans-Won Success After Three Failures Town Of 4,000 People Gase Fortune to Philanthropy Once Printer's Devil How Model Community Came Unaware of Depression Defeat of Sit-Down Strike," New York Times (1923-), Oct 14, 1945. 44, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/m-s-hershey-dead-chocolate-king-88/docview/107245684/se-2.

¹⁴"Hershey Giving Away Home: Will Add Mansion to Estate Turned Over to His Community." New York Times (1923-), Oct 11, 1928. 27, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/hershey-giving-away-home/docview/104440215/se-2.

¹⁵"M.S. Hershey Dead; Chocolate King, 88: Founder of Corporation and Model Community Donated Millions to Charity Made Army 'D' Ration Established Industrial School for Orphans-Won Success After Three Failures Town Of 4,000 People Gase Fortune to Philanthropy Once Printer's Devil How Model Community Came Unaware of Depression Defeat of Sit-Down Strike," New York Times (1923-), Oct 14, 1945. 44, https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/newspapers/m-s-hershey-dead-chocolate-king-88/docview/107245684/se-2.