Tractor Wars

♪♪ Debra Reid: So it's really a groundswell of interest in especially rural and agricultural America. They are prepared for a

tractor

that will be light and relatively reliable. Neil Dahlstrom: And it wasn't until about 1913, 1914, with the introduction of the Bull

tractor

, the beautiful nightmare period, as one editor called it, where a small tractor was built for an average-sized farm, that changed everything. Christian Overland: And so even though the tractor was one of the major losses for Henry Ford, it was a value proposition that he felt the world needed to get into and he wasn't thinking about that amount of time as a loss, he was thinking about that. amount of time as an investment. ♪♪ During the first two decades of the 20th century, a war raged between farm implement companies to build a tractor that would replace horses, increase productivity, and increase profits.

Within 20 years, hundreds of companies would enter the tractor market. But three companies would emerge as market leaders. Agriculture was entering the era of power. ♪♪ Funding for Tractor Wars was provided by Friends, the Iowa PBS Foundation, as well as generations of families and friends who are passionate about the programs they watch on Iowa PBS. Since the beginning of domesticated agriculture in the Middle East 9,000 years ago, agricultural work was done using the muscles of humans and animals, turning the soil to prepare it for planting, removing weeds and harvesting crops. Neil Dahlstrom: Basically, you're using horsepower, you're using oxen, you're using mules, but it's one person, hard work day in and day out, from sunrise to sunset.

It is simply hard and exhausting work. ♪♪ In 1837, innovation came with the John Deere self-scouring plow. The new tool could reduce the time needed to prepare an acre from 96 hours to just five. The work, however, remained the same, a combination of manual and animal labor. At that time, the United States was rural and the economy was agrarian. As late as 1870, more than half the population called themselves farmers. Those farmers used almost five million horses and mules in all types of jobs that required energy. The herd increased to more than 25 million by 1920 as the Midwest prairies were converted to farmland.

When Native Americans who had lived in the Midwest for thousands of years were displaced by Europeans moving west, the steel plow broke up the prairie and crops emerged. Christian Overland: The question was how to make it more efficient to get more output with less labor? That has always been the component and still is. And quality, quality of the product. You get innovators, Yankee ingenuity, ingenuity, the idea that you can really improve things by inventing things and trying things. So, there are people like John Deere, who was basically a blacksmith who took on a problem that farmers faced and that was the plow. ♪♪ But horsepower had its limits.

Horses were only capable of heavy work for a few hours of the day and needed food and water whether they were working or not. They were a productive tool for much of the year and were mostly dormant during the winter. Farmers' productivity skyrocketed with the steel plow. Faster plowing increased demand for other horse-drawn farm implements. Discs and harrows helped smooth fields after being plowed. Seeders and seeders were faster and more effective than scattering seeds by hand. Horse-drawn cultivators helped remove weeds. Many inventors over the centuries had attempted to mechanize harvesting. But none solved the engineering puzzle until Cyrus McCormick in 1831.

A blacksmith by trade, McCormick's reaper used the driving wheel to successfully transfer animal energy into mechanical motion that replaced manual labor. Simply cutting grain with a horizontal bar increased productivity exponentially. Later versions of the reaper would gather the grain into piles and then join them together forming crashes. Work that once required half a dozen people could now be done by a single farmer and a couple of horses. Separating the grain from the stalks remained a manual labor challenge. ♪♪ McCormick's invention of the reaper created a demand for belt power to run threshers and produce mechanically harvested grain.

By 1847, McCormick had found enough sales momentum to move the company to Chicago. Steel plows, mowers, shellers and other machines were soon added to the McCormick catalogue. McCormick Harvesting Machine Company quickly grew into a manufacturing giant. Neil Dahlstrom: At the beginning of the 20th century, you're coming out of the Gilded Age, it's an era of trusts and big business and the idea is that we're going to build everything, we're going to build more of it. , it is more profitable for the company, in theory it is a one-stop shop for the customer. And if you're building farm implements, the idea is simple: we want you to go to our dealership and buy everything from us, and if you need repairs, you'll come to us;

If he needs spare parts, he can do it. you are going to come to us. And that's the really simple philosophy behind a complete line. International Harvester is really the first company to do it and they can do it because they have an 85% market share in the harvesting business, which is by far the most profitable business when it comes to farm equipment. And then everyone else runs to catch up and survive. ♪♪ Cyrus McCormick died in 1884 after witnessing the mechanization of agriculture and gaining great wealth. His sons Cyrus Jr. and Harold would take control of the growing company.

A merger would expand the company's footprint. Neil Dahlstrom: At the beginning of the 20th century, after the formation of International Harvester in 1902, they were the fourth or fifth largest company in the United States. So, you're talking about U.S. Steel, American Tobacco, International Harvester, agricultural equipment manufacturer. They are businesses worth a hundred million dollars a year. John Deere is a three million dollar a year company. We do not compare the same in terms of size or resources. ♪♪ Steam engine energy production was revolutionizing economies around the world. Factories attracted workers from the countryside to ever-growing cities. Steam power moved ships on rivers and pushed trains further and further into the countryside.

Steam power also reduced months of manual threshing to a single day's work. To operate a wheat thresher in 1870 it took up to 13 men who could thresh 300 bushels a day. In the 1890s, giant steam-powered threshers could process 1,000 bushels per day. ♪♪ Threshing day was often a working holiday on the farm and if a photographer was hired to document the work, a photograph of the site often did double duty as a formal family portrait. By 1900, more than 30 companies were manufacturing 5,000 steam-powered tractors each year. The advent of steam power required large capital, large capital required more acres and higher returns to pay the larger mortgages. ♪♪ But the disadvantages of steam were outweighed by the benefits.

Continuous portable power was available for important jobs on the farm. However, the price of steam power and the specific function limited sales to only the largest farms. Neil Dahlstrom: So it's not a huge booming market. It has its role and its place. But it gives people the idea that we can do more with more power. And that's where the idea of ​​the tractor powered by gasoline or kerosene really came from. ♪♪ Many thought that steam was the last word in engine technology. But when the gasoline engine for automobiles appeared in 1877, it revealed the potential of small portable engines.

It provided instantaneous power at a time when its older steam siblings required long heating cycles. The automobile patent expired in 1889 and hundreds of machines powered by a portable gasoline engine appeared on the market. ♪♪ Neil Dahlstrom: Now that technology is available to everyone. So now all of a sudden you can have a one and a half or three horsepower stationary motor. Maybe it has wheels so you can move it. Now you can use a single hole corn sheller, washer or irrigation pump. So now you have power. ♪♪ The improvement in productivity was dramatic. The United States Department of Agriculture estimates that in 1822, 60 hours of work could produce 20 bushels of wheat.

In 1890, steam power reduced the hours needed to eight. As steam brought efficiency to agriculture, Henry Ford considered how to reduce the monotony of farm work. Debra Reid: There are a couple of things in your childhood that I think were formative or foundational. One of the things that Ford sees is this Nichols and Sheppard steam engine and he becomes fascinated by it and that prompted him to want to learn more about steam and the power of steam. In fact, he is going to pursue this career with the blessing of his father. He becomes an apprentice in a mechanical workshop.

But then, around 1882, he returned to the farm and that's when he repaired this Westinghouse steam engine that was used by a threshing team in his area. And those two things give him confidence and really galvanize his efforts to become more of an industrialist or a machinist than a farmer. ♪♪ But an agrarian lifestyle did not appeal to Ford and he returned to Detroit and began working as an engineer for inventor Thomas Edison. Ford tinkered with steam and gasoline engines in his spare time. In the 1890s, agricultural implement manufacturers began building internal combustion engines that mimicked the power of steam traction engines, but took up less space and cost less.

These machines could drive grain threshers via belt drive in the same way as steam engines and were also capable of plowing fields in the spring, doubling their versatility on the farm. ♪♪ Neil Dahlstrom: Maybe you can hook it up to run a thresher or something that's fairly stationary, but they're designed for plowing. So it's a huge investment, just plowing and then putting the tractor away for the rest of the season. So it's not very economical in those terms. There was a brief period of time on these big farms when big prairie tractors were great. It was kind of the gateway to what the industry would become. ♪♪ Iowa resident John Froelich built the first gasoline tractor in 1892.

He successfully worked as a thresher in South Dakota for 50 consecutive days in temperatures ranging from over 100 degrees to minus three degrees below zero. He became the precursor to the Waterloo Boy. Two University of Wisconsin engineering graduates, Charles Hart and Charles Paar, introduced their first tractor in 1902 and by 1906 were producing half of the tractors sold in the United States. In 1907 there were approximately 600 tractors on American farms, 200 of them Hart-Paar. ♪♪ ♪♪ Dozens of other manufacturers were introducing similar vehicles to capture energy farming demand. Many would sell a few tractors and then go bankrupt, unable to make enough income to cover the huge manufacturing costs.

A company that was successful in manufacturing tractors already had a track record of profitability in agricultural implements. McCormick Harvesting Machine Company was a leader in the sale of farm tools and implements in 1902. ♪♪ A merger between McCormick Harvesting Machine Company, Deering Harvester Company and three smaller companies had created the International Harvester Company. The new company was the fourth largest company in the United States and had global reach. IHC controlled 80% of agricultural implement production in the United States and was vertically integrated. The company owned hardware stores, rope factories, huge logging operations, sawmills, and coal and iron mines. He even owned the Illinois Northern Railroad, which moved finished materials and equipment in and out of its sprawling manufacturing complex on Chicago's south side. ♪♪ By 1900, much of the hard prairie soil had been broken up and row crops had become the norm in much of the Midwest.

While the wheat fields of Canada and the prairie states could use large steam engines for plowing and threshing, demand for a smaller tractor for smaller farms was increasing. Instead of pulling 12 plows at a time, Midwestern farmers only needed to pull two or three plows at a time. A 1910 study of horse plowing estimated that a farmer, following a single horse-drawn plow, walked more than eight miles per acre plowed. The market for a faster and less demanding method of tilling the land was enormous. ♪♪ IHC was ready to capture this new market. The company's owners put their money, their experience, and their designs to work developing tractors powered bygasoline and kerosene.

International Harvester launched the Titan and Mogul tractor brands. The machines were lighter and more maneuverable and could pull multiple plows in most conditions. By 1910, even with the high cost of each unit, the Titan line accounted for half of the new tractors used in the United States. ♪♪ This was also the era of populous politics and a public tired of large corporations. International Harvester was found guilty of using its monopoly power against its competitors in 1912. The company was forced to sell some of its subsidiaries, sell some alternative brands, and eliminate parts of its dealer network. Ultimately, the legal decision was a victory for International.

The government was only able to show the damage to its industry competitors and not its customers, setting the stage for 40 years of market dominance. ♪♪ ♪♪ The rapid pace of tractor innovation masked a growing conflict between International Harvester president Cyrus McCormick, Jr. and John Deere president William Butterworth. Both companies were working to complete a full line of equipment for their dealers. The goal was to capture farmers' business, from machines to repairs and parts. ♪♪ Neil Dahlstrom: This era for me really begins with a series of meetings between William Butterworth at John Deere and Cyrus McCormick, Jr. at International Harvester.

Deere is trying to build a complete line. International Harvester knows this. Neither of them wants to reveal their opinion, so they have a phone call, then a face-to-face meeting and Butterworth says, "No, we're not going into the picking business." and Harvester says, okay, but if he does you do, we'll get into the plow business, basically destroying a 70+ year old gentleman's agreement of sorts between the two companies. Well, we know that Deere is going into the harvesting business, and we know that International Harvester already bought a plow company, just in case. ♪♪ Many tractor designs of the late 19th century imitated popular implements that placed the farmer behind the horses.

Engineers at a company that was eventually absorbed by International Harvester assembled an 1891 Deering engine into an ideal new lawnmower. It became the first self-propelled implement. While not a tractor, what became known as a tiller was a first step in that design. ♪♪ ♪♪ Prior to the development of Henry Ford's assembly line, the industry had been hampered by a lack of standards and precision. Each part was unique to each machine, making manufacturing inconsistent and repairs difficult. The assembly line forced the standardization of the manufacturing of parts. International Harvester took a page from Ford's book and put the practices into action.

The race to introduce a practical tractor brought a variety of machines to the market. One of the first successes was the Bull. Introduced in 1913, its three-wheel design helped make the machine light and economical. It was an immediate hit with farmers and almost cornered the tractor market. Sales of IH tractors plummeted 76%. While the Bull was underpowered and could roll over on hills, it showed that there was a market for lighter, more agile tractors. But Bull's initial success was overcome by manufacturing problems and new competitors. By 1918, Bull had been driven into bankruptcy. The Fordson, Henry Ford's model, was exponentially successful.

Debra Reid: In 1916, when Ford was still trying to launch this Fordson to meet increased demand, there were about 124 companies producing about 30,000 tractors a year and all of those companies were operating more or less with a farm implement mentality. And that means that they don't develop individually, but they are constantly trying to figure out how we can lighten it while maintaining the structure. With all due respect, they are like dots on a screen because none of them have the capital to invest in the research and development that Ford has. And that research and development pays off in this product that transforms the entire tractor industry.

Manufacturing tractors is more difficult than it seems from a financial point of view. When you have a company like International Harvester that is a leader in the agricultural equipment business and their brand comes from mowers and other agricultural technologies. But yeah, International Harvester was maybe one of 124, but it was leading the farm implements business. ♪♪ Sales at International Harvester recovered as sales of Bull tractors fell. By 1916, IH had regained its 40% market share. That year, those 124 companies sold a total of 63,000 machines. ♪♪ (nature sounds) But horses still dominated the agricultural economy. The 1920 agricultural census showed that there were 246,000 tractors on American farms, but 26 million horses still did most of the work.

The USDA estimated that purchasing a tractor saved the farmer about 250 hours of horse care per year. The math was now shifting towards energy farming. (plowing sounds) ♪♪ International continued to drive much of the industry's growth. His MD 8-16 featured three forward speeds and an optional power take-off for powered implements. It was the first IH tractor built on an assembly line. But production problems prevented the model from meeting demand. The company knew that Ford was gaining ground and, instead of competing directly with the Fordson, it opted for a higher quality machine that was easy to maintain and promised a long life. (Machine belt running) The main enemy of tractors was dust.

The bearings and transmissions were mostly unsealed. The average life of some models was only 12 months. Farmers would buy a tractor for $1,000, about $30,000 today, and end up paying up to $400 for maintenance, a little more than $12,000 today. Despite paying almost a third of the purchase price in repair costs, tractor sales skyrocketed from 21,000 in 1915 to 200,000 in 1920. ♪♪ The year before the Bull's demise, Henry Ford put his Fordson on the market . The four-wheeled tractor was an immediate success. But the board of directors was dismayed by Ford's obsession with his tractor project. ♪♪ Christian Overland: Henry Ford, who had his little prototype at the Piquette plant, now runs the Highland Park plant in Detroit, and at that time makes cars and Model Ts.

He gave up the other things and just adopted a singular mindset and his board tells him no. The Dodge Brothers were also on his board and they said, no, no, they're fine with that one. It's like, hold the line, we're making money, Henry, build the Model T. So what does Henry do? He creates his own company and calls it Ford and Son. Ford had been in its automobile assembly line for more than a decade while he was targeting the tractor business. Debra Reid: Ford was always looking for that next endeavor. But all this time he's had the tractor in mind, that notion of putting things on wheels that are self-propelled.

So he's experimenting with tractors before the Model T is finalized and Ford actually calls the tractor the automotive plow. They use a model B, like in boy, a car engine and radiator and rear wheels from a grain binder and front wheels from a steam engine and put this piece together. And they are constantly trying to find out if a car engine can be used to move this car plow. It takes them a decade to realize that no, the tractor needs a different engine, a different frame, but ultimately it's an automotive assembly line process. ♪♪ In 1915, Ford secretly purchased 2,000 acres near Dearborn, Michigan, with the idea of ​​building the largest industrial complex in the world.

He hoped that what would eventually become his River Rouge facility would manufacture one million vehicles per year. Ford wanted to eliminate suppliers and intermediaries. Every element of the car and tractor would be created on site. The Fordson's reception was based more on its reputation than on the machine's merits. Gas Powered magazine wrote in 1916, nothing spectacular or unusual in its performance. Most would have accepted the machine without hesitation simply because it was built by Henry Ford. ♪♪ While the market was ready for a new tractor, Ford still wanted to experiment and refine. His tinkering was halted by the United States' declaration of war in 1917.

Ford, an avowed pacifist, had campaigned to end the war. His Ford Motor Company had refused to manufacture war materials for any country involved in the conflict. However, once the United States entered the war, Ford Motor Company factories supported the effort and the contracts that accompanied it. Tanks, trucks and other vehicles rolled off the assembly lines until the armistice was declared 18 months later. ♪♪ The power of the Ford name had already been seen in a contract signed with the United Kingdom. Britain had been fighting in Europe for three years with no solution in sight. The country was desperate for tractors after millions of laborers went to France and Belgium to fight.

The British Ministry of Munitions ordered 6,000 Fordsons sight unseen in 1917. ♪♪ Debra Reid: They are munitions tractors, so M-O-M is the term they are called, and they went exclusively to Britain. But Henry Ford did not launch for domestic purchase in the United States until early 1918. Sometimes farms adopted farm engines before purchasing an automobile, and sometimes they did both before purchasing a tractor, and sometimes they did both. They all bought together. So, it's really a groundswell of interest in the United States, especially rural and agricultural. They are prepared for a tractor that will be light and relatively reliable. ♪♪ The Fordson presented a compelling financial picture to farmers.

Compared to a team of horses, plowing was 40% cheaper with a tractor and the work could be completed in a quarter of the time. In April 1918, all 7,000 Fordsons were delivered to the United Kingdom. Then, Henry Ford opened sales in the American market and almost double the number of orders arrived. In June of that year, more than 50,000 tractors were delivered worldwide. Priced at $795, the Fordson was well above the planned and announced goal of $200. The Fordson nameplate was chosen because the Ford Motor Company board of directors had not yet approved the project. To focus on the tractor business, Henry Ford surprised his board of directors by stepping down as president of Ford Motor Company in December 1918.

Ford then ran his tractor business on the same tight margins he used for his Model T. Volume and Market share mattered more than profits. 80,000 tractors were quickly sold in the first two years and farmers began to push the limits of their new machines. Other tractor manufacturers avoided direct competition with the Fordson, positioning themselves as different in some way, better at plowing, more durable, or capable of doing more work on the farm. At John Deere, Butterworth observed Ford's growing market share and became concerned about the success of his competitor. Neil Dahlstrom: Fordson was very scary for American tractor manufacturers at that time.

And we see this, Ford introduces his tractor at an agricultural show in Freemont, Nebraska in 1916 and immediately afterwards we see letters from William Butterworth of, okay, let's slow down, I'm opposed to this tractor business. What it means is that we are not going to build tractors, we are not going to invest in a new factory because we are not going to compete with Henry Ford in aspects such as price or volume. And so it kind of changes Deere's perspective on things, which is how do we build and design something that doesn't directly compete with the Fordson?

We want something that maybe pulls three plows. So, it's a different segment of the market. We are going to create a different niche so as not to compete directly. Debra Reid: Outsells International Harvester, which had led tractor sales up to that point. ♪♪ Despite early approval from farmers, the Fordson had drawbacks. Like most tractors, it was too close to the ground to grow cotton or corn and had no power takeoff to drive harvesting implements. Debra Reid: Farmers are looking for something that will replace the labor needed on the farm, a reliable energy source, and affordable operation. All of those things require a transition on the farm, but this is the time when farmers need it.

Each horse replaced by a tractor allowed the farmer to devote five more acres to agricultural production. Ford then claimed that the Fordson tractor was actually a three or four horse replacement. And suddenly you have 10, 15, 20 more acres. It is also standardized as a two-plow tractor. And to expand row crop agriculture, it filled an intense need. ♪♪ Fordson's sales put IHC on the ropes and quickly devoured its market share. In 1923, 100,000 Fordson tractors were going out of production annually. And Fordson controlled a share of76% market. But in 1925, sales of the Fordson began to decline. At the same time, the Model T, essentially unchanged from its debut 18 years earlier, was fading against its competitors.

Both Ford and Fordson had to change. ♪♪ For John Deere, the path to a complete line had been one of small steps. The John Deere Board had approved his preliminary designs for a three-wheeled project called a tractor plow in 1912. Company engineer C.H. Melvin produced the first units the same year. In 1914, the John Deere Board realized that it had three options in the tractor business: start a new company or division, contract or purchase an existing tractor company, or contract to purchase various components and assemble tractors under John Deere management. Deere name. As the board considered its options, Joseph Dain, another of the company's engineers who spearheaded tractor development, added the B-2 to Deere's design menu.

In what would eventually become a Deere mainstay, its first Model B was even smaller than Melvin's machine and used a single-cylinder engine. ♪♪ Neil Dahlstrom: There are a lot of experiments going on at John Deere. I have often been asked why it took Deere so long to get into the tractor business. So there's a lot going on here and Deere just couldn't figure out where they wanted to build that machine and what it would look like. ♪♪ Deere's board of directors knew that the first prototypes would be expensive to manufacture and sell. They also knew they would have difficulty competing directly with the lighter, cheaper Bull-style tractors and tillers already on the market.

Instead of taking shortcuts, Deere opted to take the high-quality path, regardless of price, and hoped the reputation for durability would win out. ♪♪ Deere engineers took inspiration from previous designs and took a close look at several rototillers and the Moline Plow Company's Moline Universal. The Deere Board approved the construction of 25 machines based on motor cultivators and called them tractors. Design and testing of these prototypes revealed that the retail price would be $475. The machine offered savings in labor, but the numbers revealed no real savings compared to horses. ♪♪ Neil Dahlstrom: There were a couple of very strong voices at John Deere defending the farm tractor.

One of them was Willard Velie. This is the grandson of John Deere. He is the CEO of a highly successful automobile company, Velie Automobile Company. He thinks the tractor is the future. There's George Mixter, superintendent of John Deere factories. Deere builds a whole line, buys all these companies and you have to get them all to work together and he's doing that and he's a big advocate. So you have these pockets. But then you have someone like our chief executive, William Butterworth, who says: yes, tractors are the right way to go, but I can't convince any banker to lend us more money for development.

And they also know that Henry Ford is coming and that scares everyone because he has resources and capital and all the things that JohnDeere does not have as a company. ♪♪ After gathering his resources and making some designs, the tractor plan suffers a setback. In 1917, Dain, the chief architect of the B-2, died from pneumonia he contracted while he was testing his tractor. The company's visionary engineer, Theo Brown, is transferred from the program to military manufacturing. The tractor project was in danger and without momentum. Knowing that Ford was on its way to dominating the market, the board of directors finally committed to building their own tractor.

In June 1918, the first 50 Dain tractors were completed. Velie still worried that the tractor program was too timid and was being pushed to go big or abandon it. Neil Dahlstrom: Basically, the people who control the money say we have to be very careful how we do this because we can't lose everything to this new speculative technology and that's how they saw it. So I think William Butterworth was on both sides. He was saying, let's do it, let's hit the brakes until the time is right. And that was the scary part, that there isn't a huge market, now all of a sudden we went from 10 companies making tractors to 100 and we don't think many of them are very good.

And that is also detrimental to the industry and we do not want to be one more. ♪♪ Even as board members argued over the direction of the tractor program, they had no qualms about seizing the moment. Deere purchased the Waterloo Gas Engine Company and its popular Waterloo Boy Model N in 1918. The purchase price was over $2 million, an acquisition that made sense to the board. Neil Dahlstrom: The Waterloo Boy tractor kept coming up in these field tests where they were like, oh, that's a good tractor, yeah, we're hearing good things about it, okay, let's try one and that's good.

They weren't necessarily in the market to acquire a tractor manufacturer. But in 1918 the opportunity arose. It seems like a very quick acquisition, which is done in a period of a few months and there is a lot going on behind the scenes, where the shareholders say: we are for sale, but if you don't decide tomorrow, we will withdraw our stock and we will not be the sale and you have six or seven years of development under your belt, you know what you are looking for, you know it is very difficult to do and you see an opportunity, they took advantage of it and Suddenly, John Deere entered fully into the tractor business and He bought a company that sold more than 5,000 tractors a year. ♪♪ The Waterloo Boy burned kerosene, which was cheaper than gasoline, and had a simple two-cylinder engine that was more durable than the four-cylinder engines Deere had been using in its prototypes.

And as a three-plow tractor, it did not compete directly with the two-plow Fordson. Deere management believed the Waterloo Boy did 50% more work per day than other tractors, justifying the higher price of $1,000 per unit. But by 1919, Deere was dividing its focus between horse implements and machine power. For many farmers, the tractor was an expensive option because 90% of the farm's power still came from horses. ♪♪ Tractors brought advantages and disadvantages to agricultural production. They offered the opportunity to put more land to use. Typically, a quarter of a farm's acres were dedicated to feeding horses. Practical application had already shown that a tractor could plow up to 75% more acres per day than horses.

Once those acres were put into production, they contributed to a surplus of crops, reducing prices paid to farmers. Tractors also reduced the need for farm labor. Farmers' children were free to choose between staying on the farm or seeking work in the cities. The steady depopulation of rural America that had begun during the Civil War was further fueled by increased mechanization. Neil Dahlstrom: The next few years are going to be really fascinating. Then, Deere bought Waterloo in 1918 and it was not just about tractors but also stationary engines. And the company sells thousands of stationary motors. This is more of a long-term business.

The tractor business was still a bit unknown. And things will get really scary in 1921, when there is an economic recession and sales drop to 79 tractors. And there's a price war and there's a lot of competition and a lot of bankruptcies and the people at Deere are thinking: Did we make a mistake? It will take Deere seven years to turn a profit in the tractor business. So there was a lot of worry and concern about whether or not they made a big mistake and put the entire company at risk. But at the end of the day, Waterloo Boy is everything they wanted it to be. ♪♪ In late 1917, Deere's board of directors authorized the production of a newly designed all-wheel drive tractor.

Neil Dahlstrom: Really, what the board said was that we've invested so much that we have to do something, we have to have it in our back pocket in case we don't come up with something better. Deere now has two tractors. Not much happens with all-wheel drive. We don't know exactly what happened to most of them. There were probably between 90 and 100 built. And the Waterloo Boy is the company's workhorse. So it becomes a very, very different competitive market. ♪♪ John Deere was also looking for a design that could compete with the Fordson, if not directly challenge its place in the market.

Engineers' requests to experiment with four-cylinder engines were rejected because Deere lacked cash flow for testing and development. Deere reused the Waterloo Boy two-cylinder engine and made it the heart of what became the John Deere Model D. Three decades of production of the iconic tractor began in 1923. The new tractor competed with both the McCormick Deering 10-20 like with the Fordson. , but it was aimed at wheat-producing areas, where farmers were less concerned with growing corn and more concerned with plowing large farms and driving a wheat agglomerator in the field. Deere aimed to produce 1,000 Model D tractors in Waterloo, Iowa, by 1924.

Neil Dahlstrom: And ultimately, when Deere introduces the Model D tractor, it's because they focused on wheat-producing areas of the country, while International Harvester and His Farmall tractor, which was the first truly general-purpose tractor, focused on corn-producing areas of the country. ♪♪ The Allied victory in Europe in 1918 was followed by an economic depression in the early 1920s. During the war, there were global shortages of grain, horses, and contract workers. Farmers were spending twice as much on labor compared to just a decade earlier. The agricultural sector, which had planted row after row of fences to feed the United States and Europe, was now inundated with grain and choked with livestock.

From July 1920 to November 1921, the price of oats and corn fell 72%. Livestock prices were cut in half. ♪♪ Tractor manufacturers found themselves buried in canceled orders and mounting debts. In 1921, International reduced prices on its popular 10-20 and 8-16 models. With $41 million in canceled orders, the company went on the offensive. Dealers held demonstrations to compare IH tractors with Fordsons. They managed to recover 12% of the market during the crisis. Ford responded to slowing sales by cutting prices for the Fordson from $790 to $395 a unit. Debra Reid: International Harvester says we have to comply. And for about five years these two companies have been selling below production costs and Ford has the capital, although they are losing money.

Christian Overland: And the tractor

wars

affect an economic problem because it is hard for everyone. And the reason Henry Ford does it is to try to control the market. But he has a system with which he can do it. He kind of built the whole assembly line system, discovered an employee base that builds these things, and was actually moving into a new world of how can I really invest in the values ​​of agriculture and keep farm life sustained. And so, even though the tractor was one of Henry Ford's biggest losses, it was a value proposition that he felt the world needed to get into and he wasn't thinking of that amount of time as a loss, he was thinking of that amount of time as a loss. .

Time as an investment. ♪♪ In a battle for its existence, John Deere lost money. Tractor sales in 1922 were only 40% of the previous year. Deere factories were closed for months waiting for backlogged inventory to leave dealerships. Other manufacturers with deep pockets tried to enter the battle looking for a victory. General Motors purchased Samson Tractor Company in 1918. The automobile giant lost $33 million over the next four years and exited the tractor business after learning a costly lesson in tractor economics. While the brief Depression bankrupted several tractor companies, the resulting price war put tractors on farms that had previously been unable to afford them, but many farmers still believed that as long as they had horses, they would be better off keeping them. for every job on the farm.

If tractors wanted to compete with centuries of tradition, they would have to prove they could do more than just grow row crops. ♪♪ Just as the economic depression of the early 1920s was brewing, International Harvester engineer Bert Benjamin developed a new design. He had reversed the shape of the tiller, placing the larger wheels at the rear of the tractor, and called the creation Farmall. It was designed to serve more than one purpose when hauling planting and harvesting equipment. Rapid sales of the Fordsons began to push IH management to make a decision about future tractors. The company's internal resistance to a multi-purpose tractor began to fade when it became clear that the Fordson was a success. ♪♪ A handful of Farmalls were shipped to Texas in 1924 and the farmersthey loved it A test drive turned into a successful sales strategy.

Texas merchants lent Farmalls to undecided farmers. None were returned to the dealer. An IH distributor in Houston wrote to the company after receiving a shipment of prototypes: If you do not adopt Farmerall for production, we will organize a company in Houston and build it here. IH marketing promoted the tractor's versatility on the farm. A Farmall could operate 11 common implements with a single operator. Research showed that the new machine saved cotton farmers $27.70 per bale, making American cotton the cheapest to grow in the world. It was estimated that 300,000 Farmall tractors could replace 250,000 mules. Farmall's performance won over farmers before many boardroom executives.

However, production was limited so as not to hurt sales of the still popular McCormick Deering 10-20. The $825 price of the Farmall was competitive in the market. But the company manufactured the innovative tractor at a loss. ♪♪ By 1927, production had increased to 60 tractors per day. Internally, there was still concern that Farmall would kill the MD 10-20. In 1928 that was the case. Farmall sales soared to 25,000 tractors that year and the 10-20 was retired. Neil Dahlstrom: Well, we have this big transition in the American landscape. 1920 is the first time that more people live in the city than on the farm.

You have a labor shortage. So you are trying to produce more with less. And that is where the tractor begins to become an investment that makes sense because in the long term you will be more profitable. You also see with the car that I can now raise more than what my family needs. And that is the most important transition. Instead of growing for my family, now I can raise more and I can sell it and I can travel a little further and distribute. And this is what Henry Ford calls the business of growing food. And that's really the most important transition that's happening, driven largely by mechanization and energy agriculture, as they called it. ♪♪ Henry Ford was struggling to keep the Fordson competitive.

The Farmall was entering the market and rose to drive out the Fordson. ♪♪ Neil Dahlstrom: Henry Ford was incredibly stubborn, to put it mildly. But he said the Model T was a perfect car and we never needed to improve it. He said the Fordson was the perfect tractor and we never needed to improve it. Of course, you have economies of scale. It has the assembly line. It has a low price. He is selling hundreds of thousands of Fordsons. But no improvements have been made to the Fordson tractor. And there are some drawbacks. It has a tendency to overheat.

It can tip over, especially backwards if you are pulling a plow under load. But there really isn't any incremental improvement. And what happens is that the shapes of the machines begin to change. So, you have the D, you have the Farmall, you have a lot of other competing machines that listen to customer feedback that says, well, it's great for plowing, but I want it to do this, I want it to do this, I want it to do this. Henry Ford says no, this is what you get. And so, suddenly, the Fordson is outdated and everyone starts planning for its demise, but also assuming that there will be a new version of the Fordson, which ultimately never arrives. ♪♪ Since Ford stood its ground and refused to make improvements, the innovative model was left behind. ♪♪ Neil Dahlstrom: The Fordson was a good basic machine, was well priced and did what I needed.

But now I'm ready to move on. What's available? Then, the Fordson started to fall behind in 1925, 1926. ♪♪ In 1926, Fordson produced almost 94,000 units. But its market share had fallen below 50% for the first time in eight years. International went on to surpass Ford and dominate sales with a 55% market share. Neil Dahlstrom: The big question for competitors is: Will there be a new Fordson? And initially they thought so, because the Model T is replaced by the Model A against Henry Ford's will. So, are you thinking about what a Fordson replacement would look like? And then you start to wonder: will the Fordson go away? ♪♪ In January 1928, the Fordson line at River Rouge had been stopped for re-equipment.

But it never restarts. Even with the Fordson logo on two-thirds of tractors in America, the sun had set on the iconic brand and the powerful automaker left the market. Henry Ford moved all of Fordson's work to Cork, Ireland. Limited production continued in Ireland and England with the last unit rolling off the assembly line in 1933. ♪♪ Neil Dahlstrom: Farmers are incredibly progressive. They have always been like this. The flip side is that these things take a long time to incubate, come to fruition, and resolve themselves. Horses outnumbered tractors on American farms until the early 1950s. And tractors keep getting bigger and bigger, horsepower keeps increasing and implements get bigger. ♪♪ In 1929, only 33 tractor manufacturers were still operating in the United States.

In the late 1920s, International Harvester and Deere stood alone among tractor manufacturers. The two would continue to fight for market dominance for another 50 years. Technology adoption in rural America had been extensive. In a 1925 survey of Illinois farms, 80% had an automobile, 12% had electricity, 6% had indoor plumbing, and 30% had a tractor. ♪♪ Despite the rise of mechanized agriculture, the total power of tractors did not exceed horse power until 1945. ♪♪ Today, John Deere is the only company that has survived the tractor

wars

until the XXI century. The international name went down in history in 1985, when auto parts company Tenneco bought the agricultural division and merged it with its J.I.

Case line. JI. Eventually, Case was purchased by CNH Industrial, an Italian-American corporation. The agricultural giant continues to build and sell J.I. Case designs. Debra Reid: If you define the tractor war of the 1920s as a fight to the death for market share, Ford leaves, International Harvester does not necessarily win, although with its Farmall it has taken over market share, but it is a company. which had to be rebuilt more or less in the image and likeness of that automobile assembly line to compete with that new upstart tractor. Neil Dahlstrom: I think it's very difficult to sum it all up.

But I always come back to this phrase, tractor wars. This was a fundamental change in the history of agriculture and I think that's what this period is about, that we can now expand. It's about doing more with less. It's about getting more out of the land. It's about higher returns. It's about profitability for agricultural businesses. But it's about what's next. This is new technology, and no matter the decade or century, this is a story about technology, which doesn't feel like it because it's on the farm. Debra Reid: That's the lasting consequence of that war: the automotive assembly line mentality in tractor production.

And then I find it fascinating because the number of farmers is not increasing, it's not like the people on the road. There's a shrinking sales pool for this business, that consolidation of production into fewer and fewer companies is really influencing changes in rural America that I think have lasting consequences today. ♪♪ ♪♪ ♪♪ ♪♪ ♪♪ Funding for Tractor Wars was provided by Friends, the Iowa PBS Foundation, as well as generations of families and friends who are passionate about the shows they watch on Iowa PBS.