The Making of Caterpillar Inc – A Company History

Heavy Machinery is one of the largest contributors of the construction industry, used to bring many staples of civilisation into being. This week we take a look back the world’s largest construction-equipment manufacturer for plant machinery and take a look back at where it all began for Caterpillar Inc!

Caterpillar Inc. is a corporation with a worldwide dealer network, that not only manufactures heavy machinery but also designs, develops, engineers and markets a range of services to its customers.

Caterpillar was founded in 1925 when its founding companies Holt Manufacturing Company and the C. L. Best Tractor Company, merged to create the Caterpillar Tractor Company. However, the two co-founders were not always such great partners. In fact, they were business rivals.

The first ever Caterpillar machine was created on the day the wheels came off, so to speak. The steam tractors of the 1890s and early 1900s were extremely heavy. With some weighing 1,000 pounds (450 kg) per horsepower. They often sank into the earth of farmland. Benjamin Holt of Holt Manufacturing Company attempted to fix this problem by increasing the size and width of the wheels up to 7.5 feet (2.3 m) tall and 6 feet (1.8 m) wide, producing a tractor 46 feet (14 m) wide!

This also made the tractors increasingly complex, expensive, and difficult to maintain. Holt considered laying a temporary plank road ahead of the steam tractor, but this was also time-consuming, expensive, and interfered with earthmoving. In a final bid to solve the problem, Holt thought of wrapping the planks around the wheels. He replaced the wheels on a 40 horsepower (30 kW) Holt steamer, No. 77, with a set of wooden tracks bolted to chains.

Image courtesy of Daniela Kloth /

On Thanksgiving Day, November 24, 1904, Holt successfully tested the commercial track-type tractor, with the updated machine ploughing the soggy land. It was observed that when the tractor was in action it crawled like a caterpillar. Thus, resulting in the company name! – Caterpillar Inc.

Holt sold his first steam-powered tractor crawlers for US $5,500, about US$128,000 today. Each side featured a track frame measured 30 inches high x 42 inches wide and 9 feet long. The tracks were 3 inches x 4 inch redwood slats.

Despite this being the first machine created by one of the founders of Caterpillar, the company had not technically been founded yet.


Post war, Benjamin Holt and Clarence Leo Best of  C. L. Best Tractor Company, began the rivalry between the two business. Holt tractors had become well known during World War I and had started making plans to expand to keep up with the demand. However, when the war ended this need was terminated abruptly. The heavy-duty tractors needed by the military were unsuitable for farmers. The company struggled with the transition. In order to keep the company afloat, Holt borrowed money and the company was heavily plunged into debt.

Meanwhile C. L. Best Gas Tractor Company had received government support during the war. Enabling it to supply farmers with the smaller agricultural tractors they needed. As a result, Best had gained a considerable market advantage over Holt by the time the war came to an end. However, in order to continue its expansion Best too borrowed money and assumed considerable debt.

Fun Fact: Both companies also faced fierce competition from the Fordson company, now known as Ford.

Between 1907 and 1918, Best and Holt had spent about US$1.5 million in legal fees fighting each other in a number of contractual, trademark, and patent infringement lawsuits.

Holt shareholders approached Harry H. Fair of the bond brokerage house of Pierce, Fair & Company of San Francisco about their company’s financial difficulty. Fair had also helped to finance C. L. Best’s debt. He recommended that the two companies merge. In April 1925 C. L. Best merged with the market leader Holt Caterpillar to form the Caterpillar Tractor Co.

The Caterpillar Tractor Co. Factory, Peoria, Ill.

The Caterpillar company concentrated its product lines, offering only five track-type tractors: the 2 Ton, 5 Ton, and 10 Ton from the Holt Manufacturing Company’s old product line and the Caterpillar 30 and Caterpillar 60 from the C. L. Best Tractor Co.’s former product line.

Caterpillar continued to grow throughout the Great Depression of the 1930s. The need for better visibility on road construction sites led to the colourful change from grey to its trademark hi-way yellow in 1931. It wasn’t until 1950 when the company launched its first venture outside the U.S. Marking the beginning of Caterpillar’s development into a multinational corporation. Today, Caterpillar’s line of machines range from tracked tractors to hydraulic excavators, backhoe loaders, agricultural tractors, locomotives and many more. They now have over 400 products in its fleet available for purchase throughout its dealer network.

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