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Daniel Best was a competitor of the Holt concern. Best had established small factories in Oakland, California, and Albany, Oregon, by 1879 where he manufactured grain cleaners and separators. In 1885, Best had built and sold his first combined harvester. Because of his expanding product line and limited space at his factories, he purchased the existing plant and property of the San Leandro Plow Company in San Leandro, California. Setting up a new company, the Daniel Best Agricultural Works, Best relocated all of his production there in late 1886 and closed the Albany and Oakland plants.
Best bought the rights to another inventor's steam-powered tractor, and began production of steam traction engines in 1889. Early recognition of the limitations of steam power led Daniel Best to tinker with gasoline-fired internal combustion engines around 1890. In 1893, Daniel Best renamed his company and incorporated it as the Best Manufacturing Company, and in that year produced his first gasoline-powered tractor. But for a period of years thereafter, gasoline tractors were still experimental, and production of the factory consisted largely in steam tractors and in combined harvesters.
Daniel Best was a prolific inventor and had a number of patents to his name. Competition between Best and Holt led to a patent infringement lawsuit commenced in 1905. By the time the trial and appeal had been finished, and with the prospect of a re-trial, the parties decided to settle the matter. Accordingly, in 1908, Daniel Best, retiring from business, gave one-third of the Best Manufacturing Company to his son, Clarence Leo ("C.L.") Best, and sold a two-thirds interest in the Best Company to Benjamin Holt. Even though C.L. Best became president of the new Best concern, Holt had effective control.
In March 1909, the Holt concern, seeking to expand its markets in the mid-West, established a subsidiary manufacturing plant in Minneapolis, Minnesota, under the name Northern Holt Company. Benjamin Holt's nephew, Pliny E. Holt, had been dispatched to Minneapolis to superintend that manufacturing plant. There, Holt started manufacturing "Caterpillar" tractors. In late 1909, Pliny Holt purchased the manufacturing facility of a bankrupt firm located in East Peoria, Illinois. Another Holt subsidiary, Holt Caterpillar Company, was incorporated on January 12, 1910, and the manufacture of the Holt Model 45 "Caterpillar" tractors was continued at East Peoria, beginning in February, under Pliny Holt's supervision.
In 1910, C.L. Best left the Holt-controlled Best Manufacturing Company, and started the C.L. Best Gas Traction Co. in Elmhurst, near San Leandro, California. Holt sued, claiming breach of contract and infringement on the "Best" name (Holt owned the Best Manufacturing Company), but Holt lost. In 1912, C.L. started producing his first "crawler" tractor, a 70 horsepower model. Since in 1910 Holt had registered the name "Caterpillar" as a trademark with the U.S. Patent and Trademark Office, C.L. styled his "crawler" tractors "Tracklayers". Then, in 1915, C.L. demonstrated one of his new "Tracklayer" tractors at the state fair, and Holt sued again, this time for patent infringement. After the commencement of this second lawsuit, C.L. bought the Lombard patents (that pre-dated Holt's "crawler" patents) for $20,000, and then countersued Holt for patent infringement. The upshot of the court actions was that the parties settled, with a cash payment to C.L. Best plus a license authorizing C.L. Best to use all the Holt patents in the manufacture of the C.L. Best "Tracklayers."