On these cold and slippery days of winter, it’s hard to realize how important ice was to life in turn of the 20th century New York. Greater New York City, including the new borough of Brooklyn, consumed more ice than any other city on the East Coast.
Ice was necessary for the storage and shipment of meat produce and dairy, was used in restaurants and hotels, and in the iceboxes of private homes.
It was used in the production of beer and in other food industries. For a history of commercial ice making in New York, please see Part One of this story.
In the days before reliable artificial ice or electric refrigeration, the company that controlled ice controlled the fortunes and health of America’s largest city. The New York City area had many ice companies, all of which made good money.
Just think of the power and money that could be made if all of those companies were consolidated into one huge “trust”. Customers would have no choice but to pay whatever this mega-company demanded.
Where else were they going to go? That was exactly what happened, beginning in 1896, when a man named Charles W. Morse bought up the largest of New York’s ice companies and made himself the “Ice King of New York.”
Charles W. Morse was a character. Someone should have made a movie of his life by now, because he was one of the great despicable rogues of the 20th century. Businesses and industries that came under his grip were ground under his heel in his attempts to control prices, destroy rivals and make a huge pile of money for himself and his cronies.
The collateral damage to individuals, municipalities and the companies and lives he ruined never seemed to enter his mind, or his concern. He started off innocently enough, hailing from Bath, Maine.
He was born in 1856. His father was in the local shipping business, running a tow company that operated on the Kennebec River. He was already in the shipping business while a student at Bowdoin College, and by the time he graduated in 1877, he was already doing well, with money in the bank.
Morse went into business with his father and a cousin, and they soon were very successful in the lucrative business of shipping Maine’s two greatest products; lumber and ice. Soon bored with Maine, he moved down the coast, first to Boston, then to New York City.
Most of New York City’s ice came from the Hudson River and from the lakes of Rockland County. Because the river and lakes were so large, and the harvest so close to the city, Hudson Valley ice remained cheap and available to city customers all year long.
Huge icehouses along the Hudson and in NYC stored the winter’s ice for the warmer months. But in 1890, an abnormally warm winter produced an ice shortage. Desperate New Yorkers looked north for ice, and companies in Maine like Charles Morse’s took full advantage, opening up New York markets to Maine ice.
The following winters were cold again, decreasing Maine’s importance to New York markets, but Morse had gotten his foot in the door, and he liked New York.
He began by slowly buying the smaller ice companies in Manhattan and Brooklyn. Here in Brooklyn, he bought the ice companies of several of the larger breweries: Consumers, Brewers, Commonwealth, Ridgewood and others.
He bought ice companies in Yonkers, Long Island, even out in Montauk. He purchased the New York Ice Company, one of the city’s largest, and in 1896, bought his largest rival, the Knickerbocker Ice Company. Knickerbocker, as related in my last post, was the supplier of Rockland Lake ice, the purest and most desirable ice available.
They were one of New York’s oldest, largest and most successful ice companies. With Knickerbocker now under Morse’s control, he now controlled virtually all of the ice coming into New York City, Brooklyn and Long Island.
The Consolidated Ice Company was incorporated in Maine in 1895, with Charles Morse as president. His brother, father and other relatives were all officers and board members, as were a select group of investors and preferred stockholders who hailed from Philadelphia on northward, all of whom were poised to profit greatly.
They called their organization an “ice trust,” and although many of the companies they absorbed kept their old names, and in some cases, their former owners and officers, they were all a part of the “trust,” and subject to corporate dictates. In April of 1896, the trust started to flex its muscles by raising the price of ice.
That April had been a warm month, and ice supplies were needed in the city. Consolidated took the opportunity to hike up prices across the board. For families and personal use, that meant a hundred pound block of ice went from twenty to twenty-five cents to forty cents.
Wealthier people could easily absorb the hike, but for poor people in the tenements, a doubling of prices was devastating. Consolidated Ice then announced that if it stayed warm, the price would increase again in a month.
Of course, wholesale prices also doubled, affecting all the industries that needed ice to operate. Prices rose on everything they produced accordingly.
The public began wondering if Standard Oil, another prominent monopoly, was behind the ice trust, and rumors abounded in the press and on the street. When asked about it, once-independent ice manufacturers who now were a part of Consolidated would not talk to reporters, fueling the rumor mills even more.
Lawyers and lawmakers began looking into the new anti-trust legislation that had just passed designed to force monopolies like Standard Oil and Consolidated from strangling the market. But the implementation and interpretation of these laws would take time. In the meantime, it was pay up, or no ice.
By 1899 Charles Morse owned virtually all of the ice coming into NYC. That year he created a new company called the American Ice Company, which included not only natural ice companies, but local plant ice companies making ice by chemical means.
It had been discovered that ammonia and other gases could freeze water and produce ice. The technology was still growing, but these companies were still able to add to the tonnage of ice being produced, mostly for breweries and other industrial use.
By century’s end, there were a few independent chemical ice plants operating in Brooklyn and New York City. Morse snapped these up too. Small local ice companies, selling mostly to the tenements, were not worth his time, and even they had to buy his ice at some point. New York’s ice was all his.
As Morse hiked his prices again and again, lawmakers and newspapers began searching in earnest to find ways to stop the monopoly. On May 6, 1900, the New York Times printed one of their famous long exposes on the ice monopoly.
They did a thorough history of the players, and named the names of the board of directors and the major stockholders. They listed all of the companies who fell under the umbrella of the American Ice Company, listing their officers and boards of directors, as well.
The name “Morse” appeared everywhere. They also told a complex story of price fixing, artificial ice shortages and all around thuggery.
The winter of 1898-99 had been particularly cold, and the ice harvests on the Hudson, the Rockland County lakes and in Maine had been particularly good. There was a surplus of ice, so much so that new ice houses had to be built to store it all.
The year before hadn’t been bad either, and there was actually some stock left from then, too, so there was no shortage of ice as the East Coast went into the spring of 1899. Yet by May, the American Ice Company was telling its customers that there was a shortage, and that prices would have to rise that spring and into the summer.
The Times had figured out that more than 4 million tons of ice had been harvested that winter, adding to a surplus of 170,000 tons still stored in Maine from the year before. Yet the AIC claimed they only had harvested 1.4 million tons, and only had about half of it left.
The Times looked at output of the chemical ice plants and figured that AIC had at least 700,000 tons of that available, and more could be made at will. Still, the AIC claimed there was an ice shortage.
Bolstering their claims were the ice press; the trade papers and periodicals that were published by the ice industry. Since Morse controlled them too, they parroted whatever AIC told them to say, which AIC then used as independent proof of whatever point they were making.
Everyone knew it, but since everything was legal and carefully orchestrated, the AIC had New York right where they needed it to be. Prices for ice for home use soared from $5.50 a ton just a year or two before, to $13.20 a ton in the spring of 1899.
In the middle of all of this price fixing, stock in the American Ice Company was being traded briskly. Wall Street was playing the odds.
Most knew that the ride wouldn’t last forever, but while it was going on, big money could be made, with the key being able to judge when to sell, before the government broke up the company. Preferred stock from AIC was money in the bank, and everyone needs a little something in the bank, even the mayor of New York City.
The first mayor of Greater New York, Robert Anderson Van Wyck, a son of old Knickerbocker Dutch stock, his brother, and others were the recipients of the largesse of the AIC.
The scandal and legal investigation that followed would cut short a political career, and help promote the end of the American Ice Company monopoly. Our story continues next time.
(Ice trade in New York, Wikipedia)