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Charles Alfred Pillsbury, 1842–1899

Portrait of Charles Alfred Pillsbury
Courtesy of the Minnesota Historical Society
Portrait of Charles Alfred Pillsbury

Charles Alfred Pillsbury was one of Minnesota's most prominent millers. His Minneapolis company, Charles A. Pillsbury and Co., was among the largest milling firms in the world during the last decades of the nineteenth century.

Charles was born into modest circumstances in Warner, New Hampshire, on October 3, 1842. He was the son of George Alfred Pillsbury, a shopkeeper. Charles attended public school in Warner and Concord, New Hampshire, before completing a year of college prep at New Hampshire's New London Academy. He graduated from Dartmouth College in 1863.

After finishing his formal education, Charles moved to Montreal, Quebec, where he became a clerk for Buck, Robinson and Co., a produce commission company. Charles bought a share in the business within three years, but sold it and gave up his position in 1869 to join his uncle, John Sargent Pillsbury, in Minneapolis. With John's encouragement, Charles and George pooled $10,000 of their money and bought one third of a struggling local flour milling business. The purchase was viewed as a bad move at the time, since flour milling was neither stable nor lucrative and the Pillsburys had no milling experience. But under Charles's management, the business grew rapidly and posted a considerable profit within three years. It also received a new name: Charles A. Pillsbury and Co.

As general manager, Charles brought new technology into his mills including the middlings purifier and steel rollers. These advances revolutionized the flour-making process and made flour produced in Minneapolis popular internationally. He also commissioned the first architect-designed mill, the Pillsbury A. It was the largest mill in the world by 1882, shortly after its opening, and it still stands on the Mississippi riverfront.

Charles was progressive in his business practices, as well. He started one of the nation's first profit-sharing plans for company employees in 1883, supported the development of local cooper's cooperatives, and invested in measures that led to greater electrification of Minneapolis and its streetcar system.

As his flour milling business prospered, Charles diversified his financial interests. He invested in grain elevators, banking, railroads, lumbering, the Northwestern Knitting Company (later Munsingwear), and land on the Mesabi Range in Northern Minnesota. He also donated generously to philanthropic causes such as the Minneapolis Maternity Hospital and the Hinckley Fire Relief Effort of 1894-1895.

Charles served as head of Charles A. Pillsbury and Co. until it was sold to an English business group in 1889. Even then, he remained heavily involved in the company, acting as general manager until his death on September 17, 1899, of heart trouble. Charles was survived by his wife Mary and twin sons, Charles Stinson and John Sargent. Pillsbury Settlement House in Minneapolis was founded in his memory.

For more information on this topic, check out the original entry on MNopedia.

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"Diversified" interests

De-contexualized, Pillsbury's investments in railroads, grain elevators, and banking seem to be "diversification" of interests, but at the time, these kinds of investments were essential in highly integrated economy. Railroads in the Northwest in the 19th century monopolized the grain supply through engaging in land speculation, through near-universal ownership of grain elevators (and as a consequence the setting of grain grades) outside of Minneapolis, and through employing buyers and traders to work the grain exchange (the largest, almost to the point of exclusion, banking venue in the region) to the favor of their interests. The railroad interests were especially opposed to Minneapolis milling interests, since the railroads favored feeding grain markets in Chicago and New York over selling the grain locally to millers, and millers supported stricter grading standards in order to ensure the quality of their own product and sought to control grain speculation in the local market.

So when Pillsbury invested in the roads, elevators, and banking, he was really protecting his own interests against the opposing interests of people like Hill. Those investments were more like vertical integration than diversification, since "diversification" implies investing in markets whose profitability would have been unrelated to and independent of his initial milling investments, like his lumber and iron investments.