Because they both worked as attorneys in the mining industry and were both active Republicans, it would be easy to confuse Joseph Cotton with Chester Congdon. Like many other Duluth power brokers, both were also involved in politics and held memberships in Duluth’s Kitchi Gammi Club and Northland Country Club. Both men were big fans of Teddy Roosevelt; in fact, Cotton was Duluth’s delegate to the Republican National Convention in 1904 and delivered one of the nominating speeches. In 1905, both began building large, beautiful homes in Duluth’s eastern environs with the fortunes they made through iron mining.
Unlike Cotton, Congdon strongly disliked Rockefeller and felt it had been the oil baron’s aggressive business tactics that had lead to the economic collapse of 1893. In particular he viewed Rockefeller as a direct threat to Henry Oliver and himself. After his final dealings with the Merritts, Rockefeller owned the DM&R, its ore docks, and every mine on the Mesabi Range—except for those owned by the Oliver Mining Company.
Congdon and Oliver realized they were Rockefeller’s next target, especially because while he was busy swindling the Merritts, his rival Andrew Carnegie had become half owner in the Oliver Mining Company. When the Panic of ’93 struck, it hit Oliver Mining just as hard as it had the Merritts’ assets. So in the spring of 1894 Congdon and Oliver asked Henry Frick, business manager of Carnegie Steel, to invest in Oliver Mining. It was a risk: Carnegie already didn’t like Oliver, his biggest steel-making competitor, and remained unimpressed by the Mesabi ore. At first blush, it seemed he would not be willing to play ball. He told Frick that, “Oliver’s ore bargain is just like him—nothing in it. If there is any department of business which offers no inducement, it is ore. It never has been profitable, and the Mesaba is not the last great deposit that Lake Superior is likely to reveal.”
But in the end Carnegie’s rivalry with Rockefeller helped Frick to convince the steel giant to invest in Oliver. Carnegie explained to Frick that the deal “gives us a wedge that can be driven in somewhere to our advantage…In less strong hands Oliver would be squeezed… I favor taking the Oliver half.”
Frick, on behalf of Carnegie, loaned Oliver $500,000 in exchange for a one-half interest in Oliver Mining. By this time, Frick had realized that the opportunity for profit through iron-ore mining on the Mesabi Range was real. Blast furnaces had adjusted their methods in order to use Mesabi ore, it was easy and inexpensive to mine, and the demand for steel was beginning to rise as the the nation emerged from the depression. Thus the Oliver-Carnegie partnership was created. Oliver mined the iron ore and Carnegie manufactured the ore into steel. Both companies were now directly fighting with Rockefeller.
The idea of being in head-to-head competition with Rockefeller pleased neither Oliver, Congdon, nor Carnegie. They made several attempts to come to an agreement with Rockefeller, but no deal would stick. By 1896, Rockefeller had put another $19 million into his Mesabi venture. Rumors circulated that he planned to build a steel-finishing plant in Cleveland, which made Carnegie even more nervous. Eventually, Oliver and Congdon brokered a deal between Carnegie and Rockefeller: All of the ore mined by Rockefeller would be purchased and used by Carnegie Steel, and Rockefeller promised Carnegie he would stay out of steel making and keep ore prices low, at least for Carnegie Steel; in exchange, Carnegie would stop purchasing ore property and stick to making steel. Rockefeller’s Lake Superior Consolidated Mines also owned a fleet of ore carriers, so he controlled the shipping as well.
Overall, the deal worked fine for Rockefeller and Carnegie, but their smaller competitors quickly went bankrupt. This in turn reduced the value of ore properties and related businesses, which Rockefeller then bought at a bargain. Rockefeller was now the undisputed king of iron ore and Carnegie of the steel mills. Together they had a monopoly on the steel industry.
Once the monopoly was in place, Rockefeller began raising the rates on the ore, essentially breaking the deal between he and Carnegie. At the same time, Congdon bought new ore properties on the western Mesabi Range on land Rockefeller had overlooked—not just for himself and Oliver, but for Carnegie as well. Both sides broke the trust, and the rivalry intensified. Oliver and Congdon incorporated and threatened to build the Virginia & Ely Railroad, intended to terminate at Grand Marais and compete directly with the DM&N. Rockefeller raised the rates on shipping, forcing the Oliver/Carnegie contingent to order their own ore carriers from the American Steel Barge Company. As a major stockholder in the company, Rockefeller simply cancelled the order. Carnegie went to another ship builder and order 13 vessels.
Enter J. P. Morgan
The rivalry was proving too much for the overall economy and caught the attention of the country’s most influential banker, J. P. Morgan, whose wealth and power rivaled that of Rockefeller and Carnegie. Morgan saw how the Rockefeller/Carnegie monopoly influenced other industries in which he was heavily invested. The monopoly/rivalry had become a problem for Morgan, so in 1900 he set about eliminating it through the creation of the United States Steel Corporation. The plan included taking over not only all of Rockefeller’s properties, but Carnegie’s and Oliver’s as well.
Morgan began by buying up smaller steel manufacturers, then moved on to larger ones. Eventually this tactic led him to Carnegie Steel. At about this same time, Carnegie was looking to retire and turn his attention to philanthropy. He offered to sell Carnegie Steel to Morgan for $480 million—about $13.5 billion today—assuming Morgan would never agree to the price. Morgan shocked everyone by accepting the offer. Carnegie became the wealthiest man in the world and would go on to use his money to help build public libraries across the country, including three in Duluth.
Later, as both men began withdrawing from the business world, Carnegie and Rockefeller’s rivalry shifted to philanthropy, and they competed to give away their fortunes; their letters even indicate a fondness for one another. Carnegie is said to have given away $350 million during his lifetime. Like Carnegie, Rockefeller gave away much of his wealth, an estimated $100 billion in today’s dollars. It did little to change his reputation.
Shortly after Morgan bought out Carnegie, he went after Oliver. Congdon’s friend and business partner sold his remaining 1/6 interest for $9.25 million, about $260 million in today’s dollars. In 1901 Rockefeller sold his interest in the Mesabi Range to Morgan as well. He received $88.5 million (roughly $2.5 billion today) and two seats on USS’s board of directors. USS then began buying up all the mining interests on the Vermilion Range as well. The steel giant then established a new company to handle all the mining, naming it the Oliver Mining Company in honor of Henry Oliver—yet the men who established the first Oliver Mining Company, Henry Oliver and Chester Congdon, had nothing to do with the new operation.
Joseph Cotton did. In 1903 he became the attorney of USS’s new Oliver Iron Mining Company and later attorney of the conglomerate’s Minnesota Steel Company in Duluth. Three years later he built an opulent mansion in Duluth’s East End. Cotton’s 1906 Italian Renaissance home at 2309 East First Street is now one Duluth’s more popular bed & breakfasts in Duluth; it would cost about $5 million to build today. Cotton served as independent council to Rockefeller until 1935, two years before the robber baron’s death.
Congdon Compounds His Wealth
In 1894 Chester Congdon had purchased stock in the original Oliver Mining Company at $16.67 a share. When USS purchased the company in 1900, the stock was priced at $9,250 a share—Congdon realized a 555 percent increase on his investment, making him one of the richest men in Minnesota. His new fortune bolstered ongoing investments he had made in Arizona copper mines and developing agriculture in Washington State’s Yakima Valley by creating an irrigation canal called Congdon Ditch. And when USS was formed, Congdon leveraged his windfall, purchasing lower-grade, silica-laden ore on the western Mesabi for himself, Oliver, and other investors. These holdings would eventually be purchased and developed by US Steel for $10 million.
In 1905 Chester and Clara Congdon started building a new home in Duluth along the Lake Superior shore. The estate, dubbed “Glensheen,” took over four years to build at a total cost of $864,000, more than $22 million in today’s dollars. The property included land along Tischer Creek. Congdon had a love for the outdoors that was intensified by his admiration for fellow Republican Teddy Roosevelt. Inspired in part by Roosevelt, who helped create our first national parks, Congdon donated a portion of his land along the creek between Greysolon and Vermilion Roads to the city on the condition that it be turned into a park. He even hired the same landscape architects that worked on Glensheen. The city named the park in his honor.
Not that Congdon’s actions were entirely selfless. Like Rockefeller and Carnegie, Congdon could wield his influence to get what he wanted. Tischer Creek had been used as an open sewer serving Duluth’s Woodland neighborhood. Congdon intended to build a water reservoir along the creek that would feed the estate’s irrigation system. So Congdon’s offer of land and landscaping came with a condition: divert the sewage from the creek at a point above the park.
Also like Rockefeller and Carnegie, a large part of Congdon’s fortune would go to causes other than his own. Through his own efforts (and, after his death in 1916, those of his wife and children) Congdon financed the construction of what is now known as the North Shore Scenic Drive, the initial stretch of which is fittingly named Congdon Boulevard. (Congdon envisioned this road eventually stretching to the Canadian border; he called it the “Lake Superior International Highway.”) His wife Clara and their children continued to use the wealth he created for philanthropic efforts long after he was gone. His final gift came long after he died. In 1977, upon the death of his last surviving child, the University of Minnesota Duluth was gifted full ownership of his beloved Glensheen. Today it is the most visited house museum in the State of Minnesota.