Random Reminiscences of Men and Events
on the Great Lakes. Some of them were to be steamships and some
consorts, for towing, but all were to be built on substantially the
same general pattern, which was to represent the best ideals then
prevalent for ore-carrying ships.
In giving such an order he was exposed, of course, to the risk of
paying very high prices. This would have been certain if Mr. Mather
had announced in advance that he was prepared to build twelve ships
and asked bids on them. Just how he managed it I was not told until
long after, and though it is now an old story of the lakes I repeat it
as it may be new to many. Mr. Mather kept the secret of the number of
ships he wished to construct absolutely to himself. He sent his plans
and specifications, each substantially a duplicate of the others, to
each of the firms, and asked each firm to bid on one or two ships as
the case might be. All naturally supposed that at most only two ships
were to be built, and each was extremely eager to get the work, or at
least one of the two vessels.
On the day before the contracts were to be let, all the bidders were
in Cleveland on the invitation of Mr. Mather. One by one they were
taken into his private office for special conference covering all the
details preparatory to the final bid. At the appointed hour the bids
were in. Deep was the interest on the part of all the gentlemen as to
who would be the lucky one to draw the prize. Mr. Mather's manner had
convinced each that somehow he himself must be the favoured bidder,
yet when he came to meet his competitors in the hotel lobby the beams
of satisfaction which plainly emanated from their faces also compelled
many heart searchings.
At last the crucial hour came, and at about the same moment each
gentleman received a little note from Mr. Mather, conveying to him the
tidings that to him had been awarded a contract sufficient to supply
his works to their utmost capacity. They all rushed with a common
impulse to the hotel lobby where they had been accustomed to meet,
each bent on displaying his note and commiserating his unsuccessful
rivals, only to discover that each had a contract for all he could do,
and that each had been actually bidding against nobody but himself.
Great was the hilarity which covered their chagrin when they met and
compared notes and looked into each others' faces. However, all were
happy and satisfied. But it may be said in passing that these amiable
gentlemen all united subsequently in one company, which has had a
highly satisfactory career, and that we paid a more uniform price for
our subsequent purchases of ships after the combination had been made.
A LANDSMAN FOR SHIP MANAGER
With these ships ordered, we were fairly at the beginning of the ore
enterprise. But we realized that we had to make some arrangement to
operate the ships, and we again turned to our competitor, Mr. Mather,
in the hope that he would add this to his cares. Unfortunately,
because of his obligations to others, he felt that this was
impractical. I asked Mr. Gates one day soon after this:
"How are we to get some one to run these big ships we have ordered? Do
you know of any experienced firm?"
"No," said Mr. Gates, "I do not know of any firm to suggest at the
moment, but why not run them ourselves?"
"You don't know anything about ships, do you?"
"No," he admitted, "but I have in mind a man who I believe could do
it, although when I tell you about him I fear you will think that his
qualifications are not the best. However, he has the essentials. He
lives up the state, and never was on a ship in his life. He probably
wouldn't know the bow from the stern, or a sea-anchor from an
umbrella, but he has good sense, he is honest, enterprising, keen, and
thrifty. He has the art of quickly mastering a subject even though it
be new to him and difficult. We still have some months before the
ships will be completed, and if we put him to work now, he will be
ready to run the ships as soon as they are ready to be run."
"All right," I said, "let's give him the job," and we did.
That man was Mr. L.M. Bowers; he came from Broome County, New York.
Mr. Bowers went from point to point on the lakes where the boats were
building, and studied them minutely. He was quickly able to make
valuable suggestions about their construction, which were approved and
adopted by the designers. When the vessels were finished, he took
charge of them from the moment they floated, and he managed these and
the dozens which followed with a skill and ability that commanded the
admiration of all the sailors on the lakes. He even invented an anchor
which he used with our fleet, and later it was adopted by other
vessels, and I have heard that it is used in the United States Navy.
He remained in his position until we sold out. We have given Mr.
Bowers all sorts of hard tasks since we retired from the lake traffic
and have found him always successful. Lately the health of a member of
his family has made it desirable for him to live in Colorado, and he
is now the vigorous and efficient vice-president of the Colorado Fuel
and Iron Company.
The great ships and the railroad put us in possession of the most
favourable facilities. From the first the organization was successful.
We built up a huge trade, mining and carrying ore to Cleveland and
other lake ports. We kept on building and developing until finally the
fleet grew until it included fifty-six large steel vessels, This
enterprise, in common with many other important business undertakings
in which I was interested, required very little of my personal
attention, owing to my good fortune in having active, competent, and
thoroughly reliable representatives who assumed so largely the
responsibilities of administration. It gives me pleasure to state that
the confidence which I have freely given to business men with whom I
have been associated has been so fully justified.
SELLING TO THE STEEL COMPANY
The work went on uninterruptedly and prosperously until the formation
of the United States Steel Corporation. A representative of this
corporation came to see us about selling the land, the ore, and the
fleet of ships. The business was going on smoothly, and we had no
pressing need to sell, but as the organizer of the new company felt
that our mines and railroads and ships were a necessary part of the
scheme, we told him we would be pleased to facilitate the completion
of the great undertaking. They had, I think, already closed with Mr.
Carnegie for his various properties. After some negotiation, they made
an offer which we accepted, whereby the whole plant--mines, ships,
railway, etc.--should become a part of the United States Steel
Corporation. The price paid was, we felt, very moderate considering
the present and prospective value of the property.
This transaction bids fair to show a great profit to the Steel Company
for many years, and as our payment was largely in the securities of
the company we had the opportunity to participate in this prosperity.
And so, after a period of about seven years, I went out of all
association with the mining, the transporting, and the selling of iron
ore.
FOLLOW THE LAWS OF TRADE
Going over again in my mind the events connected with this ore
experience that grew out of investments that seemed at the time, to
say the least, rather unpromising, I am impressed anew with the
importance of a principle I have often referred to. If I can make this
point clear to the young man who has had the patience to follow these
Reminiscences so far, it will be a satisfaction to me and I hope it
may be a benefit to him.
The underlying, essential element of success in business affairs is to
follow the established laws of high-class dealing. Keep to broad and
sure lines, and study them to be certain that they are correct ones.
Watch the natural operations of trade, and keep within them. Don't
even think of temporary or sharp advantages. Don't waste your effort
on a thing which ends in a petty triumph unless you are satisfied with
a life of petty success. Be sure that before you go into an enterprise
you see your way clear to stay through to a successful end. Look
ahead. It is surprising how many bright business men go into important
undertakings with little or no study of the controlling conditions
they risk their all upon.
Study diligently your capital requirements, and fortify yourself fully
to cover possible set-backs, because you can absolutely count on
meeting set-backs. Be sure that you are not deceiving yourself at any
time about actual conditions. The man who starts out simply with the
idea of getting rich won't succeed; you must have a larger ambition.
There is no mystery in business success. The great industrial leaders
have told again and again the plain and obvious fact that there can be
no permanent success without fair dealing that leads to wide-spread
confidence in the man himself, and that is the real capital we all
prize and work for. If you do each day's task successfully, and stay
faithfully within these natural operations of commercial laws which I
talk so much about, and keep your head clear, you will come out all
right, and will then, perhaps, forgive me for moralizing in this
old-fashioned way. It is hardly necessary to caution a young man who
reads so sober a book as this not to lose his head over a little
success, or to grow impatient or discouraged by a little failure.
PANIC EXPERIENCES
I had desired to retire from business in the early nineties. Having
begun work so young, I felt that at fifty it was due me to have
freedom from absorption in active business affairs and to devote
myself to a variety of interests other than money making, which had
claimed a portion of my time since the beginning of my business
career. But 1891-92 were years of ominous outlook. In 1893 the storm
broke, and I had many investments to care for, as I have already
related. This year and the next was a trying period of grave anxiety
to everyone. No one could retire from work at such a time. In the
Standard we continued to make progress even through all these panic
years, as we had large reserves of cash on account of our very
conservative methods of financing. In 1894 or 1895 I was able to carry
out my plans to be relieved from any association with the actual
management of the company's affairs. From that time, as I have said, I
have had little or no part in the conduct of the business.
Since 1857 I can remember all the great panics, but I believe the
panic of 1907 was the most trying. No one escaped from it, great or
small. Important institutions had to be supported and carried through
the time of distrust and unreasoning fear. To Mr. Morgan's real and
effective help I should join with other business men and give great
praise. His commanding personality served a most valuable end. He
acted quickly and resolutely when quickness and decision were the
things most needed to regain confidence, and he was efficiently
seconded by many able and leading financiers of the country who
cooeperated courageously and effectively to restore confidence and
prosperity. The question has been asked if I think we shall revive
quickly from the panic of October, 1907. I hesitate to speak on the
subject, since I am not a prophet nor the son of a prophet; but as to
the ultimate outcome there is, of course, no doubt. This temporary
set-back will lead to safer institutions and more conservative
management upon the part of everyone, and this is a quality we need.
It will not long depress our wonderful spirit of initiative. The
country's resources have not been cut down nor injured by financial
distrust. A gradual recovery will only tend to make the future all the
more secure, and patience is a virtue in business affairs as in other
things.