A Partnership: Father and Son

One fall weekend in 1937 Jim and Elizabeth Ryan drove to Minneapolis to see the Notre Dame football team play the University of Minnesota. They stopped at a St. Paul Firestone service station where Francis worked. After graduating from Notre Dame, Fran went to work for the Firestone Tire and Rubber Company. “‘Well, son, we’ll see you later at the game,’” Fran recalled his father saying. Fran replied that he may not get to the game because of work. “You don’t mean that!” his father said. Indeed Fran did. This was no small-town family business Francis worked for, and he dreamed of climbing the corporate ladder.

“Well, we’ll just have to do something about that! Yes, we’ll have to see what we can do.” So said Jim Ryan and so began the process that resulted in the end of one family partnership and the beginning of another.

The fact that he and his brother had a verbal buy-sell agreement is an indication of the kind of businessman Jim Ryan was. Although not written, this agreement was as binding as any legal document, at least for the Ryans. For, as customers and business associates discovered over the years, a spoken word from a Ryan is given and kept as if it were a sworn oath.

Jim always assumed that his brother Tom’s health would keep him from wanting the business for himself. Jim may have been smart, but he wasn’t always right. Tom did indeed want the business for himself if the partnership were to end. So in a desire to bring his son into business with him, Jim sold his share of the partnership for $30,000.

While Jim approached another Hibbing businessman about buying his business, he sent Elizabeth to Minneapolis with a message: “Dad would buy Otto Frederick’s lumber company if Fran came home to go into business.” Ben Timmerman, who worked with Otto Frederick, had an option to buy the Frederick company. Jim Ryan made Timmerman an offer. Ryan would take over the option and, in exchange, retain Timmerman in the new company for five years at $250 a month. A deal was struck. Timmerman asked Jim Ryan what he’d call the new company and suggested a few generic names. “No way!” replied Jim Ryan. “It’ll be called nothing but Ryan, and every truck we have will be a riding billboard from now on!”

And so they were, and still are. After Otto Frederick received $18,000 for the property and another $18,000 for the company’s inventory, Frederick Lumber Company became Ryan Lumber and Coal. On Jan. 3, 1938, the partnership between James and Francis Ryan was born.

In a town where lumber was cheap, lumberyard owners also had to be contractors to compete. And so, by virtue of buying a lumberyard, Jim and Fran Ryan also became contractors. Not, however, that they knew much about it!

“I didn’t know a two-by-four from a two-by-six, and Dad didn’t either,” recalled Fran. “Dad simply said, ‘We’d better figure this thing out!’”And they did. Jim Ryan had also been smart enough to keep Timmerman, who knew a lot about it!

The first house the Ryans built in Hibbing was Bill Toivala’s house on Wisconsin Street. Toivala lived in the house, built for $4,500, for decades and always thought it was “the best house in Hibbing!” laughed Fran. Fran recalled taking $1,200 out of the business the first year. By the second year they had a new partner: Russ had graduated from Notre Dame. When Russ joined the company the natural division of labor was for Fran to watch over construction, and for Russ to take charge of the company’s finances and management. Their different skills and interests led to a complementary, not a competitive, relationship.

In the early 1940s if the Ryans made an $8,000 to $9,000 profit, it was a big year. “If we made $500 on a house we thought we were doing pretty darn well,” said Fran. Then, the average Hibbing house was built for about $4,000 to $6,000. “We were using wood lathe and plaster in those houses,” said Russ. They recalled building a house for Carl Hedman for $8,500. It was fancy, complete with terrazzo floors!

In those days plans were drawn for $25. A lot was surveyed for $5. Hugh Danahay did that for the Ryans. It cost $40 to have sewer and water put in. “Steam-Shovel John” Johnson dug it by hand. He charged $40 no matter how long he had to dig. “If it was long,” they said, “he’d just get up earlier!” Primitive, yes, but thus began the Ryans’ reputation as a Midwest design/build pioneer.

Their first commercial project came in 1940, the Hibbing bowling alley. By then Jim Ryan had begun easing his way out of his sons’ future. But, since Fran and Russ were buying him out with monthly installments, his future was closely held by his sons. And so, when they bid their first commercial project for $12,000, their father asked, “Are you sure you didn’t make a mistake?”

During the 1940s the Ryans’ business in Northern Minnesota ranged from converting space above garages into apartments to building houses, bowling alleys, grocery stores, movie theaters and churches. They had their own construction crews, and subcontracted the mechanical and electrical work. But not all years were good. “Some years we discounted materials 10 to 15 percent in order to sell them,” Russ recalled.

Then came World War II. Francis joined the Navy in 1942, and from then until he returned in 1945, Russell ran the business with his father. “We had to scramble in the war years and go in different directions in order to make it,” Russ recalled. In 1943 and 1944 that diversion translated into ammunition boxes. “We shipped in lumber, cut pieces, banded them and shipped parts to the Kroehler Furniture Company in Chicago for assembly into ammunition boxes.” Russell recalled the day his dad walked in and saw the ammunition shook scraps. “What’re you doing with that?” he asked. Russ told him that people just took them home for kindling. “Bundle those up and sell them,” said Jim Ryan. And so they did, 50 to a bundle.

In 1944 Ryan received a contract from state agencies to build 100 milk houses all over the state, the first of many food-related projects for Ryan. But not all their attempts met with equal success. “Ironing boards,” laughed Russ, “those didn’t go over very well. Those days we’d try anything to do with wood. Those ironing boards, I don’t think we actually shipped any out!”

Francis also had a clear recollection of the war years. Whenever he called Russell and asked for money to be wired, “there was never a question,” he said with a determined voice. Fran and Russ made one agreement when they started working together: to never argue about money. And they never did. That pact worked the other way in the 1940s and ’50s when Russell and his wife Pennies had high medical expenses with their family. “I drew out more money from the company than Fran did. Fran never came back and tried to even that up,” said Russ.