Wauwatosa news. [volume] (Wauwatosa, Wis.) 1900-1948, 1901-05-04
THE STORY OF MESABA.
History of Iron Ore Property on
Shore of Lake Superior.
HOW ROCKEFELLER GRABBED 1T.
The Merritts Had to Let Go Their
Holdings, but Retained Enough
10 Make Them Rich.

Sunprior Consolidated Iron Mines. re-
Gently sold to the Carnegie-Morgan syn
iicare. has risen from S1S0O0.000 to
doubIe that sum. OF the capital stock
NJ this company. john u. Rockefeller
has held until now about 80 per cent, 50
that his profits in the rise of this single
stock have been about $4,000 900. Mr.
Il ,rkpfeller secured the control of this
cnmnany in 1898 for sums supposed 10 be-
from S3.000000 to S4,O00,O0U. 1t had
belonged in its entirety TO men of this
city and state, and they were forced t.
borrow money of Rockefeller during the
height of the panic of that year on cali
loans. When these We're suddenly called
bv Mr. Rockefeller they were unable To
realize Il sum sufficient TO pay, and their
securities went into his hands.
Had the Merritt family Of Duluth sue
creded in retaining control of the mines
end roads of this company it would now
lie impossible for the United States Steel
corporation to gain the Mesaba range
mines requisite for its control Of the
mining industry of Lake Superior, the
head of Lake Superior would now be The
seat of a vast smelling and iron manu-
featuring industry, and the late {. II.
Davis would not have been United
States senator for more than one term
In his place six years ago would nave
been NJ. f. Clapp, who was elected this
winter to the senatorship to succeed
Davis. In 1892 the Merritts had dis
covered the vast mines of the Mcsaba
range. mcomparably the greatest and
mnst-easily mined ore properties in the
world. They had built a railroad part
of the way from the mines to Duluth
and wanted to complete the line. though
they had terminal arrangements over
another line that then belonged TO II. y.
Baker, now the head of the great At
lantic Transport company of Baltimore
Borrowed of Rockefeller.
In order to build this link and the
docks needed for the handling of ore
into ships at Duluth they required. 81
100000, and this was offered them by
{. w. Wetmore of New York who
claimed to represent John u. Rockefel-
Ter and probably did so. When they
came to build the line and furnish roll
ing stock and terminals they found that
money melted like snow. and more was
required Mr.. WetmOre made them
promises of large sums, and it was rep
resented to them that Mr.. Rockefeller
had an income of S5,O00.00O a year. and
would see them through. They went
ahead. borrowed something like $1,000.
600 more from him on call loans secured
by stocks in their many mines ut heavy
discounts. and the road was completed.
Iron ore was then worth about $3.50
a ton. and there was no question but at
such a price there was an enormous
Mesaba ore. Leonidas Merritt, head of
the Duluth syndicate, then stated that
at the price of 81. 80 Il ton the new COM
pany would be able to make $3.50 ton.
This was, of course. absurd, but that
there was great profit there was no
doubt But iron did not stay at $3.50 a
ton. The next year came the panic;
there was no demand for ore, and it
went off at great pace, partly on ac-
count of the opening of these very Me-
saba mines. If the best ore could get
$3.50 it was in luck, and the new and
untried Mesaba ores were sold. delivered
at Lake Erie at less than 81 ton. This
left no profit, and did not pay for the
costs of mining and transportation. At
the very height of the depression. when
there was no money for any enterprise.
however excellent its chances, Mr..
Rockefeller called the $2,000,000 loans.
An appeal was instantly made to Presi-
dent J. J. Hill of the Great Northern.
who was unable to get the money i'll
time. and the securities passed into Mr..
kockefeller's possession. Later the Mer-
rtts found that they would be able to
regain control by the aid of the stock
held by NJ. +. Clapp and his associates
IN their enterprise. and tried to do so,
but these men sold to Mr.. Rockefeller
and the entire Merritt interests were
wiped out.
In Panic Times.
AT tnat time the Minnesota iron COM !
pany, controlled by II. II. Porter of Chi |
cago and Il. Z. Flower of New York. was
offered the entire Merritt interests in
mines and railroads for a little over ST.
100000, but refused to buy. The time
soon came when the company would have
paid ten times as much. but was unable !
10 get the property. After Mr.. Rookie !
ielIers ownership and curing the panic, |
the shares of the Consolidated mines
were drug ON the market. Ia 1890
they could be bought here for IS and so
share. Gradually all the loose hold |
lngS drifted into strong hands. mostly at
Duluth. Some was held by widows, !
some by mining captains who knew the
Naiue Of the property, some by trades
VINO got 1t in exchange for cats and
yogs of all sorts. In all there We're
heid at Duluth about 10000 shares. The
rest was practically all in Rockefeller |
lands. Most of this local stock has been
held onto until now. \ few days ago
ne widow Of the Methodist preacher in |
%Yhose church the Merritts worShiped sold |
i'Np shares for $4,000. They cost the |
minister 5000 that he raised on a note !
winch the MERITS discounted. Mrs y |
-. zimmerman. who has held tightly 10 /
4''" shares that cost her almost moth !
tAS' was offered $4,000 cash. and re-
fused 1t. \ mining captain for the com
Fany. who had invested half his pay in |
IS"ck, on the basis Of IS 10 50 a share /
mas Just sold for 100000 \ local Sa- /
'2'hkeeper who paid $1,000 for some |
S5.ck i've years ago has been offered |
N-AWal. The shares sod Is. local peo- |
pr In the past few weeks have brought |
I4tm more than 81 100000 Had the |
'lerutts retained control. practically. the /
,AIire S3500O,000 in present market /
f3li!e would have been here
" hen the road and mines were in their |
infancy Moses +. Clapp was the attnr- /
II,E Tor all the interests. Cushnan X |
I'aNIs was then serving his first term as |
1htrd States senator from Minnesota |
%Hd mad not shown that remarkable ca |
laclty for international law that after |
"ardS distinguished him. Clapp was a |
WAuldate to succeed him, and one of the !
iHrftltts was elected to the state Legis- /
t'}ufe as his avowed representative. The |
;",t on he Clapp and associated hold /
> IN Consolidated stock 10 Rockefeller |
--,H'uS him control. made n breach be I
sMgeh the Clamp and Merritt interests. /
SSHd resulted directly in the election Of +
Hrn2tor Davis. Mr. Clam had to wait /