CHAPTER 13
AS FREDERICK WAS BUILDING his Minnesota timber business, great changes had come about on the family front. Not only were the children growing into adults ready to take their place in their father’s businesses, but Rock Island, the place where they grew up, would no longer be their hometown. In 1891 Frederick decided to move his Chippewa Falls office to St. Paul, Minnesota, and a few months later Sarah followed. The children were grown, and only Fred, who had not yet finished college, and Margaret, who lived with her parents when her husband, Richard, was overseas, were home on a regular basis, although Elise and Apollonia—both married in 1892—spent some time with their mother.
Frederick and Sarah moved their home base from Rock Island to St. Paul for several reasons, but a large part of the consideration for Frederick was distance. The MRLC leadership position required his time in northern Wisconsin, and his burgeoning business in Minnesota made a longer trek for him to Rock Island. Even with improved travel conditions, it was not a trip one could make easily for a weekend visit with Sarah.
Other factors figured in his decision as well. The Minneapolis–St. Paul area, located near the Mississippi headwaters, was becoming increasingly important because of its shipping potential. Railroads, too, were being built through the twin cities and rapidly replacing the river as a method for shipping finished lumber. F. E. also notes that “there may have been more agreeable associates” in St. Paul than Frederick was finding in Rock Island. There is some evidence that Frederick’s longtime partner and brother-in-law, F. C. A. Denkmann, was becoming increasingly irascible in his older years and perhaps made things difficult for Frederick on a daily basis.
Finally, it was becoming clear even at the outset of the nineties that the forests of Wisconsin and the Great Lakes region (except for Minnesota) were cut over and that new sources of timber had to be found. Protests against further timber cutting were already being heard even as Frederick was obliged to look for new forests. At the time of his move, he had begun exploring opportunities in the West and the South.
There is one other reason for Frederick’s decision to move his offices out of the Eau Claire–Chippewa Falls area. The Moline Review Dispatch of October 3, 1890, included an article titled “Weyerhaeuser Power”:
An Eau Claire, Wis. dispatch says that Frederick Weyerhaeuser has caused it to be given out that unless the big suits for flood damage against him and his co-partners are withdrawn he will remove the headquarters of his companies from the Chippewa Valley to St. Paul. The Chippewa Logging Co and the Chippewa Lumber and Boom Co. are located at Chippewa Falls, and the Mississippi River Logging Co at Eau Claire. The two latter companies saw lumber. A representative of Mr. Weyerhaeuser said that Mr. Weyerhaeuser would not turn another wheel nor cut a stick of lumber more in the valley if the suits are not abandoned.
The outcome of these lawsuits is not known, nor is it clear why Frederick “caused [this news] to be given out.” Was he already planning the move for the reasons cited above? Was this news simply a public relations ploy? Was it even accurate reporting? The article indicated that all operations, including the mills, would be moved if the suits persisted, but in the event only the business office was relocated to St. Paul.
When they arrived in St. Paul, Sarah settled into her new community as easily as she had done in Coal Valley and Rock Island. Soon there was evidence that she was developing a lively social life with other women of the city. An 1894 letter from Sarah to Margaret describes a luncheon given by a Mrs. Davis. It was described as “very informal,” but nevertheless every woman mentioned in the letter is referred to as Mrs.—not by her given name.
Within two months of their arrival, Frederick and Sarah had purchased the Olive Culbertson house on the northeast corner of Summit Avenue and Arundel Street. They enjoyed the bustle of the growing city, which was much larger and more cosmopolitan than Rock Island.
Two years later the couple found a slightly larger house a few blocks down Summit Avenue from their home on Arundel. Next door to their new house at 266 Summit, in a much grander mansion, lived James J. Hill with his wife, Mary. By the time the Weyerhaeuser couple moved in, Hill was the owner of the newly merged Great Northern/Northern Pacific Railroad. Within a decade, their neighborly situation was to prove of enormous benefit to the business dealings of both men.
In those days, transportation around the city was difficult. The cable-driven tramcars laboriously climbed the Selby Avenue hill from the commercial “downtown” up to the residential neighborhoods along Summit Avenue. In Frederick’s time the mud streets were covered with cedar blocks of wood that refused to remain in place. Any good rainstorm would wash the blocks out of their holdings and strew them around the roadbeds, making driving carriages hazardous. Frederick and Sarah owned a team of heavy horses that F. E. later said was more suitable for hauling logs than for drawing his father’s Kimball Brougham. Nevertheless, the horse-drawn carriage was the family’s usual method of transportation. Frederick, however, regularly chose to walk to and from his new office at the German American Bank downtown or to take the tramcar down the hill.
Because Frederick had necessarily worked all his life, he never had time to indulge himself in ordinary sports. On moving to St. Paul, Frederick was introduced to the Town and Country Club by one of his associates, who took him there to play golf. A cartoon of Frederick swinging a golf club as if he were a lumberjack swinging an ax appeared shortly afterward in the St. Paul Pioneer Press. It’s not clear if it was a comment on his performance on the golf course or on his reputation as a leading lumberman.
Frederick had become a true outdoorsman through his experience with the rigors of Wisconsin winters. Living with the lumberjacks had demanded a certain level of physical stamina. However, his son F. E. later writes, “In the field of sport, Father would have been rated a sub-zero, even in the limited competition of his own day.”
Sarah and the daughters may have enjoyed the social whirl in St. Paul, but Frederick had little time for anything outside of his business, save for that one notable golf game. The other exception seemed to be dinner parties at his house for his friends and associates, which he persuaded Sarah to give frequently and where he could continue to discuss the day’s business. He mainly focused on the search for the next group of forests that would yield timber for him and his associates. Many conversations, later repeated to F. E. by his father’s friends and business associates, indicate an active frame of mind even as Frederick was moving through his seventh decade. His old friend John Hill (not to be confused with James J. Hill) later related one such exchange to F. E. On an occasion when John Hill was having dinner with Sarah and Frederick at their Summit Avenue house, he recalls that he casually suggested to Frederick that a man in his sixties might be expected to take life a bit easier, to slow down somewhat in his work. Frederick replied, “Why John, if I did that I would die.”
Another guest, Archibald Stewart of Ontario, Canada, later told a similar story. Frederick was recounting his exploration of the southern timberlands and his reservation about how much personal investment the proposed venture would demand from him. Sarah interjected a teasing comment, “Don’t you have money enough?” The reply from her husband came swiftly, “It’s not the money. I like to do big business.”
In searching for new opportunities, Frederick first considered the South. He did not have great experience in that region of the country, although he had been a minor stockholder in the Southern Lumber Company of Louisiana in 1882. But in 1894 Frederick was persuaded to go along on a rail trip organized by E. W. Durant of Stillwater. The Mussers of Iowa, father and son, were interested in exploring options in the South. However, although Frederick seemed to have enjoyed himself on the trip, in the end he was unwilling to commit to any activity there.
There were several reasons for his initial resistance. He had never liked the heat, and he feared malaria. He thought the heat and the fear of illness might make it difficult to transfer managers he trusted from the North to work in any new southern venue. And finally, there was the issue of the quality of timber, which was generally inferior to that of the northern forests. Instead of the much-valued white pine, beech, and red pine, the southern forests contained long-leaved yellow pine, cypress, and other trees. Frederick was accustomed to better quality.
In addition, he had some lingering Civil War resentments to overcome, no doubt remembering the young men he had sworn into the army on his front porch in Coal Valley. They had returned utterly changed by the war, if they returned at all.
During this first southern trip, however, his resistance was challenged by what he saw. In one instance, watching men working hard to process fine white oak timber, he made the remark, “I think I would [sic] better take back my idea of this southern lumber and the people.”
Frederick’s changing views were illustrated in a story F. E. tells about his father’s hands-on experience with workers in his newest venue:
One Saturday morning as he was there the mill was running with a very short crew…The mill was cutting back on an order for small timbers which were literally being dumped out of the back end of the saw floor and which left it in hopeless confusion…Father did not like the way it was being done and…took three big negroes with him, and in short time had the timbers properly piled. On going up to the office, he told me and Harvey Clapp that he never saw better workmen—better than the Swedes in Minnesota. When pressed, he finally admitted that he had given each of them a dollar.
By 1896, when Frederick made a second trip to the South, he was growing more amenable to the idea of a southern business strategy. The area was still in a post–Civil War depression, and yellow pine was available for five dollars to eight dollars an acre. At the end of his 1896 trip, Frederick announced that he was willing to invest one million dollars in the South. Unfortunately, none of his colleagues was willing to take the risk with him. Frederick passed on the opportunity when he could not find others to share the risk.
Eventually Frederick did participate in several southern timber investments. The largest was the Southern Lumber Company of Louisiana, later renamed the Southland Lumber Company. Weyerhaeuser and Denkmann were joined by the Laird-Norton group in this investment, which had been preceded by Frederick’s smaller 1882 investment with the Lindsay, Richardson, and Ainsley families.
Frederick took a greater interest in the South with this new holding, especially as he had appointed young F. E. to be president of the company. Fred, who had cut his teeth on the lumber business working for Rudi in Cloquet, was delighted to be given this assignment. “I had the thrill of a lifetime,” he later wrote, “when Father, returning from Rock Island, told me I had been made president of the Southland Lumber Company and was expected to oversee the building of the mill in the South.”
F. E. never spent any considerable time in the South. He was married in 1902 to Harriette Davis and was living on Summit Avenue in St. Paul in 1906, so it appears that his trips to the new region did not involve living there for any significant period, nor did Harriette ever move there. This scenario would be consistent with Frederick’s longstanding reservations about moving any of his family to the South. However, F. E. was there long enough to oversee relocation of a mill, completely installed with new machinery, from Wisconsin to a site in Warren, Arkansas. One of the problems the lumbermen faced, particularly in Arkansas, was poor public roads. F. E. quotes a sign some wag tacked to a fence post near Warren:
This road is not passable
Not even jackassable
So you who travel it
Turn and gravel it.
Despite F. E.’s lack of long-term residence in the South, a later assessment by Ralph Hidy, Frank Hill, and Allan Nevins, authors of Timber and Men, is quite positive. These scholars give great credit to F. E. for the company’s success: “Altogether, with [young] Fred as its chief and members of the Denkmann and Lindsay families as dynamic aides, the Southern Lumber Company of Arkansas became a flourishing organization.”
Frederick did not show the same reluctance for large-scale investment opportunities in the western timberlands as he had in the South. A major difference was his developing friendship with his neighbor on Summit Avenue, James J. Hill.
Stories are told of Jim and Mary Hill visiting the Weyerhaeuser couple’s home on many an evening. The four of them would sit in the parlor while the gregarious Jim Hill held forth on the marvels of his newly formed merger of Northern Pacific and Great Northern railroads. This grand feat was accomplished in 1893 with the assistance of investment banker J. P. Morgan and the establishment of the Northern Securities Trust. This trust was later challenged by President Teddy Roosevelt at an early stage of his attacks on the big “combinations.”
Frederick, who was an early-morning person, would doze off as the long soirees wore on, but Hill, who liked to stay up late and smoke cigars, appeared not to notice. He would continue talking until one of the wives had the good sense to bring the evening to a close. The younger Weyerhaeusers were amused at the pair of men who were becoming friends but appeared to take little notice of each other’s habits.
As it turned out, Frederick wasn’t asleep all the time during those long social evenings. He was apparently musing on the prospect of tying the western railroads to his search for new forests. At some point he and Jim Hill came to an understanding about their common interests.
Frederick’s initial approach to the possibilities of the western timberlands could be described as “careful.” In 1885 he had received an overture from Northern Pacific (not yet merged with Hill’s Great Northern and still suffering from Jay Cooke’s disastrous management) to buy a mill and some timberlands near Tacoma, Washington. Frederick said no. A year later, however, he took an option on eighty thousand acres of Douglas fir near Tacoma with Peter Musser of Iowa. They never exercised it. As Hidy describes the situation, “Weyerhaeuser and his friends gave the west a very gingerly look.”
The transcontinental railroad had been completed in 1869, opening the great lands of the West. The rail traffic brought settlers and excitement, and Frederick saw the country changing. In 1893 Jim Hill made Frederick a cut-rate offer of forty cents per thousand for shipping lumber from the West Coast to St. Paul, and the Alaskan Klondike gold rush in 1897 added urgency to the push westward. Frederick’s attention was drawn evermore toward the timber of the western slopes.
Late in 1899, Weyerhaeuser and Denkmann bought half the stock of the Sound Timber Company in the Puget Sound area, and they also took up Hill’s offer and began to ship shingles from the West Coast over the Northern Pacific. Hill could afford to offer this low rate in the spring when the railroad needed the freight.
Frederick’s blockbuster timber investment in the West was to come in 1900. There is no question that Frederick’s many informal conversations late into the night with Jim Hill bore fruit for both men, for Frederick’s agreement with Hill established a new era in the lumber history of North America. Frederick and his associates bought nine hundred thousand acres of western timberland from the Northern Pacific Railroad for six dollars an acre. This purchase changed lives and reshaped the world of American timber.
When the agreement between Hill and Weyerhaeuser was finally struck, confirmation came in the form of a coded telegram from Hill to Frederick on December 19, 1899, announcing that the Northern Pacific Railroad accepted the terms the Weyerhaeuser group offered for the major western land acquisition:
Thwarted (tell) Weyerhaeuser toothed (that) pensiveness (parties) here faction (expect) tripped (to) additionally (accept) humdrum (his) oscillate (offer) caleb (without) (conditions) implorer (if) tower (they) cannot duchy (do) bleeds (better).
(Note: It’s not clear why James J. Hill used code, but it may have been customary at the time to keep business transactions done by telegraph confidential.)
Although direct negotiations between Hill and Weyerhaeuser had preceded the formal event, the agreement to purchase this land was signed by Frederick (on behalf of himself and his partners) and the railroad’s land agent, William H. Phipps, on behalf of James J. Hill.
It was going to be difficult to raise the large sum of money from prospective partners for this purchase. Frederick had his work cut out for him. It is a credit to the trust his associates placed in him that Frederick was able to pull the deal together. Five-million-plus dollars was a lot of money in those days. Not only that, but the agreement required that the first three million be paid immediately. (Hill needed the influx of cash to keep his railroad solvent.)
How did Frederick raise the money? It was indeed a case of rounding up the usual suspects. His longtime associates were aging, but a number of them decided to make this final gamble with him. Weyerhaeuser and Denkmann put in $1.8 million, and the Laird-Norton group from Winona was close behind with $1.2 million. R. L. McCormick, S. T. McKnight, and O. H. Ingram put up $350,000 each, and a number of lesser partners were also corralled. One man recalled later that it took practically all the lumbermen on the Mississippi to raise that much money.
The rationale for the sale of the land from the railroad’s perspective was clear. The Northern Pacific Railroad, which by this time was run by Jim Hill much more efficiently than it had been under the schemes of Jay Cooke or even Frederick Billings, had a desperate need for capital. The railroad had been poorly managed for years before Hill was in charge. The railroad was paying eight percent on the bonds it was carrying after its second bankruptcy and reorganization in 1893, when Hill had added the Northern Pacific to the Great Northern. The recently merged railroad needed to exchange some of its land for badly needed cash.
Within a short time it became apparent that this transaction was a very good deal for Frederick and his partners. Watching this purchase, others suddenly decided that they wanted a piece of the western action. Many smaller owners moved in, and land prices soared. Frederick reaped the benefit of being the first to take a major risk in the western timberlands.
Hidy and colleagues assessed the situation this way: “The Weyerhaeuser purchase loosed a flood of speculative activity in the Northwest. Smaller capitalists who trusted Frederick’s judgment followed with lesser purchases in the same area. Land that could not be given away was suddenly worth $10 an acre. Within a dozen years the price of timber was as high as it was going to go. But at the time [the deal was made], even the partners were concerned that the purchase was too speculative.”
An exchange recorded at an early meeting of the venture’s partners in Tacoma illustrated Frederick’s personal faith in this land purchase. Some members expressed anxiety about the future, and one suggested the possibility of letting the land go by simply not paying the taxes. Frederick mischievously introduced a motion to allow all the abandoned lands to be deeded to him. His motion ended that particular discussion. If Frederick had that much confidence in this purchase, his associates would go along with him.
Later, the Randolph Hearst publications leveled sharp criticism at the Weyerhaeuser associates’ Northern Pacific land purchase. The charges were complex: that the transaction involved a huge amount of land; that the land in question was part of the congressional land grant to the railroads made in Abraham Lincoln’s time to encourage building; and that the expectation had been that individuals would buy the land and settle on it. (A number of smaller landholders did buy land, much of it closer to the western coast.) The railroad’s immediate need for cash, however, outweighed any other consideration. Hill made a rather convincing argument that to sell off small parcels to individuals over many years with capital only dribbling in would threaten the economic survival of his much-needed transcontinental railroad. The fraudulent behavior of the early owners Jim Fisk and Jay Gould, who took money from Congress to build the railroads and then squandered it, leaving the railroads bankrupt, was not Hill’s way.
The Weyerhaeuser partners were right to be concerned about their prospects in this exchange. Logging was still primitive in the western forests. Although the situation was in some way similar to the early days in Wisconsin, the challenges in the West were much more severe.
In the western mountain forests, lumberjacks had oxen drag timber over greased roads to rail lines rather than simply putting the logs in the streams that fed rivers, as they did near the Mississippi. Much of the timberland in the higher mountains was inaccessible, since some places lacked roads for carts. Getting the timber back to the Midwest and the East was another problem. The Panama Canal was still a dream of the future, and the cost of sea shipping was astronomical. Also, the quality of the western forests was thought to be inferior to the timber of the East and Midwest: white fir and hemlock were practically worthless, while Douglas fir was still not widely used. Fires were always a problem in the West, even in later years. Often, when a forest fire began, there would be no way to navigate the mountainous roads to contain it.
But the greatest challenge was this: the area had never been completely “cruised.” (In cruising, foresters move through the forest to assess the value of the timber for harvesting.) About three-fourths of the area sold to the Weyerhaeuser associates had been cruised five years earlier, but the report on what the forests held was incomplete. The partners truly did not know exactly what they had purchased in terms of saleable timber.
In light of all this, the issue of naming the new company seemed a minor one. Frederick preferred the title “Universal Timber Company,” but at the first board meeting in Tacoma, his associates insisted that the new organization bear the name of the man who brought it into being with his organizational skills. Over Frederick’s objections, the name chosen was the Weyerhaeuser Timber Company.
Frederick never had any intention of moving west to manage this new effort. And every indication is that he did not want his sons that far from home, either. Fortunately, one of Frederick’s Minneapolis associates, Sumner T. McKnight, had a solution. He recommended a young man who was then working in the Wisconsin timber operations and in whom he saw a most promising future manager: George S. Long. After Long extricated himself honorably from his contract in Wisconsin, he moved west to become head of the new organization. In so doing, he assumed a key place in the complex timber industry developments that would change history.
We know the story of regional events that followed, much of it the result of the purchase. There was steady growth in the entire region. There was, despite the difficulties just listed, an ongoing boom in the timber industry, and many jobs were created, which, in turn, drew new settlers. Eventually friction erupted between the large and small landholders in the forested areas, and ultimately politicians made an issue of that friction. Long later said, “The job that confronted me for the first ten years was not a lumberman’s job, but a diplomat’s.”
Frederick Weyerhaeuser had organized his associates to make a land purchase that would have an effect on the settlement of the western states and the development of the timber industry for generations to come. As historian Chuck Twining notes, “No one was Weyerhaeuser’s equal when it came to seeing far into lumbering’s future and they realized they could do no better than attach themselves to Weyerhaeuser’s coattails, if given the chance, and hang on.”