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We digress here to relate how Caterpillar came to introduce the diesel engine to its product line in 1931, which was to revolutionize the Caterpillar tractor. Briefly, in 1893, Rudolph Diesel, a German, received his first German patent on what was to become known as the "Diesel" engine. The essential mechanical difference between a gasoline-fired internal combustion engine and a diesel- (oil-) fired internal combustion engine is that in a gasoline engine, the gasoline vapors inside the cylinders require an electric spark to cause an explosion; in a diesel engine, the compression generated inside the cylinders causes the oil vapor to become hot and explode without an electric spark. The diesel engine requires as little as one-third the amount of the fuel needed by a gasoline engine to produce the same amount of work. Another characteristic of the diesel engine is its "low end torque". The diesel can pull more at low idle and lower engine speeds than a spark- ignited engine. Thus the diesel is noticeably better at "hanging in" as the load increases. For example if you had a tractor with a diesel engine, you could start a heavy load by engaging the clutch without opening the throttle. If you tried the same with a gasoline-fired engine of comparable size, it would be more likely to die. As early as 1898, diesel engines were being manufactured in the U.S. A diesel engine was displayed at the 1915 Panama-Pacific Exposition held in San Francisco, and the display attracted much attention from C.L. Best and his engineer Oscar Starr. However, the diesel engine was not sufficiently developed to be adapted to tractor use, and C.L. Best was not able to use the engine at that time, although he maintained contact with George A. Dow of Alameda, California, a holder of a license to manufacture diesel engines. Dow, through his engineer Art Rosen, subsequently approached the Holt company as early as 1923, suggesting that Holt install diesel engines in the Holt "Caterpillar" line of machinery. However, Holt was not interested in diesel engines. Shortly after the Best-Holt consolidation into the Caterpillar Tractor Co. in 1925, C.L. Best revisited the question of diesel engines. He hired Art Rosen in 1928, who had experience with the application of diesel engines to marine uses. Between 1926 and 1932, Caterpillar spent over $1 million in engineering research and development to produce Caterpillar's first diesel engine - the D9900, for the market.
With Caterpillar's initial diesel engine development was finished, the D9900 Diesel Engine was tested on the Caterpillar Sixty Tractor chassis. As a result, various changes were made to the Sixty, including beefing up the frame of the tractor to carry the heavier diesel engine, and using a different transmission that was heftier and geared down for the diesel engine. The result was a diesel tractor that, in early field tests, worked well under a heavy strain while consuming only 4 gallons of diesel fuel (oil) per hour at a cost of 4 to 7 cents per gallon. (At that time, gasoline sold for 14 to 16 cents per gallon.) The first production models of the Diesel Sixty were sold in 1931 (14 tractors in all), and then the model number was changed to Diesel Sixty-Five, with 142 having been sold in 1932 (totaling 157 tractors in the 2 years of production). The Diesel Sixty-Five production was terminated with the introduction of four new Diesel tractor models in 1933: the Diesel Thirty-Five, the Diesel Fifty, the Diesel Seventy, and the Diesel Seventy-Five, which replaced the Diesel Seventy.
With roughly a thousand diesel-engine tractors in the field, problems with fuels and lubricants became evident. Although the company thought that the diesels would run on any grade of fuel oil, it was found that sulphur and waxes in the fuels were deleterious to the engines. The problems encountered included stuck piston rings, scored cylinder walls, and burned main bearings. It was discovered that oils with paraffin bases instead of asphalt bases did not cause as much sticking of the rings. So the company teamed up with Standard Oil of California to develop the first detergent oils. As it developed, the company could not get the oil industry as a whole to adopt and adequately distribute the detergent oils throughout the U.S., so Caterpillar enlisted its dealership network to distribute the necessary oils until such time as all the oil companies produced and sold detergent oil products manufactured to Caterpillar's specifications.
Once the diesel engine had proven itself reliable and economical, the market for gasoline-powered crawlers declined significantly. The diesel engines delivered more power for far less operating cost than the gasoline engines. For that reason, Caterpillar discontinued a number of gasoline-powered tractor models in the early to mid-1930s.