Sugar Trust Formation: Henry Havemeyer Consolidates 75% of Sugar Refining

On October 27, 1887, after two years of negotiations, Henry Osborne Havemeyer orchestrated the formation of the Sugar Refineries Company, commonly known as the “Sugar Trust,” consolidating 17 of the 23 sugar refinery companies operating in the United States. Havemeyer successfully combined nine local refineries in Brooklyn along with eleven others nationwide, creating a trust responsible for refining 75% of the nation’s sugar. The consolidation responded to harsh economic conditions in which refineries operated below capacity and smaller, less efficient operations failed—conditions that Havemeyer exploited to justify monopolistic consolidation as industrial “rationalization.”

The Sugar Trust pioneered corporate structures designed to control entire industries, fix prices, and engage in monopolistic practices that inhibited free trade. Havemeyer emerged as the dominant figure in late 19th century sugar refining, wielding unprecedented control over an essential commodity. The trust’s market dominance would grow even more extreme over subsequent decades—by 1907, the reorganized American Sugar Refining Company owned or controlled 98% of sugar processing capacity in the United States, representing one of the most complete monopolies in American industrial history.

The Sugar Trust attracted immediate legal challenges as legislative bodies and courts investigated whether it constituted an illegal monopoly restraining trade. In 1890, after extensive legal wrangling, New York courts deemed Havemeyer’s sugar trust illegal and ordered its dissolution in State of New York vs. North River Sugar Refining Company. However, Havemeyer simply reorganized the trust as a holding company—the American Sugar Refining Company—incorporated in New Jersey on January 10, 1891, by attorneys Elihu Root and John Randolph Dos Passos with $50 million in capital. This legal maneuvering anticipated how corporations would systematically exploit interstate jurisdictional differences to evade accountability. The Sugar Trust’s ability to survive legal challenges and maintain near-total market control demonstrated the inadequacy of existing regulatory frameworks and the sophisticated legal strategies corporations deployed to preserve monopoly power.