[In about 1887] Johnson had hired an engineer named Conrad M. Conradson away from the E. P. Allis Company in Milwaukee to design the machinery Johnson wanted to produce. Conradson had graduated from the University of Wisconsin in 1881 with a master's degree in mechanical engineering and was later called one of America's six mechanical geniuses. Johnson had known him as a young inventor and was sufficiently impressed by the young man to have underwritten the cost of several of his inventions. However, machinery then available to Conradson in the Fuller and Johnson shops was woefully inadequate for prototype fabrication, so much of the work had to be done in Milwaukee. In 1888, while working in Milwaukee, Conradson conceived the idea of building a heavy-duty turret lathe capable of grinding eighteen- to twenty-four-inch castings. Such a machine, he noted, was nowhere else available and would therefore enjoy a large market. Johnson agreed, and upon this perception a company was formed.
In January 1889 Johnson took out articles of incorporation for the new enterprise. For the name of the company, Johnson, then fifty-seven, recalled his childhood in Norway and the many pleasant summers he had spent at Gisholt (pronounced GISS-holt), the farm of his paternal aunt. He called the new business the Gisholt Machine Company. Johnson single-handedly underwrote the cost of the new enterprise, $41,000 in cash, every dollar of which was prudently spent. To maximize dollars available for critically important machinery, Johnson put his three oldest sons to work building a small frame factory adjacent to the Fuller and Johnson plant. They finished the building during the summer of 1889, and by early 1890 a handful of workers moved in. Everything was strictly utilitarian. The office consisted of a twelve-foot-by-twelve-foot room in in one corner of the shop, barely large enough for Conradson, who served as shop superintendent and vice president, and Frederick Johnson, the secretary-treasurer. Both men sat on Fuller and Johnson corn planter seats to which wooden legs had been attached. Power for the plant was borrowed via a rope belt from the Fuller and Johnson Company just across Mifflin Street. The arrangement worked well in dry weather, but rain, even a brief shower, would cause the rope to shrink and break and give the workers an unscheduled vacation. It was in this small east side factory that Conradson labored over his twelve-foot-long drawing board making full-scale drawings for the big, heavy-duty turret lathes the company planned to produce. The major use for the large lathes was in the manufacture of steam engines, principally locomotives.
The fledgling company faced several problems in its early years. Although the big turret lathes were available from no other manufacturer, sales during the first few years were slow, and some of the first models did not work properly. Soon after Conradson completed the initial design of the new line of turret lathes, the brilliant engineer lost interest in the product and began spending company time on his own interests, namely, electric motors. Ultimately Johnson was forced to fire Conradson, but the job was difficult because of Conradson's patent rights and financial involvement in the company. The recession of 1890-1891 and then the depression of 1893-1894 further damaged sales of the young company. For six consecutive years the Gisholt Machine Company lost money, and Johnson was required to kick in $79,000 in cash. Though all these things were deeply discouraging, he doggedly persisted, confident that the company would soon show a profit.
Meanwhile, there were some positive signs. The company had displayed its new line of turret lathes at the 1893 Columbian Exhibition in Chicago, and in head-to-head competition with big, established companies such as Pratt and Whitney, Gisholt won a bronze medal for good design.
More important than the bronze medal was the unusually good publicity the company received from trade periodicals. From this exposure several sizable orders came in from European companies. Heartened by these developments, Johnson boldly established sales agencies in Boston, New York, Pittsburgh, and Leipzig, Germany. Finally, in 1895 the company showed a profit for the first time. In 1897 Johnson sent Frederick to Berlin to open the first European branch office. As the orders began pouring in during the late 1890s, the little belt-powered factory proved utterly inadequate. In 1899 Madisonians watched a large new $75,000 factory go up in the 1200 block of East Washington Avenue.
Then in 1900 at the World's Fair in Paris, Gisholt lathes won a coveted gold medal against the best machine tool companies in the world. Probably no award in his distinguished career meant more to Johnson. Not only was the gold medal an affirmation of his high standards and his long cherished belief in the "rightness" of the machine tool business, it was also a virtual assurance that his sons would have a flourishing business they could carry on in his absence. Indeed, Johnson's failing health prevent him from being at Paris to receive the award, but his sons were there. Johnson died fifteen months after his sons accepted the gold medal on his behalf.
The book continues with an interesting analysis of the economic and political forces that influenced the fate of Johnson's companies. There are also maps and photographs that would be of interest to anyone interested in learning more about Johnson and his companies.