Authors: Garet Garrett
“Anybody can’t make nails,” said John. “I’ve looked at that.”
“Why not?”
“Nail making machines are covered by patents. There are only four firms that make them. I’ve made air tight contracts with them. We take all their machines at an advance of twenty-five per cent. over present prices and they bind themselves to sell machines to nobody else during the life of the contract. So we’ve got the bag sewed up top and bottom. They were glad to do it because there isn’t any profit in machines either with the nail makers all going busted.”
Awns stared at him with doubt and admiration mingled.
“Well, that is showing them something,” he said. “If you go far with that kind of thing laws will be passed to stop it.”
“It’s legal, isn’t it?”
“There’s no law against it,” said Awns.
“We’re not obliged to be more legal than the law,” said John. “Tell me, what do you know about bankers in Pittsburgh? I’ve got to do some business in that quarter.”
Pittsburgh at this time was not a place prepared. It was a sign, a pregnant smudge, a state of phenomena. The great mother was undergoing a Caesarian operation. An event was bringing itself to pass. The steel age was about to be delivered.
Men performed the office of obstetrics without knowing what they did. They could neither see nor understand it. They struggled blindly, falling down and getting up. Forces possessed them. Their psychic condition was that of men to whom fabulous despair and extravagant expectation were the two ends of one ecstasy. They were hard, shrewd, sentimental, superstitious, romantic in friendship and conscienceless in trade. They named their blast furnaces after their wives and sweethearts, stole each other’s secrets, fell out with their partners, knew no law of business but to lay on what the traffic would bear, read Swedenborg and dreamed of Heaven as a thoroughfare resembling Wood Street, Pittsburgh, lined with banks and in the door of each bank a grovelling president, pleading: “Here’s money for your payrolls. Please borrow it here. Very fine quality of money. Pay it back when you like.”
They were always begging money at the banks. When they made money they used it to build more mills and to fill the mills with automatic monsters that grew stranger and more fantastic. Many of these monsters, like things in nature’s own history of trial and error, appeared for a short time and became extinct. When they were not making money they were bankrupt. That was about half the time. Then they came to the banks in Wood Street to implore, beg, wheedle money to meet their payrolls.
There is the legend of a man, afterward one of the great millionaires, who drove one mare so often to Wood Street and from one bank to another in a zigzag course that the animal came to know the stops by heart, made them automatically, and could not be made to go in a straight line through this lane of money doors.
The bankers were a tough minded group. They had to be. Nobody was quite safe. A man with a record for sanity would suddenly lose his balance and cast away the substance of certainty to pursue a vision. The effort to adapt the Bessemer steel process to American conditions was an irresistible road to ruin. That process was producing amazing results in Europe but in this country it was bewitched with perversity and it looked as if the English and German manufacturers would walk away with the steel age. Fortunes were still being swallowed up in snail shaped vessels called converters, not unlike the one Aaron had built at New Damascus twenty-five years before.
Of all the bankers in Wood Street the toughest minded was Lemuel Slaymaker.
“All the same,” said Awns, “I should try him first. His name would put it through and he loves a profit.”
Awns knew him. They went together to see him. Slaymaker saluted Awns and acknowledged his introduction of Mr. John Breakspeare not otherwise nor more than by turning slowly in his chair and staring at them. He had a large white face, pale blue eyes and red, close-cropped hair. The impression he made was one of total sphericity. There was no way to take hold of him. No thought or feeling projected.
John laid out his plan, producing the papers as exhibits, A, B, C, in the appropriate places. Lastly he produced data on the nail trade, showing the amount of nails consumed in the country and the normal rate of annual increase with the growth of population, together with a carefully developed estimate of the combine’s profits at various prices per keg. When he had finished the idea was lucid, complete in every part and self-evident. Therein lay the secret of his extraordinary power of persuasion. He seemed never to argue his case. He expressed no opinion of his own to be combatted. He merely laid down a state of facts with an air of looking at them from the other man’s point of view.
“And what you want is a bank to guarantee this scheme,” said Slaymaker. “You want a bank to guarantee that if these people want cash instead of stock the cash will be forthcoming.”
This was the first word he had spoken. The papers he had not even glanced at. They lay on his desk as John had placed them there.
“That’s it,” said John. “Guarantee it. Very little cash will be required.”
“How do you say that?”
“To make them want stock instead of cash,” said John, “you have only to engage brokers to make advance quotations for the stock, here and in Philadelphia at, say, par for the preferred and fifty for the common. If you do not know brokers who can do that I will find them. The scheme is sound. The stock will pay dividends from the start. A bank that had guaranteed it might very well speak a good word for it here and there. The public will want some of the stock.”
Slaymaker gazed at a corner of the ceiling and twiggled his foot. Then he turned his back on them.
“Leave the papers,” he said, “and see me at this time tomorrow.”
When they were in the street again Awns said: “You got him.”
And so the infant trust was born,—first of its kind, first of a giant brood. Biologically they were all alike, but with evolution their size increased prodigiously. The swaddling cloths of this one would not have patched the eye of a twentieth century specimen delivered in Wall Street.
Slaymaker’s lawyers and Jubal Awns together verified all the agreements. The stock of the N. A. M. Co., Ltd., was increased enough to make sure there would be plenty to go around. Slaymaker took a large amount for banker’s fees, John took a block for promoter’s services and another block for the Twenty-ninth Street mill, the lawyers took some, and a certain amount was set aside for Thane,—for Agnes really. John was elected president and the combine was launched. Before the day came on which the options of purchase were to be exercised the preferred stock was publicly quoted at 105 and the common stock at 55, and there were symptoms of public interest in its possibilities. As John predicted, nearly all the nail manufacturers elected to take stock in the new company, with Slaymaker’s name behind it.
Everyone at length was more enthusiastic than John. He kept thinking of that phrase in the contract with Gib—“unless the party of the second part wishes to sell nails to the trade at a lower price.” No one else had noticed it, not even Slaymaker. Nobody else would have had any misgivings about it. Who could imagine, as Awns said, that a man would undersell his own contract? There is a law of self interest one takes for granted.
T
HANE had been reporting laconically on the Twenty-ninth Street mill. It now was in action and the nails were piling up. John had not been out to see it. Their contacts had become irregular; generally they met by accident in the hotel lobby, rarely in the dining room. This was owing partly to John’s absorption in his scheme and partly to the resolve he had made to avoid Agnes. He had not once been close enough to speak to her since that third morning when his haggard true self met his anti-self in the mirror, saying: “She is his.” The only way he could put her out of his mind at all was to involve himself in difficulties. Trouble was a cave of refuge. As during those two nights of struggle with his anti-self, when it had almost conquered him, he played absently at faro and increased his bets to make the game absorbing, so afterward in business, wilfully at first and then by habit, he preferred the hazardous alternative; he seemed to seek those situations in which the chance was all or none. This made his ways uncanny. Luck seems to favor one who doesn’t care. Or it may be that one who doesn’t care sees more clearly than the rest, being free of fear.
“Better come and sight it,” said Thane, one morning in the lobby. “I’m worried where to put the nails.”
“We’ll go now,” said John. “Anyhow, I want to talk to you. I don’t know about this Twenty-ninth Street mill. It’s a poor layout. Maybe we’d better shut it up. Now don’t get uneasy. Wait till I’m through. The company—(and, by the way, you are a director and there’s some stock in your name)—it has bought nearly all the nail mills there are. Over a hundred, big and little, all over the place. The idea is to combine the nail industry in one organization and put it back on a paying basis. I want you to go around with me and have a look at mills. Some of them we’ll throw away. The trouble was too many of them.”
He went on talking to take up Thane’s injured silence. That he was a director in the company, that he had stock in it, that his salary was to be doubled,—none of this availed against the puddler’s pride in what he had done with the Twenty-ninth Street mill. The thought of now shutting it up hurt him in his middle. John on his side was disappointed in Thane’s inability to rise to an opportunity. So they came to the mill.
“Sounds busy,” said John.
Thane held his thoughts.
On beholding the scene of action within, almost at a glance, John placed the puddler where he belonged. Here was the work of a master superintendent. Nothing was as it had been except the engine and furnace. Everything else had been relocated with one aim in view, which was to eliminate all unnecessary human motion and shorten the train of events from the raw material straight through to the finished nail packed in the keg and stored. Besides the physical achievement, which alone was very notable, there was a subtle psychic relation between Thane and his men. They worked on their toes and liked doing it for him.
“Shake,” said John, holding out his hand. “No, we won’t shut her up. We’ll take her as a pattern. If you can do this with all the mills we’ll walk away with it. Have you figured your costs? They must be fine.”
“In my head,” said Thane.
They stood at a little greasy box-desk screwed to the wall under a window dim with cobwebs.
“I’ll show you how to figure them,” said John. “Iron, so much; fuel, so much; kegs, so much; oil, and so forth, so much; wear and tear of tools and plant, so much; labor, so much; total, so much. Then kegs of nails, so many. Divide that by that and you have the cost per keg. Let’s see how it will work out.”
It worked out nearly as Thane had it in his head and John was sentimental with pride and satisfaction.
“Come on,” he said, impatiently. “Leave a man in charge of this, and we’ll see the other mills.”
Starting with more than a hundred mills, they scrapped twenty outright, saving only their contracts, raw material and stock on hand; others they consolidated. In the end they had fifty well equipped plants strategically placed to supply the trade by the shortest routes. They had all to be overhauled according to Thane’s ideas. He turned the Twenty-ninth Street plant into a training station and sent men from there to work the other mills. It was a large and complicated program. He carried it through so skillfully that he was appointed vice-president in charge of manufacturing, and John was free to organize the company’s business and function executively.
He raised the price of nails, first twenty-five cents a keg, then fifty, then seventy-five cents, and stopped. At that price there was a good profit. Thane was steadily reducing costs by improving plant practice and that increased profits in another way.
A dividend was paid
on
the preferred stock in the third month. The omens were fine. Still, John was uneasy. No New Damascus nails had been received under their contract with Enoch. The making of nails had not stopped at New Damascus. He made sure of that. No New Damascus nails were coming on the market, either, for John knew everything about the trade. Then what was to be expected?
The answer when it came did not surprise him. He had guessed it already.
One day the nail market was knocked in the head. Enoch was offering nails to the hardware trade at a price seventy-five cents lower than the combine’s price. That meant he was selling them for fifty cents a keg less than the combine had agreed to pay him for his whole output. He had never tendered one ten-penny nail on that contract. Instead, working his plant at high speed, he had accumulated thousands of kegs expressly for the irrational purpose of casting them suddenly on sale to break the combine’s market—John Breakspeare’s market—
Aaron’s market!
John was the only person who understood it. Everyone else was dazed.
Slaymaker sent for John.
“What’s the matter with that man at New Damascus?”
“He’s out of his mind,” said John.
“Better buy him up at his own price,” said Slaymaker. “That’s what he wants.”
John knew better. However, to satisfy Slaymaker, he sent Awns to see Enoch again.
“You’re right,” Awns reported. “The old man is clean crazy. He won’t sell at any price. All he would do was to point to that stipulation in the contract and laugh at me.”
The combine stood aside until the trade had absorbed the New Damascus nails and then tried to go on without reducing its own price; but the trade became very ugly about it, the combine began to be denounced, and Congress, hearing from the farmers, threatened to take the import duty off nails and let the foreign product in. The combine had to let down the price and wait.
Three months later the preposterous act was repeated, Enoch flooding the market with nails at fifty cents a keg less than the combine’s price. There was no doubt this time that he was selling nails at a ruinous loss, and everyone’s amazement grew. Only John knew why he did it.