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Aside from acquisition of the Russell Grader Manufacturing Company, the Caterpillar Tractor Co. did not build earth-moving equipment, but rather the tractors to which earth-moving equipment was attached. Other companies manufactured earth-moving equipment. Robert G. LeTourneau was an earth-moving contractor, who constantly tinkered with ideas and equipment, and came up with some wonderfully revolutionary ideas in earth-moving. His biggest contributions to the industry were in the line of scrapers, bulldozers, rippers, and the cable control units that operated the adjustments (e.g., raising and lowering blades). LeTourneau was a genius. While scrapers had been around a long time, it was LeTourneau who came up with remote controls for them that allowed the tractor operator to operate them instead of having a second person riding on the scraper where the adjustments were made to the blade. He then developed scrapers with their own motive power, transferring power to the wheels by way of electricity (just as a modern diesel-electric locomotive transfers power to its wheels), and with rubber wheels that could move earth much faster than a "crawler" tractor could pull a scraper. LeTourneau's method of operating was to fabricate the machine, use it on his own jobs, note the flaws, improve it or fabricate a better model, and to again use it on a job. This cycle of creation and destruction resulted in his manufacturing implements that worked.
In 1934, LeTourneau entered into an arrangement with the Caterpillar Tractor Co. as an official implement manufacturer for Caterpillar. LeTourneau would design equipment for Caterpillar tractors, and Caterpillar encouraged its wide network of dealerships to sell LeTourneau's products. Therefore, in 1935, LeTourneau moved his operations from Stockton, California to Peoria, Illinois, where he established a manufacturing plant near Caterpillar's. LeTourneau had placed much trust and confidence in the "crawlers" made by Best, Holt, and then Caterpillar, as those brands of "crawler" tractors were used exclusively by his earth-moving firm. Caterpillar dealers took orders for their tractors to be built with LeTourneau's implements, and when the tractor was finished at the Caterpillar factory in East Peoria, Illinois, it was moved by railcar a short distance to LeTourneau's factory in Peoria, Illinois, to have the implements, such as "bulldozers", installed. In 1937, LeTourneau produced his first scraper without front wheels, a site that is now familiar on all large earth-moving construction jobs.
LeTourneau was not alone in developing and manufacturing implements to be installed on Caterpillar tractors. The LaPlant-Choate firm manufactured hydraulic-controlled "bulldozers" and other equipment for Caterpillar tractors.
Entry of the U.S. into World War II in December 1941 brought challenges to the Caterpillar Tractor Co. During the War, most of the company's production capacity was devoted to military products to meet the government's needs. As with Holt in World War I, Caterpillar licensed American Car and Foundry of Pennsylvania to fabricate Caterpillar's D7 "crawler" tractors to Caterpillar's specifications for the military. Production of the military D7 model was in the neighborhood of 1,100 per month. Caterpillar diesel power units were in large demand by the military for field power. Fortunately for domestic manufacturers, at the close of World War II, the military did not ship the tractors and other construction equipment back from the theaters of war, but left them behind - in the Pacific Theater, often dumped overboard from ships into the ocean. Accordingly, manufacturing of tractors and similar machines was not adversely impacted by "war surplus" equipment, and after the War, Caterpillar shifted its production back to the civilian market.