Query on leasing leads to explanation of farm credit system

Tillotson Construction Co. was one of several organizations that welcomed Nixon Truck Grain Market at 27th and O Streets in a Dec. 1, 1938 Omaha Daily Journal-Stockman ad. “Let good construction and equipment increase your profits,” the Tillotson ad line advised.

Just 30 days later, another paper, The Daily Record, carried the brief notice of a leasing agreement between A.A. Nixon & Co. and Tillotson for machinery and equipment. Value of the lease was $1,808.24.

With questions on why a prosperous company like Nixon would lease, we tabbed Brad Perry, who’s a good friend of Our Grandfathers’ Grain Elevators, to explain. Brad has had a career in finance, which he described in an email:

With the Farm Credit meltdown of the mid 1980’s, the 12 District Banks for cooperatives merged with the central Bank for Cooperatives, headquartered in Denver. Then it was renamed CoBank.

More history: There were 12 Farm Credit Districts, roughly similar to the Federal Reserve Districts. Each District had a Federal Land Bank with local Land Bank Associations, a Federal Intermediate Credit Bank with Production Credit Associations, and a Bank for Coops (BC). The central bank handled the large loans that exceeded the District Banks for Coops’ lending limits.

All this changed after the farm crisis of the late 1980’s. There are now a total of six District Banks, including CoBank.  

I was at the Omaha BC from 1975 to 1987. In 1980, OBC started a consulting company to work with coops in our District, which was Iowa, Nebraska, South Dakota, and Wyoming. At the depth of the farm crisis, I took the consulting company private. I’m still trying to fully retire, but have a couple clients I can’t say no to!

Q. Was it customary to lease machinery and equipment from the builder of an elevator?

A. I’m betting that the elevator’s owner didn’t have adequate funds to pay for everything, so the equipment was leased to him/her. That was not unusual. Why the equipment? It could be pulled out and re-sold.

Q. It looks like individual grain merchants like Nixon monopolized the market in grain distribution.

A. You’re about right on the grain merchants and monopolizing the grain business. The primary one was Cargill, along with the flour millers. Pillsbury, Washburn (Gold Medal), and so on. On the Northern Plains, there was also Peavey. Most of them were in cahoots with the railroads. There really wasn’t any government action that broke them up, but their predatory pricing. That gave rise to farmer-organized cooperatives and locally owned grain companies. The federal government did come in to the grain business in the early 1930s–the Great Depression. They created the Federal Grain Company to buy surplus stocks, i.e. wheat. Some of those elevators still stand and are still in use.

Q. It also looks like we’ll be on the road in a few weeks, and that could lead through southwestern Kansas, where Tillotson built elevators in a string of small towns.

A. On your Kansas trip, southern Kansas has some of the oldest concrete elevators in the country. All were built for wheat. As you know, there are mammoth elevators in Salina, Hutchinson, Topeka, and Wichita–particularly Haysville just South of Wichita. On or within 25 miles of U.S. 81/I-35 are four of the five largest elevators in the world. These are in Salina, Hutchinson, Haysville, and Enid, Okla. All were paid for by Commodity Credit Corporation storage payments.

Q. Besides the bountiful grain production, why are they concentrated there?

A. It was not unusual for wheat to be stored as long as 10 years. All wheat into the “terminals” came in 40-foot boxcars from area elevators. You’ll notice larger elevators the farther west you get. Notice Dodge City. It was too far away from the terminals, so they built more storage locally. You’ll see the same in Garden City, Ulysses, and other southwest Kansas towns.

How some wooden elevators in Nebraska were repurposed to produce cattle feed

Story and photos by Brad Perry

In Nebraska, many of the 12,000- to 18,000-bushel wood elevators got turned into feed mills, mainly for cattle feed. Most of these elevators had a roller mill in the basement and made a decent feed mill due to their small bins. An example from Walthill, Nebr. is seen in the photo above.

In Iowa, this was less common due to more hogs than cattle. Swine feeds tended to be more complex with more ingredients than cattle feed.

Feed mills were still being built of wood in Iowa up until the 1960s.

Quad States Construction, out of Des Moines, Iowa, got started building wood feed mills and then became a major builder of concrete elevators and annex tanks.

A reader’s contribution presents two of the largest–and last–wooden elevators on the prairie

Story and photos by Brad Perry

When I started with the Omaha Bank for Cooperatives in 1975, my accounts were the co-ops north of Interstate 80. One was Tekamah, Nebr., where Farmers Elevator was in grain and feed. I was told this was the last wood elevator built in Nebraska. 

It was huge for a wood house — 100,000-bushel capacity. I was also told they went with wood due to poor soil conditions. You can still see it on Google Earth. It’s the big one on the left.

Editor’s note: The poor soil conditions may have led to a heavy concrete elevator settling.

This June 29, 1961 article from the Burt County Plaindealer describes the new twin-leg elevator that would soon open with all the modern fittings found in a concrete elevator.

The very last wood house we financed at OBC was for the co-op at Sisseton, S.D. It’s still in use and holds 60,000 bushels. 

I can remember it cost $6 per bushel ($360,000) when a 250,000-bushel concrete house was $500,000. 

Minnesota and North Dakota stayed with wood longer than anywhere else because of their cold weather. They built as much as 250,000-bushel wood houses. Wood is a much better insulator than concrete and does not have condensation issues.

Newly discovered photos emerge of a 1950 blowout at a Tillotson ‘clone’ elevator in Bird City, Kansas

For a 2013 post, we visited the elevator at Bird City, Kan. to learn more about its provenance. Bird City (pop. 447) is in Cheyenne County, in the northwestern corner of Kansas. The county population is about 2,500.

“It has been demonstrated that the curved headhouse was a Tillotson signature,” we wrote after the site visit. “Did someone leave the Tillotson operation and branch out on his own, or were the plans sold to Vickroy-Mong?”

Later, we followed up with the story of a blowout that occurred there in 1950, not too long after the elevator was built by Vickroy-Mong Construction Co., of Salina, Kan.

Thanks to reader Steve Wilson, who grew up in St. Francis some 15 miles from Bird City, we have new views of the aftermath of that blowout, and these give a clue as to why the name Vickroy-Mong has otherwise disappeared from history.

The elevator was announced in January of 1950. The Omaha World-Herald reported as follows:

The Bird City Equity has voted to build a 250-thousand bushel storage elevator this spring. The government will assist in the finance to the extent of 80 per cent of the cost. It will also guarantee storage income for a three-year period. A drive to raise 50 thousand dollars in capital will be staged. Total cost of the elevator is estimated to be around 160 thousand dollars.

Photos courtesy of Steve Wilson

Soon after the tanks were loaded with grain, the blowout occurred. On Aug. 24, 1950, The Herndon (Kan.) Nonpareil reported: 

Approximately 15,000 bushels of the 1950 Cheyenne County wheat crop spilled out on the ground about 6 a.m. Friday when a 30′ by 8′ section of the newly constructed Bird City Equity elevator caved in. The section of wall giving way was over the loading bins on the railroad. A train was in Bird City at the time and was sent to St Francis to be turned after wheat augers brought in from the surrounding countryside had cleared a path through the grain on the tracks. More than six boxcars of wheat were loaded with the augers after the engine returned, but between 6,000 and 7,000 bushels of wheat still remained on the ground the next day, A.A. Gillispie veteran St. Francis newspaperman reported. The elevator which has a capacity of 250,000 bushels was finished shortly before harvest this year.

Chalmers & Borton received the contract for the repair work. In 1958, they also won the contract for an addition of 241,000 bushels.

W. Stephen “Steve” Wilson retired as professor of mathematics at Johns Hopkins University and lives in Baltimore. His father, Charles Wm. Wilson, M.D., served the people of Cheyenne County “doing everything from glasses to babies to surgery.” And Dr. Wilson was a photography buff. Steve Wilson provides this addendum regarding the blowout:

I was only 4, or almost 4, but it was a big deal. Lots of grain elevators in that part of the country, and they don’t usually fall apart. Worth the drive to see it!

In 2009, I took my kid out to see where I was from (the year before he graduated from high school). We went out to one of the elevators in St. Francis, the county seat. This was an elevator [where] they would take us kids up to the top, and we would throw model airplanes with cherry bombs in them.

However, when my son and I started walking towards the elevator, someone ran out of the office and told us we couldn’t get close to the elevator. Homeland security rules. What a waste of resources! If a terrorist wants to blow up a grain elevator in a town of 1,500 where you still have to drive 175 miles to get to a town of 25,000, that’s not a bright idea. Spending money to prevent it is even stupider.

Uniqeness in an early Cargill elevator in northeastern South Dakota

Early Cargill 02

Brad Perry shares another photo of an early Cargill elevator, this one at Athol, S.D.

Athol and yesterday’s Ashton are twin towns in Spink County, a ways south of Aberdeen. Together they must have about 180 people.

We hope those people appreciate the uniqueness of their elevators.

An early Cargill country elevator complex at Ashton, S.D.

Early Cargill 01

Brad Perry shares another photo of an early Cargill elevator, this one at Ashton, S.D. As the Dakota Territory surrendered its prairie to agriculture in the 1880s, grain traders like Cargill expanded north and west. The initial heavy harvests from the rich earth raised demand for storage.

 

 

The trading partnership of Bagley & Cargill in South Dakota

Bagley

Our friend, Brad Perry, saw the recent posts about Cargill history and was prompted to send some of his photos.

“The Bagley name still shows up in South Dakota along U.S. 12,” Perry notes. This elevator turns up in an online source that says the location is Andover, just east of Aberdeen.

“George C[olt]. Bagley was a member of a grain-trading family in eastern Wisconsin,” Wayne G. Broehl, Jr. writes in his massive history of Cargill. 

In the early 1880s, Wisconsin farmers were moving out of wheat and into livestock, so Bagley betook himself to South Dakota and partnered with Sylvester Cargill, one of the five Cargill brothers.

Broehl continues:

Most of the Bagley & Cargill operations were in that part of the Dakota territory that later became the northeastern section of South Dakota. Similar to Jim Cargill’s larger-capacity operations in the Red River Valley, the Bagley & Cargill’s 13 structures at the firms 10 locations were more substantial (although only one was classified as an elevator.) This elevator, at Aberdeen, had a capacity of 25,000 bushels; the Andover warehouse had the same; the Groton operation had an 18,000-bushel capacity and the Bath warehouse, 15,000.

An extensive biography of Bagley says the company concentrated on towns along the Chicago, Milwaukee, St. Paul and Pacific Railroad.

The partnership lasted “only a short time.” Bagley’s wife, Cornelia, would later recall, “Ves Cargill [Sylvester] was a partner but George could not put up with his suspicion of all deals and bought him out.”

 

One of Cargill’s early concrete elevators found in southern Minnestota

Elmore

Our friend, Brad Perry, saw the recent posts about Cargill history and was prompted to send some of his photos.

Here he shows us one of Cargill’s early concrete elevators. It’s located in Elmore, Minn., a tiny town in Faribault County, in the south-central part of the state right on the Iowa line.

As railroads pushed west in the 1870s, Will Cargill expanded his grain storage along the lines through northern Iowa and southern Minnesota.

And as the era of reinforced-concrete elevators unfolded, Cargill’s successors continued building.

We don’t know a thing about this elevator’s dimensions or who might have built it, but how impressive is the wooden elevator on the right? It stands almost shoulder to shoulder with the more modern concrete one. 

Tillotson’s design plans consolidated the trends in elevator form and function

Photo by Gary Rich

Photo by Gary Rich

Story by Kristen Cart

The concrete elevator construction records of the Tillotson Construction Company display data in columns, each column headed with the location of the project, and the date it was built. Specifications follow. Above the header is the name of the plan used to build the elevator. A short description accompanies the plan name.

For instance, in 1955, the Boyden, Iowa, elevator was built using the Palmer, Iowa, plan of 1950, with eight bins, each being 18 feet in diameter and 117 feet high. The driveway measured 13×17 feet.

You might discover, on review, how many of each elevator type were built based upon the plan names. This exercise will show us how the elevator plans evolved, and which were successful over the years of the elevator boom. Over the next few posts, I will attempt to spot trends over the span of our records, starting at the beginning. The elevators will be referenced by their locations.

Richland,_Nebraska_Front_from_Tilden_1

Richland, Neb.: Front Street, looking east from about Tilden Street, taken on 21 October 2013, by Ammodramus via Wikipedia Commons

Goltry plan:

Goltry, the first elevator of its type, was built with a center drive and four 12-foot-diameter tanks. The Goltry plan specified an elevator in the 60,000-bushel class, the smallest Tillotson built:

Goltry, Okla. (1939); Newkirk, Okla. (1940); Douglas, Okla. (1941); Wellsburg, Iowa (revised plan, 1946); Polk, Neb. (1948–“Wellsburg plan” was another heading used for this elevator, just to make it confusing); and Richland, Neb. (1948).

From the photographs we were able to find, this elevator type was a small, four-square design with a rectilinear headhouse. Several of the type were still standing in recent photographs.

Medford Plan:

Medford 01Medford, the first elevator of its type, was built with a center drive, a cross work room, and 22 tanks of 15 1/2 feet in diameter. These old elevators had rectilinear headhouses, a feature that was later abandoned in favor of a rounded design. The plan represented a big jump in size from Goltry, having a 212,000-bushel capacity. Later, a revised Medford plan had a capacity of 140,000 bushels, and an expanded plan pushed the capacity to 240,000 bushels:

Medford, Okla. (1941); Thomas, Okla. (1941); Burlington, Okla. (revised plan, 1945); Cherokee, Okla. (revised plan, “like Burlington,” 1945); Lamont, Okla. (revised plan, 1945); Blackwell, Okla. (revised plan “like Lamont,” 1945); Booker, Tex. (revised plan, 1945); Follett, Tex (revised plan, 1945); Elkhart, Kan. (revised plan, 1946); Kingfisher, Okla. (expanded plan, later designated the Kingfisher plan, 1946); Thomas, Okla. (expanded plan, “similar to Kingfisher,” 1946); Ensign, Kan. (expanded plan, “similar to Kingfisher,” 1946); Manchester, Okla. (revised plan, later designated the Manchester plan, 1948); Montezuma, Kan. (1948)

The two daughters of the Medford plan, Manchester and Kingfisher, follow:

Manchester Plan:

Medford 02Manchester, Okla. (1948); Rolla, Kan. (“like Manchester,” 1948)

Kingfisher Plan:

Hooker, Okla. (1949)

More analysis is needed to determine exactly when the transition to a rounded headhouse occurred–but we think it did occur sometime after the Manchester plan was first designated as such, unless some of these elevators were modified at a later date.

What is clear from photos of Goltry and Medford plan elevators is that the rounded headhouse design was not used in Tillotson’s earliest elevators, and was likely adopted sometime in 1948–both plans made the transition in that year. Other details are bound to emerge as we study the other elevator plan types as they entered the Tillotson Company’s repertoire.

 

 

 

The Atlanta, Kan., elevator suggests our grandfathers’ signature designs

 

AtlantaKansas

Photo by Brad Perry

Editor’s note: Contributor Brad Perry sent this photo of Valley Coop’s elevator in Atlanta, Kan. The rounded, stepped headhouse suggests Tillotson and Mayer-Osborn design influences. A call to the elevator put us in touch with Katherine Grow, who runs it with her husband Darren.

“I think it’s a Johnson house. I remember when they built it. All the men in the community helped when they started pouring. Markle was the head of the crew that did it. I think it was ’58 or ’59 when it was constructed. In fact, it’s better designed than a lot of places. We added an outside leg. We used to load out on the rail but don’t any more. We’ve done maintenance and made safety updates. We’ve had it painted once. We were told it is the kind of concrete that has to be kept painted. It’s easy to work with, the way it’s put together with the inside leg. We’ve been pleased with it. I was a teenager or preteen when they built it. Once started, they kept pouring. With the lights at night, it reminded you of when you see a riverboat all lit up going down the river. It was cool. When we built this other bin and they could do it in sections, it was kind of different. They just pour so much and go round and round with a little cart, and come night, why, they’d quit and go home.”