The Great Lakes… 84% of the continent’s fresh water… a different story in every drop.
By Dr. Herbert J. Brinks
For a passing hour the horizon of Michigan’s upper Peninsula was alight with the prospect of a brilliant future, and expectations of economic prominence seemed more than visionary. These hopes were closely tied to Peter White, who, as a result of his integrated business establishment, embodied the hope and means for the industrial success of Marquette County. White settled in Marquette as an eighteen- year-old wanderer. He had been footloose since his fourteenth birthday, and followed Robert Graveraet when he led a party of laborers into the Upper Peninsula in 1849. Ambitious and able, White soon became a prominent resident of the Upper Peninsula. For that region with its iron range, White served as the banker, the investment broker, the insurance agent, the marketing factor, the legislator, and the industrial entrepreneur who combined all these functions in one business establishment. He hoped to erect an iron and steel industry in Marquette, close to the source of raw material, but he failed. Although recounting his efforts is freighted more with nostalgia than the excitement of steady progress, it was an episode with flesh and bones, and real stakes to win or lose.
The period of expectations, 1857-1877, was vibrant with hopeful activity. Athens of the West, entrepôt for east-west trade, and shop- keeper for the north-west, were among the overly sanguine descriptions of Marquette’s projected heights. Although naive in retrospect, such roseate prophesies commonly expressed the anticipations of frontier cities, and some cities were not disappointed. White could not perceive the outcome of his efforts, but the immediate future seemed rich with promise in the 1860s – promise based on achievements and reality as much as imagination. Marquette had an apparently inexhaustible supply of high grade iron ore, large tracts of hardwood forests for charcoal fuel used in producing pig iron, and navigable waterways connecting that city with the major pig iron markets. White knew that the hardwood trees could not last indefinitely, but easily concluded that coke or coal would replace charcoal when necessary. Ore carriers usually entered the harbor in Marquette with nearly empty holds, and when Marquette needed coal or coke, White expected the ore carriers to fill that need, thus keeping the industry in Marquette alive. For these reasons he easily justified his projection of personal and regional affluence.1
As an eighteen-year-old youth, Peter White came to Marquette under the tutelage of a vigorous pioneer, Robert Graveraet, who probably influenced the shape of his career. In 1849, when Graveraet led a party of settlers to the wilderness shores of Lake Superior he hoped to help build an iron industry there. What White knew about iron production, he learned from Graveraet, and together they witnessed and experienced the failure of several iron companies. These small industrial efforts consisted of bloomaries which refined ore by combining a mixture of iron ore and charcoal in an oven. After the ore reached a malleable state, it was beaten into a lump called a bloom. Marketing this product far out- stripped its value, and local industrialists reasoned that success would depend on the construction of the Saulte Ste. Marie Canal.2
The canal opened in 1855 and shortly thereafter the iron industry in and around Marquette began to form. However, the canal facilitated the shipment of ore as well as iron, and those who possessed sufficient capital to finance iron production chose to mine the ore and ship it to Pennsylvania and Ohio for refinement.3 White, and those who thought in terms of regional iron production, had little capital. Yet they struggled against the odds with success always just beyond their grasp. Their ultimate failure is less surprising than their relative success.
Triumph seemed imminent when Charles T. Harvey, who supervised the construction of the Saulte Ste. Marie Canal, enlisted the technical skills of Stephen R. Gay. He was an ironmonger from Massachusetts and after building a blast furnace for Harvey, Gay built two others. Lacking capital, he had to rely on Peter White, who provided the full range of his services. He helped with investment and working capital, with transportation, marketing, and legal services. He dealt with Gay’s creditors who demanded long overdue payments, and even supervised the manufacturing process when Gay went east seeking additional investment capital. It was during one such absence that Gay died, leaving the whole industry as well as his estate in White’s care. After settling the estate, White’s claim in it gave him a controlling interest in one blast furnace. Other creditors, who acquired Gay’s second blast furnace, placed it, also, under White’s supervision.4
Before White gained control of these blast furnaces, they had produced large quantities of iron, but fixed investments consumed most of the profits. When White took over in 1864, the equipment was in good repair and past debts were liquidated. Thereafter, and until 1873, White operated the business profitably and paid annual dividends at 10 percent or more.5
With Gay’s furnaces operating successfully, White initiated the establishment of another furnace in 1868. Munising, to the east of Marquette, offered a vast supply of hardwood for charcoal iron production. To establish a company there, White enlisted the support of several eastern capitalists and built a blast furnace on Munising Bay. That facility was soon in production, but lagging financial support forced it into several reorganizations, and by the time it became properly capitalized, the panic of 1873 crippled its prospects of success.6
Along with direct involvement in iron production, represented by White’s ventures in the Gay and Munising blast furnaces, he had connections with all the other iron producers in the area. These companies, numbering 17 in 18767 needed operating capital and marketing facilities. Providing both these services, as well as marine insurance, put White in a crucial relationship with the whole industry. In their most flourishing days, Marquette’s ironmongers produced a rather significant portion of the nation’s pig iron. In 1870 the industry supplied the nation with 20 percent of its pig iron. Among producers of charcoal iron Michigan ranked second in 1870, and the census of 1880 reported Michigan as the foremost producer of charcoal pig irons.8 By then, however, charcoal iron was rapidly losing its markets to the steel industry.
Since most of Michigan’s pig iron came from small companies unable to sustain the cost of individual marketing agents, they relied on Peter White. Marketing posed problems for him comparable to those facing the colonial merchants of the seventeenth and eighteenth centuries. Distance, and the absence of telegraph communication, plagued his efforts. Cold, snowbound winters and frozen lakes added to Marquette’s geographical isolation, and White usually chose that season to make an annual trip eastward to consult with his insurance companies, banking houses, and sales agents. These were the people on whom White relied in conducting his business. He had to select reliable agents in Chicago, Cleveland, and Detroit where he marketed the iron produced in Marquette.9 Selling iron, however, was only one facet of the marketing situation.
White’s sales agents functioned in a dual capacity, not only selling iron, but also advancing commercial paper to his banking affiliates. The capital shortage in Marquette demanded a constant flow of currency and credit from outside sources. Thus, Peter White stood athwart Marquette’s regional needs and capital funds available in Chicago, Cleveland, Detroit, and New York.10
He was often at pains to keep a steady flow of funds returning to Marquette. To assist in that task he established bank accounts in Midwestern cities as well as New York. Through these connections he threaded a complex network of capital flow which eventually came back to Marquette. For example, his sales agent in Chicago, N. E. Platt, placed advances in White’s Chicago Bank when iron shipments arrived there. However, such commercial paper was often needed in New York, Cleveland, or Detroit. In such cases the Chicago bank would discount the paper and transfer credit to the desired location.11 Marquette iron- mongers usually operated on advances from White’s bank in Marquette, and he kept such accounts solvent by transferring credit accumulated in New York, Cleveland, and elsewhere to these individual accounts in Marquette.12 These were the cities in which most of Marquette’s12 creditors lived, and therefore White was able to make exchange in a manner which pleased both the outside creditors and his Marquette clients.
The most crucial link in White’s financial arrangement was the sales agent. He depended on the agent’s ability to advance funds on unsold iron, and if for some reason the agent could not provide this commercial paper, White’s ability to serve the iron industry was hampered. Should such an agent go bankrupt, the whole financial structure would fall apart. While White’s agents functioned properly the iron industry was a feasible venture. However, without a middleman like White the industry had virtually no chance for survival. It is not strange that White acquired nearly all the insurance business generated by the iron industry. Few dared deny him that business when he was already supplying both working and investment capital as well as marketing and shipping arrangements. In fact, only one company in the area chose another insurance agent, and that company, the Iron Cliffs company, did its own marketing.13
For over twenty years White held this prominent post as the indispensable man in the regional iron industry. He lost that position only when credit sources outside of Marquette dried up. The demise came in 1877. The panic and depression beginning in 1873 had cut severely into profits of Marquette’s iron industry, but the blast furnaces continued operations well into the depression; in fact, production increased throughout that bleak period.14 By 1877 White was selling most of Marquette’s iron to Albert B. Meeker, a Chicago industrialist. In 1877 Meeker went bankrupt and the effect in Marquette was immediate. Not only was the market gone, but Meeker’s commercial paper was worthless until his estate was settled. Marquette could not wait that long, and soon the small iron furnaces depending on White went bankrupt. They could not meet creditors’ demands for payments on raw material, supplies, and labor. Meeker’s failure virtually destroyed the industry — while 17 companies were in blast in 1877, thereafter only four continued operations.15
However, the ultimate failure of the charcoal iron industry resulted from factors other than Meeker’s insolvency. All over the United States charcoal iron was losing markets because steel was a more desirable product. Marquette’s industrial experience would have been very common if White and like-minded investors had thought only in terms of the charcoal iron industry. But white and his associates knew very well that charcoal iron production always depended on the proximity of hardwood forests which were not inexhaustible. The industry in Marquette could last only as long as the nearby hardwood trees supplied fuel. Already in 1873 some blast furnaces were suffering from fuel shortages.16
Planning with the inevitability of fuel shortage in mind, White helped establish a coal fuel industry in Marquette. He was the sponsor of the Marquette and Pacific Rolling Mill, which used bituminous coal rather than charcoal. It was built within Marquette’s city limits, close to the labor force, with shipping docks on the company’s property comprising several large buildings, a furnace with a 35-ton per diem capacity, and 40 acres of undeveloped mineral land adjacent to a railroad. In short, the physical facilities of the mill were nearly ideal. The rolling mill was financed almost exclusively by local capital which probably indicated the limited appeal of such a venture. The mill got off to a poor start, partly because its furnace, built to use an unworkable fuel, failed to function.
Shortly thereafter local investors were impoverished by the great Marquette fire of 1868 which gutted the center of town. Many local investors had to retract their financial commitments to the mill. Finally, in 1873, the furnace was rebuilt to use coke and began to produce pig iron.17 By then, however, the panic and depression of 1873 had set in and the iron market was glutted. The rolling mill produced large quantities of iron, but without profit.18
The Grace Furnace, also situated on the Marquette waterfront, was another faltering venture which White supported. The Lake Superior Iron Mining Company incorporated the Grace Furnace as a subsidiary to its mining operations, but White’s bank provided the necessary working capital and credit. Unfortunately, the Grace Furnace did not begin production until 1873, and that same year over-supplied markets resulting from the panic forced the company into dissolution.
Local ventures such as the Pacific Rolling Mill and Grace Furnace were less than halfway measures when compared to a more significant project which White reported to the Michigan Legislature in 1875. That year, as a State senator, he sponsored legislation which changed the state’s incorporation laws. As evidence supporting the merit of his legislation, White claimed that Michigan’s incorporation law prior to 1875 had been the principal obstruction to the establishment of a multimillion-dollar iron and steel industry in the upper Peninsula. Michigan law limited industrial capitalization to $500,000, and the capitalists, who had drawn up articles of association and chosen a construction site, decided against the erection of a steel mill in Michigan. Since they planned a $4,000,000 corporation, which under Michigan law would have required the formation of eight separate companies, the investors decided against the establishment of a corporation with such a clumsy structure. White argued that the loss to Michigan and the Upper Peninsula was considerable and unnecessary. “Our state,” he orated, “was beat out of an accession of four million dollars to its productive wealth and taxable property by this good old Michigan law.”19 Doubtless there were other factors militating against the construction of a steel works in 1873. The panic that year was an obviously adverse ingredient. Since the known account of this projected industrial venture exists only in White’s speech, other factors discouraging the erection of the steel mill can only be imagined.
However, the construction of a steel works in Marquette at that time was not necessarily a bizarre venture. Most of the factors which today would make Marquette an unfavorable location for steel production did not apply in 1873. At that time the Marquette range stood as the largest proven source of iron ore in the United States. As in the early period of Marquette’s existence, vessels clearing that northern port docked with virtually empty holds. It should have been profitable for them to transport coke on the upward passage. In addition, ore shipping expenses were greater than that of coke, and the volume of coke needed to produce steel was steadily decreasing.20 In steel production fuel was becoming a less significant factor in determining industrial location because technological advances facilitated a more economical use of heat energy.21 Moreover, the steel industry was not yet so well located as to preclude investments outside of Pennsylvania and Ohio. The Illinois, Indiana, and Minnesota steel plants were all products of investment occurring after 1873.
Of the three factors usually considered in determining industrial location — marketing, raw materials, and labor — marketing seemed unfavorable to the selection of Marquette. Yet, there was heavy traffic, both rail and ship, leaving Marquette, and the expansion of that carrying trade would have been considerably less difficult than the development of entirely new avenues of trade. Also, although Marquette had no surplus labor to attract industry, there was no reason to expect that good wages would not have been an effective stimulus to remedy labor shortages.22
Considering the advantages of locating industry close to an otherwise expensively transported raw material, Marquette was a good site for the development of a steel industry in 1873. Subsequently, however, other equally rich ore supplies were uncovered. The Mesabi Range in Minnesota is a case in point. Once developed, that ore field motivated the construction of the Duluth, Minnesota, steel works. In retrospect, the industrial plans of Peter White and his struggling colleagues were not merely visionary, but hardheaded ideas destroyed by the panic of 1873 and the discovery of new ore supplies, which eliminated the singularity of Marquette’s prominence in supplying iron ore.
Of course, the fact is that the upper peninsula’s reach for industrial prominence was too short, although the process consumed an enormous amount of human energy. Peter White gave the best years of his manhood to that failing hope, and he was pained to see it fade. still clinging to the past in 1879, White saw “the light of a new era of prosperity dawning.” He predicted a 15- to 25-percent rise in the population of Marquette County. He predicted the construction of a Bessemer steel works in the city. He envisioned the development of many industrial plants in the area. “It was only a question of time,”23 he said — but the time never came. The following decades brought none of the anticipated industry. Instead, there was a relative decline in the population growth, and insurmountable competition for the few remaining blast furnaces.24
The pig iron era in the Upper Peninsula had passed.
- Richard Wade, The Urban Frontier (Chicago: University of Chicago Press, 1965 ), pp. 30-35; Lake Superior News and Mining Journal, August 29, 1846; Lake Superior Mining Journal, September 12, 1868; Peter White, “The Church Debt and Bonds,” 1879, speech in the Peter White Papers, Burton Historical Collection, Detroit Public Library.
- Peter White, “Autobiographical Sketch,” in the Peter White Public Library, Marquette, Michigan; Alfred P. Swineford, History and Review of the Copper,Iron, Silver, Slate, and Other Material Interests of the South Shore of Lake Superior (Marquette: Journal Press, 1876 ), pp. 116-121.
- Lake Superior Journal, July 12, 1855; January 5; August 16, 1856.
- Swineford, cit., pp. 215-220. The relationship between White and Gay is displayed in White’s papers, and especially in letters to one of Gay’s creditors, T. B. Meigs. Among the more informative of such letters are: P. White to T. B. Meigs, October 29, 1861; January 21, 1863, in the Peter White Papers of the Michigan Historical Collections of the University of Michigan (Hereafter cited as MHC).
- White to Charles A. Trowbridge, Jan. 14, 1863; P. White to Samuel L. Mather, Peter White Papers, MHC.
- Marquette Mining Journal, August 29, 1868; March 10, 1869; June 4, October 29, 1870; P. White to A. W. Brockway, April 6, 1867; Articles of Association and stockholders’ subscription list for the Schoolcraft Iron Company, April, 1867; Peter Van Schaik to P. White, December 9, 1870; also numerous letters to investors, such as: George Oliver, June 4, 1873; Charles J. Martin, December 20, 1873; January 10, 1874; Ralph Worthington, March 14, 1876, MHC.
- Swineford, cit., p. 214.
- S. Bureau of Census, Eighth Census of the United States: 1865. Manufactures, pp. clxxx; U.S. Bureau of Census, Ninth Census of the United States: 1872. Compendium, p. 909; U.S. Bureau of Census, Tenth Census of the United States:1883, Statistics of Manufuctures, pp. 4-7.
- White’s papers in the Michigan Historical Collections indicate that he made annual trips “down-below” as it was termed. On such trips he visited his colleagues in the banking, insurance and marketing regions connected with Marquette. White frequently decried the relatively ineffective nature of correspondence and postponed major decisions until he could meet his correspondents in person.
- White’s agents in Chicago, Cleveland, and other cities along the lakeshore received frequent admonitions to remit to his accounts as soon as iron was sold, or earlier when possible. Examples of such correspondence include: P. White to Otis & Company, Cleveland, August 27, 1861; Peter White to H. B. Tuttle Company, Cleveland, November 10, 1865; P. White to Samuel Brady Company, Detroit, August 2, 1861; P. White to G. L Hubbard Company, Chicago, July 9, 1862, MHC.
- White to N. E. Platt, Chicago, May 6, 1862 to November 28, 1874, MHC. The function of White’s agents is clearly portrayed in this rather voluminous exchange of letters.
- The White Papers of the Michigan Historical Collections contain extensive correspondence with banks in major Midwestern and eastern cities, which gives evidence of the credit structure White used for his Marquette clients.
- White to E. L. Hedstrom, June 5, 1873, MHC; E. B. Isham to P. White, May 4, 1869, Iron Cliffs Company Papers, Michigan Historical Commission Archives.
- Swineford, cit., pp. 216-232.
- Charles N. Fay to Peter White, July 31, 1877, MHC; State of Michigan, Mines and Mineral Statistics (Lansing: State Printer, 1889), p. 127.
- Swineford, cit., p. 217, notes that the Collins Furnace went out of production due to fuel shortages; Peter Temin, Iron and Steel in Nineteenth Century America (Cambridge: Massachusetts Institute of Technology Press, 1964), pp. 63-69, 76-79, 245.
- Marquette Weekly Plaindealer, September 10, 1868; Marquette Mining Journal, March 17, 1869; July 23, 30, 1870; August 2, 1873; Minutes of the Board of the Pacific Rolling Mill, MHC.
- Swineford, cit., pp. 227-228; J. S. Fay to P, White, June 6, 1879, MHC.
- White, “Address to the Joint Meeting of the State Legislature,” 1875, White Papers in the Burton Historical Collection, Detroit Public Library. Since the corporation could easily have organized in another state, Michigan’s laws could have had but little to do with the plans of the steel producer.
- Walter Isard, “Some Locational Factors in the Iron and Steel Industry Since the Early Nineteenth Century,” Journal of Political Economy, LVI (June, 1948), 213-216.
- Temin, cit., pp. 154-165.
- Wolfgang Paul Strassmann, Economic Growth in Northern Michigan (Lansing: Michigan State University, 1958), pp. 39-52.
- Peter White, “The Church Debt and Bonds,” 1879, speech in the Peter White Papers, Burton Historical Collection, Detroit Public Library.
- Marquette Mining Journal, June 16, 1883; State of Michigan, Mines and Mineral Statistics (Ishpeming: Iron ‘Ore Printing House, 1898), p. 206; P. W. to Allen & Co., February 17, 1877, MHC; State of Michigan, Manual for the Use of the Legislature (Lansing: State Printer, 1875 ), p. 285; State of Michigan, Census of the State of Michigan (Lansing: State Printer, 1886), I, clxxxv.
About the Author: Dr. Herbert J. Brinks, who earned his Ph.D. degree at the University of Michigan, is presently Assistant Professor of American Thought and Language at Michigan State University, East Lansing. This article is a portion of his doctoral dissertation entitled “Peter White: A Career of Business and Politics.” Dr. Brinks is also the author of The Guide to Dutch American Historical Collections of Western Michigan, 1967. His current research includes regionalism in the Upper peninsula, and urban leadership in the Old Northwest.