MINNESOTA: A STATE GUIDE
Those who first appreciated these resources did not keep their discoveries to themselves. They well knew that only with the help of many thousand men could they hope to take its riches from the earth, so they recruited labor throughout the United States and Europe. The industrial and commercial history of Minnesota thus became the story of those who built up lumbering, milling, mining, and quarrying; of the rise of cities and villages around these industries; of smaller manufacturing and commerce to supply living needs; and of the bankers who held the purse strings for the whole enterprise.
Not until the twentieth century came the realization that natural resources, even so lavishly bestowed, might in time become exhausted. Wheat, lumber, and iron were still the major source of the State's wealth but already the best forests had been reduced to great stretches of stumpland and the richest of the iron ore was being rapidly removed. Milling too began to decline, for the farmers had learned the advantages of a diversified agriculture, and the new preferential railroad rates were turning many millers from Minneapolis to Buffalo.
Pioneer days were over with the turn of the century, and the needs of a steadily increasing population demanded a shift in the industrial scene. Corn replaced wheat, and livestock and packing superseded milling, a transition which involved more intensive use of soil and water. Gradually too there developed industries not directly dependent upon natural resources or hindered by transportation problems.
Since the end of the World War period there have been many more changes in the industrial picture. Conflicts between capital and labor have caused dislocations. Labor has gained a strong political hold in the State, and has threatened repeatedly to take over the ownership of coveted utilities. Jobbing has developed in the cities at a rate far more rapid than their population growth. In 1933 Minneapolis ranked eighth as a jobbing center, while ranking fifteenth in size. Banking facilities have been extended to towns and villages, thereby providing sources of local credit and permitting more diversified buying. Chain businesses have shown a remarkable development, as have nonprofit co-operatives and co-operative associations of independent merchants who joined forces to combat their chain competitors.
Not usually regarded as an important manufacturing State, Minnesota is nevertheless the largest producer of linseed-oil products in the world, and the second largest producer of flour. Among other important manufactured products are farm machinery, patent medicines, beet sugar, and refrigerators.
Some of the magnates of the pioneer lumbering days came from Maine and Michigan, bringing with them a knowledge of the industry. These men had learned well how to choose and acquire the richest forest property. The settlers were too occupied with the founding of their homes and villages to give much heed, and, if the methods for securing the logging rights seem more rugged than ethical today, at that time they were little questioned.
Although its operations extended over all of the southern and eastern portions of the State, lumbering before 1870 remained in a pioneer stage. The first sawmill, built at the Falls of St. Anthony in 1822, cut logs from the trees in the vicinity for the buildings of the new Fort Snelling. Only 17 years later the first commercial sawmill was erected at Marine on the St. Croix River. Before the St. Croix timber was exhausted, 133 mills were operating in that valley. Logging did not begin its second concentrated drive (in the Mississippi and Rum River Valleys) until it had been well established for 10 years on the St. Croix.
With the seventies and the coming of the railroads, the industry went forward with gigantic strides, pioneer methods were discarded, and lumbering entered the class of "Big Business." This expansion was due not only to the rapid growth of the prairie country now made accessible by the railroads, but also to the fact that the railroads themselves required vast quantities of lumber for their own building operations.
In the 1880's the industry began to move into the northern sections of the State. Larger and more efficient mills took the place of the simpler plants. Germans and Scandinavians had succeeded the original lumber men, and with the immigration of the nineties, Russians and Finns were swept into the industry. By the end of the century 40,000 men went into the timber, and in 1901 about 552 million feet of lumber were cut in Minneapolis alone. Then, with the best forest land practically devastated the industry quickly declined. In the next few years hundreds of mills closed down and only a very few are still operating.
Nevertheless the lumber industry is still an important factor in Minnesota's commercial life. Many companies whose mills were originally in the State, but now operate elsewhere, maintain their offices in the Twin Cities a large amount of hardwood is distributed through wholesale yards here, and hundreds of retail outlets are handled by a few large concerns with Minneapolis or St. Paul headquarters. Millwork and paper making are also carried on extensively.
The story of lumbering in Minnesota is characterized not only by color and romance. Through it runs a sinister thread of despoliation. Practices that would seem intolerable now were accepted with scarcely a shrug. Indians were cajoled, betrayed, and robbed; legislators were coerced into complying with the demands of logging companies, while the State watched with little concern the destruction of one of its greatest resources.
During the 1850's when each year brought thousands of new immigrants to the Territory, flour mills sprang up along nearly every river and creek. Almost from the first the high quality of Minnesota flour was acknowledged. As early as 1861 the New York market quoted it at a premium. Then came the rapid extension of the railroads, the consequent opening up of the prairies, the importation of more and more European labor for farming and town building. The invention of farm machinery made possible the "bonanza" wheat farms, the like of which the world had never seen before. One farm alone boasted 30,000 acres. By the seventies more than a million and a half Minnesota acres were bringing forth wheat.
Obviously all this grain could not be turned into flour as soon as it was harvested. A method to meet the need of storage had to be devised. The answer was the grain elevator which soon appeared along the side of every railroad station. At first ungainly red-painted buildings, they were to evolve into the masses of colossal cement pillars that distinguish Minnesota's skylines. Not until many great terminal elevators had been built was there enough storage for the streams of wheat that poured in from the prairies.
The power at St. Anthony Falls determined the choice of Minneapolis rather than St. Paul as the great milling city. By 1870 there were 12 mills operating at the falls, and with an annual production of 250,000 barrels, they gave the new city a reputation as a flour center. By 1880 the European demand was so great that one-third of the Minneapolis output was required for export. It brought the highest price hitherto ever paid for flour. But the millers were not content. Minnesota's wheat was spring wheat, and the flour made from it, while admittedly of excellent quality, was of a darker color and inclined to be speckled as compared with that of the winter wheat flour of other States. Yet spring wheat was the only variety ideally suited to Minnesota's climate.
The problem was solved when the "new process" of milling was installed in the Minneapolis mills. Edmund La Croix, a French-Canadian, perfected a middlings purifier, and this, when combined with a new system of rollers, increased the efficiency of the mills from 25 to 90 percent. With quality now enormously improved, Minnesota flour by 1885 had become the most popular in the world, and Minneapolis was definitely established as the foremost flour-producing city.
The milling industry continued to expand and develop until 1916, the peak year. Scientific methods for testing and maintaining a uniform quality were introduced. Breakfast foods, whole wheat flours, and other cereal products were added to the mills' output. The decline began in 1917 and has continued at a varying pace through the subsequent years. Several factors have contributed to this reduction of output. Among the most significant were the adverse freight rulings of the Interstate Commerce Commission and the withdrawal of storage privileges in Buffalo warehouses, with the inevitable consequence that the export trade was transferred to Buffalo while other milling centers nearer to sources of distribution took on increasing importance. At the same time agriculture in the State turned to diversified farming and materially reduced its spring wheat crop. Nevertheless Minnesota remains a great flour-milling State, and Minneapolis still manufactures more flour than any other city in the world except Buffalo.
Today spring wheat is sown in the United States almost exclusively within the area included in the Ninth Federal Reserve District, of which Minneapolis is both the financial headquarters and the marketing seat. Grown during a short intense summer, it is harvested and moved to the market almost immediately. To insure its preservation and distribution to the mills throughout the world, an elaborate and efficient organization of many interests is required. How smoothly this operates is indicated by the fact that from the day the grain leaves the threshing machine it may be used precisely as cash.
Slightly more than half the elevators in the Northwest are farmer - or independently - owned. The remainder belong to the line companies and mills. Rural elevators are of several types; there are two groups of the so-called farmers' elevators, one is organized like a stock company, the other is owned co-operatively and its profits prorated as dividends. The independent elevators are individually owned, as the name implies, and in addition there are those held by mill owners to maintain their source of supply.
The farmer is under no compulsion to accept either the price or the grading the elevator offers. If he wishes to wait for a rise in the market, he may store his grain in the elevator and use his receipt as collateral for bank loans.
The first French explorers thought that valuable metals might be found on Lake Superior, a belief possibly arising from the story that Champlain had been shown nuggets of copper by the Indians. This tradition was handed on, first to the English and later to the Americans. In 1826, Cass persuaded the Chippewa on Lake Superior to cede to him the mineral rights of this region. The treaty of 1854 was made with an eye to prospective mineral wealth, and from that time on the northeast triangle was the scene of geological surveys instigated by interested, if not convinced, legislatures. As early as 1865 the Eames brothers found considerable iron near Vermilion Lake, but the discovery aroused little interest since Minnesotans were convinced that gold was to be found. By December of that year the gold craze was at its height, only to collapse during the following summer when repeated assays failed to establish the promised values. It was this gold interest, however, that delayed for twenty years the appreciation of the region's richness in iron ore.
Convinced of the presence of iron ore in large quantities on the Vermilion Range, a mining group in 1883 incorporated the Minnesota Iron Company By 1883 the Duluth Iron Range Railroads Company had engineered its charter and land grants through the State legislature and was prepared to build a road from the Vermilion mines to docks on the lakeshores On July 30, 1884, the first load of 100 tons of iron ore was shipped in five cars from the Breitung Pit to Two Harbors.
The first ore found on the Mesabi Range was not considered of sufficiently high grade to warrant mining. But Leonidas Merritt and his six brothers, all timber cruisers, thought otherwise. In 1890 Leonidas took out 141 leases and that year one of the Merritt exploring parties struck ore in the area that later became the site of Mountain Iron Mine. Other test pits established the fact that here was another iron range. By the next year mining operations on the Mesabi were well under way and 5 years later 20 mines were producing annually nearly three million tons.
This tremendous production was due largely to the geological formation of the range. In the Vermilion district, geological upheavals had tilted the ore deposits so sharply that all mining in this region was underground and had to be done by vertical shafting. The ore in the Mesabi Range, on the other hand, lies detached in irregular horizontal masses that run lengthwise, with an ordinary depth of 200 feet. To reach these iron-laden masses it was necessary only to strip off the glacial drift. Moreover, while the Vermilion ores were hard rock, the ores of the Mesabi were soft, dusty, and friable. Their fine texture tended to clog the furnaces, and it caused Andrew Carnegie to oppose their use until, after several years, a change in furnace design eradicated the difficulty. The easy accessibility of the ore and its softness brought into being a new method of mining--the open-pit method. All costs of underground mining were thus eliminated. Now steam or electric shovels could strip, scoop out, and transfer to waiting ore cars as much as five tons at once.
The third iron range, the Cuyuna, was worked first at the Kennedy mine in 1911. Here, as in the Vermilion Range, the ore lies in vertical lenses and must be mined underground. The distinguishing characteristic of ore from this range is that it contains manganese which plays an important part in steel production.
In the early days of mining it was found that profitable shipment to distant markets required 60 to 65 percent of iron in Minnesota ore. Later the standard was lowered to 51.5 percent. But rich ores grew scarcer and it was soon necessary to improve the quality by expelling moisture, removing waste material such as silica, sintering (fusing by heat), or jigging (crushing and screening). Any process whereby the ore is improved is called in mining parlance "beneficiation." In recent years as high as 40 percent of the total annual shipments have been thus "beneficiated."
Ore railroads and lake vessels began to supply means of transportation, but in order to transfer millions of tons to the holds of ships it was necessary to invent docks of new design. These great docks, so characteristic a feature of Duluth and Two Harbors, are in reality extensions of the railroads, whose tracks reach out to deep water on trestles. Trains are backed out on these, the hopper bottoms of the red ore cars are dropped, and the ore falls into pockets on both sides of the dock from these pockets. Ten thousand tons can be emptied into a vessel's hold within six hours.
In 1937 record demands for iron-ore by railroads and munition works resulted in a boat movement of Minnesota ore amounting to 48,697,280 gross tons. This is the largest output in the history of the mines. The former peak year was 1929, when 47,478,167 tons were shipped from the state
In the early days the ore was known by the name of the mine that produced it. It soon became necessary, however, in order to simplify shipping, not only to grade the ore according to its chemical composition, but to mix various ores for the grades desired. Today in its course from mine to furnace, the ore is repeatedly analyzed for iron, phosphorus, silica, manganese, and the degree of moisture present.
The account of the struggles for the possession of the mines is crowded with drama. Paul de Kruif in his Seven Iron Men presents the Merritt Story, and in the bibliography at the end of this Guide further references are listed which deal with the question of ownership and leases.
The taxation of mining properties has been a burning issue with many State legislatures. As a result of mining developments the population of St. Louis County leapt from 4,504 in 1880 to 206,381 in 1920. As mining towns grew with almost bewildering rapidity, they exercised their right of local taxation for schools and public improvements on valuations determined by State tax commissions, with the result that they provided themselves in rapid succession not only with waterworks, electricity, and cement pavements, but also with community houses, parks, libraries, and excellent public schools. Hibbing, for example, expended $3,800,000 for its high school and junior college. In some communities the mining companies pay over 99 percent of all taxes levied.
The question of how long the iron deposits will last is often debated. That the cream has been skimmed from the Mesabi deposits, there can be no doubt. But experiments are under way for the profitable handling of ores now considered unusable. Millions upon millions of tons of Minnesota's low grade and mixed ores have not yet been touched. Most of these experiments are conducted by the United States Bureau of Mines and at the University of Minnesota. The mining companies themselves have not yet felt acutely the threat of iron scarcity.
The major granite-producing area in the State, second only to Barre Vermont, in national importance, is a small region in Stearns and Sherburne Counties. Pioneers observed and admired the stone for its beauty but regarded it as too unwieldy for practical use. In 1868, however, two partners opened a quarry in what is today a part of the State Reformatory property, and "Reformatory Pink" became a popular medium for cemetery and other monuments. Later a darker red and gray rock was found that added still further to St. Cloud's reputation. Architects began to use it extensively for many of their more important buildings, among them the Louisiana State Capitol, the Book-Cadillac Hotel in Detroit, and the Chicago Tribune Tower. The cathedral in St. Paul is perhaps the most outstanding example of its use in this State.
Near the city of St. Cloud stands the village of Rockville, on a granite outcrop said by geologists to be 5 miles thick and 30 miles deep. "Rockville Pink" is to be used for the entire exterior of New York City's new Federal courthouse. For this building with its 38-story tower, eleven hundred carloads of the Rockville stone are required.
A second but rapidly developing granite source extends along the Archean outcrops of the Minnesota River Valley from Ortonville to New Ulm These quarries have been slower in their development than those in the St. Cloud area, although quartzite was quarried across the river from New Ulm as early as 1859. Especially prized for its beauty is the red-streaked granite from the vicinity of Morton known variously as "Rainbow "Oriental," or "Tapestry." This decorative stone is in wide demand for facings, doorways, etc., and has been used to admirable effect in many large buildings, notably the Daily News Building in Chicago. It may be quarter-sawed and laid so that its red streaks make an effective pattern. A darker 'Ruby Red" and a "Pearl White" found in this valley, together with the "black granite," a decorative foundation stone, have met with much favor.
More restricted in its use is the so-called "green granite" of the Arrowhead district, a dark stone that burnishes into a definite emerald hue. With the nearly related "black granite," it is a part of the geological formation known as Duluth gabbro.
Although Minnesota quarries no true marble, some of its limestone from Kasota and surrounding beds has been recrystallized to such a degree that it is capable of taking a high polish, and is frequently spoken of as marble. All of Minnesota's limestones are dolomitic, but some are almost a pure combination of carbonate of lime and magnesia and are specifically called dolomites. Settlers in the Minnesota River valley built their foundations with this type as early as 1868, and railroad builders before the days of concrete found it admirable for bridges, culverts, and roadbeds. When Jim Hill was ready to build his beautiful Stone Arch Bridge in Minneapolis, he sent to these quarries for the stone.
By the time concrete had replaced stone for heavier construction, quarrying and finishing tools had been vastly improved, and it was possible to use limestone much more widely in buildings. Architects became interested in variegated surface colors and textures. The cream, pink, buff, blue-and-gray mottled stones of the Kasota-Mankato quarries offered them a tempting choice for color experiment, and they rejoiced in the satiny fine texture of "old Gothic." Architects throughout the United States demanded stone from these quarries for the interiors and exteriors of some of their most important buildings. The Telephone Building in Minneapolis embodies its admirable qualities.
Some of the so-called travertine is found in the Mankato region, and in recent years "Winona Travertine" has added considerably to that city's income. A porous dolomite of the Oneota formation, the texture of this variety is very like that of the famous Italian travertine. Unlike the Italian, however, which is soft when quarried and hardens only after exposure, the Minnesota stone is hard, unaffected by climatic conditions, and extremely resistant to grease and stain.
Formerly many farmers crushed this rock and used it for a soil dressing, but architects have since discovered that it possesses not only beauty but durability. Much, however, is still broken into chips for the manufacture of "terrazzo," a flooring made up of travertine chips imbedded in a matrix and polished down to a smooth variegated surface. (The University Hospital at Iowa City, Iowa, has a quarter million square feet of this floor covering. )
A durable pinkish sandstone is found widely distributed throughout the State. It is quarried most extensively, however, in the Kettle River area Quartz is the cementing substance between the sand grains. At first used mainly for flagging and paving, it has been chosen by later builders for many public buildings in both the Eastern and Western States. In Minneapolis it was utilized for the Union Station.
Less extensive use is made of the quartzite of the Pipestone region. This is a strong but easily worked stone which, because of irregularly spaced joints, is valuable chiefly for small decorative trimmings.
Not important economically, but of great interest to the student of American history, is the pipestone or catlinite, a dull red or flecked indurated clay of variable composition. This is found at Pipestone in a bed about a foot and a half thick with quartzite interstratifications. Indians have held this spot sacred for many centuries, and have traveled great distances for the stone from which they carved their peace pipes.
The meat-packing industry in Minnesota began to assume importance in the latter part of the last century, after the trend from cash-crop to feedcrop farming was well under way in the Northwest. As the demand for livestock products in the eastern metropolitan centers grew, the development of shipping facilities kept pace in a network of railroads spun from the Twin Cities, and farmers began in a small way to market their crops in the form of hogs, cattle, and sheep.
South St. Paul, the point of convergence for six railroads entering the State capital, became a watering place for livestock shipments to Chicago. In 1888 the railroads, backed by the businessmen of St. Paul, established the St. Paul Union Stock Yards. As a result, packing firms that operated on a Nation-wide scale established plants at South St. Paul. After the turn of the century, when Minnesota farmers swung earnestly into the business of livestock raising, South St. Paul was pushed into the front rank with Chicago, Kansas City, East St. Louis, and Omaha. Since 1920 the small packing houses scattered over the State have been appropriating larger portions of the packing business each year, but have not yet approached the leadership that is South St. Paul's.
Railroads were at first the chief means of transportation to packing centers, and farmers organized shipping co-operatives for more efficient marketing. The development of trucking and the direct marketing of stock has caused a decline in co-operative associations. In 1919 there were 655 associations, but the number dropped to 400 in 1932 and is lower today. The decrease in numbers has not proportionately reduced the importance of these agencies in livestock marketing, however, for the larger associations have increased their membership and volume of business.
More than four-fifths of the many varieties caught and marketed by commercial fishermen are herring; the remainder are trout, ciscoes, sucker and whitefish. The largest percentage are caught in gill-nets at night. Lake trout are also caught by set-lines stretched between two anchor buoys with 50 or 60 supplementary lines suspended from them, each baited with small fish called shiners. The nets are drawn up every morning, and the fish are immediately washed, cleaned, and packed in boxes between alternating layers of ice, preparatory to shipping.
Some idea of the size of this industry may be obtained from the fact that in 1935 more than 8,000,000 pounds of fish were taken by the North Shore fishermen who received about $250,000 from their sale.
Along the Canadian boundary in Namaken and Rainy Lakes and Lake of the Woods, Minnesota's commercial fishermen in 1935 caught almost 3,000,000 pounds of fish of which about one-half was pickerel. The estimated value of this catch was $139,000.
Fishing in the interstate waters such as the Mississippi River and Lake Pepin is of relatively little importance, but in 1935 there was a total catch of almost 200,000 pounds. The State is sponsoring a commercial fishing experiment, the Red Lake Fisheries Association, which enables the Indians of the Red Lake Reservation to catch and market approximately 750,000 pounds of fish each year. Pike, perch, and suckers are by far the most numerous of the several commercial varieties in the lake.
Labor and Labor Relations
Skilled labor groups made the first attempt at labor organization. The first of such groups, so far as is known, was Typographical Union No. 30, formed by St. Paul printers in 1858. Minneapolis printers followed suit a year later. These unions, which disappeared during the Civil War, were the only two known to have existed prior to 1860.
From the close of the Civil War to the depression years of 1873-77, the trade union movement experienced a slow growth, although printers, plasterers, painters, plumbers, cigar makers, and trainmen formed unions between 1867 and 1873. There was little of the spectacular about these organizations and they exercised small influence. With the depression of 1873, trade unionism practically disappeared.
In the 1880's the trade union movement revived, only to be checked for a time by the rise of the Knights of Labor, an all-inclusive organization that dominated the labor field from 1883 to 1889. Originally a secret fraternal order, it had by this time discarded much of its ritual and become a dominant industrial union. The State-wide organization, known as District Assembly No. 79, had its inception early in 1883.
In its attempt to unite all labor in one central body, the Knights of Labor became unwieldy, and by 1890 its influence had begun to wane. The organization however, made a number of important contributions to the labor struggle. In 1886,1886, in conjunction with the Farmers' Alliance, it demanded the establishment by law of a State bureau of labor statistics. The bureau was created the following year, and its first two commissioners were Knights of Labor. To its credit, also, belong the celebration of Minnesota's first Labor Day on September 7,1885, and the advocacy of such advanced reforms as the regulation of hours and conditions of child labor, arbitration of industrial disputes, and the abolition of convict labor. A master workman of the order organized what is said to have been the first retail clerks' union in America. At this period, stores were open from 7 a. m. to 10 p.m., with an extra hour on Saturdays. With the assistance of other labor groups, an earlier closing was effected, but after the victory many of the clerks dropped their membership and the union disbanded.
The theory of self-employment through co-operation, advocated by Terence V. Powderly, head of the Knights of Labor, was responsible for the beginnings of the co-operative movement in Minnesota. In the 1870's, the Minneapolis coopers formed a co-operative barrel-manufacturing company, and in the next decade co-operative stores for workmen were opened in three cities.
The organization of the Minnesota State Federation of Labor was perfected in 1890. In 1896 the federation went on record against the notorious "struck jury" law. Other federation demands of the period before 1900 included State printing of textbooks, changes in the compulsory education act to prevent child labor, health and safety regulations of shops and factories, an 8-hour day for public employees, good roads, woman suffrage and establishment of postal savings banks. During the early years of the new century it played a vigorous part in the support of all liberal legislative measures proposed and enacted.
In 1913 labor achieved a crowning success in the passage of the Workmen's Compensation Act. Although the act was not the most favorable that could have been written, it represented the culmination of a long struggle against such laws as had heretofore permitted employers to evade responsibility through pleas of contributory negligence and other technicalities.
The outstanding figure in the annals of Minnesota's labor struggles is Le Grand Powers, whom Folwell calls the "Apostle of Labor." A Universalist minister who had become interested in labor problems, he was appointed State commissioner of labor in 1918. The list of his accomplishments on behalf of the health, safety, and general welfare of working men and women is far too long to be incorporated here. Until 1918, when he retired at the age of 71, he devoted himself tirelessly to investigating and combating social injustices and to finding means for their eradication.
Most of Minnesota's labor achievements have been won by the ballot. Relatively early, the value of affiliation with discontented farmers was recognized, and the subsequent rise of a combined third political party offered legislative opportunities which labor was quick to perceive. Nevertheless the State has been the scene of several dramatic strikes.
In the period before 1880, Minnesota experienced about 15 strikes, most of them in the Twin Cities area. The first was in 1854, when journeyman tailors of St. Paul struck for a pay increase. In the last two decades of the century there were 383 strikes, involving 1,663 establishments and about 70,000 workers; 63 percent were initiated by organized labor. The early labor contests were rarely accompanied by violence and bloodshed.
In 1889 occurred the first of the series of long and bitterly contested industrial disputes whose spectacular features were for almost fifty years to attract Nation-wide attention. That year, in Duluth, a conflict involving strikers, pickets, police, and deputized businessmen resulted in the killing of two of the citizens' army, and the wounding of fifty strikers. In the Twin Cities during a street railway strike of the same year, a mob of 10.000 tore up two miles of track and overturned cars. The company's victory on this occasion was a severe blow to labor, and one from which it took long to recover. Workers continued to carry the struggle into many fields, but their successes were few and the concessions won but minor.
By 1900 the open shop principle was so strongly intrenched in Minnesota industry that the succession of employers' victories was practically uninterrupted This was largely due to the favorable labor market offered by the Twin Cities. Tens of thousands of migratory workers poured through the State every spring and fall. Minneapolis was for years the greatest migratory labor center in the country. Usually there were plenty of workers to be had, and with the decline of the lumbering and milling industries, the supply far exceeded the demand.
In the northern part of the State, on the Iron Range, the thousands of miners in the beginning of the century's second decade began to unite on a common discontent. The famous Iron Range strike of 1916 started with a small group of miners employed by an independent company. Like a forest fire it spread until more than 6,000 strikers and all the employers were involved. Unorganized, often unable to speak any English, the miners rose up in mass protest against the contract system, low wages, the 10-hour day, monthly pay checks, and other grievances. Both sides enlisted reinforcements. The miners welcomed the Industrial Workers of the World, and the employers deputized an army of about two thousand strikebreakers. In the end three strikers were killed and more than 200 were arrested for the killing of a deputy; six were held and, of these, three were sentenced to a maximum of 20 years imprisonment. Not one of the points for which the miners had struggled was gained, although four separate investigations served to confirm the justice of their demands. Months later, however, the mine owners, headed by the United States Steel Corporation, raised all wages 10 percent.
In Minneapolis and St. Paul the traditional open shop labor principle was militantly maintained until 1934. Then, in May of that year, Local 574 of the Teamsters' Union ordered a strike and promptly paralyzed the trucking industry in Minneapolis. Highlight of the strike was the battle in the market district, where between twenty and thirty thousand people watched or participated in what became known as the "Battle of Deputies Run." Pickets, police, and deputized businessmen joined the conflict in which two of the citizens' army were killed and scores of strikers wounded. Complaining that no settlement of the larger issues had been attained, truckers struck again in the following July. This time the killing of two pickets and the wounding of 48 brought martial law. Well organized and supported by several farmers' organizations, the union finally achieved a substantial advantage.
Local 544, successor to 574, presents a nominal compromise in the Nationwide controversy over industrial as against craft unionism. Although recognized and chartered by the American Federation of Labor, it retains the character of Local 574 in respect to industrial organization Among its members are skilled and unskilled workers and a section of the unemployed.
Between these groups and today's successful associations there was little actual difference; but co-operatives had to learn that their survival depended upon certain methods of management. The fundamentals of procedure, laid down in 1844 by a group of 28 weavers in Rochdale, England are the groundwork upon which successful co-operatives are functioning in Minnesota and the world over. The Minnesota co-operatives have accepted these principles and succeeded in codifying most of them into the State laws. These principles provide unlimited voluntary membership, democratic control, one vote for each member, no proxies, limited return on capital, selling at market price, profits returned on basis of patronage cash purchase, federation for wholesaling or production, and allowance for education.
It is to the Iron Range and its Finns that Minnesota owes its first object lesson in modern consumer co-operative procedure. Finns and Danes came to the State already schooled in the methods of co-operatives and convinced of the necessity for united effort. From the beginning of the present century until the provisions of organization were written into State law, they kept alive the ideal of collective economic action.
In 1917 the struggles of the small, independent Finnish storekeepers in the Iron Range and Duluth area became unendurable. Delegates from 15 associations met in Superior, Wisconsin, to start their first wholesale pool. By 1934 this association, now the strongest of co-operative wholesalers, had purchased a $100,000 plant to distribute goods to member associations throughout Minnesota, Wisconsin, and Michigan.
Isolated rural associations, both producer and consumer, had in the meantime realized the necessity of unification and legal protection. Because the need for adjustment between the price of the crops they sold and the cost of the goods they bought was painfully apparent to them, the farmers were early at the front of the co-operative movement.
Once convinced of the value of a producer co-operative for the marketing of products, the adoption of the same method for obtaining supplies was but a short step. Only the mechanics of organization proved a stumbling block. Although co-operative creameries were known. in New York in the late 1850's, it was not until 1889 that the first Minnesota association was organized in Biscay in McLeod County, to be followed in 1890 by a more permanent society at Clark's Grove in Freeborn County. This creamery was used as an example by Professor Haecker, university dairy expert, in his long campaign to organize Minnesota dairymen. Little opposition was encountered by these producer organizations; but in 1918 trouble arose when the farmers in the area tributary to the Twin Cities established a regional milk-distributing agency. Twin City consumers, unfamiliar with the organization, obtained an indictment against the officers. In 1919, responding to the producers' appeal for help against this action, the legislature prepared a code of laws to protect farmers' co-operatives and to prevent promoters from entering the field.
The act and its subsequent amendments assigned to the State department of agriculture the duty "to most vigorously, openly, and extensively promote, help, and encourage the co-operative movement." This department provides a free information and advisory bureau and offers help in legal matters charter writing, and the like to any co-operative group within the State A separate division of co-operative accounting audits the association books on a cost basis.
The rapid growth of co-operatives in the State dates from the passage of these laws. Inexperienced organizations, ignorant of the necessity of reserve capital, are prevented by law from using all earnings as patronage returns. Nascent co-operatives over the State found themselves in an improved position and old co-operatives reorganized in accordance with the new laws. All were encouraged to widen their fields of activities and services.
Most spectacular of Minnesota consumer associations and perhaps the best known nationally is the oil-distributing society. The first oil association in the State (said to be the first in the Nation) was organized by a group of farmers at Cottonwood, Minnesota, on July 7,1921. A year later Owatonna formed a second association and within three years 17 associations were in existence. Typical of these is the Albert Lea co-operative, organized 1925 with $500 capital. Ten years later the capitalization had been increased by less than $12,000, but the assets totaled $125,000 and members had received $250,000 in dividends. By 1935, the 145 associations in the State had returned to members $500,000 in dividends. One of the four central wholesalers has increased its sales from about $25,000 to almost $2,500,000 in eight years. Co-operative oil sales exceed those of every commercial distributor in the State with the exception of Standard Oil's In Kanabec County, co-operatives supplied 71 percent of the oil needs of the entire county.
Producer and consumer organizations have preceded the so-called service co-operatives. Many of these have come into existence only within the last 10 years. Fire insurance mutuals have existed in the State since its settlement. Loosely organized, these associations were little more than solicited lists of persons who pledged to share their fellows' losses and paid sums into a common pool for this purpose. Most of the truly co-operative fire insurance mutuals in the State are affiliated in the State Association of Farmers Mutual Insurance. An automobile insurance co-operative has functioned successfully at Lake Elmo for 15 years.
Public utilities co-operatives in the State date from the 1890's when telephone systems were established by farmers in rural regions and small villages. There were (1936) 1,558 rural companies in operation. Of the 80 percent of farm homes with telephone service, go percent are supplied by nonprofit firms. However, because of their failure to federate, these companies are at present in some danger of absorption by private interests. Electrical power has been successfully produced on a nonprofit basis at Granite Falls since 1913. Only recently has a central unit, the Federated Electric Co-operative, been incorporated; it is now in a position to plan rural electrification on a wide scale.
Credit unions are very similar to their European prototypes. Minnesota did not have a law defining their organization until 1925 when the Credit Union National Extension Bureau succeeded in arousing enough sponsors to insure the bill's passage. A union was organized that same year by the postal employees, and one year later six associations had total resources of $125,827 In 1935 the total resources were almost $2,500,000. More than 20 associations were in existence in 1936.
Co-operative trucking associations in Minnesota numbered 12 in February 1936, but many co-operatives are actively sponsoring the organization of additional groups. Burial associations have in many cases cut the cost of burials in half. Coal and fuel associations, co-operative bookstores, boarding houses, cafes, dry cleaners, meeting and recreation halls, parks, and newspapers are services which the co-operative-minded believe will lend themselves to successful nonprofit control. At least one association for each of these functions exists in Minnesota. Many of these groups are rapidly increasing their numbers. Many independent societies exist that have no relation to the larger groups, and some overlapping of function seems inevitable until unification is completed.
A 1934-5 survey of Minnesota co-operatives lists 2,866 consumer cooperatives with more than 500,000 members; 1,318 producer co-operatives with 144,000 members; and an annual volume of business for both groups of more than $125,000,000 The increase in membership and volume of business has been so rapid that even approximate totals for 1938 are unavailable.