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As early as the 1850s lumber was important to the development of Minneapolis. The milling of wheat likewise became increasingly significant as new strains were found that were winter hardy (spring wheat) and new milling processes were developed. Saw milling and flour milling both proved financially rewarding, establishing the area as a significant commercial district. Early key milling figures included Franklin Steele, Cadwallader C. Washburn, John Sargent Pillsbury and his nephew Charles A. Pillsbury, George H. Christian, brothers Edmund and Nicholas La Croix, and George T. Smith.
Within a few decades the mills that were clustered around St. Anthony Falls led the world in the production of lumber and flour. A v-shaped dam spanned the river just above the falls and diverted water to either side, where it powered the mills that lined the riverbanks. Local millers and engineers were responsible for several technological advances in flour milling, including the "middlings purifier," a process that could make hard, winter wheat into clean, white flour that was salable. This process helped make Minneapolis flour world-renowned and the city led the world in flour production from 1882 to 1930. Dominating the milling district was the Washburn A Mill, of the Minneapolis Mill company, built in 1874 and at that time owned by Cadwallader Washburn, Governor of Wisconsin. It was the pride of the city and when it was destroyed by fire in 1878, the future of flour milling in Minneapolis was in question. Washburn rebounded, however, and the new "A" Mill built the next year was even larger than its predecessor.
In tandem with the growth of flour milling was the growth of grain trading. The Minneapolis Chamber of Commerce (later to be named the Minneapolis Grain Exchange) was established in 1881 to purchase grain from the Midwest region and ship it to the East. The Chamber of Commerce rapidly established Minneapolis as an important terminal grain market. The number of bushels of wheat shipped from Minneapolis to the East jumped from less than 200,000 bushels in 1881 to 2 million bushels in 1882. By 1885, Minneapolis was the number one wheat receiving market in the United States. By 1891, 21 million bushels of wheat moved from Minneapolis to the East and overseas. Minneapolis eventually became, and remains today, the largest cash exchange market in the world. Legislation enacted in 1885 gave the state power to regulate and license grain elevator companies. The companies in turn were allowed to issue commercial paper on grain they received on consignment. Not only did this facilitate operations of the Minneapolis Chamber of Commerce but went far to establish Minneapolis as a major financial center.
Lumbering prospered because high quality timber was available in abundance, the Mississippi River provided a means to convey the logs to waiting mills, and with the rush of immigrants moving into the area, there was a demand for the milled wood. From 1849 to 1852 the number of saw mills increased from one to four and daily production capacity went from 15,000 to 50,000 board feet. By 1869, there were 18 mills manufacturing lumber at or near the Falls of St. Anthony, and the number of board feet these mills produced per year increased to 90,734,595. Key players included Franklin Steele, Caleb Cushing, Robert Ratoul, Thomas B. Walker, Thomas H. Shevlin, Henry C. Akeley, and S.C. Hall.
During the first decades of the 20th Century, first lumbering and then flour milling became less significant in the city's economy. The white pine in northern Minnesota, which had helped build St. Paul, St. Louis, and numerous other cities along the Mississippi, was depleted. The last sawmill in Minneapolis, the Carpenter-Lamb Mill, closed in 1921. By 1931, Minneapolis had lost its place as the nation's largest flour producer, a title it held for 50 years. A variety of factors contributed to the decline of flour milling in the area, including tariff changes favoring other markets, higher freight rates, decreased supply of spring wheat, decreased demand for high-grade flour, and cheaper sources of power other than water.
However, many companies with roots in the milling, flour, and lumber business went on to diversify and grow. Will Cargill established his grain elevator company in Minneapolis in 1865. Today the company, which is the nation's largest private corporation, is international in scope and active in a wide range of agricultural and industrial sectors.
The Pillsbury Company, founded in Minneapolis in 1869, has been one of America's oldest and best-known names in food retailing. The Pillsbury Doughboy and the Jolly Green Giant are known throughout the U.S., and Häagen-Dasz is another well-known Pillsbury brand. Pillsbury was acquired by London-based Grand Metropolitan PLC in 1989, becoming Diageo PLC in 1997.
In 2001, Diageo PLC was acquried by General Mills, a local company that grew out of the milling company of Washburn Crosby in 1928.
Super Valu, the second-largest food wholesaler and distributor in the U.S., originated in the merger of two Minneapolis wholesale grocers in the late 19th century, B.S. Bull & Company and Newell and Harrison. The company undertook a number of acquisitions and mergers, changing its name to Super Valu Stores in 1951.
Ancillary industries that sprung from the grain and lumber industries included sash and door factories, furniture factories, farm implement manufacture (for example, Minneapolis Moline), and linseed oil processing (a precursor to paints and varnishes), with Minnesota Paints founded in 1870, becoming Valspar in 1970. Another significant local industry was the textile industry, as exemplified by Munsingwear (founded in 1886) and North Star Woolen Mills (founded in 1860 and for a time the largest manufacturer of fine woolen blankets in the country.) These industries were well established and remained strong, partly due to the network of railroads that was then in place to transfer their products.
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