Milton Hershey Came Home Broke, With Bad Credit and One Lesson About Milk

Milton Snavely Hershey was born in Pennsylvania in 1857. At about 14, he became an apprentice to Joseph Royer, a candy and ice cream maker on King Street in Lancaster, where he learned the basics of the trade.

In 1876, during the Centennial celebrations, he opened his own candy business in Philadelphia. He borrowed from his uncle Abraham Snavely, and his mother and his Aunt Mattie worked alongside him. The work was hard and steady, but the business never brought in enough cash to pay its suppliers and debts. After six years it failed.

Hershey did not stop after Philadelphia, and the next several years did not go well. He went west to Denver, then tried Chicago and New Orleans without success. From 1883 to 1886 he ran a candy business in New York that did well at first, then collapsed, again because of cash flow.

By 1886 he had failed in several cities. According to the Hershey Community Archives, he came back to Lancaster with a bad credit rating and almost no collateral beyond some cooking kettles in a rented space. His mother's family, the Snavelys, declined to support him this time.

One thing he carried home was knowledge. In Denver he had worked for a confectioner who made caramels with fresh milk. The Hershey archives describe this as a technique that proved crucial to his later success. His failures had cost him money and standing, but they had also taught him how to make a better product and how quickly a business can die when cash runs short.

The first help came from William Henry Lebkicher, who had worked in Hershey's Philadelphia shop and boarded with him there. When Hershey arrived in Lancaster with his equipment shipped cash on delivery and no money to claim it, Lebkicher gave him clothes, a meal, and a place to sleep, paid the delivery charges, and arranged storage.

Hershey's mother and Aunt Mattie went back to work making candy with him. He began the Lancaster Caramel Company in 1886 in a borrowed warehouse space, later moving to an old factory building on Church Street.

The breakthrough was an order from an English candy importer, larger than Hershey could fill with what he had. He needed a loan, and his credit history worked against him. The cashier of a Lancaster bank, whose name is not given in the archive accounts, lent him the money and backed the loan with his own signature.

Hershey filled the order. The archives describe him running down the street to the bank with his apron still on when the English payment arrived. From there, the business began to grow quickly.

By 1894 the Lancaster Caramel Company employed roughly 1,500 people across several facilities. In August 1900 Hershey sold the caramel business for $1 million so he could concentrate on chocolate, keeping the rights to the Hershey Chocolate Company.

In 1909 Milton and his wife, Catherine, founded a school for orphan boys, the Hershey Industrial School, now the Milton Hershey School. In 1918 he gave his fortune, including his ownership of the chocolate company, to the school's trust. He died on October 13, 1945, at age 88.