Tractor Wars

[LEE KLANCHER] Ford gets taken out of the picture.

IH has their Farmall tractor out, which was kind of the revolutionary tractor that could replace the horse.

[DEBRA REID] It's amazing that tractor companies continued to release new products.

[NEIL DAHLSTROM] So Deere went back to the drawing board and wanted to develop a true row crop tractor, which the model A was.

Funding for Tractor Wars II was provided by Friends, the Iowa PBS Foundation, as well as generations of families and friends who feel passionate about the programs they watch on Iowa PBS.

[NARRATOR] By 1929, the farm tractor had evolved from huge lumbering machines to smaller, nimble units that could both plow fields and cultivate row crops.

Tractors were steadily replacing horses as the source of power on farms.

Millions of farmers were ready for their first tractor.

[NEIL DAHLSTROM] State of the tractor business was optimistic.

The Deere Board of Directors got together in October of 1929 and talked about all the good times ahead.

They were expecting record sales and record profits.

They didn't know what was coming actually, two days later.

[NARRATOR] Two days after the John Deere board meeting, the nation's mood changed.

The New York Stock Exchange had been gyrating for weeks.

The Dow Jones Average had lost 10% of its value since its August highs.

On Thursday, October 24th, the Dow dropped 13%, and over the next three weeks, the index shed half its value.

A crisis that began in finance moved to manufacturing and then spread to the rest of the economy.

The sudden drop in manufacturing and exports spurred a freefall of commodity prices.

American agriculture was on the edge of collapse.

[DEBRA REID] Farm families are in the midst of an ongoing economic depression that actually began before the stock market crash of 1929, and they have invested heavily, especially the Corn Belt.

It's the most highly mortgaged region of agriculture in the nation, so it's a fairly precarious time in 1930.

They've also been transferring their power and energy sources away from horses or draft animals and towards tractors.

You can't say they're on every farm by 1930, but a significant number of farmers have a tractor and a horse, and that tractor business is pretty established.

There's models for wheat farmers and there's models for row crop farmers.

And there's the general purpose tractors, too.

[NARRATOR] A year later, in the fall of 1930, the bank failures began.

Over the next two years, more than 5,000 banks, about 15% of the nation's total institutions, would fail.

Households, both wealthy and poor, found themselves destitute.

By January of 1933, US incomes had dropped by more than half.

Unemployment would exceed 24%.

The move to tractors, which had improved efficiency on many farms, compounded the problem.

Farm production increased as demand dropped, crushing prices.

The farm implement industry was forced to shrink.

[NEIL DAHLSTROM] There were 160 manufacturers in 1924, 1925.

By 1930, there were about eight full line equipment manufacturers that were left, so there was a lot of mergers, acquisitions, consolidations.

International Harvester was still the leader by far after Henry Ford's departure.

John Deere was a distant number two, especially in the tractor business.

[NARRATOR] Despite difficult financial conditions, 30% of farms in the Corn Belt own tractors in 1930.

Tractors were even more valuable in North and South Dakota, where they were responsible for powering 40% of operations.

Timely planting and harvest mattered more for wheat than other row crops.

International Harvester saw the largest growth in tractor sales, and by 1929, the Farmall commanded 60% of the tractor market.

[LEE KLANCHER] IH has their Farmall tractor out, which was kind of the revolutionary tractor that could replace the horse.

So International Harvester itself is sort of hit their stride, and they did slow sales, but they doubled down on development.

And this was one of the smartest things they did in history.

If they had continued to do it, it would be a very different world today.

[NARRATOR] John Deere executives and engineers believe that the ability to cultivate row crops was the missing piece to tractor success.

[LEE KLANCHER] And they developed this model GP and they went down a lot of wrong roads, which isn't unexpected.

Management so badly wanted to answer the Farmall and get in on some of those big sales that they pushed them to get it out too quickly, and it just wasn't ready.

[NARRATOR] The GP was underpowered for its weight and was plagued by design issues.

Only 30,000 GPs were sold over eight years when Harvester was selling that many Farmalls every year.

The tractor industry was terrified of Harvester.

[LEE KLANCHER] Harvester had such a fiscal advantage, it was literally like 10 to 1 at that time in terms of dollar for dollar, what they were making.

So these companies to survive had to be very, very careful.

[NARRATOR] But the horse was still the primary source of power on American farms.

[DEBRA REID] There were about 25 million horses and mules on farms and still in cities in 1920.

And by 1930 there's about 13.5 million.

So that's a significant drop in the numbers of horses and mules directly attributable to increased use of tractors.

But what does that really mean?

So for every horse that you take out of your stable, you could put about two and a half acres into some other product row crops for market sale, row crops for livestock feed.

So you combine that change during the 20s with the economic collapse and the continuing price collapse for agricultural commodities.

Getting rid of the horses and investing in tractors increased production.

And the consequence was overproduction and market collapse.

[NARRATOR] Between 1929 and 1932, commodity prices dropped 32%, while gross farm income was cut in half.

Rural Americans were encouraged to become more self-sufficient by canning vegetables, butchering and preserving meats, raising chickens, or milking dairy cows.

Much of the self-sufficiency placed a heavy burden on women, as additional food production was viewed as an extension of housework.

Some believed allowing price drops was good for an economy, but the deflationary spiral pulled both prices and wages downward, accelerating the fall of both.

[DOUG HURT] We're getting closer and closer to the interjection of the federal government into the farm economy.

It's just on the precipice of doing this with the Agricultural Marketing Act of 1929.

And this is really sort of the first time in American history where the federal government has sort of a farm policy.

And that is Hoover really didn't believe the federal government should interject itself into the agricultural economy in terms of production reductions or paying farmers to do certain things.

[NARRATOR] Despite the economic troubles, some farmers were able to buy tractors, but at a slower rate than during the 1920s.

The number of tractors working American farms grew from 246,000 in 1920 to 920,000 in 1930.

However, sales at John Deere collapsed, dropping 86% between 1930 and 1932.

[NEIL DAHLSTROM] Deere laid off at one point probably 80 to 90% of their employees during the depression.

They stopped calling in loans.

They went to their dealers and said do not collect from customers.

And they extended terms.

In the 1970s and 80s, Deere customers were saying, you carried my grandparents through the Great Depression and that's why I buy Deere.

[NARRATOR] Farmers ignored President Hoover's Grow Less, Get More campaign as voluntary reductions were for the other guy.

Planted acres increased for the only time in the nation's history, the decades long migration from rural areas to cities reversed.

Life on the farm meant having work to do and food to eat.

But a farm that was profitable when a bushel of wheat was a dollar was not profitable when a bushel of wheat fell to $0.40.

Eventually, unpaid debts brought foreclosure.

A bank in trouble would recall all of its loans, good and bad, in a last ditch effort to remain solvent.

Hundreds of failed rural banks forced hundreds of thousands of farm foreclosures.

Of the 6 million farms in the US in 1930, 750,000 were shuttered or foreclosed between 1929 and 1933.

The desperate times sparked desperate actions.

The Farmers Holiday Association discouraged farmers from bringing their products to market in 1932.

Centered in Iowa, a hotbed of agricultural activism, roadblocks were set up to block agricultural traffic.

The National Guard was called out to clear roads and keep commodities moving to market.

Some farmers abandoned their tractors and returned to horses as worthless grain was cheap fuel for animal power.

[DOUG HURT] It's a time, really, of philosophical disagreement about how you go about in dealing with the farm problem.

[NARRATOR] When Franklin Delano Roosevelt was inaugurated in March of 1933, farmers were facing the lowest commodity prices in 40 years.

[FRANKLIN ROOSEVELT] Preserve, protect and defend the Constitution of the United States.

[NARRATOR] Days later, Roosevelt signed the Emergency Banking Act, which insured bank deposits.

The next day, half of the cash in America hoarded by a panicked public, was redeposited in the country's banks.

Deposit insurance eliminated banking panics, and the financial system found some stability.

[DOUG HURT] The Roosevelt administration takes the approach that farmers can't save themselves.

Cooperatives can't save the American farmer.

There's got to be the expertise and financial support in some context that will help farm families, but nobody still is quite sure what that meant.

So during the 1930s, you're going to see a number of farm policy programs that are contradictory, that are expensive, that are trial and error, some of which sort of work and some of which clearly don't.

But in the first 100 days, we have the Agricultural Adjustment Act approved, which is clearly an attempt to reduce production and increase prices.

[NARRATOR] Secretary of Agriculture Henry A. Wallace believed a drop in production would boost commodity prices.

The Agricultural Adjustment Act allowed farmers to be paid the difference between the government's target price and the actual market price.

Like the Commodity Credit Corporation, the AAA was meant to be temporary, but it essentially became permanent.

[DOUG HURT] And the advantage of this was it would do a couple of things.

It would inject money into the farm economy immediately.

You're just paying farmers to do something with the hope that the production reduction then is going to pay off a little bit later down the line.

But if you pay farmers to do something, what are they going to do?

They're going to spend it on their mortgage.

They're going to buy groceries.

It'll have this multiplier effect.

[NARRATOR] Payments for farm production targets became considerable insurance, which helped provide a modest income for farmers.

[DOUG HURT] And this marks a very important part in American agricultural history, because it's really the first time in which the federal government has interjected itself into the agricultural economy and farmers accepted it.

And once this happens, the federal government never leaves.

It also means that -- and many farmers will not like to hear this today but it's true -- and that is once you become dependent upon the federal government for payments of programs of various sorts, you're dependent on the federal government.

You've lost the freedom of action that the American farmer never had before.

So essentially, I think you can argue very clearly from 1933 with the passage of the Agricultural Adjustment Act to the farm policy in the 21st century, the vestiges are there that have made the American farmer dependent upon the federal government.

[NARRATOR] In the South, sharecroppers didn't receive support, and many were evicted when landowners took advantage of government programs and reduced their planted acres.

[DEBRA REID] The tractors displacing horses and allowing more arable land to be put into crop or livestock feed for marketable livestock that also moves laborers, hired men, and family laborers off the farm.

And where do you go?

You go to earn a steady wage at an industry, maybe small town, maybe large city.

But you've got that increased press of laborers needing jobs and jobs just not to be had.

[NARRATOR] Many farmers took their government checks and bought tractors.

The New Deal farm programs improved the finances of America's farmers, but they also raise prices for consumers, which made the policies unpopular.

Farming remained a mostly unprofitable enterprise through the rest of the decade, while tractors improved efficiency and allowed more acres to be farmed.

They came at a high price.

[CHRISTIAN OVERLAND] What's not fully done yet, though, is the power of the horse.

And because what's really needed at that point in time, in order for the tractor to be essential to really work on every farm, it has to replicate everything that a horse does.

So it can not just pull, it needs to do reaping, it needs to do cultivating.

[NARRATOR] Competition and consolidation had shrunk the farm implement business.

By 1930, just seven long line companies remained.

Tractor development continued despite drops in sales.

[NEIL DAHLSTROM] So Deere went back to the drawing board and wanted to develop a true row crop tractor, which the model A was.

[NARRATOR] In 1934, John Deere introduced their 23 horsepower model A. Over the next 18 years, Deere would sell 293,000 copies.

[NEIL DAHLSTROM] It had a PTO for driving implements and the rear axle was configurable.

So whether you're planting corn or cotton or potatoes, you had this adjustable rear axle that really set it apart from anything else that Deere had on the market.

So it was wildly popular.

It's going to stay in the product lineup, both the A and the B til the early 50s, and the A is going to become the best selling single model John Deere tractor of all time.

[NARRATOR] The use of horses on American farms would peak in 1919 at 26 million.

But 1,000 pound horse consumes 10 pounds of grain and 10 pounds of hay each day.

Working or not, tractors were attractive tools.

[DOUG HURT] Many farmers are, they're not stick in the muds, they're progressive and they can see the advantages of this.

And they take a gamble that if I buy this size tractor, I can handle this acreage plowing, planting, cultivating.

And I can probably make my payments.

And other farmers would just like to have a tractor because it's nice to have a tractor.

[NARRATOR] The transition from draft animals to tractors would eventually move 85 million acres from raising crops for feeding into growing crops for market.

Loans provided by the Rural Electrification Act to rural co-ops helped deliver electrical service to farms.

Electricity on farms led to indoor plumbing, electric stoves, refrigerators, and pumps.

[DOUG HURT] People talk about a history making day, and they use the term the day the lights came on.

It made all the difference in the world.

[NARRATOR] The Domestic Allotment and Agricultural Act of 1936 began sourcing revenue for farmers from all taxpayers.

The American public as a whole would financially support its farmers.

But when asked to reduce acres, farmers let their worst land lie fallow and farm their best acres more intensively.

Tractors allowed a crop to be planted and harvested in less time.

Despite grinding through low prices and drought, farmers often bought tractors to increase production and improve efficiency on the farm.

Tractor manufacturers responded by moving to four and six cylinder engines, which delivered more power.

But four and six cylinder engines required expensive gasoline two cylinder Deere engines that could operate on kerosene were still cheaper to run.

[NARRATOR] Many farmers waited for horse drawn equipment to wear out to justify the switch to tractors.

One horse could only plow one acre per day due to fatigue, while a six horse team could plow six acres in ten hours.

The cost per acre of horse work versus tractor work were similar, but tractors were often twice or three times as fast as horses, resulting in many more acres worked in a day.

The rapid adoption of the tractor as power on the farm meant most steam engines were retired by 1940, and the rest became more valuable for scrap during World War Two.

Tractors and electricity improve both the material and economic life on the farm.

Government support of farmers helped keep the balance sheets of tractor manufacturers in the black.

IH averaged a 9% profit margin annually in the farm division during the 1930s, even as overall sales dropped.

John Deere managed an 18% annual profit as its models rolled off the line.

International Harvester responded to competition by building the Farmall F20 and F30, which provided more horsepower than the Farmall regular that had been dominating the tractor market since 1924.

[NARRATOR] Inventors continued to tinker with new technologies.

Hessel Roorda of Spencer, Iowa, put low pressure tires on the Farmall in 1929 and found they worked in all conditions while using less fuel.

Allis Chalmers made tires an option on the model U in 1933, and the rest of the industry followed.

Grain threshing equipment company J.I.

Case introduced their first row crop tractors, the model C and CC, in 1929.

The CC was designed to compete with the Farmall regular and became known for its durability.

The 1935 Case RC was aimed at small farms that were still using horses.

It was marketed as able to do the work of 4 to 5 large animals.

Allis Chalmers introduced its All-crop tractor in 1930.

The introduction of its All-crop harvester, which was aimed at farms of less than 100 acres, gave farmers their first look at combines.

[LEE KLANCHER] One of the fascinating questions in farming in that 20s, teens, even into the 30s, when does it make fiscal sense to switch to a tractor?

One of the wonderful quotes I saw about this was that horsepower is elastic and tractor power is fixed.

And what that means is horses wear out, they tire, you have to feed them.

And there was an incredible number of studies done at the time to see when, what size, when does it make sense to go to a tractor?

It's a very complex question.

[NARRATOR] After the production of the Fordson ceased in 1930, International Harvester sold half of the new tractors in America.

John Deere followed with 20% of sales.

Mergers were a constant presence in the tractor business.

The Hart-Parr company moved to Charles City, Iowa in 1901 and developed one of the first gasoline powered tractors.

Hart-Parr merged with Oliver Chilled Plow and two other companies in 1929 to form the Oliver Farm Equipment Company.

While farm income remained flat through the depression, the average farm size grew from 157 acres to 175 acres.

Larger farms required mechanization.

Manufacturers would have to adapt to new demands from farmers.

[NEIL DAHLSTROM] Like the depression, Deere always had this mentality that no matter what, you have to survive.

And they would use that word specifically and say as an organization, as an operation, we have to figure out a way to survive.

One of the ways they did that was they would make decisions before other companies did.

And sometimes that meant maybe laying off the workforce, but figuring out a way to kind of keep them nearby because you knew business was going to pick up again.

There was a lot of R&D.

So the little bit of money that was to be had went into R&D.

And Deere was fortunate because they did have a cash surplus.

And that was a lesson learned during the ag recession of the early 1920s, which we're going to put away cash reserves.

We're in a cyclical market.

We understand that.

So when this time comes, we're going to be prepared to survive.

And in 1937, Deere goes from somewhere in the neighborhood of $20 million in sales in like 1933 to $100 million in sales in 1937, their centennial year.

So they're back in a big way.

They've got a product lineup that is really going to take them really through the 1950s.

[NARRATOR] During the Depression, tractors began to take their cues from autos and other consumer goods, acknowledging that the appearance of a product could be an important part of marketing.

Harry Merritt was sales manager of the Allis Chalmers tractor division, and was inspired by a field of poppies to paint the company's tractors Persian orange.

[LEE KLANCHER] And so when Allis comes out with this bright orange tractor, it lights up the sales world and the tractor industry is on notice.

Hey, we need to add industrial design.

This time period in tractor history is one of the most interesting because you can visually just look at these gray engineer design things and all of a sudden these sleek, beautiful machines that came out.

And if you look at each company had their own way of approaching it.

[NARRATOR] In 1939, J.I.

Case jumped on the color trend with Flambeau Red, a color that would dominate their paint scheme for 50 years.

Other tractor brands followed with their own bright colors.

Henry Dreyfus began his career as designer of sets for Broadway shows and later moved into industrial design.

Hired in 1937 to help design the John Deere Model B, his work brought a grille with horizontal slits and an improved dash layout.

The John Deere models A and B also signaled that Deere was going to design tractors for small and medium sized farms, even as the model D was still popular on huge wheat farms of the Prairie states.

[NEIL DAHLSTROM] And it's really interesting because initially it was, okay, well, we understand the automobile business and people want their machines to look good.

So we've got to catch up and these things have to look a little less utilitarian.

But what they learned from industrial designers is it's not just a visual.

We can make things easier to operate.

[NARRATOR] The 1935 Oliver Model 70 was the first tractor with a high compression six cylinder engine, and also brought a dark green color and streamlined sheet metal work to the market.

Not all new designs worked as intended.

The Minneapolis-Moline Company rolled out its three plow UDL in 1938.

The machine was designed with the comfort of an automobile, and was intended to blend the utility of a tractor with the convenience of a car.

The cab was hot and small, the visibility for farming terrible, and the vehicle cost more than a car and tractor combined.

Its failure made it highly collectible, and most of the hundred that were sold are still in existence.

Market leader International Harvester added red paint to the exterior of its tractors for the first time in 1936.

Industrial designer Raymond Loewy was hired by International Harvester to transform the practical Farmall shape into an attractive consumer product.

Loewy's work was revealed in 1939 on the M and H models, which replaced the Farmall F series.

[LEE KLANCHER] And so the M's and H's sold significantly more.

That was Harvester's best selling tractor of all time.

They sold in the neighborhood of 400,000 of the two models.

But the letter series certainly was a time when Harvester used their might to just create the perfect machine for the time.

It was beautiful.

Railway came in and designed it and put that beautiful sheet metal on it, and it did everything right.

It had every implement you could want.

And they had a sales network that was phenomenal, and they sold them like hotcakes.

[CHRISTIAN OVERLAND] And this Farmall design emerges in the 30s as this kind of like, almost like it should have been the 1939 World Fair.

The idea of it is it's the future.

You're not just purchasing something that it's for utility, but you're purchasing something that you're a future orientated person.

You know what's going on with the trends.

You're investing in new technologies.

[NARRATOR] At Deere, style innovations by designer Henry Dreyfuss would appear on every Deere tractor through the 1954 model 70.

[NEIL DAHLSTROM] And by the 50s, it just becomes just part of kind of the fabric of design.

[DEBRA REID] Despite the doom and gloom that we've discussed in terms of the economic situation for agriculture in the 30s, it's amazing that tractor companies continued to release new products, Ford being a good example with the 9N seeing a need.

[NARRATOR] For production of the Fordson tractor had ended in the US in 1929, but Henry Ford had never mentally left the tractor business.

In 1938, Irish inventor Harry Ferguson demonstrated his hydraulic three point hitch for Ford, starting a paradigm shift in tractor design.

[LEE KLANCHER] Harry Ferguson, fascinating character, brilliant engineer from Ireland.

Harry had a love of farm machinery and Harry was a genius and Harry figured out as early as 1920 that the problem with the farm machine of this time was draft control, getting the plow down into the soil and using leverage to do that.

So he developed basically a triangle that would make sure the tractor pushed the plow down, and if it hit something, instead of pulling the tractor up and lifting it up, which is a problem with the early Fords, if you hit something and it would ratchet the machine up like this was how the leverage would work.

And if you didn't grab that clutch, it would flip you over and often kill the operator.

Bit of a design flaw.

Ferguson had figured out how to get around that and develop this system.

Famously, he came to Dearborn, demonstrated his system, and they had several other competitors' machines.

It worked way better.

It was faster, more efficient.

This was a revolutionary technology.

And Harry and Henry sat down at a little wooden table and came to an agreement and shook hands on it.

This would probably be the most problematic handshake in the history of farm equipment, and possibly America.

[DEBRA REID] That meeting in October of 1938 at Fairlane, when Ferguson demonstrated the three point hitch hitched to the Ferguson Brown tractor, outperformed the Fordson, outperformed an Allis Chalmers, and convinced Ford of the utility of this three point hitch.

And this gentleman's agreement resulted in the Ford tractor with the Ferguson system.

[NARRATOR] The 9N would again make Ford the low cost tractor for the American farmer, but with technology other tractors couldn't match.

[CHRISTIAN OVERLAND] And when you get to that three point hitch factor with Ferguson and Ford, you get that paradigm change that allows other innovations to happen.

And really, what's starting to happen too, is that, you know, the size of things go up and down a bit.

You do get into like the Ford 9N and then the Ford 8N in 1947.

That becomes even a smaller tractor, but much more flexible in its use to actually use on a farm by more people and becoming more affordable.

[NARRATOR] The 9N captured 20% of the tractor market by 1941.

Industry skepticism of the Ferguson three point hitch quickly reversed, and it became the industry standard.

[LEE KLANCHER] It came out at the same time IH had a brand new line that had been engineering since the beginning of the Depression, their stroke of genius, arguably, I would say, of that century, the letter series tractors, they just hit every note right.

They had implements, they had all the features everyone wanted.

They were beautiful, they worked well, and they sold like they'd never sold tractors before.

That comes out just as Henry comes back into the market with a revolutionary technology on the back.

Beautiful tractor, perfectly sized for these farms that were transitioning.

And if you had a big farm, you wanted one as a small tractor.

If you didn't have a horse, this was the moment you come in.

And so he comes in and he did sell more even Harvester at their peak.

He did.

So Henry once again found the perfect timing and the perfect combination of things to poke another stick in the eyes of International Harvester.

[NARRATOR] In 1939, there were 1.6 million tractors on farms across the countryside, double the total in 1930.

The USDA estimated that 60% of farms that were big enough for a tractor were using one.

The tug of war between market leaders shifted during the 1930s.

Unable to build tractors fast enough, International Harvester lost ground to John Deere and other manufacturers.

While the war in Europe was over the horizon for most Americans, the creation of the War Resources Board in 1939 was the beginning of the war effort for the United States.

The next year, the Defense Plant Corporation began building military factories.

[CHRISTIAN OVERLAND] So we had the system to integrate manufacturing in a different way.

So when the war came, arms need to be made.

And these companies that could build things retooled.

[NARRATOR] In the 1940 presidential election, isolationists voted for Wendell Willkie, while interventionists voted for President Franklin Roosevelt to serve a third term.

During that election year, Roosevelt asked for $1 billion to build 5,000 airplanes.

[FRANKLIN ROOSEVELT] Our most useful and immediate role is to act as an arsenal for them as well as for ourselves.

[NARRATOR] The 1941 Lend Lease Act facilitated the shipment of war materials to the Allied nations.

Rural isolationists believed Lend Lease violated the nation's neutrality, but hoped the measure would delay or avoid American involvement in the war.

Some feared extending Lend Leaseto Russia would be viewed as supporting communism.

Military spending jumped to $60 billion by the summer of 1941, around 16% of the country's gross domestic product.

The US had been drifting towards war since 1939, when Germany invaded Poland.

(explosion) [NARRATOR] The 1941 attack on Pearl Harbor forced the country into war.

Wartime quickly ended the problems of the farm economy.

Prices rose as surpluses disappeared.

[DOUG HURT] So you have fairly quickly a labor shortage in many farm areas of the country, particularly in terms of cotton, particularly in terms of vegetable and fruit crops in California, but also just raising beef cattle.

Harvest labor may not be year round, but even the seasonal labor shortage is affected.

[NARRATOR] The Office of Production Management set limits on farm manufacturers to roughly 80% of their 1940 production, but allowed an increase in their production of parts.

[LEE KLANCHER] World War II obviously was a difficult time in America and had really interesting implications for the country.

So for the farm makers, the looming of World War II slowed them down, and as soon as America entered the war, getting material for production was very, very difficult.

[DOUG HURT] There's a little bit of production, but it's rationed out through the states into the counties, and then county boards determine who's going to get this tractor based on applications.

So you might have a dozen farmers wanting this new tractor, and they've got one for the county.

[NARRATOR] Federal wages for war work were often higher than the wage for jobs in town.

In Nebraska, a worker could receive 30 cents per hour working in retail, but 70 cents per hour for war work.

Americans wanted the war to end, but the good economic times to last.

For some, it was the first prosperity they had ever known.

Across the country, war plants sprouted from farm fields, like the Ford Motor Company's Willow Run factory, built on the edge of Detroit in 1941.

When the factory was operating at peak production, it finished a B-24 bomber every 63 minutes.

[CHRISTIAN OVERLAND] And within a year built a mile long assembly plant will run with a head over 7,500 bombers built within four years.

And that's an amazing production of planes coming out of there.

[DEBRA REID] So this is really a global scale issue, what tractors and what implements are in production.

So when Ford suspends domestic production in favor of serving the war effort, it doesn't mean that they're going to not have any income given military spending and tractors satisfy the need for supporting the war effort, but then they have a good income with Jeeps and tanks and aircraft.

[NEIL DAHLSTROM] Deere was was pretty diverse actually and, you know, like I think most companies were at that that part of time.

But of course there were manufacturing operation at the end of the day.

So Deere did everything from design and build tank transmissions, undercarriages for a track tractor called Cletrac by the Cleveland Tractor Company, things like airplane components, submarine hatches, ammunition in a number of factories.

Probably the biggest product in terms of just volume were mobile laundry units.

So you're in the field and they were worried about disease.

And so these mobile laundry units could be towed so that you could wash your clothes.

Also in ordnance, it was the 308th Ordnance Battalion, better known as the John Deere Battalion.

So this was a group of about 900 employees and dealer employees that spent about two years in Belgium, in France, repairing tanks, armored vehicles.

So they were a support unit.

[NARRATOR] Between 1940 and 1945, 17 million people found jobs with the military or US government.

More than 40% of those workers had been unemployed in 1940.

By the end of the war, the farm population had shrunk by 20%.

Net farm income tripled between 1940 and 1945.

Lobbying by the Farm Bureau earned draft deferments for all farm laborers working essential crops.

But farm deferments were contentious as they required more urban draftees to meet military quotas.

In October of 1942, all essential dairy, poultry and livestock workers were insulated from the draft.

Farm pay was half of factory pay, but it kept farmhands out of the war.

Between 1940 and 1945, the number of women in the workforce expanded by 50%.

Comprising over 37% of the workforce, their ranks grew from 11 million to over 18 million.

For many women, wartime employment was the first job they held outside the home.

At the beginning of the war, Japan controlled 97% of the rubber used by the US.

As the war progressed, tires and other essential raw materials were rationed.

Gasoline was rationed to limit driving and save rubber tires.

In September 1942, Secretary of Agriculture Claude Wickard issued an order temporarily rationing farm equipment.

Purchases of combines, pickers, drills and tractors could only be made with government approval.

By 1943, one third of all agricultural production went to the war effort.

Of that amount, 75% was exported to Britain and another 20% went to Russia.

New farm technology continued to spread.

A corn picker that could fill a 60 bushel wagon every 30 minutes was becoming common.

The new machine was faster than two men could empty the wagons.

Food shortages sometimes occurred as migrant labor arrived in town for harvest.

Farmers often lacked enough food to feed a crew four meals a day.

The allies, driven forward by the industrial capacity of the United States, were slowly but surely winning the war.

On D-Day in June of 1944, Germany could only deploy 319 airplanes.

The US and the allies had over 12,000 planes on hand.

[NARRATOR] The day after the war ended in August of 1945, the government began canceling war contracts.

Plants spun down even faster than they had spun up at the beginning of the war.

Thousands of workers were laid off at a time.

But many workers had saved over 10% of their earnings during wartime, which created massive pent up demand.

Many were concerned that the country would experience a recession after the war, similar to the recession that followed the Great War a generation before.

When wartime price controls were lifted, a sharp spike in prices triggered a two year recession that ended in 1947.

Freed from wartime production limits, farmers embraced both tractors and combines.

The combine converted soybeans from a forage to a cash crop for many farms and made the harvest of wheat and oats a one man job.

Mechanical corn pickers reduce the corn harvest from a months long slog to just a few weeks.

The demand for hired labor dropped dramatically.

By accelerating harvest, farms could grow in size.

The introduction of corn pickers with shellers allowed more of the harvest to be completed in the field.

Adding a drying system to the farm meant earlier harvests with lower yield loss.

Self-propelled combines were the final step in maximizing harvest efficiency.

[NEIL DAHLSTROM] The combine kind of the evolution from the binder to the pull behind combine to the self-propelled combine the self-propelled really after World War II really starts to take off.

[NARRATOR] Between 1945 and 1960, the number of tractors on farms doubled, while the number of combines tripled.

The US ended the war with fewer farms than when the war began.

Farmers with cash had bought out their neighbors and the rural population continued to shrink.

Post-war farmers had to become more technologically literate, utilize more complex strategies, and be highly capitalized.

[LEE KLANCHER] So they know how to use machines.

They also come back at a time when the American economy is booming and people have money, people are making money and farms are making money.

So the farm is roaring for machines.

Give us those tractors.

We are done with horses.

This is tractor time.

It does take a bit because there are restrictions on production, even post war.

You don't see a ton of new models or new development in this time.

These companies survived the war, built as much as they could and then are just making hay, just selling as many tractors as they possibly can.

[NEIL DAHLSTROM] In 1945, only 30% of farms have a tractor.

So you have this huge opportunity.

There's almost 7 million farms in 1920 and the 30s and 40s the size of farms start to grow and the farm population starts to shrink.

[NARRATOR] By the middle of the 20th century, tractors were the driver of farm growth.

Over 800,000 farms bought their first tractor between 1945 and 1950, when 46% of farms had at least one tractor.

In 1952, the first center pivot irrigation system received a patent.

The landscape of the Great Plains changed as self-propelled irrigation systems brought corn, cotton, and soybeans into wheat country.

The use of anhydrous ammonia increased dramatically, requiring the creation of higher horsepower tractors to knife the fertilizer into the soil.

[NEIL DAHLSTROM] It's very much a race, and you start to see this start kind of like in 1944 and then 1945, you've got all this pent up R&D because even though you're not allowed to introduce anything new, there's still plenty of R&D going because you know the war is going to end.

[NARRATOR] Tractor sales peaked in 1948 at 753,000 units.

International Harvester sold twice as many tractors as John Deere, while Deere sold twice as many tractors as any of the other tractor brands.

[LEE KLANCHER] Profit margin is a key for heavy, the heavy equipment industry and for International Harvester it was a bit of a linchpin.

They historically had always not compared well, particularly to John Deere and Caterpillar and their contemporaries.

They were always lower.

Some of it was the nature of how Harvester ran their business.

They catered very much to their consumer.

So they would offer many, many, many options for their truck line in particular.

You could order hundreds of tiny little things.

There was even a policy that if someone asked for something, they would add it and add it to the option sheet.

[NARRATOR] International Harvester stock paid investors consistent and lucrative dividends.

[LEE KLANCHER] Harvester's dividends are some of the highest of anyone, much higher than Caterpillar or Deere by a significant margin.

[NARRATOR] Unfortunately for IH, the dollars being paid as dividends were dollars that didn't go into development or marketing or efficiency.

[LEE KLANCHER] If we get into the early 1950s, a lot of change is happening at both International Harvester and Deere.

International Harvester has been big for a long time, since 1902, the big player.

This is a company used to being the biggest, the best, and much of what they did was the best.

Their sales and marketing phenomenal.

They made their own bolts.

They owned the production line from A to Z. They were a big, dominant, arrogant company.

Unfortunately, the application of that meant resources that should have gone to developing new tractor lines.

The machines they had out at the time, the 100, 150 series tractors, were based on that same letter series platform introduced in 1939, talking about a very old platform that is very long in the tooth.

[NARRATOR] Between 1940 and 1950, 1.5 million tractors were added to American farms, but the rate of sales growth was unsustainable.

The tractor business embarked on two paths for sales, high horsepower tractors for bigger jobs and smaller tractors for smaller farms.

[CHRISTIAN OVERLAND] Farmall came out with the Cub in 1945.

Ford came out with the 8 in '47, these smaller tractors that could actually do different things for the need of kind of like not having heavy compaction on certain soils, but also certain types of farm and agricultural work.

[LEE KLANCHER] The only way to get a bigger market, the very large tractors sold to very large farms, that's a very small market.

The minute you get down to a one horse, two horse farm, wow, that's a big market.

So little tractors made sense and little tractors were what they really felt was a big deal.

International Harvester engineered the Farmall model A, model B, they introduced them first.

[NARRATOR] Allis-Chalmers was an early adopter of the trend, and had brought its model B to the farm before the war.

At 2,000 pounds and ten horsepower, it made an excellent cultivator for truck farms or light duty jobs.

Other brands rolled out small models to solve small farm needs.

Massey-Harris had the Pony 11.

John Deere had its model M. International's 1947 Farmall Cub was aimed at farms of less than 50 acres, where producers grew cash crops like tobacco and vegetables.

The strategy worked.

Two-thirds of buyers didn't own another tractor, while half of Cub owners were part time farmers.

IH built 65,000 cubs in the model's first two years.

The 1948 Allis-Chalmers G was an innovative design providing the operator maximum visibility.

Vegetable farms embraced the smaller tractor, and many G's are still in use 75 years later.

[NEIL DAHLSTROM] You see these small tractors which we'd look at today and go, well, I can't even mow my lawn with that.

But now you're kind of catering to all these folks who maybe were growing victory gardens, or they have small plots of land.

So really, you have this new audience, this new customer base that evolves as well.

So now you have growing horsepower on larger tractors, but you have this huge small horsepower segment that's starting to evolve as well.

You also see these companies, they're trying to diversify, they're trying to grow, and they're just trying to compete.

[NARRATOR] The Ford 9N had been a successful small tractor selling over 100,000 units, but Ford Motor believed the patents from the original Ferguson hitch had expired.

The 1947 Ford 8N would essentially break the deal.

[LEE KLANCHER] Ford comes out with a new N-series tractor, which isn't really new in any way.

The color schemes are a little different and the Ferguson name isn't on it.

Harry, of course, is not happy about that, and this goes very publicly to the courts.

This was front page news across the nation.

[DEBRA REID] So Ferguson sues for patent infringements, and there were four specific patents and for violation of the Sherman Antitrust Act, so unfair competition.

It's finally settled in 1952 and Ferguson does receive more than $9 million.

So it's a significant settlement.

[NARRATOR] Ferguson's court win required a five year wait, and his tractor business eventually merged with Massey-Harris to form Massey-Harris-Ferguson in 1953.

[LEE KLANCHER] And the handshake agreement ended up being very costly to Ford's heirs.

[NARRATOR] John Deere had to fight off Poppin' Johnny sneers and regular rumors that they were abandoning two cylinder engines.

Deere engineers knew that they had begun to hit the upper limit of the horsepower that their smaller two cylinder engines could generate.

The highly successful model D was becoming obsolete in the world of more powerful engines.

[LEE KLANCHER] John Deere has been content to be the number two manufacturer in the world since they started in tractors, going way back.

What they do is make two cylinder tractors.

They make them so they will last forever.

They're beautiful.

They don't make quick changes.

That is who they are.

Enter Bill Hewitt.

His vision for John Deere is not to be number two.

He's like, it's time for us to be number one.

[NEIL DAHLSTROM] So Deere realizes in the 1950s that they're not going to get a whole lot more power out of the two cylinder design.

Probably if you had to draw a line in the sand, you would say 1953.

That's the year that Charles Deere Wiman, who's been CEO since 1928, he drives to Waterloo, Iowa, talks to a small group of engineers and says it's time to redevelop the John Deere tractor.

And he says the only thing you might keep is the green and yellow paint.

And he puts together this small team that they call the new design group.

They buy a former meat market, a butcher shop, essentially in Waterloo, Iowa.

They put brown Kraft paper on the windows.

They don't mark it as a John Deere location.

You have to go in through the back door and they white paper the John Deere farm tractor.

Their goal is to launch the new line in 1958.

It'll take all the way until 1960 and a new CEO, Bill Hewitt, to bring it all to fruition.

[NARRATOR] John Deere's secret tractor project was a technological gamble.

The board hoped it would put the John Deere brand ahead of International Harvester, the company that had defined the tractor industry.

Just as farms needed to grow larger to remain profitable.

Size would make and break tractor companies.

Funding for Tractor Wars II was provided by Friends, the Iowa PBS Foundation, as well as generations of families and friends who feel passionate about the programs they watch on Iowa PBS.