Out with Cattle Cars; in with Ice Box Cars.
By Megan McKinney
While Henry Ford was inventing one new industry, Gustavus Swift had completed revolutionizing another. The great butcher pioneered the business school term “vertical integration,” loosely defined as a form of organization in which all stages of production—commodities, manufacturing, distribution, and retail—are controlled by the company. In Swift’s case, he merged the usual steps of meatpacking into a smooth efficient process, inspiring Mr. Ford of Detroit and influencing the Ford Motor Company’s legendary assembly line.
In each of our Classic Chicago Dynasties series we discuss individuals within several generations of a great family, about how they lived and often about what each was able to achieve in his or her own life.
We will do so with the Swifts—we have just begun the seven-part series on this dynasty and there will be much to explore in the coming weeks.
Today the focus is on Gustavus, on his courage, his resilience, his singular style and the certainty he held that what he was doing was correct.
There is no doubt that G. F. Swift was an amazing executive, who transformed forever the manner in which the meat industry was conducted. He was also God fearing, philanthropic, a caring employer and a devoted husband and father; however we can’t ignore the fact that Upton Sinclair based “The Jungle,” his derogatory 1906 book about the meatpacking industry, on Swift’s plants. And that Swift & Company was one of the six members of the price-fixing “Beef Trust,” leading to the Supreme Court case “Swift and Co. v. United States,” which determined that the federal government had the right to regulate monopolies. Although the company did not reach full notoriety until the 20th century reign of G. F.’s oldest son, Louis, certain patterns may have begun.
“Always,” wrote Louis Swift of his father’s early Chicago years,” his vision ran ahead of his fellows, of his competition, and of his capital.” When the great stockyards city became Gustavus Swift’s home in mid-life, he brought with him such inbred New England characteristics as frugality and a horror of any sort of waste, both basic to his great success.
Yet, there was also a continuing expansionism and—in the early years—reliance on extreme credit. G. F.’s borrowing from this bank or that bank, from acquaintances and employees, “from Peter to pay Paul,” not knowing in the morning from where the money would come to settle the afternoon’s debts, was anything but down east behavior. Yet it worked. And without this perilous expansion, Swift & Company would have remained another somewhat successful 19th century family company of the Union Stockyards.
When one hears of 1893, images of the White City spring to mind, especially in connection with Chicago; however it was also the year a major financial panic set in and would last another four years. No portion of the nation was spared and Swift & Company was particularly hard hit.
Years later, Chicago’s First National Bank President J. B. Forgan told Helen Swift of her father coming in to see him one day that first summer, asking for a million dollar loan.
“Mr. Swift,” I said, “the Bank can’t do it. You already owe two and a half million.”
“’Yes,’ Mr. Swift replied, ‘and that’s just exactly the reason you’re going to loan me another million, to protect what I already owe you.’
“I didn’t believe it possible,” Forgan finished, “but he left the office a short time later with a million dollars.”
The floor of the Chicago Board of Trade in 1900.
Another 1893 panic story was told by authors Harper Leech and John Charles Carroll in their book Armour and his Times.
“Rumors of the failure of Swift & Company had brought the long, lean Yankee to the floor of the Board Trade, where he shouted ‘Swift and Company cannot fail!’ From there he strode into a secret conclave of the bankers of the city who already had started a premature autopsy. Brusquely reminding them that if Swift failed, they would have to close their doors, he got the time he desperately needed.” At the time, Swift owed the men in the room $10 million.
Louis F. Swift
In his 1927 biography, The Yankee of the Yards, Louis Swift, wrote at length of his father’s horror of waste and his fury over such matters as the marginally inefficient handling of carpenter’s nails or the use of seven cents worth of cheese cloth to wipe lightly soiled hands (when one’s handkerchief would do as well), issues that might go unnoticed by the rest of us. Not by this West Sandwich, Massachusetts boy. “It was all waste,” according to Louis Swift,” and to my father any waste was too much!”
Swift’s dismay was especially aroused by the thought of any animal by-product not put to use. He was famously credited with saying his company “used every part of a hog but his squeal,” or more historically correct, “Now we use all of the hog except his grunt.”
However, true waste, the sort of waste which we can all understand, is animals squeezed into cattle cars to the point of suffocation. This happened often to cattle on their way from Chicago to the East for slaughter, and many who were not dead on arrival were so badly bruised that portions of their meat could not be sold. They also lost weight in transit. It was estimated that as much as 40 percent of a carload of beef on the hoof was wasted. Meanwhile the cattle owner had also paid to have the non-edible “by-product” portions of the creatures transported without reason.
The answer would be a refrigerated rail car, making it possible to transport Chicago dressed beef–rather than living cattle—to Eastern markets. In 1878, a mere three years after both Swift and his major competitor, Philip Danforth Armour, arrived in Chicago, Swift hired a Boston engineer, Andrew S. Chase, to design a refrigerator car. Chase was experienced in creating cold-storage facilities, yet creation of a rail car/refrigerator was as much raw invention as it was design and required a year to accomplish–but he did. It was then that the Swift legend began.
The Swift advances irritated his competitors, particularly Armour–leading old P. D. to repeatedly announce to his employees, “Any man who says we should do so and so because Swift is doing so and so, will be shot!” However—once Armour and his colleagues saw Gustavus was unstoppable–the whole of the industry would join the Swift revolution.
But it was far from smooth. We think of a refrigerator as a machine powered by electricity. Swift’s “refrigerator” cars were similar to old fashioned ice boxes, as shown in the illustration above. To fill the ice tanks at either end, Swift bought ice-harvesting rights in lakes of the Midwest, particularly northern Illinois and southern Wisconsin. He developed icing stations across the states on the way to his Eastern markets and the ice-harvesting facilities to supply them.
Yet, a certain percentage of the carloads of dressed beef was lost, sometimes before the beef left the Yards. His son Louis remembered, “Many a hot July and August night he got on a horse and rode over to the packing house at midnight or later. He would go straight to the coolers and eye the thermometers. Then he would be after the foreman. ‘You’ve got to get those men to shoveling more ice and more salt,’ he would direct. ’Let’s see the temperature come down five degrees.’”
Swift could ride a horse over to the packing house at midnight because he lived—not on Prairie Avenue but in a working class neighorhood—adjacent to the Yards. Also living there were his key employees, men who were as motivated as he. Swift didn’t lavish praise on good men. They knew they were valued, and those he valued were well compensated. G. F. knew his men; he cared about them and their families. He encouraged them to own stock in the company and they did; the mutual sense was that the man was there for life and Gustavus’ slogan was, “I can raise better men than I can hire.”
“Raise” would become literal when five Swift sons followed their father in running a gargantuan business, with an immensity that would be confirmed by Forbes, in 1918, the year the magazine featured its first Rich List. “Swift & Company,” reported this historic issue, ”was Second in Business Volume.” Second to what? Read the Louis Swift of Lake Forest segment of this series to learn.
Publisher Megan McKinney’s Classic Chicago Dynasties series on the family of Gustavus Swift will continue next with a segment about the private lives of Gustavus and Ann Swift on Chicago’s Emerald Ave.
Edited by Amanda K. O’Brien
Author Photo by Robert F. Carl