The Pacific Northwest Forum
Volume III, Number 1, Pages 11-24
Winter, 1978

The Birth of Montana's Lumber Industry

Clarence C. Strong and Judy Schutza

Clarence C. Strong worked for ten years in blister rust control. Then in 1934 he accepted the first of many Forest Service assignments in Idaho and Montana. Additionally he served for two years in Afghanistan as advisor to the Ministry of Agriculture. St'nce his retirement in 1957 he has co-authored a book on lumbering in the Inland Empire - White Pine: King of Many Waters.

Judy Schutza studied forestry at Stephen F. Austin State University and the University of Montana and has worked for the Forest Service in Idaho, California, and Montana.

Lumbering was one of the first industries established in Montana. Initially, commercial logging and sawmilling supplied only local needs and it was not until the 1890's that Montana's timberlands began to attract national attention.

The Mission Mills

The earliest sawmills in the Territory were erected by Catholic missionaries among the Indians. In 1845 the Jesuit Fathers at St. Mary's Mission in the Bitterroot Valley constructed the first sawmill in Montana. At St. Ignatius. on the Flathead Reservation, Missionaries built another mill in 1856.(1) These early mills were small and crude. Not until the discovery of gold and the growth of the mining industry did sawmills become extensive private business ventures.

The Headwaters of the Missouri

A.M. Holter and his partner Evanson are frequently credited with establishing the first sawmill for commercial purposes in the mining districts. With an ox team he and his partner hauled a second-hand mill all the way from Denver to Montana in late 1863. Upon arriving in Montana Holter discovered that Evanson, who had claimed to be a millwright by profession, had deceived him and had very little knowledge about the mechanics of a sawmill. He also discovered that some parts of the mill were missing. In spite of these drawbacks, Holter constructed his mill in Ramshorn Gulch, eighteen miles from Virginia City (in present Madison County). The mill was primitive and was operated by a sixteen foot overshot water wheel. Parts were hard to come by, and when mechanical problems arose, Holter frequently had to improvise. However, the partners did manage to saw 15 thousand board feet (MBF) in their first year.

Proving his mettle as a competitor, Holter opened a lumber yard in Nevada City and undercut the going local rate of $150 a thousand by selling his product for $140 for sluice and flume lumber and $125 for building lumber, all purchases payable in gold dust. Lumber was disposed of as quickly as it arrived at the yard. Occasionally demand was greater than supply:

...quite often some of the larger mining companies would send a spy out on the road, in order that they might be informed when a load of lumber was approaching. Then they would have a crew of men arrive at the yard simultaneously with the load of lumber, and when the team stopped, without consulting me at all, they would unload the lumber and carry off every board to their mines. Soon a man would come to me with pay for the lumber .... No loss was incurred by this summary method of marketing our product.(2)

Horse Trailing - OBrien Creek, 1913

Once there was a conflict with miners, when the water from Ramshorn Gulch was diverted from the sawmill into another gulch. The miners turned the water on again, but only long enough for the mill to prepare the amount of lumber they needed, and then they again turned the water into the gulch in which they were working. A court injunction and a dozen arrests and convictions were required before the water question was settled.

Holter purchased a portable boiler and engine, with 25-30 horsepower, which he used in 1866 when he started a mill eight miles southwest of Helena. Another sawmill was already in operation near Helena at the time, run by a man whom Holter believed to be quite wealthy and who drastically lowered his prices to make competition keen for Holter. The competitor, a person whom Holter identifies only as "Mr. Vann," began selling lumber for $60 per thousand. Holter retaliated by asking only $40 per thousand and by refusing to extend any credit.

Following success, in this case, he began buying other mills that were going bankrupt in the area. In Great Falls in 1887 the Holter Lumber Co. was incorporated, but after the price of common lumber had fallen to $14 per thousand in 1893, he cut back on his operations. One of Holter's competitors in that same city did not fare as well as Holter and his partners. A mill owned principally by Bostonians was not removed until 1894 and wound up sustaining a loss of $500,000.

Holter remained active in the Montana lumber business until he dissolved most of his interests and retired in 1898.

The Bitterroot and Clark Fork

The beginning of Missoula dates from the winter of 1864-65 when C.P. Higgins, Frank Worden, and David Pattee joined to form the Missoula Mills Company. A sawmill was constructed about four miles up the Clark Fork from Hellgate. By 1866 there were three sawmills in the Missoula area.

A.B. Hammond and Associates

The building of the railroad through Montana played a major role in the fortunes of several gentlemen from Missoula, specifically the owners of the merchandising firm of Eddy, Hammond and Company, which had been formed in 1876. Six years later the firm, under the direction of R.A. Eddy, A.B. Hammond, and E.L. Bonner, branched into the lumbering business when it entered into an agreement with the Northern Pacific Railroad to supply building lumber, ties, tunnel timbers, and other materials. Later that year Eddy, Hammond and Company formed a new corporation, the Montana Improvement Company, for the specific purpose of cutting and marketing timber. The new company was the Territory's first to be well organized and financed, and it marked the transition of the lumber industry from a strictly hit or miss proposition to a planned economic enterprise.(3)

The new firm was clearly the child of the railroad. The Northern Pacific controlled over half of the corporation's total $2,000,000 in stock. It signed a twenty-year contract with the company to supply all Northern Pacific's timber and lumber needs for the 925 mile distance from Miles City, Montana, to the Walla Walla junction in Washington, and it gave rebates to the company on everything shipped on the railroad it was helping to build. Problems arose, however, when in 1885 the federal government charged the Montana Improvement Company with illegally cutting timber from the public domain. Thereafter the company's timber operations were shifted to other organizations.(4) In 1884 a small, portable mill was assembled on the Blackfoot River (presently Bonner) and began cutting the timber and lumber that went into the building of the dam on the Blackfoot and also into the construction of the larger, permanent mill. The new plant, financed and owned by the Montana Improvement Company, began sawing logs in June, 1886; a year later a planing mill was added; a sash and door factory soon followed.(5)

Sawmill at Eddy, Montana

Operators in the Bitterroot

The Bitterroot proved to be a lumberman's dream, as the merchantable timber was of comparatively easy access, and the canyons from the West Fork north usually carried enough water in the spring and were otherwise suitable to float logs into the main river.

As cited by John B. Leiberg, a government agent, the principal species utilized for lumbering was Ponderosa pine, while lodgepole pine, Douglas-fir, grand fir, balsam, and aspen were used "only to a trifling extent."(6)

Lodgepole pine and Douglas-fir were used locally for posts, fencing material, and mining timbers. None of the remaining subalpine species-western larch, subalpine fir, whitebark pine, Engelmann spruce, and yew were utilized.

The Bitter Root Development Company, organized by Marcus Daly, extended its operations throughout the more accessible timbered portions of the valley, and in 1899 agent Leiberg reported that Daly's company had cut over 6,500 acres just within the new Bitterroot Forest Reserve. Leiberg not only observed heavy logging in the region but he was also highly critical of the manner in which it was being accomplished:

The cutting upon these tracts varies from total, or nearly so, in the valley trough, to 20 per cent on tracts farther removed....It is impossible to ascertain the exact quantity cut from these lands, as nothing is left to show the average height of the trees that were felled.(7)

Judging from the adjacent remaining forests, Leiberg did venture a guess that about 50,000 MBF of lumber had been logged by the Bitter Root Development Company. He continued his attack on poor logging methods:

The cutting was accompanied by a great deal of unnessary waste. Only the choice portions of the logs were taken. Trees were felled carelessly, breaking and splintering adjacent ones. Trees were felled, sawed up into proper logging lengths, and left to rot. Logs were hauled together in piles for banking and abandoned. In no case were the tops disposed of, and they litter the ground in all directions within a vast mass of inflammable material.(8)

It was also revealed in Leiberg's report that logging operations were extensive outside of the reserve, and that 90 percent of the merchantable timber below Grantsdale had been cut. "Most of the valley of Tin cup Creek had been logged clean of yellow pine, and the valley of the West Fork, from its junction with the East Fork to the reserve line, is logged off clean in the trough, and from 10 to 95 per cent on the slopes."(9)

Cormier's Water-Powered Sawmill
at Six Mile Creek outside Missoula.

Marcus Daly

While A.B. Hammond was investing in the Missoula area, Marcus Daly was casting an eye on the Bitterroot Valley. But where Hammond's principal market lay in the railroad, Daly's lay in mining. As one of the original incorporators of the Montana Improvement Company in 1881, Daly recognized early the importance of the lumbering industry to mining. He incorporated the Bitter Root Development Company in 1890, and subsequently conceived a lumbering empire in that valley.(10)

At Hamilton Daly established one of the largest and most modern sawmills in the Northwest. He also accumulated an empire of choice agricultural and timber land, and soon after these interests were established he engaged in a bit of legal maneuvering of the ownership of his enterprises, transferring the stock among various corporations which his business associates formed. By 1895 the property of the Bitter Root Development Company had been transferred to the Anaconda Copper Mining Company for the minimum consideration of $1.00.(11)

Three years later that company purchased the Big Blackfoot Milling Company's mill at Bonner, the mill erected by the Hammond interests in 1886.

In 1902 there were an estimated 26 mills in Missoula and Hamilton, and by 1910 the Western News of the latter city had already begun to lament the disappearing trees:

Thirty years ago, a chain of forests shaded the west side of the valley, but a dozen mills swept them away as far south as Darby, and the stately pines are being replaced with apple trees. Until late years the mills, as fast as the 'settings' were cut out, followed the receding timber.(12)

The Flathead and Northwest Montana

The earliest logging on non-reservation lands in the Flathead Valley was done by settlers for domestic purposes, but by the 1880's a few persons had begun to make logging a business.

The first commercial sawmill in the valley was not erected until 1884. Numerous other small mills were built and operated along the Flathead River, particularly after the Indian reservation was opened to homesteaders.(13)

Marcus Daly of the Anaconda Copper Mining Company in Butte invested in the Flathead at about the same time he was commencing operations farther south, and he established Anaconda's Butte-Montana Company east of Kalispell in 1893. The timber from the Flathead was shipped to supply fuel for the smelter at Great Falls and lumber and fuel for the mines in Silver Bow County, with some exported for sale in the eastern portion of the state and in North Dakota.(14)

The number of mills in the valley and throughout northwestern Montana increased during the 1890's, but it was not until after the turn of the century that the larger, more powerful mills appeared. Capital for these mills was supplied by businessmen who were moving west from the Lake States. Montana lumber had finally attracted a national audience.

The Patterns of Development

The first independent commercial sawmills were located near centers of mining activity, and some were in production as early as the 1860's. Later mining corporations began to form their own sawmilling operations. The early mills also depended upon a constant source of water for power, and for the transportation of logs to the mill. However, as steam-powered mills were introduced, and as the railroad lines were extended, water became less vital.

Although the Montana lumber business was characteristically unstable, the industry itself was firmly implanted in the state's needs. In the early years the mills were small, portable, and primitive. R.G. Raymer cites the number of saw and shingle mills in 1879 as forty-two. This number had increased to over 100 in 1890. Of these "Ten had a capacity of fifty thousand feet daily. The shingle mill of Bascom and Company at Noxon, cut one thousand shingles per day and eleven others cut from twelve thousand to twenty-five thousand a day." The Blackfoot Milling and Manufacturing Company's Bonner, with its capacity of 240 MBF per day, was the largest, and in 1890 it sawed 32,000 MBF of lumber.(15)

Extensive timber holdings were concentrated among only a few firms prior to World War I, such as the Anaconda Copper Mining Company, which controlled over a million acres and produced nearly 50 percent of the timber turned out within the state. Several large, independent mills were established near Missoula in 1910, and in 1914 the J. Neils Company moved from Minnesota to Libby and became one of the largest operators in the state.(16) By 1891 the Bitterroot Valley could boast of possessing over 20 sawmills having a daily capacity of from 10 to 240 MBF.(17)

Even though the lumber industry continued to expand, it was at first impossible to compete in eastern markets. However, with the coming of the Great Northern in 1890 freight rates were lowered considerably and Montana lumber began to appear commercially on a national basis. As the supplies in the South and East decreased, Montana lumbermen could raise their prices. The cost per MBF in 1893 had dropped to $2.05, but had grown to $9.70 by 1899, and to $11.30 by 1904.(18)

A serious economic depression came upon the industry previous to the First World War, and in the years 1913 to 1915 mills usually operated at less than half their capacity. In 1917, out of 150 mills, 122 cut less than 100 MBF each, and twelve cut under 500 MBF. Bankruptcy was common. The crisis also encouraged waste since sound lumbering practices were uneconomical. Cutover lands brought no returns for years to come.(19)

Lumber Pile and Flume - Gallatin National Forest, 1902

Summary and Conclusions

When the region destined to become Montana was settled, its forest resources were rich and tempting. A logging and sawmilling industry was one of the earliest to become established in the Territory, but as the population was transient and unstable, so too was the lumber industry. Nevertheless, as the mining industry matured and became sophisticated, the lumber industry grew with it.

Land use patterns were established quickly, as the mills followed the mines, the water courses, and the accessible timber. "Accessible" timber in the nineteenth century meant those merchantable trees that grew on gentle, not steep, slopes and that grew near a river or stream down which logs could be driven. Thus logging rarely occurred at great distances from driveable streams or on the steepest mountainsides. Good timber close to the source of demand was sometimes left untouched because it could not be easily transported from the mountains to a mill. As steam donkeys and other modern equipment were introduced, loggers became more versatile. In the 1970's, when our wealth of logging equipment includes skyline techniques and helicopters, "inaccessible" usually applies only to those areas legally protected from harvesting. Most of the forests now included in wilderness areas remained in a primitive state because of the impossibility of their being logged with simple techniques and simple machinery.

Large commercial mills did not appear in northwestern Montana until the mid-80's and 90's, when much of the accessible timber near the mines had been logged off, and after the railroad had been stretched across the state. At the same time timber supplies in the South and East were diminishing rapidly, and Montana lumber began to grow in demand on the national market.

Montana's wood products have remained on the national scene, and the industry itself has become settled in the state's economy. One or two person ownerships have surrendered to corporate ownerships, however, and the small portable mills have given way to larger, more permanent establishments. The mills no longer follow the timber surrounding driveable streams; instead, they own and maintain their own woodlands or they purchase timber from other lands that are being professionally managed.


(1) L.B. Palladino, Indian and White in the Northwest: a History of Catholicity in Montana (Lancaster, Penn.: Wickersham Publishing Co., 1922).

(2) A.M. Holter, "Pioneer Lumbering in Montana," Timberman 12 (1911): 21.

(3) K. Ross Toole, Montana: an an Uncommon Land (Norman, Okla.: University of Oklahoma Press, 1959).

(4) Edward Butcher, "An Analysis of the Timber Depredations in Montana to 1900." (unpublished Master's thesis, University of Montana, 1968).

(5) The Missoulan, 7 June 1936.

(6) John B. Leiberg, "The Bitterroot Forest Reserve" (Washington: U.S. Government Printing Office, 1899), p. 274.

(7) Leiberg, p. 274.

(8) Ibid.

(9) Leiberg, p. 274

(10) Toole.

(11) Butcher.

(12) Supplement to the Western News [Hamilton, Mont.], May, 1910.

(13) Olga Wedemeyer Johnson, in the Supplement to the Kalispell News-Farm Journal, 29 March 1956.

(14) Butcher.

(15) R.G. Raymer, Montana: the Land and its People (Chicago: Lewis Publishing Co., 1930), p. 411.

(16) R.K. Widner, ed., Forests and Forestry in the American States (Compiled by The National Association of State Foresters).

(17) Raymer.

(18) Widner.

(19) Benjamin Rader, "The Montana Lumber Strike of 1917," Pacific Historical Review, 36(1967): 191-192.