Otto Y. Schnering

Introduction

Nicknamed the “U.S. Candy Bar King,” Otto Y. Schnering (born: October 9, 1891 in Chicago, IL; died: January 10, 1953 in Cary, IL) used his personal sales skills and understanding of advertising and marketing to build the Curtiss Candy Company in Chicago and the post–World War I United States chocolate candy industry into modern, successful enterprises. His Baby Ruth and Butterfinger products are still sold. His contributions extended beyond the chocolate candy industry into the cattle breeding and agriculture industries with the founding of Curtiss Farm and Curtiss Breeding Services in Cary, Illinois. Believing that his community was an extension of his family, Otto Schnering was also an important philanthropist and community leader in northern Illinois. Half a century after his death in 1953, Curtiss Candy and Curtiss Farm employees and their families returned to Otto’s home in Cary to honor the man who was a founding father of the twentieth-century United States candy business and who treated his employees like family.

Family and Ethnic Background

Named after his father’s business partner, Otto Young Schnering was born and raised in Chicago. His parents, Julius Schnering (1852-1931) and Helen Curtiss Schnering, grew up in different circumstances, but imparted the same beliefs about hard work, education, and family to their son.[1] Julius and his parents immigrated to the United States from Germany in 1853, when Julius was one. At the age of twelve, Julius became a drummer boy for the 131st Pennsylvania regiment in the Civil War. After the Civil War, Julius came to Chicago and met Otto Young, the namesake for his future son. The two men managed the wholesale jewelry firm Otto Young & Co.[2] After retiring from the jewelry business in the 1910s, Julius joined the Curtiss Candy board of directors and worked in the company’s finance department until his death in 1931—embodying the German principles of hard work and dedication.[3] Otto later credited Julius with teaching him to save twenty percent of his income.[4] That habit helped Curtiss Candy survive the Great Depression.

Helen Elizabeth Curtiss (1862–1944) was born in Vermont to a wealthy New England family. According to the 1850 United States Census, the Curtiss Family had seven servants and assets worth $9,000 in 1860 (or $243,000 in 2010 dollars).[5] Helen and Julius had three servants during Otto’s youth, who helped care for Otto and his young sister Helen Marjorie Schnering (1898–unknown). Otto maintained a close relationship with his parents. Otto used Helen’s maiden name “Curtiss” for his fledgling candy company. Some sources suggest that he used her maiden name to avoid any anti-German sentiments after World War I. Otto said the name was a “tribute to his mother.”[6] His maternal devotion remained steadfast. After her death in 1944, he closed the company offices for a day of mourning.[7]

Education was valued in the Schnering family, as it was in Germany. The German university system flourished in the nineteenth century, establishing the higher education model still used in Europe and the United States in the twenty-first century. A college education was necessary to obtain a German government job; technical knowledge was considered the means to modernize Germany.[8] German immigrants applied that belief in the power of education to modernize or transform to their lives in the United States. Otto received a Bachelor of Philosophy degree (Ph.B.) from the University of Chicago in 1913, and both his sons also graduated from the University of Chicago. Otto eventually created two educational foundations, the Helen Curtiss Schnering Education Foundation and the Julius Schnering Education Foundation, to honor his parents and to encourage his workers to obtain an education.[9] Employees of Curtiss Candy could apply to those foundations for scholarships. Formal and informal education enabled Otto to build and expand his business from candy to agriculture. The close family bond among the Schnerings also provided a familial or paternal leadership model, which Otto employed to manage Curtiss Candy and Curtiss Farm.

Business Development

Otto Schnering was a complete businessman. He mastered every aspect of running a business: manufacturing efficiency, supply chain management, advertising and marketing, and finance. He founded Curtiss Candy Co., the Equipment Finance Corp., and the Curtiss Candy Employees Retirement Fund, which were located in Chicago.[10] He essentially built a company town on his estate in Cary, Illinois, which evolved into the Curtiss Farm and Curtiss Breeding Services businesses. Otto’s love of entrepreneurship and animals first manifested at the age of twelve when he founded his first business: a breeding zoo. He sold pigeons, puppies, and pheasants—early experience for the large scale farm he would later operate in Cary.[11] His first job was as a salesman for the George P. Bent Piano Company in Chicago. After Sears, Roebuck & Co., purchased the company, Otto found himself unemployed. A friend told him about some candy-making equipment that could be purchased for $100 (approximately $2,050 in 2010 dollars).[12] Thus the Curtiss Candy Company began in 1916.

The chocolate candy business was in its infancy in the early 1900s. Few firms existed. Americans did not eat chocolate candy, and candy companies were unable to prevent their chocolate products from becoming stale quickly. Milton Hershey founded his namesake company, Hershey Chocolate Company, in 1902 and was the first to manufacture molded chocolate bars. Children were the main consumers of confectionaries and chose penny hard candies over the more expensive chocolate bars.

The turning point for the chocolate bar candy industry was World War I. Candy bars provided sugar and portable sustenance to hungry soldiers. Hershey Chocolate Company was the first candy company to supply chocolate bars to the United States military in 1914. When they returned home, the soldiers continued to buy chocolate bars. During World War I, Hershey Chocolate Company had an average annual income of $10 million ($127 million in 2010 dollars); by 1929, annual revenues grew to $41 million ($2.2 billion in 2010 dollars).[13]

A postwar crash in sugar prices helped manufacturers to enter the chocolate market for the first time and to sell chocolate candy bars at lower prices. George Williamson launched the first ten-cent candy bar, the Oh Henry!, in 1920—selling approximately one hundred ten million bars per year by 1924. In 1921, Otto Schnering sold the first five cent candy bar, the Baby Ruth, which forced Williamson, Hershey, and Mars to lower their prices to five cents per bar (or 61 cents in 2010 value). At its peak in 1924, one and a half million Baby Ruth bars were sold per day in the United States.[14]

The World War I newcomers like Williamson, Schnering, and the Mars family were the first serious national rivals to Milton Hershey. The chocolate candy market expanded so rapidly during the 1920s that Hershey and his competitors generated $1 billion in sales in 1928.[15] By 1930, Milton Hershey was focusing on his philanthropic ventures and leaving the daily management of Hershey Chocolate Company (and the problems of the newly competitive chocolate market) to his corporate successors. Until his death in 1945, Milton Hershey remained chairman of his company and, like Otto, regarded himself as the father of the Hershey corporate family.[16] However, Hershey’s twenty-year-old distribution network, brand name recognition, and political connections allowed the Hershey Chocolate Company to maintain its dominance, even when threatened in the 1920s. Consequently, Hershey’s rivals needed to create innovative candy bar recipes, sell those bars cheaply, and craft novel advertising/marketing campaigns to compete against the Hershey juggernaut.

Except for Hershey, the major early-twentieth-century candy companies, like Curtiss Candy, Mars, Inc., and the Williamson Company were all headquartered in Chicago. Chicago’s railway hub and access to key ingredients like milk, corn syrup, and sugar are typically cited as reasons for this concentration. Its German community also played a pivotal role in establishing Chicago’s candy dominance. Germans were noted candy makers and continued to make candy in America, albeit in small batches for their own consumption. German prowess in candy making was first showcased in Chicago in 1893 at the World’s Columbian Exposition. The German pavilion featured chocolate candy-making machinery that could create large batches of a family’s candy recipe – inspiring a young Milton Hershey to purchase that equipment for his factory in Pennsylvania. Chicago’s Germans and retailers also saw the business potential in those machines. Between 1900 and 1930, E.J. Brach & Sons, Montgomery Ward, Marshall Field, Ferrara Pan Candy Co., Curtiss Candy Company, M.J. Holloway, and Mars, Inc. either founded or established facilities in Chicago.[17] The German pavilion at the World’s Columbian Exposition advertised the chocolate candy making knowledge and candy-making machinery of German immigrants that helped build the American chocolate candy business.

Otto Schnering began the Curtiss Candy Company in 1916 in the back of a hardware store with his own candy recipe that he cooked in a five-gallon kettle.[18] Between 1918 and 1919, Curtiss Candy introduced a number of bars with varying degrees of success; the products introduced included: the Polar Bar, Jolly Jacks, Earth-O-Nut Dipp, the Vanilla Coconut, and the Honey Comb Chip. By 1919, the success of the “Kandy Kake” bar allowed Otto to expand to a factory in the Streeterville area of Chicago, located immediately north of the Chicago River and west of Lake Michigan. Curtiss Candy still lacked a signature or marquee candy bar.[19] In 1920, when financial pressures began to weigh on Curtiss Candy, Otto embarked on a two-pronged strategy. First, he decided to make a five-cent candy bar. He believed that manufacturing efficiencies and bulk purchase of high-quality ingredients could reduce costs to allow for a nickel sale price. While Otto promoted his reliance on machinery as more sanitary than human hands touching raw ingredients, the use of machinery was also cheaper and faster than human labor, allowing him to purchase additional factories without dramatically increasing his employee headcount. By 1928, Curtiss Candy produced one billion candy bars per year with its three Chicago factories and thirty-five hundred employees.[20] Second, he embarked on a multi-state trip to sell his new five-cent candy bar dealer-by-dealer. Otto also avoided using third party distributors for his products. Curtiss salesmen distributed products, ensuring freshness and speedy delivery.[21] Today, this distribution strategy is known as a Corporate Vertical Marketing System: the company maintains ownership of product manufacturing and distribution to control costs and create efficiencies.[22] Another advantage of a Corporate Vertical Marketing System is that a company immediately knows where sales are increasing or decreasing and can quickly adjust its advertising and marketing strategies—a key concern for Otto in those early days. By 1921, that new five-cent candy bar, christened Baby Ruth, was an enormous nationwide success; by then Curtiss Candy employed over three thousand people.[23] One hundred fifty thousand pounds of peanuts were used each day at plants operating on a twenty-four-hour schedule. More than 50 five-ton trucks transported raw materials to and finished products from the plants.[24] The combined popularity of Baby Ruth and Polar Bar generated over $1 million in sales in 1921, approximately $69 million in 2010 dollars.[25]

The name Baby Ruth attests to Otto’s marketing savvy. In a 1928 interview, Otto said that he “called it ‘Baby Ruth.’ That was a typical American name, and there was a smile in it.”[26] In other interviews, he claimed that the candy bar was named after the daughter of President Grover Cleveland, Ruth, who was born six days before Schnering. Forgotten today, Ruth Cleveland’s birth and early death at age twelve in 1904 inspired media frenzies similar to those the Kennedy children inspired in the 1960s.[27] Contemporary writers in the 1920s believed that the similarity in names of the candy bar Baby Ruth and the baseball player Babe Ruth, whose popularity rose after joining the New York Yankees in 1919, was more than chance or coincidence.[28] When Babe Ruth decided to sell his own candy bar, Curtiss Candy sued him for breach of copyright and won. The court found the Baby Ruth Cleveland story plausible.[29] Otto maintained his official version of the story through the 1950s, reminding interviewers of their shared October 1891 births.[30]

Controversy about the origin of the name continues to the present. A profile of John Kenfield, a vice president at Curtiss Candy in the early 1920s, reports that Kenfield claimed that he contacted Babe Ruth about licensing Ruth’s name as a new moniker for the existing Curtiss’ Kandy Kake. That product was being reformulated to become the five-cent bar that Otto wanted to sell. Ruth demanded more money than Curtiss could pay at the time. Kenfield said that he then suggested the Baby Ruth name.[31] Nestlé, the brand’s current owner, still refers to the Baby Ruth Cleveland story on its official website. While the confusion and probably deliberate coincidence may have prompted curiosity about the candy bar, the success of Baby Ruth is a testament to Otto’s perseverance. The bar became popular because Otto sold it city-by-city, state-by-state. Knowing that he could not continue to travel while managing the business, Otto approached Eddy Brandt of the newly formed Brandt Advertising Agency for help in advertising the new candy bar. Brandt created the slogan “All you want for a nickel” and placed color ads in the Saturday Evening Post, Colliers, and other popular national magazines. Baby Ruth banners appeared on planes, speedboats, circus animals, barns, racehorses, billboards, and balloons. Otto also invented and patented a cardboard point-of-sale display container, similar to displays currently seen by store registers. Baby Ruth samples with little parachutes were dropped from airplanes.[32]

Recognizing the power of the Baby Ruth brand name, Otto utilized the now commonplace technique of brand extension, taking a popular brand name from one product category and using that brand name for other products in complementary categories. Companies use this practice to leverage consumer familiarity and good will towards one product to improve the prospects for another product. Brand extensions are popularly used in very competitive markets and at the end of the main product’s initial growth phase.[33] At the start of the Baby Ruth candy bar growth phase, Otto used the Baby Ruth name for a variety of confectionary products from nuggets to gum. He promoted the gum by publishing coupons for free gum packs in major newspapers.[34] The candy bar remained the most popular version. In 1926, Curtiss Candy introduced its second-most-popular candy bar: the Butterfinger. The company held a “name the candy bar” contest and selected Butterfinger as the winner.[35] Since the term “butterfinger” was used to refer to a clumsy athlete, one could speculate that the Butterfinger obliquely acknowledged the Baby Ruth’s connection to Babe Ruth. Curtiss Candy used similar brand extension strategies with the Butterfinger, a practice candy manufacturers continue to follow: creating ice cream flavors, nuggets, or other products derived from the original product.

Competition was a critical issue for Otto and his rivals. Milton Hershey had very few and very local competitors when he began in 1902. Otto faced Hershey, George Williamson, and the Mars family, among others. Mars was arguably the most formidable competitor, due to Milton Hershey’s semi-retired status that slowed Hershey’s development. In 1935, Mars produced almost half of the candy bars manufactured in the United States. Mars introduced brands that are still top sellers in the twenty-first century: Milky Way (introduced in 1924, #1 in US sales in 1935, and #7 in US sales in 2010), Snickers (introduced in 1930 and #3 in US sales in 2010), and Three Musketeers (introduced in 1932 and #8 in US sales in 2010).[36] Milky Way was Mars’ Baby Ruth, generating $720,000 in sales when introduced in 1924, approximately $19.2 million in 2010 dollars. By 1929, Mars was selling 20 million candy bars per year, second only to Hershey.[37] Clever marketing and advertising was essential to attracting consumer attention in that competitive marketplace.

Otto also pushed his fellow candy manufacturers to advertise jointly to market their own products and the industry as a whole. He became the chairman of the merchandising and advertising committee of the National Confectioners’ Association. He commissioned a study to discern the amount of money spent (known as the “marketing spend”) on advertising candy versus the marketing spend for other food products. After discovering that candy was “the least advertised food product,” Schnering solicited donations from fellow manufacturers to launch the “Candy is Delicious Food – Eat Some Every Day” campaign in 1938. He also crafted the association’s “Candy is an Energizing Food” message and coordinated a “Candy as a Wholesome Food” campaign with the Corn Products Refining Company.[38] This strategy was probably also intended to counteract top-selling Lucky Strike cigarettes’ “Reach for a Lucky Instead of a Sweet” advertising campaign.

The Curtiss Candy path to success was not assured. Merger or buyout rumors swirled during the Great Depression. Otto admitted in 1929 that he had discussed a merger with Loft, Inc., a New York confectionary company, but eventually decided against the merger.[39] Curtiss Candy never became a public company, but did sell stock shares to private investors directly.[40] Otto retained control of the company and regarded its employees as part of his extended family – a paternal approach to corporate governance.

When Curtiss Candy began, Otto worked beside his employees. The company’s rapid growth soon made that approach impossible. The four hundred employees of 1919 grew to thirty-three hundred employees in 1942.[41] His factories were noted for their cleanliness and fresh air, provided by an air purification system. Nurses and matrons supervised the female staff.[42] Curtiss Candy offered its own employee profit sharing and pension plans in the 1940s. Employees also received paid vacations and holidays. Life, health, and accident insurance were provided. The company even had an Employee Loan Association. Employment ads from 1947 show that Curtiss Candy paid men and women more than other confectionary companies. Men could receive $1.33 per hour and women $0.96 per hour (roughly $22 and $16, respectively, in 2010 dollars). The national average wage for men and women in the confectionary industry was $0.90 ($15 per hour in 2010 dollars). Otto claimed that these efforts prevented unions from entering his factories. His ads also stated that the company sought “refined, intelligent men and women over 18… [to] join our happy family” and promoted that “we’re all happy and prosperous.”[43] Otto’s emphasis on family and children for his workers also created a positive image for Curtiss Candy customers. His lifelong commitment to children’s charities shows that he was not just cynically promoting his candy to children. He spent his own time and money to improve children’s lives.

Otto’s own life and the business of Curtiss Candy changed in the early 1940s. At the outset of World War II in 1941, Curtiss Candy, Mars, Inc., E.J. Brach, Marshall Field’s, and other Chicago candy companies manufactured half of the candy bars in the United States— more than any other city.[44] Curtiss Candy sold 30,000 shares of stock worth $3 million (approximately $117 million in 2010 dollars) to private investors to fund product expansion and farmland purchases in 1942.[45] World War II changed Otto’s expansion plans and forced Curtiss Candy to adapt to wartime labor shortages. The United States government also threatened to end the entire candy industry. Deeming the candy industry non-essential, the United States government considered shuttering the industry in 1942 and repurposing its factories for war production. William Murrie of the Hershey Chocolate Company persuaded Congress that candy could be used in soldiers’ rations, just like in World War I. Congress agreed and allowed the candy industry to continue producing civilian products. Hershey became the biggest supplier of candy for soldiers’ rations.[46] Curtiss Candy’s Jolly Jack was later selected for inclusion in army rations in 1945.[47]

Though the government now deemed candy an essential industry, candy companies had to compete with other industries for the shrinking labor pool. Like other companies, Curtiss Candy faced a labor shortage during World War II. The company unsuccessfully tried to hire Mexican laborers to work on its farms near Marengo, Illinois in April 1943.[48] The company then decided to use sixteen Japanese-Americans, who were placed via the federal government’s war relocation authority. The Marengo town officials and citizens complained about the presence of the Japanese. Otto defended his actions:

“These people are all master farmers. Many had their own farms on the west coast before the war. They want to work and they are good Americans. We talked with leading citizens in and around Marengo before we brought these people in and were assured that they would be favorably received.”[49]

After discussions with the town and its citizenry, the Japanese-Americans did begin work for Curtiss Candy in mid May 1943. They and their families lived in a dormitory on the farm for the duration of the war.[50] The Japanese-American workers were integrated into the regular Curtiss Company production units. They ate with the white workers in the cafeteria. A Japanese American recruiter for Curtiss Candy stated: “the company insists on the Nisei mixing with the whites.”[51] Otto’s steadfast support of the Japanese-American workers probably grew from two motivations: his business need for labor and his sensitivity to wartime scapegoating. Less publicized was Otto’s use of German prisoners of war on Curtiss Farm. The United States Army guarded the prisoners while they picked potatoes. Local residents did not object to the presence of those prisoners, possibly because of the presence of the army.[52]

Otto does not appear to have publicly discussed his opinions about the German prisoners of war or his own German heritage. He had experienced the anti-German sentiments during World War I and was living through another anti-German period in World War II. In interviews, he referred to his products and his success as American. American values were important to Otto. With the exception of hiring the Japanese-Americans and protesting perceived radicalism at the University of Chicago, he generally eschewed political activities. In April 1935, Otto and Charles R. Walgreen, president of the drug store chain, had complained about “the talk of radicalism on the [University of Chicago] campus.” Otto, Walgreen, and other parents were concerned about socialists, anti-war professors and anti-war protests that occurred on the campus.[53] In that instance, he was acting with other parents and not solely bearing the burden of the protest. Being German in America and in Chicago, Otto was still exposing himself to risk. When Germans first began migrating to America in significant numbers after the 1848 Revolutions in Europe, they arrived in a new country that was experiencing a wave of nativism. Some Germans came to improve their economic situation; other Germans came because they were failed revolutionaries, forced to flee Germany.[54] (It is not known exactly why Julius Schnering and his parents came to America.) By the 1880s, Germans were also known as the leaders of Chicago’s radical labor, anarchist, and free-thought movements. German workers on the whole were considered radicals.[55]

On May 4, 1886, radicals and police fought in the streets of Chicago. A bomb exploded; policemen died. Dubbed the Haymarket Riot, the incident resulted in the de-radicalization of Germans. During the subsequent arrests and trial, a large number of the arrestees were German. Chicago’s Germans experienced a backlash from other Chicagoans because of the violence in the labor movement and of the riot. Within twenty years, Slavs/Eastern Europeans had replaced Germans as leaders of the radical labor movements. World War I revived the American nativism that German immigrants had experienced in the 1850s. After receiving citizen petitions, the Chicago City Council changed over one thousand German street names. Private clubs and Chicagoans changed their names, too. The Lincoln Club sounded more patriotic than the Germania Club.[56]

Both Julius and Otto Schnering experienced these events. As pragmatists, they focused on their businesses, like other German-Americans. When Germans migrated to America, they typically had advanced skills and training in trades, as compared to other immigrant groups. One study concluded that fifty-six percent of Chicago’s skilled tradesmen in 1900 were Germans: butchers, tinners, coopers, bakers, saloonkeepers, brickmakers, cabinet makers, machinists.[57] Having a trade and business experience allowed Germans to found their own businesses; they did not need to find jobs or learn skills. Their Old World training remained useful and relevant in the United States. Since Germans/German-Americans comprised twenty-five percent of Chicago’s population in 1900, Julius and Otto would have certainly socialized with or known other Germans.[58] The Schnerings never changed their names, but they did not appear to publicly associate with German clubs or causes. Otto did use his mother’s more Anglican-sounding last name for his company, rather than his own obviously German last name. Otto’s self-identification as a German or a Chicagoan or an American is open to interpretation. He explicitly stated his “American-ness,” which could have been the result of the anti-German sentiments sweeping Chicago. Given the strength of the German population and the prevalence of German-based businesses in Chicago, Otto may have utilized German business techniques, points of view, or methodologies without realizing their Germanic roots – simply using prevailing business practices.

Prior to the start of World War II, Otto and other prominent Chicagoans were interviewed about the possibility of war. In 1939, Otto commented: “I am against our getting into war under present conditions. I am hoping for a miracle that will yet bring peace.” His remarks aligned with the other interviewees.[59] Once World War II began, Otto demonstrated his loyalty in unique ways. He supplied six Holstein bulls to perform stud service to Brahma cattle in India; a request made by the British government to increase the milk supply for British military outposts in India.[60] He also gave candy bars to reward children who donated scrap paper to the war effort.[61] His advocacy of the Japanese-Americans workers hints that he could empathize with another scapegoated population and had some loyalty or pride in his German heritage.

The stress of all those wartime situations and problems, as well as the pressure of the Curtiss Candy expansion, may have contributed to Otto’s heart attack in 1944. Under doctor’s orders to slow his hectic pace, Otto asked his son Robert to manage the daily business of Curtiss Candy. He also purchased the John Hertz estate in Cary, Illinois in 1944, moving from his home in Evanston, Illinois (approximately 20 miles north of the Curtiss factories in downtown Chicago) to Cary (approximately 40 miles west of the Curtiss factories in downtown Chicago). Hertz, the rental car magnate, used the estate for horse breeding and lavish parties. Otto, unable to slow down, transformed the estate into an animal and crop farm, as well as a company town renamed Curtiss Farm.

In 1942, Otto had begun purchasing farmlands in McHenry County, Illinois, approximately 40 to 60 miles northwest of Chicago. Otto’s choice of location was no accident. The land in McHenry County was relatively cheap, and the Chicago & North Western Railway ran through the area: easy transport for cattle and other goods. The land itself was mainly grasslands, ideal for dairy farms. Borden Dairy and Oatman Milk Company established facilities in the area in the early 1900s.[62] Otto knew the land could support the cows and crops needed for Curtiss Candy.

Cattle were Otto’s original reason for needing the land. Their milk and butter were needed for the chocolate bars. Otto recognized that by owning the sources of needed raw materials, he would have better control over the cost of those raw materials and be less vulnerable to shortages or price swings. Learning a lesson from the changes in sugar prices during the 1920s, Otto was reducing his risk by employing a vertical integration strategy: owning the raw material sources needed for your end product, rather than purchasing those raw materials from suppliers. For businesses vulnerable to notable price swings in raw material costs, vertical integration is a popular cost-stabilization strategy.[63] Vertical integration, or controlling all aspects of a business, was a common German business technique in the nineteenth century. Some Germans even visited businesses in other countries to learn all the elements (manufacturing technologies, raw material production, marketing techniques, distribution strategies) of a particular industry.[64] Thus, Otto’s use first of a vertical marketing strategy and then later of a vertical integration strategy was unsurprising for a German, but innovative in the context of the United States candy business.

Otto was not satisfied with merely controlling raw material costs. The cattle themselves quickly became a profitable business. Otto’s interest in farming probably began at a young age at his father’s country home in Michigan; his first entrepreneurial venture was his breeding zoo. By August 1942, he had purchased almost one thousand acres of land and a herd of Guernsey cattle.[65] When he moved to Cary in 1944, Otto had to create a mini-city at Curtiss Farm, complete with worker dormitories, cafeterias, factories, and barns, because Cary lacked rental apartments or housing for his workforce. Curtiss Farm supplied the milk, produce, meat, and Curtiss Candy products for the workers and their families. Both Otto’s family and the workers’ families lived on the farm, with Otto exercising paternalistic control. Otto could have sold the houses and apartment buildings to the employees or outside investors, but he did not. Businessmen in Germany exhibited these same familial attitudes towards their employees.[66] Otto also would have been familiar with the concept of a company town due to railroad magnate George Pullman’s famous/infamous Pullman City, opened in 1881 on the south side of Chicago—another example of the cross-pollination of German and American business practices that influenced Otto.[67]

Transferring his entrepreneurial nature from the candy business into the cattle business, by 1949, Otto had built a nationwide artificial insemination system for cattle breeding and was recognized as a renowned farmer, with a ten thousand acre farm, the largest agricultural development in the state of Illinois.[68] At its peak, the farm had cows, hogs, turkeys, hens, ducks, sheep, and horses. Otto also stocked the springs on the estate with trout that he sold to Chicago restaurants and hotels. His cattle won over one thousand blue ribbons in American and international competitions and led to the founding of the Curtiss Breeding Services.[69]

Curtiss Breeding Services, originally known as the CURTiSS Improved Stud Service, was the first large artificial insemination cattle breeding company in the United States. The bull semen was delivered within one day anywhere in the United States, and results were guaranteed. In 1949, Farmers paid from $7 to $150 ($64 to $1370 in 2010 dollars) for the semen. Not content to innovate in candy manufacturing and marketing, Otto also introduced new standards of cleanliness and new insemination techniques. The staff included two veterinarians, and breeders were invited to visit Curtiss Farm to meet the bulls. Each bull was pictured on a postcard advertisement, which included his name, weight, number of offspring sired, breed, and a tagline. Toreby Pride, for example, was tagged “performance and progeny proven.”[70] Curtiss Breeding Services had its own technical institute. Otto purchased a schoolhouse and named it Otto Schnering College. Technicians received two weeks of artificial insemination training and lived in a dormitory near the school. Applicants had to be at least thirty years old, and graduation was not guaranteed.[71] The school trained over one thousand technicians during its existence.[72]

By applying the lessons learned in candy marketing and manufacturing, Otto built a new business. He also angered the existing breeding businessmen. Initially, urban candy executives were sent to buy cows from the tight-knit community of rural cattle farmers. Otto used the proceeds from Curtiss Candy to quickly build a large-scale cattle operation, which would have taken the local cattlemen a generation to build.[73] Otto’s sudden death in January 1953 at the age of sixty-one endangered the fledgling Curtiss Breeding Services business, leaving it vulnerable to attack from veteran cattlemen who resented the upstart, urban newcomer.

Dorothy maintained control of Curtiss Breeding Services after Otto’s death. When Standard Brands offered to purchase Curtiss Candy in 1964, it did not want the cattle breeding business because it was unprofitable. Although no reason was given, one would suspect that Curtiss Breeding Services was obliged to supply Curtiss Candy and Curtiss Farm with milk and butter products, instead of selling those products to drive additional revenue. Dorothy prevented the sale of Curtiss Candy until the board agreed to let her buy Curtiss Breeding Services. She established Curtiss Breeding Service as an independent, eventually profitable business, because she did not have to supply Curtiss Candy or Curtiss Farm.[74] Employees could buy stock shares from her and gain an ownership stake in the company.[75] In 1968, Dorothy sold Curtiss Breeding Services to G.D. Searle, a pharmaceutical company looking to research animal reproduction. She had fought the American Breeders’ Services’ attempt to drive Curtiss Breeding Services out of business and had built a profitable company. The outstanding loan used to purchase the company and the death of twelve important bulls between 1966 and 1967 inhibited the company’s finances, forcing the sale to Searle.[76] Dorothy retired to Florida where she died in 1973.

Robert and Philip Schnering, Otto’s sons, took over Curtiss Candy after their father’s death. After both men graduated from the University of Chicago, they joined Curtiss Candy as trainees. Like their father, they worked in every aspect of the business: sales, manufacturing, and management. Robert eventually managed the farm and research divisions, while Philip was a division sales manager. Robert then was elected company president with Philip as the senior vice president of sales.[77] Curtiss Candy remained a key company for Chicago, listed in a 1957 Chicago Association of Commerce and Industry promotional book for the city.[78] However, the Schnering family did not control Curtiss Candy and its subsidiaries. Otto willed his stock to a trust fund controlled by bankers, who immediately began to divest the farmland and livestock.[79] Otto’s reason for this decision remains unknown and surprised the family at that time. A plausible explanation is that the 1942 stock sale and possible subsequent stock sales reduced Otto’s majority stake in Curtiss Candy. As the founder and still successful businessman, Otto would have enjoyed the respect of the bankers and held persuasive power that his sons could not. By 1954, Robert Schnering had begun to sell off acres of the family’s personal farmland to real estate developers.[80] The cost of maintaining the Curtiss Farm and Curtiss Breeding Services may have siphoned profits from Curtiss Candy, which explains the rapid divestment of the farmlands and Curtiss Breeding Services after Otto’s death.

Curtiss Candy was sold to Standard Brands for $7.5 million in 1964, approximately $102 million in 2010 dollars.[81] After multiple other corporate sales, Nestlé now owns the rights to Curtiss Candy products. The two most popular Curtiss Candy products created during the Otto Schnering era are still sold today. Baby Ruth is no longer a marquee candy bar and does not even rank in the top thirty candy bars sold in the United States between 2007 and 2010, with sales of almost $64.7 million in 2010. Butterfinger, with its 2010 sales of $598 million, has become increasingly popular and has typically ranked as the eleventh most popular candy bar sold in the $17.68 billion United States chocolate confectionery market between 2007 and 2010.[82]

Social Status, Networks, Family, and Public Life

Otto Schnering was married twice, both times to women named Dorothy. Otto’s first wife was Dorothy Amelia Bent, the daughter of George P. Bent, owner of one of the United States’ largest piano companies. Otto and Dorothy met while Otto was working as a salesman for his company. Otto’s first wife was Dorothy Amelia Bent, the daughter of George P. Bent, owner of one of the United States’ largest piano companies. Otto and Dorothy met while Otto was working as a salesman for his company. They married on August 23, 1913.[83] The exact date of their divorce is unknown. A 1922 biography of George Bent describes Otto and Dorothy as married at the time. [84] Dorothy Bent’s 1924 passport application lists her marital status as single and does not use the Schnering name. On July 2, 1925, Dorothy Bent married her second husband, Clayton Lane.

Otto married Dorothy Russell Blessed (1893–1973) on March 15, 1927. Dorothy had been married to William Blessed, Jr., a Detroit grocer, in May 1914; the marriage had produced two sons, Robert (1915-1973) and Philip (born 1917), and one daughter, Barbara (1919-1987); research thus far cannot establish if Dorothy was a widow or a divorcee when she married Otto in 1927. The pair may have met when the Schnering family visited their summer home near Detroit, but the exact circumstances of their meeting and wedding are unknown. The Blessed marriage produced three children, whom Otto adopted: two sons, Robert (1915–1973) and Philip (born 1917), and one daughter, Barbara (1919–1987).[85] The members of the tight-knit Schnering family lived near each other in Evanston: Julius and Helen at 930 Michigan Avenue and Otto and Dorothy at 934 Michigan Avenue.[86]

Within the Chicago community, the Schnering family was well-known but not considered elite. Julius’ name was first included in the Chicago Blue Book, a directory of the city’s prominent citizens, in 1890. He only belonged to the Chicago Athletic Association and was not a member of prominent German-American Chicago clubs like the Germania Männerchor.[87] Although born in Germany, Julius came to America at a young age and may have considered himself more American than German. No information has been found about any correspondence between Julius and relatives who remained Germany. Neither Otto nor Dorothy spoke German at Curtiss Farm or observed any special German customs or holidays.[88]

Otto’s business success elevated the family’s status. He and Dorothy attended Franklin Roosevelt’s 1933 inauguration.[89] Chicago’s Mayor Ed Kelly named Otto to a special committee to determine which of the 1933 Chicago World’s Fair buildings and exhibits should remain intact for an extended time period.[90] Otto belonged to the Chicago Athletic Association, Shawnee Country, the Evanston Country Club, and the Sunset Ridge Country clubs.[91] Devoting himself to every aspect of the candy business, Otto joined multiple professional organizations like the Chicago Farmers, the American Guernsey Cattle Association, and the National Confectioners’ Association.

The family’s choice to live in Evanston may have precluded their ability to join elite Chicago clubs, but the Schnerings seemed disinterested in those activities. Otto and Dorothy were interested in the welfare of children and families and joined clubs where they could help children. Otto volunteered with the Evanston Council of the Boy Scouts of America and the Family Welfare Association of Evanston.[92] Dorothy supported the Northwestern University settlement group and the Evanston Infant Welfare Society.[93] After the Schnerings created Curtiss Farm, they contributed to the 1950s Sally Contests sponsored by the Chicago Tribune Charities and Tribune columnist Sally Joy Brown. Children wrote essays to win tickets to movies, plays, and parties. One hundred children visited the Curtiss Farm, and Otto supplied candy for their Chicago-based activities.[94] Curtiss Breeding Services worked with 4-H and Future Farmers of America programs.[95] At Christmastime, Otto gave presents, candy boxes, and a turkey to the families living on the Curtiss Farm, as well as sponsoring an annual children’s Christmas party for the Cary community. All children of Curtiss Candy employees could receive free horseback riding lessons on the Curtiss Farm.[96] Employees received chickens, milk, eggs, and vegetables every week, reducing their living expenses and underscoring Otto’s generosity towards his employees.[97]

Conclusion

Otto Schnering’s life motto was “All of Us.”[98] At a 2004 reunion of his former employees, grown men cried when remembering their universally described “beloved” boss.[99] He considered his employees and community part of his family, opening his home and resources for their well-being. He was genuinely concerned about his employees and his community, spending his own time and money to improve the lives of others. Curtiss Candy grossed $100,000 in 1916 ($9.6 million in 2010 dollars), its first year of business. By the 1960s, before its sale to Standard Brands, the company was grossing $60 million dollars per year ($813 million in 2010 dollars).[100] Otto Schnering’s belief in education, vertical integration, and a familial corporate culture created that success.

In business, Otto displayed the energy and steadfastness of a first-generation immigrant, rather than his actual status as the wealthy, second-generation son of a successful immigrant. Julius Schnering instilled the German values of hard work, thrift, and planning in his son. Otto controlled every aspect of Curtiss Candy, mixing the first recipes himself, vertically integrating the supply chain, supervising the marketing, being the first salesman, and establishing a strong, paternalistic corporate culture. He founded additional businesses, like Curtiss Breeding Services, from the support systems for Curtiss Candy.

Otto also served the candy industry. He recognized the importance of advertising and marketing, driving the industry to promote itself and its products. He applied those same skills to his later cattle-breeding and farming businesses, where he was less successful in establishing collegial relationships. Curtiss Candy products are still made today. Curtiss Breeding Services, under other ownership, eventually went bankrupt in 1981.[101] Perhaps Helen Curtiss Schnering, Otto’s mother, instilled the importance of family and community service. Using her name for his company indicated a deep respect for her. Otto also found an able partner in his wife Dorothy, who successfully managed Curtiss Breeding Services after Otto’s death.

The names Otto Schnering and Curtiss Candy have been swallowed by history and subsumed by other businesses. The World Wars and radical labor movements of the nineteenth century have also dimmed the contributions of German Americans. The anti-German sentiments during the early part of the twentieth century diminished Otto’s ability to credit his heritage or German ideas for his business success. Otto did embrace his family, by incorporating his parents, his wife, and his children into his businesses and by considering his employees as family. Otto, the Mars family, and George Williamson modernized the United States chocolate industry after World War I. Otto’s marketing brilliance also contributed to the massive candy industry growth during the 1920s. At its peak in 1929, the U.S. chocolate industry had fifty-nine manufacturers. By 1954, twenty-eight manufacturers remained.[102] The Curtiss Candy Company outlasted many of its contemporaries, and a few of its products are still enjoyed by children and families around the world. More importantly for Otto, his employees and their children still remember a man whose generosity exceeded his impressive business success.

Notes