CHAPTER XVI
MILLS AND THE MEN
THE one vital lesson in iron and steel that I learned in Britain was the necessity for owning raw materials and finishing the completed article ready for its purpose. Having solved the steel-rail problem at the Edgar Thomson Works, we soon proceeded to the next step. The difficulties and uncertainties of obtaining regular supplies of pig iron compelled us to begin the erection of blast furnaces. Three of these were built, one, however, being a reconstructed blast furnace purchased from the Escanaba Iron Company, with which Mr. Kloman had been connected. As is usual in such cases, the furnace cost us as much as a new one, and it never was as good. There is nothing so unsatisfactory as purchases of inferior plants.
But although this purchase was a mistake, directly considered, it proved, at a subsequent date, a source of great profit because it gave us a furnace small enough for the manufacture of spiegel and, at a later date, of ferro-manganese. We were the second firm in the United States to manufacture our own spiegel, and the first, and for years the only, firm in America that made ferro-manganese. We had been dependent upon foreigners for a supply of this indispensable article, paying as high as eighty dollars a ton for it. The manager of our blast furnaces, Mr. Julian Kennedy, is entitled to the credit of suggesting that with the ores within reach we could make ferro-manganese in our small furnace. The experiment was worth trying and the result was a great success. We were able to supply the entire American demand and prices fell from eighty to fifty dollars per ton as a consequence.
While testing the ores of Virginia we found that these were being quietly purchased by Europeans for ferro-manganese, the owners of the mine being led to believe that they were used for other purposes. Our Mr. Phipps at once set about purchasing that mine. He obtained an option from the owners, who had neither capital nor skill to work it efficiently. A high price was paid to them for their interests, and (with one of them, Mr. Davis, a very able young man) we became the owners, but not until a thorough investigation of the mine had proved that there was enough of manganese ore in sight to repay us. All this was done with speed; not a day was lost when the discovery was made. And here lies the great advantage of a partnership over a corporation. The president of the latter would have had to consult a board of directors and wait several weeks and perhaps months for their decision. By that time the mine would probably have become the property of others.
We continued to develop our blast-furnace plant, every new one being a great improvement upon the preceding, until at last we thought we had arrived at a standard furnace. Minor improvements would no doubt be made, but so far as we could see we had a perfect plant and our capacity was then fifty thousand tons per month of pig iron.
The blast-furnace department was no sooner added than another step was seen to be essential to our independence and success. The supply of superior coke was a fixed quantity—the Connellsville field being defined. We found that we could not get on without a supply of the fuel essential to the smelting of pig iron; and a very thorough investigation of the question led us to the conclusion that the Frick Coke Company had not only the best coal and coke property, but that it had in Mr. Frick himself a man with a positive genius for its management. He had proved his ability by starting as a poor railway clerk and succeeding. In 1882 we purchased one half of the stock of this company, and by subsequent purchases from other holders we became owners of the great bulk of the shares.
There now remained to be acquired only the supply of iron stone. If we could obtain this we should be in the position occupied by only two or three of the European concerns. We thought at one time we had succeeded in discovering in Pennsylvania this last remaining link in the chain. We were misled, however, in our investment in the Tyrone region, and lost considerable sums as the result of our attempts to mine and use the ores of that section. They promised well at the edges of the mines, where the action of the weather for ages had washed away impurities and enriched the ore, but when we penetrated a small distance they proved too "lean" to work.