Mining the North
By Lorna Benson
May 1999

RealAudio 3.0 | Slide show

In the late 1880s, three brothers from Duluth set out to prove a rumor that the Mesabi district in northern Minnesota was rich with iron ore. In just a few months, the Merritt brothers discovered the tip of what turned out to be the most valuable ore deposit in the United States. Instead of getting rich, the brothers lost all their money, and surrendered every one of their valuable iron mines to an eastern oil tycoon named John D. Rockefeller.

ALFRED, LON AND CASSIUS MERRITT were all expert lumbermen, well-aquatinted with the woods and swamps of northeastern Minnesota. Their family - eight boys in all - migrated from Pennsylvania to the area surrounding Lake Superior in the years just before Minnesota became a state, when the timber industry was just taking hold.

In 1887, Cassius was assessing timber not far from where the town of Mountain Iron is today. Walking along, with his head tipped back to observe the quality of the mighty pines, he tripped and fell head-first onto the ground. Andrus Merritt followed his brother's progress on the range and wrote a book describing their adventure called The story of the Mesabi.

Andrus: Being an observing man, his fall brought to light a piece of iron ore about as big as his two fists. He stored it in his pack and had it assayed when he returned to Duluth. It proved to be high-grade ore.

One year later, the brothers began sending out small surveying parties to map out the rough boundaries of the ore that was hiding just beneath the surface of the ground. Again, Andrus Merritt.

Andrus: The men would go out with 100-pound packs on their backs, containing a 30-day supply of food. The rule was to carry them throughout the day and move the camp forward from night to night. This is such exacting labor that only those whose muscles have been inured to toil and their spirits strengthened by abundant hardships are able to hold their course.

The surveyors walked slowly through the forest holding a dip needle that looked like a compass, but reacted when the men passed over the magnetic walls surrounding the ore. The Merritts soon realized their find was much bigger than any of them had imagined. They began buying up large sections of land on the range. A crew started testing for the best place to build a mine. In 1890, they found a spot on the side of a hill that was soon called Mountain Iron.

Grant: They started working feverishly to get the ore out with steam shovels. That had never been done before.

Grant Merritt is Alfred Merritt's grandson and the family historian. He lives in the Twin Cities suburb of New Hope today.

Grant: Historians from the Iron Range said the Merritts weren't going to mine iron ore, they were going to farm it and that's about what they did, going into huge strip mining operations.

Unlike the solid chucks of ore on the Vermilion Range, just north of Mesabi, this new form of iron was soft and powdery. It was also cheap to produce. It cost only three cents a ton to scrape Mesabi ore from the ground compared to $1 a ton to mine ore at Vermillion . But even though the iron ore was plentiful and cheap, the Merritts had a hard time convincing potential investors that it was worth something. In a memoir years later, Lon Merritt describes the Mesabi's critics.

Lon: All sorts of experts were sent to look it over and report on it. Most of them said it was no good. One geologist with a country-wide reputation, visited us, looked over the property and reported that there was no ore. But if a geologist is a bad man to find a mine, he's a good man to help you sell one. He has a reputation, and people with money rely on him.

The Merritts had ore, but it was stranded deep in the north woods. They needed to haul it from Mountain Iron to Lake Superior, almost 50 miles away, where it could be shipped to steel mills in the east. For that, they needed both a railroad and an ore dock where ships could receive the iron. The Merritts couldn't get any of the existing railroads to build a line from Mountain Iron to the port at Duluth, so they began building their own track.

Grant: In seven months they built the railroad; 26 miles into Duluth and the ore dock as well as several hundred ore cars. They built the ore dock in about five months, which is incredible, because an ore dock was about 2,000 feet long and had 380 pockets for the ore. They started the dock in the winter, got the logs from Oregon or Washington - thousand-foot timbers - and they put them down through the ice to get it done.

Even 100 years ago, the risk they were taking by pushing their project so quickly was enormous. But the Merritts drive to develop the Mesabi sparked an iron rush on the Range. By 1893, more than 100 entrepreneurs had mines on the Mesabi. But the country soon plunged into the worst economic depression in its history and investors were scarce. The Merritts finally approached John D. Rockefeller for help. He agreed to loan the brothers $500,000 and pool some of his mining interests with the Merritt's holdings on the Mesabi. The company was called Lake Superior Consolidated Mining.

Grant: Rockefeller believed in consolidation to have one large company, and so he did the same thing here: forced them into the consolidated trust company into which the Merritts put all their properties. Rockefeller put three mines, then the Merritts took stock in the company, controlled the company.

With Rockefeller's money, the Merritts quickly finished their railroad. In July of 1893, the first train car of ore shipped entirely over their track arrived at their new ore docks in Duluth. Lon Merritt was still in New York, working out the final details of their deal with Rockefeller. His wife Elizabeth wrote him a letter describing the train's arrival.

Away up the hill through the smoke and haze, we could see a black line that looked like a caterpillar creeping slowly along. Soon it came onto the trestle work and then onto the dock where we all stood waiting for it. I moved out until the ore cars were over the pockets and then stopped to unload. Nobody made a sound - not a "hurrah" or any thing while they came on the dock.

I will send you a little of the ore from the cars that came down today so that you will realize that they have really begun to ship ore.

Even with Rockefeller's money, the Merritts were still unable to pay their creditors. Railroad debt was piling up at a rate of $10,000 per day. The workers began appearing at the Duluth office, demanding payment with shotguns in hand. On top of this, the Merritts were still unable to sell the ore because the eastern blast furnaces that made steel still hadn't been adapted to process this new, powdery form of ore. In his memoir John D. Rockefeller wrote that he was reluctant to provide more cash, but he saw no choice.

Rockefeller: Although we were minority holders of stock, it seemed to be up to us to keep the enterprise alive through the harrowing panic days. I had to loan my personal securities to raise money, and we were compelled to supply a great deal of actual cash. To get it, we were obliged to go into the then greatly upset money market and buy currency at a high premium to ship west by express to pay the laborers on the railroad and to keep them alive.

The Merritts were nearly bankrupt. In January 1894, Rockefeller agreed to bail them out, but also to let them regain control of Consolidated Mining at a later date. Meanwhile, an earlier deal between the Merritts and Rockefeller went sour, and the brothers accused Rockefeller of trying to swindle them out of their share in the company.

Andrus: In retrospect, it seems clear that, almost from the first, Mr. Rockefeller laid his plans to get us, because of this vast potential of wealth in our hands. He didn't intend to rob us of all our possessions, but to use us to further his own plans and place himself in a position of commanding power in the economic world where his desire to bind men by chains of gold would be satisfied.

In 1895, the Merritts sued Rockefeller for fraud and the court awarded the family almost $1 million. But that decision was overturned 15 months later on appeal. In the end, Rockefeller agreed to pay nearly $1 million to settle the Merritts' debt, but the family lost all of their holdings on the range, including the giant ore dock, the railroad, and three iron-ore mines.

When U.S. Steel formed six years later, Rockefeller sold his interests on the Mesabi Range for $80 million.

Grant Merritt says the entire state of Minnesota lost out when Rockefeller took hold of his family's Mesabi mines.

Grant: It certainly wasn't good for the Merritts because had Rockefeller stuck with them, they would have all been fabulously rich, and all the money that was sucked out to Pittsburgh and New York, would have stayed here in Minnesota. They would have had a good piece of it, not all of it, but the money would have stayed here, and it would have benefited northeastern Minnesota for these ensuing hundred years.

Alfred Merritt stayed in mining for the rest of his life. He went west to California and, later, Utah where he managed lead, silver and zinc mines. His brother Lon became the commissioner of finance for the City of Duluth. Cassius died in 1893 of a heart attack, while the brothers were still deeply in debt. The Merritts believe he died of a broken heart. The family still owns mineral rights on more than 100 acres in northern Minnesota and grandson Grant Merritt hopes the family can start drilling soon for new deposits of ore.

Our story on the Merritts was produced by Annie Feidt, with Kate Kuhn and edited by Stephen Smith. We also had help from music librarian Rex Levang.

Thanks to Stephen Smith, Dave Shliep, Alan Baker and Lynn Holt for bringing the Merritts and Mr. Rockefeller to life.