Random Reminiscences of Men and Events

by John D. Rockefeller

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.

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 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.

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.

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 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.

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 capital, put in by one's self or secured from others, and a strict adherence to the sound natural laws of business.

THE ORE MINES

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 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.

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.

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.

It was a surprise to me that the great iron and steel manufacturers did not place what seemed to be an adequate value on these mines. The lands which contained a good many of our best ore mines could have been purchased very cheaply before we became interested. Having launched ourselves into the venture, we decided to supply ore to every one who needed it, by mining and transporting with the newest and most effective facilities, and our profits we invested in more ore lands.