Charles George Guth (June 3, 1877May 24, 1948) was an American businessman, who, as executive of the Loft Candy Company, purchased the

trademark A trademark (also written trade mark or trade-mark) is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from others ...

and the syrup recipe of the twice-

bankrupt Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debt ...

Pepsi-Cola Company PepsiCo, Inc. is an American multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase. PepsiCo's business encompasses all aspects of the food and beverage market. It oversees the manu ...

. He was President of Loft Candy Company from 1930 to 1935 and President of Pepsi-Cola Company from 1931 to 1939.

Biography

He was born on June 3, 1877 in Philadelphia, Pennsylvania to Emil Guth of Dresden, Germany.

Murder of George A. Murphy

While living in

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during September 1913, Guth was arrested for murdering George A. Murphy, an African American man who was employed as his

chauffeur A chauffeur is a person employed to drive a passenger motor vehicle, especially a luxury vehicle such as a large sedan or limousine. Originally, such drivers were often personal employees of the vehicle owner, but this has changed to speciali ...

.''Fizz: How Soda Shook Up the World'' by Tristan Donovan. p. 104-105Annual Report of the NAACP, Vol. 1-7, p. 143
/ref> The

NAACP The National Association for the Advancement of Colored People (NAACP) is a civil rights organization in the United States, formed in 1909 as an interracial endeavor to advance justice for African Americans by a group including W. E.&nb ...

-published magazine ''

The Crisis ''The Crisis'' is the official magazine of the National Association for the Advancement of Colored People (NAACP). It was founded in 1910 by W. E. B. Du Bois (editor), Oswald Garrison Villard, J. Max Barber, Charles Edward Russell, Kelly Mi ...

'' reported on the incident several times, and noted that Guth "killed his colored chauffeur in a dispute which arose because Guth didn't want his milk delivered at the same time as his chauffeur's."''

'':
November 1913 issue, p. 324
In Guth's version of events, he fired the man, and Murphy allegedly responded by trying to attack him with an axe. Guth responded by shooting Murphy dead. Guth was later cleared of all charges by both a coroner's jury and a grand jury.''

'':
January 1914 issue, p. 117
The NAACP noted in its annual newsletter that the "not guilty" verdict in Guth's case was "a woeful miscarriage of justice".

Loft Candy Company

In April, 1929, Charles Guth became Vice-President of the Loft Candy Company when Loft bought Mavis Candies, of which Guth was president at the time. In 1930, he was elected president at a

stockholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...

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where the police had to intervene to ensure it did not become a riot. He remained president of Loft until he resigned in 1935 amidst a stockholder revolt arising from his using Loft's resources to build his other company, Pepsi-Cola Company.

Pepsi-Cola

Charles Guth owned a family business, Grace Company, which made syrups for soft drinks in a plant in Baltimore, Maryland. Then, he became interested in the Pepsi-Cola Company after

Coca-Cola Coca-Cola, or Coke, is a carbonated soft drink manufactured by the Coca-Cola Company. Originally marketed as a temperance drink and intended as a patent medicine, it was invented in the late 19th century by John Stith Pemberton in Atlanta ...

refused to give him concessions on the sale of the

cola Cola is a carbonated soft drink flavored with vanilla, cinnamon, citrus oils and other flavorings. Cola became popular worldwide after the American pharmacist John Stith Pemberton invented Coca-Cola, a trademarked brand, in 1886, which was imita ...

in his drugstore. He stopped selling Coke and started selling Pepsi. When Pepsi-Cola Company went

(for the second time) on June 8, 1931, he bought the Pepsi-Cola Co. from Roy Megargel, for the price of $10,500. Megargel, however, kept a third of the 300,000 shares. Guth was also supposed to pay him a $25,000 annual royalty. Guth never paid the royalty and Megargel sued him for $11,000, even though the amount Guth owed was near $70,000. The lawsuit was settled out of court with Guth giving Megargel $35,000 and Megargel's giving Guth his 97,000 remaining shares. However, Guth did not have any success with the company and almost declared bankruptcy himself. In a desperate bid, Guth approached Coca-Cola and offered to sell them the company but officials from Coca-Cola declined his offer, not even placing a bid. In 1935 he moved the entire company to

Long Island City Long Island City (LIC) is a residential and commercial neighborhood on the extreme western tip of Queens, a borough in New York City. It is bordered by Astoria to the north; the East River to the west; New Calvary Cemetery in Sunnyside to the ...

, New York. After Loft chemists changed the recipe "more to his liking", Guth negotiated a contract to bottle Pepsi in a six

ounce The ounce () is any of several different units of mass, weight or volume and is derived almost unchanged from the , an Ancient Roman units of measurement, Ancient Roman unit of measurement. The #International avoirdupois ounce, avoirdupois ounce ...

bottle. After the product still failed to become a success, he introduced Pepsi in a twelve-ounce format but with the same price as the six ounce drink. By 1933, Pepsi-Cola was sold in 313 stores in the United States and in 83 other countries. By 1936, his company was making two million dollars of profit and had become the second largest soda company. That year alone, 500 million bottles of the cola were consumed.

Lawsuit

In 1935, Loft sued Guth for breaching his

duty of loyalty The duty of loyalty is often called the cardinal principal of fiduciary relationships, but is particularly strict in the law of trusts. In that context, the term refers to a trustee's duty to administer the trust solely in the interest of the ben ...

to the company by failing to sell the syrup formula to Loft, and instead appropriating it for himself. Loft argued that while its president, Guth used Loft's assets, credit, finances, facilities and employees to build up the other company. Guth argued that the opportunity came to him personally and that it was out of Loft's business sector. Loft sued for the 237,500 shares that Guth owned (91% of Pepsi-Cola's total shares). He remained president of Pepsi during the process. In 1939, the

Delaware Supreme Court The Delaware Supreme Court is the sole appellate court in the United States state of Delaware. Because Delaware is a popular haven for corporations, the Court has developed a worldwide reputation as a respected source of corporate law decision ...

rendered the verdict in favor of Loft. Guth was then removed from the board and replaced with Walter Mack. He was also ordered to give Loft $475,000. However, he remained

general manager A general manager (GM) is an executive who has overall responsibility for managing both the revenue and cost elements of a company's income statement, known as profit & loss (P&L) responsibility. A general manager usually oversees most or all of ...

while he appealed the verdict. He left Pepsi shortly before his appeal was denied. Loft merged with Pepsi in 1941, but kept the Pepsi-Cola name. In American corporation law, the Guth rule now stipulates that no representative of a company should take a business opportunity for himself if the corporation is doing well enough financially to carry out the action, if the corporation is interested in it or if it is reasonably expected that the opportunity will do well and the opportunity is in the company's line of business.

Noxie-Kola

After leaving Pepsi he worked for Noxie-Kola.

Death

He died on May 24, 1948 in

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References

{{DEFAULTSORT:Guth, Charles 1876 births 1948 deaths American business executives American people of German descent PepsiCo people