John C. Osgood and CF&I

John C. Osgood dominated the fuel trade in Colorado during the twentieth century he went from a agent for the railroads to the owner of the Victor American Fuel Company. Along the way he created other companies some of which did not fare well under Osgood’s direction. Osgood handled one of his companies to the point he lost control. Colorado Fuel and Iron Company, originally the largest coal producer and steel plant in the West floundered under Osgood’s control. He allowed the company to fall into a critical financial position which caused him to sell out to John D. Rockefeller.

Osgood came to Colorado in 1882 in search of coal reserves for the Chicago, Burlington, and Quincy Railroad. Instead of providing new coal sources for the railroad company Osgood decided to create a new fuel company in Colorado. Osgood and the Iowa Group (John Jerome, J.A. Kebler, A.C. Cass, and D.C. Beaman) created the Colorado Fuel Company in 1883. Osgood’s company became a competitor with William Palmer’s Colorado Coal and Iron Company. Osgood succeeded in dominating the fuel market in Colorado and he merged his company with Colorado Coal and Iron into a new company Colorado Fuel and Iron (C.F. & I.). Osgood and his Iowa group took control of the new company. The new company produced both coal and steel, the largest company in the West to do so at the time.

Osgood made several enhancements to the company. He started with expanding and upgrading the steel works in Pueblo, Colorado. The steel works was built by William Palmer to supply his Denver and Rio Grande Railroad. Osgood believed the mill needed to be upgraded in order to make it profitable. Osgood contracted with engineers to expand the steel works, creating new blast furnaces. At the same time Osgood created Sociological Department at C.F. & I. under the direction of Dr. Corwin. The Sociological department created housing, schools, and programs for the miners and workers of C.F. & I. Osgood also expanded the companies land holdings acquiring new land for coal mining. Osgood acquired part of the Maxwell land grant through a C.F. & I. subsidiary, a source of large amounts of coal for fuel. At the time Osgood expanded C.F. & I. operations he acquired the Victor American Fuel Company. Osgood later turned this company into one of the largest fuel companies in Northern Colorado.

Osgood knew the value of fuel to the company, prior to his takeover the steel works did not continuously maintain profitability. Under William Palmer the coal fields acquired by Colorado Fuel and Iron maintained the steel works. Coal is the primary source of fuel for creating coke and steel. In Osgood’s time period no one made coal without coal. The excess coal produced by the company was sold off as fuel. Osgood tried to make the steel works profitable through expanding it, building new coke ovens and blast furnaces. At the same time his acquisition of new fuel lands kept the fuel department of the company profitable. Osgood’s plans for C. F. & I. ultimately did not help the company. Osgood’s management of the company created a financial crisis for C. F. & I.

In 1903 C. F. & I. did not have the ability make payments on its debts. Though the company made money the debt incurred through Osgood’s plant expansion and other improvements outweighed the profits. Osgood did not make smart choices dealing with the extensive plant improvements he invested in. He hired the Garrett and Cromwell Engineering Company to plan the improvements. Garrett & Cromwell provided estimates in 1901 for the steel works which amounted to 2.8 million dollars. By 1903 the estimates expanded to 5.5 million dollars. The problems with construction went further. Delays in construction of blast furnaces, coke oven, and employee housing increased the cost of the project. Along with Osgood’s land acquisitions he put the company in the bad financial position. Osgood also created the Colorado Finance and Construction Company to sell C.F. & I. shares to raise money for the construction. Osgood not only owned the company there was no oversight, he used the company as he saw fit with no record of his actions. All of Osgood actions with C. F. & I. created the high debt, with no way to make payments.

In order to keep the company afloat and avoid receivership Osgood went to George Gould and John D. Rockefeller, The Gould and Rockefeller interests agreed to help the company. Rockefeller through his son John D. Rockefeller Jr. presented the funds to save the company in exchange for control. Osgood sold the majority interest in company stock to Rockefeller, allowing the Rockefeller interests to take over the company. The Rockefeller’s wanted control of the company to ensure their acquisitions would be profitable. Osgood left the company so he would not be controlled by the Rockefellers. He wanted to continue to do things his way. Osgood still held control of the Victor American Fuel Company. Through Victor American Osgood became of the fuel kings in Colorado.

All pictures used with permission of Bessemer Historical Society, 215 Canal Street Pueblo, CO 81004.

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