The fright which Pittsburgh financial institutions had with regard to myself and our enterprises rapidly gave place to perhaps somewhat unreasoning confidence. Our credit became unassailable, and thereafter in times of financial pressure the offerings of money to us increased rather than diminished, just as the deposits of the old Bank of Pittsburgh were never so great as when the deposits in other banks ran low. It was the only bank in America which redeemed its circulation in gold, disdaining to take refuge under the law and pay its obligations in greenbacks. It had few notes, and I doubt not the decision paid as an advertisement.
In addition to the embarrassment of my friends Mr. Scott, Mr. Thomson, and others, there came upon us later an even severer trial in the discovery that our partner, Mr. Andrew Kloman, had been led by a party of speculative people into the Escanaba Iron Company. He was assured that the concern was to be made a stock company, but before this was done his colleagues had succeeded in creating an enormous amount of liabilities—about seven hundred thousand dollars. There was nothing but bankruptcy as a means of reinstating Mr. Kloman.
This gave us more of a shock than all that had preceded, because Mr. Kloman, being a partner, had no right to invest in another iron company, or in any other company involving personal debt, without informing his partners. There is one imperative rule for men in business—no secrets from partners. Disregard of this rule involved not only Mr. Kloman himself, but our company, in peril, coming, as it did, atop of the difficulties of my Texas Pacific friends with whom I had been intimately associated. The question for a time was whether there was anything really sound. Where could we find bedrock upon which we could stand?
Had Mr. Kloman been a business man it would have been impossible ever to allow him to be a partner with us again after this discovery. He was not such, however, but the ablest of practical mechanics with some business ability. Mr. Kloman's ambition had been to be in the office, where he was worse than useless, rather than in the mill devising and running new machinery, where he was without a peer. We had some difficulty in placing him in his proper position and keeping him there, which may have led him to seek an outlet elsewhere. He was perhaps flattered by men who were well known in the community; and in this case he was led by persons who knew how to reach him by extolling his wonderful business abilities in addition to his mechanical genius—abilities which his own partners, as already suggested, but faintly recognized.
After Mr. Kloman had passed through the bankruptcy court and was again free, we offered him a ten per cent interest in our business, charging for it only the actual capital invested, with nothing whatever for good-will. This we were to carry for him until the profits paid for it. We were to charge interest only on the cost, and he was to assume no responsibility. The offer was accompanied by the condition that he should not enter into any other business or endorse for others, but give his whole time and attention to the mechanical and not the business management of the mills. Could he have been persuaded to accept this, he would have been a multimillionaire; but his pride, and more particularly that of his family, perhaps, would not permit this. He would go into business on his own account, and, notwithstanding the most urgent appeals on my part, and that of my colleagues, he persisted in the determination to start a new rival concern with his sons as business managers. The result was failure and premature death.
How foolish we are not to recognize what we are best fitted for and can perform, not only with ease but with pleasure, as masters of the craft. More than one able man I have known has persisted in blundering in an office when he had great talent for the mill, and has worn himself out, oppressed with cares and anxieties, his life a continual round of misery, and the result at last failure. I never regretted parting with any man so much as Mr. Kloman. His was a good heart, a great mechanical brain, and had he been left to himself I believe he would have been glad to remain with us. Offers of capital from others—offers which failed when needed—turned his head, and the great mechanic soon proved the poor man of affairs.[33]