Financial History 25th Anniversary Special Edition (104, Fall 2012) - Page 16

EDUCATORS’ PERSPECTIVE Turning a Yankee Liability into an Asset: Selling New England Ice in India, 1833–1880 By Dan Cooper and Brian Grinder During an MBA oral exam this past summer, I (Brian) asked the student under fire to imagine himself in Boston in 1833 where he meets an individual who wants to load a ship with ice cut from local ponds, transport it to Calcutta, India, and sell it. “What advice would you give this person?” I asked. The student thought for a moment, surmised that the ship would have to be wind powered, and asked how long it would take to travel from Boston to Calcutta in a ship under sail. “About four months,” I replied, “and remember, since there was no Suez Canal in 1833, the ice would have to be transported across the equator and around the southern tip of Africa.” The student responded, “I would advise him not to do it because the ice would melt before it got there.”1 As others in the room listened in astonishment, I told the student how Fredric Tudor successfully sent New England ice to India in 1833 on an unrefrigerated sailing vessel. The success of his Indian venture came at a fortuitous time for Tudor, who owed over $200,000 to his creditors and was in danger of being sent to debtor’s prison again.2 Tudor’s first ice trading venture in 1806 was met with derision by a reporter from the Boston Gazette, who wrote, “No joke. A vessel with a cargo of 180 tons of ice has cleared out from this port for Martinique. We hope this will not prove to be a slippery speculation.” Although Tudor’s ice survived the trip, poor planning resulted in a loss of between $3,000 and $4,000. Undaunted, Tudor began experimenting with ice house designs, had an ice house built in Havana, Cuba, and sent his first shipment of ice there in January of 1807. In late 1807, he decided to go to Cuba himself and build an improved ice house, but before the ice house was completed, the Embargo Act of 1807 went into effect putting a halt to Tudor’s ice business for the next two years. “He who gives back at the first repulse and without striking the second blow, despairs of success, has never been, is not, and never will be, a hero in war, love, or business.” — Frederic Tudor, 1805 The War of 1812 interrupted business again, but Tudor pressed on in spite of constant harassment from his creditors. After the war, he expanded into Charleston, SC; Savannah, GA; and New Orleans, LA. The New Orleans expansion was especially successful. Tudor, hoping to sell an average of $10 of ice a day during his first season in New Orleans, was overjoyed when his brother Harry reported daily sales averaging $40 a day. After 15 years of setbacks, disappointments and frustration, the business had finally reached a turning point. Shortly after receiving the good news from New Orleans, Tudor suffered a nervous breakdown. The signs of increasing stress were evident in Tudor’s daily diary entries, which often included the word “ANXIETY” written in bold capital letters. Fortunately, Tudor’s brother-in-law, Robert Gardiner, stepped in and skillfully managed the business while Tudor recovered. The ice business also received a much-needed shot in the arm when Tudor hired Nathaniel Jarvis Wyeth in 1826. Wyeth single-handedly changed the production side of the ice industry with his invention of a horse-drawn ice plow in 1825. Before the ice plow, ice harvesters simply hacked ice out of ponds as best they could. The irregular shapes of ice produced by this inefficient method caused problems at sea because the ice would shift during the voyage. Wyeth’s plow produced uniform blocks of ice that not only stayed put during transport bu [