Random Reminiscences of Men and Events

by John D. Rockefeller

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.

BUILDING THE SHIPS

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 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.

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.

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.

EMPLOYING A COMPETITOR

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 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.

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 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.

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.