Beloit-The Alonzo Aldrich Era 1889-1916

Aldrich took ever on the eve of the "Gay Nineties" at a time very
favorable to business in general and to paper machine manufacturers in .
particular. Paper consumption had more than doubled between 1870 and
1890 and would continue to expand rapidly in the 1890's. The economy in
general was in the midst of a boom that had begun in 1886 and would last
until the Panic of 1893, and the four year depression that followed. 1

The United States had become the foremost industrial power in the
world by the mid 1880's and led the world in the production of iron and
steel. This was the era of the rise of big business in a basically
laissez-faire economy. There were few rules and even when new laws, like
the Interstate Commerce Act of 1887 and the Sherman Anti-Trust Act of
1890 were passed, actual practice and court decisions supporting that
practice emasculated their intent. It was a time of great opportunity
but also great risks because of the tactics of cut-throat competition.

In politics, there were not many differences between the Republicans
and Democrats and the political campaigns especially in the 1880's were
basically over personalities rather than issues. Grover Cleveland was
the leading Democrat, but he had just been defeated by Benjamin Harrison
in the electron of 1888. In this election, as in the election of 1876
between Rutherford Hayes and Samuel Tilden, the victor received fewer
popular votes than his opponent. Cleveland would soon get his revenge
by defeating Harrison in the election of 1892. Yost businessmen saw
little difference between the two candidates because both were promoting and benefiting from the rapid rise of industrial America.

The workingman's material benefits had been steadily improving
since the 1870's. Money wages rose by over lo%, and the cost of living
declined between 1870 and 1890. Since the price index went down, real
wages had gone up sharply by between 10 and 20% in the 1870's and by
about 25% more in the 1880's. The main reason for this was technological -new
machinery made labor more productive and management soon learned how
to employ labor more efficiently through simplified work procedures, a
more rapid pace of production, and improvement in plant design.

Despite this boost in wages and the drop in the cost of living the
average worker still did not earn enough money by himself to support a
family decently. Hours were long -typically ten hours a day, six days
a week but with large variations, often upward -and annual earnings of
wage earners averaged less than $500 per year in 1890. In contrast the
New York Tribune counted 4,047 millionaires in the country by 1892.2

Many anomalies prevailed in 1890 not the least of which had to do
with land. The United States Census of 1890 revealed that a discernable
frontier line between occupied and unoccupied land no longer existed.
Yet more land would be settled after 1890 than before. Equally important,
within three years a young historian at the University of Wisconsin,
Frederick Jackson Turner, would write a seminal article on "The Significance
of the Frontier in American History" which concluded that the frontier was
the biggest influence on making the United States democratic and uniquely
different from Western Europe. Now it was gone. What did this mean for
the future?

While the frontier was gone, the Indian inhabitants of much of the
West were very much alive. In fact, 1890 was a seminal year for Indian- 15

Page 14

White relations. Just 14 years after Custer's defeat at the Little Big
Horn, the last great 19th century confrontation between Whites and
Indians occurred. The massacre of the Indians at Wounded Knee signaled
the end of the Indian Wars. The West was now open for white expansion
without fear of the Indians. This westward expansion paralleled and aided
the general expansion within the United States in the 1890's that would .
culminate in the nation's first foreign imperialist adventure -the "Splendid Little War" with Spain in 1898.

While these events occurred on the national and international scene, the new officers of the Iron Works were concerned with ensuring that their company got its share of the rapidly expanding market for paper products. The rise of paper products in the 1890's symbolized the shift then going on from packing to packaging. Packing was designed to preserve and to
transport safely while packaging was designed to sell. Packing mean?
bulkiness -boxes and metal containers laboriously made while packaging
meant new light-weight paper products produced on a mass scale. That
this was significant was attested to by David Ames Welles, an economist,
who observed in 1889 that the paper bag had been the 1880's most important
innovation to increase retail sales. What the paper bag meant to the
1880's, the folding box, which got its start in 1879, symbolized to
improved packaging in the 1890's. By the end of the century nearly 1000
different patents had been registered that related to folding boxes and
their machines. 3

The impact of this change on both the retailer and consumer was
immense in the 1890's and succeeding decades. Until then the retailers'
stock was acquired in bulk lots and then displayed in open shelves, wooden
bins, barrels and burlap bags. After purchases, the retailer had to 16

divide the merchandise into smaller units for resale to the consumer.
Sugar, crackers, and similar products were scooped from barrels that
were constantly exposed to dust and moisture. There were few brand
names since the retailer bore the responsibility of guaranteeing quality.
This situation began to change in the mid 1890's when the National
Biscuit Company began to market soda crackers using a folded carton and
waxed paper. The "Uneeda Biscuit" started a trend toward brand names
and, in time, it signaled the end of the old "cracker barrel" era. 4

The Beloit Iron Works under the leadership of their new President
sought to take advantage of the changes occurring in the 1890's. That
they and he were successful then and later was obvious because by the
time Alonzo Aldrich died on December 20, 1931, he had served forty-two
years as President of a company that had become the leading manufacturer
of paper machines in the United States.

By 1890, Beloit was a great booster city prone to exaggeration. Community interest keyed on the activity of local business. This favorable
attitude toward industry bubbled forth with comments such as:

"The music of the anvil and forge echoes back and forth between the Thompson and Besley works, and the busy hum of The Iron Works carries on the song of industry with the noise of the hammer clicks in its chime from the new Cunningham sash and door factory. Truly, no better evidence of Beloit's prosperity can be produced than by a trip up Third Street. 5

Groups of Beloit citizens raised money in efforts to persuade new industries into locating in Beloit. Such activities led to headlines like this: H U S T L E !

The Philistines Are Upon Us Another Enterprising City bidding
for The Engine Works and has Put Up The Cash,
Beloit Must Hustle Now or Lose The Works 6

Aldrich began his Presidency with a backlog of orders carried
over from Messer's term . They had taken orders for six complete paper
machines in 1889. Ten more were ordered by the end of 1890. They also
advertised in The Paper Trade Journal as a rebuilder and noted that they
made cast iron wood tub bearing engines, heavy and medium automatic
ream cutters, iron and gun-metal plunger pumps, fan pumps, rag cutters, .
Kingsland engines, steel knives, rag dusters, revolving and stack reels,
single and double iron screen vats, friction pulleys, and cylinder
washers. 7 The company had come a long way from the Merrill and Houston
dependence on the water wheel.

From January 1890, when the works were described as "humping at
the regular busy rate," throughout the year they remained busy and properous.
After the company was favorably mentioned in an article in The
Paper Trade Journal, the Beloit Weekly Free Press claimed that the Iron
Works constructed the best paper machines made and that the paper makers
recognized this. This certainly was true in the case of Kimberly Clark
and Company, then in the midst of a business boom and rapid expansion.
By 1890, Kimberly Clark was running 13 paper machines at their various
mills, seven of which were made by the Iron Works. One more was on
order and this would be followed by more orders in the next few years. 8

The rapid expansion that Kimberly Clark was going through was
typical of paper makers in the Great Lakes region which were growing even
more rapidly than the paper industry as a whole. The following table
shows the results. 9

Lake State Paper Production Statistics: 1890 = 100
Year	1890	1899	1909	1919
United States Growth Index	100	326	520	765
Lake States Growth Index	100	415	890	1850
Lake State Percent of total US production.	8.8	11.9	15.3	18.8

In the future, the Iron Works would benefit from these statistics,
but by the end of 1890, they were benefiting from their own successes.
At the annual meeting held on October 29, the Directors declared a 20%
dividend."

Innovations and investment continued in 1891 and 1892. l' As the
shops were modernized, new types of paper machines were built. In both
1891 and 1892, seven complete machines were built. The most important
was a Yankee machine built for the Thilmany Pulp and Paper Company of
Kaukauna, Wisconsin, Oscar Thilmany, a German immigrant, contracted with
the Beloit Iron Works to build this machine using plans modified from the
German example, Because of the design, this was the largest casting for
a dryer ever attempted by the Iron Works. The result was a very versatile
tissue machine that led the industry. It was so successful that two
similar machines were ordered in the next few years. 12

These innovative efforts paid off in the summer of 1892 when the
Iron Works contracted to build the model Fourdrinier for display at the
1893 Columbian Exposition -The World's Fair -in Chicago. It was a
large machine for the time, having 17 dryers each 48 inches in diameter
and 106 inches long. The machine was guaranteed to run at a speed ranging
from 75 to 275 feet per minute. 13

Townsfolk started bragging about the machine as early as August, 19
1892. The Free Press commented that "The Beloit Iron Works was not only one of the city's most most important industries, but it is one of the leading manufactories in its line, paper machinery, in the world, and this assertion has not been made simply from feelings of local pride and enthusiasm, but because the output of the factory has warranted it." 14 Although the town cried for information concerning the machine, the Iron .
Works said little, and the paper complained that it had to worm out the
facts inch by inch. The reason for this was that the paper trade companies
in the Northwest wanted to exhibit and operate a paper machine
at the fair. To carry out the plan, they formed the American Paper
Making Exhibit Company to insure that they got the finest and most modern
paper machine ever built. They picked the Beloit Iron Works because of
past reputation and success, but when they telegraphed the Iron Works to
tell them of the honor and ask them to make the machine, they got a reply
that Beloit would only be interested under "conditions which are satisfactory"
to the Iron Works. While Beloit was not blind to the fame that
a successful machine would bring, they saw the deal mainly as a business
transaction. Thus the matter hung for weeks probably until Beloit got a
deal in which many of her expenses were met. Ultimately Beloit retained
ownership of the machine and sold it the following year to The Nekoosa
Paper Company of Wisconsin where the machine with many modifications
still runs. 15

Once constructed and installed in Chicago, the machine was described
as "The Novel Fourdrinier Machine of the Beloit Iron Works." The machine
was then put in operation seven or eight hours a day with a full paper-making
crew. The souvenir booklet explained that the machine represented
"the latest and most advanced achievement in this line of machinery. All
patterns are of new design, embodying all improvements known to be

Page 19

Click here to see Engineering Specifications for the Columbia Exposition Machine.

All patterns are of new design, embodying all improvements known to be
desirable, many of which are original, used and controlled" solely by
the Iron Works. 16

Exhibiting this machine was a profitable venture for Aldrich and
his group of hard headed businessmen. They got support to send the
machine to the Exposition, and they already had the machine sold to
Nekoosa before they sent it to Chicago. At the Exposition, potential
customers were impressed by the machine and the award of merit it won
for a "very high standard of workmanship and productiveness." Eastern
paper makers were jealous of Beloit's success complaining that "an outfit
way back in the woods of Wisconsin was awarded the prize." They could
not understand how the Iron Works could build a better machine than they
could. 17

The company operated at a high level of financial success between
1891 and 1893. At the annual meeting in the fall of 1891 the Board of
Directors were authorized to declare a dividend when they thought it was
advisable. They also raised the salaries of the President and Superintendent.
One year later they decided upon a dividend of 88%! At this
point, L. B. Verrill's 10 share interest was purchased by Alonzo Aldrich
who assigned one share to Joseph Janvrin, his brother-in-law. Janvrin then became a Director. Therefore the company entered the depression year of 1893 with 91
shares of stock outstanding divided up as follows: 18

The promising years between 1886 and 1894 were threatened by the
events that culminated in the Panic of 1893 and the deep
depression that continued until 1897. Just before leaving office in
March 1893 President Benjamin Harrison commented that never has there
"been a time in our history when work was so abundant, or when wages
were as high. . .'I Things fell apart soon afterwards when the Philadelphia
. and Reading Railroad suddenly went bankrupt. The stock market then
collapsed in May; bank loans were called in; credit became nearly impossible
to get, and businesses went bankrupt. By the end of the year
500 banks and nearly 16,000 businesses had gone under. The Panic of
1893 then turned into the depression of 1894. Business investments
declined rapidly, wages and prices dropped at least 10X, and consumption
of consumer goods was at only 75% of capacity. Unemployment rose to as
much as 20% of the work force. 19

The Iron Works was affected by this depression especially in 1894
and again in 1897-1898. The sale of new paper machines dropped to three
or four a year from 1894 through 1897, but the works remained relatively
busy because of rebuilds and spare parts. What was true for the Iron
Works was al so mostly true for Beloit which saw itself as a "favored
city" not much affected by the depression. 20 Jacob Coxey's Army of
unemployed that marched on Washington demanding jobs working on the
public roads got little sympathy from Beloit during the prosperous spring
of 1894.

At this time, an economy measure to lower the salaries of the
President and Superintendent from $2,400 to $2,100 per year was more
apparent than real because it was coupled with a dividend of $5 per
share per month to the owners of the 91 shares of stock outstanding. 23

Page 21

For example, this meant that the President received an extra $1,440 per
year as long as this dividend was in effect, and it remained in effect
until the company was re-capitalized in December 1897. 21

Eighteen ninety-five was an eventful year for the Iron Works.
First, they decided to sell some of their property to Oscar T. Thompson
& Sons Plow Works. More importantly, they began to expand and modernize .
by constructing some entirely new shops on the Island property. This
was the first major expansion of the Iron Works. 22

On October 1, 1896, when the construction work was completed the
Beloit Daily Free Press devoted much of the front page to a large artist's
rendering of the new shops and to a capsule history of the organization.
The Iron Works was described as "One of the Grand Industries of the City--
an Enterprise Created and Developed by Beloit Pluck and Skill."

Even allowing for the exaggeration common to a booster press,
the new shops were a magnificent addition to the company's holdings.
The old shops were too crowded, and with paper machines getting bigger
by the year, new buildings were needed to enable Beloit to keep an edge
over its competition. The new buildings, all of brick and glass, included
a 70' x 85' foundry, a 65' x 400' main shop (half of the great room being
used for the iron working tools and the other half for the erecting floor),
and a new office building. All were heated by hot air and run by electricity.
In fact, main shafting was no longer necessary because the
factory used over a dozen electric motors, thus allowing counter-shafting
when required. 23

The Iron Works had achieved a great deal in the first decade of
its existence. They had purchased some old wooden shops and obsolescent
equipment, but they had the practical experience to make a factory work.

Page 22

By the end of l896 the company was employing 150 men, had an annual out-put
of $200,000 in billings, and due to the new facilities, was very
competitive with other companies. 24 Up until this time nearly all sales
had gone to the Midwestern and western states but with the new facilities
the Iron Works was soon to sell machines to both coasts of the United
States and internationally.
The international business

began in November 1896 with a sale of
a 96" Fourdrinier to the Yokka Ichi Paper Company of Tokyo, Japan. Mr.
Aldrich journeyed to New York City to make the sale through the agents
of the Japanese company. This sale also set another precedent in that
the Japanese company did not require that the machine be erected by Iron
Works' personnel, much to the chagrin of some of the men who envisioned
a free trip to the mysterious East. The company was extremely proud of
that machine. So much so that they made sure that each of the 13 railroad
cars needed to transport it to the West Coast had Paper Machine for Japan,
Made by Beloit Iron Works, Beloit, Wisconsin printed on the boxcar sides. 25

However, with that order and its completion in April 1897 the
shops were practically idle. Just as the depression that had begun in
1893 was easing, the company was forced to lay off most of the work force.
AS a result, the Iron Works' men, who had originated the May Day picnic
some years before for all the workers in Beloit, came on May 1, 1897, as
guests of the other workers. Fortunately, this idleness lasted only a
short while as a new paper machine order was received in the second week
of May and the workers were called back. 26

By the end of the year business was improving. The dividend of $5
per share per month was continued and more importantly the capital stock
was increased from $10,000 to $136,500. In terms of the stock outstanding, 25
each stockholder received 15 shares of the new stock for every share
held previously. 27

Eighteen ninety-eight was not a good year for the Iron Works, as
sales dropped below the $100,000 mark, but the few years after 1898 would
be much better. In April 1898, the United States, which had sympathized
with and aided Cuban Revolutionaries since 1895, finally went to war with
Spain. The provocation was the sinking of the Battleship Maine in Havana
harbor, but in reality this was an excuse more than a cause because no
one knew for sure why the explosion occurred. Many businessmen welcomed
the end to uncertainty and applauded the beginning of this war which was
portrayed in the media as a patriotic war to bring democracy to freedom-loving
Cubans. By the end of summer the United States had emerged from
this war as an imperial power controlling not just Cuba but Puerto Rico,
Guam, the Hawaiian Islands, and the Philippines. Events were a lot less
exciting in Beloit, but the community lost four of her sons in the war. 28

There were two innovations at the Iron Works that year -one with
immediate repercussions and the other whose effects would not be felt
for over two decades. The first was another improvement in paper machine
technology that allowed the company to design a machine that would make
paper at 500 feet per minute. Although a local newspaper implied that
this was a record, machines were running at that speed at three different
locations the preceding year. 29 Nevertheless this was an important
achievement that insured that the Iron Works would be competitive in the
race to build faster and faster machines.

The other innovation was the idea of Charles Warner, the chief
engineer of the Iron Works. He designed a removable Fourdrinier but his
sketch was not used. Twenty years later Bert Larson, a development 26
engineer, used the principles developed by Warner to design a Fourdrinier
to be removed in five sections. Only one of these machines was built
after it was patented by Mr. Larson and E. H. Neese, Sr., but by the
1920's the Iron Works had patented a Fourdrinier that was removed in
one piece. This idea "caught the imagination of the trade" and nearly
every Fourdrinier built in the world since the 1920's has been the
removable type. 30 Since the Iron Works held the patents, licensing agreements
with all the other builders were a lucrative addition to sales.

Although these licensing advantages would be in the future, the
company approached the turn of the century with renewed confidence, increased,
higher profits, and a greater return to investors. The sales of complete machines, which had stagnated in the mid to late 1890's at three or four a year, rose to eight in 1899, nine in 1900, and nine in 1901. This success enabled the directors twice to raise the officers' salaries, to increase the annual dividend, and to declare an extra dividend. 31

Good times were back, and most industries in the city of Beloit
were prosperous and expanding. Fairbanks, Morse and Company, the new
name for the concern that had begun as the Eclipse Windmill Company in
1873, employed the greatest number of workers. It was followed in
employment by Thcmpson's Plow Works, the John Foster Shoe Factory and
the Beloit Iron Works. 32

The Iron Works, previously so dependent on the Wisconsin and Midwest
market, began to become more of a national and even international company
in the years around 1900. The 1896 sale to Japan would not be repeated
for a decade but a number of sales were made to Canada and China as well
as to companies in the Northeast, South, and Far West. 33

Perhaps some of these sales were pleasant repercussions from the fame that the Iron
Works had received from the World's Fair machine, Another even more likely reason for the good years around the turn of the century was the rapid increase in demand for paper. Paper prices also went up, in part because of the Spanish-American War, and
the industry could not keep up with the demand for new products like .
rolled toilet paper. As they sought more capacity and higher speeds,
the Iron Works benefited so much that on March 13, 1901, President
Alonzo Aldrich stated that the company was seriously considering the
erection of another building equal in size to what they already had in
order to keep up with their orders. 34 This enthusiasm did not actually
result in a new building for three years, but it showed that the company
was prospering.

The Iron Works was a good place to work, and its employees were
for the most part faithful, competent, and loyal. Wages were competitive
with other industries -about $2.50 per day for a lo-hour day while some
other industries paid as low as $2.00 per day for a 12-hour day. The
foundry employed 20-25 men, eight to ten men worked in the pattern shop
and three or four did the drafting. Some workers were skilled transients
called "hobo moulders." They were usually good employees as long as they
stayed because they were experienced workers who had learned their skills
by working in many other shops. 35

The company's sales and profits declines in the 1894-1898 period
were reversed by these events at the turn of the century. Total sales
volume in 1899 was the best in history, and it went up 60% in 1900 and
more than doubled in 1902. By this time gross sales averaged $300,000
to $400,000 a year. These good years continued through 1904 before slumping to a mediocre year in 1905. 36

Page 26

These few years were a time of great changes in the United States
and in the government's attitudes toward the world. The conservative
Republican William McKinley had been elected in 1896 and easily re-elected
in 1900. The Spanish-American War had been a popular war to most people,
and it helped culminate the rapid rise of a young New Yorker named
Theodore Roosevelt to the Vice-Presidency under McKinley. To many
leading Republican politicians the Vice-Presidency was the perfect
place to keep that young upstart (or as Mark Hanna said, "that damned
cowboy") in a safe place where he could do no harm. Everyone figured
that the popular McKinley would serve out his second term. But on September
6, 1901, McKinley was shot by the anarchist Leon Czolgosz, and when he
died eight days later, Theodore Roosevelt became President.

While Roosevelt promised to "continue absolutely unbroken" McKinley's
policies, in reality he helped revolutionize that United States by giving
Progressivism a spokesman in the White House. While doing so Roosevelt
became the first "modern" President of the United States by using his
Presidential powers extensively. During T. R' s terms from 1901 to 1909
the United States acted like a great power and involved itself around
the globe. Domestic politics were reformist with the so-called Muckrakers
leading the way by pointing out the seamy side of American life and calling
for reforms.

Of all the reforms going on in the Progressive Era, Theodore
Roosevelt is usually identified with "Trust Busting." In actuality he
was more in favor of regulating trusts rather than destroying them,
although a number of "bad" trusts were destroyed including the Northern
Securities Company, the Standard Oil Company of New Jersey, and the 29

Page 27

American Tobacco Company. A lesser known trust, but one particularly
important to the expanding Beloit Iron Works, was the Paper Trust.

In reality there was more than one paper trust. The first began
in 1898 on the East coast as the International Paper Company, a combination
of the manufacturers of newsprint. Other combinations in writing
paper, book paper, straw board, and envelopes followed. 37 The Midwestern
paper mills remained unorganized until 1900 when under the leadership of
J. A. Kimberly of Neenah, Wisconsin, they formed the General Paper Company
in order to fight the International Paper Company for control of the
western market. 38

The main difference between the two companies was that the Inter-national
owned all its mills while under the General the mills remained
under individual ownership but all products were sold through the General.
This distinction was crucial because it was the basis for a successful
trust busting suit against the General which did not affect the International.

By 1904, the General Paper Company was a successful combination of
24 companies mostly located in Wisconsin and mostly customers of the
Beloit Iron Works. It was the exclusive selling agent of the combined
companies, and anyone wishing to buy paper in the Midwest had to buy from
it and pay its prices. One alleged result of the combination was a 50%
increase in the price of newsprint paper between 1900 and 1904. 39 There
is little doubt that this successful combination increased prices at a
time of increased demand which encouraged its members to purchase new
equipment. Since the Iron Works received many orders for new equipment
from member companies during this time, its existence benefited Beloit's
sales and profits.

Both the International and the General Paper Companies were
investigated by the government beginning in 1902 because of complaints
by the newspaper publishers. By 1904 the investigators determined that,
since International owned all its mills, it could sell to whomever it
chose at whatever prices it could get. Thus it stayed in business and
the agitation of the newspaper publishers was directed against the General.
Paper Company. According to the Paper Trade Journal this prosecution was
"a large factor in the demoralization of the western market" that began
in 1905. Since the General only acted as a sales agent and did not own
all the;, mills, it was found to be illegal under the terms of the Sherman
Anti-Trust Act of 1890, and it was dissolved in May 1906. 40

This decision seems to have had a direct effect on the sales and
profits of the Iron Works. The years from 1905 through 1909 were relatively
lean. Three of the years had average profits and two were below average.
During this time only one new machine was sold to a Wisconsin paper mill,
and that mill had not been a part of the General Paper Company. 41

While the controversy over the General Paper Company and its
dissolution probably was detrimental to the Iron Works, the first decade
of the twentieth century was good for innovations in the use of paper
and paper products. These encouraged manufacturers to buy new machines
and to rebuild old ones.

Perhaps the biggest innovation in the manufacturing of paper then
going on was the gradual switch from paper made from rags and straw to
paper made from wood pulp. As the wood pulp processes were perfected
both output and demand increased. Also wood pulp experiments brought
about a multiplication of the kinds of paper in use as well as new uses
for improved paper.

Wood pulp paper was especially important in the Midwest in general
and Wisconsin in particular. Wood was abundant and the lumber industry
was in decline. As a consequence the Lake States were ahead of the
nation as a whole in converting to wood pulp. 43

Innovations in the use of paper also rapidly appeared after 1900.
Cardboard fiber containers began to replace boxes made out of wood by -1903.
Perhaps their greatest importance was in making folding boxes for
cereals. By 1906 paper milk cartons were being manufactured in California.
The next year saw the introduction of paper cups, and by 1909 Kraft paper
was being manufactured in the United States. This latter innovation
helped expand the paper machine market into the South because southern
pine trees were used for pulp. By the end of the decade the wrapping
of bread in printed paper had practically become universal and even fruit
was being wrapped in paper. 44

While these changes gradually became apparent on the national
scene, events in Beloit also affected the Iron Works. The city had
grown 65% since the census of 1890. By 1901-1902 they had acquired a
new Carnegie Library and were doing everything they could to promote
trade and business. This led to two problems -a housing shortage and
agitation among workers to organize into unions. Manufacturers were
unanimous in seeking a solution to the housing shortage as they feared
workers would leave if they: could not find adequate housing. They were
also practically unanimous in their wish to limit the power of unions
and in most cases not recognize unions as bargaining agents. 45

By late 1903 there were over 2,000 union members in the city.
They had their own journal, the short-lived Beloit Labor Journal, and
they had struck a number of companies including the Gaston Scale Works

Page 30

Fairbanks Morse. The strikes failed, and most of the unions were
broken. One Fairbanks employee, who later worked for the Iron Works,
claimed that he got lower wages at Fairbanks after the strike. He also
noted that not only had the Iron Works not gone out on strike then but
that a union never was established during Mr. Aldrich's lifetime. 47 In
these early years, at least, this may have been due as much to the loyalty'
and closeness of the workers to management than to anything else. This
closeness was shown in October 1903 when the oldest worker, a veteran
machinist of 40 years employment, suddenly died. The whole plant shut
down at the time of his funeral to honor his memory. 47 Actions like
this were characteristic of the Aldrich-run Iron Works. The company
officers had worked their way to the top, and they never forgot their
origins.

In most ways 1903 was a good year for the company as sales
reached $400,000 for the first time. Because more capacity was needed
in the foundry and machine shop, President Aldrich asked for and got
permission from the stockholders to enlarge the shops. Officers'
salaries were increased again; the 6% annual dividend was kept, and a
special dividend was declared. 48

This prosperity was best symbolized by the completion of a huge
triple deck, high speed, box board machine sold to the Thames Paper
Company of England. According to the paper, this nearly $100,000 contract
required 25 railroad cars to get it to the port of Montreal. 49

In the autumn the Directors decided upon an internal organizational
change in which R. J. Burdge retired from the largely ceremonial Secretary's
position but remained a Director. Noble Ross then became Secretary-Treasurer
and also retained all his duties as Superintendent.

This move in effect abolished the Superintendent's position. 5o From then to 1916,
when Elbert Neese, Sr., was brought in as Vice-President, the company
was managed by the surviving founders. Aldrich remained President,
W. H. Grinnell remained Vice-President, and Noble Ross was Secretary
and Treasurer.

Fiscal 1904 was a banner year. While Theodore Roosevelt got
elected President and work was begun on the Panama Canal, the company
sold more machines than ever before and profits were the highest in
history. The shops also were enlarged as a brick and steel two-story
50' x 250' building was constructed on the south end of the island.
This machine and erecting shop greatly increased the facilities. 51

Ironically just as the new facilities were ready a sales downturn
occurred that made 1905 a mediocre year and 1906 only an average one.
Since the country was very prosperous, this slight downturn was probably
due in part to the successful anti-trust action against the General
Paper Company which consisted of so many of Beloit's Midwestern customers.
Nevertheless the company continued relatively busy with about 160 men
working a day and a night shift six days a week. The output was impressive.
On the average two carloads of raw material entered the plant each day and
one carload of finished products left. In the five years since 1901 the
annual payroll averaged around $100,000, and the Iron Works built around
25% of all the new paper machines constructed in the United States during
those years. 52

The profits of 1904 justified another increase in salary for the
officers as well as an increase in the dividend from 6% to 8% of the
$136,500 capitalization. Kr. Aldrich was also given permission to declare
a special dividend whenever business conditions justified it. 53

Page 32

By early 1906 business was picking up again and there was a
substantial backlog of orders. The pride of the shops that year was
a 154 inch Fourdrinier built for a Minnesota mill. According to the
Paper Trade Journal, in the edition dated the day after the massive
San Francisco earthquake, it was a high speed "record breaker" that
moved at 600 feet per minute. This was by far the fastest machine the .
company had made up to this time and probably was capable of running
faster than any other machine in the country. 54

Nineteen hundred and seven began as a prosperous year for the
Iron Works and for the country. Beloit's business remained strong
throughout the year, and the company set a new record of slightly over
$400,000 in gross sales. Despite the strong sales, company profits
were down substantially. The downturn at the Iron Works mirrored the
country as a whole where prosperity turned to panic, then recession,
and then to a depression which lasted throughout 1908 and into 1909
before recovery set in. The situation at the company was not nearly
SO severe but sales did decline in 1908 and again in 1909 when sales
volume returned to its 1906 level. 55

Even though sales slipped during this time, the company's advertisements
were aggressive, and they emphasized Beloit's technical
superiority. The Adjustable Fourdrinier and the Adjustable Shake were
especially emphasized. The Fourdrinier was better because it weighed
less than comparable machines. This was undoubtedly due to the scrutiny
of Mr. Aldrich, who was always asking his designers to cut back on metal
whenever it was feasible. It was also superior because it could be
adjusted while it ran just by turning one handwheel. Also the vibrating
parts were designed to be antifriction and the wires designed to last for many weeks.

Most importantly Beloit machines were designed to run longer
and make better paper than their competitors. 56

Towards the end of 1907 with the country trying to recover from
the panic brought about by the failure of the Knickerbocker Trust Company
there was a currency shortage nationwide. Repercussions were felt in
Beloit where banks for a time did not have enough cash to handle the
payrolls of the large industries. The city fathers called upon the
populace to deposit cash kept at home in the banks to ease the shortage.
Within a few weeks the shortage began to ease, but the leaders of the
Iron Works emphasized their liquidity and cash in hand by having their
workers paid in gold. 57 The end result of this attention grabber was
the populace's increased confidence in themselves and in the Iron Works.

While this confidence in the Iron Works was well placed in the
long run, the business failed to improve for some time. As a consequence
both Alonzo Aldrich and Noble Ross unilaterally cut their own salaries
almost 20% and vowed to stay at that level until business improved.
Business was very light in the winter of 1907-1908 so when a $40-50,000
machine order was received in February 1908 the local newspaper rejoiced
at the timeliness of the business that would help the economic situation
in Beloit. Undoubtedly this order helped, but the city remained in a
depressed state as Spring approached. There were many more workers than
jobs available in Beloit. 58

Despite the problems and the retrenchment within the Iron Works,
planning for the future continued and improvements in the facilities
continued to be made. 59 Company policy in general was to make needed
improvements during slack times so the improvements would not be so
obstructive to the workers and to production. This argument was one

Page 34

they used on their customers as well. Build new machines in bad times
SO you will be one up on the competition when inevitably the situation

improves. In 1908 the officers were very aggressive in searching out
new orders and trips were made by Aldrich and Ross to Massachusetts,
California, and Canada to pursue business and guarantee contracts. 60

Despite the hard work, new machine orders fell to three in 1909.
This was the lowest number in 11 years. Even the company's advertising
appeared to be a little desperate. The usual positive things about
Beloit's machines were mentioned -words like "latest improvements" and
"invented and used by ourselves exclusively." However, and somewhat in
contradiction, the same advertisement noted that a number of the Iron
Works' patented improvements had been used by others and that all infringers
would be prosecuted. 61

The nation's economy slowly improved during 1909, but the Iron
Works' business remained slow until autumn. Then a breakthrough occurred
and the company got a contract to build the world's largest paper machine
for an Alton, Illinois company. The local newspaper was ecstatic and
headlined the event. With a 145 inch face this was the largest cylinder
machine that Beloit had ever built. Its overall weight was over one
million pounds, and it required 50 railroad cars to transport it. While
it was designed to move at only 120 feet per minute, its capacity was 75
tons of box board each day. 62 This contract along with the end of the
depression seemed to turn the company around because the next decade was
the most profitable in the company's history. Leading the movement
towards renewed prosperity were Beloit-built newsprint machines that made
the fastest speed in the world and board machines that allowed the
greatest production in the world.

The Alton job was completed in 1910, and its success symbolized
the company's increased sales and the financial successes of the years
right up to 1917 when United States entered World War I. These years
were the highpoint of the Progressive Era. William Howard Taft, President
from 1909 to 1913, gave way to Woodrow Wilson after the election of 1912.
Reform was the word of the day and many more were added to those already .
enacted during Teddy Roosevelt's Presidency. Of course, in Wisconsin,
Robert LaFollette had been a reform Governor until 1906 when he resigned
to become a United States Senator. LaFollette's reforms were improved
upon by his successors until Wisconsin became known as the most progressive
state in the nation. Some of this progress, for example the income tax
instituted by the 1911 legislature, shifted much of the tax burden from
agriculture to industry. This led industrialists to complain vocally
that Wisconsin businessmen were now at a competitive disadvantage.

It is likely that the relatively conservative leaders of the Iron
Works were opposed to the new income tax on businesses, but the years
after enactment were the most profitable in the company's history. Consequently
the company could and did pay its fair share, and the business
was still very competitive with other paper machine companies.

Nineteen ten was a complete turnaround from the declining sales
and profits of 1909. In fact sales nearly doubled to reach a new
record of almost $600,000 a year and profits went up accordingly both
as a percentage of sales and in total amount. While sales would not
surpass the record year of 1910 until 1917, the year the United States
entered World War I, the years between 1910 and 1916 were very good ones.
Even during 1915 when sales dropped back to the 1909 level profits were
better than average. 64 It is clear that during these years Aldrich and

ROSS kept the company in fine tune with the times and were flexible and
relatively accurate in knowing how many men were needed to keep the
company going on profitable terms. When times were slack, men were
quickly laid off, and when orders came in the shops expanded rapidly.
In this way the company remained very competitive even in years such
as 1915 when only one new paper machine was sold.

Part of this good judgment was knowing when to update equipment
to expand the facilities. Even though 1909 had been a depression year,
the officers decided to expand in 1910. As it turned out this was a
wise choice and good timing. Power capacity was doubled, and sales rose
to help fill up that capacity. To build for the future had become a
byword for the Aldrich-run Iron Works, and the 1910 expansion was the
right thing to do at the right time.

By the autumn of 1910 the addition was completed. The new power room had one Cooper 250 horsepower engine in it plus a 300 horsepower
boiler. These replaced two engines with a total horsepower of 125 which
were discarded. The new facilities meant that the Iron Works had doubled
its power capacity which would enable the company to build more shops as
conditions warranted. 65

Shortly after the new building was completed the company began
negotiating with 0. J. Johnson to buy his property that adjoined the Iron
Works. While he drove a hard bargain, the sale was completed in 1911,
and the Iron Works then had plenty of room for further expansion. As a
further consequence of the good times Aldrich's and Ross's salaries
were raised again to bring them in line with what executives at other
papermaking machinery companies were receiving. 66

Page 37

After the great sales and profits in 1910 sales declined slightly, but 1911 was the second best year in the company's history. Nineteen twelve was the third best year until the better years of 1913 and 1914 dropped it to fifth best. During these years sales to Midwestern companies were very strong but machines were also sent to Oregon, England,
and Germany.

The company was very competitive. Perhaps this is best shown by *
the 1911 publication by Pusey & Jones, a major rival, of a monthly
company magazine called The Super-Calender. This was a low-key publication
that often had articles or drawings that dealt with the history
of papermaking. In one issue the motto on the front cover drawing was
"When Speed Fails" which certainly implies that while Pusey & Jones made
quality machines they did not run particularly fast. 67 This contrasted
with the Iron Works whose quality machines ran rapidly as well.

By 1913 Iron Works officials could tell local businessmen that
their papermaking machines held the world production record. These were
optimistic times for the company because there were so many new uses
for paper. G. A. Macklem, the design engineer, emphasized new products
like thinner and stronger wrapping paper which came about due to consumer
demands for conservation and beauty. The Iron Works led in this area.
Other new products that benefited the company included the use of
wall paper instead of plaster, paper for sanitary purposes, and paper
packing cases instead of wooden boxes. 68

Macklem's confidence for good business in 1913 was borne out by
the results that showed machine shop hours to be even higher than the
record year of 1910! 69 Another positive occurrence at that time was
the decision by the stockholders to instruct Mr. Aldrich to "investigate
the best way to increase" the company's Capital Stock. 70 While this was not accomplished for a long time, concern for it showed that the company's
future was bright.

Page 380

Business continued strong into 1914 and the stockholders were
pleased to raise Aldrich's and Ross's salaries again. Few people fore-saw
the seriousness of the war clouds then hanging over Europe, and
World War I, when it came in August, was a shock to the American people.
Economic conditions had declined even before the outbreak of war, but the
war itself exacerbated a bad situation and brought on a short but severe
recession with high unemployment. Foreign trade rapidly declined, and
the Progressive Reform movement began to wane as new interests were
ignited. Despite Woodrow Wilson's wish that Americans be "neutral in
thought and deed" the realities of the situation made this impossible.

For the Iron Works, the war insured that the hopes for further
European sales would have to wait for the peace. On the home front,
paper mill owners, initially cautious, soon began to expand their plants
to take advantage of the increased demand for paper products. 71 The
Wilson Administration, despite complaints from the pacifistic Secretary
of State William Jennings Bryan, allowed continued trade with the
belligerents. This trade was soon followed by credits and then by out-right
loans. Boom times followed for United States trade. While most
people applauded the new war-induced prosperity, they opposed United
States belligerency. Whether the trade which increasingly went to the
Allies would bring on the war was an open question.

In Beloit, despite the wartime prosperity, new machine sales
dropped off to four in the partial war year of 1914, and then to one in
1915. Employees were laid off, but the company remained profitable even
as sales rapidly declined. Fortunately the parts trade continued to do

well, and it helped carry the company until new machine orders in
increasing numbers began to be received. By 1916 the company caught
up with the boom times that had begun for the East Coast mills in late
1914, and for the rest of the war new machine orders would carry the
company through greatly increased sales and higher profits. 72

At mid-decade the city of Beloit was a prosperous, growing city
exceedingly proud of its accomplishments and very much in competition
with nearby Janesville. According to its own figures, Beloit not only
had passed Janesville in population but had passed 20,000 in late 1915.
Industries were the bread and butter of the town and they were thriving.
The Beloit Daily News best exemplified that booster spirit in numerous
editorials and finally by a special edition that proclaimed that Beloit
was "the ideal location for industry or home. " 73

In its review of industries the Daily News noted that the Iron
Works was the fourth largest after the massive Fairbanks-Morse Manufacturing
Company proclaimed as the "world's largest oil and gas engine plant with
2,200 employees;" the Berlin Machine Works (now Yates-American) described
as the "world's largest wood working machinery plant" with 800 employees,
and the Stewart-Warner Speedometer Company alleged to produce the "world's
best" speedometer. It had 250 employees. The Iron Works, with its more
than 200 employees, was described rather limply as "one of the most
substantial and reliable of Beloit's industries." 74 This is surprisingly
faint praise for a company that could have been promoted as one of the
leaders, if not the leader, in speed and capacity of its papermaking
machines. Perhaps the then current lean times for the Iron Works was
the real reason for the paper's relative lack of enthusiasm.

Ironically, it was just at that time that the Iron Works leadership
a decision that in the long run would help turn a moderately sized
local company that basically served a regional Midwestern market into
a large internationally known family corporation that serves the world
market. The decision was to hire Elbert Haven Neese, Sr., as Vice-President.
Mr. Neese, who had married Alonzo Aldrich's only child, Laura, in 1914,
came to the Iron Works in 1916 from Pusey and Jones of Wilmington,
Delaware, one of the Iron Works' competitors. 75 He would remain with
Beloit in a variety of capacities including President from 1931 to 1952,
and Chairman of the Board thereafter until his death in 1961.

It was no accident that Laura Aldrich met Elbert H. Neese, Sr.,
as Alonzo Aldrich was long known for his ability to find "live wires"
that he thought would help the Iron Works if they could be induced into
switching employers. Young Neese was a real comer who had been made
Vice-President for sales of Pusey & Jones when he was only 26 years old.
Undoubtedly both men's ties to the papermaking machinery business insured
that they knew each other personally. Apparently because of this, Neese
and Laura Aldrich also met each other. It seems unlikely that Alonzo
Aldrich planned the whole thing but it certainly worked out fortunately
for him personally and for the Iron Works. Alonzo Aldrich remained a
strong President until his death in 1931, but E. f-l. Neese, Sr., got
increasing authority and made a large impact on the company by the 1920's.

2 Garraty, pp. 128-29, 131; Harold U. Faulkner, Politics Reform and
Expansion, 1890-1900, (Harper & Row: New York, 1959), pp. 91-92.

3 Daniel Boorstin, The Americans--The Democratic Experience (Vintage: New York, 1974), pp. 434-439.

4 Progress of Paper (Lockwood Publishing Co: New York, 1947), p. 247; Harry 3. Bettendorf, Paperboard and Paperboard Containers--A History .
(Board Products Publishing Co., 1946), p. 8.

6 BWFP, February 7, 1889.

7 Neese and Dundore, "Pioneers Paper Machines," Beloit Corporation
Archives, pp. 37-38.

8 BWFP, January 16, 1890 and May 15, 1890; Four Men and a Machine, p. 13.

9 Branch, Papermaking in the Lake States Region, 1848-1947, unpublished Ph. D. Thesis, University of Wisconsin, p. 60.

10 Minute Book, October 29, 1890.

12 Neese and Dundore, pp. 39-40; BWFP, July 2, 1891; History of the Wisconsin
Paper Industry, Howard PublishingCompany, pp. 18-19.

13 BWFP, March 11, 1893

16 Souvenier Views 1893; Aldrich to Nekoosa Paper Company, March 17, 1893, Beloit Corporation Archives.

17 Beloit Daily News, September 24, 1954; Neese and Dundore, p. 41. 3. A.
Fischer letter, Paperchine, January, 1940.

18 Minute Book, October 27, 1891, October 26, 1892, November 11, 1892, November 3, 1893.

19 Faulkner, pp. 141-42

20 BWFP, March 15, 1894. The Eclipse Windmill Company remained open but cut wages from 12 l/ 2 to 18% in September, 1893.

21 This dividend cost the company $5,460 per year. Minute Book, April 23, 1894, December 6, 1897.

28 BWFP, September 22, 1898. Of the 90 dead from Wisconsin, all but four died of disease!

29 BWFP, July 7, 1898; Dard Hunter, Papermaking, p. 578.

30 Memo from E. H. Neese, Sr., to A. P. Warner, June 15, 1954, Beloit Corporation Archives.

31 Minute Book, November 8, 1899, December 31, 1900, December 17, 1901; Neese and Dundore, pp. 47-49.

35 Henry Whalen, interviewed by Robert Hilton, July 20, 1951, in Wisconsin
State Historical Society Archives.

36 Statistics in letter from E. H. Neese, Jr., May 15, 1979.

37 Paper Trade Journal (Hereafter PTJ), January 7, 1899, p. 9.

44 Hunter, Papermaking, pp. 580-581; Bettendorf, Paperboard and Paperboard
Containers, p. 59; Progress of Paper, p. 274.

45 BWFP, September 5, 1901, December 27, 1901, April 17, 1902, May 1, 1902, &--29, 1902, June 19, 1902. 45

75 Apparently Aldrich told everyone that it would be a "case of the Neese's coming to Beloit or his giving up the Iron Works and moving to Wilmington," Bill Goodwillie interview tape, April 19, 1979.