3M Company - Rough Start As Sandpaper Maker: 1900s–10s

Rough Start As Sandpaper Maker: 1900s–10s

Minnesota Mining and Manufacturing Company (soon nicknamed 3M) was formed in 1902 in Two Harbors, Minnesota, a thriving village on the shores of Lake Superior, by five entrepreneurs—a lawyer, a doctor, two railroad executives, and a butcher—in order to mine the rare mineral corundum and market it as an abrasive. The ill-planned venture—sparked by a flurry of other forms of mining operations in northeastern Minnesota—nearly bankrupted the company, for its mineral holdings turned out to be not corundum but low-grade anorthosite, a virtually useless igneous rock. This unsettling discovery (by whom or when is unclear) was never disclosed in the company records and, for whatever reason, did not deter the owners from establishing a sandpaper factory in Duluth, another more or less ill-fated scheme that placed the company further in jeopardy (3M faced a host of abrasives competitors in the East and was soon forced to import a garnet inferior to that owned by domestic manufacturers, which resulted in a lower quality product). Company headquarters were moved to Duluth in 1905.

In May 1905 a principal investor named Edgar B. Ober, determined to save the company, persuaded friend and fellow St. Paul businessman Lucius Pond Ordway to join with him in rescuing 3M from almost certain demise by paying off $13,000 in debt and pumping in an additional $12,000 in capital. Together Ordway and Ober purchased 60 percent of the company; over the next several years, Ordway, a self-made millionaire, spent an additional $250,000 on a company that had yet to produce a profit, and Ober, who proceeded to oversee 3M, went without a salary. Ordway's continued backing, despite a strong desire to cut his losses early on and his decision to move the firm to St. Paul, ensured 3M's eventual health during the boom years following World War I. A new sandpaper factory was built in St. Paul in 1910, and 3M's headquarters were shifted to that city in 1916, the same year that the firm paid its first dividend.