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MANAGEMENT GIANT

Frederick Weyerhaeuser
Timeline
1834 Born. 1852 Aged 18, emigrates to the United States. 1856 Starts in the timber industry at Mead, Smith, and Marsh sawmill. 1857 Put in charge of Coal Valley operation. 1858 Mead, Smith, and Marsh is bankrupted. 1860 Buys Mead, Smith, and Marsh sawmill. Renames it Weyerhaeuser & Denkmann. 1871 Forms Mississippi River Logging Company with 17 charter members. 1899 Moves into 266 Summit Avenue, St. Paul, Minneapolis. 1900 Founds the Weyerhaeuser Timber Company and becomes president. 1902 Buys the Everett sawmill for $243,000. 1905 Has amassed 1.5 million acres of timber. 1914 Dies.

Summary
One of the unsung heroes of U.S. economic history, Frederick Weyerhaeusers story is a classic tale of rags to riches. Born in Germany, he emigrated to the United States at the age of 18 in 1852. Settling in Rock Island, Illinois, he joined a local sawmill and worked his way up. He took advantage of the owners misfortune, buying the business when his boss went bankrupt. By the 1880s, through a series of astute maneuvers and shrewd investment, he was in charge of several companies involved in the timber industry and owned vast tracts of pine forest. He moved to St. Paul, Minneapolis in 1899 and, over dinner with a neighbor one evening, did a deal to acquire 900,000 acres of railway-owned land for the bargain price of $6 an acre. Founding the Weyerhaeuser Timber Company in 1900 to exploit the land, Weyerhaeuser remained president until his death in 1914, head of the largest timber company in the world.

Background and Rise

Frederick Weyerhaeuser was born in 1834 in Niedersaulheim, Rhein Hessen, Germany. Like many other young men of his generation, Weyerhaeuser left Europe for the United States to seek his fortune. He arrived there in 1852, aged 18. He had no money, no skills to speak of and no valuable possessions to sell. All he had were his strength and a willingness to work hard. Weyerhaeusers first job was as a laborer in Erie, Pennsylvania. There he met and married his wife Elisabeth. The couple then moved to Rock Island, Illinois where he worked on the railroad. In 1856, when he was 22, Weyerhaeuser obtained work at the local sawmill, Mead, Smith, and
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Marsh. It was dirty, difficult work but Weyerhaeuser applied himself assiduously, and impressed the mill owner enough to earn a promotion. He was put in charge of lumber sales. Shortly after, in 1857, he was chosen to head an offshoot operation of Mead, Smith, and Marshs in Coal Valley, Illinois. It was the start of a lifelong career in the timber industry, in which he would rise from laborer to multi-millionaire. Later Weyerhaeuser attributed his tremendous success to honest endeavor. The secretlay simply in my readiness to work. I never counted the hours or knocked off until I had finished what I had in mind, he said.

Defining Moments
In 1858, the Mead, Smith, and Marsh mill went bankrupt. Weyerhaeuser was out of a job. But like all good entrepreneurs, instead of crumbling at the first sight of adversity, he turned a setback into an opportunity. Two years later he bought the sawmill for $3,500 with his brotherin-law, Frederick Denkmann. The new venture was called Weyerhaeuser & Denkmann. Weyerhaeuser went out to build up the business, and Denkmann ran the sawmill. It took all of Weyerhaeusers capacity for hard work to keep the debt-riddled company going. I went around among the farmers, exchanging lumber for horses, oxen, hogs, eggs, anything they had, which I then traded to the raftsmen for logs, Weyerhaeuser said. In at the deep end, he learned his trade quickly. He traveled upriver to meet the rivermen, visited the loggers in their camps and learned how to fell trees and scale logs. At the time, hardwood was logged from close to the rivers banks in the local area, and pine (growing in popularity) was logged to the north and floated down the Mississippi River. The traditional method for getting the pine downriver was with giant log rafts, crewed by up to 35 rivermen using oars to steer the cumbersome vessels. This all changed when a boatyard owner invented a steamboat specifically designed to tow the logs. The steamboats first run towed a Weyerhaeuser & Denkmann raft down the Mississippi to the Rock Island sawmill. Sensing a commercial opportunity, in 1871 Weyerhaeuser formed a coalition of sawmill owners under the auspices of the Mississippi River Logging Company. Weyerhaeuser became president. During its busiest time of year, the Mississippi River Logging Company had 75 steamboats towing logs on the upper Mississippi and employed some 1,500 men. Other sawmills were acquired by Weyerhaeuser and, in 1878, he and Denkmann founded the Rock Island Lumber and Manufacturing Co. As business began to flourish, Weyerhaeuser purchased tracts of pine forest in Wisconsin. Through the 1870s and 1880s, he bought over 200,000 acres in Wisconsin from Cornell University. As the end of the 19th century approached, Weyerhaeuser was in charge of the largest lumbering enterprise in the United States. The business, located in the Midwest, had logged much of the old forest of the Great Lakes region. Weyerhaeuser needed more land and turned his attention to other U.S. states. While musing over which direction to take next, he decided to move. He packed his bags and, leaving his daughter Apollonia in their family house on Rock Island, moved to St. Paul, Minneapolis. It was probably the best decision he ever made.
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In 1899, Weyerhaeuser moved into 266 Summit Avenue, one of St. Pauls most prestigious addresses. Formerly owned by newspaper magnate Frederick Driscoll, the substantial town house, with its marble floors and majestic hardwood staircase, was a measure of Weyerhaeusers business success. But there was better to come. One of his new neighbors was James J. Hill, a long-time St. Paul resident and president of the Great Northern railway, then in the process of completing the rail link from St. Paul to Seattle. Weyerhaeuser became firm friends with Hill and frequently dined at his house. By 1900, Hill had acquired a controlling interest in the Northern Pacific railway, Great Northerns principal competitor. Along with ownership of the company and all its railroad interests, came the possession of vast swathes of landoriginally donated in the 1880s by the federal government for the construction of the transcontinental railroad. The land was a substantial portion of the original allocation of 44 million acres, equivalent to 68,750 square miles. At dinner one evening, Weyerhaeuser casually inquired how much he would have to pay for the 900,000 acres of Northern Pacific land in Washington. He suggested five dollars an acre, Hill suggested seven, and they settled on six. It was one of the best land deals ever. For $3 million up front and eight payments of $300,000, plus interest, Weyerhaeuser acquired 900,000 acres of prime forestry land. There is a great lot of it, in every conceivable direction, he said, commenting on the quantity of timber. Better still, as part of the deal, he negotiated shipping rates with Hill for transporting the timber that were far below commercial rates. The deal, speculative as it was, was too big for Weyerhaeuser aloneso he turned to other timbermen for help. It took nearly all the timbermen of the upper Mississippi River to raise the down payment. Together with the other investors, in 1900 Weyerhaeuser founded the Weyerhaeuser Timber Company, with himself as president. In 1902, the company bought the Everett sawmill for $243,000. The renovated mill turned out 50 million feet of lumber a year. By 1905, Weyerhaeuser owned 1.5 million acres of timber. He died in 1914, having built the largest timber company in the world. His son John succeeded him.

Context and Conclusions

Many of the great business leaders in history are people who have invented a product and then exploited it commerciallyHenry Ford and his Model T; Edwin Land and the polaroid camera; King Camp Gillette and the razor blade. Frederick Weyerhaeuser belongs to a different class of businessmen, no less great, who exploited natural resources to help build a nation. Through hard work, entrepreneurial endeavor and brilliant management, Weyerhaeuser brought together the rivermen, the loggers, the millers and the other diverse trades involved in the timber industry, and built the biggest timber company in the world. Today, in an environmentally sensitive age, his rapacious plundering of the forests of the United States might raise an outcry. The Weyerhaeuser Company, still trading today and employing over 45,000 people in 17 countries, no doubt takes a more considered approach to its activities in this regard than did its founder. But it should not be forgotten that Frederick Weyerhaeuser was in the engine room, driving a rapidly expanding economy. He was one of the unsung heroes that helped make the United States the economic powerhouse it is today.

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Close But No Cigar

Captain Robert Dollar Lumberman and shipping owner, friend of emperors and presidents, Captain Robert Dollar rose from his humble Scottish origins to become one of the biggest producers of lumber in the United States in the early 20th century. From cooks boy to international ambassador, Dollarthrough his Dollar Steamship Companylaid the foundations for American-Asian import-export.

For More Information

Books: Hidy, Ralph, et al. Timber and Men (The Weyerhaeuser Story). . New York: Macmillan, 1963. Sensel, Joni. Traditions Through the Trees: Weyerhaeusers First 100 Years. Seattle: Documentary Book Publishers Corporation, 1999.

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