Bonanza, a rare luck, a sudden happiness, fell to those who became owners of fertile land in the Red River valley. This was the name given to the farms that flourished in this area at the turn of the 19th and 20th centuries. The agrarian bonanza became a milestone in the development of the U.S. agricultural sector.
In the second half of the XIX century to stimulate the construction of railroads, the U.S. government generously gave to the ownership of each railway company lying on either side of it uninhabited land. The Northern Pacific Company, which laid the road from east to west of the U.S. through the virgin lands of Minnesota and Dakota, was on the verge of ruin during construction.
The only way to continue construction and save shareholders’ money was to sell Northern Pacific land and convert its bonds into land. Thus, private investors, previously far from farming activities, became owners of agricultural land. These include industrial capitalists from the eastern states, managers and employees of the Northern Pacific.
In order to get some income, they had to start farming. And they did it on an industrial scale. At the turn of the 19th and 20th centuries, the average size of an American farm was just over 140 acres (or 70 ha). The size of agrarian bonanza holdings in Dakota and Minnesota were hundreds of times larger and reached 10,000-35,000 hectares.
A typical super large farm was organized as a “factory farm“. Typically, it consisted of several large plots of land (“farms”) scattered throughout the state. Each plot had a separate production team and a manager. Management decisions were made centrally by the general manager in consultation with the shareholders.
Cultivation was dominated by the queen of the world market of those times – wheat, grown as a monoculture.
There were few permanent employees on the bonanza – guards, blacksmiths, repair workers. For the summer season, labor force from all over the country was hired. On separate bonanzas at this time were involved up to 1000 people and 1000 heads of working cattle. In winter months the majority of workers went to sawmills in neighboring districts of Minnesota and other states.
Seed, reapers, threshers, cattle, and ploughs were centrally purchased with shareholder money or under company guarantees to banks. And while family farmers purchased the necessary inputs at retail prices, factories could do so at a lower wholesale price. Centralized sales of huge volumes of grain gave owners of super-sized farms advantages when negotiating with railways.
From the very first days of capitalist farms’ existence, their owners started building linear elevators and then mills. Elevators that served their own enterprises and neighboring farms, including family farms, became an additional source of profit. The companies’ money was used to build telephone networks to connect production units located in different parts of the state.
Some companies became owners of the villages that emerged around their production facilities. For the residents of these townships, the cost of water, telephone and telegraph services and electricity were paid for or subsidized by the company. By the end of the 19th century, the agrarian bonanza had reached the peak of its power.
Their power only increased with the introduction of agricultural machines equipped with a steam engine in the early XX century. The Bonanza in Highland, North Dakota, may have been the first mechanized farm in the United States that abandoned the use of horses as tractive power.