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Sources of Credit for a Frontier Lumber Company: The Daniel Shaw Lumber Company as a Type Study
Published online by Cambridge University Press: 24 July 2012
Extract
Throughout American history the frontier was plagued by a shortage of capital and credit. The small pioneer farmer who migrated westward to take up cheap or free land needed capital or credit to build his homestead, secure tools and supplies, and provide for the immediate needs of himself and his family until the farm became self-sustaining. Likewise, men who wished to engage in commercial and industrial enterprises on the frontier had to have adequate capital or credit facilities to establish their businesses and to continue operations until the regular marketing of their products made the project self-supporting. The characteristic frontiersman was optimistic about the future and desired to enlarge his capital investment by expanding his landholding or his business in the expectation that future prosperity would create a greater demand for his produce—he believed that the larger the scale of his operations the greater the profits he would reap. His investments and operations, therefore, tended to outrun his own capital, and he characteristically turned to others for help. Since all elements in a frontier society were handicapped by the insufficiency of capital, and its handmaiden, credit, only limited aid could be expected from the frontier community. Assistance from the more stabilized eastern regions was necessary if the pioneer effort was to expand and prosper.
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References
1 Likewise cyclical “hard times” depressed the lumber market and the prices obtainable for the products.
2 Seley and Shaw to Daniel Shaw and Company, January 23, 1872; Eugene Shaw to Daniel Shaw and Company, September 19, 1874 (Shaw papers in the Minnesota Historical Society); Eugene Shaw to “My dear Joe” (Joseph S. Bradstreet), August 12, 1877 (Shaw papers in the Eau Claire, Wisconsin, Public Library).
3 George B. Shaw to “My dear Joe” (Joseph S. Bradstreet), October 20, 1877; George B. Shaw to Peter G. Bradstreet, March 20, 1878; George B. Shaw to R. E. Johnson, April 26, 1878 (Shaw papers in the Minnesota Historical Society).
4 Eugene Shaw to William Bigelow, June 12, 1894 (Shaw papers in the Eau Claire. Wisconsin, Public Library).
5 Eugene Shaw to L. B. Wadleigh, March 22, 1898 (Shaw papers in the Eau Claire, Wisconsin, Public Library).
6 Hatch, William Collins, A History of the Town of Industry, Maine (Farmington, Maine, 1893), pp. 805–806.Google Scholar
7 George B. Shaw to “My dear Uncle” (Milton G. Shaw), January 5,1877 (Shaw papers in the Minnesota Historical Society).
8 Bradstreet Brothers was a Maine logging and sawing concern, which milled spruce timber for the New York market. Kingsbury, Henry D. and Deyo, Simeon L. (editors), Illustrated History of Kennebec County, Maine (New York, 1892), p. 621.Google Scholar
Very friendly relations prevailed between these eastern lumbermen and bankers and the Shaw company. Various members of the Bradstreet family had invested heavily in Wisconsin timberland, and the Shaws served as western agent in looking after the family's land interests. From time to time the Daniel Shaw Lumber Company made extensive land purchases from the Maineites; George B. Shaw to “My dear Joe” (Joseph S. Bradstreet), March 6, 15, 1882 (Shaw papers in the Minnesota Historical Society).
9 George B. Shaw to “My dear Joe” (Joseph S. Bradstreet), December 27, 1877, January 6, 1878, December 3, 1881 (Shaw papers in the Minnesota Historical Society).
10 George B. Shaw to “My dear Joe” (Joseph S. Bradstreet), October 20, 1877, April 24, 1882 (Shaw papers in the Minnesota Historical Society). Covering letters, George B. Shaw to “My dear Joe,” many dates, enclosing notes or commercial paper for discount, are in the Shaw papers in the Eau Claire, Wisconsin, Public Library and the Minnesota Historical Society.
11 Eau Claire National Bank and the Chippewa Valley Bank.
12 U. S. Circuit Court, Western District of Wisconsin, E. M. Ferguson vs. Daniel Shaw Lumber Company, copy of W. K. Coffin Affidavit, December 27, 1899; copy of George T. Thompson Affidavit, December 27, 1899; copy of B. A. Buffington Affidavit, December 27, 1899. These affidavits are in File A-96 in the possession of the Eau Claire, Wisconsin, Public Library.
13 Eugene Shaw to Lincoln Trust Company, October 27, 1906 (Shaw papers in the Minnesota Historical Society).
14 George B. Shaw to Nazro and Company, March 25, 1881 (Shaw papers in the Minnesota Historical Society).
15 George B. Shaw to J. Q. Bennett, December 2, 17, 28, 1880, January 10,1881, March 7, April 26, 1881, et al. (Shaw papers in the Minnesota Historical Society).
16 The interest rate was orginally 10 per cent for these lines. George B. Shaw to “My dear Joe” (Joseph S. Bradstreet), August 12, 1877 (Shaw papers in the Eau Claire, Wisconsin, Public Library). Shaw loan and discount requests and arrangements for paying loans at maturity: letters from George B. Shaw to George L. Otis, Cashier, Commercial National Bank, October 23, December 8, 1877, et al. (Shaw papers in the Minnesota Historical Society); George B. Shaw to L. J. Gage, October 31, November 27, December 1, 11, 26, 27, 1877, February 16, March 2, 7, April 12, May 2, 1878, et al. (Shaw papers in the Minnesota Historical Society); Eugene Shaw to L. B. Wadleigh, March 22, 1898 (Shaw papers in the Eau Claire, Wisconsin, Public Library).
17 Although railroad shipment of lumber to market was inaugurated in the early 1880's, much of the company's annual cut continued to find its way to market via the great lumber rafts which floated down the natural water highway.
18 The Daniel Shaw Lumber Company owned a majority of the stock of each of these subsidiary companies. George B. Shaw to A. Streeter, December 1, 1879 (Shaw papers in the Minnesota Historical Society).
19 George B. Shaw to M. H. Hulett (President of Lake City Lumber Company), October 9, November 5, 15, December 12, 1877, March 20, April 18, June 8, December 10, 1878, January 10, February 5, 10, 21, April 15, 1879, et al.; George B. Shaw to J. G. Leonard (President of Daniel Shaw and Company, Sabula, Iowa), February 4, 1879, et al. (Shaw papers in the Minnesota Historical Society).
20 George B. Shaw to George L. Otis, Cashier (Commercial National Bank, Chicago), October 23, 1877, et al.; George B. Shaw to F. G. Bigelow, Assistant Cashier (First National Bank, Milwaukee), November 7, 19, 1877, February 23, April 20, 1878, January 9, 1879, et al.; George B. Shaw to L. J. Gage, Cashier (First National Bank, Chicago), November 27, December 11, 26, 1877, March 2, May 2, 1878, et al.; George B. Shaw to J. Q. Bennett, Cashier (Market National Bank, Boston), January 10, 1881; George B. Shaw to A. E. Jefferson, Cashier (First National Bank, Hudson, Wisconsin), March 29, 1878; George B. Shaw to E. C. Ripley, Cashier (National Bank of Galena, Galena, Illinois), December 17, 1881; George B. Shaw to Louis Boisot, Cashier (German National Bank, Dubuque, Iowa), March 7, May 10,1878 (Shaw papers in the Minnesota Historical Society).
21 George B. Shaw to F . G. Bigelow, January 9, 1878; George B. Shaw to Louis Boisot, March 7, 1878; George B. Shaw to P . J . Lee, October 2, 1879; George B. Shaw to A. Streeter, December 1, 1879 (Shaw papers in the Minnesota Historical Society).
Originally one of the retail yards was known as Daniel Shaw and Company, Sabula, Iowa. Consequently, it was difficult t o maintain the fiction that the yard was completely independent. The Shaw correspondent (Joseph S. Bradstreet) in South Gardiner, Maine, declared that it was impossible to place any more paper emanating from an obvious Shaw connection. To obviate this problem the yard was incorporated as the Sabula Lumber Company; George B. Shaw to F. G. Leonard, February 19, 1879; George B. Shaw to “Dear Uncle” (Milton G. Shaw), February 19, 1879; George B. Shaw to “My dear Joe” (Joseph S. Bradstreet), February 19,1879 (Shaw papers in the Minnesota Historical Society).
22 George B. Shaw to M. H . Hulett, October 25, November 29, December 3, 4, 8, 1877, March 4, 9, 20, April 11, 26, July 19, December 16, 1878, et al.; George B. Shaw to Dan Edwards, March 17, 1879, et al.; George B. Shaw to J . G. Leonard, June 17, 1878, January 17, 1881, et al. (Shaw papers in the Minnesota Historical Society).
23 George B. Shaw to E. R. Lumbert and Company, October 2, 11, 25, 26, November 6, 15. 20, 29, December 7, 1877 (Shaw papers in the Minnesota Historical Society); George B. Shaw to E. R. Lumbert and Company, May 31, September 5, 1877 (Shaw papers in the Eau Claire, Wisconsin, Public Library); George B. Shaw to “My dear Charlie” (Charles Dean), July 20, 1878, January 25, February 17, April 15, 1879 (Shaw papers in the Minnesota Historical Society).
24 George B. Shaw to F. G. Bigelow, November 19, December 21, 25, 1877' March 4, April 20, 1878; George B. Shaw to L. J. Gage, August 15, November 27, 1877, March 7, 1878; George B. Shaw to Francis Palms, August 21, 1879; George B. Shaw to E. C. Ripley, August 18, 27, 1879 (Shaw papers in the Minnesota Historical Society).
25 George B. Shaw to “My dear Charlie” (Charles Dean), January 4, 1877, February 23, March 3, May 21, July 10, 1878; George B. Shaw to E. R. Lumbert and Company, June 16, 29, 1877 (Shaw papers in the Minnesota Historical Society); George B. Shaw to E. R. Lumbert and Company, April 17, 1877 (Shaw papers in the Eau Claire, Wisconsin, Public Library). Sometimes Shaw drafts were accepted by the reciprocating company. George B. Shaw to “My dear Charlie” (Charles Dean), January 11, February 4, 1879 (Shaw papers in the Minnesota Historical Society).
26 Eugene Shaw to John P. Hampton, January 14, 1884 (Shaw papers in the Eau Claire, Wisconsin, Public Library).
27 The interest rates gradually declined in the latter part of the nineteenth century. During the 1860's and 1870's 10 per cent interest was usually collected; Horton and Hamilton—Daniel Shaw and Company Agreement, February 19, 1868; Dulany and McVeigh—Daniel Shaw Lumber Company Agreement, November 3, 1876 (Shaw papers in the Minnesota Historical Society). In the early 1880's the interest rate was pared to 8 per cent; S. C. and S. Carter—Daniel Shaw Lumber Company Agreement, March 15, 1881 (Shaw papers in the Minnesota Historical Society). By the end of that decade it had dropped another 1 per cent; Daniel Shaw Lumber Company (Eugene Shaw) to Frederick Weyerhauser, December 9, 1889 (Shaw papers in the Minnesota Historical Society). At the end of the century Eugene Shaw was arranging advances at 6 per cent interest; Eugene Shaw to F. W. Heidemann, March 17, 1898 (Shaw papers in the Minnesota Historical Society).
28 Varying from 500,000 to 5,000,000 board feet.
29 Advances were usually made on lumber to be sawed during the first days of the milling season, but sometimes advanced payment was made on milled lumber which was laid up over the winter owing to the closing of navigation before it could be delivered. In such cases the lumber was rafted to the customer at the opening of the new navigation season. Dulany and McVeigh—Daniel Shaw Lumber Company Agreement, November 3,1876; George B. Shaw to Henry Reed, November 18, 28, December 23, 1879; November 7, 1880; George B. Shaw to Dulany and McVeigh, November 18, 26, 1879; George B. Shaw to Burch, Babcock, and Company, November 22, 1879, April 21, 1880; Burch, Babcock, and Company—Daniel Shaw Lumber Company Agreement, December 3, 1879; Eugene Shaw to N. C. Chapman, October 6, 29,1896 (Shaw papers in the Minnesota Historical Society).
30 Many of the wholesalers made the advances primarily to insure that they would be recipients of a good share of the first cut of the new season.
31 Eugene Shaw to Daniel Shaw Lumber Company, May 3, 1877 (in File A-47 in the Eau Claire, Wisconsin, Public Library).
32 Daniel Shaw Lumber Company—Badger State Lumber Company Agreement, November 21, 1880; Eugene Shaw to D. Dubach and Company, December 13, 17, 1877, March 2, 1881; Eugene Shaw to N. C. Chapman, October 6, 1896 (Shaw papers in the Minnesota Historical Society); Eugene Shaw to Dulany and McVeigh, April 9, 1877 (Shaw papers in the Eau Claire, Wisconsin, Public Library). If the lumber were sold to other parties, the Shaw company repaid the amount of money advanced plus accrued interest as per the contract.