Chocolate Wars: The 150-Year Rivalry Between the World's Greatest Chocolate Makers (38 page)

On February 5, 1918, at a solemn Rowntree board meeting in York, the younger members of the family, Seebohm and Arnold Rowntree, argued earnestly in favor of the three Quaker firms joining forces. But Joseph Rowntree was resolutely against it. Some believe this was a matter of stubborn pride; others attribute it to his vision. As a Quaker, he wanted Rowntree to survive independently in order to pioneer a profit-sharing scheme for its staff. “The present industrial organisation of the country is unsound,” he said, because it causes a class division “between the holders of capital on one side and workers on the other.” He wanted to use the family firm to test out how to “minimise the evils” of the capitalist system. As a Quaker, Joseph saw it as his duty to nurture the guiding light within each member of staff. The real goal for an employer “was to seek to secure for others . . .
the fullest life
of which an individual is capable.” An amalgamation between firms he thought would lead to a colossus: a moneymaking behemoth that lost sight of Quakerly ambitions.

Although the Rowntrees opposed the merger, they joined the Frys, Cadburys, and other Quaker colleagues for a Conference of Quaker Employers that April. They wanted to discuss steps to realize such high ambitions. “War has revolutionised the industrial outlook,” declared the conference chairman, Arnold Rowntree, in his opening address. During a time of crisis, there was an urgent need for Quaker leaders—whether shareholders, employers, or workers—to examine the way their religious faith could be given “even fuller expression in business life.” He asked all friends to consider the Quaker
Book of Discipline.
Citing the section on “The Stewardship of Wealth,” he warned against “the spirit of greed . . . unchecked by a sense of social responsibility” and urged the conference to find ways to express the Quaker view “that all human life should be reverenced as capable of the highest distinction.”

Seebohm Rowntree led a session on wages that explored the ethical principles that should be used in determining wages. It was a “monstrous thing,” he declared, that millions still lived below the poverty line, and he encouraged Quaker employers to “strongly press for State action in that direction.” He argued that employers should ensure “that
every
man should be entitled to a Basic Wage,” set at a level that “should enable a man to marry, live in a decent house, and provide the necessaries of physical efficiency for a normal family.” If a business could not afford to pay such wages, its management “should very strictly limit” what they pay themselves while they improve the efficiency of their company. George Cadbury Jr. led a session on the factors that affect a worker’s peace of mind: security of employment, quality of environment, and so on. Other speakers addressed such topics as industrial injury, pensions, and even the democratization of industry: schemes for profit sharing or other forms of copartnership and training to enable junior staff to aspire to senior positions within a firm. The result was a visionary report setting out a template for applying Quaker principles to business life. Years later, after the Second World War, some of these ideas were enshrined in British law with the formation of the Welfare State.

But at such a time, it was not easy to apply Quaker ideals when the war brought real issues of business survival to deal with. Talks about Fry joining forces with Cadbury continued over the spring of 1918. At a directors meeting in Bournville, George Sr. opposed a merger of the chocolate houses but for different and more commercial reasons than his rival in York. “If we fought off the foreign competition once, I have no fear of doing so again,” he said. His voice may have sounded frail, but his fighting spirit was intact. With ingenuity and drive, he was certain they could take on their overseas competitors. As part of a merged entity, he felt there would not be “the same energy thrown by either firm into their business.” As someone who had forged the business from the start, he recognized the significance of that immeasurable, indefinable fighting spirit.

The younger generation of Frys and Cadburys listened to their Quaker elders, but they were keen to proceed. The Great War had
exposed fundamental weaknesses in Fry’s operation, and Barrow and Edward Cadbury, calling the matter “urgent,” feared “the Frys might be tempted to take offers from other quarters.” If Nestlé bought Fry, they would gain an “insurmountable advantage” in the British market. Over the spring and summer of 1918, the chocolate companies were valued by two different city accountants as a first step towards a potential merger.

By now, letters from their younger brothers brought news of turning points in the war. Laurence’s Quaker convoy was at the Second Battle of Marne, seventy-five miles northeast of Paris. At the front line in late June 1918, “There was great uneasiness,” Laurence wrote. “Everyone knew an attack was coming—but where?” On July 15, “The Hun made his greatest and last push over a 50 mile front,” he wrote. Convoys from the Friends Ambulance Unit were positioned to help the French Army at the hottest points. By late July, the tables had turned. “We had regained the initiative and were attacking.” At a certain point, the French found there was no one in front of them. They started in pursuit, recounted Laurence, “and kept the Hun on the run giving him absolute hell.” It was the first in a series of Allied victories.

Bertie was also beginning to glimpse victory. In April 1918, he had been promoted to captain in the new Royal Air Force and was put in charge of a squadron at Great Yarmouth that was responsible for patrolling for U-boats and Zeppelins. He wrote to his father on August 6, 1918: “You will have heard . . . that my lucky star has again been in the ascendant, and that another Zeppelin has gone to destruction, sent there by a perfectly peaceful live-and-let-live citizen, who has no lust for blood or fearful war spirit in his veins. It all happened very quickly and very terribly.”

Bertie was at a concert with his fiancée when he was summoned to the RAF station at Yarmouth. He heard three Zeppelins had been sighted fifty miles to the northeast. Knowing full well that there was only one machine left with the necessary speed and climb, he wrote, “I roared down to the station in an ever-ready Ford, seized a scarf, goggles and helmet, tore off my streamline coat, and semi-clothed,
with a disreputable jacket under my arm, sprinted as hard as ever Nature would let me, and took a running jump into the pilot’s seat. I beat my most strenuous competitor by one-fifth of a second.”

As soon as he left the air field, Bertie saw the Zeppelins and maneuvered into a position where his gunner, Bob Leckie, could target one. The explosive bullets ripped a massive hole in the airship, flames ran along its length, and it plunged in a great fireball into the sea. “The action was very short,” he wrote. “She lighted after a few rounds and went hurtling down to destruction from a great height.” He and Leckie gave chase and managed to start a fire in a second airship, but it was extinguished and the Zeppelins moved away at high speed.

Their luck had run out. Bertie’s engine stopped. Leckie’s gun jammed. “Our sting had gone. . . . I think that half hour, driving through 12,000 feet of cloud in inky blackness on a machine that I had been told could not land at night, even if I ever made land again, was the most terrible I have ever experienced.” When he did successfully land, “in a machine which I thought certain to crash and catch fire,” to his horror, he found that his bombs had failed to release and he had “two 1001b bombs on board; also my live saving belt had been eaten through by acid from an accumulator.”

Afterwards they learned that the airship they destroyed was an L70, the best in the German fleet. They had brought down Peter Strasser, the chief of the German Airship Service, Fuhrer der Luftschiffe. After this raid, there were no further Zeppelin attacks.

As the guns of the Great War finally fell silent in November 1918, belief in European civilized supremacy had been thrown into question. Thirty countries had battled in a conflagration that was fought on five continents. The Austro-Hungarian and Ottoman Empires had been destroyed; Germany and Russia had been defeated. The Versailles Peace Treaty brought 13 million more people into the British Empire and added 1.8 million square miles. But the price was terribly high. More than three-quarters of a million British fighting men had died. At Bournville, of the 2,000 men who left to join the forces,
218 never came back. In a solemn ceremony, a memorial tablet was raised in their honor.

Those who did come home to Bournville returned to a different commercial landscape. In the final weeks of the Great War, the Cadburys’ once great rival, Fry, had partnered with them in a new holding company called the British Cocoa and Chocolate Company. The Fry family, believing that both firms were of equal value, was shocked when the valuations were completed. Cadbury’s assets were worth three times more than Fry’s. Consequently, although both firms were subsidiaries in the British Cocoa and Chocolate Company, Cadbury held the controlling interest. Shares were issued in relation to the valuations of the two companies. Chairmanship of the whole enterprise fell to Barrow Cadbury. Keen to “do the right thing” by the Frys, he valued their shares generously. The great Bristol chocolate house was now effectively a subsidiary run from Bournville. It was the first in a series of mergers and takeovers that would transform the British chocolate industry over the next century as the pace of globalization quickened.

It soon became abundantly clear that far from being the dynamic rival the Cadburys had envisaged, Fry was something of a white elephant. Twenty-six-year-old Bertie, honored with a Distinguished Flying Cross for his war record as a fighter pilot, was eager to take on the challenge of the Bristol firm. He returned from the war to find there was no room for him at Bournville. Instead he took an offer from Fry at £300 a year, but when he turned up at Union Street in Bristol for his first day in May 1919, the state of the firm shocked him.

He was greeted by the legacy of failed investment by Joseph Storrs Fry II. “Partially manufactured goods were transported by horse drawn box vans through narrow congested streets,” he wrote home, “between 24 different factories.” The doors from the many buildings opened directly out onto the street, making it impossible to track who came and went; goods disappeared without trace. With a pub on every street, the calm discipline that characterized Bournville was lacking. Equally curious for Bertie, “It was impossible to shake the then directors out of their complacency and their false sense of security.” For a reason best known to the director of confectionery and the
director of chocolate-making, the two men were “hardly on speaking terms.” Since they both required large teams of almost identical staff, the inefficiencies multiplied, as did the confusion. Worse still, reported an amazed Bertie: “Fry’s never had much regard for quality, but during the War they abandoned any pretence of maintaining it and they opened up their refiners and let them rip.” The inevitable result was that they had a “terrible reputation” and were producing “unpleasant” chocolate. Could anyone be surprised they were failing, he thought, “with a divided and hopelessly inefficient and out of date factory, a sales force split in two, and a reputation for poor quality?”

As for the Swiss rival that had prompted the move in the first place, as George Sr. had forecast, they had nothing to fear. Nestlé’s bold growth strategy came with a high price. They had continued their aggressive spending, acquiring twenty-two more factories in Australia and America in 1920 alone. They had eighty factories worldwide when the postwar downturn kicked in. The combination of plummeting government orders, stunning levels of debt, a crisis in foreign exchange, a rise in costs of raw materials, and panic selling of Nestlé shares in 1921 brought the company to a crisis point. In 1921, for the first time in the company’s history, Nestlé announced a substantial deficit of 1 million Swiss francs.

E
ver practical, when George Sr. and Elsie learned there were children starving in Austria after the war, they made arrangements to bring fifteen of them to stay in Bournville village. Quaker friends organized “cocoa rooms” to feed orphaned children in Vienna. George became known as “the chocolate uncle” on account of the numerous boxes of chocolates that he sent to the children.