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Before the introduction of steam tractors, horses or mules were used to pull the harvesters through the fields of grain. But with the development of "combined" harvesters, the machines were becoming bigger and heavier - attributable to the increased number of functions the machines performed. Accordingly, teams of horses had to struggle to pull the agricultural implements, and it became increasingly necessary to utilize steam tractors to pull the combined harvesters.
Holt was an inventor and manufacturer. His family's firm specialized in manufacturing combined harvesters. Their first was sold in 1886 and their first steam traction engine was sold in 1890. His combined harvesters used chains and sprockets to transfer power from the steam engine to the moving parts of the harvester. Chains and sprockets were the fundamentals of a working "crawler".
Holt was already aware of the notion of "crawler" tractors powered by steam. Holt saw one of Lombard's machines, and several other tracked machines around the US and Europe, and was inspired to create a similar machine at his manufacturing works. Holt's version was first tested on Thanksgiving Day in 1904. Company engineers were instructed to remove the rear wheels off of a steam-powered steam traction engine and replace them with the tracks Holt had designed. This track-type tractor prototype underwent additional tests in March 1905. The story is that during the additional tests, Holt's photographer, Charlie Clements, saw the motion of the track undulating between the drive sprocket and the front idler wheel, and exclaimed that the machine crawled like a "caterpillar." Holt adopted that name for his "crawler" tractors.
Between Thanksgiving 1904 and the end of 1906, Holt had fabricated six steam-powered track-type tractor prototypes. The third prototype tractor actually became the first production machine when it was sold to a company in Louisiana that was reclaiming wetlands that would be dedicated to growing sugar cane.
The steam boilers on all tractors, wheeled or "crawler", proved problematic. As they worked in the fields, they spewed hot cinders that often started fires, especially on grasslands - the wheat and hay fields being harvested as they became golden yellow and dry. The steam boilers were also subject to explosions when steam pressure was inadvertently allowed to become too high or water levels in the boilers to become too low. Even today, antique steam tractor enthusiasts are familiar with the tragedies of antique steam tractors on display at fairs and shows exploding and injuring or killing those nearby.
Aware of the limitations of steam power, in early October 1906, the Holts organized the Aurora Engine Company in Stockton, California, and commenced experimenting with gasoline-fired internal combustion engines - a relatively new arrival on the scene and used to power the new-fangled "horseless carriage" or "automobile". In 1908, production of gasoline-powered "Caterpillar" tractors began, with four produced in that year. The gasoline engines had about 40 horsepower and were styled a "Holt Model 40 Caterpillar." A year later, the same tractor, with a slightly larger engine, was manufactured and labeled the "Holt Model 45 Caterpillar."
The designations of model numbers in the early days (1900-1925) were based upon either horsepower (e.g., the Holt "60") or weight of the tractor (e.g., the "Holt 10-Ton"). Best, one of Holt's competitors that we will learn more about shortly, designated his models by horsepower; Holt initially by horsepower, and later by weight.