February 6, 1894: John D. Rockefeller takes over Merritt Mining & Railroad Interests

Lewis and Hepzibah Merritt, whose sons opened the Mesabi Iron Range.

On this day in 1894, John D. Rockefeller took control of all the mining and railroad interests of the Merritt Family, pioneers of Oneota and, along with the Wheeler clan, West Duluth’s most prominent citizens. Patriarch Lewis Merritt had traveled to Lake Vermilion in search of gold in 1866; he returned speaking of iron, not gold, and told his sons that north of Duluth there were iron deposits “worth more than all the gold in California.” After the Vermilion Range opened up in the early 1880s, the Merritt boys went in search of iron on what would become the Western Mesabi Iron Range. In 1890 they struck iron on a site they called Mountain Iron. The next year they built the Duluth, Missabe & Northern Railway to transport the ore to their ore dock under construction in West Duluth. All of this work was done on speculation and before they generated enough cash, creditors came calling. The Merritts made a deal with Rockefeller: Rockefeller would pay off their debts for a substantial stake in their mining and railroad operations. The Financial Panic of 1893 set them back even further. By January 1894 the mine was still not operating at a profit, its stock value had dropped, and Rockefeller called in his note. (They later tried to sue the industrialist, but won back less than $1 million, barely enough to cover their debts). After toiling ceaselessly for five years, the Merritts had created and lost a fortune. Their efforts did little for them, but they had opened the Mesabi Iron Range, through which many others would find a way to make their living—and a handful of others would make a fortune.

One Response to February 6, 1894: John D. Rockefeller takes over Merritt Mining & Railroad Interests

  1. This is good until you get down to so-called “speculation”. My ancestors had a very large contract with Henry W. Oliver made after he went to the Mesabi Range following the 1892 Republican Convention in Minneapolis. It was for 200,000 tons of iron ore and required the Merritts to deliver it in 1893. This caused them to build the DM&N to Stony Brook Junction where the ore was interlined over the Duluth & Winnipeg to Superior. The contract with the D&W called for delivery of 750 ore cars and completion of the Allouez dock in Superior. The D&W reneged on these contract obligations causing the Merritts to consider building the DM&N to Duluth. This caused them to borrow from Rockefeller.
    After Rockefeller’s associate Wetmore failed to advance the money agreed upon, Rockefeller enticed the Merritts into a consolidation with Rockefeller. They put all their Merritt mines (some seven in all), the DM&N and the Duluth Ore Dock into the consolidated and Rockefeller put three mines. His mines were not “gilt edged” and producers as he said and that fraud was the basis of the lawsuit Grandfather Alfred brought on behalf of the family against Rockefeller. He “sued” (not tried to sue) and won a jury verdict in Duluth Federal Court against Rockefeller. He appealed to the 8th Circuit in St. Louis and that appellate court reversed and remanded for a new trial claiming that some jury instructions were erroneous. The Merritts ironically had big help in this lawsuit from lawyer Jed Washburn, featured this week in Zenith City Online. The Merritts settled with Rockefeller to avoid the expense and burden of another trial for enough to pay off their debts and have money for themselves in addition. They did not file for bankruptcy as is so often done today,but instead paid their creditors.

    Grant Merritt

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