Part 7 (1/2)
When we realized that events were shaping themselves so that to protect our investments we should be obliged to go into the business of selling in a large way, we felt that we must not stop short of doing the work as effectively as possible; and having already put in so much money, we bought all the ore land that we thought was good that was offered to us. The railroad and the s.h.i.+ps were only a means to an end. The ore lands were the crux of the whole matter, and we believed that we could never have too many good mines.
It was a surprise to me that the great iron and steel manufacturers did not place what seemed to be an adequate value on these mines. The lands which contained a good many of our best ore mines could have been purchased very cheaply before we became interested. Having launched ourselves into the venture, we decided to supply ore to every one who needed it, by mining and transporting with the newest and most effective facilities, and our profits we invested in more ore lands.
Mr. Gates became the president of the various companies which owned the mines and the railroad to the lake to transport the ores, and he started to learn and develop the business of ore mining and transportation. He not only proved to be an apt scholar, but he really mastered the various complexities of the business. He did all the work, and only consulted me when he wished to; yet I remember several interesting experiences connected with the working out of these problems.
BUILDING THE s.h.i.+PS
After this railroad problem was solved, it was apparent that we needed our own s.h.i.+ps to transport the ore down the lakes. We knew absolutely nothing of building s.h.i.+ps for ore transportation, and so, following out our custom, we went to the man who, in our judgment, had the widest knowledge of the subject. He was already well known to us, but was in the ore transportation business on a large scale on his own account and, of course, the moment we began to s.h.i.+p ore we realized that we would become compet.i.tors. Mr. Gates got into communication with this expert, and came with him one evening to my house in New York just before dinner. He said he could stay only a few minutes, but I told him that I thought we could finish up our affairs in ten minutes and we did. This is the only time I remember seeing personally any one on the business of the ore company. All the conferences, as I said before, were carried on by Mr. Gates, who seemed to enjoy work, and he has had abundant privileges in that direction.
We explained to this gentleman that we were proposing to transport our ore from these Lake Superior lands ourselves, and that we should like to have him a.s.sume charge of the construction of several s.h.i.+ps, to be of the largest and most approved type, for our chance of success lay in having boats which could be operated with the greatest efficiency.
At that time the largest s.h.i.+ps carried about five thousand tons, but in 1900, when we sold out, we had s.h.i.+ps that carried seven thousand or eight thousand tons, and now there are some that transport as much as ten thousand tons and more.
This expert naturally replied that as he was in the ore-carrying trade himself, he had no desire to encourage us to go into it. We explained to him that as we had made this large investment, it seemed to us to be necessary for the protection of our interests to control our own lake carriers, so we had decided to mine, s.h.i.+p, and market the ore; that we came to him because he could plan and superintend the construction of the best s.h.i.+ps for us, and that we wanted to deal with him for that reason; that notwithstanding that he represented one of the largest firms among our compet.i.tors, we knew that he was honest and straightforward; and that we were most anxious to deal with him.
EMPLOYING A COMPEt.i.tOR
He still demurred, but we tried to convince him that we were not to be deterred from going into the trade, and that we were willing to pay him a satisfactory commission for looking after the building of the s.h.i.+ps. Somebody, we explained, was going to do the work for us, and he might as well have the profit as the next man. This argument finally seemed to impress him and we then and there closed an agreement, the details of which were worked out afterward to our mutual satisfaction. This gentleman was Mr. Samuel Mather of Cleveland. He spent only a few minutes in the house, during which time we gave him the order for about $3,000,000 worth of s.h.i.+ps and this was the only time I saw him. But Mr. Mather is a man of high business honour, we trusted him implicitly although he was a compet.i.tor, and we never had occasion to regret it.
At that time there were some nine or ten s.h.i.+pbuilding companies located at various points on the Great Lakes. All were independent of each other and there was sharp compet.i.tion between them. Times were pretty hard with them; their business had not yet recovered from the panic of 1893, they were not able to keep their works in full operation; it was in the fall of the year and many of their employees were facing a hard winter. We took this into account in considering how many s.h.i.+ps we should build, and we made up our minds that we would build all the s.h.i.+ps that could be built and give employment to the idle men on the Great Lakes. Accordingly we instructed Mr. Mather to write to each firm of s.h.i.+pbuilders and ascertain how many s.h.i.+ps they could build and put in readiness for operation at the opening of navigation the next spring. He found that some companies could build one, some could build two, and that the total number would be twelve.
Accordingly we asked him to have constructed twelve s.h.i.+ps, all of steel, all of the largest capacity then understood to be practicable on the Great Lakes. Some of them were to be steams.h.i.+ps 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 s.h.i.+ps.
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 s.h.i.+ps 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 s.h.i.+ps 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 s.h.i.+ps as the case might be. All naturally supposed that at most only two s.h.i.+ps 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 compet.i.tors 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 n.o.body 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 pa.s.sing 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 s.h.i.+ps after the combination had been made.
A LANDSMAN FOR s.h.i.+P MANAGER
With these s.h.i.+ps ordered, we were fairly at the beginning of the ore enterprise. But we realized that we had to make some arrangement to operate the s.h.i.+ps, and we again turned to our compet.i.tor, 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 s.h.i.+ps 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 s.h.i.+ps, 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 s.h.i.+p 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 s.h.i.+ps will be completed, and if we put him to work now, he will be ready to run the s.h.i.+ps 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.