Companies: California Beet Sugar Company

The Pajaro Valley was primed for an agricultural revolution in the late 1860s. Unfortunately, produce transportation methods were simply not refined enough to make most crops profitable. One crop that could work, however, was beets, which could last several months if stored properly. Claus Spreckels, the Sugar King of Hawai'i, was interested in the prospect of growing beets on the West Coast and it may have been one of the motivating factors that led him to buy part of Rancho Aptos in Santa Cruz County and erect the Aptos Hotel there. As early as April 1873, the Santa Cruz Sentinel envisioned Spreckels enlarging his sprawling resort (today's Rio del Mar) into a rival to Santa Cruz, with features such as a paper mill, chicory factory, and sugar beet refinery. But the only hitch in the plan was a railroad. Fortunately for local entrepreneurs, the Santa Cruz Railroad was incorporated (with Spreckels' financial support) on June 18, 1873, initiating a three-year construction project to connect the city of Santa Cruz by a narrow-gauge railroad to the Southern Pacific Railroad's station at Pajaro. The news of the railroad invigorated the hopes of sugar beet producers, but Spreckels was not yet ready to invest his money in a poorly-tested replacement for cane sugar. Instead, the troubled California Beet Sugar Company of Alvarado (Union City) decided to relocate to Soquel and try its luck.

View of the California Beet Sugar Company in Soquel, ca 1880. [University of California, Santa Cruz, Legacy Digital Collections – colorized using DeOldify]

The idea of growing sugar beets as a replacement for sugar cane, which required a very specific climate, had originated in France under the Napoleonic Empire of the early nineteenth century. The processes were rudimentary, though, and it took many years for adequate sugar to be produced from beetroots. In 1869, a group of Bay Area entrepreneurs incorporated the California Beet Sugar Company as the second beet sugar enterprise in California's history. It was led and financed by Ebenezer Herrick Dyer, General C. I. Hutchinson,  Timothy Guy Phelps, and other San Francisco Bay area capitalists, as well as Augustus D. Bonesteel, Andrew Otto, and Ewald Klineau of Wisconsin. The company's refinery was built by B. F. Ingalls on the Dyer farm outside Oakland and opened in November 1870. The operation ran for four seasons but never returned a dividend to its investors. Nonetheless, it seemed to be at least breaking even since each year the facility was enlarged slightly and the equipment upgraded or replaced with her quality components. One of the reasons for the poor return of the refinery was that the quality of the soil was too poor in the Oakland area due to nearby salt marshes. In addition, fuel wood had to be imported a considerable distance to keep the dehydrators running at sufficient temperatures—the Alvarado facility used between 2,600 and 3,000 tons of coal per year.

Sketch of the original Alvarado refinery of the California Beet Sugar Company, 1870.

Around December 1873, the directors of the California Beet Sugar Company announced their planned move to Santa Cruz County to a 30-acre property leased from Frederick A. Hihn on the east bank of Soquel Creek midway between Soquel and Camp Capitola. The reason for this move was that land, labor, and cultivation costs were estimated to be half that of Alvarado. Dyer, still confident that his property could support a beet sugar refinery, did not follow the venture south but rather continued to experiment, later incorporating the Standard Sugar Manufacturing Company in 1879. Meanwhile, the excited Sentinel forecasted a population boom in Soquel, the next step in the town's long-sought campaign to replace Santa Cruz as the chief city in the county. The sugar company shipped farming equipment, beetroot, and beet seeds to encourage local farmers to take up the industry, and many farmers heard the call and began planting in the hope of cashing in on the new industry. Speculators estimated that 2,000,000 tons of beets could be grown in the first year, amounting to 1,000 tons of refined sugar.

Camp Capitola looking west toward Soquel Landing and Opal Cliffs, 1876. Photo by Romanzo E. Wood. [California State University Chico – colorized using DeOldify]

As soon as the rainy season ended, Bonesteel, Otto, and Klineau began work erecting the facility. By late April 1874, the ground was prepared and construction began on the refinery itself. The machinery for the facility arrived at Soquel Wharf from Alvarado in late June. At the same time, it was announced that Professor Partz's cube sugar process would be used at Soquel, a system that made sugar easier to ship and sell. The refinery was completed the week of July 18 but the company still had to wait three months before the first beets were ready for processing. In anticipation of this, Alexander Getchmann of the Park House threw a grand ball in September under the starry sky with Chinese lantern decorations. The use of these lanterns was no mere convenience.

Chinese workers had been associated with the California Beet Sugar Company since the beginning. In 1870, they did most of the manual labor for the factory. In Soquel, they did even more. Of the approximately 200 employed by the sugar company, nearly three-fourths were Chinese. Some worked at the refinery itself hauling cartloads of beets or doing the uncomfortable work of stoking the furnaces, but most worked in the fields under contract. White property owners provided water, land, and seeds or beetroots, and Chinese workers cultivated and picked the beets. While labor intensive, it was not without profit for either party. The Chinese contractors and workers made good money growing and shipping the beets to Soquel. Indeed, the factory's managers even acknowledged that the company would not have succeeded without them. Predictably, the heavy use of Chinese labor sparked anti-Chinese sentiments among even the local newspapers' editors. By 1878, the company had reduced its reliance on Chinese labor, thereby increasing its overall operating costs. Most of the out-of-work laborers entered the Pajaro Valley fruit industry, cultivating strawberries, raspberries, and blackberries.

Distant view of Soquel Creek with the California Beet Sugar Company's refinery in the distance, ca 1880. [UCSC Legacy Digital Collections – colorized using DeOldify]

Returning to 1874, the new refinery opened on October 12 to universal acclaim and strong optimism. The facility was three and a half stories and built beside a short hill that allowed gravity to assist in processing. Stated in brief, beets would be dumped into a chute in the third story and sugar cubes would be shipped out of the first. Five steam boilers and engines ran all of the machinery inside. Elsewhere on the property, the company had a blacksmith shop, coopery, and three-story barn with a cupola atop. The factory operated all day, every day for seven months of the year, and around sixty men and women worked within the building. On average, it produced between 50 to 60 tons of pure white sugar every 24 hours. The beet pulp and other byproducts were sold as fertilizer and possibly animal feed. The Sentinel's editor reported of the first crop that the sugar was "as white as any of our best sugar in market, while for strength and flavor, one could not distinguish it from cane sugar." In 1875, the facility was enlarged to provide pastureland for 500 cattle and homes for mill workers.

Soquel Wharf looking toward the Monterey Bay, 1875. [Santa Cruz Public Libraries – colorized using DeOldify]

Transportation remained a problem for the company. In its first year of operation, most of the beets were grown in the Soquel area, but the best agricultural land was fifteen miles away in Watsonville and the Pajaro Valley. For the first two years that the refinery operated, the mill shipped the bulk of its non-local products to San Francisco via the steamship Santa Cruz, the first being 500 barrels of grain sugar shipped from Soquel Wharf on November 5, 1874. Plans were in place from the beginning, though, to connect the refinery to the Santa Cruz Railroad. The problem was that the railroad was taking longer than anticipated to build. It was finally completed to Pajaro on May 7, 1876 and in September a spur was installed to the beet sugar facility. The newspaper gave the length of the spur as only 200 feet, enough to accomodate eight boxcars. This was far from sufficient to reach the mill and it was likely an inaccurate number. An earlier statement had estimated that the mill sat 200 yards from the tracks—a still inaccurate distance but probably closer to the actual length. Indeed, by December, Hihn was discussing the possibility of extending the track beyond the mill to the town of Soquel, although this never happened. Unfortunately, little more is known about the spur to the mill and no photos survive. It probably broke off from the main track near the later location of Capitola Depot and it was likely removed when the Southern Pacific Railroad standard-gauged the Santa Cruz Branch in 1883. This makes the spur one of the only that catered exclusively to a Santa Cruz Railroad customer.

View looking down Soquel Creek toward the Southern Pacific Railroad bridge, ca 1890. [UCSC Legacy Digital Collections – colorized using DeOldify]

The years 1875 and 1876 saw little change. Production slowly ramped up and Pajaro Valley farmers entered the scene in 1876, responding to the increased accessibility provided by the Santa Cruz Railroad. Indeed, in an interview, Hihn stated that "without the [rail]road the factory would have closed down" in 1877. A mysterious new group of investors from San Francisco took over the company in July 1876 but retained the local management and staff. Whether this was Spreckels, Hihn, or some other group is unknown—none of them are ever named in local newspapers. In early 1877, the Sacramento Beet Sugar Company's mill shut down, leaving the California Beet Sugar Company as the last beet sugar refinery in the state. This same year, the company abandoned growing its own beets and shifted entirely to sourcing beets from area farmers. Hihn encouraged farmers to grow beets by lowering the freight costs of shipping on the Santa Cruz Railroad. Confident in the continuing success of its venture, the company purchased from Hihn the refinery's property for $6,000 on December 10, 1878.

The Sentinel and other Central Coast newspapers continued to laud the company throughout 1878 and 1879 even as hints of impending calamity began to appear between the headlines. Rumor in 1878 suggested that the mill was going to move to Watsonville, to be closer to the beet farmers, but this was later undermined by the purchase of the refinery property. Meanwhile, some of the farmers began disputing the profitability of beets, with evidence suggesting that crops such as wheat and hay were becoming more profitable to grow. In spite of these rumors, the year 1878 was the company's most productive year on record, with the mill averaging 64 tons of beets per day and 10,000 tons for the season. Eight carloads of beets were shipped to Soquel daily. The mill at the time employed eighty workers and investors in 1879 reported good dividends.

View looking up Soquel Creek from atop of the Southern Pacific Railroad bridge, ca 1900. [UCSC Legacy Digital Collections – colorized using DeOldify]

Yet 1879 would be the company's last year, with production continuing through early 1880. John T. Porter was one of the company's largest beet suppliers, planting 400 acres of crop in the Pajaro Valley in 1879. By September 1879, the California Beet Sugar Company had apparently failed to uphold the terms of its contract with Porter and the latter took the former to court. In what proved to be a controversial trial, Porter was awarded $12,755.95 in damages from the beet sugar company, which was far more cash than it had on hand to deliver. As a result, Judge Belden ordered that the 30 acres of land and the refinery upon it be sold at auction on October 4, 1879. Before the auction was held, the company managed to have it delayed until the next year, allowing it to complete its current season. Reports for the season stated that fewer beets were grown but the company still likely turned a small profit.

On April 30, 1880, Sheriff Robert Orton auctioned the Soquel property to none other than Porter for slightly under the required amount. Presumably the difference was paid in cash or in kind. Porter apparently was uninterested in the actual machinery of the sugar refinery and had it sold at another sheriff's auction in December. Hihn bought it all for $100. For the next few years, rumors persisted that the mill would move to Watsonville and reopen, and that the old mill site would become a fruit packing plant. Neither ever happened. Meanwhile, a long appeal by the California Beet Sugar Company passed through the California court system, ultimately resulting in the company being granted a retrial in 1886. But by that point, their company had been long defunct and it is unclear if the former directors actually took the matter to trial again, settled out of court, or dropped the matter.

Excerpt of a map showing property owners in the Soquel area with John T. Porter's 30 acre tract, formerly owned by the California Beet Sugar Company, in the center, 1881

After sitting on the property for decades, the Porter family or a subsequent owner finally subdivided the refinery property in 1924 into Riverside Terrace Subdivision 1, which today occupies everything between Soquel Creek and Bay Avenue/Capitola Avenue from Center Street to Beverly Avenue. A building from the refinery was later moved to become the Capitola Park Hotel, which later was renamed the Lewis House. Meanwhile, Watsonville finally got its long-promised sugar beet refinery in 1888 when Spreckels returned to the county to establish the Western Beet Sugar Company. Some of the first locals he hired were Chinese fruit growers who had first come to the county in 1874 to work at the Soquel beet sugar factory.

Citations & Credits:

• Perry, Frank. Personal correspondence.
• Street, Richard Steven. Beasts of the Field: A Narrative History of California Farmworkers, 1769-1913. Stanford: University Press, 2004.
• Various articles from the Los Angeles Herald, Pacific Rural Press, Petaluma Weekly Argus, Record-Union, Sacramento Bee, Santa Cruz Sentinel, 
• Wiley, Harvey Washington. The Sugar-beet Industry: Culture of the Sugar-beet and Manufacture of Beet Sugar. Washington: Government Printing Office, 1890.
• Willey, S. H., C. L. Anderson, Edward Martin, and W. H. Hobbs. History of Santa Cruz County, California. San Francisco: Wallace W. Elliott & Co., 1879.