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that time, the family’s iron foundry. When the foundry failed in the wake of the bank
The C.H. & L.J. McCormick Reaper
Manufactory in Chicago, 1875
Advertisement for the McCormick No. 4 in 1894 It did not take long for dozens of new competitors to flood the market with their version
From the American Ikons licensed collection,
this McCormick Deering Thresher Vintage Metal Sign
measures 15 inches by 12 inches
At right: 1931 McCormick Reaper Centennial,
International Harvester so-called “dollar”
selling for $17.50 at usacoinbook.com
panic of 1837 that left the family deep in debt, McCormick went back to work on his
still-unexploited reaper to work out the kinks.
“In this hour of debt and defeat, Cyrus showed that indomitable spirit which was, more
than any other one thing, the secret of his success,” wrote Herbert Casson in Cyrus Hall
McCormick: His Life and Work. “Without money, without credit, without customers, he
founded the first of the world’s reaper factories in the little log workshop near his father’s
house and continued to give exhibitions.”
He sold his first two commercially viable reapers in 1841 with the promise of more orders
to come. His new business venture was off to a promising start.
Moving to the American West
McCormick saw that the American West (which today we call the Midwest) as a magnet
for his mechanical reaper, with its abundance of
farmland and farmers but a scarcity of workers. He
reasoned that the best way to reach them was to locate
his business near that market rather than stay in
Virginia. If not, he’d have to ship his product, first by
boat from Virginia to New Orleans, then up the
Mississippi, with final delivery by wagon.
In 1847, McCormick and his brother Leland left the
McCormick family farm to set up a factory in Chicago.
The city had no paved streets but it was on the south-
western shore of Lake Michigan, the second-largest of
the Great Lakes (by volume) and fifth-largest lake in the
world, connecting to major rivers and a hub for railroad
connections to the West. It was clear to McCormick
that Chicago was the perfect place to turn the making of
his mechanical reaper into a successful business.
William Ogden, Chicago’s first mayor, agreed to give
McCormick part of his own money, $25,000 ($700,000
today), for a half-interest in what turned into
McCormick, Ogden & Co. The venture was so
profitable, McCormick bought out Ogden two years
later for $50,000 and promptly changed the name to
McCormick Harvesting Machine Co.
Selling Reapers
of patented and unpatented mechanical reapers. When McCormick’s patent expired in 1848,
he sought to extend it to 1865 so he could continue to collect a royalty on each machine sold.
The application was rejected after competitors, armed with lawyers such as Abraham Lincoln
and Stephen Douglas, lobbied the government.
The Commission of Patents explained the rationale for its decision: “He is an inventor
whose fame, while he is yet living, has spread throughout the world ... but the reaper is of too
great value to the public to be controlled by any individual, and the extension of his patent
is refused.”
Except for improvements on the reaper patented after 1831, the basic machine then passed
into the public domain, launching a slew of competitive companies.
Sales and Marketing were King
Peter Reid Dickson, professor of marketing at Florida
International University, wrote in Cyrus McCormick:
A Legitimate Marketing Genius: “Cyrus had by then
recognized that his success would not come
from patent protection, but from his mass
manufacturing and marketing methods.”
As it turns out, McCormick was not only
a born inventor but a born marketer and
showman. To expand his market,
McCormick employed local merchants
throughout the region, and later the country,
to act as sub-agents to sell, service, and
collect debt on the Company’s behalf.
During its peak, The McCormick
Harvesting Company had around 5,000
“third-party” sales agents in the field. These
salesmen were trained to demonstrate the
operation of the machines in the field, as well as to
get parts quickly and repair machines in the field if
necessary, during crucial times in the farm year.
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