The history of the discovery and development of the Mesabi Iron Range of Minnesota is intensely interesting; it holds many romances more engrossing and thrilling than an imaginative writer of fiction could plan. It uncovers some of the most vital foundation-stones of America’s greatest business combination; it discloses incidents in the lives of the wealthiest of America’s multi-millionaires; and “it shatters all preconceptions of the genius necessary to achieve millionaireship.” Genius of the American Business Executive.-Furthermore, the history of the Mesabi Iron Range of Minnesota indicates strikingly the supreme genius of the American business executive; it indicates some of the methods by which American manufacturers are able to compete favorably with manufactured products of other countries, notwithstanding that labor in this country commands a wage far higher than that which rules in most other countries. The American wage-earner, by the genius of the executive, by the efficiency of management of great corporations, such as the United States Steel Corporation, finds that his labor gives him the means with which to live on a far better scale than he could, by the most incessant application to work for wages, in other countries. So much for “big business,” without which the United States would not stand as high among the nations of the world as she does today, in matters of industry and trade.
Mineral Value Suspected in 1827.-The Mesabi Range, though of comparatively recent development, was considered potentially valuable in minerals at a very early day. When the Northwest territory was first formed, and the international boundary delineated by the two nations, the United States government apparently was not unaware that there were minerals in what is now Northern Minnesota, At all events, Northern Minnesota, Wisconsin and Michigan were considered primarily important in potential mineral wealth.
Iron Found in 1850-52.-In 1850, or 1852, J. G. Norwood, a geologist, noted an outcrop of iron on the shore of Gunflint Lake, the extreme eastern edge of the range, “where the trail of the voyageurs crossed the formation,” and “another outcrop where LaPrarie River flows into the Mississippi.” In a report on the iron formations of Michigan, Wisconsin and Minnesota, he “ventured the guess that it was all one formation.” Even earlier than his discovery, eyes of mining men of Wisconsin were upon Northern Minnesota, although they sought only richer minerals, gold, silver and copper, and subsequent history shows that they passed by indications of iron, when, with the opening of Northern Minnesota to white settlement in 1855, they rushed to prospect and claim the copper, silver and gold they had been led to believe they would find. A company was organized to exploit copper indications seen, or heard of, by the Indian agent at Fond du Lac, the organization being effected even before the Treaty of LaPointe, September, 1854, by which the Indians ceded Northern Minnesota, had been signed.
392The Eames Report, 1865.-It was “perhaps as far back as the ’50s” when “James Whitehead, an Indian trader, dug a shaft at Pokegama Falls, near the La Prairie exposure.” And the “Jasper peak of solid iron” was noted by many prospectors who were lured into the Vermilion district, in 1865-66, in search of the goldfields Prof. H. H.
Eames, state geologist, had noted. The same geologist reported, in 1865-66, that he had discovered indications of iron ore on the Mesabi range.
Activity in ‘Seventies.-The ‘seventies were not far advanced before definite endeavors were made to exploit the deposits of the Mesabi. N. H. Winchell in 1872 was state geologist, and during the next few years several references were made, in state reports, to the Mesabi iron ore deposits. While the first City of Duluth was enjoying the fullness of its extraordinary growth, during what might be termed the Jay Cooke period, 1869-73, Duluthians were content to let the future rest mainly with Jay Cooke, or at all events, with what would, in natural course of things, come their way from the Northwest wheat lands, into which Jay Cooke’s Northern Pacific Railway was reaching its ever-lengthening arms of steel. But the whole aspect changed with the Jay Cooke crash of September, 1873. Railway construction was at an end, at least temporarily; Jay Cooke’s potency had gone from Duluth, in fact from America, for he never fully recovered his prestige as a financier. Times were hard in 1874, any many Duluthians had to “sweep their minds” frantically for sources of revenue. And it was then that some remembered the gossip of men who were on the Vermilion Range in the ‘sixties, in a vain search for gold. They remembered the stories of “mountains of pure iron,” and the remembrance was indirectly the cause of the first attempt made to exploit the iron ore of the Mesabi. Unfortunately, however, for nearly twenty years, they were destined to find only the lean, unworkable ore of that range. However, failing gold, silver and copper, iron ore seemed to promise the means of subsistence in times such as followed the panic of 1873. And soon afterwards, certain Duluth residents, who had already had experience of mining in Wisconsin, resolved to look over the ranges. With that object, Peter Mitchell, acting for “an Ontonagon syndicate,” explored the eastern end of the Mesabi, and what he discovered induced that syndicate of Duluth, but formerly Ontonagon, men to acquire “a large tract of land on the Mesabi Range, in township 60 n., ranges 12 and 13 w.” In December, 1874, these same men were the principal promoters of the Duluth and Iron Range Railroad Company then formed “in order to get access to the lands.” (The promotion is referred to extensively in the chapter on the Vermilion Range.) Charlemagne Tower, 1875.-Possibly Jay Cooke would have been the outstanding figure in the exploitation of the mineral wealth of St. Louis County, had he not become hopelessly insolvent in the financial stringency that came to America, in common with the world, in the early ‘seventies, possibly because of the Franco-Prussian war, which it appears was one of the principal causes of the failure of Jay Cooke. His Duluth agent, and associate, was General Sargent, whose right-hand man was George C. Stone. Stone was interested in the promotion of the Duluth and Iron Range Railroad Company, in 1874, and later became identified with Charlemagne Tower in the exploitation of the ore deposits of the Vermilion Range. In view of Stone’s earlier association, there is reason to believe that George C. Stone would have approached Jay Cooke in the first instance. But when 393the great Philadelphia financier had become crippled by his endeavor to meet the financial needs of the Northern Pacific Railway, Stone had perforce to look elsewhere for capital with which to build the railway from the Head of the Lakes to their mineral land on the Mesabi. He took to the East early in 1875 “samples of the iron ores of Northern Minnesota, hoping to interest capitalists there.” The Chester Expedition, 1875.-The outcome was the Chester Expedition of 1875. Prof. Albert H. Chester, head of the expedition, stated that “Mr. Stone’s specimens were so attractive that he had little trouble in interesting Samuel A. Munson, of Utica, New York, and Charlemagne Tower, of Pottsville, Pennsylvania.” He further stated that, “a specimen of the Mesabi magnetite, taken from Mitchell’s workings,” had been submitted to him at the time of Mr. Stone’s visit, and it was “found to be most desirable in quality.” Mesabi Ore Condemned, 1875.-However, the specimens the professor took in townships 59-14 and 60-13 and shipped to the laboratory of Hamilton College for examination caused him to think differently of the Mesabi Range. The analysis was such that Professor Chester was forced to condemn “the lean magnetite” of the Mesabi, while he reported favorably on the ores of the Vermilion.
Efforts Centered on Vermilion Range, 1880.-As no further interested movement was made by eastern capitalists until after Professor Chester had undertaken another expedition, this time directly to the Vermilion range, in 1880, it would seem that the 1875 expedition was organized expressly to examine the Mesabi deposits, the visit then to the Vermilion range being an afterthought, or at all events of only secondary importance. (In view of the wonderful subsequent development of the Mesabi range, Prof. Chester, in condemning the Mesabi ore, was thought to be “a d – d fool … who did not know a good thing when he saw it;” yet events have shown that he was right in condemning the low-grade ore of the eastern Mesabi, as almost two generations were destined to elapse before a method was devised of handling it profitably.-See Argo township chapter, this volume.) “A Red Cut that Shouted Iron.”-The unfavorable report of Professor Chester made it impossible for Duluthians to do anything further in the East with Mesabi range mining propositions for several years, but in 1880 Tower and Munson had definitely decided to invest in the exploitation of the Vermilion range ores, and in that year plans were made to construct a railway from Two Harbors to the Vermilion region. This became known to the Duluth men who were interested in Mesabi lands, and on January 15, 1882, the Mesabi Iron Company was formed. Its incorporators were W. W. Spaulding, Ex-Governor Alexander Ramsay, and other mining men of Wisconsin and Marquette. Its authorized capital was $3,000,000, and they were confident of success, knowing that, to get to the Vermilion range.
Mr. Tower’s railway would have to pass over the Mesabi range, within accessible distance of their mineral land. It happened so, of course, and in 1883, in clearing the way across the Mesabi for the steel tracks of the Duluth and Iron Range railway, there was uncovered “a red cut that shouted iron to every passer-by.” Undoubtedly, the Mesabi range occupied the attention and thoughts of many mining men of Duluth and elsewhere in the eighties. They had no option. If they wanted iron, they had to look to the Mesabi because Messrs Tower and Munson had “swallowed” all the “choice lands” of the Vermilion. Mining prospects in general seemed so good in 3941883 that another railway was planned, the Lake Superior and Northwestern road, which was to run from Minnesota Point in many directions, but one of the branches was to run to Rainy River, by way of Vermilion, crossing the Mesabi. The railway company was capitalized at $5,000,000, but went no further than incorporation. The only service it rendered was to make it easier for the Merritts, eight years later, to go ahead with their plans to find a railway that would reach their mines at Mountain Iron. They took the charter of the Lake Superior and Northwestern and by simply changing the name to Duluth, Missabe, and Northern Railway Company, had the legal preliminaries all clear for construction of the road without delay.
Interest in Mesabi Again Strong, 1883-8.-Several explorers followed that “red cut that shouted iron.” John Mallman was one; another was James B. Geggie, who “followed the trend of the ore onto state property which, though it brought him nothing, resulted in the mineral-lease law that is enriching the Minnesota state schoolfund by a hundred million, or so.” “Frank Hibbing, who, afterwards dug into a hundred million tons in the district that bears his name, was in camp with Mailman,” while “at the other end of the range, David T. Adams, who eventually brought immense treasures to light, was, in 1886 looking up prospects for Myers Brothers, a Duluth real-estate firm, in the ground that Eames first scratched.
And the Merritts were everywhere.” That was the position in 1886 on the Mesabi; according to one reliable student of its history. Adams was on the Mesabi in 1883, having followed the line of the Duluth and Iron Range Railway from Agate Bay (Two Harbors), accompanied by one James Lane. His attention was then “attracted by fragments of quartz and clean pieces of hematite ore strewn over the surface,” at a point which he learned later was in section 20, township 59-14.
He spent a few days “exploring the country as far east as the magnetic cropping, and southwest over the hematite formation in the footlands along the slope of the Mesaba Heights, for some distance.” He formed the theory then that the “drift ore found in the low lands” at the foot of the Heights “did not come from its summit,” but “from an iron formation under the surface of the low lands.” D. T. Adam’s Discoveries.-Adams made two trips to the western end of the Mesabi Range in 1886. During the first trip he “found a ledge of quartz and iron which crossed the Prairie River just below what is known as the lower rapids.” The “ledge lay nearly horizontal, and bedded on what is known as the Pokegama quartz.” That was n the vicinity of section 34, township 56-25. On his second trip “to -he west end of the range,” in 1886, he was accompanied by Mike Maxwell, and the object was to “trace out” the range, so that he might publish a map. He did so, and the map, though crude, was commendably accurate, showing “the trend of the range and the northwestern boundary of the ore-bearing zone accurately.” The Merritts: The “Great Mesabi Adventure” Begins.-The early history of the Mesabi Range is made particularly romantic, one might almost say dramatic, by the short but conspicuous part taken in the exploration and development work by the members of the Merritt family. Chief among them were the seven sons of Lewis H. Merritt, a pioneer of Oneota, who had been on the Vermilion. The sons were: Napoleon B.; Lucien, who eventually became a Methodist minister; Leonidas and Alfred, the central figures in the Mesabi adventure; Lewis J., Cassius C., whose death in 1894 was perhaps hastened by the Mesabi misadventure; and Andrew R. Then there 395were several of the next generation of Merritts, who stood “shoulder to shoulder with the heads of the clan” in the Mesabi matter, among them John E. and Wilbur J., Eugene T. and Thomas A.
The Merritt Family; True Pioneers.-The family had clung to Duluth through the poverty of the sixties, and had grown with the city, in its later periods of prosperity. J. S. Pardee states that: In 1888, they (the Merritts) were men of substance and standing, having pioneer daring in uncommon degree, and that faith which will move mountains, or borrow a million without winking. “My brothers and I,” says Lon Merritt, “had between us three million dollars of disposable property; we were ready to bet every cent of it on our Mesabi discoveries; and we did.” If the estimate is higher than others would place on their holdings at that time, it may be accounted for by the fact that it was mostly in real estate (largely wild land at that) following a western boom. At any rate, it was a substantial stake, pledged without hesitation.
The Merritts, i. e., most of the seven sons, were expert timber cruisers. They were proud of the title and occupation, and were “accustomed from boyhood to running around in the woods.” From the time Leonidas Merritt “took up his first government claim in 1880, he was all over this northern country till he knew … every foot of it.” “The very lands that were in the heart of the Mesabi discoveries he had cruised in 1882, and some of the original entries disposed of to pine-land men at a small advance were made by Eaton and Merritt” (Leonidas Merritt and Frank W. Eaton).
“Little by little, Lon Merritt pieced together his Mesabi knowledge, having always in the back of his head his father’s surmise that the jasper peak he saw at Vermilion, in 1865, was the head of a claim of deposits.” In 1884, John E. Merritt, “looking up swamp lands for his uncle,” Leonidas, brought in specimens of lean ore chipped from a ledge of taconite in the Virginia district. That strengthened the Merritts in believing that their father’s surnise was correct, “taconite being but another word for jasper.” But they had other work then to complete. However, in 1887, the opportunity came to investigate further.
C. C. Merritt Finds Indications of Ore, 1887.-Cassius C. Mer- .ritt, one of the brothers, was head explorer of an engineering corps, engaged in the work of “running a survey for a railroad line from Duluth to WVinnipeg, Man.” Alfred Merritt writes: My brother ran the exploring line from the mouth of Sturgeon river around the south side of the lake, and then to Winnipeg. ‘In locating this line through township 58 north, range eighteen west, in section 5, just at the height of land, on the divide of the waterways, my brother saw a boulder of iron ore, and brought it to Duluth. This was the first chunk of pure iron ore taken off the Mesabi range. Exploration was not started on the Mesabi range for some time after that.
That year, according to Lon Merritt’s recollection, writes Pardee, “they were beginning to map the range. It is difficult to fix these dates since there is hardly a scrap of paper for verification; what papers were pertinent were lost in a fire some time after.” “I made an agreement” said Leonidas Merritt, “with the Wisconsin, Minnesota and Pacific, a railroad company having a land-grant in that vicinity, to prospect the whole country. As they had their engineer they took the more difficult end of following the Mesabi, and as we were not supposed to know as’much, we were to go over the Vermilion. Their experts reported that there was nothing there.
The experts were in good company; nearly all the men who should know were of the same opinion.” 396Looking for Non-Magnetic Ore with a Magnetic Needle.-The same stalwart old pioneer, still alive, and still prominent in civic affairs of the City of Duluth, continued: The next year, which must have been 1889, we went over the Mesabi ourselves, from Embarrass lake on the east to the Mississippi on the west (and this is the district within which until very recently every deposit of value has been included) running diagonals across the formation, and mapping the lines of attraction with a dip needle. Folks may say we were crazy, looking for non-magnetic ore with a magnetic needle, but the maps we made then showed the approximate location of every large body of ore known today, and at that time I developed the same theory which was afterwards put forth by Van Hise, and is accepted as scientific. Only I wasn’t a scientist and I called it a basin instead of a trough.
Their methods of exploration were crude, yet, of all those who were drawn to the iron ranges of Minnesota in those early vague days, the Merritts seem to have been the first to have any true conception of the magnitude of the ore deposits of the Mesabi.
They “Glimpsed an Empire.”-They “saw the thing big from the start;” indeed, it has been said, that “had they seen less they would have found more.” They “glimpsed an empire,” and notwithstanding all else-and they were busy men-“the Merritts never let go their Mesabi enterprise, in which every minute they were getting nearer the goal.” They knew the range from end to end. An instance of this knowledge was seen as soon as the state lands were opened to leasing. Without delay Leonidas Merritt “made filings on nearly two hundred locations, not only in the heart of the Mesabi, but all the way from Gunflint to Bowstring, sometimes twenty-five and fifty miles out of the course, not a few of them in ground that is a probable field for exploration today.” Actual. Discovery.-Regarding the actual discovery of formations of ore, it is not an easy matter to decide which of the pioneer explorers was the first to discover a bed which later was developed into a mine. Pardee asserts that “John McCaskill … shares with the Merritts the fame of actual discovery.” Further he writes: By all tradition, the Mesabi range was discovered by the ore sticking to the roots of an upturned tree. That must be true because four different locations have been pointed out where the tree told the secret. J. T. Hale remembers seeing it on his way to look at McCaskill’s test-pit. Lon Merritt had a cane made out Qf that tree, with a ferrule smelted from the tell-tale ore; the tree blew down, and almost crushed their camp, not long after they struck ore. So there is no doubt there was such a tree. Another tradition is that Mountain Iron was revealed by an axeman kicking up the moss and finding a red earth under it. A third tradition is that a deer, scuffing up the moss, betrayed the secret of the Mesab’i.
Anyhow, John McCaskill dug the first test-pit in ore. That was apparently in the summer of 1889. McCaskill, a Canadian woodsman, was one of the cruiser type, who must find out what is over the next hill. On his own account he cruised the entire range, making a rough map of the formation that indicated every main feature, traced the Virginia loop, where the range swings six miles to the south, and then west, and gauged the ground so well that he dug a pit in what was afterwards the Biwabik, and struck ore. at a depth of less than four feet. He took what samples he wanted, wasted the rest in a creek, and covered his pit with brush. His discovery should have been his fortune. But the agent who took up the exploitation got tangled in litigation, ending in bankruptcy, and McCaskill never got a cent. He died poor.
(More regarding McCaskill, and the Biwabik mine will be found in Biwabik, McKinley and Merritt chapter.) Mountain Iron.-The Merritt brothers were, undoubtedly, the first of the exploring expeditions to carry their explorations to the point where they had a pit bottomed in ore. Alfred Merritt, as has been told in the Mountain Iron chapter, “took a crew of six men in” 397(to what became Mountain Iron) in March, 1889, and there established a camp, and went doggedly on with the work of exploration until they found ore, which was not until the summer of 1890 had come and they had expended $20,000 in needless drilling operations.
mainly in township 59-18. They had to come southward before they found the ore, and, singularly, “ore was not found south,” states Alfred Merritt, “until the wheels of heavily-laden timber-wagons that passed from a portable sawmill had cut so deeply into the topsoil that the ore was disclosed.” First Successful Exploration, 1890.-The United States Geological Survey XLIII recorded the discovery of ore on the Mesabi Range as follows: The most persistent of the explorers were the Merritts, and their faith in the range was the first to be rewarded. One of their test-pit crews, in charge of Captain J. A. Nichols, of Duluth, struck ore on November 16, 1890, in nw. qr. section 3, township 58 n., range 18, just north of what is now known as the Mountain Iron mine. Ore was next discovered by John McCaskill, an explorer, who observed ore clinging to the roots of an upturned tree on what is now the Biwabik mine. This led to the discovery in other places, and the rush of explorers followed.
As a matter of fact, according to Alfred Merritt himself, ore wsas discovered by them at Mountain Iron before they employed Captain Nichols. (See Mountain Iron chapter.) Unsuccessful Expeditions, 1887-88.–There were several unsuccessful explorations undertaken on the Mesabi Range before the Merritts began seriously at Mountain Iron. Captain Griffith, of Minneapolis, was perhaps “the first to start actual explorations for iron ore on the Mesabi Range” operating about where the Diamond mine now is. He began his work there in 1887. In 1888, John Mailman, of Duluth, did some work in section 11-59-14, he thus being probably the first to start actual explorations in the eastern part of the Mesabi. Frank Hibbing was exploring in section 20-59-14 later in the same year, and Captain Elisha Morcom, superintendent at the Soudan mines of the Vermilion Range, “did some exploring in a slaty formation on the summit of the Mesabi Heights, in section 13-59-15.” Mountain Iron Company Organized, 1890.-The Merritt brothers probably had discovered the ore before they organized the Mountain Iron Company, which they did on July 11, 1890. The capital was $2,000,000, in shares of $100 denomination, par value. The first officers were: Leonidas Merritt, president; R. H. Palmer, vice president; and J. T. Hale, secretary. Alfred Merritt was treasurer, and the other directors were K. D. Chase, M. B. Harrison, A. R. and C. C.
Merritt, and W. K. Rogers. Much of the capital, probably, was paper stock, but several of the men identified with it were Duluth men of “big affairs,” and probably the company did not lack money with which to continue the exploration.
Biwabik Mine.-Having the Mountain Iron development work well in hand, the Merritts, in 1891, took an option on the Biwabik property, and sent Captain Kehoe there to begin explorations, in the “nw. corner of the ne. quarter of the ne. quarter of section 3-58-16, in a spot where Jack McCaskill had previously discovered yellow ocher on the roots of an upturned tree.” At the same time A. E. Humphreys, George G. Atkins, and others, engaged David T. Adams to sink a test-pit on what became known as the Cincinnati property, Adams “sinking No. 1 pit in the nw. corner of the sw. quarter of the nw.
quarter of section 2-58-16.” 398First to Find Blue Ore, 1891.-There he “encountered a blue ore in his first pit, after passing through about 30 feet of surface,” which, he claims, “was the first commercial blue ore discovered on the Mesabi.” He states that “Captain Kehoe then moved his works to the south and started a pit almost due west” of his No. 1 pit on the Cincinnati, and “after passing through about thirty-five feet of surface and brown ore, encountered blue ore on the Biwabik.” Ore “by the Acre”: Transportation Limitations.-At about that time, or soon afterwards, “ore was being discovered by the acre; all it needed was someone to mine it and a railroad to carry it.” To the eastward, about twenty-five miles distant from Mountain Iron across comparatively level country, lay the Duluth and Iron Range Railway.
From Mountain Iron, south, it was about forty-five miles to the Duluth and Winnipeg Railroad at Stony Brook. The contractors of that railway were Grant and Chase, and in 1890 were actually building the Duluth and Winnipeg road, so that when the Merritts found that in Order to get the Duluth and Winnipeg Company to carry their ore to the Head of the Lakes, it would be necessary for them to build themselves from their mines to Stony Brook, they had experienced railway contractors at hand. Grant and Chase undertook the work, and the Lake Superior and Northwestern Railway charter was at their disposal. So that, without difficulty, the Duluth, Missabe and Northern Railway Company came into corporate existence, on February 11, 1891, “only two months after Captain Nichols had found ore at Mountain Iron.” The two Merritt companies, “the Mountain Iron and the Biwabik Mountain, raised $200,000 each, which was advanced to the railroad company, in exchange for bonds,” and construction proceeded. “Grant and Chase agreed otherwise to finance the construction contract for $900,000 bonds of the railroad company and $333,000 common stock.” Railway Reaches Mines, 1892.-The road was built from Mountain Iron to Stony Brook in 1892, and connection made with the Duluth and Winnipeg, which, by the way, could only take the ore to Superior, there being no ore docks at Duluth, which was somewhat unsatisfactory. Also, they did not carry through their undertaking to provide ore-cars before the end of 1892. Therefore, the Merritt companies, which by that time had increased greatly in importance and were ready to ship substantially, supported the Merritts in their decision to build a railway into Duluth, and also to build docks (see D. M. & N. Ry. history, chapter XII).
Extension Fatal to Merritts.-It was their undoing. They perhaps expected that the enthusiasm manifested by the Duluth people early in 1891 when they first appreciated what the Merritt discovery at Mountain Iron really signified, would still hold. But as 1892 advanced, and passed, and 1893 came uncertainly in, people in general were beginning to sense that a time of extreme money-stringency was not far off. In consequence the Merritts were soon in the throes of financial embarrassment.
The Mining “Fever,” 1891-3.-It had been different in 1891. Then, in Duluth, it is said mining companies were organized, and presumably to some extent subscribed, “at the rate of one, two, five million dollars a day.” “Every office was a mining exchange.” The “fever” to “get into mining” was so fierce that, it is said, “there was such a crush of speculators in the Spaulding Hotel lobby, night after night, that one could hardly elbow his way through the throng.” They were not all Merritt companies.
399Mining Companies Galore.-Many of the companies were entirely prospective; some had discovered nothing valuable; and others that had “were too thinly financed to realize on their finds.” And, although Duluth people did not stop to note it, it was hardly strange that the fever of speculation did not go beyond Duluth. Outside investors were not excited; not at all interested in fact. And for several years some of the steel companies, the consumers of the ore, were not even luke-warm to the Mesabi discoveries.
First Shipment.-The first shipment, little more than four thousand tons, made from the Mountain Iron Mine was distributed among four furnaces, with indifferent results. Indeed, it was necessary eventually to adapt the furnaces to the ore before complete success was obtained. But with such reports from the practical men to support the prejudices of the geologist against the peculiar formation of the Mesabi ore deposits, prudent men would have halted, and set aside an instinctive unreasoning desire to exploit and develop the Mesabi.
“White Elephants.”-There came a time to the Merritts when their holdings, their millions and tens of millions of tons of proved ore actually was a liability to them. Their mines were “white elephants”; they could not be worked at a profit. Rockefeller once offered to sell the whole of his Mesabi properties to a steel manufacturer on the basis of three cents a ton for the “proved up” ore. He could not find a buyer. Still, that was not in early 1893, at which time, according to the state geological report, the number of companies incorporated to exploit Mesabi Range land since the Merritts had found ore at Mountain Iron, exceeded one hundred, and the paper capital exceeded $200,000,000. And of all the mining men, the Merritts were the most resolute, and venturesome. Nothing could daunt them. No argument could shake their faith in the Mesabi, and, possibly, they had not been sufficiently long in “big business” to know that the ruling factor is money. Honest intention, hard work, superhuman physical effort avail not in corporate affairs if the exchequer is weak. And in the final analysis, which has to deal with either success or failure, business plans that did not give money its proper and proportionate place in initial plannings must be considered faulty.
Grant and Chase Break with Merritts.-Grant and Chase, who were responsible for the building of the first link of the Merritt railway, from Stony Brook to the mines, refused to support the Merritts, when the latter decided to build into Duluth and also to build ore docks at West Duluth. They knew that, from a financial viewpoint, the proposition was deplorably weak, not because the operation of the railway when established would not have a reasonable probability of earning more than operating expenses-as a matter of fact, the D. M. & N. Ry. has since proved to be “a gold mine,” returning forty per cent, or more yearly, on a capital of about $17,213,500-but for the irrefutable reason that the “million or so” necessary to carry out the Merritt project of Duluth railway and docks, was not to be had.
The Merritts Unperturbed.-However, the Merritts went onwith their plans. To grapple with great projects on little capital was not an unusual experience for them. They had been reared in the poverty of the present, and the fabulous wealth of the future; they had grown through the “fish-and-potatoes” period of Duluth, through the sixties, when they had nothing to eat save the fish they could catch on Lake Superior, and the potatoes they could grow on their clearing, but with the alluring possibility ever before them that with 400the certain “coming of a railroad” their potato-land would make them wealthy almost overnight. So, the Merritts were not discouraged by the financial apprehensions others had early in 1893.
U. S. Treasury “Scraping on Bare Bottom.”-They saw that with the “immense carrying contracts” they could make on the Mesabi, with mine-owners “along their main-line from Mountain Iron, their Virginia branch, and the branch to be built into Hibbing” would, in point of earnings make the future of the railway, if completed, bright; so, when Grant and Chase pointed out that the “United States Treasury was even then scraping on bare bottom, and bankers were learning to say ‘No’,” and in consequence urged the Merritts to adopt “a safe policy,” the latter still decided to go ahead even without Grant and Chase.
Enter Wetmore.-That led them, “by a roundabout course to the Rockefeller alliance.” It so happened that, at about this time, the principals of the American Steam Barge Company, “a hopeful and ambitious company” then earning “better than twenty per cent on its capital” were attracted to the Mesabi. “The barge company saw possibilities in the ore traffic, and began dickering for contracts.” The principal stockholders were Capt. Alexander McDougall, the inventor of the unique “whaleback” steam-barges, which were “then regarded as the final word in lake commerce;” A. D. Thomson, a grain exporter, both of Duluth; and “Cleveland vesselmen,” the Cleveland interest being a large one, represented by Colgate Hoyt, as president. The secretary was C. WV. Wetmore, “a shrewd lawyer of excellent connections.” Their negotiation for the lake carriage of Mesabi ores naturally brought them to the Merritts, the largest shippers, in fact, up to then, the only shippers; and the Merritts, with the perplexity of the uncompleted railway still before them, saw an advantage, in accessible funds, by a merger of the mines, railway, docks and ships.
Wetmore to Raise Two Million.-The outcome was that Wetmore was to raise $2,000,000 with which to complete the Hibbing extension, build the Duluth extension, and also the docks, a “holding company” was to be formed “to include the Merritt mines, the Hibbing group, the Adams properties, and others,” as well as the railway and shipping interests-“very much the same scheme that afterwards took form in the Lake Superior Consolidated Mines, under Rockefeller auspices.” “For the Control of a Kingdom.”-Grant and Chase did not give up their interest in the railway without an effort; indeed, the battle between the Merritt and Grant-Chase factions was “as for the control of a kingdom.” Grant and Chase “made a desperate stand against the American Barge contract, as they understood it,” but the Merritt faction, in which was Wetmore, won, owing chiefly to Wetmore, who, “with a promoter’s exuberance had no doubt allowed them to suppose that he carried Rockefeller’s cheque book in his pocket,” that impression arising, perhaps, from the knowledge that the “Cleveland interest” of the Barge Company had had dealings with Rockefeller.
Rockefeller Introduced.-After “the first skirmish” Leonidas Merritt was “quoted in the Duluth News, of January 30, 1893,” as stating that: The Merritt syndicate has complete control of the D. M. & N. They propose to take the road into their own hands and make it the best iron road in the world, as fast as money and men can do it. They own and control it for all time, and the Rockefellers. and the Barge Company, behind them will furnish all the money that may be needed.
Vol. I-26 401Charles W. Wetmore was later “charged” with being an agent of Mr. Rockefeller, but eventually he “made oath, as did Mr. Rockefeller, that there never was the slightest relation of agency betwen them at any time, direct or indirect.” Frederick T. Gates.-Frederick T. Gates, who eventually comes into the story as the direct representative of Mr. Rockefeller, wrote, in his “The Truth About Mr. Rockefeller and the Merritts,” as follows: Mr. Wetmore heard the Merritt’s story of fabulous quantities of ore on the Missabe, of the ease and cheapness with which it could be mined, of the enormous profits immediately to be realized, of limitless wealth just ahead, and he himself fell under the spell of the three illusions. He visited the range and he did not visit the furnaces. So the Merritts and Wetmore, for mutual profit, formed a close personal and business alliance, endorsing each other’s notes, mingling each other’s collateral, ultimately occupying the same offices in New York … Mr. Wetmore speedily interested himself and several personal friends in some choice properties on the range, under the guidance of the Merritts, and undertook the serious task of raising among eastern capitalists by the sale of bonds the $1,600,000 then supposed to be enough for the railroad. In January, 1893, Mr. Rockefeller took a ‘quarter of the whole lot, but scarcely anyone else wanted any. Mr. Wetmore tried in vain to sell them to banks … No one would take the bonds of a small distant ore railroad, to undeveloped mines of doubtful ore values. Wetmore was reduced to borrowing from banks in driblets on short time, with the bonds as collateral widely margined. As to investments in Missabe, Mr. Rockefeller declined to join his syndicate and formally sent him word that he would neither invest in, or loan money on, Missabe mines. I conveyed this decision to Mr.
Wetmore January 18, 1893.
Injunctions.-Before the end of January, the courts granted an injunction to the Grant-Chase faction restraining the Merritts from selling D. M. & N. bonds below par value, and secured another injunction “forbidding ratification of the American Barge Contract.” An Unfortunate Expedient.-In early February, however, Chase “capitulated,” agreeing to sell the Grant-Chase block of stock for $250,000, to the Merritt-Wetmore faction, and Wetmore was to obtain a further $400,000 “for the treasury,” in order “to buy control of the road.” The money was advanced to him, “for a week,” by A. D. Thomson, and finally Wetmore had to meet the liability “by borrowing it from the surplus of American Barge Company, secured by personal notes of Merritt and Wetmore, with the stock attached as collateral.” Colgate Hoyt, president of the American Barge Company, was in Europe at the time, and was not consulted; and “when he got back from Europe he was furious.” Optimistically Planning.-Still, that temporary expedient gave the Merritt-Wetmore faction the control of the D. M. & N., and Leonidas Merritt succeeded Chase as president, Alexander McDougall, A. D. Thomson, and C. W. Wetmore of the American Barge Company, also joining the directorate. At the meeting of directors of the D. M. & N., February 7, 1893, Leonidas Merritt stated: The company expects to cover the entire Mesabi range with branches and spurs. Extensions to some of the new mines are already under way. The important timber interests will not be neglected. The company has $400,000 in its treasury and not a cent of debt. The Chases and Grant received $250,- 000 for their 5,000 shares; the Merritts took half, and the Rockefeller interests one-half. Of the $400,000 sold at par, the Merritts bought $300,000, and the Rockefellers took $100,000. The Merritts and their associates have therefore a greater proportionate interest than ever.
Their Triumph Their Destruction.-“We control it forever” he said. Had he read the conditions correctly, he would have seen that the control had already passed from them. “They had bought control 402with borrowed money, in a time when no borrower could survive.” Their triumph was their destruction.
Wetmore’s Holding Company.-To carry out the financial and consolidation plan, Wetmore and Merritt formed the New York and Missabe Company, “for a holding company, with a New Jersey charter” and made “tentative contracts with the various mining interests.” In March, 1893, Wetmore and E. B. Bartlett acquired, “for the benefit of the New York and Missabe” a half-interest in the Hibbing and Trimble mines, for $250,000 bonus” and in April, Wetmore obtained an option on the Adams properties at Eveleth.
Negotiations with Rockefeller.-Wetmore had many conversations with Rockefeller representatives during the period March-May, 1893, but was not able to put an acceptable proposition before them.
Wetmore, with the Colby-Hoyt (Wisconsin) syndicate, proposed a merger of all the Lake Superior iron ore interests, bringing into it the Gogebic Range mines, the mines of the Vermilion, and those of the Mesabi, together with the railway, and, states Gates, “this scheme was worked over for nearly two months.” However, “irreconcilable differences developed,” and the scheme was rejected by the Rockefeller advisers on April 11th.
Everybody “Snugging Up” for Money Panic.-The position of the Merritts was getting more precarious every week. Wetmore was “deplorably failing” in his endeavor to “place the $2,000,000 bonds for the Mesabi railway extensions.” Rockefeller would take no more than the first block he had bought, or lent money on. Gates writes: It is now May. The Merritt brothers in Duluth are cramped for money, and send Leonidas to New York, to find out what is the matter with Wetmore.
Matter enough. Leonidas finds the situation serious. Everybody is snugging up for the money panic.
No Credit Without Gold Dollars as Collateral.-Leonidas Merritt stayed in New York for a while, and with AWetmore made one more attempt to bring about a merger, “to raise the wind, in a market where you could not have obtained credit without gold dollars as collateral.” It “was impossible to get money for the railroad, for the mines, or for themselves, anywhere, at any price.” Revolvers Drawn.-Yet money had to be provided. Gangs of men were working in the railroad construction, and in the building of the dock; and they had to be paid. Gates writes: May and June went by, with conditions worse every hour. The Merritts in Duluth had let their contracts for the big dock, and for the extensions of the railroad; the contractors were at work with hundreds of men; the railroad debt was piling up at the rate of ten thousand dollars per day; the mines were idle; and no money was forthcoming from the east. The financial arrangements planned in the spring had completely broken down. The railroad was trembling on the brink of a receivership. Interest on the bonds was not paid. Suits were actually begun. There were labor riots on the Missabe Range. Contractors were knocked down on the Merritt railroad by their enraged men. Knives were drawn. Men actually entered the railroad offices in Duluth and demanded cash on their pay checks at the ends of drawn revolvers.
The personal affairs of the Merritts themselves were in no better shape. Some of their creditors were jumping on them and threatening to sell their collateral.
Rockefeller the Only Hope.-There seemed to be but one man in America who had money, and could save them. That was John D. Rockefeller, and even he, it may be presumed, was feeling the stringency, if inference may be drawn from the impecunious state of John D.’s brother, Franklin, who, in that period of pressure, was interested in the development of the Franklin mine at Virginia, and “having 403incurred” a bill of about $250, “for chemical work” done by a Virginia chemist, had been compelled to allow the account to remain unpaid until “past due.” Then “he finally consented to give us a note, payable in sixty days,” testifies the metallurgist concerned, Fred Lerch, of Virginia.
The situation became so desperate for the Merritts in July, 1893, that Leonidas Merritt wired direct to Gates, the Rockefeller representative: “Must have some money at once to save MXerritt boys’ collateral, which means control of best properties.” A Mountain of Debt.-The end was near.’ The Merritts had struggled bravely, ever clinging “to their magnificent scheme,” and ever sinking deeper into the bog of debt. In July, “there was owing some $3,200,000 in bonds and a mountain of floating debt. Equipment notes were maturing at the rate of $50,000 or $60,000 a month, scattered among a dozen creditors. Contractor’s estimates were falling due., The Duluth offices were on the point of being mobbed halfa- dozen times. Time checks were discounted at sixty per cent Applications for receiverships were staved off day after day. Leonidas Merritt, president of the D. M. & N., was back and forth most of the time, with Wetmore in New York … Merritts Buy a Bank.-They bought control of the Southern National Bank, making an earnest money payment, and endorsing each other’s notes for the remainder. They took an option on Pittsburgh, Lake Erie and Shenango, to give them access to the great ore market.” They did many “heroic” things during the last few months, before finally placing themselves unreservedly in the hands of John D. Rockefeller.
Rockefeller’s Vital Interest.-In reality, John D. Rockefeller was an interested party. It may, perhaps, be safely inferred that he, a man of such shrewdness, and with such able advisers at his elbow, was then aware of the true state of affairs, as it affected his holding of D. M. & N. Ry. bonds, and probably knew then, as he knew definitely later, that first lien on the property lay with the railway contractors.
He soon was advised by Joseph B. Cotton, attorney for the company, that “outstanding contracts were made before the mortgage deed was recorded, and there was a million or more owing to the contractors that came ahead of the bonds.” Clearly, then, he had to step into the breach and save the Merritts, so as to save his own investment. It was not his introduction to iron ore, by the way, for at that time he was “slightly interested” in the Michigan iron ranges, “somewhat more interested” in the Gogebic, and “rather largely” inthe Cuban deposits of the Spanish-American Iron Company, also holding “something like a quarter of a million” in the MAinnesota Iron Company (of the Vermilion range), “besides investments” in the stock of the American Barge Company. So that John D. Rockefeller might almost be considered “a mining man” at that time.
Rockefeller to the Rescue.-He deputed Rev. F. T. Gates and G. Welwood Murray to arrange matters with the Merritts and Wetmore.
The result was embodied in one final paper, or agreement, dated August 28th, the gist of which agreement was, as described by Mr. Gates: Mr. Rockefeller was to finance the railroad with $500,0OC. (He actually put in over $2,000,000.) Mr. Rockefeller was to take over without recourse the Adams and Lone Jack mining properties, which the partners. Wetmore and Merritt, had recently bought for $428,000 short paper. Mr. Rockefeller was to advance Merritt and Wetmore, as partners, considerable sums of needed cash, and to the Merritts personally $150,000, that they might retain control 404of their stocks. Mr. Rockefeller was to buy all the ore the Mountain Iron mine could produce and ship over the railroad that fall, so as to put the mine in operation. The Merritts, on their part, were to put their railroad stock, and all their best mining stocks, the “Mountain Iron,” “Biwabik,” “Missabe Mountain,” “Rathbun,” “Shaw,” into one basket, or company, to be called the Lake Superior Consolidated Iron Mines, issuing the Consolidated stock to themselves on valuations for their mines to be fixed by themselves, Leonidas Merritt to be president, and the Merritts to control. This company was to buy from Mr. Rockefeller all his mining stocks, including the Adams and Lone Jack now his, paying for these stocks in debenture bonds of the Consolidated Company, so many bonds for so much stock.
Where Rockefeller Lost Tens of Millions.-Mr. Rockefeller did well by the arrangement, though, as was eventually shown, he might have done better had he taken stock instead of bonds. What then cost him “a million or so,” but eventually cost him “about ten,” he eventually disposed of to the United States Steel Corporation for about eighty millions, but for which, had he known what J. Pierpont Morgan, as a last resort, was prepared to pay for the Rockefeller holding, he might have got $150,000,000. But had he n6t in 1893, with the caution of the prudent’ financier, elected to take bonds “at ninety,” and “get a mortgage on the whole property” to protect his original securities, he might have exchanged his interests for stock at two to one, as the others had done, and thus in the final transfer eight years later to the Steel Trust, have doubled his profit.
Rockefeller’s Preference.-Still, the arrangement semed fair and satisfactory to all. Rockefeller had put in actual money; he took solid .security. The Merritts brought equities of great potential value; they retained equities of great potential value. And, though within eight years, Lake Superior Consolidated came to be worth many tens of millions, “it was then only a golden hope, led along an improvised railroad, to a group of explorations and expectations in which few mining men, and fewer furnace men, had any confidence.” The Merritt Holding.-The Merritt brothers received for their personal interest in the properties about $10,000,000, par value, in stocks of the new company. Altogether, what were considered Merritt interests, i. e., the Merritt side as distinct from the Rockefeller side, received $21,050,000 of the $28,000,000 of stock issued by the Lake Superior Consolidated Company.
The Adams Properties.-The Adams properties were rated at: Adams mine, $1,220,000; the Lone Jack, at $500,000; and the Shaw, at $400,000; and it appears that Adams “bargained for bonds at 90 for the Adams and Lone Jack mines, taking Consolidated stock at 50, as the Merritts had done, for the remainder.” Hibbing’s Lake Superior Company became part of the Lake Superior Consolidated by transfer of the contract given to Wetmore and Bartlett; and McKinley’s property was acquired in September.
Control of New Company.-The control of the new company “rested in a voting trust, composed of Lon. and Alf. Merritt, C. W.
Wetmore, and F. T. Gates.” Rockefeller does not seem to have at that time sought to control the company, though as a matter of fact he.held control all the time with his bonds. Indeed, Rockefeller only asked for the privilege of naming two of five, or three of seven directors.
Not Yet “Out of the Wood.”-One would imagine that the Merritts were now “out of the wood,” and they themselves thought sofor a time. But they had eventually to come to the realization that “they were still staggering under an enormous load of financial adventure.” They had a tottering bank, the Southern National, to keep 405from utter collapse; they were involved in the Pittsburgh, Lake Erie, and Shenango railroad, which liability, in their desperate endeavor to prop up “the great adventure, the Mesabi,” they had imprudently incurred; there were many “land deals,” and “mining prospects;” one branch of the family had a ten-million-dollar corporation floundering in Tennessee coal-lands; and there were many other calls upon their resources. Over and above all, there was their well-nigh insatiable desire to still further involve themselves in Mesabi properties, for they did not seem to realize even yet that ore in the ground does not necessarily lead to cash in hand. That however was quite clear to bankers at that time, and although, after the formation of the Lake Superior Consolidated Mines, and the issuance to the Merritt brothers of stock to the value of $10,000,000, Leonidas Merritt jubilantly stated: “The days are past when we rate ourselves as paupers,” bankers could not see that Lake Superior Consolidated stock at 50 was good collateral for a loan of forty per cent, even with Rockefeller in the background.
However, as far as the affairs of the Lake Superior Consolidated Company went, the Merritts were in control, their properties were being satisfactorily developed, the railway and dock work was being prosecuted steadily, and the future was comparatively secure, backed by the bulging pockets of Rockefeller. Had it not been for their other personal committments, the Merritts would have been easy of mind.
Rockefeller Again Aids.-But the pressure eventually became intolerable, and in January the Merritts offered, through Frederick T. Gates, to “sell 90,000 shares of their Consolidated stock” to Rockefeller, and would accept 10 dollars a share, or $900,000 for the whole.
It appears that Leonidas Merritt misunderstood Mr. Rockefeller, or his agent, at the time of the merger, in July, 1893. He thought he had been promised a loan on their stock in the new company, to the extent of 40 per cent of their stock-holding. But later the Rockefeller interests emphatically denied having suggested, or in any way implied, that such an accommodation was possible.
Rockefeller “Talked About the Weather.”-As a matter of fact, Leonidas Merritt only saw John D. once, and then only for a few moments after the first contract had been signed, and then John D. only “talked a few minutes about the weather.” John D. Rockefeller testified to that effect before the Stanley Committee. Leonidas vowed that he was promised a loan. And the misunderstanding undoubtdly embarrassed the Merritts during the latter half of 1893, though, in view of their desperate state in July; when the contract was made, there seems little reason to doubt that Leonidas Merritt would have consented to the consolidation whether it was tacitly understood that it would open the way to a personal loan, or not.
Merritts Sell Holdings to Rockefeller.-However, financial affairs had reached such a desperate state with the Merritts in January, 1894, that they had to come again to Rockefeller, and he then purchased 90,000 shares at $10 a share, or at ten cents on the dollar, which, by the way, was about as much as they were then worth. As a matter of fact, Rockefeller bought several small parcels of the same stock during the next month or two at $8 a share. A few weeks later, the Merritts sold a further 1,200 shares at same price ($10) to John D., but in the first transactions they were granted the right to buy back 55,000 of the 90,000 shares within one year at the same price, with interest.
Gates’ Version.-Gates, regarding these transactions with the Merritts, writes: 406I knew the Merritts were heavily in debt, but Leonidas concealed had carefully from me the full extent of their obligations, if indeed he knew him- self, which I doubt. I supposed that their difficulties were now past, when in January, 1894, we received to my great surprise, an offer from the Merritts to sell 90,000 shares of their Consolidated stock. This stock we bought, but gave the Merritts the right to buy back 55,000 shares of the stock in one year at the same price, with six per cent. Why they were compelled to sell just at that time we never knew. The Merritts falsely swore before the Stanley Committee that Mr. Rockefeller compelled them to sell by calling a loan of over $400,000, and giving them twenty-four hours in which to pay. In this there was not one syllable of truth. The Merritts owed Mr. Rockefeller at that time $150,000 only, and five-sixths of that had a long time yet to run.
It was quite clear that the Merritts could not sell their stock for even $10 a share at the time they sold to Mr. Rockefeller at that price, but apparently they sought only the accommodation, and hoped not to have to lose their stock, which, had they kept, they could have “cashed in” at the time of the absorption by the United States Steel Corporation at $270 a share.
Merritts Scorn a Curb.-It does seem astonishing that the Merritts should have disposed of their stock, and have thus relinquished hold of the properties. So much was evident when the annual meeting of the D. M. & N. Ry. Co. “and the principal mining companies,” was held shortly afterwards, on February 6, 1894. The Merritts were present, though both had refused to continue in office, shorn of voting power as they then were. They had been “offered the reins under a guiding hand,” that of Rockefeller’s, but they had for so long been masters of their own affairs that they would brook no such curb. They just passed out, and “Rockefeller men” became directors, and executives of the companies. F. T. Gates became president, and WV. J. 01- cott, “who had made good on the Gogebic” was put in command of the mining operations..
Decide to Fight Rockefeller.-Why the Merritts did not, however, exercise their option, a year hence, and then redeem the block of 55,000 shares they could have demanded of Rockefeller at $10 a share, plus interest, seems unexplainable, excepting by the fact that they had in the meantime resolved to fight Rockefeller, on many points. Had they repossessed themselves of that block of stock, and held it until the merger with the larger corporation, seven years later, they could have then sold the holding for $9,190,500 “cash in New York.” Litigation.-Litigation was impending in 1894, and came before the courts for trial in 1895. The Merritts won, in the lower court, but the finding was eventually reversed by the United States -Circuit Court of Appeals.
Charges of Fraud.-The Merritts charged the Rockefeller interests with fraud and misrepresentation, and although the supreme court ended the matter by reversing the judgment of the first court, bitterness still rankled, and the Merritts, comparatively destitute, had one consolation; they could realize that they had been upheld in one court.
Retraction.-Finally, however, on January 22, 1897, at Duluth, twenty members of the Merritt family (including Leonidas and Alfred, and one other person, acting as administrator of the estate of Cassius C. Merritt, “who broke his heart” and died in the spring of 1894), signed a paper declaring that “from recent independent investigations” made by them, they had “become satisfied that no misrepresentation was made, or fraud committed by Mr. Rockefeller or by his 407agents” in the matter of the Lake Superior Consolidated Iron Mines, and other transactions between the Rockefeller and Merritt interests.
Soon after the publication of that disclaimer, Rockefeller is said to have “made a settlement of nearly a million dollars to relieve the Merritts of their debts.” The end of the “Great Mesabi Adventure.”-That was the final outcome of their “great Mesabi adventure.” They were relieved of their debts, and after discovering properties worth tens of millions, and spending precious years of their lives in endeavoring to capitalize their treasure, they were relieved of their debts and put into a state where they could start again, without embarrassment, but with this handicap, the chance to discover a range like the Mesabi does not come often. However, they were reconciled to the inevitable. They had “played a great game,” had “miscalculated the difficulties,” and had lost. In November, 1890, they were “kings of the Mesabi;” in February, 1894, they were dethroned. It was the destiny of the luckless, or the inevitable ending that comes to enterprises undertaken by visionaries, who fail to balance their visions with money weights-cold calculating fact.
Not long after the Merritts began to be extremely active at Mountain Iron, and elsewhere, another man embarked upon like enterprises at Virginia, and during the next few years “proved himself to be a genius,” or that he had the luck of the lucky. Oliver’s enterprise succeeded; Merritt’s failed. Luck, or sound business.
Enter Oliver, the “Genius of the Mesabi.”-Henry W. Oliver may be said to have had an initial advantage the Merritts did not possess.
He had the interest of the consumers at the outset. He had been “among the boy companions of Thomas M. Carnegie,” brother of Andrew, and “had become one of the cleverest business men of Pittsburgh,” having “made several fortunes in iron and steel manufacture before he reached the maturity of midlife.” He was introduced to the Mesabi Range by Captain Edward Florada, who “took an option on the Missabe Mountain mine from the Merritt brothers, and succeeded in interesting” Mr. Oliver. The latter formed the Oliver Mining Company in 1892, and began to work the mine on what was certainly not a very favorable basis. He had to pay a royalty of 65 cents a ton, 40 cents of which went to the Merritts, and eventually to the Lake Superior Consolidated, and 25 cents a ton to the state, the mine being “situated on indemnity school lands.” However, the Rockefeller royalty was reduced from 40 cents to 25 cents in 1894, “in consideration of a very large output,” 400,000 tons a year being the required minimum output.
Oliver-Frick-Carnegie.-Oliver’s position, however, was very satisfactory from the outset. He needed the mine so as to “provide a cheap and uninterrupted supply of high-grade Bessemer ore for his own furnaces;” and he also had the satisfaction of knowing that Frick, then president of the Carnegie Steel Company, was watching Oliver’s Mesabi “experiment with interest,” having a similar need.
Soon Mr. Frick “suggested to Mr. Oliver that an ore combination with the Carnegie Steel ,Company might be mutually beneficial.” Mr. Oliver was a “far-sighted and enterprising” business man, and “quickly saw the advantage of such a union, permitting him, as it would do, to bargain with independent miners and transportation companies on the basis of a high minimum.” The effect of the policy is seen in the reduction of the Rockefeller royalty on the Missabe Mountain mine Oliver had leased. And with Frick’s aid, he planned 408to extend his scope of operations, and “make exceptional offers to mine owners willing to let their ores be worked on a royalty basis.” He therefore agreed “to Mr. Frick’s proposal to give the Carnegie Company one-half the stock of the Oliver Mining Company, conditioned on a loan of half a million dollars, secured by a mortgage on the ore properties, to be spent in development work.” A Gift of Millions Rejected.-That was how it happened that Carnegie came into Mesabi mining without spending a dollar. Carnegie was at the time in Scotland, but “the matter was at once brought to his attention. He “laconically opposed it,” writing as follows in August, 1892, to Mr. Frick: 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 very profitable, and the Mesabi is not the last great deposit that Lake Superior is to reveal.
The Gift Forced.-Mr. Frick, however, was in charge of the Carnegie Steel Company, and he “made the combination with Mr. Oliver,” which executive action was the cause of the “first coldness” between Carnegie and Frick. Carnegie was firmly convinced that pioneering didn’t pay, and was very emphatic in the theory, especially when development of iron-ore properties was the subject discussed. He was a “steel man,” and was prepared to leave the production of ore to others, and buy what he needed in the open market. In April, 1894, he wrote “to the Board of Managers” of the steel company: The Oliver bargain I do not regard as very valuable. You will find that this ore venture, like all our other ventures in ore, will result in more trouble and less profit than almost any branch of our business … I hope you will make a note of this prophecy.
Carnegie Expected More.-“It subsequently transpired, however,” writes J. H. Bridge, in his “The Inside History of the Carnegie Steel Company,” that Mr. Carnegie thought his company was entitled to a larger share than one-half of the Oliver Mining Company’s stock; and to please him Mr. Oliver consented to sell the Carnegies an additional interest of one-third, making their holdings five-sixths of the total stock. But he took care to safeguard his own interests by a contract under which the Oliver furnaces were entitled to one-sixth of all ore mined by the company. At this time the capital of the company was $1,200,000.” Rockefeller-Carnegie Agreement.-In 1896, it became evident that the Rockefeller and Carnegie interests (through Oliver) were coming closer together on the Mesabi range, the Oliver Company taking over the operation of the Lake Superior Consolidated Iron Mines properties on the Mesabi range “on a royalty basis of only 25 cents a ton,” which low price “was given by the Rockefellers in consideration of a guaranteed output of 600,000 tons a year, to be shipped over the Rockefeller railroads and steamships on the lakes” and that an equal quantity would be mined from the Oliver (or Missabe Mountain) mine. Bridge writes: This amounted to 1,200,000 tons a year; and as the contract was to run for fifty years, it meant a guarantee of 60,000,000 tons of freight, at 80 cents a ton by rail, and 65 cents a ton on the lakes-a consideration great enough to justify the low royalty of 25 cents, when other mine owners were getting 65 cents. To the Oliver-Carnegie iron interests it meant a visible saving of $27,000,000.
Independent Mine-Owners Panic-Stricken.-There is no doubt that Oliver saw that another advantage would accrue from the “alli- 409ance with the Rockefellers.” And it was not long in developing. The news of the Rockefeller-Oliver agreement “produced a panic among the other mine owners; and stockholders in Boston, Chicago, Cleveland and the Northwest hastened to get rid of their ore properties at almost any price. Norrie, a Gogebic ore, “which sold at $6 a ton in 1891, dropped to $2.65 on the docks at Cleveland.” Oliver Seizes Opportunity.-Mr. Oliver hastened to seize the opportunity. “Backed by Mr. Frick, and some of the more enterprising Carnegie managers, like Curry, Schwab, Gayley, and Clemson, he hastened to secure options on all the best mines in the Lake Superior region.” In his letter, dated July 27, 1897, to “H. C. Frick, Chairman,” regarding the acquisition of options on ore properties, Mr. Oliver pointed out that he was “mining the rich quarry we have on the Mesabi Range ** * for less than 5 cents a ton for labor” by methods of “cheap steam-shovel mining,” and he also emphasized the need there was for quickness of action regarding the options. He stated: I desire to impress upon you the fact that, if it had not been for our Rockefeller-Mesalbi deal of last year, with the consequent demoralization of the trade caused by the publication thereof, it would not have been possible for us to now secure the other Range properties I propose to acquire, either by lease, or for any reasonable price. We simply knocked the price of ore from $4.00 down to say $2.50 a ton. Now let us take advantage of our action before a season of good times gives the ore producers strength and opportunity to get together by combination.
Carnegie’s Laconic Veto.-Mr. Frick was in London, but Mr.
Oliver’s letter was sent to him by special messenger, and by Mr.
Frick transmitted to Mr. Carnegie in Scotland without delay. “From the fastness of his Highland retreat, he (Carnegie) again issued a laconic veto, with a quip and a chuckle at his partners’ enthusiasm.” However, Mr. Oliver would not take that as final. He cabled Carnegie, “distressed” that his “hard summer’s work” might “go for naught.” “On receipt of Mr. Oliver’s cablegram … Mr. Carnegie so far reconsidered his objections as to leave the decision to the chairman of the board of managers in Pittsburg,” who “promptly authorized Mr. Oliver to close the deal.” Carnegie-Oliver Interests Impregnable.-That action “was the pivotal point in the gathering together, by the Carnegie-Oliver interests, of the great ore properties which gave them their impregnable position in the iron industry” and may have been the reason why Rockefeller today is not to iron and steel what he is to oil. “On the organization of the United States Steel Corporation, the Carnegie- Oliver Company owned two-thirds of the known Northwestern supply of Bessemer ores-roughly 500,000,000 tons, which Mr. Schwab has since valued at $500,000,000,” which made the Carnegie Steel Company the dominating, indeed invulnerable, factor, when a tussle for supremacy in steel came just prior to the organization of the United States Steel Corporation by J. Pierpont Morgan. Carnegie, eventually, “so far modified his estimate of Mr. Oliver as to offer him an interest in the Carnegie Steel Company.” No man ever made a fortune by less effort than did Andrew Carnegie in this Mesabi venture of Mr. Oliver. He actually fought against it, and it was thrust upon him. Bridge writes: The great value of the gift which Andrew Carnegie thus reluctantly allowed Mr. Frick to accept for the company may be further illustrated. The first Mesaba mine secured by Mr. Oliver is of such character that 5,800 tons 410of ore have been mined and loaded into cars by one steam shovel in ten hours; and the output for one month was 164,000 tons. This was the work of only eight men. Three such machines, … mined from its natural bed 915,000 tons of ore during the season of 1900, working day-shift only. … Some of the other great mines are of the same character. … Andrew Carnegie often says that Fortune timidly knocks at every man’s door at least once during his lifetime. The statement is too modest to fit his own case; for Fortune has repeatedly battered down the barricades with which he has tried to exclude her.
Pittsburg Steamship Co.-Having secured the raw materials, the Carnegie interests then sought to make sure of “lines of communication between the mines and the mills.” They were satisfied with the carrying contract entered into with the Rockefeller subsidiary, Bessemer Steamship Company, successor to the American Barge Company, but for the excess output, above 1,200,000 tons a year, they were “dependent upon the small fleet of ships owned by individuals to a greater extent than seemed desirable.” Therefore, upon Mr. Oliver’s recommendation, the Pittsburg Steamship Company was formed, and soon the Mesabi mines were assured of two fleets.
United States Steel Organized.-The organization of the United States Steel Corporation grew primarily out of the desire “to avert a threatened competition.” The organizations most vitally concerned, in the latter half of 1900 were the Carnegie Steel Company, the Federal Steel Company, the National Tube Company, and the American Steel and Wire Company. One of the vital factors in this competitive war was raw material, and the companies named had their bases practically secure in the ore properties of the Lake Superior district, which even then was “the main supply of the country.” Instancing the position of the Carnegie Steel Company in that respect, Abraham Berglund, in his “The United States Steel Corporation” (1907), states: Notwithstanding Mr. Carnegie’s repeated assertion that the best way to obtain ore is to buy it in the open market, ore supplies with accompanying transportation facilities were … obtained. In 1896, a five-sixths interest in the stock of the Oliver Mining Company was purchased; and this Durchase secured for the Carnegie Company large ore deposits in the Gogebic and the Mesabi ranges. By a fifty-year contract with the Rockefeller iron mining and transportation companies 1,500,000 tons of soft ore were supplied and transported to the lower lake ports annually. Thus an abundant supply of hard and soft ore at stable and cheap prices was secured. Controlling interests were also obtained in the Pittsburg Steamship Company, which owned, in 1900, eleven steamships and two tug boats, with six additional steamers under construction, and the Pittsburg, Bessemer, and Lake Erie Railroad extending from Conneaut, Ohio, to the Carnegie mills at Duquesne. By the close of 1897, the Carnegie Steel Company was almost self-sufficient in all factors of production.
Safety and Profit in Consolidation.-As a matter of fact, the Carnegie Steel Company was in a position to defy any combination It was self-contained, and had less costly raw material sources and surer “lines of communication” than any other steel corporation, and could have met any competition. Still, it was brought into the “pool” because it was figured that its stockholders would benefit moro thereby. Also the political situation was insecure. No one could 1-, sure what action the Federal government might take in the event of a bitter trade war, and no one could gauge how detrimentally such action might undermine the bases of all the steel companies. As stated, the original plan was to embrace only the four companies named, but “a quick survey of the field, however, showed at least four other concerns which might offer inconveniently active competition, but which could easily be persuaded to enter the confederation.
These organizations were the National Steel, the American Tin Plate, 411the American Steel Hoop and the American Sheet Steel companies.
“An attempt was made to purchase the Jones and Laughlin plant at Pittsburg for $30,000,000, but the offer was refused.
Rockefeller “Cashes in.”-The Rockefeller ore properties in the Lake Superior region were secured by the payment of $80,000,000 of stock-$40,000,000 preferred, and $40,000,000 common; and the orecarrying fleet was purchased for $8,500,000 cash. This purchase gave to “the new corporation about two-fifths of its ore, and nearly one-half of its ore-fleet,” states Berglund.
Carnegie’s Interest.-The Steel Corporation was organized on February 23, 1901, under the laws of the State of New Jersey, with a capital of $3,000. This nominal capital was shortly afterwards increased to $1,100,000,000, of which authorized stock $550,000,000 was to be preferred, and $550,000,000 common. The Carnegie interests were purchased for $492,556,160. Mr. Carnegie’s personal interest was $217,720,000, which he took wholly in bonds of the United States Steel Corporation.
Ore Possessions.-With the consolidation, “forty-one mines, nearly 1,000 miles of railroad … and a lake fleet of one hundred and twelve vessels” came into the control of the Steel Corporation.
It was stated that “the most important asset of the Steel Corporation” was “its valuable mines of iron ore in Minnesota, Michigan, and Wisconsin. … At the time of the organization of the United States Steel Corporation, the Vermilion Range produced approximately 1,700,000 tons of ore annually, nearly all of which belonged to the new corporation; … and of the 7,800,000 tons produced in the Mesaba Range, the corporation would have 5,700,000 tons.” In 1902, the Steel Trust shipped “over sixty per cent of all the ore reduction of the Lake Superior region.” Regarding the entire supply of “workable ore in the ground,” Berglund writes: Mr. Schwab, in his statement before the Industrial Commission, estimated this proportion at not less than eighty per cent of the total deposits of the Lake Superior district. The ore fields of the Carnegie, Federal Steel, National Steel, and American Steel and Wire Companies, were estimated to contain at least 500,000,000 tons. In addition to this the Rockefeller holdings were supposed to represent about one-half the iron ore of the Mesaba range, or approximately 250,000,000 tons. If these estimates were correct the Steel Corporation would have come into possession of 750,000.000 tons of workable ore.
Oliver Iron Mining Company.-In the nineties, Mesabi and Vermilion Range iron ore mining operations were principally in the hands of three companies: the Minnesota Iron Company, which was formed by Charlemange Tower in the early eighties, and almost monopolized Vermilion Range mining, passing to the Federal Steel Company in about 1887, and reaching out into the Mesabi in the nineties; the Lake Superior Consolidated Iron Mines, Rockefeller’s mining subsidiary, which, from 1893, owned the principal mines of the Mesabi; and the Oliver Mining ‘Company, the Oliver-Frick-Carnegie subsidiary, the principal operating company of the Mesabi before the organization of the Steel Corporation. With the completion of that great company-promotion, by J. Pierpont Morgan in 1901, the three mining companies were merged into one subsidiary of the Steel Corporation. The new mining company perpetuated the Oliver connection with the Mesabi, becoming known as the Oliver Iron Mining Company. That company has ever since been the main factor of mining on the Vermilion and Mesabi Ranges. According to the University of Minnesota School of Mines statistics, for 1920, the great 412mining company then owned, or was operating under lease, 125 iron mines in Minnesota.
James J. Hill Makes Millions.-Just one other important “milestone” must be touched in this “notice” of the main “landmarks” of Mesabi history; that is the leasing of the James J. Hill interests.
And perhaps it would be just as well to let’ John S. Pardee, capable historian of Duluth, tell the story in his own inimitable way. He wrote, in 1915, as follows: The Hill leases are an interesting chapter in themselves. James J. Hill, of whom you may have heard as a railroad man, was roped into making a fortune in ore through his excessive good nature, very much the way Rockefeller got caught. There seems to be a fatality about such things. There was a jerky logging road running from Grand Rapids, Minn., up vaguely into the woods. It belonged to a party of Saginaw people who built it merely to use in cutting over a tract of timber and when their timber was cut, having no further use for the road, they asked Mr. Hill to take it off their hands. He didn’t want it, a logging road running from nowhere, in particular, into an uninhabitable wilderness, from which the only traffic had been skinned. However, to be obliging, he yielded to their importunity, and relieved them of the incubus. If he had known that some thousands of acres of cut-over land went with the road, it is doubtful if he would have stood for it. There is a point where friendship ceases.
As it turned out, however, there was iron ore under some of that cut-over land. Quite a lot of it. So much indeed, that the value of Great Northern Ore Certificates was reckoned at about one hundred million dollars. Attached to Great Northern at first, it was found necessary under the Hepburn act to separate the ore lands from the railroad, whereupon the issue of ore certificates proved one of the juciest of the famous Hill melons.
The lease of these Great Northern ores to United States Steel was a wonder. The ore was sold on a sliding scale, through a term of years, beginning at 85 cents a ton and running quickly to $1 a ton, a higher royalty than had ever been placed on Mesaba ores. The minimum to be mined was very large, requiring ten million tons a year. One-fifth of all the iron ore consumed in the United States was to come from this one group of mines owned by a single interest. Great Northern was to have the haul of the ore, of course, at the same remunerative scale that was in effect on the other two roads. And there was the particularly canny provision that if ever ore rates were reduced, the royalty was to be increased. The lease was accounted a marvel at the time of its making. For months it hitched and hung, and it is to this day current gossip that it was forced on the Steel Trust by the Morgan influence. When it was finally signed, the steel people were rather glum about it, and when it was cancelled the sighs of relief from the Oliver Mining Co.’s offices were heard far out in Lake Superior.
An Extraordinary Contract.-The lease was cancelled in 1915. It was a remarkably favorable contract for the Great Northern while it lasted, for the minimum to be mined was 750,000 tons for the year 1907, “and increases of 750,000 tons per year until it reaches 8,250,000 tons” stated Judge Gary, in announcing the completion of the “long negotiation.” The Reason for It.-Why the Steel Corporation was so desirous of monopolizing the Hill supply is made clear in the history of the United States Steel Corporation, Berglund writing: No sooner was the Steel Corporation organized than several companies, alive to their own interests, secured possession or leases of property in these fields. Among the most active was Mr. J. J. Hill, whose ore lands became nearly as extensive as those of the Steel Corporation itself, and whose railroad interests helped to make him one of its most formidable rivals.
And, notwithstanding the extraordinarily-hard bargain Hill drove, “it should be clearly stated that the Hill holdings leased to the Steel Corporation” did not include “the developed mines owned by the Great Northern” interests. “Such noted mines as the Mahoning, Stevenson, and others, Mr. Hill could riot convey,” though it was estimated that the properties leased had more than 100,000,000 tons 413of ore “in sight,” which, by the way, Hill acquired for $4,000,000, with a railroad which in itself was worth the money paid.
Certainly, the history of the Mesabi Iron Range of Minnesota “shatters all preconceptions of the genius necessary to achieve millionaireship.” Oliver’s Place in Minnesota History.-Henry N\V. Oliver made the Mesabi what it is today; he made the market for its ore. It would have been undoubtedly made, eventually, by some other mining or steel man, but that probability does not detract from the credit due to Mr. Oliver. Had he not stepped in when he did, in 1892, when the exploitation of the Mesabi Range was dependent upon men of little means, and of no influence with steel manufacturers, there is more than a possibility that the difficulties experienced by furnace men in their first experiments with Mesabi ore would have so prejudiced buyers, in general, that efforts would not be made to adapt furnaces to the “explosive” Mesabi ore, which in consequence would be so reduced in marketable value that almost all development would be checked. And in the pioneer stage of most things, it takes very little to seriously delay development. Duluth was settled in 1855-56.
In 1857 scarcity of money caused the settlers to rush away in panic; and Duluth lay dormant for another twelve years, being a place of scarcely a dozen families in 1869. Had Oliver, a steel manufacturer, not “taken hold” of the Mesabi in 1892, before even the first test of Mesabi ore had been made, the range might have lain dormant for very many years after the first blighting check of 1893. So that Oliver’s place in Minnesota history is certain, especially when one realizes how enormous is the revenue the state derives as the result of his success in pioneering the Mesabi.
What the Mesabi Means to the State.-The United States Steel Corporation is Minnesota’s largest taxpayer, paying the state and county, in direct assessment of real property, more than ten million dollars a year; its check for “current real estate taxes on its mines and other real estate in St. Louis County,” for the latter half of 1919 was for $5,412,866.44. Of that amount, $5,276,305.68 represented taxes on property of “Oliver Iron Mining Company, including subsidiaries,” i. e., taxes on operation of mines of Mesabi and Vermilion Ranges. And, by the way, that enormous sum excludes taxes paid on their operations in that part of the Mesabi Range to the southwestward of St. Louis County, and on the Cuyuna Range. “In 1919 taxes paid on iron ore were $13,048,054” on the levy of 1918, St. Louis county, wholly because of mining operations, contributes as much to the state coffers as the state receives altogether from forty-nine other Minnesota counties. And it seems that the state will in the future receive even more from iron ore, unless the supertax, the tonnage tax, “kills the goose that lays the golden eggs.” Captains Edward Florada and A. J. Carlin were the pioneer superintendents at Missabe Mountain Mine, Oliver’s first venture on the Mesabi, and W. J. Olcott came into the direction of the Lake Superior Consolidated Iron Mines, owned by Rockefeller, in 1894, at which time J. H. Hearding was superintendent at the Adams Mine of the Rockefeller group.
What the Mesabi Has Yielded.-Not a ton of ore had been shipped from the Mesabi Range when Oliver took the lease of the Missabe Mountain Mine. By the time navigation closed in 1919 the total quantity of ore won’ from the Mesabi, in the less than three 414decades of operation, was 520,686,631 tons, and there still remain billions of tons, though some of it is of low grade.
It is a wonderful possession. Its operation brings into circulation in St. Louis County tens of millions of dollars each year, the monthly pay-roll on the two ranges being approximately $3,000,000. Its operation has developed communities that are a pride to the county and state, and public schools that probably lead the whole country, the educational system of Minnesota being wonderfully efficient, mainly because the revenue it receives from the operation of its mineral land enables it to employ the highest grade of educators.
Other Mesabi Leaders.-Of course, Henry WV. Oliver is not the man to whom the whole of this excellent state of affairs is to be attributed.
Many other great business men and engineers have had part in the enormous development that has come. But to Oliver is due the initial credit. The Merritts showed the ore. Oliver made it usable, which was an all-important service. Others came in to carry it on to the immensity of recent years.
Thomas F. Cole was president of the Oliver Iron Mining Company in early consolidation days; W. J. Olcott, vice-president; Pentecost Mitchell, general manager, and J. H. McLean, assistant general manager. With the march of time, W. J. Olcott became president; Mitchell, vice; J. H. McLean, manager, and J. H. Hearding, assistant general manager.
Other Large Mining Companies.-Among the other important mining companies of the Mesabi and Vermilion Ranges are: Cleveland- Cliffs Iron Company; Jones and Laughlin Steel Company; M. A. Hanna and Company; Mahoning Ore and Steel Company; Mesabi Iron Company, which is beginning to exploit the billions of tons of lean magnetite of the Eastern Mesabi; Great Northern Iron Ore Properties; Pickands Mathers and Company, Republic Iron and Steel Company, Shenango Furnace Company, and Tod-Stambaugh Company. The State of Minnesota is also an appreciable factor in mining, owning wholly, or in part, forty-three mines, the operation of which brings an enormous revenue in royalties, which go to swell the school-fund. F. A. Wildes has been state mineral-lands agent for many years.
Great Mesabi Mines.-Among the great mines of the Mesabi Range are: the Hull-Rust, which has yielded 51,848,910 tons of ore; the Fayal, 29,908,246 tons; the Mahoning, 29,618,759 tons; the Adams, 22,310,351 tons; Mountain Iron, 17,198,871 tons; Burt, 16,347,691 tons; Morris, 14,949,021 tons; Canisteo, 14,681,979 tons; Stevenson, 13,- 945,402 tons; Biwabik, 12,793,623 tons; Spruce, 11,182,140 tons; Leonard, 10,877,931 tons. These figures are of shipments to end of 1919.
There are several other mines from which millions of tons of ore have been taken, but the list would be too long to state here.
Leading Iron Range.-The Mesabi Range comes unquestionably first among the iron ranges of the Lake Superior District, and the relative importance of the ranges can be gauged by the following figures, which are of shipments to the end of 1919: Mesabi Range ………………….. 520,686,631 tons Marquette Range ……………….. 131,512,722 tons Menominee Range ………………. 120,474,574 tons Gogebic Range …………………. 116,962,117 tons Vermillion Range ……………… 43,179,510 tons Cuyuna Range …………………. 11,660,147 tons Mayville and Baraboo ranges……… 2,070,216 tons 415History of Mesabi Range.-Including the output in 1920, the shipment of ore from the Lake Superior District has now exceeded one billion tons, more than half of which tonnage was mined on the Mesabi Range.
What a billion tons of iron ore has added to the wealth of the nation may be understood by a few comparisons. The steel which could be produced from such a tonnage of ore would be sufficient for 503,478 modern office buildings, each ten stories high arid 100×100 feet ground area. It would be sufficient for 167,820 ships, each of 9,000 deadweight tons.
If sold at the average price paid for a ton of Lake Superior ore in 1920, namely, $6.33, the total amount of ore taken from the district to the end of 1920 would bring $6,377,390,495.. Converted into pig iron, at the rate of two tons of ore to one of iron, 503,478,197 tons would be produced, which, if sold at $30 a ton, would give the ore a smelted value of $15,104,345,910, according to the “Iron Age Review.” Excavation of Panama Exceeded.-Open-pit mining is almost universal on the Mesabi, and with the 300-ton electric shovels recently introduced, the cost of mining will be probably even further reduced, and the enormous present production exceeded. The amount of excavation work done on the Mesabi Range has far exceeded that done in cutting the Panama Canal, great as was that achievement; and some of the engineering problems overcome in the development of the Mesabi must necessarily come into national records. Not the least astounding achievement was the recent moving of a town of 15,000 inhabitants, Hibbing, a place of a generation’s growth, with substantial permanent buildings, having been moved two miles, at an expense to the mining company of about eighteen million dollars, so that the ore underlying its original site might be worked. Nothing is impossible to Americans.