August/September 2004 | Volume 55, Issue 4
Cyrus McCormick and the problem with agriculture
Whatever the oldest profession may be, the oldest occupations are hunting and gathering. Indeed, for millions of years they were the only occupations, until farming began about 10,000 years ago and slowly spread around the world. Two hundred and fifty years ago, perhaps 80 percent of the population of the Western world was engaged in agriculture. But then, as the Industrial Revolution began in the cloth industry in the English Midlands, the percentage of the population that was devoted to farming began to drop.
In the industrialized world it has been dropping ever since. In the United States, 71.8 percent of the working population were farmers in 1820. By 1900 it was 37.5 percent; by 1960, 6.1 percent. In 1994 it was a mere 2.5 percent. Yet agricultural production has soared. The United States, despite having so few farmers, not only can feed itself but is the world’s leading exporter of agricultural products.
But while the number of farmers has been dropping steadily, their political clout has not dropped commensurately. There are three principal reasons for this. One is that each state has two senators regardless of population. This gives farm states great influence in the Senate. Second, every state has a significant agricultural sector in its economy. Even tiny Rhode Island has some 700 farms. Finally, generations after most of us left, there is still a deep, if atavistic, affection for what is now largely a myth, the “family farm.”
Agricultural lobbyists, both here and elsewhere in the industrial world, have been able to use this myth very effectively to protect farmers from economic reality with lavish government subsidies, tariff protection, and import quotas. The result is not only sometimes mountainous agricultural surpluses in the developed world but higher prices for consumers and agricultural distress—owing to lack of export markets—in undeveloped countries, where a far higher percentage of the work force is still engaged in agriculture.
Finding a way to reduce and then eliminate the subsidies and protection will be one of the biggest political problems to solve as the world moves more and more to an integrated global economy. The problem only came about in the first place, however, because the United States began finding ways to mechanize agriculture in the early nineteenth century and has been finding new ways ever since. The man who started the process was Cyrus McCormick.
Cyrus McCormick’s ancestors were Scots-Irish, who were known as a prideful and cantankerous lot. Their most famous son was Andrew Jackson, who fought three duels and avoided several others only when his opponents wisely backed down. Of one early Scots-Irish immigrant, a contemporary said: “His looks spoke out that he would not fear the devil, should he meet him face to face. . . .” The McCormick family was no exception to this generality. Cyrus would one day sue the Pennsylvania Railroad over a matter arising from an overcharge of $8.70 and take the case to the United States Supreme Court before winning it—a year after his death.
The McCormicks arrived in the 173Os and later settled in Virginia’s Shenandoah Valley, where Cyrus was born in 1809, on his father’s 1,200-acre farm. McCormick’s father also operated a whiskey distillery and a small farm-implement shop, where he tinkered with inventions, none of which were commercially successful.
Cyrus, like his father, was a born tinkerer, and he happily spent hours working in his father’s shop. There he began thinking about the problem of reaping the rapidly expanding American wheat crop.
In Europe, where land was dear and labor cheap, that was not much of a problem. But in the new United States it certainly was, because this country had the opposite situation: endless fertile land and an acute labor shortage. The labor shortage limited the amount of land that could be planted with wheat because there is a very limited time after the wheat is ready for harvest when it can be reaped.
Unlike plowing, reaping is a complex task, and McCormick began thinking about how its various parts could be mechanized and accomplished by one machine. By 1831, when he was only 22, he had a working prototype. An arm gathered the wheat to be cut by a knife that moved back and forth. The knife had “fingers” attached to hold the wheat and to prevent its being merely flattened by the knife, rather than cut. The cut wheat then fell onto a platform, from which it was raked off, bundled, and tied by hand.
All of this was powered by a wheel that dug into the ground and turned the machinery as the wheel turned. The entire assembly was set off to one side so that the horse pulling it would not trample the wheat to be cut.
In 1831 McCormick gave the first public demonstration of his new reaper, at Lexington, Virginia, 18 miles south of the family farm. Opinions were decidedly mixed. The horses panicked at the noise the machine made, and it had to be pulled by slaves instead. One witness thought it would be worth “a hundred thousand dollars,” then a vast sum of money, but another thought it was “a right smart curious sort of thing, but that it wouldn’t come to much.”
It didn’t at first. Indeed, Cyrus McCormick did not sell a single reaper for 10 years, although he continued to improve it. Finally the machine began to sell, albeit slowly, and in 1842 he sold seven of them. Events then began to move in McCormick’s direction at an accelerating pace. The depression that had struck the American economy in early 1837 finally began to lift in 1843, and in 1845 the British harvest failed. The next year Britain finally repealed its “corn laws,” which had excluded cheap foreign grain from its market. The international demand for American wheat began to grow quickly.
By now McCormick had visited the Middle West and seen firsthand the natural homeland for his reaper, the endless, gently rolling plains, with topsoil that was yards deep. John Deere’s steel plow had made it possible to farm the heavy soil of the Middle West; McCormick’s reaper made it possible to exploit far more of this verdant territory than would otherwise have been possible with the available labor supply. For while one man could reap one acre a day by hand, with the reaper he could deal with up to eight acres.
McCormick settled in Chicago in 1847 and began building a factory to produce reapers. Chicago, founded only in the 183Os, was still a small town of no great economic importance. But McCormick had chosen wisely, for the following year the Illinois and Michigan Canal joined Chicago, with its ready access to the Great Lakes and the Erie Canal, to the agricultural riches of down-state Illinois. A few years later a widening net of railroads connected Chicago with both Eastern markets and Western farmland, and the city began to grow with explosive speed.
In 1848 McCormick lost his bid to get a patent extension on his reaper, but by continuing to innovate he was able to maintain a decisive competitive edge over others who began manufacturing reapers. He introduced an early form of mass production and invested heavily in machinery and in research so as to be the low-cost producer. And he paid good wages to get and keep the best workers. (He was also, for his time, remarkably open to the formation of unions among his employees.)
Realizing that farmers are perpetually short of cash, he found a new way to make it easy for them to buy his reaper: He offered deferred payments. The reapers began to sell in much larger numbers, about a thousand a year over the five years after he opened the factory in 1848.
Sales of McCormick’s reaper soared in the prosperous 185Os, and wheat production soared with it. While production in the Northeast remained at about 30 million bushels in the 185Os, in the North Central states it went from 43 million to 95 million bushels in that decade alone. When the Civil War placed unprecedented demands on the American labor supply, sales rose yet again, and McCormick sold reapers by the tens of thousands, allowing farm output to continue to grow even while hundreds of thousands of young men left the farms to fight for the Union. (McCormick, however, though not disloyal, was a defender of slavery and a political opponent of Abraham Lincoln until the end of the war.)
By this point Cyrus McCormick was a very rich man. In the 1860 census he reported that he owned some $278,000 in personal property and $1,750,000 in real estate. By the time he died, in 1884, he possessed one of the great American fortunes. And the company he founded, which became International Harvester, has had a profound effect on both the American landscape and the American economy. Many of those farm boys who went off to fight in the Civil War returned not to the farm but to the new industries, such as the manufacture of farm machinery.
The revolution in American agriculture begun by Cyrus McCormick, however, was possible only because there was a reliable export market for the agricultural surplus his reaper helped generate. That market was essential to turning a Third World country called the United States into the world’s leading economy. That market is equally essential to helping today’s Third World move up the economic ladder. The United States and the other industrialized countries can assure that market by repealing the present-day corn laws that impede it.