| THE
ERA OF E.W. BACKUS |
Edward W. Backus was the key man
in the development of Koochiching County and no history of
the area would be complete
without the story of his life and a review of events that took
place during the 30 years he was active in these parts. Though
his vast empire of paper and lumber mills, power plants and
woodlands collapsed during the Great Depression, he is still
remembered as the founder of enterprises that survived his
own downfall. The forest products industries that have been
the mainstay of Koochiching's economy for 75 years — and
are continuing as such — are deeply rooted in the accomplishments
of E.W. Backus.
Present-day Koochiching was still a part of Itasca County — sparsely
settled and largely undeveloped — when he first came
on the scene in the late 1890s. He was a successful Minneapolis
lumberman, energetic, influential and already wealthy at the
age of 40. He had been watching the gradual decline of the
Twin Cities sawmill industry as supplies of accessible timber
dwindled. What he needed was a new operating area, a new field
for pursuing his lofty goals.
Backus found his new field in the Minnesota-Ontario boundary
region. Here, he knew, was an abundance of timber for the lumber
and paper mills he proposed to build. Here, too, was an enormous
supply of hydro-electric power waiting to be harnessed at Koochiching
Falls on Rainy River and at other sites.
First, the background of this extraordinary person: Born at
Jamestown, N.Y., Dec. 1, 1860, Edward Wellington Backus grew
up at Red Wing, Minn., where his parents moved when he was
two years old. His father, Abel Backus, was a stone mason and
farmer of modest means.
His education began in a country school and continued at the
University of Minnesota, where he enrolled at age 17. Determined
to pay his own way, he worked at University Farm in St. Paul,
accepted part-time jobs wherever he found them and took one
winter off from his classes to teach in a rural school. In
four years of intermittent work and study he thus managed to
complete three years of his University course.
In the spring of 1882 he was down to his last five-dollar bill — so
the story goes — and he felt forced to make an important
decision. He would have to find steady, more remunerative employment;
perhaps in a year or two he could save enough to finish his
University course.
What business should he enter? He found himself with two choices:
lumbering and flour milling. These were the main industries
of the Twin Cities at the time and the young man was interested
in both. It is related that he then flipped a coin. The toss
favored lumbering.
His introduction to sawmilling came in the sum-
mer of 1882 when he was hired, at $9 per week, as a bookkeeper
for Lee & McCulloch. This was a new company whose small
mill with circular saws was located in Northeast Minneapolis.
It is said that Backus admitted at the time that he knew nothing
about lumber but was eager to learn.
Learn he did because the following year he was practically
in charge of the firm. He then took advantage of a chance to
buy Alexander McCulloch's share of the business, borrowing
$3000 to swing the deal.
Three years later he bought Judson Lee's interests and was
then completely on his own. He named his concern the E.W. Backus & Co.
There were ups and downs in the succeeding years, mostly ups.
He sold the circular sawmill, rated at one million feet per
season, and bought two other plants that in 1892 produced 76
million ft. In 1893 a fire that swept a large part of the sawmill
district destroyed both of the Backus plants along with 60
million feet of lumber.
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the following year with the purchase of a large North Minneapolis
mill from
the C.A. Pillsbury interests. Under Backus' leadership, five
major lumber companies then formed a syndicate to acquire extensive
timberlands in an area north of Brainerd to assure a supply
for their mills. The venture was said to involve more than
two billion feet of sawlogs. Along with the timber purchase
came plans for a railroad to haul the logs to the mills. This
was the beginning of the Minnesota & International Ry.
which reached International Falls in 1907. Sixty miles of track
were laid northward from Brainerd in 1894 and the division
carried 150 million feet of logs in its first year. |
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In 1899 Backus acquired a partner in
the person of William F. Brooks, a mechanical engineer formerly
associated with one of Backus' competitors. The new firm was
incorporated in 1902 under the name Backus-Brooks Co. It became
the parent company for numerous subsidiaries that came into
being with developments at International Falls, Fort Frances,
Kenora and elsewhere. Brooks was treasurer and carried numerous
executive responsibilities. He was elected in 1918 to represent
his Minneapolis district in the State Senate, and served with
distinction until his death in 1928.
Backus-Brooks sawmill operations in Minneapolis continued until 1906, when the
remaining mill was sold. By then the owners were devoting most of their efforts
to the new enterprises taking shape in the north. |
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Koochiching Falls,
Unharnessed Until dam was built — 1905-09 |
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During his Minneapolis years
Backus gained a broad acquaintanceship in the business world,
providing contacts that often proved valuable in his larger
ventures that followed in the North Country. It is written
that he was easy to meet and had appealing features.
He was above average in stature and was considered quite handsome. A biographical
sketch by Editor Larry Rossman of Grand Rapids, who knew Backus well, mentions
his "expansive personality and pleasant smile."
The biographer's appraisal of Backus is not entirely complimentary:
" With all his possessions, Ed Backus' personality was developed. He could
be brutal, remorseless, ruthless, and not always (to say the least) ethical.
Other times he could be exactly the opposite. His personality was such that he
could obtain a respectful hearing before distinguished political groups on both
sides of the international dividing line." |
At his peak in the middle 1920's,
Backus was a director of the Northern Pacific Ry., N. W. National
Bank, Minneapolis, and several other firms in addition to being
president of Backus-Brooks and all its many subsidiaries.
Industrial development of this area dates from 1900, when Backus-Brooks
acquired the 127 1/2-acre Baker homestead adjoining Koochiching
Falls. Here the big dam, a power house, mills and part of the
new town itself would be built. Alexander Baker, the original
owner and first settler of the area, had sold the tract in
1892 to W.V. Win-chell and C.J. Rockwood.
Negotiations with the U.S. and Canadian governments for riparian
rights — needed to develop the waterpower — began
at the turn of the century and continued for several years.
Construction of Koochiching dam began in 1905 and the massive
structure wasn't finished until 1910 because of delays. A partially
completed power house went into service in December 1909 and
Falls and Fort Frances residents enjoyed for the first time
the convenience of electric lighting. |
Meanwhile Backus' men were busily engaged in
buying forest lands and obtaining cutting rights for great
volumes of timber that would be needed to feed his proposed
paper and lumber mills.
The pace of development quickened after the Minnesota & International
Ry. reached the border in September 1907. It was a line Backus
and the booming village of International Falls sorely needed.
The Northern Pacific, operators of the M. & 1., had stopped
construction when the rails reached Big Falls and the road
was now overdue. Backus then formed a railway company of his
own and threatened to build the 34-mile stretch himself. Under
this pressure the Northern Pacific relented and put crews to
work.
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Dam construction
at early stage. View is from Canadian side.
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Building of the Falls
paper mill began while work on the dam was still in progress.
The plant,
a four-machine newsprint mill, was completed in the spring
of 1910 and went into operation in June of that year. The mill,
hailed as the most modern in the world, had facilities for
making both ground-wood and sulphite pulp. A kraft pulp mill
was added in 1917 to broaden the product line.
The International Lumber Co. sawmill was next on the Backus
timetable. Erected on the riverfront just east of the Falls,
it. too, was of most modern design and employed 300-500 men.
Started up in August 1911, it operated until 1937 to set a
record for longevity among plants of its size in Minnesota.
Its peak year was 1917, when it sawed the timber harvest of
23 logging camps in Koochiching, Itasca and St. Louis counties.
Backus-owned lumber operations in the 1920s included the Spooner,
Minn., mill which Backus acquired from a Shevlin firm. |
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Falls paper mill as it appeared at
start-up in 1910 |
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To provide transportation
for construction materials, raw timber and finished products,
Backus organized
the Minnesota, Dakota & Western Ry., a common carrier connecting
with the M. & I. at the Falls and the Duluth, Winnipeg & Pacific
Ry. at Ranier Jct., three miles to the east.
Portions of the M.D. & W. were built in 1909, the Loman
line in 1910. The latter was envisioned as the first segment
of a mainline that would tap Red River Valley agricultural
areas by way of Thief River Falls. It was proposed to construct
a flour mill at International Falls and the M.D. & W. would
haul grain. The plans didn't materialize. Activity in the woodlands
that Backus acquired increased while the paper and lumber mills
were being built. These plants would need an enormous volume
of timber and preparations had to be made to meet that need.
Company-owned logging camps were established during this period
and logging railways began stretching out.
Newsprint was the one and only product of the Falls paper mill
in its early years but the situation changed with the development
of Insulite, beginning in 1914. This product, the first of
its kind, was destined to play an important part in Company
operations for the remainder of the Backus era, and beyond.
Looking for a way to utilize screenings that were a by-product
of the papermaking process, Backus in 1913 named a committee
of three to study the possibilities. The late Paul H.
Kinports of the Falls was one of the three.
Discussions led to the hiring of Carl Muench, who had experience
in the insulating field. In 1914 he designed a small cylinder
machine that produced a sheet four feet wide. Mill mechanics
assembled it in the basement of the plant, using scrap parts.
Sheets were cut to length with a butcher knife and dried in
a crude kiln. The machine worked and the quality of the product
encouraged further experimentation.
In 1915 the machine was redesigned with still better results.
The product was well accepted and markets were developing.
Early uses for the product, which was first called Universal
Insulite and then changed to Insulite, included roof insulation
and the insulation of railway refrigerator cars. A large volume
was used in the construction of temporary barracks during World
War I. Research and market studies in the ensuing years led
to numerous other products for specific uses: sheathing, siding,
interior paneling, plaster base and ceiling tile being among
them. |
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Courthouse and Paper Mill, both brand-new
in 1910 |
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Needing room for expansion to meet growing
market demands, the Company in 1925 built the Insulite machine
room which is still in use (1983). Its No. 1 forming machine
represented numerous improvements and was the first to produce
a sheet 12 feet wide. Two additional machines were installed
during the Backus years.
The general success and profitability of the Falls Insulite
operations undoubtedly figured in Backus' decision to build
a mill in Karhula, Finland. The two-machine plant was erected
in 1930 at a cost of $3 million. Using equipment and technology
developed at the Falls, the Karhula mill began operating in
1931 — about the time Backus was losing control of his
North American holdings. The receivers operated the plant until
it was sold to Finnish interests just prior to the outbreak
of World War II. |
Backus developments
north of the border were as extensive and as numerous as
those in Minnesota — too
numerous to be described in the space available here. His first
venture into Canada, it appears, was his purchase of the Keewatin
Lumber Co. in 1906. In 1913 he acquired the Norman dam and
in 1920 the Kenora Municipal dam, both investments being part
of his plan to build a paper mill in the area.
Closer to home, the Fort Frances paper mill was constructed
in 1912-'14 and expanded in 1927. International bridge across
Rainy River, a property of International Bridge & Terminal
Co., Ltd., was completed in 1912 to accommodate both railway
and vehicular traffic.
Activities in Canada during the 1920's included construction
of the Kenora pulp and newsprint mill, a facility that was
expanded two years later. Hydro-electric developments on the
Seine River, a major project, were completed in 1928. The three
new dams and generating stations added 25,000 H.P. to the power
supply at the Fort Frances mill. Also in the 1920's, Backus
became affiliated with the Great Lakes Paper Co. and was active
in the firm when it built a large, modern mill at Fort William
(Thunder Bay). The No. 1 paper machine in the new plant was
publicized as the widest in the world.
Seymour W. Backus joined the Backus-Brooks organization in
1916 and became vice president with various executive responsibilities
at Minneapolis headquarters and the mill towns. He was the
younger of two sons born to Mr. and Mrs. E.W. Backus ( Elizabeth
Horr). The elder son, Edward Raymond, lost his life in a hunting
accident on Rainy Lake in 1912. The young man had graduated
with honors from Yale University shortly before the tragedy
occurred.
Residents of Minneapolis, the Backus families maintained a
summer home on Huckleberry Island (the present Curtice Island),
Rainy Lake, and occupied it each season for many years. |
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Intl.
Lumber Sawmill at the Falls — Built in 1911
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A long and sometimes bitter controversy
over the use of boundary water emerged in the mid-1920's
and ended
in a resounding defeat for E.W. Backus — the man who
usually got what he wanted.
His plans for hydro-electric development in the Rainy Lake
watershed called for a series of power and storage dams stretching
eastward from Lac La Croix. These dams, he contended, would
increase and stabilize power generation at Koochiching dam;
also prevent flooding. Announcement of his proposal drew strong
opposition at once from conservation groups and private citizens
of both the U.S. and Canada. The proposed dams, they argued,
would spoil priceless scenery and constitute serious misuse
of natural resources that belonged to the public. |
Ernest C. Oberholtzer, Rainy
Lake resident and dedicated conservationist, agreed to lead
the stop-Backus campaign
and was joined by Frank Hubacheck of Chicago, Sig Olson of
Ely, and other wilderness advocates. The Quetico-Superior Council
with Oberholtzer as president was founded in 1928 and played
an important role in coordinating the campaign.
With public opinion strongly in their favor, the opponents
finally won a clear-cut victory. Congress in 1930 passed the
Shipstead-Nolan Act prohibiting further power developments
in Superior National Forest, and in 1933 the International
Joint Commission firmly rejected the Backus plan. His power,
wealth and pleasing personality had proved to be of no avail.
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More trouble was
in store — trouble
that would deprive Backus of his empire and wipe out his personal
fortune.
The easy-money, free-spending years preceding the market crash
of 1929 had been a period of great expansion of Backus companies
on borrowed money. As the national economy weakened newsprint
sales decreased and prices dropped to unbelievable lows. Backus
was running out of money!
The shock came on Feb. 28, 1931, when Min-
nesota and Ontario Paper Co., the principal company, was forced
into receivership after defaulting on a large obligation. Backus
was among the receivers appointed by the court but resigned
at the end of the year. R.H.M. Robinson became the managing
trustee and guided the Company through 10 years of receivership
leading up to a reorganization effective March 1, 1941. Robinson
was elected president of the reorganized Minnesota and Ontario
Paper Co.
Under the reorganization plan approved by the courts, bondholders,
noteholders and other creditors having tangible claims received
payments in the form of new stock, bonds or partly in cash.
Holders of the common stock, largely the Backus family, received
nothing. The loss was estimated at the time at 50 million or
more.
Backus fought for several years to regain control of his empire
but his death in New York City Oct. 29, 1934, abruptly ended
the struggle. His passing was page 1 news, for he was still
a national figure, still a fighter at age 73! |
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Industries founded by Backus flourish
under Boise Cascade ownership. Photo taken in 1981 shows
only portion of International Falls and Fort Frances
facilities. |
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