Tyler Duke

24 January 2011

Mrs. Heijl

Gustavus Swift and Vertical Intergration

Encyclopedia
Gustavus Franklin Swift (June 24, 1839 – March 29, 1903) founded a meat-packing
 empire in the Midwest during the late 19th century, over which he presided until his death. He is credited with the
development of the first practical ice-cooled railroad car

 which allowed his company to ship dressed meats to all parts of the country and even abroad, which ushered in the
"era of cheap beef." Swift pioneered the use of animal

 by-products for the manufacture of soap, glue, fertilizer

, various types of sundries, and even medical products.

Swift donated large sums of money to such institutions as the University of Chicago
, the Methodist Episcopal Church
, and the Young Men's Christian Association (YMCA). He established Northwestern University

's "School of Oratory" in memory of his daughter, Annie May Swift, who died while a student there. When he died in
1903, his company was valued at between US$125 million and $135 million, and had a workforce that was more than
21,000 strong. "The House of Swift" slaughtered as many as two million cattle, four million hogs, and two million
sheep a year. Three years after his death, the value of the company's capital stock topped $250 million. He and his
family are interred in a mausoleum

 in Mount Hope Cemetery in Chicago

, IL.

Early life
He was the second of three boys born to William Swift and Sally Crowell, descendants of British
 settlers who went to New England
 in the 17th century. The family (which included Gustavus’ brothers Noble and Edwin) lived and worked on a farm in
the Cape Cod
 town of West Sandwich, Massachusetts
 (present-day Sagamore
), where they raised and slaughtered cattle
, sheep, and hog. This where he got the idea of packing meat.
As a boy, Swift took little interest in his studies and consequently left the nearby country school after only eight years.
During that period he was employed in a number of jobs, finally finding full-time work in his elder brother Noble's
butcher
 shop at the age of fourteen. Two years later, in 1855, he opened his own cattle and pork
 butchering business with the help of small loans from his family. Swift purchased livestock
 at the market in Brighton
 and drove them to Eastham
, a ten-day journey. A shrewd businessman, he purportedly followed the somewhat common practice of denying his
herds water during the last miles of the trip so that they would drink large quantities of liquid once they reached their
final destination, effectively boosting their weights. Swift married Annie Maria Higgins of North Eastham in 1861. Over
the years Annie gave birth to a total of eleven children, nine of whom reached adulthood. In 1862, Swift and his new
bride opened a small butcher shop and slaughterhouse
. Seven years later Gustavus and Annie moved the family to Brighton (near Boston
), where in 1872 Swift became partner in a new venture, Hathaway and Swift. Swift and partner James A. Hathaway
(a renowned Boston meat dealer) initially relocated the company to Albany
, then almost immediately thereafter to Buffalo
.

An astute cattle-buyer, Swift followed the market steadily westward. On his recommendation, Hathaway and Swift
moved once more in 1875, this time to join the influx of meat packers setting up shop in Chicago
's sprawling Union Stock Yards
. Swift established himself as one of the dominant figures of "The Yards", and his distinctive delivery wagons became
familiar fixtures on Chicago's streets. In 1878 his partnership with Hathaway dissolved and Swift Bros and Company
was formed in partnership with younger brother Edwin. The company became a driving force in the Chicago meat
packing industry
, and was incorporated in 1885 as Swift & Co. with $300,000 in capital stock and Gustavus Swift as president. It is
from this position that Swift led the way in revolutionizing how meat was processed, delivered, and sold.

Chicago and the birth of the meat-packing industry

Following the end of the American Civil War
, Chicago emerged as a major railway center, making it an ideal point for the distribution
 of livestock raised on the Great Plains
 to Eastern markets. Getting the animals to market required herds to be driven distances of up to twelve hundred
miles to railhead
s in Kansas City, MO
, whereupon they were loaded into specialized stock car
s and transport
ed live (on the hoof) to regional processing centers. Driving cattle across the plains also led to tremendous weight
loss, and a number of animals were typically lost along the way. Upon arrival at the local processing facility, livestock
were either slaughter
ed by wholesalers and delivered fresh to nearby butcher shops for retail sale, smoked, or packed for shipment in
barrels of salt.

Certain costly inefficiencies were inherent in the process of transporting live animals by rail, particularly due to the
fact that some sixty percent of the animal's mass is composed of inedible matter. Many animals weakened by the
long drive died in transit, further increasing the per-unit shipping cost. Swift's ultimate solution to these problems was
to devise a method to ship dressed meats from his packing plant in Chicago to the East.

Advent of the refrigerator car

A number of attempts were made during the mid-19th century to ship agricultural
 products via rail car. As early as 1842 the Western Railroad of Massachusetts was reported in the June 15 edition of
the Boston Traveler to be experimenting with innovative freight car designs capable of carrying all types of perishable
goods without spoilage. The first known refrigerated boxcar
 or "reefer
" entered service on the Northern Railroad (New York) (or NRNY, which became part of the Rutland Railroad
) in June 1851. This "icebox on wheels" was a limited success in that it was only able to function in cold weather. That
same year, the Ogdensburg and Lake Champlain Railroad (O&LC) began shipping butter to Boston in purpose-built
freight cars, utilizing ice to cool the contents.

The first consignment of dressed beef to ever leave the Chicago stockyards did so in 1857, and was carried in
ordinary boxcar
s retrofitted with bins filled with ice. Placing the meat directly against ice resulted in discoloration and affected the
taste, however, and therefore proved to be impractical. During the same period Swift experimented by moving cut
meat using a string of ten boxcars which ran with their doors removed, and made a few test shipments to New York
 during the winter months over the Grand Trunk Railway
 (GTR). The method proved too limited to be practical. Detroit
's William Davis patented a refrigerator car that employed metal racks to suspend the carcasses above a frozen
mixture of ice and salt. He sold the design in 1868 to George H. Hammond, a Detroit meat-packer, who built a set of
cars to transport his products to Boston using ice from the Great Lakes
 for cooling. The loads had the unfortunate tendency of swinging to one side when the car entered a curve at high
speed, and the use of the units was discontinued after several derailments. Finally, in 1878, Swift hired engineer
Andrew Chase to design a ventilated car that was well-insulated, and positioned the ice in a compartment at the top
of the car, allowing the chilled air to flow naturally downward.

The meat was packed tightly at the bottom of the car to keep the center of gravity low and to prevent the cargo from
shifting. Chase's design proved to be a practical solution to providing temperature-controlled carriage of dressed
meats, and allowed Swift & Company to ship their products all over the United States
, and even internationally, and in doing so radically altered the meat business. Swift's attempts to sell this design to
the major railroads were unanimously rebuffed as the companies feared that they would jeopardize their considerable
investments in stock cars
 and animal pens if refrigerated meat transport gained wide acceptance. In response, Swift financed the initial
production run on his own, then — when the American
 roads refused his business — he contracted with the GTR (a railroad that derived little income from transporting live
cattle) to haul them into Michigan
 and then eastward through Canada
. In 1880, the Peninsular Car Company
 (subsequently purchased by ACF) delivered to Swift the first of these units, and the Swift Refrigerator Line (SRL)
was created. Within a year the Line’s roster had risen to nearly 200 units, and Swift was transporting an average of
3,000 carcasses a week to Boston. Competing firms such as Armour and Company
 quickly followed suit. By 1920 the SRL owned and operated 7,000 of the ice-cooled rail cars. The General American
Transportation Corporation
 would assume ownership of the line in 1930.

Live cattle and dressed beef deliveries to New York (ton

s):
(Stock Cars) (Refrigerator Cars)
  Year   Live Cattle   Dressed Beef
  1882 366,487 2,633
  1883 392,095 16,365
  1884 328,220 34,956
  1885 337,820 53,344
  1886 280,184 69,769

The subject cars travelled on the Erie

, Lackawanna
, New York Central
, and Pennsylvania
 railroads.

Source: Railway Review, January 29, 1887, p. 62.

"Everything but the squeal"

In response to public outcries to reduce the amount of pollutants generated by his packing plants, Swift sought innovative ways to use
previously discarded portions of the animals his company butchered. This practice led to the wide scale commercial production of such
diverse products as oleomargarine, soap
, glue
, fertilizer
, hairbrushes, buttons, knife handles, and pharmaceutical preparations such as pepsin
 and insulin
. Low-grade meats were canned in products like pork and beans
.

The absence of federal

 inspection led to abuses. Sausages might incorporate rat droppings, dead rodents, or sawdust, and meat that had spoiled or meat mixed
with waste materials was sometimes packed and sold (Swift once bragged that his slaughterhouses had become so sophisticated that they
used "everything but the squeal"). Transgressions such as these were first documented in Upton Sinclair's
 novel The Jungle
, the publication of which shocked the nation and led to the passing of the Federal Meat Inspection Act
 of 1906.

Vertical integration

The meat packing plants of Chicago were among the first to utilize assembly-line (or in this case, disassembly-line) production techniques.
Henry Ford
 states in his autobiography My Life and Work that it was a visit to a Chicago slaughterhouse which opened his eyes to the virtues of
employing a moving conveyor system and fixed work stations in industrial applications. These practices symbolize the concept of
"rationalized organization of work" to this day.

Swift adapted the methods of the industrial revolution to meat packing operations, which resulted in huge efficiencies by allowing his plants
to produce at a massive scale. The work was divided into myriad specific sub-tasks, which were carried out under the direction of supervisory
personnel. Swift & Co. was broken down organizationally into various divisions, each one responsible for conducting a different aspect of the
business of "bringing meat from the ranch to the consumer". By developing a vertically integrated
 company, Swift was able to control the sale of his meats from the slaughterhouse to the local butcher shop.

Swift devoted a great deal of time to indoctrinating employees and teaching them the company’s methods and policies. He also motivated his
employees to focus on the company's profit goals by adhering to a strict policy of promotion from within. The innovations that Swift
championed not only revolutionized the meat packing industry, but also played a vital role in establishing the modern American business
system, with an emphasis on mass production
, functional specialization, managerial expertise, national distribution networks, and adaptation to technological innovation.

Further reading

 Lowe, David Garrard (2000) Lost Chicago. Watson-Guptill Publications, New York, New York ISBN 0-8230-2871-2.
 Neilson, Helen Louise Swift (1937) My Father and My Mother. The Lakeside Press, Chicago, Illinois.
 Sinclair, Upton

 (1906) The Jungle. Signet Classics, New York, New York. ISBN 0-451-52804-2.
  Swift, Louis Franklin and Arthur Van Vlissingen (1927) The Yankee of the Yards: The Biography of Gustavus Franklin Swift. A.W.
Shaw and Company, Chicago, Illinois — provides a history of Chicago’s meat packing industry from the viewpoint of the son of
the founder of the largest packing company in the world.

http://www.absoluteastronomy.com/topics/Gustavus_Franklin_Swift