Blue Heron Beginnings: Commentary on the Willamette Falls Legacy Project -

William S. Ladd was a Gilded Age Titan.

By the time of his death in 1893, Ladd had constructed an Octopus-like Portland-based financial, real-estate and industrial empire that made him one of the dominant figures of the Pacific Northwest’s economic development during the latter 19th century. His investment holdings included, among others, Portland’s Ladd & Tilton Bank, Salem’s Ladd & Bush Bank, the Oregon Steam Navigation Company, the Oregon Furniture Manufacturing Company, the Portland Cordage Company, the Portland Hotel, the Oregon Telegraph Company, the Oregon Iron Company and the Oregon Central Railroad Company. He subdivided Ladd’s Addition in Southeast Portland.

by: WEST SHORE MAGAZINE - The West Shore sketch from 1887 of the Imperial Mills would have been drawn during the era of the Portland Flouring Mills.Ladd knew Oregon City. In the 1870s, he held a significant ownership stake in and served as the treasurer of the Oregon City Woolen Mills; including at the time of the 1872 fire that completely destroyed the Woolen Mills and necessitated its complete reconstruction.

From the south end of the long Woolen Mills building on Main Street, Ladd could look out directly upon the “far-famed” Imperial Mills, built in 1862 by John McLoughlin’s son-in-law Daniel Harvey, and which under Harvey’s successor proprietors George LaRocque and D.W. Burnside exported flour as far as England by 1874.

From the north end, Ladd could look out directly upon the Oregon City Flouring Mills (OCFM), built in 1866 as W.W. Buck’s Pioneer Paper Company, the first paper mill in the Pacific Northwest. Known in Oregon City as the “Brick Mill” because of its red brick exterior, it had been converted into a flourmill in 1868 by steamboat captains J.D. Miller and George Marshall, and their partner Charles P. Church. By April of 1876, Miller, Marshall & Co. was also exporting flour to England, running the mill “day and night” to fill an order eventually amounting to 22,000 barrels to a Liverpool firm. A number of Oregon newspapers printed a dispatch Ladd sent Nov. 4, 1876, from the Centennial Exposition in Philadelphia, reporting on all the awards won by Oregonians, including OCFM. “The half has not been told,” he gushed. “Visiting the Exposition causes one to praise God that he lives in the age and country.” OCFM won a medal and diploma for the best pastry flour.

These two Oregon City flourmills, with their prestige and their established export business, may have made an impression on W.S. Ladd in the mid-1870s. Within a decade, he would own both of them.

The Imperial Mills and OCFM became part of the original core of four flour-milling companies that Ladd brought together within a holding company called the Portland Flouring Mills (PFM) Co. With his trusted confidant Theodore B. Wilcox, Ladd built PFM into a global flour empire.

Oregon City can make a strong case for being the birthplace of that empire.

Oregon City’s key link in the PFM’s founding story was the steamboater and grain exporter Charles P. Church. He and Miller co-owned the steamboat Onward in the mid-1870s. Church served as the manager of the Brick Mill through 1875, and then with Miller formed Miller, Church & Co. upon Marshall’s retirement in 1876. After Miller bought him out in the late 1870s, Church teamed up with William S. Sibson in 1879 to form the international grain export firm Sibson & Church.

Church found new opportunity with the Brick Mill in Miller’s collapse, only four years after his twin triumphs in Liverpool and Philadelphia; and, only three months after a glowing October 1879 profile of OCFM in Portland-based West Shore magazine, which reported, “The entire mill has just undergone a thorough overhauling, and is now fitted with the latest and best labor-saving machinery that it was possible to obtain in the eastern markets.” Perhaps this extensive overhauling over-extended Miller. Salem’s Willamette Farmer reported Jan. 9, 1880:

“A Bankrupt. We regret to learn that Capt. J. D. Miller, of Oregon City, has failed, and his property has been seized by his creditors to pay their demands as far as possible... Mr. Miller is lying ill at his residence in Oregon City.”

For a nominal $5,000 and a retaining right to redeem — never exercised — Miller deeded the Brick Mill in September of that year to his son-in-law, James S. Cochran, also a steamboat captain. Cochran’s mill venture included his father John W. Cochran, who had been the first-ever steamboat captain to run the upper Willamette, reaching Eugene with the James Clinton in 1857. In 1880, the elder Cochran trademarked the name “Oregon City Mills Baker’s Best XXX” and in 1881 the name “Willamette Falls Mills XXX Bakers Best Flour From Walla Walla Wheat.” The Cochrans continued to export: for example, in May 1881 they shipped 7,700 barrels of flour to Liverpool through their exporting agent: none other than Sibson & Church.

Sibson & Church soon made their move to purchase the Brick Mill outright. In April of 1882, Sibson & Church formed the Oregon City Flouring Mills Co. with W.S. Ladd and several of his business associates — including his son William Meade Ladd, his Salem banking partner Asahel Bush, and Portland attorney and merchant Donald Macleay — and the group purchased the Brick Mill for $45,000 from J.S. Cochran.

by: OREGON HISTORICAL SOCIETY - Oregon City's Brick Mill, shown during the 1870s, is located in the future area of the Blue Heron paper mill.Meanwhile, Ladd had become interested in the Salem Flouring Mills, founded in 1870 by members of the McKinney family. It had a well-established English export trade; in fact one of its partners by 1881 was a Liverpool commission merchant, William Scott. Upon the death of Albert McKinney that year, his will directed that his interests in the mill be offered first to Scott, who accepted. Scott brought in Ladd and several of his associates, including Sibson, Bush, and others, and reorganized the mill into the Salem Mills Co. At the time, it was the largest flourmill in the state.

The Imperial Mills became the third mill to enter Ladd’s orbit. OCFM purchased the Imperial Mills in the fall of 1883 from D.W. Burnside for $85,000. Just prior to this purchase, the company increased OCFM’s capital stock from $60,000 to $150,000 to cover the Imperial Mills purchase, and empowered OCFM to buy, develop and hold waterpower and water rights, with which the Imperial Mills was well endowed.

In this period of the early 1880s, the business judgment and strategy of Ladd in his associates appears to have come into focus for this emerging flour milling enterprise. According to an “official” history of the Ladd & Tilton Bank, “It soon became apparent that while the output of the mills was in excess of local requirements, the surplus was not sufficient for satisfactory export business, and hence a somewhat greater capacity was needed in order to secure the prompt loading and dispatch of export cargoes.” Railroad baron Henry Villard’s Sept. 11, 1883, completion of the Portland’s transcontinental railroad would provide both improved access to export markets and an influx of population to spur local demand for flour.

Ladd’s group followed a two-fold strategy to achieve the desired economies of scale. First, the same core group that had in April of 1882 incorporated OCFM had in November incorporated the PFM. The objective of this incorporation was to construct the behemoth flourmill in the then-independent town of Albina, on the east bank of the Willamette River across from Portland. Construction of the Albina Mill began in early 1883, and by the end of that year it was milling flour using new technology: the roller mills that would soon render millstones obsolete.

Second, PFM began expanding beyond the core group of the fourmills Ladd and his associates owned to become agents, led by Sibson & Church, of several other mills. In September 1883, West Shore magazine, under the headline “An Important Enterprise,” described PFM as a sort of umbrella holding company of all four of the core mills, led by the key aforementioned players: The Ladds, Sibson & Church, Bush, Macleay, Scott and others. The article emphasized the firm’s integration of production; grain exporting capability through Sibson & Church; and English market presence through Scott. It listed the capacity in barrels per day of each of the mills owned by core group: Oregon City Flouring Mill (300), Imperial Mills (500), Salem Flouring Mills (550) and the Albina Mill (1,000). In addition, the article mentioned an array of 11 other mills in Oregon and Washington represented by Sibson & Church, with an additional total capacity of over 2,000 barrels of flour per day. PFM appeared poised to dominate the Pacific Northwest’s flour business.

Then, the bottom almost fell out.

A deep recession hit in 1884. The many factors included, among others, the untimely collapse of Villard’s railroad holding company just after it completed the transcontinental railroad, and a wheat price depression caused by worldwide overproduction. The recession hit Ladd’s PFM group, and in particular, both Sibson & Church, and OCFM went down. The Willamette Farmer reported Sept. 26, 1884:

“The loss sustained by millers and exporters were very heavy last year. Demanding proof of this fact, we are informed that the Oregon City mills, that were reorganized last year under a new incorporation, as was supposed with brilliant prospects, lost the full amount of its capital stock. They are mortgaged for $100,000, and we are told the directors have resolved to surrender the property rather than work through, which probably has been done.”

Ladd’s deep reservoir of capital allowed PFM to endure the shock. He stepped forward and consolidated the loose umbrella group more firmly under himself. In December 1884 he re-filed PFM with himself and his son W.M. Ladd in the driver’s seat. In March of 1885, OCFM transferred all its property, including the Imperial Mills, the Brick Mill, their multiple respective warehouses, water rights, etc., to PFM for a grand total of $1. Finally, in this period, Ladd’s trusted lieutenant Theodore B. Wilcox rose to assume the primary managerial role of PFM.

Wilcox had started off as a teller for the Ladd & Tilton Bank, and rose meteorically through the ranks. Ladd placed him in charge of PFM mills, and he responded so well to the challenge that he gave up his bank role completely. With the consolidation and new management in place and the recovery of the economy after 1885, PFM went off like a supernova.

Daniel J. Meissner tells that fascinating story in his 2003 article in the Oregon Historical Quarterly, “Theodore B. Wilcox: Captain of Industry and Magnate of the China Trade, 1884-1918.” At a dizzying pace, Wilcox started building and buying up flourmills throughout Oregon and Washington, gained a near monopoly on grain elevators and warehouses in the Pacific Northwest, and used all the ruthless tactics of laissez-faire capitalism, like focused temporary price wars, to drive out smaller regional flourmills.

Then, in contrast to the English flour trade cultivated over the years by Sibson & Church, Wilcox turned his export focus to Asian markets. He cornered the Chinese market by creating a syndicate of Hong Kong brokers, muscling out American competitors from California and Washington. His flour became “famous from Vladivostock to the Malabar Coast, and far into the interior of China.” He came to dominate the flour markets on both sides of the Pacific. Meissner credits Wilcox’s empire as key contributor to Portland’s prosperity in the late 19th and early 20th centuries.

A record exists of the flourmills in Oregon City contributing to the Asian exports of PFM. An 1899 article in the Oregon City Courier-Herald reported that they “can grind more than a million bushels of wheat a year, and their flour is in the markets of Eastern Asia.” By the end of the first decade of the 20th century, Chinese flour brokers began to import American milling equipment to set up their own enterprises, and PFM’s empire went into decline. After Wilcox’s death in 1918, the firm became incorporated into General Mills Corp. in the late 1920s.

By this time to, the original core of Ladd’s flourmills were no longer central to the global enterprise. The Brick Mill closed for seven years in the 1890s. PFM shuttered it completely in 1902, and shipped its machinery to other mills.

The Imperial Mills, however, remained a mainstay, and just a William Ladd had eyed it and the Brick Mill in the 1870s, by 1908 another young entrepreneur was eyeing these two mills from across the Willamette River in West Linn. Willard C. Hawley would soon take advantage of them to launch Hawley Pulp & Paper Company, an enterprise that would grow almost as explosively in the paper industry, as PFM did in the flour industry.

Oregon City resident James Nicita is a former city commissioner.

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