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diff --git a/17090-h/17090-h.htm b/17090-h/17090-h.htm new file mode 100644 index 0000000..efb2fb0 --- /dev/null +++ b/17090-h/17090-h.htm @@ -0,0 +1,4464 @@ +<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" + "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> + +<html xmlns="http://www.w3.org/1999/xhtml"> + <head> + <meta http-equiv="Content-Type" content="text/html;charset=iso-8859-1" /> + <title> + The Project Gutenberg eBook of Random Reminiscences, by John D. Rockefeller. + </title> + <style type="text/css"> +/*<![CDATA[ XML blockout */ +<!-- + p { margin-top: .75em; + text-align: justify; + margin-bottom: .75em; + } + h1,h2,h3,h4,h5,h6 { + text-align: center; /* all headings centered */ + clear: both; + } + hr { width: 33%; + margin-top: 2em; + margin-bottom: 2em; + margin-left: auto; + margin-right: auto; + clear: both; + } + + a[name] { position:absolute; } + a:link {color:#0000ff; + text-decoration:none} + link {color:#0000ff; + text-decoration:none} + a:visited {color:#0000ff; + text-decoration:none} + a:hover {color:#ff0000} + + table { width: 60%; padding: 1em; text-align: left; margin-left: auto; margin-right: auto;} + .tr {margin-left: 20%; margin-right: 10%; margin-top: 5%; margin-bottom: 5%; padding: 2em; background-color: #f6f2f2; color: black; border: dotted black 1px;} + .tocch { text-align: right; vertical-align: top;} + .tocpg {text-align: right; vertical-align: bottom;} + body{margin-left: 10%; + margin-right: 10%; + } + .pagenum {position: absolute; left: 92%; text-indent: 0; font-weight: normal; color: gray; font-size: 0.7em; text-align: right;} + + .blockquot{margin-left: 5%; margin-right: 10%;} + .center {text-align: center;} + .smcap {font-variant: small-caps;} + .caption {font-weight: bold;} + +p.address {text-indent: 2em;} + + p.quotdate { /* date of a letter aligned right */ + text-align: right; + } + p.quotsig { /* author signature at end of letter */ + margin-left: 85%; + text-indent: -4em; /* gimmick to move 2nd line right */} + + + p.address {text-indent: 2em; } + p.address1 {margin-left: 60%; } + p.address2 {margin-left: 50%; } + + // --> + /* XML end ]]>*/ + </style> + </head> +<body> + + +<pre> + +The Project Gutenberg EBook of Random Reminiscences of Men and Events +by John D. Rockefeller + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: Random Reminiscences of Men and Events + +Author: John D. Rockefeller + +Release Date: November 18, 2005 [EBook #17090] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK RANDOM REMINISCENCES OF MEN *** + + + + +Produced by Ted Garvin, Sankar Viswanathan, and Distributed +Proofreaders Europe at http://dp.rastko.net + + + + + + +</pre> + + + + + + + + +<div class="center"><img src="images/image_01.jpg" alt="MR. JOHN D. ROCKEFELLER AT THE AGE OF EIGHTEEN." width="362" height="434" /><br /> +<span class="caption">MR. JOHN D. ROCKEFELLER AT THE AGE OF EIGHTEEN.</span></div> + +<h1>Random Reminiscences</h1> + +<h2>of Men and Events</h2> + +<h3> </h3> +<h3> </h3> +<h3>BY</h3> +<h2>JOHN D. ROCKEFELLER</h2> + + + +<h4> </h4> +<h4> </h4> +<h4><img src="images/image_02.jpg" alt="Seal" width="150" height="153" /></h4> +<h4> </h4> +<h4> </h4> +<h4>New York</h4> +<h4>Doubleday, Page & Company</h4> + +<h4>1909</h4> + + +<p class="center">COPYRIGHT, 1908, 1909, BY DOUBLEDAY, PAGE & COMPANY</p> + + + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_v" id="Page_v">[v]</a></span></p> +<h2><a name="PREFACE" id="PREFACE"></a>PREFACE</h2> + + +<p>Probably in the life of every one there comes a time when he is +inclined to go over again the events, great and small, which have made +up the incidents of his work and pleasure, and I am tempted to become +a garrulous old man, and tell some stories of men and things which +have happened in an active life.</p> + +<p>In some measure I have been associated with the most interesting +people our country has produced, especially in business—men who have +helped largely to build up the commerce of the United States, and who +have made known its products all over the world. These incidents which +come to my mind to speak of seemed vitally important to me when they +happened, and they still stand out distinctly in my memory.</p> + +<p>Just how far any one is justified in keeping what he regards as his +own private affairs from the public, or in defending himself from +attacks, is a mooted point. If one talks about one's experiences, +there is a natural temptation to charge one with traveling the easy +road to egotism; if one keeps silence, the inference of <span class='pagenum'><a name="Page_vi" id="Page_vi">[vi]</a></span>wrong-doing +is sometimes even more difficult to meet, as it would then be said +that there is no valid defence to be offered.</p> + +<p>It has not been my custom to press my affairs forward into public +gaze; but I have come to see that if my family and friends want some +record of things which might shed light on matters that have been +somewhat discussed, it is right that I should yield to their advice, +and in this informal way go over again some of the events which have +made life interesting to me.</p> + +<p>There is still another reason for speaking now: If a tenth of the +things that have been said are true, then these dozens of able and +faithful men who have been associated with me, many of whom have +passed away, must have been guilty of grave faults. For myself, I had +decided to say nothing, hoping that after my death the truth would +gradually come to the surface and posterity would do strict justice; +but while I live and can testify to certain things, it seems fair that +I should refer to some points which I hope will help to set forth +several much-discussed happenings in a new light. I am convinced that +they have not been fully understood.</p> + +<p>All these things affect the memories of men who are dead and the lives +of men who are living, and it is only reasonable that the public +should <span class='pagenum'><a name="Page_vii" id="Page_vii">[vii]</a></span>have some first-hand facts to draw from in making up its final +estimate.</p> + +<p>When these Reminiscences were begun, there was of course no thought +that they should ever go so far as to appear between the covers of a +book. They were not prepared with the idea of even an informal +autobiography, there was little idea of order or sequence, and no +thought whatever of completeness.</p> + +<p>It would have been a pleasure as well as a satisfaction to dwell with +some fulness upon the stories of daily and intimate companionship +which existed for so many years with my close partners and associates, +but I realize that while these experiences have always been to me +among the great pleasures of my life, a long account of them would not +interest the reader, and thus it happens that I have but mentioned the +names of only a few of the scores of partners who have been so active +in building up the business interests with which I have been +associated.</p> + +<p class="citation">J.D.R.</p> + +<p class="address"><i>March</i>,1909.</p> + + + + + +<hr style="width: 65%;" /> +<h2><a name="CONTENTS" id="CONTENTS"></a>CONTENTS</h2> + +<div class='center'> +<table summary=" Contents"> +<tr> + + <td class="tocch" style="font-variant:small-caps ">Chapter</td> + <td > </td> + <td class="tocpg" style="font-variant:small-caps ">Page</td></tr> +<tr> + <td class="tocch" >I</td> + <td > </td> + <td ><a href="#CHAPTER_I">Some Old Friends</a></td><td class="tocpg">3</td></tr> +<tr> + <td class="tocch" >II</td> + <td > </td> + <td ><a href="#CHAPTER_II">The Difficult Art of Getting</a></td><td class="tocpg">33</td></tr> +<tr> + <td class="tocch" >III</td> + <td > </td> + <td > <a href="#CHAPTER_III">The Standard Oil Company</a></td><td class="tocpg">55</td></tr> +<tr> + <td class="tocch" >IV</td> + <td > </td> + <td > <a href="#CHAPTER_IV">Some Experiences in the Oil Business</a></td><td class="tocpg">79</td></tr> +<tr> + <td class="tocch" >V</td> + <td > </td> + <td > <a href="#CHAPTER_V">Other Business Experiences and +Business Principles</a></td><td class="tocpg">115</td></tr> +<tr> + <td class="tocch" >VI</td> + <td > </td> + <td > <a href="#CHAPTER_VI">The Difficult Art of Giving</a></td><td class="tocpg">139</td></tr> +<tr> + <td class="tocch" >VII</td> + <td > </td> + <td > <a href="#CHAPTER_VII">The Benevolent Trust--The Value +of the Cooperative Principle in +Giving</a></td><td class="tocpg">165</td></tr> +</table> +</div> + + + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_3" id="Page_3">[3]</a></span></p> +<h2><a name="CHAPTER_I" id="CHAPTER_I"></a>CHAPTER I</h2> + +<h3><span class="smcap">Some Old Friends</span></h3> + + +<p>Since these Reminiscences are really what they profess to be, random +and informal, I hope I may be pardoned for setting down so many small +things.</p> + +<p>In looking back over my life, the impressions which come most vividly +to my mind are mental pictures of my old associates. In speaking of +these friends in this chapter, I would not have it thought that many +others, of whom I have not spoken, were less important to me, and I +shall hope to refer to this subject of my early friends in a later +chapter.</p> + +<p>It is not always possible to remember just how one first met an old +friend or what one's impressions were, but I shall never forget my +first meeting with Mr. John D. Archbold, who is now a vice-president +of the Standard Oil Company.</p> + +<p>At that time, say thirty-five or forty years ago, I was travelling +about the country visiting the point where something was happening, +<span class='pagenum'><a name="Page_4" id="Page_4">[4]</a></span>talking with the producers, the refiners, the agents, and actually +getting acquainted.</p> + +<p>One day there was a gathering of the men somewhere near the oil +regions, and when I came to the hotel, which was full of oil men, I +saw this name writ large on the register:</p> + +<div class="blockquot"><p><i>John D. Archbold, $4.00 a bbl.</i></p></div> + +<p>He was a young and enthusiastic fellow, so full of his subject that he +added his slogan, "$4.00 a bbl.," after his signature on the register, +that no one might misunderstand his convictions. The battle cry of +$4.00 a barrel was all the more striking because crude oil was selling +then for much less, and this campaign for a higher price certainly did +attract attention—it was much top good to be true. But if Mr. +Archbold had to admit in the end that crude oil is not worth "$4,00 a +bbl.," his enthusiasm, his energy, and his splendid power over men +have lasted.</p> + +<p>He has always had a well-developed sense of humour, and on one serious +occasion, when he was on the witness stand, he was asked by the +opposing lawyer:</p> + +<p>"Mr. Archbold, are you a director of this company?"</p> + +<p>"I am."</p> +<p><span class='pagenum'><a name="Page_5" id="Page_5">[5]</a></span></p> + +<p>"What is your occupation in this company?"</p> + +<p>He promptly answered, "To clamour for dividends," which led the +learned counsel to start afresh on another line.</p> + +<p>I can never cease to wonder at his capacity for hard work. I do not +often see him now, for he has great affairs on his hands, while I live +like a farmer away from active happenings in business, playing golf, +planting trees; and yet I am so busy that no day is long enough.</p> + +<p>Speaking of Mr. Archbold leads me to say again that I have received +much more credit than I deserve in connection with the Standard Oil +Company. It was my good fortune to help to bring together the +efficient men who are the controlling forces of the organization and +to work hand in hand with them for many years, but it is they who have +done the hard tasks.</p> + +<p>The great majority of my associations were made so many years ago, +that I have reached the age when hardly a month goes by (sometimes I +think hardly a week) that I am not called upon to send some message of +consolation to a family with whom we have been connected, and who have +met with some fresh bereavement. Only recently I counted up the names +of the early associates who have passed <span class='pagenum'><a name="Page_6" id="Page_6">[6]</a></span>away. Before I had finished, +I found the list numbered some sixty or more. They were faithful and +earnest friends; we had worked together through many difficulties, and +had gone through many severe trials together. We had discussed and +argued and hammered away at questions until we came to agree, and it +has always been a happiness to me to feel that we had been frank and +aboveboard with each other. Without this, business associates cannot +get the best out of their work.</p> + +<p>It is not always the easiest of tasks to induce strong, forceful men +to agree. It has always been our policy to hear patiently and discuss +frankly until the last shred of evidence is on the table, before +trying to reach a conclusion and to decide finally upon a course of +action. In working with so many partners, the conservative ones are +apt to be in the majority, and this is no doubt a desirable thing when +the mere momentum of a large concern is certain to carry it forward. +The men who have been very successful are correspondingly +conservative, since they have much to lose in case of disaster. But +fortunately there are also the aggressive and more daring ones, and +they are usually the youngest in the company, perhaps few in number, +but impetuous and convincing. <span class='pagenum'><a name="Page_7" id="Page_7">[7]</a></span>They want to accomplish things and to +move quickly, and they don't mind any amount of work or +responsibility. I remember in particular an experience when the +conservative influence met the progressive—shall I say?—or the +daring side. At all events, this was the side I represented in this +case.</p> + + +<p class="center"><b>ARGUMENTS VERSUS CAPITAL</b></p> + +<p>One of my partners, who had successfully built up a large and +prosperous business, was resisting with all his force a plan that some +of us favoured, to make some large improvements. The cost of extending +the operations of this enterprise was estimated at quite a sum—three +million dollars, I think it was. We had talked it over and over again, +and with several other associates discussed all the pros and cons; and +we had used every argument we could command to show why the plan would +not only be profitable, but was indeed necessary to maintain the lead +we had. Our old partner was obdurate, he had made up his mind not to +yield, and I can see him standing up in his vigorous protest, with his +hands in his pockets, his head thrown back, as he shouted "No."</p> + +<p>It's a pity to get a man into a place in an <span class='pagenum'><a name="Page_8" id="Page_8">[8]</a></span>argument where he is +defending a position instead of considering the evidence. His calm +judgment is apt to leave him, and his mind is for the time being +closed, and only obstinacy remains. Now these improvements had to be +made—as I said before, it was essential. Yet we could not quarrel +with our old partner, but a minority of us had made up our minds that +we must try to get him to yield, and we resolved to try another line +of argument, and said to him:</p> + +<p>"You say that we do not need to spend this money?"</p> + +<p>"No," he replied, "it will probably prove to be many years before such +a sum must be spent. There is no present need for these facilities you +want to create, and the works are doing well as they are—let's let +well enough alone."</p> + +<p>Now our partner was a very wise and experienced man, older and more +familiar with the subject than some of us, and all this we admitted to +him; but we had made up our minds, as I have said, to carry out this +idea if we could possibly get his approval, and we were willing to +wait until then. As soon as the argument had calmed down, and when the +heat of our discussion had passed, the subject was brought up again. I +had thought of a new way to approach it. I said:</p> +<p><span class='pagenum'><a name="Page_9" id="Page_9">[9]</a></span></p> + +<p>"I'll take it, and supply this capital myself. If the expenditure +turns out to be profitable the company can repay me; and, if it goes +wrong, I'll stand the loss."</p> + +<p>That was the argument that touched him. All his reserve disappeared +and the matter was settled when he said:</p> + +<p>"If that's the way you feel about it, we'll go it together. I guess I +can take the risk if you can."</p> + +<p>It is always, I presume, a question in every business just how fast it +is wise to go, and we went pretty rapidly in those days, building and +expanding in all directions. We were being confronted with fresh +emergencies constantly. A new oil field would be discovered, tanks for +storage had to be built almost over night, and this was going on when +old fields were being exhausted, so we were therefore often under the +double strain of losing the facilities in one place where we were +fully equipped, and having to build up a plant for storing and +transporting in a new field where we were totally unprepared. These +are some of the things which make the whole oil trade a perilous one, +but we had with us a group of courageous men who recognized the great +principle that a business cannot be a great success that does not +fully and <span class='pagenum'><a name="Page_10" id="Page_10">[10]</a></span>efficiently accept and take advantage of its opportunities.</p> + +<p>How often we discussed those trying questions! Some of us wanted to +jump at once into big expenditures, and others to keep to more +moderate ones. It was usually a compromise, but one at a time we took +these matters up and settled them, never going as fast as the most +progressive ones wished, nor quite so carefully as the conservatives +desired, but always made the vote unanimous in the end.</p> + + +<p class="center"><b>THE JOY OF ACHIEVEMENT</b></p> + +<p>The part played by one of my earliest partners, Mr. H.M. Flagler, was +always an inspiration to me. He invariably wanted to go ahead and +accomplish great projects of all kinds, he was always on the active +side of every question, and to his wonderful energy is due much of the +rapid progress of the company in the early days.</p> + +<p>It was to be expected of such a man that he should fulfil his destiny +by working out some great problems at a time when most men want to +retire to a comfortable life of ease. This would not appeal to my old +friend. He undertook, single handed, the task of building up the East +Coast of Florida. He was not satisfied to plan a railroad from St. +Augustine to Key <span class='pagenum'><a name="Page_11" id="Page_11">[11]</a></span>West—a distance of more than six hundred miles, +which would have been regarded as an undertaking large enough for +almost any one man—but in addition he has built a chain of superb +hotels to induce tourists to go to this newly developed country. +Further than this, he has had them conducted with great skill and +success.</p> + +<p>This one man, by his own energy and capital, has opened up a vast +stretch of country, so that the old inhabitants and the new settlers +may have a market for their products. He has given work to thousands +of these people; and, to crown all, he has undertaken and nearly +completed a remarkable engineering feat in carrying his road on the +Florida Keys into the Atlantic Ocean to Key West, the point set out +for years ago.</p> + +<p>Practically all this has been done after what most men would have +considered a full business life, and a man of any other nationality +situated as he was would have retired to enjoy the fruits of his +labour.</p> + +<p>I first knew Mr. Flagler as a young man who consigned produce to Clark +& Rockefeller. He was a bright and active young fellow full of vim and +push. About the time we went into the oil business Mr. Flagler +established himself <span class='pagenum'><a name="Page_12" id="Page_12">[12]</a></span>as a commission merchant in the same building +with Mr. Clark, who took over and succeeded the firm of Clark & +Rockefeller. A little later he bought out Mr. Clark and combined his +trade with his own.</p> + +<p>Naturally, I came to see more of him. The business relations which +began with the handling of produce he consigned to our old firm grew +into a business friendship, because people who lived in a +comparatively small place, as Cleveland was then, were thrown together +much more often than in such a place as New York. When the oil +business was developing and we needed more help, I at once thought of +Mr. Flagler as a possible partner, and made him an offer to come with +us and give up his commission business. This offer he accepted, and so +began that life-long friendship which has never had a moment's +interruption. It was a friendship founded on business, which Mr. +Flagler used to say was a good deal better than a business founded on +friendship, and my experience leads me to agree with him.</p> + +<p>For years and years this early partner and I worked shoulder to +shoulder; our desks were in the same room. We both lived on Euclid +Avenue, a few rods apart. We met and walked <span class='pagenum'><a name="Page_13" id="Page_13">[13]</a></span>to the office together, +walked home to luncheon, back again after luncheon, and home again at +night. On these walks, when we were away from the office +interruptions, we did our thinking, talking, and planning together. +Mr. Flagler drew practically all our contracts. He has always had the +faculty of being able to clearly express the intent and purpose of a +contract so well and accurately that there could be no +misunderstanding, and his contracts were fair to both sides. I can +remember his saying often that when you go into an arrangement you +must measure up the rights and proprieties of both sides with the same +yardstick, and this was the way Henry M. Flagler did.</p> + +<p>One contract Mr. Flagler was called upon to accept which to my +surprise he at once passed with his O.K. and without a question. We +had concluded to purchase the land on which one of our refineries was +built and which was held on a lease from John Irwin, whom we both knew +well. Mr. Irwin drew the contract for the purchase of this land on the +back of a large manila envelope that he picked up in the office. The +description of the property ran as such contracts usually do until it +came to the phrase "the line runs south to a mullen stalk," etc. <span class='pagenum'><a name="Page_14" id="Page_14">[14]</a></span>This +seemed to me a trifle indefinite, but Mr. Flagler said:</p> + +<p>"It's all right, John. I'll accept that contract, and when the deed +comes in, you will see that the mullen stalk will be replaced by a +proper stake and the whole document will be accurate and shipshape." +Of course it turned out exactly as he said it would. I am almost +tempted to say that some lawyers might sit at his feet and learn +things about drawing contracts good for them to know, but perhaps our +legal friends might think I was partial, so I won't press the point.</p> + +<p>Another thing about Mr. Flagler for which I think he deserves great +credit was that in the early days he insisted that, when a refinery +was to be put up, it should be different from the flimsy shacks which +it was then the custom to build. Every one was so afraid that the oil +would disappear and that the money expended in buildings would be a +loss that the meanest and cheapest buildings were erected for use as +refineries. This was the sort of thing Mr. Flagler objected to. While +he had to admit that it was possible the oil supply might fail and +that the risks of the trade were great, he always believed that if we +went into the oil business at all, we should do the work as well as we +knew <span class='pagenum'><a name="Page_15" id="Page_15">[15]</a></span>how; that we should have the very best facilities; that +everything should be solid and substantial; and that nothing should be +left undone to produce the finest results. And he followed his +convictions of building as though the trade was going to last, and his +courage in acting up to his beliefs laid strong foundations for later +years.</p> + +<p>There are a number of people still alive who will recall the bright, +straightforward young Flagler of those days with satisfaction. At the +time when we bought certain refineries at Cleveland he was very +active. One day he met an old friend on the street, a German baker, to +whom he had sold flour in years gone by. His friend told him that he +had gone out of the bakery business and had built a little refinery. +This surprised Mr. Flagler, and he didn't like the idea of his friend +investing his little fortune in a small plant which he felt sure would +not succeed. But at first there seemed nothing to do about it. He had +it on his mind for some days. It evidently troubled him. Finally he +came to me and said:</p> + +<p>"That little baker man knows more about baking than oil refining, but +I'd feel better if we invited him to join us—I've got him on my +conscience."</p> +<p><span class='pagenum'><a name="Page_16" id="Page_16">[16]</a></span></p> + +<p>I of course agreed. He talked to his friend, who said he would gladly +sell if we would send an appraiser to value his plant, which we did, +and then there arose an unexpected difficulty. The price at which the +plant was to be purchased was satisfactory, but the ex-baker insisted +that Mr. Flagler should advise him whether he should take his pay in +cash or Standard Oil certificates at par. He told Mr. Flagler that if +he took it in cash it would pay all his debts, and he would be glad to +have his mind free of many anxieties; but if Mr. Flagler said the +certificates were going to pay good dividends, he wanted to get into +and keep up with a good thing. It was rather a hard proposition to put +up to Mr. Flagler, and at first he declined to advise or express any +opinion, but the German stuck to him and wouldn't let him shirk a +responsibility which in no way belonged to him. Finally Mr. Flagler +suggested that he take half the amount in cash and pay 50 per cent. on +account of his debts, and put the other half in certificates, and see +what happened. This he did, and as time went on he bought more +certificates, and Mr. Flagler never had to apologize for the advice he +gave him. I am confident that my old partner gave this affair as much +time and thought as he did <span class='pagenum'><a name="Page_17" id="Page_17">[17]</a></span>to any of his own large problems, and the +incident may be taken as a measure of the man.</p> + + +<p class="center"><b>THE VALUE OF FRIENDSHIPS</b></p> + +<p>But these old men's tales can hardly be interesting to the present +generation, though perhaps they will not be useless if even tiresome +stories make young people realize how, above all other possessions, is +the value of a friend in every department of life without any +exception whatsoever.</p> + +<p>How many different kinds of friends there are! They should all be held +close at any cost; for, although some are better than others, perhaps, +a friend of whatever kind is important; and this one learns as one +grows older. There is the kind that when you need help has a good +reason just at the moment, of course, why it is impossible to extend +it.</p> + +<p>"I can't indorse your note," he says, "because I have an agreement +with my partners not to."</p> + +<p>"I'd like to oblige you, but I can explain why at the moment," etc., +etc.</p> + +<p>I do not mean to criticize this sort of friendship; for sometimes it +is a matter of temperament; and sometimes the real necessities are +such that the friend cannot do as he would like to do. As I look back +over my friends, I can <span class='pagenum'><a name="Page_18" id="Page_18">[18]</a></span>remember only a few of this kind and a good +many of the more capable sort. One especial friend I had. His name was +S.V. Harkness, and from the first of our acquaintance he seemed to +have every confidence in me.</p> + +<p>One day our oil warehouses and refinery burned to the ground in a few +hours—they were absolutely annihilated. Though they were insured for +many hundred thousands of dollars, of course, we were apprehensive +about collecting such a large amount of insurance, and feared it might +take some time to arrange. That plant had to be rebuilt right away, +and it was necessary to lay the financial plans. Mr. Harkness was +interested with us in the business, and I said to him:</p> + +<p>"I may want to call upon you for the use of some money. I don't know +that we shall need it, but I thought I'd speak to you in advance about +it."</p> + +<p>He took in the situation without much explaining on my part. He simply +heard what I had to say and he was a man of very few words.</p> + +<p>"All right, J.D., I'll give you all I've got." This was all he said, +but I went home that night relieved of anxiety. As it turned out, we +received the check of the Liverpool, London & Globe Insurance Company +for the full <span class='pagenum'><a name="Page_19" id="Page_19">[19]</a></span>amount before the builders required the payments; and +while we didn't need his money, I never shall forget the whole-souled +way in which he offered it.</p> + +<p>And this sort of experience was not, I am grateful to say, rare with +me. I was always a great borrower in my early days; the business was +active and growing fast, and the banks seemed very willing to loan me +the money. About this time, when our great fire had brought up some +new conditions, I was studying the situation to see what our cash +requirements would be. We were accustomed to prepare for financial +emergencies long before we needed the funds.</p> + +<p>Another incident occurred at this time which showed again the kind of +real friends we had in those days, but I did not hear the full story +of it until long years after the event.</p> + +<p>There was one bank where we had done a great deal of business, and a +friend of mine, Mr. Stillman Witt, who was a rich man, was one of the +directors. At a meeting, the question came up as to what the bank +would do in case we wanted more money. In order that no one might +doubt his own position on the subject, Mr. Witt called for his +strong-box, and said:</p> + +<p>"Here, gentlemen, these young men are all <span class='pagenum'><a name="Page_20" id="Page_20">[20]</a></span>O.K., and if they want to +borrow more money I want to see this bank advance it without +hesitation, and if you want more security, here it is; take what you +want."</p> + +<p>We were then shipping a large quantity of oil by lake and canal, to +save in transportation, and it took additional capital to carry these +shipments; and we required to borrow a large amount of money. We had +already made extensive loans from another bank, whose president +informed me that his board of directors had been making inquiries +respecting our large line of discounts, and had stated that they would +probably want to talk with me on the subject. I answered that I would +be very glad of the opportunity to meet the board, as we would require +a great deal more money from the bank. Suffice it to say, we got all +we wanted, but I was not asked to call for any further explanations.</p> + +<p>But I fear I am telling too much about banks and money and business. I +know of nothing more despicable and pathetic than a man who devotes +all the waking hours of the day to making money for money's sake. If I +were forty years younger, I should like to go into business again, for +the association with interesting and quick-minded men was always a +<span class='pagenum'><a name="Page_21" id="Page_21">[21]</a></span>great pleasure. But I have no dearth of interests to fill my days, +and so long as I live I expect to go on and develop the plans which +have been my inspiration for a lifetime.</p> + +<p>During all the long period of work, which lasted from the time I was +sixteen years old until I retired from active business when I was +fifty-five, I must admit that I managed to get a good many vacations +of one kind or another, because of the willingness of my most +efficient associates to assume the burdens of the business which they +were so eminently qualified to conduct.</p> + +<p>Of detail work I feel I have done my full share. As I began my +business life as a bookkeeper, I learned to have great respect for +figures and facts, no matter how small they were. When there was a +matter of accounting to be done in connection with any plan with which +I was associated in the earlier years, I usually found that I was +selected to undertake it. I had a passion for detail which afterward I +was forced to strive to modify.</p> + +<p>At Pocantico Hills, New York, where I have spent portions of my time +for many years in an old house where the fine views invite the soul +and where we can live simply and quietly, I have spent many delightful +hours, <span class='pagenum'><a name="Page_22" id="Page_22">[22]</a></span>studying the beautiful views, the trees, and fine landscape +effects of that very interesting section of the Hudson River, and this +happened in the days when I seemed to need every minute for the +absorbing demands of business. So I fear after I got well started, I +was not what might be called a diligent business man.</p> + +<p>This phrase, "diligent in business," reminds me of an old friend of +mine in Cleveland who was devoted to his work. I talked to him, and no +doubt bored him unspeakably, on my special hobby, which has always +been what some people call landscape gardening, but which with me is +the art of laying out roads and paths and work of that kind. This +friend of thirty-five years ago plainly disapproved of a man in +business wasting his time on what he looked upon as mere foolishness.</p> + +<p>One superb spring day I suggested to him that he should spend the +afternoon with me (a most unusual and reckless suggestion for a +business man to make in those days) and see some beautiful paths +through the woods on my place which I had been planning and had about +completed. I went so far as to tell him that I would give him a real +treat.</p> + +<p>"I cannot do it, John," he said, "I have an <span class='pagenum'><a name="Page_23" id="Page_23">[23]</a></span>important matter of +business on hand this afternoon."</p> + +<p>"That may all be," I urged, "but it will give you no such pleasure as +you'll get when you see those paths—the big tree on each side and +----"</p> + +<p>"Go on, John, with your talk about trees and paths. I tell you I've +got an ore ship coming in and our mills are waiting for her." He +rubbed his hands with satisfaction—"I'd not miss seeing her come in +for all the wood paths in Christendom." He was then getting $120 to +$130 a ton for Bessemer steel rails, and if his mill stopped a minute +waiting for ore, he felt that he was missing his life's chance.</p> + +<p>Perhaps it was this same man who often gazed out into the lake with +every nerve stretched to try to see an ore ship approaching. One day +one of his friends asked him if he could see the boat.</p> + +<p>"No-o, no-o," he reluctantly admitted, "but she's most in sight."</p> + +<p>This ore trade was of great and absorbing interest at Cleveland. My +old employer was paid $4 a ton for carrying ore from the Marquette +regions fifty years ago, and to think of the wickedness of this maker +of woodland paths, who in later years was moving the ore <span class='pagenum'><a name="Page_24" id="Page_24">[24]</a></span>in great +ships for eighty cents a ton and making a fortune at it.</p> + +<p>All this reminds me of my experiences in the ore business, but I shall +come to that later. I want to say something about landscape gardening, +to which I have devoted a great deal of time for more than thirty +years.</p> + + +<p class="center"><b>THE PLEASURES OF ROAD PLANNING</b></p> + +<p>Like my old friend, others may be surprised at my claim to be an +amateur landscape architect in a small way, and my family have been +known to employ a great landscape man to make quite sure that I did +not ruin the place. The problem was, just where to put the new home at +Pocantico Hills, which has recently been built. I thought I had the +advantage of knowing every foot of the land, all the old big trees +were personal friends of mine, and with the views of any given point I +was perfectly familiar—I had studied them hundreds of times; and +after this great landscape architect had laid out his plans and had +driven his lines of stakes, I asked if I might see what I could do +with the job.</p> + +<p>In a few days I had worked out a plan so devised that the roads caught +just the best views at just the angles where in driving up <span class='pagenum'><a name="Page_25" id="Page_25">[25]</a></span>the hill +you came upon impressive outlooks, and at the ending was the final +burst of river, hill, cloud, and great sweep of country to crown the +whole; and here I fixed my stakes to show where I suggested that the +roads should run, and finally the exact place where the house should +be.</p> + +<p>"Look it all over," I said, "and decide which plan is best." It was a +proud moment when this real authority accepted my suggestions as +bringing out the most favoured spots for views and agreed upon the +site of the house. How many miles of roads I have laid out in my time, +I can hardly compute, but I have often kept at it until I was +exhausted. While surveying roads, I have run the lines until darkness +made it impossible to see the little stakes and flags. It is all very +vain of me to tell of these landscape enterprises, but perhaps they +will offset the business talks which occupy so much of my story.</p> + +<p>My methods of attending to business matters differed from those of +most well-conducted merchants of my time and allowed me more freedom. +Even after the chief affairs of the Standard Oil Company were moved to +New York, I spent most of my summers at our home in Cleveland, and I +do still. I would come <span class='pagenum'><a name="Page_26" id="Page_26">[26]</a></span>to New York when my presence seemed necessary, +but for the most part I kept in touch with the business through our +own telegraph wires, and was left free to attend to many things which +interested me—among others, the making of paths, the planting of +trees, and the setting out of little forests of seedlings.</p> + +<p>Of all the profitable things which develop quickly under the hand, I +have thought my young nurseries show the greatest yield. We keep a set +of account books for each place, and I was amazed not long ago at the +increase in value that a few years make in growing things, when we +came to remove some young trees from Westchester County to Lakewood, +New Jersey. We plant our young trees, especially evergreens, by the +thousand—I think we have put in as many as ten thousand at once, and +let them develop, to be used later in some of our planting schemes. If +we transfer young trees from Pocantico to our home in Lakewood, we +charge one place and credit the other for these trees at the market +rate. We are our own best customers, and we make a small fortune out +of ourselves by selling to our New Jersey place at $1.50 or $2.00 +each, trees which originally cost us only five or ten cents at +Pocantico.</p> +<p><span class='pagenum'><a name="Page_27" id="Page_27">[27]</a></span></p> + +<p>In nursery stock, as in other things, the advantage of doing things on +a large scale reveals itself. The pleasure and satisfaction of saving +and moving large trees—trees, say, from ten to twenty inches in +diameter, or even more in some cases—has been for years a source of +great interest. We build our movers ourselves, and work with our own +men, and it is truly surprising what liberties you can take with +trees, if you once learn how to handle these monsters. We have moved +trees ninety feet high, and many seventy or eighty feet. And they +naturally are by no means young. At one time or another we have tried +almost all kinds of trees, including some which the authorities said +could not be moved with success. Perhaps the most daring experiments +were with horse-chestnuts. We took up large trees, transported them +considerable distances, some of them after they were actually in +flower, all at a cost of twenty dollars per tree, and lost very few. +We were so successful that we became rather reckless, trying +experiments out of season, but when we worked on plans we had already +tried, our results were remarkably satisfactory.</p> + +<p>Taking our experiences in many hundreds of trees of various kinds in +and out of season, <span class='pagenum'><a name="Page_28" id="Page_28">[28]</a></span>and including the time when we were learning the +art, our total loss has been something less than 10 per cent., +probably more nearly 6 or 7 per cent. A whole tree-moving campaign in +a single season has been accomplished with a loss of about 3 per cent. +I am willing to admit that in the case of the larger trees the growth +has been retarded perhaps two years, but this is a small matter, for +people no longer young wish to get the effects they desire at once, +and the modern tree-mover does it. We have grouped and arranged clumps +of big spruces to fit the purposes we were aiming for, and sometimes +have completely covered a hillside with them. Oaks we have not been +successful with except when comparatively young, and we don't try to +move oaks and hickories when they have come near to maturity; but we +have made some successful experiments with bass wood, and one of these +we have moved three times without injury. Birches have generally +baffled us, but evergreens, except cedars, have been almost invariably +successfully handled.</p> + +<p>This planning for good views must have been an early passion with me. +I remember when I was hardly more than a boy I wanted to cut away a +big tree which I thought interfered with the view from the windows of +the dining-<span class='pagenum'><a name="Page_29" id="Page_29">[29]</a></span>room of our home. I was for cutting it down, but some +other members of the family objected, though my dear mother, I think, +sympathized with me, as she said one day: "You know, my son, we have +breakfast at eight o'clock, and I think if the tree were felled some +time before we sat down to table, there would probably be no great +complaint when the family saw the view which the fallen tree +revealed."</p> + +<p>So it turned out.</p> + + + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_33" id="Page_33">[33]</a></span></p> +<h2><a name="CHAPTER_II" id="CHAPTER_II"></a>CHAPTER II</h2> + +<h3><span class="smcap">The Difficult Art of Getting</span></h3> + + +<p>To my father I owe a great debt in that he himself trained me to +practical ways. He was engaged in different enterprises; he used to +tell me about these things, explaining their significance; and he +taught me the principles and methods of business. From early boyhood I +kept a little book which I remember I called Ledger A—and this little +volume is still preserved—containing my receipts and expenditures as +well as an account of the small sums that I was taught to give away +regularly.</p> + +<p>Naturally, people of modest means lead a closer family life than those +who have plenty of servants to do everything for them. I count it a +blessing that I was of the former class. When I was seven or eight +years old I engaged in my first business enterprise with the +assistance of my mother. I owned some turkeys, and she presented me +with the curds from the milk to feed them. I took care of the birds +myself, <span class='pagenum'><a name="Page_34" id="Page_34">[34]</a></span>and sold them all in business-like fashion. My receipts were +all profit, as I had nothing to do with the expense account, and my +records were kept as carefully as I knew how.</p> + +<p>We thoroughly enjoyed this little business affair, and I can still +close my eyes, and distinctly see the gentle and dignified birds +walking quietly along the brook and through the woods, cautiously +stealing the way to their nests. To this day I enjoy the sight of a +flock of turkeys, and never miss an opportunity of studying them.</p> + +<p>My mother was a good deal of a disciplinarian, and upheld the standard +of the family with a birch switch when it showed a tendency to +deteriorate. Once, when I was being punished for some unfortunate +doings which had taken place in the village school, I felt called upon +to explain after the whipping had begun that I was innocent of the +charge.</p> + +<p>"Never mind," said my mother, "we have started in on this whipping, +and it will do for the next time." This attitude was maintained to its +final conclusion in many ways. One night, I remember, we boys could +not resist the temptation to go skating in the moonlight, +notwithstanding the fact that we had been <span class='pagenum'><a name="Page_35" id="Page_35">[35]</a></span>expressly forbidden to +skate at night. Almost before we got fairly started we heard a cry for +help, and found a neighbour, who had broken through the ice, was in +danger of drowning. By pushing a pole to him we succeeded in fishing +him out, and restored him safe and sound to his grateful family. As we +were not generally expected to save a man's life every time we skated, +my brother William and I felt that there were mitigating circumstances +connected with this particular disobedience which might be taken into +account in the final judgment, but this idea proved to be erroneous.</p> + + +<p class="center"><b>STARTING AT WORK</b></p> + +<p>Although the plan had been to send me to college, it seemed best at +sixteen that I should leave the high school in which I had nearly +completed the course and go into a commercial college in Cleveland for +a few months. They taught bookkeeping and some of the fundamental +principles of commercial transactions. This training, though it lasted +only a few months, was very valuable to me. But how to get a job—that +was the question. I tramped the streets for days and weeks, asking +merchants and storekeepers if they didn't want a boy; <span class='pagenum'><a name="Page_36" id="Page_36">[36]</a></span>but the offer +of my services met with little appreciation. No one wanted a boy, and +very few showed any overwhelming anxiety to talk with me on the +subject. At last one man on the Cleveland docks told me that I might +come back after the noonday meal. I was elated; it now seemed that I +might get a start.</p> + +<p>I was in a fever of anxiety lest I should lose this one opportunity +that I had unearthed. When finally at what seemed to me the time, I +presented myself to my would-be employer:</p> + +<p>"We will give you a chance," he said, but not a word passed between us +about pay. This was September 26, 1855. I joyfully went to work. The +name of the firm was Hewitt & Tuttle.</p> + +<p>In beginning the work I had some advantages. My father's training, as +I have said, was practical, the course at the commercial college had +taught me the rudiments of business, and I thus had a groundwork to +build upon. I was fortunate, also, in working under the supervision of +the bookkeeper, who was a fine disciplinarian, and well disposed +toward me.</p> + +<p>When January, 1856, arrived, Mr. Tuttle presented me with $50 for my +three months' <span class='pagenum'><a name="Page_37" id="Page_37">[37]</a></span>work, which was no doubt all that I was worth, and it +was entirely satisfactory.</p> + +<p>For the next year, with $25 a month, I kept my position, learning the +details and clerical work connected with such a business. It was a +wholesale produce commission and forwarding concern, my department +being particularly the office duties. Just above me was the bookkeeper +for the house, and he received $2,000 a year salary in lieu of his +share of the profits of the firm of which he was a member. At the end +of the first fiscal year when he left I assumed his clerical and +bookkeeping work, for which I received the salary of $500.</p> + +<p>As I look back upon this term of business apprenticeship, I can see +that its influence was vitally important in its relations to what came +after.</p> + +<p>To begin with, my work was done in the office of the firm itself. I +was almost always present when they talked of their affairs, laid out +their plans, and decided upon a course of action. I thus had an +advantage over other boys of my age, who were quicker and who could +figure and write better than I. The firm conducted a business with so +many ramifications that this education was quite extensive. They owned +dwelling-houses, ware<span class='pagenum'><a name="Page_38" id="Page_38">[38]</a></span>houses, and buildings which were rented for +offices and a variety of uses, and I had to collect the rents. They +shipped by rail, canal, and lake. There were many different kinds of +negotiations and transactions going on, and with all these I was in +close touch.</p> + +<p>Thus it happened that my duties were vastly more interesting than +those of an office-boy in a large house to-day. I thoroughly enjoyed +the work. Gradually the auditing of accounts was left in my hands. All +the bills were first passed upon by me, and I took this duty very +seriously.</p> + +<p>One day, I remember, I was in a neighbour's office, when the local +plumber presented himself with a bill about a yard long. This +neighbour was one of those very busy men. He was connected with what +seemed to me an unlimited number of enterprises. He merely glanced at +this tiresome bill, turned to the bookkeeper, and said:</p> + +<p>"Please pay this bill."</p> + +<p>As I was studying the same plumber's bills in great detail, checking +every item, if only for a few cents, and finding it to be greatly to +the firm's interest to do so, this casual way of conducting affairs +did not appeal to me. I had trained myself to the point of view +doubtless held by many young men in business to-day, <span class='pagenum'><a name="Page_39" id="Page_39">[39]</a></span>that my check on +a bill was the executive act which released my employer's money from +the till and was attended with more responsibility than the spending +of my own funds. I made up my mind that such business methods could +not succeed.</p> + +<p>Passing bills, collecting rents, adjusting claims, and work of this +kind brought me in association with a great variety of people. I had +to learn how to get on with all these different classes, and still +keep the relations between them and the house pleasant. One particular +kind of negotiation came to me which took all the skill I could master +to bring to a successful end.</p> + +<p>We would receive, for example, a shipment of marble from Vermont to +Cleveland. This involved handling by railroad, canal, and lake boats. +The cost of losses or damage had to be somehow fixed between these +three different carriers, and it taxed all the ingenuity of a boy of +seventeen to work out this problem to the satisfaction of all +concerned, including my employers. But I thought the task no hardship, +and so far as I can remember I never had any disagreement of moment +with any of these transportation interests. This experience in +conducting all sorts of transactions at such an impressionable age, +with the <span class='pagenum'><a name="Page_40" id="Page_40">[40]</a></span>helping hand of my superiors to fall back upon in an +emergency—was highly interesting to me. It was my first step in +learning the principle of negotiation, of which I hope to speak later.</p> + +<p>The training that comes from working for some one else, to whom we +feel a responsibility, I am sure was of great value to me.</p> + +<p>I should estimate that the salaries of that time were far less than +half of what is paid for equivalent positions to-day. The next year I +was offered a salary of $700, but thought I was worth $800. We had not +settled the matter by April, and as a favourable opportunity had +presented itself for carrying on the same business on my own account, +I resigned my position.</p> + +<p>In those days, in Cleveland, everyone knew almost everyone else in +town. Among the merchants was a young Englishman named M.B. Clark, +perhaps ten years older than I, who wanted to establish a business and +was in search of a partner. He had $2,000 to contribute to the firm, +and wanted a partner who could furnish an equal amount. This seemed a +good opportunity for me. I had saved up $700 or $800, but where to get +the rest was a problem.</p> +<p><span class='pagenum'><a name="Page_41" id="Page_41">[41]</a></span></p> + +<p>I talked the matter over with my father, who told me that he had +always intended to give $1,000 to each of his children when they +reached twenty-one. He said that if I wished to receive my share at +once, instead of waiting, he would advance it to me and I could pay +interest upon the sum until I was twenty-one.</p> + +<p>"But, John," he added, "the rate is ten."</p> + +<p>At that time, 10 per cent. a year interest was a very common rate for +such loans. At the banks the rate might not have been quite so high; +but of course the financial institutions could not supply all the +demands, so there was much private borrowing at high figures. As I +needed this money for the partnership, I gladly accepted my father's +offer, and so began business as the junior partner of the new firm, +which was called Clark & Rockefeller.</p> + +<p>It was a great thing to be my own employer. Mentally I swelled with +pride—a partner in a firm with $4,000 capital! Mr. Clark attended to +the buying and selling, and I took charge of the finance and the +books. We at once began to do a large business, dealing in carload +lots and cargoes of produce. Naturally we soon needed more money to +take care of the increasing trade. There was nothing <span class='pagenum'><a name="Page_42" id="Page_42">[42]</a></span>to do but to +attempt to borrow from a bank. But would the bank lend to us?</p> + + +<p class="center"><b>THE FIRST LOAN</b></p> + +<p>I went to a bank president whom I knew, and who knew me. I remember +perfectly how anxious I was to get that loan and to establish myself +favourably with the banker. This gentleman was T.P. Handy, a sweet and +gentle old man, well known as a high-grade, beautiful character. For +fifty years he was interested in young men. He knew me as a boy in the +Cleveland schools. I gave him all the particulars of our business, +telling him frankly about our affairs—what we wanted to use the money +for, etc., etc. I waited for the verdict with almost trembling +eagerness.</p> + +<p>"How much do you want?" he said.</p> + +<p>"Two thousand dollars."</p> + +<p>"All right, Mr. Rockefeller, you can have it," he replied. "Just give +me your own warehouse receipts; they're good enough for me."</p> + +<p>As I left that bank, my elation can hardly be imagined. I held up my +head—think of it, a bank had trusted me for $2,000! I felt that I was +now a man of importance in the community.</p> +<p><span class='pagenum'><a name="Page_43" id="Page_43">[43]</a></span></p> + +<p>For long years after the head of this bank was a friend indeed; he +loaned me money when I needed it, and I needed it almost all the time, +and all the money he had. It was a source of gratification that later +I was able to go to him and recommend that he should make a certain +investment in Standard Oil stock. He agreed that he would like to do +so, but he said that the sum involved was not at the moment available, +and so at my suggestion I turned banker for him, and in the end he +took out his principal with a very handsome profit. It is a pleasure +to testify even at this late date to his great kindness and faith in +me.</p> + + +<p class="center"><b>STICKING TO BUSINESS PRINCIPLES</b></p> + +<p>Mr. Handy trusted me because he believed we would conduct our young +business on conservative and proper lines, and I well remember about +this time an example of how hard it is sometimes to live up to what +one knows is the right business principle. Not long after our concern +was started our best customer—that is, the man who made the largest +consignments—asked that we should allow him to draw in advance on +current shipments before the produce or a bill of lading were actually +in hand. We, of course, wished to <span class='pagenum'><a name="Page_44" id="Page_44">[44]</a></span>oblige this important man, but I, +as the financial member of the firm, objected, though I feared we +should lose his business.</p> + +<p>The situation seemed very serious; my partner was impatient with me +for refusing to yield, and in this dilemma I decided to go personally +to see if I could not induce our customer to relent. I had been +unusually fortunate when I came face to face with men in winning their +friendship, and my partner's displeasure put me on my mettle. I felt +that when I got into touch with this gentleman I could convince him +that what he proposed would result in a bad precedent. My reasoning +(in my own mind) was logical and convincing. I went to see him, and +put forth all the arguments that I had so carefully thought out. But +he stormed about, and in the end I had the further humiliation of +confessing to my partner that I had failed. I had been able to +accomplish absolutely nothing.</p> + +<p>Naturally, he was very much disturbed at the possibility of losing our +most valued connection, but I insisted and we stuck to our principles +and refused to give the shipper the accommodation he had asked. What +was our surprise and gratification to find that he con<span class='pagenum'><a name="Page_45" id="Page_45">[45]</a></span>tinued his +relations with us as though nothing had happened, and did not again +refer to the matter. I learned afterward that an old country banker, +named John Gardener, of Norwalk, O., who had much to do with our +consignor, was watching this little matter intently, and I have ever +since believed that he originated the suggestion to tempt us to do +what we stated we did not do as a test, and his story about our firm +stand for what we regarded as sound business principles did us great +good.</p> + +<p>About this time I began to go out and solicit business—a branch of +work I had never before attempted. I undertook to visit every person +in our part of the country who was in any way connected with the kind +of business that we were engaged in, and went pretty well over the +states of Ohio and Indiana. I made up my mind that I could do this +best by simply introducing our firm, and not pressing for immediate +consignments. I told them that I represented Clark & Rockefeller, +commission merchants, and that I had no wish to interfere with any +connection that they had at present, but if the opportunity offered we +should be glad to serve them, etc., etc.</p> + +<p>To our great surprise, business came in upon us so fast that we hardly +knew how to <span class='pagenum'><a name="Page_46" id="Page_46">[46]</a></span>take care of it, and in the first year our sales amounted +to half a million dollars.</p> + +<p>Then, and indeed for many years after, it seemed as though there was +no end to the money needed to carry on and develop the business. As +our successes began to come, I seldom put my head upon the pillow at +night without speaking a few words to myself in this wise:</p> + +<p>"Now a little success, soon you will fall down, soon you will be +overthrown. Because you have got a start, you think you are quite a +merchant; look out, or you will lose your head—go steady." These +intimate conversations with myself, I am sure, had a great influence +on my life. I was afraid I could not stand my prosperity, and tried to +teach myself not to get puffed up with any foolish notions.</p> + +<p>My loans from my father were many. Our relations on finances were a +source of some anxiety to me, and were not quite so humorous as they +seem now as I look back at them. Occasionally he would come to me and +say that if I needed money in the business he would be able to loan +some, and as I always needed capital I was glad indeed to get it, even +at 10 per cent. interest. Just at the moment <span class='pagenum'><a name="Page_47" id="Page_47">[47]</a></span>when I required the +money most he was apt to say:</p> + +<p>"My son, I find I have got to have that money."</p> + +<p>"Of course, you shall have it at once," I would answer, but I knew +that he was testing me, and that when I paid him, he would hold the +money without its earning anything for a little time, and then offer +it back later. I confess that this little discipline should have done +me good, and perhaps did, but while I concealed it from him, the truth +is I was not particularly pleased with his application of tests to +discover if my financial ability was equal to such shocks.</p> + + +<p class="center"><b>INTEREST AT 10 PER CENT.</b></p> + +<p>These experiences with my father remind me that in the early days +there was often much discussion as to what should be paid for the use +of money. Many people protested that the rate of 10 per cent. was +outrageous, and none but a wicked man would exact such a charge. I was +accustomed to argue that money was worth what it would bring—no one +would pay 10 per cent., or 5 per cent., or 8 per cent. unless the +borrower believed that at this rate it was profitable to employ it. As +<span class='pagenum'><a name="Page_48" id="Page_48">[48]</a></span>I was always the borrower at that time, I certainly did not argue for +paying more than was necessary.</p> + +<p>Among the most persistent and heated discussions I ever had were those +with the dear old lady who kept the boarding-house where my brother +William and I lived when we were away from home at school. I used to +greatly enjoy these talks, for she was an able woman and a good +talker, and as she charged us only a dollar a week for board and +lodging, and fed us well, I certainly was her friend. This was about +the usual price for board in the small towns in those days, where the +produce was raised almost entirely on the place.</p> + +<p>This estimable lady was violently opposed to loaners obtaining high +rates of interest, and we had frequent and earnest arguments on the +subject. She knew that I was accustomed to make loans for my father, +and she was familiar with the rates secured. But all the arguments in +the world did not change the rate, and it came down only when the +supply of money grew more plentiful.</p> + +<p>I have usually found that important alterations in public opinion in +regard to business matters have been of slow growth along the line of +proved economic theory—very rarely <span class='pagenum'><a name="Page_49" id="Page_49">[49]</a></span>have improvements in these +relationships come about through hastily devised legislation.</p> + +<p>One can hardly realize how difficult it was to get capital for active +business enterprises at that time. In the country farther west much +higher rates were paid, which applied usually to personal loans on +which a business risk was run, but it shows how different the +conditions for young business men were then than now.</p> + + +<p class="center"><b>A NIMBLE BORROWER</b></p> + +<p>Speaking of borrowing at the banks reminds me of one of the most +strenuous financial efforts I ever made. We had to raise the money to +accept an offer for a large business. It required many hundreds of +thousands of dollars—and in cash—securities would not answer. I +received the message at about noon and had to get off on the +three-o'clock train. I drove from bank to bank, asking each president +or cashier, whomever I could find first, to get ready for me all the +funds he could possibly lay hands on. I told them I would be back to +get the money later. I rounded up all of our banks in the city, and +made a second journey to get the money, and kept going until I secured +the necessary amount. With this I was off on the three-o'clock train, +and closed the transaction. <span class='pagenum'><a name="Page_50" id="Page_50">[50]</a></span>In these early days I was a good deal of +a traveller, visiting our plants, making new connections, seeing +people, arranging plans to extend our business—and it often called +for very rapid work.</p> + + +<p class="center"><b>RAISING CHURCH FUNDS</b></p> + +<p>When I was but seventeen or eighteen I was elected as a trustee in the +church. It was a mission branch, and occasionally I had to hear +members who belonged to the main body speak of the mission as though +it were not quite so good as the big mother church. This strengthened +our resolve to show them that we could paddle our own canoe.</p> + +<p>Our first church was not a very grand affair, and there was a mortgage +of $2,000 on it which had been a dispiriting influence for years.</p> + +<p>The holder of the mortgage had long demanded that he should be paid, +but somehow even the interest was barely kept up, and the creditor +finally threatened to sell us out. As it happened, the money had been +lent by a deacon in the church, but notwithstanding this fact, he felt +that he should have his money, and perhaps he really needed it. +Anyhow, he proposed to take such steps as were necessary to get it. +The matter came to a head <span class='pagenum'><a name="Page_51" id="Page_51">[51]</a></span>one Sunday morning, when the minister +announced from the pulpit that the $2,000 would have to be raised, or +we should lose our church building. I therefore found myself at the +door of the church as the congregation came and went.</p> + +<p>As each member came by I buttonholed him, and got him to promise to +give something toward the extinguishing of that debt. I pleaded and +urged, and almost threatened. As each one promised, I put his name and +the amount down in my little book, and continued to solicit from every +possible subscriber.</p> + +<p>This campaign for raising the money which started that morning after +church, lasted for several months. It was a great undertaking to raise +such a sum of money in small amounts ranging from a few cents to the +more magnificent promises of gifts to be paid at the rate of +twenty-five or fifty cents per week. The plan absorbed me. I +contributed what I could, and my first ambition to earn more money was +aroused by this and similar undertakings in which I was constantly +engaged.</p> + +<p>But at last the $2,000 was all in hand and a proud day it was when the +debt was extinguished. I hope the members of the mother church were +properly humiliated to see how far <span class='pagenum'><a name="Page_52" id="Page_52">[52]</a></span>we had gone beyond their +expectations, but I do not now recall that they expressed the surprise +that we flattered ourselves they must have felt.</p> + +<p>The begging experiences I had at that time were full of interest. I +went at the task with pride rather than the reverse, and I continued +it until my increasing cares and responsibilities compelled me to +resign the actual working out of details to others.</p> + + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_55" id="Page_55">[55]</a></span></p> +<h2><a name="CHAPTER_III" id="CHAPTER_III"></a>CHAPTER III</h2> + +<h3><span class="smcap">The Standard Oil Company</span></h3> + + +<p>It would be surprising if in an organization which included a great +number of men there should not be an occasional employee here and +there who acted, in connection with the business or perhaps in +conducting his own affairs, in a way which might be criticized. Even +in a comparatively small organization it is well-nigh impossible to +restrain this occasional man who is over-zealous for his own or his +company's advancement. To judge the character of all the members of a +great organization or the organization itself by the actions of a few +individuals would be manifestly unfair.</p> + +<p>It has been said that I forced the men who became my partners in the +oil business to join with me. I would not have been so short-sighted. +If it were true that I followed such tactics, I ask, would it have +been possible to make of such men life-long companions? Would they +accept, and remain for many years in positions of the greatest trust, +and finally, could <span class='pagenum'><a name="Page_56" id="Page_56">[56]</a></span>any one have formed of such men, if they had been +so browbeaten, a group which has for all these years worked in loyal +harmony, with fair dealing among themselves as well as with others, +building up efficiency and acting in entire unity? This powerful +organization has not only lasted but its efficiency has increased. For +fourteen years I have been out of business, and in eight or ten years +went only once to the company's office.</p> + +<p>In the summer of 1907 I visited again the room at the top of the +Standard Oil Company's building, where the officers of the company and +the heads of departments have had their luncheon served for many +years. I was surprised to find so many men who had come to the front +since my last visit years ago. Afterward I had an opportunity to talk +with old associates and many new ones, and it was a source of great +gratification to me to find that the same spirit of coöperation and +harmony existed unchanged. This practice of lunching together, a +hundred or more at long tables in most intimate and friendly +association, is another indication of what I contend, slight as it may +seem to be at first thought. Would these people seek each other's +companionship day after day if they had been forced into this +relation? People <span class='pagenum'><a name="Page_57" id="Page_57">[57]</a></span>in such a position do not go on for long in a +pleasant and congenial intimacy.</p> + +<p>For years the Standard Oil Company has developed step by step, and I +am convinced that it has done well its work of supplying to the people +the products from petroleum at prices which have decreased as the +efficiency of the business has been built up. It gradually extended +its services first to the large centres, and then to towns, and now to +the smallest places, going to the homes of its customers, delivering +the oil to suit the convenience of the actual users. This same system +is being followed out in various parts of the world. The company has, +for example, three thousand tank wagons supplying American oil to +towns and even small hamlets in Europe. Its own depots and employees +deliver it in a somewhat similar way in Japan, China, India, and the +chief countries of the world. Do you think this trade has been +developed by anything but hard work?</p> + +<p>This plan of selling our products direct to the consumer and the +exceptionally rapid growth of the business bred a certain antagonism +which I suppose could not have been avoided, but this same idea of +dealing with the consumer directly has been followed by others <span class='pagenum'><a name="Page_58" id="Page_58">[58]</a></span>and in +many lines of trade, without creating, so far as I recall, any serious +opposition.</p> + +<p>This is a very interesting and important point, and I have often +wondered if the criticism which centred upon us did not come from the +fact that we were among the first, if not the first, to work out the +problems of direct selling to the user on a broad scale. This was done +in a fair spirit and with due consideration for every one's rights. We +did not ruthlessly go after the trade of our competitors and attempt +to ruin it by cutting prices or instituting a spy system. We had set +ourselves the task of building up as rapidly and as broadly as +possible the volume of consumption. Let me try to explain just what +happened.</p> + +<p>To get the advantage of the facilities we had in manufacture, we +sought the utmost market in all lands—we needed volume. To do this we +had to create selling methods far in advance of what then existed; we +had to dispose of two, or three, or four gallons of oil where one had +been sold before, and we could not rely upon the usual trade channels +then existing to accomplish this. It was never our purpose to +interfere with a dealer who adequately cultivated his field of +operations, but when we saw a new opportunity or a new place for +extending <span class='pagenum'><a name="Page_59" id="Page_59">[59]</a></span>the sale by further and effective facilities, we made it +our business to provide them. In this way we opened many new lines in +which others have shared. In this development we had to employ many +comparatively new men. The ideal way to supply material for higher +positions is, of course, to recruit the men from among the youngest in +the company's service, but our expansion was too rapid to permit this +in all cases. That some of these employees were over-zealous in going +after sales it would not be surprising to learn, but they were acting +in violation of the expressed and known wishes of the company. But +even these instances, I am convinced, occurred so seldom, by +comparison with the number of transactions we carried on, that they +were really the exceptions that proved the rule.</p> + +<p>Every week in the year for many, many years, this concern has brought +into this country more than a million dollars gold, all from the +products produced by American labour. I am proud of the record, and +believe most Americans will be when they understand some things +better. These achievements, the development of this great foreign +trade, the owning of ships to carry the oil in bulk by the most +economical methods, the sending out of men to fight for the world's +<span class='pagenum'><a name="Page_60" id="Page_60">[60]</a></span>markets, have cost huge sums of money, and the vast capital employed +could not be raised nor controlled except by such an organization as +the Standard is to-day.</p> + +<p>To give a true picture of the early conditions, one must realize that +the oil industry was considered a most hazardous undertaking, not +altogether unlike the speculative mining undertakings we hear so much +of to-day. I well remember my old and distinguished friend, Rev. +Thomas W. Armitage, for some forty years pastor of a great New York +church, warning me that it was worse than folly to extend our plants +and our operations. He was sure we were running unwarranted risks, +that our oil supply would probably fail, the demand would decline, and +he, with many others, sometimes I thought almost everybody, prophesied +ruin.</p> + +<p>None of us ever dreamed of the magnitude of what proved to be the +later expansion. We did our day's work as we met it, looking forward +to what we could see in the distance and keeping well up to our +opportunities, but laying our foundations firmly. As I have said, +capital was most difficult to secure, and it was not easy to interest +conservative men in this adventurous business. Men of property were +<span class='pagenum'><a name="Page_61" id="Page_61">[61]</a></span>afraid of it, though in rare cases capitalists were induced to unite +with us to a limited extent. If they bought our stock at all, they +took a little of it now and then as an experiment, and we were +painfully conscious that they often declined to buy new stock with +many beautiful expressions of appreciation.</p> + +<p>The enterprise being so new and novel, on account of the fearfulness +of certain holders in reference to its success, we frequently had to +take stock to keep it from going begging, but we had such confidence +in the fundamental value of the concern that we were willing to assume +this risk. There are always a few men in an undertaking of this kind +who would risk all on their judgment of the final result, and if the +enterprise had failed, these would have been classed as visionary +adventurers, and perhaps with good reason.</p> + +<p>The 60,000 men who are at work constantly in the service of the +company are kept busy year in and year out. The past year has been a +time of great contraction, but the Standard has gone on with its plans +unchecked, and the new works and buildings have not been delayed on +account of lack of capital or fear of bad times. It pays its workmen +well, it cares for them when sick, and pensions them when old. It has +never <span class='pagenum'><a name="Page_62" id="Page_62">[62]</a></span>had any important strikes, and if there is any better function +of business management than giving profitable work to employees year +after year, in good times and bad, I don't know what it is.</p> + +<p>Another thing to be remembered about this so-called "octopus" is that +there has been no "water" introduced into its capital (perhaps we felt +that oil and water would not have mixed); nor in all these years has +any one had to wait for money which the Standard owed. It has suffered +from great fires and losses, but it has taken care of its affairs in +such a way that it has not found it necessary to appeal to the general +public to place blocks of bonds or stock; it has used no underwriting +syndicates or stock-selling schemes in any form, and it has always +managed to finance new oil field operations when called upon.</p> + +<p>It is a common thing to hear people say that this company has crushed +out its competitors. Only the uninformed could make such an assertion. +It has and always has had, and always will have, hundreds of active +competitors; it has lived only because it has managed its affairs well +and economically and with great vigour. To speak of competition for a +minute: Consider not only the able people who compete <span class='pagenum'><a name="Page_63" id="Page_63">[63]</a></span>in refining +oil, but all the competition in the various trades which make and sell +by-products—a great variety of different businesses. And perhaps of +even more importance is the competition in foreign lands. The Standard +is always fighting to sell the American product against the oil +produced from the great fields of Russia, which struggles for the +trade of Europe, and the Burma oil, which largely affects the market +in India. In all these various countries we are met with tariffs which +are raised against us, local prejudices, and strange customs. In many +countries we had to teach the people—the Chinese, for example—to +burn oil by making lamps for them; we packed the oil to be carried by +camels or on the backs of runners in the most remote portions of the +world; we adapted the trade to the needs of strange folk. Every time +we succeeded in a foreign land, it meant dollars brought to this +country, and every time we failed, it was a loss to our nation and its +workmen.</p> + +<p>One of our greatest helpers has been the State Department in +Washington. Our ambassadors and ministers and consuls have aided to +push our way into new markets to the utmost corners of the world.</p> + +<p>I think I can speak thus frankly and enthusi<span class='pagenum'><a name="Page_64" id="Page_64">[64]</a></span>astically because the +working out of many of these great plans has developed largely since I +retired from the business fourteen years ago.</p> + +<p>The Standard has not now, and never did have a royal road to +supremacy, nor is its success due to any one man, but to the multitude +of able men who are working together. If the present managers of the +company were to relax efforts, allow the quality of their product to +degenerate, or treat their customers badly, how long would their +business last? About as long as any other neglected business. To read +some of the accounts of the affairs of the company, one would think +that it had such a hold on the oil trade that the directors did little +but come together and declare dividends. It is a pleasure for me to +take this opportunity to pay tribute to the work these men are doing, +not only for the company they serve, but for the foreign trade of our +country; for more than half of all the product that the company makes +is sold outside of the United States. If, in place of these directors, +the business were taken over and run by anyone but experts, I would +sell my interest for any price I could get. To succeed in a business +requires the best and most earnest men to manage it, and the best men +<span class='pagenum'><a name="Page_65" id="Page_65">[65]</a></span>rise to the top. Of its origin and early plans I will speak later.</p> + + +<p class="center"><b>THE MODERN CORPORATION</b></p> + +<p>Beyond question there is a suspicion of corporations. There may be +reason for such suspicion very often; for a corporation may be moral +or immoral, just as a man may be moral or the reverse; but it is folly +to condemn all corporations because some are bad, or even to be unduly +suspicious of all, because some are bad. But the corporation in form +and character has come to stay—that is a thing that may be depended +upon. Even small firms are becoming corporations, because it is a +convenient form of partnership.</p> + +<p>It is equally true that combinations of capital are bound to continue +and to grow, and this need not alarm even the most timid if the +corporation, or the series of corporations, is properly conducted with +due regard for the rights of others. The day of individual competition +in large affairs is past and gone—you might just as well argue that +we should go back to hand labour and throw away our efficient +machines—and the sober good sense of the people will accept this fact +when they have studied and tried it out. Just see how <span class='pagenum'><a name="Page_66" id="Page_66">[66]</a></span>the list of +stockholders in the great corporations is increasing by leaps and +bounds. This means that all these people are becoming partners in +great businesses. It is a good thing—it will bring a feeling of +increased responsibility to the managers of the corporations and will +make the people who have their interests involved study the facts +impartially before condemning or attacking them.</p> + +<p>On this subject of industrial combinations I have often expressed my +opinions; and, as I have not changed my mind, I am not averse to +repeating them now, especially as the subject seems again to be so +much in the public eye.</p> + +<p>The chief advantages from industrial combinations are those which can +be derived from a coöperation of persons and aggregation of capital. +Much that one man cannot do alone two can do together, and once admit +the fact that coöperation, or, what is the same thing, combination, is +necessary on a small scale, the limit depends solely upon the +necessities of business. Two persons in partnership may be a +sufficiently large combination for a small business, but if the +business grows or can be made to grow, more persons and more capital +must be taken in. The business may grow so large that a partnership +ceases to be a proper <span class='pagenum'><a name="Page_67" id="Page_67">[67]</a></span>instrumentality for its purposes, and then a +corporation becomes a necessity. In most countries, as in England, +this form of industrial combination is sufficient for a business +co-extensive with the parent country, but it is not so in America. Our +Federal form of government making every corporation created by a state +foreign to every other state, renders it necessary for persons doing +business through corporate agency to organize corporations in some or +many of the different states in which their business is located. +Instead of doing business through the agency of one corporation they +must do business through the agencies of several corporations. If the +business is extended to foreign countries, and Americans are not +to-day satisfied with home markets alone, it will be found helpful and +possibly necessary to organize corporations in such countries, for +Europeans are prejudiced against foreign corporations, as are the +people of many of our states. These different corporations thus become +coöperating agencies in the same business and are held together by +common ownership of their stocks.</p> + +<p>It is too late to argue about advantages of industrial combinations. +They are a necessity. And if Americans are to have the privilege <span class='pagenum'><a name="Page_68" id="Page_68">[68]</a></span>of +extending their business in all the states of the Union, and into +foreign countries as well, they are a necessity on a large scale, and +require the agency of more than one corporation.</p> + +<p>The dangers are that the power conferred by combination may be abused, +that combinations may be formed for speculation in stocks rather than +for conducting business, and that for this purpose prices may be +temporarily raised instead of being lowered. These abuses are possible +to a greater or less extent in all combinations, large or small, but +this fact is no more of an argument against combinations than the fact +that steam may explode is an argument against steam. Steam is +necessary and can be made comparatively safe. Combination is necessary +and its abuses can be minimized; otherwise our legislators must +acknowledge their incapacity to deal with the most important +instrument of industry.</p> + +<p>In the hearing of the Industrial Commission in 1899, I then said that +if I were to suggest any legislation regarding industrial combinations +it would be: First, Federal legislation under which corporations may +be created and regulated, if that be possible. Second, in lieu +thereof, state legislation as nearly uniform as possible, encouraging +combinations of persons <span class='pagenum'><a name="Page_69" id="Page_69">[69]</a></span>and capital for the purpose of carrying on +industries, but permitting state supervision, not of a character to +hamper industries, but sufficient to prevent frauds upon the public. I +still feel as I did in 1899.</p> + + +<p class="center"><b>THE NEW OPPORTUNITIES</b></p> + +<p>I am far from believing that this will adversely affect the +individual. The great economic era we are entering will give splendid +opportunity to the young man of the future. One often hears the men of +this new generation say that they do not have the chances that their +fathers and grandfathers had. How little they know of the +disadvantages from which we suffered! In my young manhood we had +everything to do and nothing to do it with; we had to hew our own +paths along new lines; we had little experience to go on. Capital was +most difficult to get, credits were mysterious things. Whereas now we +have a system of commercial ratings, everything was then haphazard and +we suffered from a stupendous war and all the disasters which +followed.</p> + +<p>Compare this day with that. Our comforts and opportunities are +multiplied a thousand fold. The resources of our great land are now +actually opening up and are scarcely <span class='pagenum'><a name="Page_70" id="Page_70">[70]</a></span>touched; our home markets are +vast, and we have just begun to think of the foreign peoples we can +serve—the people who are years behind us in civilization. In the East +a quarter of the human race is just awakening. The men of this +generation are entering into a heritage which makes their fathers' +lives look poverty-stricken by comparison. I am naturally an optimist, +and when it comes to a statement of what our people will accomplish in +the future, I am unable to express myself with sufficient enthusiasm.</p> + +<p>There are many things we must do to attain the highest benefit from +all these great blessings; and not the least of these is to build up +our reputation throughout the whole world.</p> + +<p>The great business interests will, I hope, so comport themselves that +foreign capital will consider it a desirable thing to hold shares in +American companies. It is for Americans to see that foreign investors +are well and honestly treated, so that they will never regret +purchases of our securities.</p> + +<p>I may speak thus frankly, because I am an investor in many American +enterprises, but a controller of none (with one exception, and that a +company which has not been much of a dividend payer), and I, like all +the rest, am dependent upon the honest and capable adminis<span class='pagenum'><a name="Page_71" id="Page_71">[71]</a></span>tration of +the industries. I firmly and sincerely believe that they will be so +managed.</p> + + +<h3>THE AMERICAN BUSINESS MAN</h3> + +<p>You hear a good many people of pessimistic disposition say much about +greed in American life. One would think to hear them talk that we were +a race of misers in this country. To lay too much stress upon the +reports of greed in the newspapers would be folly, since their +function is to report the unusual and even the abnormal. When a man +goes properly about his daily affairs, the public prints say nothing; +it is only when something extraordinary happens to him that he is +discussed. But because he is thus brought into prominence +occasionally, you surely would not say that these occasions +represented his normal life. It is by no means for money alone that +these active-minded men labour—they are engaged in a fascinating +occupation. The zest of the work is maintained by something better +than the mere accumulation of money, and, as I think I have said +elsewhere, the standards of business are high and are getting better +all the time.</p> + +<p>I confess I have no sympathy with the idea so often advanced that our +basis of all judgments in this country is founded on money. <span class='pagenum'><a name="Page_72" id="Page_72">[72]</a></span>If this +were true, we should be a nation of money hoarders instead of +spenders. Nor do I admit that we are so small-minded a people as to be +jealous of the success of others. It is the other way about: we are +the most extraordinarily ambitious, and the success of one man in any +walk of life spurs the others on. It does not sour them, and it is a +libel even to suggest so great a meanness of spirit.</p> + +<p>In reading the newspapers, where so much is taken for granted in +considering things on a money standard, I think we need some of the +sense of humour possessed by an Irish neighbour of mine, who built +what we regarded as an extremely ugly house, which stood out in bright +colours as we looked from our windows. My taste in architecture +differed so widely from that affected by my Irish friend, that we +planted out the view of his house by moving some large trees to the +end of our property. Another neighbour who watched this work going on +asked Mr. Foley why Mr. Rockefeller moved all these big trees and cut +off the view between the houses. Foley, with the quick wit of his +country, responded instantly: "It's invy, they can't stand looking at +the ividence of me prosperity."</p> + +<p>In my early days men acted just as they <span class='pagenum'><a name="Page_73" id="Page_73">[73]</a></span>do now, no doubt. When there +was anything to be done for general trade betterment, almost every man +had some good reason for believing that his case was a special one +different from all the rest. For every foolish thing he did, or wanted +to do, for every unbusiness-like plan he had, he always pleaded that +it was necessary in his case. He was the one man who had to sell at +less than cost, to disrupt all the business plans of others in his +trade, because his individual position was so absolutely different +from all the rest. It was often a heart-breaking undertaking to +convince those men that the perfect occasion which would lead to the +perfect opportunity would never come, even if they waited until the +crack o' doom.</p> + +<p>Then, again, we had the type of man who really never knew all the +facts about his own affairs. Many of the brightest kept their books in +such a way that they did not actually know when they were making money +on a certain operation and when they were losing. This unintelligent +competition was a hard matter to contend with. Good old-fashioned +common sense has always been a mighty rare commodity. When a man's +affairs are not going well, he hates to study the books and face the +truth. From the first, the men who managed the Standard Oil <span class='pagenum'><a name="Page_74" id="Page_74">[74]</a></span>Company +kept their books intelligently as well as correctly. We knew how much +we made and where we gained or lost. At least, we tried not to deceive +ourselves.</p> + +<p>My ideas of business are no doubt old-fashioned, but the fundamental +principles do not change from generation to generation, and sometimes +I think that our quick-witted American business men, whose spirit and +energy are so splendid, do not always sufficiently study the real +underlying foundations of business management. I have spoken of the +necessity of being frank and honest with oneself about one's own +affairs: many people assume that they can get away from the truth by +avoiding thinking about it, but the natural law is inevitable, and the +sooner it is recognized, the better.</p> + +<p>One hears a great deal about wages and why they must be maintained at +a high level, by the railroads, for example. A labourer is worthy of +his hire, no less, but no more, and in the long run he must contribute +an equivalent for what he is paid. If he does not do this, he is +probably pauperized, and you at once throw out the balance of things. +You can't hold up conditions artificially, and you can't change the +underlying laws of trade. If you try, you must inevitably fail. All +this may be trite and <span class='pagenum'><a name="Page_75" id="Page_75">[75]</a></span>obvious, but it is remarkable how many men +overlook what should be the obvious. These are facts we can't get away +from—a business man must adapt himself to the natural conditions as +they exist from month to month and year to year. Sometimes I feel that +we Americans think we can find a short road to success, and it may +appear that often this feat is accomplished; but real efficiency in +work comes from knowing your facts and building upon that sure +foundation.</p> + +<p>Many men of wealth do not retire from business even when they can. +They are not willing to be idle, or they have a just pride in their +work and want to perfect the plans in which they have faith, or, what +is of still more consequence, they may feel the call to expand and +build up for the benefit of their employees and associates, and these +men are the great builders up in our country. Consider for a moment +how much would have been left undone if our prosperous American +business men had sat down with folded hands when they had acquired a +competency. I have respect for all these reasons, but if a man has +succeeded, he has brought upon himself corresponding responsibilities, +and our institutions devoted to helping men to help themselves need +the brain of the <span class='pagenum'><a name="Page_76" id="Page_76">[76]</a></span>American business man as well as part of his money.</p> + +<p>Some of these men, however, are so absorbed in their business affairs +that they hardly have time to think of anything else. If they do +interest themselves in a work outside of their own office and +undertake to raise money, they begin with an apology, as if they are +ashamed of themselves.</p> + +<p>"I am no beggar," I have heard many of them say, to which I could only +reply: "I am sorry you feel that way about it."</p> + +<p>I have been this sort of beggar all my life and the experiences I have +had were so interesting and important to me that I will venture to +speak of them in a later chapter.</p> + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_79" id="Page_79">[79]</a></span></p> +<h2><a name="CHAPTER_IV" id="CHAPTER_IV"></a>CHAPTER IV</h2> + +<h3><span class="smcap">Some Experiences in the Oil Business</span></h3> + + +<p>During the years when I was just coming to man's estate, the produce +business of Clark & Rockefeller went on prosperously, and in the early +sixties we organized a firm to refine and deal in oil. It was composed +of Messrs. James and Richard Clark, Mr. Samuel Andrews, and the firm +of Clark & Rockefeller, who were the company. It was my first direct +connection with the oil trade. As the new concern grew the firm of +Clark & Rockefeller was called upon to supply a large special capital. +Mr. Samuel Andrews was the manufacturing man of the concern, and he +had learned the process of cleansing the crude oil by the use of +sulphuric acid.</p> + +<p>In 1865 the partnership was dissolved; it was decided that the cash +assets should be collected and the debts paid, but this left the plant +and the good-will to be disposed of. It was suggested that they should +go to the highest bidder among ourselves. This seemed a just +settlement to <span class='pagenum'><a name="Page_80" id="Page_80">[80]</a></span>me, and the question came up as to when the sale should +be held and who would conduct it. My partners had a lawyer in the room +to represent them, though I had not considered having a legal +representative; I thought I could take care of so simple a +transaction. The lawyer acted as the auctioneer, and it was suggested +that we should go on with the sale then and there. All agreed, and so +the auction began.</p> + +<p>I had made up my mind that I wanted to go into the oil trade, not as a +special partner, but actively on a larger scale, and with Mr. Andrews +wished to buy that business. I thought that I saw great opportunities +in refining oil, and did not realize at that time that the whole oil +industry would soon be swamped by so many men rushing into it. But I +was full of hope, and I had already arranged to get financial +accommodation to an amount that I supposed would easily pay for the +plant and good-will. I was willing to give up the other firm of Clark +& Rockefeller, and readily settled that later—my old partner, Mr. +Clark, taking over the business.</p> + +<p>The bidding began, I think, at $500 premium. I bid a thousand; they +bid two thousand; and so on, little by little, the price went up. +Neither <span class='pagenum'><a name="Page_81" id="Page_81">[81]</a></span>side was willing to stop bidding, and the amount gradually +rose until it reached $50,000, which was much more than we supposed +the concern to be worth. Finally, it advanced to $60,000, and by slow +stages to $70,000, and I almost feared for my ability to buy the +business and have the money to pay for it. At last the other side bid +$72,000. Without hesitation I said $72,500. Mr. Clark then said:</p> + +<p>"I'll go no higher, John; the business is yours."</p> + +<p>"Shall I give you a check for it now?" I suggested.</p> + +<p>"No," Mr. Clark said, "I'm glad to trust you for it; settle at your +convenience."</p> + +<p>The firm of Rockefeller & Andrews was then established, and this was +really my start in the oil trade. It was my most important business +for about forty years until, at the age of about fifty-six, I retired.</p> + +<p>The story of the early history of the oil trade is too well known to +bear repeating in detail. The cleansing of crude petroleum was a +simple and easy process, and at first the profits were very large. +Naturally, all sorts of people went into it: the butcher, the baker, +and the candlestick-maker began to refine oil, and it was only a short +time before more of the <span class='pagenum'><a name="Page_82" id="Page_82">[82]</a></span>finished product was put on the market than +could possibly be consumed. The price went down and down until the +trade was threatened with ruin. It seemed absolutely necessary to +extend the market for oil by exporting to foreign countries, which +required a long and most difficult development; and also to greatly +improve the processes of refining so that oil could be made and sold +cheaply, yet with a profit, and to use as by-products all of the +materials which in the less-efficient plants were lost or thrown away.</p> + +<p>These were the problems which confronted us almost at the outset, and +this great depression led to consultations with our neighbors and +friends in the business in the effort to bring some order out of what +was rapidly becoming a state of chaos. To accomplish all these tasks +of enlarging the market and improving the methods of manufacture in a +large way was beyond the power or ability of any concern as then +constituted. It could only be done, we reasoned, by increasing our +capital and availing ourselves of the best talent and experience.</p> + +<p>It was with this idea that we proceeded to buy the largest and best +refining concerns and centralize the administration of them <span class='pagenum'><a name="Page_83" id="Page_83">[83]</a></span>with a +view to securing greater economy and efficiency. The business grew +faster than we had anticipated.</p> + +<p>This enterprise, conducted by men of application and ability working +hard together, soon built up unusual facilities in manufacture, in +transportation, in finance, and in extending markets. We had our +troubles and set-backs; we suffered from some severe fires; and the +supply of crude oil was most uncertain. Our plans were constantly +changed by changed conditions. We developed great facilities in an oil +centre, erected storage tanks, and connected pipe-lines; then the oil +failed and our work was thrown away. At best it was a speculative +trade, and I wonder that we managed to pull through so often; but we +were gradually learning how to conduct a most difficult business.</p> + + +<h3>FOREIGN MARKETS</h3> + +<p>Several years ago, when asked how our business grew to such large +proportions I explained that our first organization was a partnership +and afterward a corporation in Ohio. That was sufficient for a local +refining business. But, had we been dependent solely upon local +business, we should have failed long since. We were forced to extend +our markets into <span class='pagenum'><a name="Page_84" id="Page_84">[84]</a></span>every part of the world. This made the sea-board +cities a necessary place of business, and we soon discovered that +manufacturing for export could be more economically carried on there; +hence refineries were established at Brooklyn, at Bayonne, at +Philadelphia, at Baltimore, and necessary corporations were organized +in the different states.</p> + +<p>We soon discovered, as the business grew, that the primary method of +transporting oil in barrels could not last. The package often cost +more than the contents, and the forests of the country were not +sufficient to supply cheaply the necessary material for an extended +time. Hence we devoted attention to other methods of transportation, +adopted the pipe-line system, and found capital for pipe-line +construction equal to the necessities of the business.</p> + +<p>To operate pipe-lines required franchises from the states in which +they were located—and consequently corporations in those states—just +as railroads running through different states are forced to operate +under separate state charters. To perfect the pipe-line system of +transportation required many millions of capital. The entire oil +business is dependent upon the pipe-line. Without it every well <span class='pagenum'><a name="Page_85" id="Page_85">[85]</a></span>would +be less valuable and every market at home and abroad would be more +difficult to serve or retain, because of the additional cost to the +consumer. The expansion of the whole industry would have been retarded +without this method of transportation.</p> + +<p>Then the pipe-line system required other improvements, such as +tank-cars upon railroads, and finally the tank-steamer. Capital had to +be furnished for them and corporations created to own and operate +them.</p> + +<p>Every one of the steps taken was necessary if the business was to be +properly developed, and only through such successive steps and by a +great aggregation of capital is America to-day enabled to utilize the +bounty which its land pours forth, and to furnish the world with +light.</p> + + +<h3>THE START OF THE STANDARD OIL COMPANY</h3> + +<p>In the year 1867 the firms of William Rockefeller & Co., Rockefeller & +Andrews, Rockefeller & Co., and S.V. Harkness and H.M. Flagler united +in forming the firm of Rockefeller, Andrews & Flagler.</p> + +<p>The cause leading to the formation of this firm was the desire to +unite our skill and capital in order to carry on a business of greater +magnitude with economy and efficiency in place of <span class='pagenum'><a name="Page_86" id="Page_86">[86]</a></span>the smaller +business that each had heretofore conducted separately. As time went +on and the possibilities became apparent, we found further capital to +be necessary; then we interested others and organized the Standard Oil +Company, with a capital of $1,000,000. Later we saw that more money +could be utilized, found persons who were willing to invest with us, +and increased our capital to $2,500,000, in 1872, and afterward in +1874 to $3,500,000. As the business grew, and markets were obtained at +home and abroad, more persons and capital were added to the business, +and new corporate agencies were obtained or organized, the object +being always the same—to extend our operations by furnishing the best +and cheapest products.</p> + +<p>I ascribe the success of the Standard Oil Company to its consistent +policy of making the volume of its business large through the merit +and cheapness of its products. It has spared no expense in utilizing +the best and most efficient method of manufacture. It has sought for +the best superintendents and workmen and paid the best wages. It has +not hesitated to sacrifice old machinery and old plants for new and +better ones. It has placed its manufactories at the points where they +could supply <span class='pagenum'><a name="Page_87" id="Page_87">[87]</a></span>markets at the least expense. It has not only sought +markets for its principal products, but for all possible by-products, +sparing no expense in introducing them to the public in every nook and +corner of the world. It has not hesitated to invest millions of +dollars in methods for cheapening the gathering and distribution of +oils by pipe-lines, special cars, tank-steamers, and tank-wagons. It +has erected tank-stations at railroad centres in every part of the +country to cheapen the storage and delivery of oil. It has had faith +in American oil and has brought together vast sums of money for the +purpose of making it what it is, and for holding its market against +the competition of Russia and all the countries which are producers of +oil and competitors against American products.</p> + + +<h3>THE INSURANCE PLANS</h3> + +<p>Here is an example of one of the ways in which we achieved certain +economies and gained real advantage. Fires are always to be reckoned +with in oil refining and storage, as we learned by dear experience, +but in having our plants distributed all over the country the unit of +risk and possible loss was minimized. No one fire could ruin us, and +we were able thus to establish a system of insuring ourselves. Our +reserve <span class='pagenum'><a name="Page_88" id="Page_88">[88]</a></span>fund which provided for this insurance could not be wiped out +all at once, as might be the case with a concern having its plants +together or near each other. Then we studied and perfected our +organization to prevent fires, improving our appliances and plans year +after year until the profit on this insurance feature became a very +considerable item in the Standard earnings.</p> + +<p>It can easily be seen that this saving in insurance, and minimizing +the loss by fire affected the profits, not only in refining, but +touched many other associated enterprises: the manufacture of +by-products, the tanks and steamers, the pumping-stations, etc.</p> + +<p>We devoted ourselves exclusively to the oil business and its products. +The company never went into outside ventures, but kept to the enormous +task of perfecting its own organization. We educated our own men; we +trained many of them from boyhood; we strove to keep them loyal by +providing them full scope for their ability; they were given +opportunities to buy stock, and the company itself helped them to +finance their purchases. Not only here in America, but all over the +world, our young men were given chances to advance themselves, and the +sons of the old partners were welcomed to the councils and +responsibilities of the admin<span class='pagenum'><a name="Page_89" id="Page_89">[89]</a></span>istration. I may say that the company +has been in all its history, and I am sure it is at present, a most +happy association of busy people.</p> + +<p>I have been asked if my advice is not often sought by the present +managers. I can say that if it were sought it would be gladly given. +But the fact is that since I retired it has been very little required. +I am still a large stockholder, indeed I have increased my holdings in +the company's stock since I relinquished any part in its management.</p> + + +<h3>WHY THE STANDARD PAYS LARGE DIVIDENDS</h3> + +<p>Let me explain what many people, perhaps, fully appreciate, but some, +I am sure, do not. The Standard pays four dividends a year: the first +in March, which is the result of the busiest season of the whole +twelvemonth, because more oil is consumed in winter than at other +seasons, and three other dividends later, at about evenly divided +periods. Now, these dividends run up to 40 per cent. on the capital +stock of $100,000,000, but that does not mean that the profit is 40 +per cent. on the capital invested. As a matter of fact, it represents +the results of the savings and surplus gained through all the +thirty-five or forty years of the workings of the companies. The +capital stock could be <span class='pagenum'><a name="Page_90" id="Page_90">[90]</a></span>raised several hundred per cent. without a +penny of over-capitalization or "water"; the actual value is there. If +this increase had been made, the rate would represent a moderate +dividend-paying power of about 6 to 8 per cent.</p> + + +<h3>A NORMAL GROWTH</h3> + +<p>Study for a moment the result of what has been a natural and +absolutely normal increase in the value of the company's possessions. +Many of the pipe-lines were constructed during a period when costs +were about 50 per cent. of what they are now. Great fields of oil +lands were purchased as virgin soil, which later yielded an immense +output. Quantities of low-grade crude oil which had been bought by the +company when it was believed to be of little value, but which the +company hoped eventually to utilize, were greatly increased in value +by inventions for refining it and for using the residues formerly +considered almost worthless. Dock property was secured at low prices +and made valuable by buildings and development. Large unimproved +tracts of land near the important business centres were acquired. We +brought our industries to these places, made the land useful, and +increased the value, not only of our own property, but of <span class='pagenum'><a name="Page_91" id="Page_91">[91]</a></span>the land +adjacent to it to many times the original worth. Wherever we have +established businesses in this and other countries we have bought +largely of property. I remember a case where we paid only $1,000 or so +an acre for some rough land to be used for such purposes, and, through +the improvements we created, the value has gone up 40 or 50 times as +much in 35 or 40 years.</p> + +<p>Others have had similar increases in the value of their properties, +but have enlarged their capitalization correspondingly. They have +escaped the criticism which has been directed against us, who with our +old-fashioned and conservative notions have continued without such +expansion of capitalization.</p> + +<p>There is nothing strange or miraculous in all this; it was all done +through this natural law of trade development. It is what the Astors +and many other large landholders did.</p> + +<p>If a man starts in business with $1,000 capital and gradually +increases his property and investment by retaining in his concern much +of his earnings, instead of spending them, and thus accumulates values +until his investment is, say, $10,000, it would be folly to base the +percentage of his actual profits only on the original $1,000 with +which he started. Here, again, I think the managers of the Standard +should be <span class='pagenum'><a name="Page_92" id="Page_92">[92]</a></span>praised, and not blamed. They have set an example for +upbuilding on the most conservative lines, and in a business which has +always been, to say the least, hazardous, and to a large degree +unavoidably speculative. Yet no one who has relied upon the ownership +of this stock to pay a yearly income has been disappointed, and the +stock is held by an increasing number of small holders the country +over.</p> + + +<h3>THE MANAGEMENT OF CAPITAL</h3> + +<p>We never attempted, as I have already said, to sell the Standard Oil +stock on the market through the Stock Exchange. In the early days the +risks of the business were great, and if the stock had been dealt in +on the Exchange its fluctuations would no doubt have been violent. We +preferred to have the attention of the owners and administrators of +the business directed wholly to the legitimate development of the +enterprise rather than to speculation in its shares. The interests of +the company have been carefully conserved. We have been criticized for +paying large dividends on a capitalization which represents but a +small part of the actual property owned by the company. If we had +increased the capitalization to bring it up to the real value, and +listed the shares on the <span class='pagenum'><a name="Page_93" id="Page_93">[93]</a></span>Exchange, we might have been criticized then +for promoting a project to induce the public to invest. As I have +indicated, the foundations of the company were so thoroughly +established, and its affairs so conservatively managed, that, after +the earlier period of struggle to secure adequate capital and in view +of the trying experiences through which we then passed, we decided to +pursue the policy of relying upon our own resources. Since then we +have never been obliged to lean very heavily upon the financial +public, but have sought rather to hold ourselves in position not only +to protect our own large and important interests, but to be prepared +in times of stress to lend a helping hand to others. The company has +suffered from the statements of people who, I am convinced, are not +familiar with all the facts. As I long ago ceased to have any active +part in the management of its affairs perhaps I may venture the +opinion that men who devote themselves to building up the sale of +American products all over the world, in competition with foreign +manufacturers should be appreciated and encouraged.</p> + +<p>There have been so many tales told about the so-called speculations of +the Standard Oil Company that I may say a word about that subject. +This company is interested only in oil products <span class='pagenum'><a name="Page_94" id="Page_94">[94]</a></span>and such +manufacturing affairs as are legitimately connected therewith. It has +plants for the making of barrels and tanks; and building pumps for +pumping oil; it owns vessels for carrying oil, tank-cars, pipes for +transporting oil, etc., etc.—but it is not concerned in speculative +interests. The oil business itself is speculative enough, and its +successful administration requires a firm hand and a cool head.</p> + +<p>The company pays dividends to its stockholders which it earns in +carrying on this oil trade. This money the stockholders can and do use +as they think fit, but the company is in no way responsible for the +disposition that the stockholders make of their dividends. The +Standard Oil Company does not own or control "a chain of banks," nor +has it any interest directly or indirectly in any bank. Its relations +are confined to the functions of ordinary banking, such as other +depositors have. It buys and sells its own exchange; and these +dealings, extending over many years, have made its bills of exchange +acceptable all over the world.</p> + + +<h3>CHARACTER THE ESSENTIAL THING</h3> + +<p>In speaking of the real beginning of the Standard Oil Company, it +should be remembered that it was not so much the consolidation <span class='pagenum'><a name="Page_95" id="Page_95">[95]</a></span>of the +firms in which we had a personal interest, but the coming together of +the men who had the combined brain power to do the work, which was the +actual starting-point. Perhaps it is worth while to emphasize again +the fact that it is not merely capital and "plants" and the strictly +material things which make up a business, but the character of the men +behind these things, their personalities, and their abilities; these +are the essentials to be reckoned with.</p> + +<p>Late in 1871, we began the purchase of some of the more important of +the refinery interests of Cleveland. The conditions were so chaotic +and uncertain that most of the refiners were very desirous to get out +of the business. We invariably offered those who wanted to sell the +option of taking cash or stock in the company. We very much preferred +to have them take the stock, because a dollar in those days looked as +large as a cart-wheel, but as a matter of business policy we found it +desirable to offer them the option, and in most cases they were even +precipitate in their choice of the cash. They knew what a dollar would +buy, but they were very sceptical in regard to the possibilities of +resurrecting the oil business and giving any permanent value to these +shares.</p> + +<p>These purchases continued over a period <span class='pagenum'><a name="Page_96" id="Page_96">[96]</a></span>of years, during which many +of the more important refineries at Cleveland were bought by the +Standard Oil Company. Some of the smaller concerns, however, continued +in the business for many years, although they had the same opportunity +as others to sell. There were always, at other refining points which +were regarded as more favourably located than Cleveland, many +refineries in successful operation.</p> + + +<h3>THE BACKUS PURCHASE</h3> + +<p>All these purchases of refineries were conducted with the utmost +fairness and good faith on our part, yet in many quarters the stories +of certain of these transactions have been told in such form as to +give the impression that the sales were made most unwillingly and only +because the sellers were forced to make them by the most ruthless +exertion of superior power. There was one transaction, viz., the +purchase of the property of the Backus Oil Company, which has been +variously exploited, and I am made to appear as having personally +robbed a defenceless widow of an extremely valuable property, paying +her therefor only a mere fraction of its worth. The story as told is +one which makes the strongest appeal to the sympathy and, if it <span class='pagenum'><a name="Page_97" id="Page_97">[97]</a></span>were +true, would represent a shocking instance of cruelty in crushing a +defenceless woman. It is probable that its wide circulation and its +acceptance as true by those who know nothing of the facts has awakened +more hostility against the Standard Oil Company and against me +personally than any charge which has been made.</p> + +<p>This is my reason for entering so much into detail in this particular +case, which I am exceedingly reluctant to do, and for many years have +refrained from doing.</p> + +<p>Mr. F.M. Backus, a highly respected citizen of Cleveland and an old +and personal friend of mine, had for several years prior to his death +in 1874 been engaged in the lubricating oil business which was carried +on after his death as a corporation known as the Backus Oil Company. +In the latter part of 1878, our company purchased certain portions of +the property of this company. The negotiations which led to this +purchase extended over several weeks, being conducted on behalf of +Mrs. Backus, as the principal stockholder, by Mr. Charles H. Marr, and +on behalf of our company by Mr. Peter S. Jennings. I personally had +nothing to do with the negotiations except that, when the matter first +came up, Mrs. Backus requested me to call at her house, which <span class='pagenum'><a name="Page_98" id="Page_98">[98]</a></span>I did, +when she spoke of selling the property to our company and requested me +to personally conduct the negotiations with her with reference to it. +This I was obliged to decline to do, because, as I then explained to +her, I was not familiar with the details of the business. In that +conversation I advised her not to take any hasty action, and when she +expressed fears about the future of the business, stating, for +example, that she could not get cars to transport sufficient oil, I +said to her that, though we were using our cars and required them in +our business, yet we would loan her any number she needed, and do +anything else in reason to assist her, and I did not see why she could +not successfully prosecute her business in the future as in the past. +I told her, however, that if after reflection she desired to pursue +negotiations for the sale of her property some of our people, familiar +with the lubricating oil business, would take up the question with +her. As she still expressed a desire to have our company buy her +property, negotiations were taken up by Mr. Jennings, and the only +other thing that I had to do with the matter was that when our experts +reported that in their judgment the value of the works, good will, and +successorship which we had decided <span class='pagenum'><a name="Page_99" id="Page_99">[99]</a></span>to buy were worth a certain sum, I +asked them to add $10,000, in order to make doubly sure that she +received full value. The sale was consummated, as we supposed, to the +entire satisfaction of Mrs. Backus, and the purchase price which had +been agreed upon was paid.</p> + +<p>To my profound astonishment, a day or two after the transaction had +been closed, I received from her a very unkind letter complaining that +she had been unjustly treated. After investigating the matter I wrote +her the following letter:</p> +<div class="blockquot"> + +<p class="quotdate">November 13, 1878.</p> + +<p><span class="smcap">Dear Madam</span>:</p> + +<p>I have held your note of the 11th inst., received yesterday, until +to-day, as I wished to thoroughly review every point connected with +the negotiations for the purchase of the stock of the Backus Oil +Company, to satisfy myself as to whether I had unwittingly done +anything whereby you could have any right to feel injured. It is +true that in the interview I had with you I suggested that if you +desired to do so, you could retain an interest in the business of +the Backus Oil Company, by keeping some number of its shares, and +then I understood you to say that if you sold out you wished to go +entirely out of the business. That being my understanding, our +arrangements were made in case you concluded to make the sale that +precluded any other interests being represented, and therefore, +when you did make the inquiry as to your taking some of the stock, +our answer was given in accordance with the facts noted above, but +not at all in the spirit in which you refer to <span class='pagenum'><a name="Page_100" id="Page_100">[100]</a></span>the refusal in your +note. In regard to the reference that you make as to my permitting +the business of the Backus Oil Company to <i>be taken</i> from you, I +say that in this as in all else you have written in your letter of +the 11th inst., you do me most grievous wrong. It was but of little +moment to the interests represented by me whether the business of +the Backus Oil Company was purchased or not. I believe that it was +for your interest to make the sale, and am entirely candid in this +statement, and beg to call your attention to the time, some two +years ago, when you consulted Mr. Flagler and myself as to selling +out your interests to Mr. Rose, at which time you were desirous of +selling at <i>considerably less price</i>, and upon time, than you have +now received in cash, and which sale you would have been glad to +have closed if you could have obtained satisfactory security for +the deferred payments. As to the price paid for the property, it is +certainly three times greater than the cost at which we could now +construct equal or better facilities; but wishing to take a liberal +view of it, I urged the proposal of paying $60,000, which was +thought much too high by some of our parties. I believe that if you +would reconsider what you have written in your letter, to which +this is a reply, you must admit having done me great injustice, and +I am satisfied to await upon your innate sense of right for such +admission. However, in view of what seems to be your present +feeling, I now offer to restore to you the purchase made by us, you +simply returning the amount of money which we have invested, and +leaving us as though no purchase has been made.</p> + +<p>Should you not desire to accept this proposal, I offer to you 100, +200 or 300 shares of the stock at the same price that we paid for +the same, with this addition, that if we keep the property we are +under engagement to pay into the treasury of the Backus Oil Company +any amount which added to the amount <span class='pagenum'><a name="Page_101" id="Page_101">[101]</a></span>already paid would make a +total of $100,000 and thereby make the shares $100 each.</p> + +<p>That you may not be compelled to hastily come to a conclusion, I +will leave open for three days these propositions for your +acceptance or declination, and in the meantime believe me,</p> + +<p class="address2">Yours very truly,</p> + +<p class="address1"><span class="smcap">John D. Rockefeller</span>.</p> +</div> + +<p>Neither of these offers was accepted. In order that this may not rest +on my unsupported assertion, I submit the following documents: The +first is a letter from Mr. H.M. Backus, a brother of Mrs. Backus's +deceased husband, who had been associated with the business and had +remained with the company after his death. The letter was written +without any solicitation whatever on my part, but I have since +received permission from Mr. Backus to print it. It is followed by +extracts from affidavits made by the gentleman who conducted the +negotiations on behalf of Mrs. Backus. I have no wish to reprint the +complimentary allusion to myself in Mr. Backus's letter, but have +feared to omit a word of it lest some misunderstanding ensue:</p> + +<div class="blockquot"> +<p class="quotdate"><span class="smcap">Bowling Green, Ohio</span>, <br />September 18, '03.</p> + +<p><span class="smcap">Mr. John D. Rockefeller</span>, <br /><span style="margin-left:2em;"> Cleveland, Ohio.</span></p> + +<p>I do not know whether you will ever receive this letter or not, +whether your secretary will throw it into the waste-basket or <span class='pagenum'><a name="Page_102" id="Page_102">[102]</a></span>not, +but I will do my part and get it off my mind, and it will not be my +fault if you do not receive or read it. Ever since the day that my +deceased brother's wife, Mrs. F.N. Backus, wrote you the unjust and +unreasonable letter in reference to the sale of the property of the +old Backus Oil Company, in which I had a small interest, I have +wanted to write you and record my disapproval of that letter. I +lived with my brother's family, was at the house the day you called +to talk the matter of the then proposed purchase of the property +with Mrs. Backus by her request, as she told Mr. Jennings that she +wanted to deal through you. I was in favour of the sale from the +first.</p> + +<p>I was with Mrs. Backus all through the trouble with Mr. Rose and +with Mr. Maloney, did what I could to encourage her, and to prevent +Mr. Rose from getting the best of her. Mrs. Backus, in my opinion, +is an exceptionally good financier, but she does not know and no +one can convince her that the best thing that ever happened to her +financially was the sale of her interest in the Backus Oil Company +to your people. She does not know that five more years of the then +increasing desperate competition would have bankrupted the company, +and that with the big debt that she was carrying on the lot on +Euclid Avenue, near Sheriff Street, she would have been swamped, +and that the only thing that ever saved her and the oil business +generally was the plan of John D. Rockefeller. She thinks that you +literally robbed her of millions, and feeds her children on that +diet three times a day more or less, principally more, until it has +become a mania with her, and no argument that any one else can +suggest will have any effect upon her. She is wise and good in many +ways, but on that one subject she is one-sided, I think. Of course, +if we could have been assured of continued dividends, I would have +been opposed <span class='pagenum'><a name="Page_103" id="Page_103">[103]</a></span>to selling the business, but that was out of the +question. I know of the ten thousand dollars that was added to the +purchase price of the property at your request, and I know that you +paid three times the value of the property, and I know that all +that ever saved our company from ruin was the sale of its property +to you, and I simply want to ease my mind by doing justice to you +by saying so. After the sale to your company I was simple enough to +go to Buffalo and try it again, but soon met with defeat and +retired with my flag in the dust. I then went to Duluth, and was on +the top wave, till the real-estate bubble broke, and I broke with +it. I have had my ups and downs, but I have tried to take my +medicine and look pleasant instead of sitting down under a juniper +tree and blaming my losses to John D. Rockefeller.</p> + +<p>I suppose I would have put off writing this letter for another year +or more as I have done so long, had it not been for a little chat +that I had with Mr. Hanafin, Superintendent of the Buckeye Pipe +Line Company, a day or two since when I was relating the sale, +etc., of the old B.O. Co.'s business, and in that way revived the +intention that had lain dormant since the last good resolution in +regard to writing it was made. But it's done now, and off my mind.</p> + +<p>With much respect and admiration to John D. Rockefeller I remain,</p> + +<p class="address2">Yours truly,</p> + +<p class="address1"><span class="smcap">H.M. Backus.</span></p> +</div> + +<p>It appears from the affidavits that the negotiations were conducted on +behalf of Mrs. Backus and her company by Charles H. Marr, who had been +in the employ of the Backus Company for some time, and by Mr. Maloney, +who was the <span class='pagenum'><a name="Page_104" id="Page_104">[104]</a></span>superintendent of the company from the time of its +organization and was also a stockholder; and on behalf of the Standard +Oil Company by Mr. Peter S. Jennings.</p> + +<p>There has been an impression that the Standard Oil Company purchased +for $79,000 property which was reasonably worth much more, and that +this sacrifice was occasioned by threats and compulsion. Mr. Jennings +requested Mr. Marr to submit a written proposition giving the price +put by the Backus Company upon the several items of property and +assets which it desired to sell. This statement was furnished and was +annexed to Mr. Jennings's affidavit. The Standard Oil Company finally +decided not to purchase all of the assets of the company, but only the +oil on hand, for which it paid the full market price, amounting to +about $19,000, and the item "works, good-will, and successorship," +which were offered by Mr. Marr at $71,000, and for which the Standard +offered $60,000, which was promptly accepted. Mr. Marr made affidavit +as follows:</p> + +<div class="blockquot"><p>"Charles H. Marr, being duly sworn, says that, in behalf of the +Backus Oil Company, he conducted the negotiations which led to the +sale of its works, good-will, and stock of oils and during same +when said company had offered to sell its <span class='pagenum'><a name="Page_105" id="Page_105">[105]</a></span>entire stock for a gross +sum, to wit, the sum of one hundred and fifty thousand dollars +($150,000), which was to include cash on hand, accrued dividends, +accounts, etc., said Jennings requested said company to submit an +itemized proposition fixing values upon different articles proposed +to be sold, and that he, after full consideration with Mrs. Backus +and with her knowledge and consent, submitted the written +proposition attached to said Jennings's affidavit; that the same is +in his handwriting, and was copied at the office of the American +Lubricating Oil Company from the original by himself at the request +of said Jennings, and said original was submitted by affiant to +Mrs. Backus.</p> + +<p>"That she was fully cognizant of all the details of said +negotiations and the items and values attached thereto in said +proposition, consulted with at every step thereof, none of which +were taken without her advice, as she was by far the largest +stockholder in said Backus Oil Company, owning about seven-tenths +(7/10) of said company's stock, and she fully approved of said +proposition, and accepted the offer of said Jennings to pay sixty +thousand dollars ($60,000) for the item works, good-will, and +successorship without any opposition, so far as affiant knows. And +affiant says that the amount realized from the assets of the Backus +Oil Company, including purchase price, has been about one hundred +and thirty-three thousand dollars ($133,000), and a part of its +assets have not yet been converted into money as affiant is +informed."</p></div> + +<p>Mr. Marr, who was, it will be remembered, the widow's representative, +refers to the negotiations leading up to the purchase and says:</p> + +<div class="blockquot"><p>"But affiant says that nothing that was said by Mr. Jennings or +anybody else during their progress could be construed into <span class='pagenum'><a name="Page_106" id="Page_106">[106]</a></span>a +threat, nor did anything that was said or done by said Jennings +hasten or push forward said trade."</p></div> + +<p>He also says:</p> + +<div class="blockquot"><p>"Affiant says that the negotiations extended over a period of from +two to three weeks ... and during their pendency that Mrs. Backus +frequently urged affiant to bring the same to a conclusion as she +was anxious to dispose of said business and relieve herself from +further care and responsibility therewith. And when the said offer +of purchase by said Jennings upon the terms aforesaid was conveyed +to her by affiant, she expressed herself as entirely satisfied +therewith."</p></div> + +<p>Mr. Maloney made an affidavit that he was superintendent of the Backus +Oil Company from the time of its organization, and also a stockholder +in the company, and had been associated in business with Mr. Backus +for many years previous to his death; that he took part in the +negotiations for the sale, representing Mrs. Backus in the matter. +After speaking of the negotiations, he says:</p> + +<div class="blockquot"><p>"Finally, after consultation, the proposition was made by her to +dispose of the works, good-will, and successorship for $71,000. A +few days after the proposal was made to her to pay the sum of +$60,000 for works and good-will, and to take the oil on hand at its +market price, which proposition she accepted, and the sale was +concluded.</p> + +<p>"During these negotiations Mrs. Backus was anxious to sell, and was +entirely satisfied with the sale after it was concluded. I know of +the fact that about a year and a half pre<span class='pagenum'><a name="Page_107" id="Page_107">[107]</a></span>vious she had offered to +sell out the stock of the Backus Oil Company at from 30 to 33 per +cent. less than she received in the sale referred to, and the value +of the works and property sold had not increased in the meantime. I +was well acquainted with the works of the Backus Oil Company and +their value. I could at the time of the sale have built the works +new for $25,000. There were no threats nor intimidations, nor +anything of the kind used to force the sale. The negotiations were +pleasant and fair, and the price paid in excess of the value, and +satisfactory to Mrs. Backus and all concerned for her."</p></div> + +<p>So far as I can see, after more than 30 years have elapsed, there was +nothing but the most kindly and considerate treatment of Mrs. Backus +on the part of the Standard Oil Company. I regret that Mrs. Backus did +not take at least part of her pay in Standard certificates, as we +suggested she should do.</p> + + +<h3>THE QUESTION OF REBATES</h3> + +<p>Of all the subjects which seem to have attracted the attention of the +public to the affairs of the Standard Oil Company, the matter of +rebates from railroads has perhaps been uppermost. The Standard Oil +Company of Ohio, of which I was president, did receive rebates from +the railroads prior to 1880, but received no advantages for which it +did not give full compensation. The reason for rebates <span class='pagenum'><a name="Page_108" id="Page_108">[108]</a></span>was that such +was the railroads' method of business. A public rate was made and +collected by the railroad companies, but, so far as my knowledge +extends, was seldom retained in full; a portion of it was repaid to +the shippers as a rebate. By this method the real rate of freight +which any shipper paid was not known by his competitors nor by other +railroad companies, the amount being a matter of bargain with the +carrying company. Each shipper made the best bargain that he could, +but whether he was doing better than his competitor was only a matter +of conjecture. Much depended upon whether the shipper had the +advantage of competition of carriers.</p> + +<p>The Standard Oil Company of Ohio, being situated at Cleveland, had the +advantage of different carrying lines, as well as of water +transportation in the summer; taking advantage of those facilities, it +made the best bargains possible for its freights. Other companies +sought to do the same. The Standard gave advantages to the railroads +for the purpose of reducing the cost of transportation of freight. It +offered freights in large quantity, car-loads and train-loads. It +furnished loading facilities and discharging facilities at great cost. +It provided regular traffic, so that a railroad could <span class='pagenum'><a name="Page_109" id="Page_109">[109]</a></span>conduct its +transportation to the best advantage and use its equipment to the full +extent of its hauling capacity without waiting for the refiner's +convenience. It exempted railroads from liability for fire and carried +its own insurance. It provided at its own expense terminal facilities +which permitted economies in handling. For these services it obtained +contracts for special allowances on freights.</p> + +<p>But notwithstanding these special allowances, this traffic from the +Standard Oil Company was far more profitable to the railroad companies +than the smaller and irregular traffic, which might have paid a higher +rate.</p> + +<p>To understand the situation which affected the giving and taking of +rebates it must be remembered that the railroads were all eager to +enlarge their freight traffic. They were competing with the facilities +and rates offered by the boats on lake and canal and by the +pipe-lines. All these means of transporting oil cut into the business +of the railroads, and they were desperately anxious to successfully +meet this competition. As I have stated we provided means for loading +and unloading cars expeditiously, agreed to furnish a regular fixed +number of car-loads to transport each day, and arranged with them for +all the other <span class='pagenum'><a name="Page_110" id="Page_110">[110]</a></span>things that I have mentioned, the final result being to +reduce the cost of transportation for both the railroads and +ourselves. All this was following in the natural laws of trade.</p> + + +<h3>PIPE-LINES VS. RAILROADS</h3> + +<p>The building of the pipe-lines introduced another formidable +competitor to the railroads, but as oil could be transported by +pumping through pipes at a much less cost than by hauling in tank-cars +in a railroad train the development of the pipe-line was inevitable. +The question was simply whether the oil traffic was sufficient in +volume to make the investment profitable. When pipe-lines had been +built to oil fields where the wells had ceased to yield, as often +happened, they were about the most useless property imaginable.</p> + +<p>An interesting feature developed through the relations which grew up +between the railroads and the pipe-lines. In many cases it was +necessary to combine the facilities of both, because the pipes reached +only part of the way, and from the place where they ended the railroad +carried the oil to its final destination. In some instances a railroad +had formerly carried the oil the entire distance upon an agreed rate, +but now that this oil was <span class='pagenum'><a name="Page_111" id="Page_111">[111]</a></span>partly pumped by pipe-lines and partly +carried by rail, the freight payment was divided between the two. But, +as a through rate had been provided, the owners of the pipe-line +agreed to remit a part of its charges to the railroad, so we had cases +where the Standard paid a rebate to the railroad instead of the +reverse—but I do not remember having heard any complaint of this +coming from the students of these complicated subjects.</p> + +<p>The profits of the Standard Oil Company did not come from advantages +given by railroads. The railroads, rather, were the ones who profited +by the traffic of the Standard Oil Company, and whatever advantage it +received in its constant efforts to reduce rates of freight was only +one of the many elements of lessening cost to the consumer which +enabled us to increase our volume of business the world over because +we could reduce the selling price.</p> + +<p>How general was the complicated bargaining for rates can hardly be +imagined; everyone got the best rate that he could. After the passage +of the Interstate Commerce Act, it was learned that many small +companies which shipped limited quantities had received lower rates +than we had been able to secure, notwithstanding the fact that we had +made large invest<span class='pagenum'><a name="Page_112" id="Page_112">[112]</a></span>ments to provide for terminal facilities, regular +shipments, and other economies. I well remember a bright man from +Boston who had much to say about rebates and drawbacks. He was an old +and experienced merchant, and looked after his affairs with a cautious +and watchful eye. He feared that some of his competitors were doing +better than he in bargaining for rates, and he delivered himself of +this conviction:</p> + +<p>"I am opposed on principle to the whole system of rebates and +drawbacks—unless I am in it."</p> + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_115" id="Page_115">[115]</a></span></p> +<h2><a name="CHAPTER_V" id="CHAPTER_V"></a>CHAPTER V</h2> + +<h3><span class="smcap">Other Business Experiences and Business Principles</span></h3> + + +<p>Going into the iron-ore fields was one of those experiences in which +one finds oneself rather against the will, for it was not a deliberate +plan of mine to extend my cares and responsibilities. My connection +with iron ores came about through some unfortunate investments in the +Northwest country.</p> + +<p>These interests had included a good many different industries, mines, +steel mills, paper mills, a nail factory, railroads, lumber fields, +smelting properties, and other investments about which I have now +forgotten. I was a minority stockholder in all these enterprises, and +had no part in their management. Not all of them were profitable. As a +matter of fact, for a period of years just preceding the panic of +1893, values were more or less inflated, and many people who thought +they were wealthy found that the actual facts were quite different +from what they had imagined when the hard <span class='pagenum'><a name="Page_116" id="Page_116">[116]</a></span>experiences of that panic +forced upon them the unpalatable truth.</p> + +<p>Most of these properties I had not even seen, having relied upon the +investigation of others respecting their worth; indeed, it has never +been my custom to rely alone upon my own knowledge of the value of +such plants. I have found other people who knew much better than I how +to investigate such enterprises.</p> + +<p>Even at this time I had been planning to relieve myself of business +cares, and the panic only caused me to postpone taking the long +holiday to which I had been looking forward. I was fortunate in making +the acquaintance of Mr. Frederick T. Gates, who was then engaged in +some work in connection with the American Baptist Education Society, +which required him to travel extensively over the country, north, +south, east, and west.</p> + +<p>It occurred to me that Mr. Gates, who had a great store of common +sense, though no especial technical information about factories and +mills, might aid me in securing some first-hand information as to how +these concerns were actually prospering. Once, as he was going South, +I suggested that he look over an iron mill in which I had some +interest which happened to be on his route.</p> +<p><span class='pagenum'><a name="Page_117" id="Page_117">[117]</a></span></p> + +<p>His report was a model of what such a report should be. It stated the +facts, and in this case they were almost all unfavourable. A little +later he happened to be going West, and I gave him the name and +address of property in that region in which I held a minority +interest. I felt quite sure that this particular property was doing +well, and it was somewhat of a shock to me to learn through his clear +and definite account that it was only a question of time before this +enterprise, too, which had been represented as rolling in money, would +get into trouble if things kept on as they were going.</p> + + +<h3>NURSING THE COMMERCIALLY ILL</h3> + +<p>I then arranged with Mr. Gates to accept a position whereby he could +help me unravel these tangled affairs, and become, like myself, a man +of business, but it was agreed between us that he should not abandon +his larger and more important plans for working out some philanthropic +aspirations that he had.</p> + +<p>Right here I may stop to give credit to Mr. Gates for possessing a +combination of rare business ability, very highly developed and very +honourably exercised, overshadowed by a passion to accomplish some +great and far-reaching benefits to mankind, the influence <span class='pagenum'><a name="Page_118" id="Page_118">[118]</a></span>of which +will last. He is the chairman of the General Education Board and +active in many other boards, and for years he has helped in the +various plans that we have been interested in where money was given in +the hope that it would do something more than temporary service.</p> + +<p>Mr. Gates has for many years been closely associated with my personal +affairs. He has been through strenuous times with me, and has taken +cares of many kinds off my shoulders, leaving me more time to play +golf, plan roads, move trees, and follow other congenial occupations. +His efforts in the investigations in connection with our educational +contributions, our medical research, and other kindred works have been +very successful. During the last ten or twelve years my son has shared +with Mr. Gates the responsibility of this work, and more recently Mr. +Starr J. Murphy has also joined with us to help Mr. Gates, who has +borne the heat and burden of the day, and has well earned some leisure +which we have wanted him to enjoy.</p> + +<p>But to return to the story of our troubled investments: Mr. Gates went +into the study of each of these business concerns, and did the best he +could with them. It has been our <span class='pagenum'><a name="Page_119" id="Page_119">[119]</a></span>policy never to allow a company in +which we had an interest to be thrown into the bankruptcy court if we +could prevent it; for receiverships are very costly in many ways and +often involve heavy sacrifices of genuine values. Our plan has been to +stay with the institution, nurse it, lend it money when necessary, +improve facilities, cheapen production, and avail ourselves of the +opportunities which time and patience are likely to bring to make it +self-sustaining and successful. So we went carefully through the +affairs of these crippled enterprises in the hard times of 1893 and +1894, carrying many of them for years after; sometimes buying the +interests of others and sometimes selling our own interest, but all or +nearly all escaped the expenses and humiliation of bankruptcy, +receivership, and foreclosure.</p> + +<p>Before these matters were entirely closed up we had a vast amount of +experience in the doctoring of the commercially ill. My only excuse +for dwelling upon the subject at this late day is to point out the +fact to some business men who get discouraged that much can be done by +careful and patient attention, even when the business is apparently in +very deep water. It requires two things: some added <span class='pagenum'><a name="Page_120" id="Page_120">[120]</a></span>capital, put in +by one's self or secured from others, and a strict adherence to the +sound natural laws of business.</p> + + +<h3>THE ORE MINES</h3> + +<p>Among these investments were some shares in a number of ore mines and +an interest in the stocks and bonds of a railroad being built to carry +the ore from the mines to lake ports. We had great faith in these +mines, but to work them the railroad was necessary. It had been begun, +but in the panic of 1893 it and all other developments were nearly +ruined. Although we were minority holders of the stock, it seemed to +be "up to us" to keep the enterprise alive through the harrowing panic +days. I had to loan my personal securities to raise money, and finally +we were compelled to supply a great deal of actual cash, and to get it +we were obliged to go into the then greatly upset money market and buy +currency at a high premium to ship west by express to pay the +labourers on the railroad and to keep them alive. When the fright of +the panic period subsided, and matters became a little more settled, +we began to realize our situation. We had invested many millions, and +no one wanted to go in with us to buy stock. On the contrary, +everybody else seemed to want <span class='pagenum'><a name="Page_121" id="Page_121">[121]</a></span>to sell. The stock was offered to us in +alarming quantities—substantially all of the capital stock of the +companies came without any solicitation on our part—quite the +contrary—and we paid for it in cash.</p> + +<p>We now found ourselves in control of a great amount of ore lands, from +some of which the ore could be removed by a steam shovel for a few +cents a ton, but we still faced a most imperfect and inadequate method +of transporting the ore to market.</p> + +<p>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 ships 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.</p> + +<p>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 <span class='pagenum'><a name="Page_122" id="Page_122">[122]</a></span>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.</p> + +<p>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.</p> + + +<h3>BUILDING THE SHIPS</h3> + +<p>After this railroad problem was solved, it was apparent that we needed +our own ships to transport the ore down the lakes. We knew absolutely +nothing of building ships 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 <span class='pagenum'><a name="Page_123" id="Page_123">[123]</a></span>his own +account and, of course, the moment we began to ship ore we realized +that we would become competitors. 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.</p> + +<p>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 assume charge of the construction of several ships, 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 ships carried about five thousand tons, but +in 1900, when we sold out, we had ships that carried seven thousand or +eight thousand tons, and now there are some that transport as much as +ten thousand tons and more.</p> +<p><span class='pagenum'><a name="Page_124" id="Page_124">[124]</a></span></p> + +<p>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, ship, and market the ore; +that we came to him because he could plan and superintend the +construction of the best ships 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 competitors, we knew that he was honest +and straightforward; and that we were most anxious to deal with him.</p> + + +<h3>EMPLOYING A COMPETITOR</h3> + +<p>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 +ships. 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 <span class='pagenum'><a name="Page_125" id="Page_125">[125]</a></span>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 ships 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 competitor, and we never had +occasion to regret it.</p> + +<p>At that time there were some nine or ten shipbuilding companies +located at various points on the Great Lakes. All were independent of +each other and there was sharp competition 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 ships we should build, and we made up our minds that we would +build all the ships 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 shipbuilders and ascertain how many ships they +could build and put in readiness for operation at the opening of +navigation the next spring. He found <span class='pagenum'><a name="Page_126" id="Page_126">[126]</a></span>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 ships, all of +steel, all of the largest capacity then understood to be practicable +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.</p> + +<p>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.</p> +<p><span class='pagenum'><a name="Page_127" id="Page_127">[127]</a></span></p> + +<p>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.</p> + +<p>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 <span class='pagenum'><a name="Page_128" id="Page_128">[128]</a></span>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.</p> + + +<h3>A LANDSMAN FOR SHIP MANAGER</h3> + +<p>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:</p> + +<p>"How are we to get some one to run these big ships we have ordered? Do +you know of any experienced firm?"</p> + +<p>"No," said Mr. Gates, "I do not know of any firm to suggest at the +moment, but why not run them ourselves?"</p> + +<p>"You don't know anything about ships, do you?"</p> +<p><span class='pagenum'><a name="Page_129" id="Page_129">[129]</a></span></p> + +<p>"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."</p> + +<p>"All right," I said, "let's give him the job," and we did.</p> + +<p>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 <span class='pagenum'><a name="Page_130" id="Page_130">[130]</a></span>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.</p> + +<p>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 <span class='pagenum'><a name="Page_131" id="Page_131">[131]</a></span>which I have freely given to business men with whom I +have been associated has been so fully justified.</p> + + +<h3>SELLING TO THE STEEL COMPANY</h3> + +<p>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.</p> + +<p>This transaction bids fair to show a great profit to the Steel Company +for many years, and as our payment was largely in the securi<span class='pagenum'><a name="Page_132" id="Page_132">[132]</a></span>ties 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.</p> + + +<h3>FOLLOW THE LAWS OF TRADE</h3> + +<p>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.</p> + +<p>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 +<span class='pagenum'><a name="Page_133" id="Page_133">[133]</a></span>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.</p> + +<p>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 <span class='pagenum'><a name="Page_134" id="Page_134">[134]</a></span>head over a little +success, or to grow impatient or discouraged by a little failure.</p> + + +<h3>PANIC EXPERIENCES</h3> + +<p>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 every one. 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.</p> + +<p>Since 1857 I can remember all the great <span class='pagenum'><a name="Page_135" id="Page_135">[135]</a></span>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 +coöperated 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 every one, 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, <span class='pagenum'><a name="Page_136" id="Page_136">[136]</a></span>and patience is a virtue in business affairs as in other +things.</p> + +<p>Here again I would venture to utter a word of caution to business men. +Let them study their own affairs frankly, and face the truth. If their +methods are extravagant, let them realize the facts and act +accordingly. One cannot successfully go against natural tendencies, +and it is folly to fail to recognize them. It is not easy for so +impressionable and imaginative a people as we Americans are to come +down to plain, hard facts, yet we are doing it without loss of +self-esteem or prestige throughout the world.</p> + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_139" id="Page_139">[139]</a></span></p> +<h2><a name="CHAPTER_VI" id="CHAPTER_VI"></a>CHAPTER VI</h2> + +<h3><span class="smcap">The Difficult Art of Giving</span></h3> + + +<p>It is, no doubt, easy to write platitudes and generalities about the +joys of giving, and the duty that one owes to one's fellow men, and to +put together again all the familiar phrases that have served for +generations whenever the subject has been taken up.</p> + +<p>I can hardly hope to succeed in starting any new interest in this +great subject when gifted writers have so often failed. Yet I confess +I find much more interest in it at this time than in rambling on, as I +have been doing, about the affairs of business and trade. It is most +difficult, however, to dwell upon a very practical and business-like +side of benefactions generally, without seeming to ignore, or at least +to fail to appreciate fully, the spirit of giving which has its source +in the heart, and which, of course, makes it all worth while.</p> + +<p>In this country we have come to the period when we can well afford to +ask the ablest men to devote more of their time, thought, and money to +the public well-being. I am <span class='pagenum'><a name="Page_140" id="Page_140">[140]</a></span>not so presumptuous as to attempt to +define exactly what this betterment work should consist of. Every man +will do that for himself, and his own conclusion will be final for +himself. It is well, I think, that no narrow or preconceived plan +should be set down as the best.</p> + +<p>I am sure it is a mistake to assume that the possession of money in +great abundance necessarily brings happiness. The very rich are just +like all the rest of us; and if they get pleasure from the possession +of money, it comes from their ability to do things which give +satisfaction to someone besides themselves.</p> + + +<h3>LIMITATIONS OF THE RICH</h3> + +<p>The mere expenditure of money for things, so I am told by those who +profess to know, soon palls upon one. The novelty of being able to +purchase anything one wants soon passes, because what people most seek +cannot be bought with money. These rich men we read about in the +newspapers cannot get personal returns beyond a well-defined limit for +their expenditure. They cannot gratify the pleasures of the palate +beyond very moderate bounds, since they cannot purchase a good +digestion; they cannot lavish very much money on fine <span class='pagenum'><a name="Page_141" id="Page_141">[141]</a></span>raiment for +themselves or their families without suffering from public ridicule; +and in their homes they cannot go much beyond the comforts of the less +wealthy without involving them in more pain than pleasure. As I study +wealthy men, I can see but one way in which they can secure a real +equivalent for money spent, and that is to cultivate a taste for +giving where the money may produce an effect which will be a lasting +gratification.</p> + +<p>A man of business may often most properly consider that he does his +share in building up a property which gives steady work for few or +many people; and his contribution consists in giving to his employees +good working conditions, new opportunities, and a strong stimulus to +good work. Just so long as he has the welfare of his employees in his +mind and follows his convictions, no one can help honouring such a +man. It would be the narrowest sort of view to take, and I think the +meanest, to consider that good works consist chiefly in the outright +giving of money.</p> + + +<h3>THE BEST PHILANTHROPY</h3> + +<p>The best philanthropy, the help that does the most good and the least +harm, the help that nourishes civilization at its very root, that most +<span class='pagenum'><a name="Page_142" id="Page_142">[142]</a></span>widely disseminates health, righteousness, and happiness, is not what +is usually called charity. It is, in my judgment, the investment of +effort or time or money, carefully considered with relation to the +power of employing people at a remunerative wage, to expand and +develop the resources at hand, and to give opportunity for progress +and healthful labour where it did not exist before. No mere +money-giving is comparable to this in its lasting and beneficial +results.</p> + +<p>If, as I am accustomed to think, this statement is a correct one, how +vast indeed is the philanthropic field! It may be urged that the daily +vocation of life is one thing, and the work of philanthropy quite +another. I have no sympathy with this notion. The man who plans to do +all his giving on Sunday is a poor prop for the institutions of the +country.</p> + +<p>The excuse for referring so often to the busy man of affairs is that +his help is most needed. I know of men who have followed out this +large plan of developing work, not as a temporary matter, but as a +permanent principle. These men have taken up doubtful enterprises and +carried them through to success often at great risk, and in the face +of great scepticism, <span class='pagenum'><a name="Page_143" id="Page_143">[143]</a></span>not as a matter only of personal profit, but in +the larger spirit of general uplift.</p> + + +<h3>DISINTERESTED SERVICE THE ROAD TO SUCCESS</h3> + +<p>If I were to give advice to a young man starting out in life, I should +say to him: If you aim for a large, broad-gauged success, do not begin +your business career, whether you sell your labour or are an +independent producer, with the idea of getting from the world by hook +or crook all you can. In the choice of your profession or your +business employment, let your first thought be: Where can I fit in so +that I may be most effective in the work of the world? Where can I +lend a hand in a way most effectively to advance the general +interests? Enter life in such a spirit, choose your vocation in that +way, and you have taken the first step on the highest road to a large +success. Investigation will show that the great fortunes which have +been made in this country, and the same is probably true of other +lands, have come to men who have performed great and far-reaching +economic services—men who, with great faith in the future of their +country, have done most for the development of its resources. The man +will be most successful who confers the greatest service on the world. +Commercial <span class='pagenum'><a name="Page_144" id="Page_144">[144]</a></span>enterprises that are needed by the public will pay. +Commercial enterprises that are not needed fail, and ought to fail.</p> + +<p>On the other hand, the one thing which such a business philosopher +would be most careful to avoid in his investments of time and effort +or money, is the unnecessary duplication of existing industries. He +would regard all money spent in increasing needless competition as +wasted, and worse. The man who puts up a second factory when the +factory in existence will supply the public demand adequately and +cheaply is wasting the national wealth and destroying the national +prosperity, taking the bread from the labourer and unnecessarily +introducing heartache and misery into the world.</p> + +<p>Probably the greatest single obstacle to the progress and happiness of +the American people lies in the willingness of so many men to invest +their time and money in multiplying competitive industries instead of +opening up new fields, and putting their money into lines of industry +and development that are needed. It requires a better type of mind to +seek out and to support or to create the new than to follow the worn +paths of accepted success; but here is the great chance in our still +rapidly developing country. The penalty of a selfish attempt to <span class='pagenum'><a name="Page_145" id="Page_145">[145]</a></span>make +the world confer a living without contributing to the progress or +happiness of mankind is generally a failure to the individual. The +pity is that when he goes down he inflicts heartache and misery also +on others who are in no way responsible.</p> + + +<h3>THE GENEROSITY OF SERVICE</h3> + +<p>Probably the most generous people in the world are the very poor, who +assume each other's burdens in the crises which come so often to the +hard pressed. The mother in the tenement falls ill and the neighbour +in the next room assumes her burdens. The father loses his work, and +neighbours supply food to his children from their own scanty store. +How often one hears of cases where the orphans are taken over and +brought up by the poor friend whose benefaction means great additional +hardship! This sort of genuine service makes the most princely gift +from superabundance look insignificant indeed. The Jews have had for +centuries a precept that one-tenth of a man's possessions must be +devoted to good works, but even this measure of giving is but a rough +yardstick to go by. To give a tenth of one's income is wellnigh an +impossibility to some, while to others it means a miserable <span class='pagenum'><a name="Page_146" id="Page_146">[146]</a></span>pittance. +If the spirit is there, the matter of proportion is soon lost sight +of. It is only the spirit of giving that counts, and the very poor +give without any self-consciousness. But I fear that I am dealing with +generalities again.</p> + +<p>The education of children in my early days may have been +straightlaced, yet I have always been thankful that the custom was +quite general to teach young people to give systematically of money +that they themselves had earned. It is a good thing to lead children +to realize early the importance of their obligations to others but, I +confess, it is increasingly difficult; for what were luxuries then +have become commonplaces now. It should be a greater pleasure and +satisfaction to give money for a good cause than to earn it, and I +have always indulged the hope that during my life I should be able to +help establish efficiency in giving so that wealth may be of greater +use to the present and future generations.</p> + +<p>Perhaps just here lies the difference between the gifts of money and +of service. The poor meet promptly the misfortunes which confront the +home circle and household of the neighbour. The giver of money, if his +contribution is to be valuable, must add service in the way of study, +and he must help to attack and improve under<span class='pagenum'><a name="Page_147" id="Page_147">[147]</a></span>lying conditions. Not +being so pressed by the racking necessities, it is he that should be +better able to attack the subject from a more scientific standpoint; +but the final analysis is the same: his money is a feeble offering +without the study behind it which will make its expenditure effective.</p> + +<p>Great hospitals conducted by noble and unselfish men and women are +doing wonderful work; but no less important are the achievements in +research that reveal hitherto unknown facts about diseases and provide +the remedies by which many of them can be relieved or even stamped +out.</p> + +<p>To help the sick and distressed appeals to the kind-hearted always, +but to help the investigator who is striving successfully to attack +the causes which bring about sickness and distress does not so +strongly attract the giver of money. The first appeals to the +sentiments overpoweringly, but the second has the head to deal with. +Yet I am sure we are making wonderful advances in this field of +scientific giving. All over the world the need of dealing with the +questions of philanthropy with something beyond the impulses of +emotion is evident, and everywhere help is being given to those heroic +men and women who are devoting themselves to the prac<span class='pagenum'><a name="Page_148" id="Page_148">[148]</a></span>tical and +essentially scientific tasks. It is a good and inspiring thing to +recall occasionally the heroism, for example, of the men who risked +and sacrificed their lives to discover the facts about yellow fever, a +sacrifice for which untold generations will bless them; and this same +spirit has animated the professions of medicine and surgery.</p> + + +<h3>SCIENTIFIC RESEARCH</h3> + +<p>How far may this spirit of sacrifice properly extend? A great number +of scientific men every year give up everything to arrive at some +helpful contribution to the sum of human knowledge, and I have +sometimes thought that good people who lightly and freely criticize +their actions scarcely realize just what such criticism means. It is +one thing to stand on the comfortable ground of placid inaction and +put forth words of cynical wisdom, and another to plunge into the work +itself and through strenuous experience earn the right to express +strong conclusions.</p> + +<p>For my own part, I have stood so much as a placid onlooker that I have +not had the hardihood even to suggest how people so much more +experienced and wise in those things than I should work out the +details even of those plans <span class='pagenum'><a name="Page_149" id="Page_149">[149]</a></span>with which I have had the honour to be +associated.</p> + +<p>There has been a good deal of criticism, no doubt sincere, of +experiments on living dumb animals, and the person who stands for the +defenceless animal has such an overwhelming appeal to the emotions +that it is perhaps useless to allude to the other side of the +controversy. Dr. Simon Flexner, of the Institute for Medical Research, +has had to face exaggerated and even sensational reports, which have +no basis of truth whatever. But consider for a moment what has been +accomplished recently, under the direction of Dr. Flexner in +discovering a remedy for epidemic cerebro-spinal meningitis. It is +true that in discovering this cure the lives of perhaps fifteen +animals were sacrificed, as I learn, most of them monkeys; but for +each one of these animals which lost its life, already scores of human +lives have been saved. Large-hearted men like Dr. Flexner and his +associates do not permit unnecessary pain to defenceless animals.</p> + +<p>I have been deeply interested in the story of a desperate experiment +to save a child's life, told in a letter written by one of my +associates soon after the event described; and it seems worthy of +repeating. Dr. Alexis Carrel has been <span class='pagenum'><a name="Page_150" id="Page_150">[150]</a></span>associated with Dr. Flexner and +his work, and his wonderful skill has been the result of his +experiments and experiences.</p> + + +<div class="blockquot"><p><b>A WONDERFUL SURGICAL OPERATION</b></p> + +<p>"Dr. Alexis Carrel, one of the Institute's staff, has been making +some interesting studies in experimental surgery, and has +successfully transplanted organs from one animal to another, and +blood vessels from one species to another. He had the opportunity +recently of applying the skill thus acquired to the saving of a +human life under circumstances which attracted great interest among +the medical fraternity of this city. One of the best known of the +younger surgeons in New York had a child born early last March, +which developed a disease in which the blood, for some reason, +exudes from the blood vessels into the tissues of the body, and +ordinarily the child dies of this internal hemorrhage. When this +child was five days old it was evident that it was dying. The +father and his brother, who is one of the most distinguished men in +the profession, and one or two other doctors were in consultation +with reference to it, but considered the case entirely hopeless.</p> + +<p>"It so happened that the father had been impressed with the work +which Dr. Carrel had been doing at the Institute, and had spent +several days with him studying his methods. He became convinced +that the only possibility of saving the child's life was by the +direct transfusion of blood. While this has been done between +adults, the blood vessels of a young infant are so delicate that it +seemed impossible that the operation could be successfully carried +on. It is necessary not only that the blood vessels of the two +persons should be united together, but it must be done in such a +way that the interior lining of the vessels, which is a smooth, +shiny tissue, should be continuous. If the blood <span class='pagenum'><a name="Page_151" id="Page_151">[151]</a></span>comes in contact +with the muscular coat of the blood vessels, it will clot and stop +the circulation.</p> + +<p>"Fortunately, Dr. Carrel had been experimenting on the blood +vessels of some very young animals, and the father was convinced +that if any man in the country could perform the operation +successfully, it would be he.</p> + +<p>"It was then the middle of the night. But Dr. Carrel was called on, +and when the situation was explained to him, and it was made clear +that the child would die anyhow, he readily consented to attempt +the operation, although expressing very slight hope of its +successful outcome.</p> + +<p>"The father offered himself as the person whose blood should be +furnished to the child. It was impossible to give anæsthetics to +either of them. In a child of that age there is only one vein large +enough to be used, and that is in the back of the leg, and deep +seated. A prominent surgeon who was present exposed this vein. He +said afterward that there was no sign of life in the child, and +expressed the belief that the child had been, to all intents and +purposes, dead for ten minutes. In view of its condition he raised +the question whether it was worth while to proceed further with the +attempt. The father, however, insisted upon going on, and the +surgeon then exposed the radial artery in the surgeon's wrist, and +was obliged to dissect it back about six inches, in order to pull +it out far enough to make the connection with the child's vein.</p> + +<p>"This part of the work the surgeon who did it afterward described +as the 'blacksmith part of the job.' He said that the child's vein +was about the size of a match and the consistency of wet cigarette +paper, and it seemed utterly impossible for anyone to successfully +unite these two vessels. Dr. Carrel, however, accomplished this +feat. And then occurred what the doctors who were present described +as one of the most dramatic incidents <span class='pagenum'><a name="Page_152" id="Page_152">[152]</a></span>in the history of surgery. +The blood from the father's artery was released, and began to flow +into the child's body, amounting to about a pint. The first sign of +life was a little pink tinge at the top of one of the ears, then +the lips, which had become perfectly blue, began to change to red, +and then suddenly, as though the child had been taken from a hot +mustard bath, a pink glow broke out all over its body, and it began +to cry lustily. After about eight minutes the two were separated. +The child at that time was crying for food. It was fed, and from +that moment began to eat and sleep regularly, and made a complete +recovery.</p> + +<p>"The father appeared before a legislative committee at Albany, in +opposition to certain bills which were pending at the last session +to restrict animal experimentation, and told this incident, and +said at the close that when he saw Dr. Carrel's experiments he had +no idea that they would so soon be available for saving human life; +much less did he imagine that the life to be saved would be that of +his own child."</p></div> + + +<h3>THE FUNDAMENTAL THING IN ALL HELP</h3> + +<p>If the people can be educated to help themselves, we strike at the +root of many of the evils of the world. This is the fundamental thing, +and it is worth saying even if it has been said so often that its +truth is lost sight of in its constant repetition.</p> + +<p>The only thing which is of lasting benefit to a man is that which he +does for himself. Money which comes to him without effort on his part +is seldom a benefit and often a curse. That is the principal objection +to specu<span class='pagenum'><a name="Page_153" id="Page_153">[153]</a></span>lation—it is not because more lose than gain, though that is +true—but it is because those who gain are apt to receive more injury +from their success than they would have received from failure. And so +with regard to money or other things which are given by one person to +another. It is only in the exceptional case that the receiver is +really benefited. But, if we can help people to help themselves, then +there is a permanent blessing conferred.</p> + +<p>Men who are studying the problem of disease tell us that it is +becoming more and more evident that the forces which conquer sickness +are within the body itself, and that it is only when these are reduced +below the normal that disease can get a foothold. The way to ward off +disease, therefore, is to tone up the body generally; and, when +disease has secured a foothold, the way to combat it is to help these +natural resisting agencies which are in the body already. In the same +way the failures which a man makes in his life are due almost always +to some defect in his personality, some weakness of body, or mind, or +character, will, or temperament. The only way to overcome these +failings is to build up his personality from within, so that he, by +virtue of what is within him, may overcome the weakness which was the +cause <span class='pagenum'><a name="Page_154" id="Page_154">[154]</a></span>of the failure. It is only those efforts the man himself puts +forth that can really help him.</p> + +<p>We all desire to see the widest possible distribution of the blessings +of life. Many crude plans have been suggested, some of which utterly +ignore the essential facts of human nature, and if carried out would +perhaps drag our whole civilization down into hopeless misery. It is +my belief that the principal cause for the economic differences +between people is their difference in personality, and that it is only +as we can assist in the wider distribution of those qualities which go +to make up a strong personality that we can assist in the wider +distribution of wealth. Under normal conditions the man who is strong +in body, in mind, in character, and in will need never suffer want. +But these qualities can never be developed in a man unless by his own +efforts, and the most that any other can do for him is, as I have +said, to help him to help himself.</p> + +<p>We must always remember that there is not enough money for the work of +human uplift and that there never can be. How vitally important it is, +therefore, that the expenditure should go as far as possible and be +used with the greatest intelligence!</p> +<p><span class='pagenum'><a name="Page_155" id="Page_155">[155]</a></span></p> + +<p>I have been frank to say that I believe in the spirit of combination +and coöperation when properly and fairly conducted in the world of +commercial affairs, on the principle that it helps to reduce waste; +and waste is a dissipation of power. I sincerely hope and thoroughly +believe that this same principle will eventually prevail in the art of +giving as it does in business. It is not merely the tendency of the +times developed by more exacting conditions in industry, but it should +make its most effective appeal to the hearts of the people who are +striving to do the most good to the largest number.</p> + + +<h3>SOME UNDERLYING PRINCIPLES</h3> + +<p>At the risk of making this chapter very dull, and I am told that this +is a fault which inexperienced authors should avoid at all hazards, I +may perhaps be pardoned if I set down here some of the fundamental +principles which have been at the bottom of all my own plans. I have +undertaken no work of any importance for many years which, in a +general way, has not followed out these broad lines, and I believe no +really constructive effort can be made in philanthropic work without +such a well-defined and consecutive purpose.</p> + +<p>My own conversion to the feeling that an <span class='pagenum'><a name="Page_156" id="Page_156">[156]</a></span>organized plan was an +absolute necessity came about in this way.</p> + +<p>About the year 1890 I was still following the haphazard fashion of +giving here and there as appeals presented themselves. I investigated +as I could, and worked myself almost to a nervous break-down in +groping my way, without sufficient guide or chart, through this +ever-widening field of philanthropic endeavour. There was then forced +upon me the necessity to organize and plan this department of our +daily tasks on as distinct lines of progress as we did our business +affairs; and I will try to describe the underlying principles we +arrived at, and have since followed out, and hope still greatly to +extend.</p> + +<p>It may be beyond the pale of good taste to speak at all of such a +personal subject—I am not unmindful of this—but I can make these +observations with at least a little better grace because so much of +the hard work and hard thinking are done by my family and associates, +who devote their lives to it.</p> + +<p>Every right-minded man has a philosophy of life, whether he knows it +or not. Hidden away in his mind are certain governing principles, +whether he formulates them in words <span class='pagenum'><a name="Page_157" id="Page_157">[157]</a></span>or not, which govern his life. +Surely his ideal ought to be to contribute all that he can, however +little it may be, whether of money or service, to human progress.</p> + +<p>Certainly one's ideal should be to use one's means, both in one's +investments and in benefactions, for the advancement of civilization. +But the question as to what civilization is and what are the great +laws which govern its advance have been seriously studied. Our +investments not less than gifts have been directed to such ends as we +have thought would tend to produce these results. If you were to go +into our office, and ask our committee on benevolence or our committee +on investment in what they consider civilization to consist, they +would say that they have found in their study that the most convenient +analysis of the elements which go to make up civilization runs about +as follows:</p> + +<p>1st. Progress in the means of subsistence, that is to say, progress in +abundance and variety of food-supply, clothing, shelter, sanitation, +public health, commerce, manufacture, the growth of the public wealth, +etc.</p> + +<p>2nd. Progress in government and law, that is to say, in the enactment +of laws securing justice and equity to every man, consistent with the +<span class='pagenum'><a name="Page_158" id="Page_158">[158]</a></span>largest individual liberty, and the due and orderly enforcement of +the same upon all.</p> + +<p>3rd. Progress in literature and language.</p> + +<p>4th. Progress in science and philosophy.</p> + +<p>5th. Progress in art and refinement.</p> + +<p>6th. Progress in morality and religion.</p> + +<p>If you were to ask them, as indeed they are very often asked, which of +these they regard as fundamental, they would reply that they would not +attempt to answer, that the question is purely an academic one, that +all these go hand in hand, but that historically the first of +them—namely, progress in means of subsistence—had generally preceded +progress in government, in literature, in knowledge, in refinement, +and in religion. Though not itself of the highest importance, it is +the foundation upon which the whole superstructure of civilization is +built, and without which it could not exist.</p> + +<p>Accordingly, we have sought, so far as we could, to make investments +in such a way as will tend to multiply, to cheapen, and to diffuse as +universally as possible the comforts of life. We claim no credit for +preferring these lines of investment. We make no sacrifices. These are +the lines of largest and surest return. In this particular, namely, in +cheapness, ease of <span class='pagenum'><a name="Page_159" id="Page_159">[159]</a></span>acquirement, and universality of means of +subsistence, our country easily surpasses that of any other in the +world, though we are behind other countries, perhaps, in most of the +others.</p> + +<p>It may be asked: How is it consistent with the universal diffusion of +these blessings that vast sums of money should be in single hands? The +reply is, as I see it, that, while men of wealth control great sums of +money, they do not and cannot use them for themselves. They have, +indeed, the legal title to large properties, and they do control the +investment of them, but that is as far as their own relation to them +extends or can extend. The money is universally diffused, in the sense +that it is kept invested, and it passes into the pay-envelope week by +week.</p> + +<p>Up to the present time no scheme has yet presented itself which seems +to afford a better method of handling capital than that of individual +ownership. We might put our money into the Treasury of the Nation and +of the various states, but we do not find any promise in the National +or state legislatures, viewed from the experiences of the past, that +the funds would be expended for the general weal more effectively than +under the present methods, nor do we find in any of the schemes of +socialism <span class='pagenum'><a name="Page_160" id="Page_160">[160]</a></span>a promise that wealth would be more wisely administered for +the general good. It is the duty of men of means to maintain the title +to their property and to administer their funds until some man, or +body of men, shall rise up capable of administering for the general +good the capital of the country better than they can.</p> + +<p>The next four elements of progress mentioned in the enumeration above, +namely, progress in government and law, in language and literature, in +science and philosophy, in art and refinement, we for ourselves have +thought to be best promoted by means of the higher education, and +accordingly we have had the great satisfaction of putting such sums as +we could into various forms of education in our own and in foreign +lands—and education not merely along the lines of disseminating more +generally the known, but quite as much, and perhaps even more, in +promoting original investigation. An individual institution of +learning can have only a narrow sphere. It can reach only a limited +number of people. But every new fact discovered, every widening of the +boundaries of human knowledge by research, becomes universally known +to all institutions of learning, and becomes a benefaction at once to +the whole race.</p> +<p><span class='pagenum'><a name="Page_161" id="Page_161">[161]</a></span></p> + +<p>Quite as interesting as any phase of the work have been the new lines +entered upon by our committee. We have not been satisfied with giving +to causes which have appealed to us. We have felt that the mere fact +that this or the other cause makes its appeal is no reason why we +should give to it any more than to a thousand other causes, perhaps +more worthy, which do not happen to have come under our eye. The mere +fact of a personal appeal creates no claim which did not exist before, +and no preference over other causes more worthy which may not have +made their appeal. So this little committee of ours has not been +content to let the benevolences drift into the channels of mere +convenience—to give to the institutions which have sought aid and to +neglect others. This department has studied the field of human +progress, and sought to contribute to each of those elements which we +believe tend most to promote it. Where it has not found organizations +ready to its hand for such purpose, the members of the committee have +sought to create them. We are still working on new, and, I hope, +expanding lines, which make large demands on one's intelligence and +study.</p> + +<p>The so-called betterment work which has always been to me a source of +great interest <span class='pagenum'><a name="Page_162" id="Page_162">[162]</a></span>had a great influence on my life, and I refer to it +here because I wish to urge in this connection the great importance of +a father's keeping in close touch with his children, taking into his +confidence the girls as well as the boys, who in this way learn by +seeing and doing, and have their part in the family responsibilities. +As my father taught me, so I have tried to teach my children. For +years it was our custom to read at the table the letters we received +affecting the various benevolences with which we had to do, studying +the requests made for worthy purposes, and following the history and +reports of institutions and philanthropic cases in which we were +interested.</p> + + + + +<hr style="width: 65%;" /> +<p><span class='pagenum'><a name="Page_165" id="Page_165">[165]</a></span></p> +<h2><a name="CHAPTER_VII" id="CHAPTER_VII"></a>CHAPTER VII</h2> + +<h3><span class="smcap">The Benevolent Trust—the Value of the Coöperative Principle in +Giving</span></h3> + + +<p>Going a step farther in the plan of making benefactions increasingly +effective which I took up in the last chapter under the title of "The +Difficult Art of Giving," I am tempted to take the opportunity to +dwell a little upon the subject of combination in charitable work, +which has been something of a hobby with me for many years.</p> + +<p>If a combination to do business is effective in saving waste and in +getting better results, why is not combination far more important in +philanthropic work? The general idea of coöperation in giving for +education, I have felt, scored a real step in advance when Mr. Andrew +Carnegie consented to become a member of the General Education Board. +For in accepting a position in this directorate he has, it seems to +me, stamped with his approval this vital principle of coöperation in +aiding the educational institutions of our country.</p> +<p><span class='pagenum'><a name="Page_166" id="Page_166">[166]</a></span></p> + +<p>I rejoice, as everybody must, in Mr. Carnegie's enthusiasm for using +his wealth for the benefit of his less fortunate fellows and I think +his devotion to his adopted land's welfare has set a striking example +for all time.</p> + +<p>The General Education Board, of which Mr. Carnegie has now become a +member, is interesting as an example of an organization formed for the +purpose of working out, in an orderly and rather scientific way, the +problem of helping to stimulate and improve education in all parts of +our country. What this organization may eventually accomplish, of +course, no one can tell, but surely, under its present board of +directors, it will go very far. Here, again, I feel that I may speak +frankly and express my personal faith in its success, since I am not a +member of the board, and have never attended a meeting, and the work +is all done by others.</p> + +<p>There are some other and larger plans thought out on careful and broad +lines, which I have been studying for many years, and we can see that +they are growing into definite shape. It is good to know that there +are always unselfish men, of the best calibre, to help in every large +philanthropic enterprise. One of the most satisfactory and stimulating +pieces of good fortune <span class='pagenum'><a name="Page_167" id="Page_167">[167]</a></span>that has come to me is the evidence that so +many busy people are willing to turn aside from their work in pressing +fields of labour and to give their best thoughts and energies without +compensation to the work of human uplift. Doctors, clergymen, lawyers, +as well as many high-grade men of affairs, are devoting their best and +most unselfish efforts to some of the plans that we are all trying to +work out.</p> + +<p>Take, as one example of many similar cases, Mr. Robert C. Ogden, who +for years, while devoting himself to an exacting business, still found +time, supported by wonderful enthusiasm, to give force by his own +personality to work done in difficult parts of the educational world, +particularly to improving the common school system of the South. His +efforts have been wisely directed along fundamental lines which must +produce results through the years to come.</p> + +<p>Fortunately my children have been as earnest as I, and much more +diligent, in carefully and intelligently carrying out the work already +begun, and agree with me that at least the same energy and thought +should be expended in the proper and effective use of money when +acquired as was exerted in the earning of it.</p> + +<p>The General Education Board has made, or <span class='pagenum'><a name="Page_168" id="Page_168">[168]</a></span>is making, a careful study +of the location, aims, work, resources, administration, and +educational value, present and prospective, of the institutions of +higher learning in the United States. The board makes its +contributions, averaging something like two million dollars a year, on +the most careful comparative study of needs and opportunities +throughout the country. Its records are open to all. Many benefactors +of education are availing themselves of these disinterested inquiries, +and it is hoped that more will do so.</p> + +<p>A large number of individuals are contributing to the support of +educational institutions in our country. To help an inefficient, +ill-located, unnecessary school is a waste. I am told by those who +have given most careful study to this problem that it is highly +probable that enough money has been squandered on unwise educational +projects to have built up a national system of higher education +adequate to our needs if the money had been properly directed to that +end. Many of the good people who bestow their beneficence on education +may well give more thought to investigating the character of the +enterprises that they are importuned to help, and this study ought to +take into account the kind of people who are responsible <span class='pagenum'><a name="Page_169" id="Page_169">[169]</a></span>for their +management, their location, and the facilities supplied by other +institutions round about. A thorough examination such as this is +generally quite impossible for an individual, and he either declines +to give from lack of accurate knowledge, or he may give without due +consideration. If, however, this work of inquiry is done, and well +done, by the General Education Board, through officers of +intelligence, skill, and sympathy, trained to the work, important and +needed service is rendered. The walls of sectarian exclusiveness are +fast disappearing, as they should, and the best people are standing +shoulder to shoulder as they attack the great problems of general +uplift.</p> + + +<h3>ROMAN CATHOLIC CHARITIES</h3> + +<p>Just here it occurs to me to testify to the fact that the Roman +Catholic Church, as I have observed in my experience, has advanced a +long way in this direction. I have been surprised to learn how far a +given sum of money has gone in the hands of priests and nuns, and how +really effective is their use of it. I fully appreciate the splendid +service done by other workers in the field, but I have seen the +organization of the Roman Church secure better results with a given +sum of money than other <span class='pagenum'><a name="Page_170" id="Page_170">[170]</a></span>Church organizations are accustomed to secure +from the same expenditure. I speak of this merely to point the value +of the principle of organization, in which I believe so heartily. It +is unnecessary to dwell upon the centuries of experience which the +Church of Rome has gone through to perfect a great power of +organization.</p> + +<p>Studying these problems has been a source of the greatest interest to +me. My assistants, quite distinct from any board, have an organization +of sufficient size to investigate the many requests that come to us. +This is done from the office of our committee in New York. For an +individual to attempt to keep any close watch of single cases would be +impossible. I am called upon to explain this fact many times. To read +the hundreds of letters daily received at our office would be beyond +the power of any one man, and surely, if the many good people who +write would only reflect a little, they must realize that it is +impossible for me personally to consider their applications.</p> + +<p>The plan that we have worked out, and I hope improved upon year after +year, has been the result of experience, and I refer to it now only as +one contribution to a general subject which is of such great moment to +earnest <span class='pagenum'><a name="Page_171" id="Page_171">[171]</a></span>people; and this must be my excuse for speaking so frankly.</p> + + +<h3>THE APPEALS THAT COME</h3> + +<p>The reading, assorting, and investigating of the hundreds of letters +of appeal which are received daily at my office are attended to by a +department organized for this purpose. The task is not so difficult as +at first it might seem. The letters are, to be sure, of great variety, +from all sorts of people in every condition of life, and indeed, from +all parts of the world. Four-fifths of these letters are, however, +requests for money for personal use, with no other title to +consideration than that the writer would be gratified to have it.</p> + +<p>There remain numbers of requests which all must recognize as worthy of +notice. These may be divided, roughly, as follows:</p> + +<p>The claims of local charities. The town or city in which one lives has +a definite appeal to all its citizens, and all good neighbours will +wish to coöperate with friends and fellow townsmen. But these local +charities, hospitals, kindergartens, and the like, ought not to make +appeal outside the local communities which they serve. The burden +should be carried by the people who are on the spot and who are, or +should be, most familiar with local needs.</p> +<p><span class='pagenum'><a name="Page_172" id="Page_172">[172]</a></span></p> + +<p>Then come the national and international claims. These properly appeal +especially to men of large means throughout the country, whose wealth +admits of their doing something more than assist in caring for the +local charities. There are many great national and international +philanthropic and Christian organizations that cover the whole field +of world-wide charity; and, while people of reputed wealth all receive +appeals from individual workers throughout the world for personal +assistance, the prudent and thoughtful giver will, more and more, +choose these great and responsible organizations as the medium for his +gifts and the distribution of his funds to distant fields. This has +been my custom, and the experience of every day serves only to confirm +its wisdom.</p> + +<p>The great value of dealing with an organization which knows all the +facts, and can best decide just where the help can be applied to the +best advantage, has impressed itself upon me through the results of +long years of experience. For example, one is asked to give in a +certain field of missionary work a sum, for a definite purpose—let us +say a hospital. To comply with this request will take, say, $10,000. +It seems wise and natural to give this amount. The missionary who +wants this money is <span class='pagenum'><a name="Page_173" id="Page_173">[173]</a></span>working under the direction of a strong and +capable religious denomination.</p> + +<p>Suppose the request is referred to the manager of the board of this +denomination, and it transpires that there are many good reasons why a +new hospital is not badly needed at this point, and by a little good +management the need of this missionary can be met by another hospital +in its neighbourhood; whereas another missionary in another place has +no such possibility for any hospital facilities whatever. There is no +question that the money should be spent in the place last named. These +conditions the managers of all the mission stations know, although +perhaps the one who is giving the money never heard of them, and in my +judgment he is wise in not acting until he has consulted these men of +larger information.</p> + +<p>It is interesting to follow the mental processes that some excellent +souls go through to cloud their consciences when they consider what +their duty actually is. For instance, one man says: "I do not believe +in giving money to street beggars." I agree with him, I do not believe +in the practice either; but that is not a reason why one should be +exempt from doing something to help the situation represented by the +street beggar. Because one does <span class='pagenum'><a name="Page_174" id="Page_174">[174]</a></span>not yield to the importunities of +such people is exactly the reason one should join and uphold the +charity organization societies of one's own locality, which deal +justly and humanely with this class, separating the worthy from the +unworthy.</p> + +<p>Another says: "I don't give to such and such a board, because I have +read that of the money given only half or less actually gets to the +person needing help." This is often not a true statement of fact, as +proved again and again, and even if it were true in part it does not +relieve the possible giver from the duty of helping to make the +organization more efficient. By no possible chance is it a valid +excuse for closing up one's pocketbook and dismissing the whole +subject from one's mind.</p> + + +<h3>INSTITUTIONS AS THEY RELATE TO EACH OTHER</h3> + +<p>Surely it is wise to be careful not to duplicate effort and not to +inaugurate new charities in fields already covered, but rather to +strengthen and perfect those already at work. There is a great deal of +rivalry and a vast amount of duplication, and one of the most +difficult things in giving is to ascertain when the field is fully +covered. Many people simply consider whether the institution to which +they are giving is <span class='pagenum'><a name="Page_175" id="Page_175">[175]</a></span>thoughtfully and well managed, without stopping to +discover whether the field is not already occupied by others; and for +this reason one ought not to investigate a single institution by +itself, but always in its relation to all similar institutions in the +territory. Here is a case in point:</p> + +<p>A number of enthusiastic people had a plan for founding an orphan +asylum which was to be conducted by one of our strongest religious +denominations. The raising of the necessary funds was begun, and among +the people who were asked to subscribe was a man who always made it a +practice to study the situation carefully before committing himself to +a contribution. He asked one of the promoters of the new institution +how many beds the present asylums serving this community provided, how +efficient they were, where located, and what particular class of +institution was lacking in the community.</p> + +<p>To none of these questions were answers forthcoming, so he had this +information gathered on his own account with the purpose of helping to +make the new plan effective. His studies revealed the fact that the +city where the new asylum was to be built was so well provided with +such institutions that there were already vastly more beds for +children than there were <span class='pagenum'><a name="Page_176" id="Page_176">[176]</a></span>applicants to fill them, and that the field +was well and fully covered. These facts being presented to the +organizers of the enterprise, it was shown that no real need for such +an institution existed. I wish I might add that the scheme was +abandoned. It was not. Such charities seldom are when once the +sympathies of the worthy people, however misinformed, are heartily +enlisted.</p> + +<p>It may be urged that doing the work in this systematic and apparently +cold-blooded way leaves out of consideration, to a large extent, the +merits of individual cases. My contention is that the organization of +work in combination should not and does not stifle the work of +individuals, but strengthens and stimulates it. The orderly +combination of philanthropic effort is growing daily, and at the same +time the spirit of broad philanthropy never was so general as it is +now.</p> + + +<h3>THE CLAIM OF HIGHER EDUCATION</h3> + +<p>The giver who works out these problems for himself will, no doubt, +find many critics. So many people see the pressing needs of every-day +life that possibly they fail to realize those which are, if less +obvious, of an even larger significance—for instance, the great +claims of <span class='pagenum'><a name="Page_177" id="Page_177">[177]</a></span>higher education. Ignorance is the source of a large part +of the poverty and a vast amount of the crime in the world—hence the +need of education. If we assist the highest forms of education—in +whatever field—we secure the widest influence in enlarging the +boundaries of human knowledge; for all the new facts discovered or set +in motion become the universal heritage. I think we cannot +overestimate the importance of this matter. The mere fact that most of +the great achievements in science, medicine, art, and literature are +the flower of the higher education is sufficient. Some great writer +will one day show how these things have ministered to the wants of all +the people, educated and uneducated, high and low, rich and poor, and +made life more what we all wish it to be.</p> + +<p>The best philanthropy is constantly in search of the finalities—a +search for cause, an attempt to cure evils at their source. My +interest in the University of Chicago has been enhanced by the fact +that while it has comprehensively considered the other features of a +collegiate course, it has given so much attention to research.</p> + + +<h3>DR. WILLIAM R. HARPER</h3> + +<p>The mention of this promising young institution always brings to my +mind the figure of Dr. <span class='pagenum'><a name="Page_178" id="Page_178">[178]</a></span>William R. Harper, whose enthusiasm for its +work was so great that no vision of its future seemed too large.</p> + +<p>My first meeting with Dr. Harper was at Vassar College, where one of +my daughters was a student. He used to come, as the guest of Dr. James +M. Taylor, the president, to lecture on Sundays; and as I frequently +spent week-ends there, I saw and talked much with the young professor, +then of Yale, and caught in some degree the contagion of his +enthusiasm.</p> + +<p>When the university had been founded, and he had taken the presidency, +our great ambition was to secure the best instructors and to organize +the new institution, unhampered by traditions, according to the most +modern ideals. He raised millions of dollars among the people of +Chicago and the Middle West, and won the personal interest of their +leading citizens. Here lay his great strength, for he secured not only +their money but their loyal support and strong personal interest—the +best kind of help and coöperation. He built even better than he knew. +His lofty ideals embodied in the university awakened a deeper interest +in higher education throughout the Central West, and stirred +individuals, denominations, and legislatures to effective action. The +world will probably never <span class='pagenum'><a name="Page_179" id="Page_179">[179]</a></span>realize how largely the present splendid +university system of the Central Western States is due indirectly to +the genius of this man.</p> + +<p>With all his extraordinary power of work and his executive and +organizing ability, Dr. Harper was a man of exquisite personal charm. +We count it among the rich and delightful experiences of our home-life +that Dr. and Mrs. Harper could occasionally spend days together with +us for a brief respite from the exacting cares and responsibilities of +the university work. As a friend and companion, in daily intercourse, +no one could be more delightful than he.</p> + +<p>It has been my good fortune to contribute at various times to the +University of Chicago, of which Dr. Harper was president, and the +newspapers not unnaturally supposed at such times that he used the +occasions of our personal association to secure these contributions. +The cartoonists used to find this a fruitful theme. They would picture +Dr. Harper as a hypnotist waving his magic spell, or would represent +him forcing his way into my inner office where I was pictured as busy +cutting coupons and from which delightful employment I incontinently +fled out of the window at sight of him; or they would represent me as +fleeing across rivers on cakes of floating ice with Dr. Harper in hot +<span class='pagenum'><a name="Page_180" id="Page_180">[180]</a></span>pursuit; or perhaps he would be following close on my trail, like the +wolf in the Russian story, in inaccessible country retreats, while I +escaped only by means of the slight delays I occasioned him by now and +then dropping a million-dollar bill, which he would be obliged to stop +and pick up.</p> + +<p>These cartoons were intended to be very amusing, and some of them +certainly did have a flavour of humour, but they were never humorous +to Dr. Harper. They were in fact a source of deep humiliation to him, +and I am sure he would, were he living, be glad to have me say, as I +now do, that during the entire period of his presidency of the +University of Chicago, he never once either wrote me a letter or asked +me personally for a dollar of money for the University of Chicago. In +the most intimate daily intercourse with him in my home, the finances +of the University of Chicago were never canvassed or discussed.</p> + +<p>The method of procedure in this case has been substantially the same +as with all other contributions. The presentation of the needs of the +university has been made in writing by the officers of the university, +whose special duty it is to prepare its budgets and superintend its +finances. A committee of the trustees, with <span class='pagenum'><a name="Page_181" id="Page_181">[181]</a></span>the president, have +annually conferred, at a fixed time, with our Department of +Benevolence, as to its needs. Their conclusions have generally been +entirely unanimous and I have found no occasion hitherto seriously to +depart from their recommendations. There have been no personal +interviews and no personal solicitations. It has been a pleasure to me +to make these contributions, but that pleasure has arisen out of the +fact that the university is located in a great centre of empire; that +it has rooted itself in the affections and interest of the people +among whom it is located; that it is doing a great and needed work—in +fine, that it has been able to attract and to justify the +contributions of its patrons East and West. It is not personal +interviews and impassioned appeals, but sound and justifying worth, +that should attract and secure the funds of philanthropy.</p> + +<p>The people in great numbers who are constantly importuning me for +personal interviews in behalf of favourite causes err in supposing +that the interview, were it possible, is the best way, or even a good +way, of securing what they want. Our practice has been uniformly to +request applicants to state their cases tersely, but nevertheless as +fully as they think necessary, in writing. Their applica<span class='pagenum'><a name="Page_182" id="Page_182">[182]</a></span>tion is +carefully considered by very competent people chosen for this purpose. +If, thereupon, personal interviews are found desirable by our +assistants, they are invited from our office.</p> + +<p>Written presentations form the necessary basis of investigation, of +consultation, and comparison of views between the different members of +our staff, and of the final presentation to me.</p> + +<p>It is impossible to conduct this department of our work in any other +way. The rule requiring written presentation as against the interview +is enforced and adhered to not, as the applicant sometimes supposes, +as a cold rebuff to him, but in order to secure for his cause, if it +be a good one, the careful consideration which is its due—a +consideration that cannot be given in a mere verbal interview.</p> + + +<h3>THE REASON FOR CONDITIONAL GIFTS</h3> + +<p>It is easy to do harm in giving money. To give to institutions which +should be supported by others is not the best philanthropy. Such +giving only serves to dry up the natural springs of charity.</p> + +<p>It is highly important that every charitable institution shall have at +all times the largest possible number of current contributors. This +<span class='pagenum'><a name="Page_183" id="Page_183">[183]</a></span>means that the institution shall constantly be making its appeals; +but, if these constant appeals are to be successful, the institution +is forced to do excellent work and meet real and manifest needs. +Moreover, the interest of many people affords the best assurance of +wise economy and unselfish management as well as of continued support.</p> + +<p>We frequently make our gifts conditional on the giving of others, not +because we wish to force people to do their duty, but because we wish +in this way to root the institution in the affections of as many +people as possible who, as contributors, become personally concerned, +and thereafter may be counted on to give to the institution their +watchful interest and coöperation. Conditional gifts are often +criticized, and sometimes, it may be, by people who have not thought +the matter out fully.</p> + +<p>Criticism which is deliberate, sober, and fair is always valuable and +it should be welcomed by all who desire progress. I have had at least +my full share of adverse criticism, but I can truly say that it has +not embittered me, nor left me with any harsh feeling against a living +soul. Nor do I wish to be critical of those whose conscientious +judgment, frankly expressed, differs from my own. No matter <span class='pagenum'><a name="Page_184" id="Page_184">[184]</a></span>how noisy +the pessimists may be, we know that the world is getting better +steadily and rapidly, and that is a good thing to remember in our +moments of depression or humiliation.</p> + + +<h3>THE BENEVOLENT TRUSTS</h3> + +<p>To return to the subject of the Benevolent Trusts, which is a name for +corporations to manage the business side of benefactions. The idea +needs, and to be successful must have, the help of men who have been +trained along practical lines. The best men of business should be +attracted by its possibilities for good. When it is eventually worked +out, as it will be in some form, and probably in a better one than we +can now forecast, how worthy it will be of the efforts of our ablest +men!</p> + +<p>We shall have the best charities supported generously and adequately, +managed with scientific efficiency by the ablest men, who will gladly +he held strictly accountable to the donors of the money, not only for +the correct financing of the funds, but for the intelligent and +effective use of every penny. To-day the whole machinery of +benevolence is conducted upon more or less haphazard principles. Good +men and women are wearing out their lives to raise money to sustain +institutions <span class='pagenum'><a name="Page_185" id="Page_185">[185]</a></span>which are conducted by more less or unskilled methods. +This is a tremendous waste of our best material.</p> + +<p>We cannot afford to have great souls who are capable of doing the most +effective work slaving to raise the money. That should be a business +man's task, and he should be supreme in managing the machinery of the +expenses. The teachers, the workers, and the inspired leaders of the +people should be relieved of these pressing and belittling money +cares. They have more than enough to do in tilling their tremendous +and never fully occupied field, and they should be free from any care +which might in any wise divert them from that work.</p> + +<p>When these Benevolent Trusts come into active being, such +organizations on broad lines will be sure to attract the brains of the +best men we have in our commercial affairs, as great business +opportunities attract them now. Our successful business men as a +class, and the exceptions only prove the truth of the assertion, have +a high standard of honour. I have sometimes been tempted to say that +our clergymen could gain by knowing the essentials of business life +better. The closer association with men of affairs would, I think, +benefit both classes. People who have had much to do with ministers +<span class='pagenum'><a name="Page_186" id="Page_186">[186]</a></span>and those who hold confidential positions in our churches have at +times had surprising experiences in meeting what is sometimes +practised in the way of ecclesiastical business, because these good +men have had so little of business training in the work-a-day world.</p> + +<p>The whole system of proper relations, whether it be in commerce, or in +the Church, or in the sciences, rests on honour. Able business men +seek to confine their dealings to people who tell the truth and keep +their promises; and the representatives of the Church, who are often +prone to attack business men as a type of what is selfish and mean, +have some great lessons to learn, and they will gladly learn them as +these two types of workers grow closer together.</p> + +<p>The Benevolent Trusts, when they come, will raise these standards; +they will look the facts in the face; they will applaud and sustain +the effective workers and institutions; and they will uplift the +intelligent standard of good work in helping all the people chiefly to +help themselves. There are already signs that these combinations are +coming, and coming quickly, and in the directorates of these trusts +you will eventually find the flower of our American manhood, the men +who not only know how to <span class='pagenum'><a name="Page_187" id="Page_187">[187]</a></span>make money, but who accept the great +responsibility of administering it wisely.</p> + +<p>A few years ago, on the occasion of the decennial anniversary of the +University of Chicago, I was attending a university dinner, and having +been asked to speak I had jotted down a few notes.</p> + +<p>When the time arrived to stand up and face these guests—men of worth +and position—my notes meant nothing to me. As I thought of the latent +power of good that rested with these rich and influential people I was +greatly affected. I threw down my notes and started to plead for my +Benevolent Trust plan.</p> + +<p>"You men," I said, "are always looking forward to do something for +good causes. I know how very busy you are. You work in a treadmill +from which you see no escape. I can easily understand that you feel +that it is beyond your present power carefully to study the needs of +humanity, and that you wait to give until you have considered many +things and decided upon some course of action. Now, why not do with +what you can give to others as you do with what you want to keep for +yourself and your children: Put it into a Trust? You would not place a +fortune for your children in the hands of an inexperienced <span class='pagenum'><a name="Page_188" id="Page_188">[188]</a></span>person, no +matter how good he might be. Let us be as careful with the money we +would spend for the benefit of others as if we were laying it aside +for our own family's future use. Directors carry on these affairs in +your behalf. Let us erect a foundation, a Trust, and engage directors +who will make it a life work to manage, with our personal coöperation, +this business of benevolence properly and effectively. And I beg of +you, attend to it <i>now</i>, don't wait."</p> + +<p>I confess I felt most strongly on the subject, and I feel so now.</p> +<hr style="width: 65%;" /> + + + + + + + + + + +<pre> + + + + + +End of the Project Gutenberg EBook of Random Reminiscences of Men and Events +by John D. 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