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The Autobiography of William Henry Donner (CS)

The Autobiography of William Henry Donner (CS)

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THE AUTOBIOGRAPHY OF WI LLIAM HENRY DONNE R
THE AUTOBIOGRAPHY
OF
W LL AM HENRY
1864-1953
SAN FRANCI S CO
1973
CONTENTS
Preface
Acknowledgments
Introduction by Dora Donner Ide
Foreword by WHD
The Autobiography of William Henry Donner
Addenda
PHOTOGRAPHS
page vii
ix
xi
XV
I
WHD in his seventies Frontispiece
Delta Tau Delta Fraternity, Phi Chapter, Hanover College. Page 9
October I I , I 8 8 2 . WHD frst left, back row.
Bicycle type used by WHD and associates in the races of I 88
5
2
5
(The Stanford University Museum of Art)
WHD in his thirties 4
5
Mr. and Mrs Frederick Donner with their grandchild,
7 5
William Henry Donner, Jr.
WHD i his ffties 99
The Donner home in Columbus, Indiana I I 9
The President's Residence at Hanover College. I 3 9
One of fve buildings constructed with the aid of Donner funds
PREFACE
It is a great pleasure and privilege to have this limited edition of the
autobiography written by my father, William Henry Donner, privately
printed.
Several months after he passed away, his attorney gave galley proofs
of his autobiography to a few people. During the nineteen thirties at
the urging of his family and friends, father had commenced the task
of writing his memoirs, and he had continued to work on them from
time to time for approximately sixteen years. They span an era of great
growth and industrialization in this country.
His autobiography was to have been printed shortly after his death,
and I had expected to have this done, but life with its pressures delays
many intended projects.
On June I I, I 9
7
2, an article appeared in the San Francisco Examiner
and Chronicle, entitled 'Fine Printers in the City, ' by Elaine Ratner.
It seemed to be the perfect place and an opportune time to under­
take this P�

oject.
ACKNOWLEDGMENTS
I mentioned the project of father's autobiography to Mr. Stephen Gale
Herrick, the former president of the Herrick Iron Works, who is a
biblio
p
hile & a bookbinder. He was acquainted with the various crafts­
men referred to in ' Fine Printers in the City' by Elaine Ratner, & kindly
showed me examples of their books from his collection. As he evinced
such an interest in this
p
roject, I mentioned that my father had been
in the steel business also, and gave him the autobiography to read. He
was most enthusiastic about itt and I owe more than I can ex
p
ress to
him for his kidness and for his highly esteemed assistance in helping
me to
p
lan and edit this book.
Several
p
hotostats of newspaper cli
pp
ings regarding father's decease
were sent to me by the late Robert N. Donner.
I should like to thank Mrs . Robert H. Cromwell, Mrs. Reed Gerard
and Miss Elizabeth Jorzick for their invaluable
p
hotographs and help­
ful information.
I am beholden to Mr. C. Kenneth Baxter, father's friend & trusted
business advisor, who gave me valued aid. My deep a
p
preciation is due
to Mrs. Mildred Goodwin MacLachlan, the executive secretary to Mr.
Baxter, who gave unstintingly of her time.
A overwhelming debt of gratitude is owed to Mrs. Katharine M.
Parker and to Dr. T. Grier Miller.
I am under great obligation to Dr. John E. Horner, president of
Hanover College, who provided important photogra
p
hs and other
p
er­
tinent material.
I am thankful to Mr. David L. I son & Mrs. Alma F. Bergmann, for­
merly of the Park & Recreation De
p
artment, Columbus, Indiana, who
showed me relevant
p
ictures and furnished interesting data. ix
My sincere gratitude is due to Mr. Lee D. Lagessie, Public Relations
Representative, Republic Steel Corporation, Chicago District, for his
kindness in providing a photocopy (f, 'The Story of the Donner-Hanna
Coke Corporation I 9 1 7- 1 9S6' by Philip S. Savage.
Several anecdotes in the Introduction were derived from the late
Bob Gordon's Columbus Comment in the Columbus Evening Repub­
lican of November 4, 1 9.3, and from the late Laura Long's Horse and
Buggy Days in the Columbus Herald of October I, I 96 s.
Warm thanks are hereby extended to the Bartholomew County His­
torical Society, Columbus, Indiana; Mr. Ross G. Crump; Dr. Lorenz
Eitner, Director of the Stanford University Museum of Art; Mrs. Betty
M. Gale, Senior Administrative Assistant of the Donner Laboratory
Business Ofce, Berkeley; Mr. E. Dixon Heise; Dr. J. R. Nolan, Medi­
cal Director of the Souther California Cancer Center, Los Angeles ;
Dr. Eugene P. Pendergrass; Mr. Guy Preston; Mrs. Irene B. Sheldon; Mr.
James G. Shields ; Mrs . Clementine I. Tangeman; Mr. NormanF. Wesley,
Public Relations Ofce of the U. S. Steel Corporation, Pittsburgh Dis­
trict; Mr. Darrell Williams; and to the many others who have so kindly
helped with this project.
Without the secretarial assistance of Miss Claudine Aubelay & later
Mrs. Nora McGowan, this book could not have been completed.
INTRODUCTION
William H. Donner' s autobiography relates the life and experiences of a
notable man with singular personal courage & individual initiative who
was destined to become one of the great steel men of his era. Born in
1 864 in Columbus, Indiana, father lived there until he was thirty years
of age. He never forgot the happy memories of his youth & when in­
dulging in reminiscences with friends about Columbus one could per­
haps discern in him a feeling of nostalgia for those early years. Numer­
ous benefactions made later in life expressed his continuing esteem
for that community.
His parents, who were happily married for sixty-two years, were in­
fuential in their family & community. They were prominent menbers
of the Presbyterian Church, & Frederick Donner taught Sunday School
for his entire adult life. His wife Mary was a dainty and petite lady who,
although a very active person, had a serene and tranquil nature. A
cousin who remembers her long ago wrote me that she was so under­
standing, infnitely kind and thoughtful that she seemed to the child to
be rather like an angel. I understand that while my grandmother was
tending her small children she still found time to study trigonometry.
These varied aspects of her character may explain in part why William
H. Donner said of her in his understated way, ' My mother was a re­
markable woman. ' Father was the frst of their fve children.
Father was educated in the public schools and early in his career xi
showed his initiative by delivering the daily newspaper. Perhaps the
money he made in this venture went into his frst speculation, which
was a dismal failure.
As the story goes, he conceived the notion of buying up all the avail­
able eggs in Columbus and holding them for a price rise. Someone had
told him that eggs placed in brine and put away in open casks would
keep. So, he invested his savings in eggs and cornered the Columbus
market so far as possible. Having stored away the casks in the basement
of his home, the young fnancier sat back to wait for the price of eggs
to rise. But instead, the eggs began going up themselves, and on inves­
tigating the popping noises in the basement he found it necessary to
hold his nose and run. It took the combined eforts of several people
to clean the rotten eggs out of the basement.
In I 8 90, William H. Donner married Adelia May Newsom. They had
four children: Robert, Joseph, Mary and Margaret. In I 909, following
their separation, father married Dora Browning Rodgers, a widow with
two small children, Dorothy & Katherine. Their union produced three
children: William, Elizabeth and Dora. I am the last mentioned and the
youngest.
An industrious & determined individual , father's success in life was
due to his own eforts and may be partly attributed to the perseverance
,
thoroughness, ingenuity & foresight which he applied to every under­
taking. He was an altruistic and generous person who provided fnan­
cial help for many people as well as for his own immediate family.
William H. Donner once stated to his friend the Reverend George
Pence that looking over his long and successful career, he was most
proud of his success in managing his father's milling business .
Father' s powers of concentration were noteworthy and when in­
terrupted at work his blue eyes would look enquiringly at you over the
rir1less half lens plnce-nez perched on his nose.
He was a very spruce person and behind the lapel of his coat he al­
ways carried a straight pin which he deftly used to remove items of
interest from the newspapers.
As the youngest child and therefore still living with my parents after
father retired from the steel business in I 92 9, it was my good fortune
to be included in many trips to Europe before I was married in I 940.
During our travels, his keen insight and enquiring mind delved into
the economic problems of other nations, and being an observant per­
son he also learned a good deal about the lives and customs of the na­
tives. So as to keep abreast with cancer research and therapy, we often
visited hospitals and laboratories in various parts of the world. In I 9 3 8
father took my mother and me on a particularly memorable voyage
which included India, Ceylon, Java, Bali, Siam and Cambodia. His frst
trip around the world was in I9Io- I 1.
William H. Donner bought many works of art during his lifetime.
Among his fnest acquisitions were a Whistler Nocturne and a Winter­
halter portrait of Queen Victoria as a young woman. In accordance
with his wishes the Winterhalter portrait was given to the National Gal­
lery in Washington in I954· Mrs. john F. Kennedy found the painting
in storage at The Smithsonian and at her request it was hung in the
White House during the Kennedy years.
Father was a very active person of medium build and his erect, trim
fgure changed little over the years. A temperate individual, he neither
smoked nor drank. He had a relaxed and tranquil attitude toward life
and no trouble sleeping, which he attributed to his clear conscience.
Outliving many of his stronger friends, he admitted that this might
have been due to his wise choice of parents.
A quiet, benevolent and unassuming gentleman with considerable
charm, W. H. Donner had a wealth of stories about his experiences
which he enjoyed telling. The theater was a preferred diversion. xiii
Another favorite form of relaxation was playing bridge in the evening
with his family and friends.
Upright, sagacious and humane, father had good judgment and a
sound sense of values. Athough his success in business enabled him to
enjoy the luxuries of life, his basic wants remained simple.
Dora Donner Ide
San Francisco, California
October 1 97 3
FOREWORD
As an explanation and apology for this conglomeration, I want to say
that when my mother was about seventy years old she persuaded me
to start my autobiography. She lived to be almost ninety
-
two and re­
peatedly asked me to fnish it. But being busy, a poor writer and a good
procrastinator, active work on it was postponed. The one person in the
world who thinks more of you than you deserve is your mother.
It may be cowardly to fasten part of the blame on my youngest child,
but to understand Dora is difcult. With her own money she bought
a typewriter and insisted on helping me. She asked me questions and
made copies of the answers, one of which she gave to me, keeping the
other, which she put in her trust box so it would not be lost.
I hope that anyone who wades through this incoherent mass will
not be too bored, will overlook some of the trivial incidents mentioned
and will take into consideration that when most of this data was com­
piled, I had passed three score years and ten.
We absorb the little knowledge that we accumulate from what we
see, hear, read & can deduce from experience. Ordinary, unimportant
events sometimes make deep impressions that later help us to cope
with future problems . If we are observing, it is remarkable how much
information we unconsciously absorb that becomes useful. Trivial in­
cidents frequently infuence our future lives much more than we real­
ize at the time they happen.
I have never kept a diary and have related only a few experiences &
observations. In order to refresh my memory as to dates , facts, & fg­
ures which were common knowledge in the iron and �teel industry, I
consulted friends, referred to my fles & well known books . The state­
ments herein I believe are correct & have been secured from memory
or 'derived from sources considered reliable but not guaranteed.' xv
THE AUTOBIOGRAPHY OF WI LLIAM HENRY DONNE R
Chapter I . MyParents.On May 2 8 , I 8 3 6, Frederick Donner, my father,
was born in Stuttgart, Germany, where his grandparents and parents
had been born and lived their lives. In I 844, when he was eight years
old, his mother, who was widowed, decided to come out to Ohio and
bring her son with her. She had relatives there. Later she remarried a
Mr. Diehl. He was not kind to his stepson. When my father was four­
teen years old, he bound himself out as an apprentice to a watchmaker
for three years. For his services he was given his room and board plus
$2 � the frst year, $ �o the second year and $ 7 � the third year. His
mother had expected to help him out while he was putting in his ap­
prenticeship, but she was not permitted to do so, and father had a dif­
fcult time.
My mother, Mary Jane Johnson, was born in Pittsford, New York,
on the 23 rd of December, I 8 3 6. Her parents were bor in Mossley,
near Manchester, England. Her father, Job Johnson, was a blacksmith.
He took a trip to America to look conditions over and decided to make
his home in the United States. It had been his intention to return to
England and marry the girl he was engaged to, but as travel was slow
and expensive he wrote her and suggested that she join him in America
and be married here, thereby saving time and money, which she did.
My parents lived simply i n Columbus, Indiana, compared with many
famtlies there today. Candles were used and some coal oil lamps were
quite good. We had a music box and an organ. Of course, in later years,
gas, electric lights, etc. , followed.
Chapter 2. Life Begis f
o
r M
e.
On May 2 I, I 864, at one o' clock in the
morg, I arrived i �olumbus, Indiana, about two weeks earlier than
I had been expected; I weighed 7 � pounds. As the hospital nearest to
Columbus was situated in Indianapolis, 4 I miles distant, with few trains
operating between these points and the only other means of traveling
being by horse and buggy, babies were usually born at home.
1
My parent' s home, a brick dwelling at the corner of Franklin and
Eighth Streets, where I was born, remains but has been remodeled sever­
al times. It was a comfortable house, and I slept constantly unless dis­
turbed by hunger or colic pains. The room mother and I occupied was
pleasant. It had a sheet-iron stove for burning wood. I was provided
with plenty of clothes and covers. The stove was seldom used except
when I was bathed, which I am told occurred too often to please me,
and I protested as vigorously as I could. Even after I was a big boy, it
seemed to me that mother insisted I wash my face and hands much
more frequently than was necessary.
During the frst months of my life, I was given te food nature pro­
vides for babies and later cow' s milk was added. The milk was strained
but not pasturized, homogenized nor certifed. My Aunt Minnie told
me that before and after I was a year old, I would put anything I could
into my month, including my toes. I probably needed more vitamins,
but they had not been discovered then and could not be purchased.
Having selected long-lived parents probably helped me to survive.
Father and mother said I was a beautiful baby and a nice little boy;
they never exaggerated and were truthful . Is it not remarkable that I
outgrew these prominent traits?
Cha
p
ter 3·
My Family
.
I was the second
child born to my parents in a
family of eight. They had lost a baby girl, Ella, a victim of scarlet fever
while they were living in Hope, Bartholomew County, Indiana, before
they moved to Columbus.
Cha
p
ter 4·
Early Memories.
One of my earliest recollections is my
mother advising when I did not understand anything to ask questions
as that was the way I would learn, and when I heard new words, to re­
peat them so that I would remember them. Needless to say, I asked her
many questions which she tried very hard to explain in such a way
that I would understand. She was always patient with me.
When I was fve years old, I was playing in the back yard and saw a
teamster trying to drive a pair of mules over a pile of sand. One mule
refused to go. After several trials, the driver got angry and beat the mule
many times with a black-snake whip and said, 'You G-- d--- s-- of a b----. '
And the mule obeyed. I repeated these magic words continually so that
I would remember them. On entering the house, I saw mama getting
ready to bathe the baby and asked, ' What are you going to do?' She re­
plied, ' Bathe little sister.' I tried my new words saying, ' You G-- d--- s-­
of a b----. ' Her look of astonishment told me that I had said something!
She laid the baby on the bed and asked, ' Where did you hear those ter­
rible words?' I replied, ' In the alley. ' Mama then said, ' Never repeat those
words. That is swearing. ' My Aunt Minnie who had been present dur­
ing the conversation almost laughed and left the room, and mama soon
joined her. Aunt Minnie told mama that she did not think that I coul d
remember so many new words. (She did not know that mama had
taught me to repeat words so that I could remember and use them. )
They did not realize that I could hear them talking. Their laughing
made me think that I had done nothing very bad. During the next few
days, I looked through the fence many times and saw the teamster &
his mules, but I was very much disappointed that the mules obeyed. I
wanted the excitelent repeated. Even now, when I hear that expres­
sion, I recall how parrotlike I repeated exactly what I heard.
Mother had a friend who had but little money. She raised chickens
and sold them, as well as eggs, to help pay their expenses
:
One day
mother needed two dozen eggs & had me buy them from her friend.
The price of eggs was twenty cents a dozen. She gave me forty cents
to pay for them, suggested that I put the money in a pail so I would not
lose it, and cautioned me to be careful not to fall and break the eggs.
She crossed the street with me saying, ' When you come back I will meet
you here, and we will go home together. ' When she met me and saw 3
the eggs she said, 'These are bantam eggsl' I replied, 'Yes, she carefully
picked them for me because bantam eggs are sweeter than other eggs. '
Mama said, 'I am surprised she told you such nonsense. Bantam eggs
are not sweeter than other eggs. Sugar is not used in eggs; some per­
sons put in salt or pepper or both. Small eggs contain a less amount of
food than large ones and for that reason are not worth as much. She
cheated my little boy. I will have nothing to do with a woman who
cheats a child. ' I then asked, 'Mama, what does cheating mean?' She
replied, 'If three or four years from now a man tries to sell your little
sister a small piece of candy which he breaks of a big piece, and tells
her that it is sweeter than the big piece, what would you do?' 'I don't
know,' I said, 'but I think I would like to hit him, because he would be
trying to cheat my sister.' Mama said, 'I am glad you understand now
what cheating is.'
I remember mother telling me that I 'as the only child she had who
thought out loud, and my thoughts were not always complimentary.
I asked her what complimentary meant. She answered, 'Not fattering
nor pleasant,' but said I was always honest.
I have always enjoyed the circus which was an annual, well-adver­
tised event in Columbus, Indiana, when I was a child. Father took me
when I was quite young, as he said, 'to see the animals,' but as we always
remained to see the performance, mother laughed & teased him, saying
'His son is only an excuse.' In later years, I took Dora, my youngest
child, & when in my eighties, I managed to attend several of the great
shows.
When a child, I was provided with tickets for the Columbus Lecture
Bureau & encouraged to attend. Hotel accommodations were poor in
Columbus and important people were frequently invited to private
homes. I remember among those we entertained was Paul Duchaillu.
His adventures in Africa & talks about the gorilla were most interesting.
He wrote a book describing his trip that I thoroughly enjoyed reading.
Chapter�· To School, To Work, Back to School and Hanover College.
Years I 87 I -I 8 8 2 . I did not start school as young as most children as I
was not strong when a child. I frst artended a local private school for
about two years, but it was not well managed and my parents decided
to send me to the Columbus public high school. I graduated from high
school in May I 8 8 2 .
In February I 8 8 I , I had to leave school to assist my father. He had
traded Indianapolis real estate for a four mill in Columbus. Any time
he devoted to the mill interfered with his regular business and worried
him. I never knew the amount of his investment and doubt if he did.
The building was of wood construction and its rate of fre insurance
was 4 ) per cent. He operated the mill under a partnership arrange­
ment so that he was equally responsible fqr any gains or losses. The mill
made a little proft the previous year, but my father found his partner
was a peculiar old gentleman and exceedingly careless in fnancial mat­
ters; instead of depositing their money in a bank, he kept it in the pock­
·ets of his trousers. Father believed his intentions were honest, but his
methods were exceedingly crude and he had but few records. The old
miller was an elder in the Presbyterian Church, as was my father. His
daughter was my Sunday school teacher, a very fne person, as were her
father and mother.
Becoming dissatisfed, father asked the miller to buy or rent the
mill . He refused and stated he would not rent the mill at any price be­
cause it was not located on a railroad. Father replied, 'If you do not
have enough confdence in the mill to ofer any rent for it, I will not
continue our partnership beyond the last of February, I 8 8 I .
'
He had
me at the mill the last week of February as he would soon have it on
his hands.
On March I , I 8 8 I , I was selected to temporarily manage the mill. s
It was a small one but my job was heavy for a boy my age-not quite
seventeen. The new miller father had engaged was a splendid judge of
wheat. He helped me as much as he could, but had no business ex­
perience. Buying the wheat and com, selling the four, meal and feed,
collecting accounts and looking after the books, kept me busy. I made
numerous mistakes but worked diligently to learn the business.
In July, my mother's brother, Joseph Johnson, a farmer, came from
Michigan to take over the work in the mill so that I could return to
school . He was about forty-fve years of age, a fne man, but had no
experience in the milling business. Not knowing many of the customers
made him reluctant to solicit orders & collect accounts as I had done,
so he had the teamster, who delivered four to grocers, solicit orders
and make collections as he was in their vicinity frequently. This was
a good idea. He was paid by the week, had plenty of time and liked to
solicit orders, make collections, etc.
Until school started in September I continued at the mill but when­
ever there was an opportunity I worked with the city or county engi­
neers, for which I received one dollar per day. On Saturdays & on eve­
nings during the week, I collected accounts and solicited orders as my
uncle requested.
I rejoined my class in the Columbus High School . Having been away
almost three months, I was behind in my studies and kept very busy.
From September I 8 8 I to May I 8 8 2, I had to work diligently to catch
up with my class. Professor A. H. Graham was most kind in tutoring me
during that period.
In I 8 8 I and I 8 8 2 the Columbus High School had but one teacher in
language who taught only Latin, so I could not take German. I had one
year of German in the private school I attended, and I am sure I would
have passed in that subject if It had been taught. The school was at
fault in not having a teacher, & because of this I was allowed to gradu-
ate without credit in a modern language in May I 8 8 2. In September
I 882 , when I entered Hanover College, I had to be examined in every­
thing or enter college as a senior prep because I was not qualifed in
German or Latin. I chose to be examined in all subjects .
When I was being examined in mathematics, Professor Morse in­
quired what geometry I studied. I replied, 'Davies, ' which pleased him.
He asked me to go to the blackboard and demonstrate theorem num­
ber twelve. I replied, 'I do not remember theorems by number, but if
you will read it, I will demonstrate it. ' Much to my surprise, he read a
theorem that was new to me. I hesitated and asked him to please read
it again, which he did. I replied, 'That theorem is not in my book. ' He
smiled and acted like the theorem was in the book and I could not solve
it. I stated that if he would give me a few minutes I thought I could de­
monstrate it. He said, ' All right, take your own time & raise your hand
when ready, ' but he looked so skeptical as to my ability to succeed that
I was determined to solve it.
After struggling a long time, I raised my hand. He told me to go to
the blackboard & proceed. After I fnished, he smiled pleasantly & said,
'Your demonstration is very awkward, but correct. You certainy never
found that solution in any book. Let me see your geometry. ' I went
downstairs & secured it. After examining it, he said, 'It is an elementary
book written by Davies, the author of Davies-Legendere, which we
use. ' He then gave me another theorem from Davies-Legend ere which
he knew was not in my book. I solved it in a few minutes . This pleased
him. He remarked, ' Your solution is an improvement over the last one
but it is not the one in Davies-Legendere. What arithmetic and algebra
did you study?' After I answered he said, 'You are a freshman in mathe­
matics without any conditions .' One of the seniors who was in the room
said to me afterwards, 'You are solid with Professor Morse through
college unless you commit murder. '
7
I passed all the other examinations and was eligible as a freshman,
with the exception of Latin, in which I was a senior prep.
I intended to be an engineer, and it was only for this reason that I
decided to change to Lehigh University or Boston Tech. Dr. Fisher,
president of Hanover College, was not pleased with my decision, but
when I explained my reason to Professor Morse, he was very sympa­
thetic & said, 'I am sorry to see you leave Hanover, but I understand
your reason. ' I was very fond of Hanover; it was beautifully situated
above the Ohio River.
Much to my surprise, Father wrote me in December and asked me
to go home and take charge of the four mill as my Uncle 1 oe was not
well. He stated, however, that the next year I could go to Lehigh or
Boston Tech, whichever I preferred.
Chapter 6. Bac to Work. Years 882-1 S83. Shortly after I returned to
Columbus, I learned that the mill had been losing money. My uncle
was sick about the situation, considered the mill out of date and an im­
possible proposition. I thought that with some improvements & care­
ful management, it could be made to pay.
The mill had fve employees-the miller, engineer, teamster, mill­
hand and myself. I employed an ofce girl immediately. Occasionally
we had an extra laborer. The coal was hauled from the railroad by con­
tract. To manage the mill, I studied every machine, its operation and
adjustments. In a short time I was able to relieve the miller during his
lunch hour.
The grinding of wheat with buhrs or stones had almost disappeared
because the four manufactured by the roller process was superior and
made white bread. Our competitor had installed rolls more than two
years previously and had practically all the business in Columbus. We
could not compete. The mill must be improved or closed down per­
manently.
The miller advised father that a combination stone and roller system
would make four just as white as that manufactured by the full roller
process. To get information on the subj ect, I called on Mr. John A.
Thompson of Edinburg, a banker, who owned an up-to-date mill. He
was very kind and allowed me to stay in his mill several days to study
the roller process and gave me good advice. I told father the miller was
mistaken. I knew that Mr. Thompson had frst tried that system, but
abandoned it as a mistake and installed the full roller process. Father,
however, adopted the miller's plan because it would cost about half as
much as the full roller process, but he decided that I should purchase
the machinery. I found that the miller had been guided almost entirely
by the machinery salesman and he did not have me meet him. When
the miller was busy, I saw the salesman and insisted on specifcations
of the machinery proposed and the fow of the mill. With that infor­
mation, I secured a competitive bid from Nordyke and Marmon Com­
pany, Indianapolis. Judging from the prices submitted by the miller &
those I secured, there must have been a commission of at least $ 1 ,ooo.
Father was delighted. A large part of the machinery I purchased was
the same and part of it was superior.
Soon after the mill was started, it was evident that there was no im­
provement in the four. Father saw that he had made a serious mistake;
six month's time and about $2 ,ooo in money had been wasted even if
he used the machinery purchased, which had cost about $
3
,ooo. The
millwright work was a total loss. Father recognized that he must make
further improvements or close the mill. If he followed the latter course
he would incur an enormous loss, as the mill and equipment would
be unsalable. He therefore authorized me to buy the machinery neces­
sary to make the mill a success, stating, 'I will give you for your services
your board and a third of the profts from the mill . ' This ofer stimu­
lated me. I was of the opinion that the mill should make $
3
,ooo or
1 1
$4,ooo per year, notwithstanding that it had been losing money over
the last two years.
I secured prices on the additional machinery required from E. P Allis
and Company, Milwaukee, and Nordyke and Marmon Company, and
placed the order with the latter frm. Their salesman represented that
the installation of machinery including milwright work would cost
$8,ooo and for another $ I ,ooo the capacity of the mill could be in­
creased from sixty-fve barrels to one hundred barrels, which would
mean a saving in the cost of manufacture. I thought that with a better
four we should enlarge the business and s
p
end the $ I ,ooo extra. To
my surprise, I found that the improvements would cost $ I I ,{OO in­
stead of $9, 000.
About two weeks before the mill was ready to start, father told me
that he was in fnancial trouble as he could borrow no more money
from the First National Bank. Last year' s improvements in the mill were
a failure which hurt his credit. One of the directors of the bank ofered
to lend him $ 5 ,ooo provided he was given a mortgage on the mill, but
he must pay the bank's loan of $ 2,{oo. His total liabilities were now
$ I I ,{OO. He was rated in Bradstreet from$ I o,ooo to $ 2o,ooo. His in­
debtedness was too large to make a fnancial statement. The question
of money had never occurred to me. I had
t
hought, of course, that he
could get the money at the bank. Father was troubled and mother was
terribly worried. I saw the treasurer of Nordyke and Marmon Com­
pany and explained that I was responsible for increasing the capacity
of the mill to one hundred barrels, which they had recommended at
an extra cost of $ I ,ooo, but that the total cost of the improvements
amounted to $ 2 ,{OO more than their representative' s estimate. Their
regular terms were three years, which I had not questioned, but in view
of their mistakes, I thought that they should reduce the frst year' s pay­
ments to one-quarter instead of one-third & spread the payments over
four years instead of three. The treasurer of the company refused; I
saw the president and he granted me substantially my request. Fortu­
nately� father secured a loan of $ 5 , ooo from a friend in Cincinnati,
which eased money matters with him. I realized that if the mill was not
successful, father was in a serious fnancial position.
When the mtll was started, the four proved satisfactory, but natu­
rally was no better than that of our competitor. He had supplied prac­
tically all the four in Columbus for three years & retained the business.
I was deeply disappointed in not being able to secure a few of our pre­
vious customers. The discouraging feature was that I made no pro­
gress. I was sensitive. If a grocer had none of our four in stock and
refused to give me an order, it was with difculty that I could refrain
from tears.
On account of higher costs, we could not sell the carload buyers in
competition with the merchant mills. I made an effort to sell the small­
er buyers in nearby towns. I visited North Vernon weekly. I would take
the 4:3 o P. M. train, remain overnight and return to Columbus the next
morning. Every two weeks I went to Jefersonville, New Albany, and
Louisville. I would catch the 4:50 A. M. train and return late at night
so as to be away from the mill as little as possible. When home, I was
at the mill from seven A. M. until six P. M. I never heard of the eight­
hour day. I went to Indianapolis occasionally for a day, when I could
sell a carload at about cost to a baker.
I found that I could get more orders from strangers than in Colum
­
bus, which I thought was because when away from home I had more
confdence in myself. I learned to do a better j ob in soliciting orders
on which we had to pay the freight, but met with no success at home.
The mill lost about $ r, 2 oo in four months. I was quite discouraged
& regretted having enlarged the mill. I began to fear that my Uncle Joe
was right.
1 3
Chapter 7. A Few Experiences as a Young Man. At the age of sixteen
years, I expected to become a civil engineer and on Saturdays, holidays
and during summer vacation, when opportunity ofered, I carried the
rod and chain for the city and county engineers. I never became an
engineer, but the knowledge gained was useful to me in later years.
In those years dancing was not countenanced by most churches, but
roller skating was permissible and popular. Mother did not oppose my
taking dancing lessons or going to private dances, but objected strong­
ly to my skating with certain girls, although I explained that it was be­
cause they were the best skaters that I selected them as partners. My
explanation was only partially accepted. I must admit that several of
the girls to whom she objected were good looking in addition to being
good skaters. She looked much further than I did regarding them and
their families as well as associates. She criticized me so fairly and in
such a nice way that it was a pleasure to comply with her wishes.
Progressive euchre parties at that time were quite popular. It was cus­
tomary to give prizes, but no one played for money. The game was
severely criticized as gambling by some churches. One day I brought
home a very nice plush collar&handkerchief box,which mother saw in
my room. She suspected where I had got it and questioned me. I asked
her if she understood euchre and she admitted that she did not. At
that time spelling matches were quite common, and I explained that
progressive euchre parties were similiar to them, but in euchre it was
problems that had to be solved instead of words to be spelled; that the
game was played by partners (oy and girl) against two opponents at
each table, the partners being changed at every table each game, and
the successful partners progressing to the next table. I, with the help
of my diferent partners, had been successful in solving the greatest
number of euchre problems and making the most progressions. Con­
sequently, as a 'reward of merit,' I had secured the prize to which she
referred. I do not recall what the lady received. The Presbyterian Sun­
day School gave ' rewards of merit' to scholars answering the largest
number of Bible questions and that was the reason I referred to the
euchre prize as a ' reward of merit. ' I explained that it was much more
of a game and fun to compete for a ' reward of merit' at a euchre party
than i a Suday school class. Mother was amused by my explanation.
She did not think I had done anything very bad. Cards were never
played in our home, neither was there any dancing.
Some years later, when I was living in Anderson, Indiana, Robert &
Joseph, my sons, visited my parents . I was shocked when they returned
to fnd that they had a pack of cards which their grandmother had
bought them because they wanted to play ' Snap Jack' and 'Old Maid. '
On my next trip to Columbus, I told mother that she was not nearly
as strict as when I was a boy. She was quite surprised, saying that I was
mistaken. I stated she had purchased a pack of cards for my boys and
permitted them to
p
lay cards in her home, a privilege I never had. She
was amused, & admitted she had changed her views on many questions.
Father was an elder in the Presbyterian Church, or probably both
cards and dancing might have been
p
ermitted. He was a skilled watch­
maker and also in the jewelry business. He built a photograph gallery
i the rear of his building for photographs and tintypes, owning the
equipment. The photographer received half the
p
rofts . In some twenty
years, father had saved enough out of his business to own his stock of
merchandise, the building he occupied, the home in which we lived
and several thousand dollars worth of real estate. He generally was in
debt several thousand dollars. He traded real estate at various times:
once for land in Texas and once for an Indianapolis property. Father
never had an accurate set of books, but they were not so necessary in
that period, as there were no income taxes, and bookkeeping was not
so essential as it is today.
I
S
Chapter 8. A Good Investment. Year I 8 83. One Saturday, while in a
barber shop, I bought a warehouse for $ 2 2 {. The building and its im­
provements probably cost $ I ,{oo, but the salvage value was probably
not worth more than $ I {O. It was located on land leased from the
Pennsylvania Railroad at $ 7 { per year. I heard that the owner of the
building had received notice to vacate, but I knew the superintendent
of the railroad and thought that I could have the lease extended from
year to year, which I succeeded in doing.
The property had been rented at $ 2 { per month for a feed store, but
the tenant was retiring from business. I was not aware of this. After
learning of it I suggested to Frank Everroad, an employee of the tenant,
that he take over the feed business. He laughed and said,
'
I would like
to, but have no money. ' He went on to say that he would gladly work
for me at $ I o per week-the wages he was receiving. I had done
some business with the tenant, had seen Everroad several times, and
had formed a favorable impression as to his ability. I proceeded to
make several inquiries regarding him and, as all replies were favorable,
I asked him to call and see me. He knew quite a lot about the business
and again ofered to work for me at $ I o a week. I made him the fol­
lowing proposition: 'If you work for me, I will guarantee that you make
at least $ I o per week on the following plan- First: You are to run the
business in your name. It is not to be known that I have any interest in
it. Second: You are to draw $ I o per week and pay $ 2 { per month rent,
the same as the present tenant. Third: We will divide the profts at the
end of the frst year. If you do not make more than $ I o per week,
you are to retain that amount and our agreement ends. ' His share of
the profts was a little more than $ I 8 per week. The business was con­
tinued and proved to be satisfactory to both of us.
Chapter 9· The Shipping of Grain. Year 1 8 84. The mill never shipped
grain until I became its manager. Grain shippers thought we should
buy wheat for milling only & so expressed themselves. Shipping grain
became an important part of our business.
In buying wheat there was usually a proft of two to three cents per
bushel for shippers, but when the millers needed wheat to operate
their mills the proft for shippers of wheat disappeared.
We bought all the wheat we could buy at market prices and carried
s ,coo bushels, and frequently more, when the market was between
6) and So cents per bushel, but if the market was in excess of 90 cents
we owned little. This policy was proftable. In corn it was diferent. A
cerealine mill in Columbus shipped an enormous tonnage of prime
white corn from Illinois to Columbus. It paid a fancy price for good
white corn to encourage local farmers and no yellow corn was raised.
One of the leading farmers in the country wanted to sell 8 ,coo bush­
els of white corn that had been damaged by several heavy rains blow­
ing into his cribs. He showed me a half-bushel basket that he con­
sidered a fair sample. It was discolored by mould. I explained to him
that if I could see the corn in his cribs I would have a much better idea
of its value and said I would drive out immediately and look at it. I
found that part of the corn was badly discolored, but some was not
damaged. I knew shelling would greatly improve its appearance as it
gets a severe rubbing in going through the sheller. I discovered that
rubbing the corn in your hands removed considerable mould. I se­
lected a bushel of the most discolored I could fnd and ran it through
our sheller. It improved its color even more than I had expected. Load­
ing the corn into wagons, shoveling it into cars, transporting it to In­
dianapolis, unloading it into the elevator, shelling and transporting it
again to its destination not only thoroughly mixed it, but gave it a lot
of airing and friction and improved its appearance. I concluded that
the corn might sell to a good advantage in some markets.
When I next saw the farmer, he asked me to make a bid on the 1 7
entire lot. I saw that he was exceedingly anxious to sell . I stated that
the market price on prime corn was forty-three cents per bushel , but
explained that there was considerable uncertainty and risk in buying
damaged grain-where to ship it, how it would grade and its value­
but that I was willing to take the risk and buy the 8, ooo bushels at
twenty-fve cents per bushel. He asked me how soon I would accept
delivery. He was a man who liked to rush his work. I replied, 'As fast
as you can haul it and load it into boxcars. ' This pleased him. He an­
swered, 'All right, young man, it' s your corn. My teams will start to­
morrow morning at 7 o'clock. ' We signed a memorandum accordingly.
I telegraphed an Indianapolis elevator and asked what they would
charge per bushel for shelling about 8, ooo bushels of corn in transit.
They quoted a fair rate which I accepted. I shipped the corn to Toledo
with a stop-over in Indianapolis at $ 3 . oo per car. The cor graded bet­
ter than I had expected. We realized a proft of ffteen cents per bushel
or $ 1 ,2oo.
I learned afterwards that two grain shippers refused to buy the grain
outright , as they considered the risk too great, hqt ofered to handle it
on a commission basis of two cents per bushel. Their timidity made it
easy for me to buy. I bought it probably fve cents per bushel less than
I would have paid if there had been keen competition.
When corn is being shelled it receives a rough scouring and a terrifc
blowing. I had not thought of the fact that good cor would not be
damaged. This was the only lot of damaged corn I ever had a chance
to buy. We purchased prime corn for corn meal , also of-grade wheat
for mixing purposes, but it was handled at fairly close prices .
The farmer from whom I bought this corn was a large grower of
wheat & took great pride in its quality. He had the reputation of being
' as close as the bark on a tree, ' but was thoroughly honest. He was sat­
isfed with the transaction, and as the other buyers refused to make a
defnite ofer, it helped me to secure a fair chance in buying his wheat,
which was superior in quality to the average and worth more to us for
millng purposes.
Chapter 1 o. The Mystery of My Unsuccessful Salesmanship Solved.
We had an understanding, a gentleman' s agreement, with our com­
petitor in Columbus on the price of four delivered to the grocers and
bakers. I adhered strictly to those prices and supposed he did the same.
A friend of my mother, Mrs. Sarah George, carried on after her hus­
band's death the grocery business he had established. She managed the
business quite successfully and sold a lot of four that went to Brown
County. One morning she said, 'Will, I want to tell you confdentially
why I have not given you more orders. The reason which infuenced
me probably applies to others. At the end of every month, I am allowed
a rebate of ten cents per barrel . Please do not give me away. ' I thanked
her and said, ' You need have no fear. ' She explained, 'I pay all my bills
by check after the end of each month. ' She showed me a receipted
statement for the last month's four bill and the check with which it
had been paid. In making the check she deducted ten cents per barrel
rebate from the amount in the statement.
I had been stupid and my pride was hurt. Our competitor was old
enough to be my father, and he had put things over me like a tent. I
decided immediately to fght and to continue that fght until we sold
half the four in Columbus-we were selling only about eight or ten
per cent at this time. The proftable business was here.
I studied our situation. If we only met the cut of ten cents we would
accomplish nothing. The reduction must be as large as we could make
it, so that it would be evident that F. Donner and Son were making it,
and there could be no question about it. I reduced the price in Colum­
bus fve cents per 2 s lbs in paper sacks (the package in which most of
the four was sold). This was equivalent at that time to 4 s cents per 1 9
barrel . We reduced the price of four sold in bulk 2. cents per 1 oo lbs,
which was about the same price as in paper sacks, but as few wooden
barrels were used the reduction on account of the cost of the barrel
was only 2. cents. We exchanged four for wheat, the price of which
was not afected. We did local advertising which read as follows:
Bread is the Staf of Lifel If you want a good substantial
one and the best bread, use Donner' s light loaf four.
After learning that all grocers and bakers who were customers of
our competitor had not received the rebate of ten cents per barrel, I
informed them that some grocers & bakers did. A few were so wrought
up that they were charged more than their competitors that they gave
us subsantial orders and continued to favor us. We promised to treat
them fairly. In order to call on all the buyers on the same day, I skipped
lunch. The mill secured more local orders that day than it had received
in any six weeks since F. Donner and Son had started in business. Our
business was growing. The reductions applied only to light loaf four.
We had diferent grades and brands in other markets.
I called on our competitor and stated, ' Since you have given private
rebates of ten cents per barrel, I give you our new reduced prices. I
want you to understand that we intend to sell ffty per cent of the four
sold in Columbus and will continue low prices until we secure that per­
centage. ' I was evidently the frst to notify him. He was so fabbergasted
that he hesitated. He then admitted that in a few instances he had given
ten cents per barrel for cash only. I replied, 'You are a liar; you have not
given that reduction only as a cash discount. ' He became pale & angr,
saying, ' You are a d--- fool . I will see your father. ' I replied, 'Go ahead. If
you do not play fair, remember, we will reduce prices further. '
When I had fnished, I saw father and explained what I had done.
He was greatly surprised at the size and number of orders I had secured.
At frst he thought that I had made prices lower than necessary, but I
argued that if we had only met the ten cent rebate and cash discount,
we woud have received no consideration from the favored buyers &
secured few orders; whereas we had taken enough business to make a
deep impression on our competitor and all buyers. We had also estab­
lished a favorable position with the consumers. I explained to father
that the reduction of forty-fve cents still left us a margin of ffteen to
twenty cents per barrel or as much proft as where we paid the freight.
He concluded that I was right and said, ' Finish the j ob you started. ' I
said, ' It may be necessary to sell four at low prices and fght untU we
obtain half the trade, but as we have practically nothing to lose and so
much business to gain I shall enjoy continuing this war until we accom­
plish the results for which we are fghting. '
The next morning, the gentleman called on father and asked him
to agree on a price twenty-fve cents higher per barrel. He tried to con­
vince father that his son did not know what he was doing. He argued,
' Your prices are now so low that you can make no money. ' Father ex­
plained that his son received no salary, only a percentage of the profts,
and if the mill made no money for a year or two, it woud teach the
young man a lesson. I thought that father' s answer was perfect. We
telegraphed and quoted the nearby out-of-town stores and secured a
number of orders in that way.
I was in such a belligerent mood that fghting for business made me
forget my timidity and sensitiveness. Several months later the price of
wheat declined and our competitor called on me to say, 'There is no
need to reduce the price of four. ' Five cents per bushel was the equiva­
lent of about twenty-fve cents per barrel. I hesitated and fnally said,
'I was thinking about twenty-fve cents per barrel . However, I will give
you a trial. Today' s prices will be all right if you play fair, but if you do
not, look out!' We now had a fair proft and almost half of the local
business and our trade was growing.
2 I
There were several grain buyers who bought and shipped wheat
from Columbus and nearby railroad stations. I refused to enter into any
understanding with them as to the prices we would pay for the dif­
ferent grades of wheat, because there were too many diferences in
opinions as to gradings . We would use our own judgment as to the price
we would pay in Columbus and nearby stations. I did not consider
that an arrangement as to the price at nearby railroad stations would
be desirable, since many farmers preferred to deliver their wheat to
nearby stations because it was a shorter haul than to Columbus. We
would be foolish not to pay an extra price for delivery to our mill , be­
cause if we bought it in the general market we would pay a higher price,
the freight to Columbus, and the cost of hauling it from the railroad to
the mill. The mill lost $ I , 2 oo the frst four months, but had a proft of
slightly more than two thousand dollars for the year. I do not think
that we ever encountered a more difcult situation.
It requires as much work to succeed in a small business as in a larger
one-the fundamentals are the same.
Chapter I 1 . A Grain Purchase Mr. Irwin Wanted Explained and Our
Reward. Years
I
8 84- I 88
.
. Mr. lrwin, our banker, said to me one day,
'You must have made a lot of money this year. ' I said, ' We have made
no more than last year at this time. ' He said, 'I do not understand. Last
year you owed me about $ 2 ,ooo. This year you have money in the
bank and
.
OO barrels of four worth about $ 2 ,
.
OO stored in my buggy
house. ' I replied, ' But the wheat it is made from is not paid for and its
price not yet determined. I will show you, confdentially, my contract. '
I explained that a gentleman, Mr. X, had part of his wheat crop from
last year and the year before, amounting to I o,ooo bushels , & he had
said that as the roads were very good he would like to get it hauled at
that time. Wheat was very scarce in Bartholomew County and I was
anxious to secure this lot of wheat as I thought we might not be able
to operate the mill unless we did. The market at that time justifed a
price of ninety-seven cents, but as it was a nice lot of wheat I ofered
ninety-eight cents per bush
e
l for it. Mr. X said, 'I want $ I . oo per bush­
el . ' I laughed and said he would want more when he could get that
price. Mr. X said, 'No, I will agree to sell when I can get $ I . oo.
'
I re­
plied, 'Under those conditions, I will store your wheat free of charge
and will agree to pay you three cents under the Indianapolis price of
No. 2 red wheat and you must consider the wheat sold whenever the
market price reaches $ I . 03 in Indianapolis. Under these conditions, I
will haul the wheat now. ' I wrote a simple agreement, which we signed.
There was no active demand for four, but I could sell bran at high
prices and a little four that would net us $ I . I o for the wheat sold. It
will be noted that Mr. X wanted to sell the wheat at $ I . oo per bushel
net to him, & we agreed to store it free of cost until the market reached
$ 1. 03 . If the price had reached $ 1. 03 Mr. X would have received ex­
actly what he wanted.
The prospects for spring & winter wheat were good but soon prices
declined rapidly. When the No. 2 red wheat reached eighty-three cents
in Indianapolis, Mr. X closed it out at eighty cents.
Mr. Irwin said it was a nice contract and was quite pleased. He said
that I could not lose. He further said, ' Hereafter, I will charge you six
per cent on your daily average overdrafts at the end of the month.
Since some of your checks are not cashed promptly you will have quite
a saving on this arrangement. ' I used this credit as if we had $ s , ooo
in the bank.
Chapter 1 2 . Bicycle Races-Popular Sport. Years 1 884- 1 8 8s. During
this time the high wheel bicycle was very popular. Columbus had more
bicycles than many cities much larger. This was brought about through
the activities of Charles Smith, who had the state agency of the Pope
Manufacturing Company, makers of the Columbia bicycle.
2 3
Will Irwin and I were enthusiastic bicyclists. We interested Dr. Rice,
Charlie Green, and Charles Smith to j oin us in starting bicycle races in
Columbus. In I 8 84 we rented the fair grounds , which had a good half
mile track, and advertised a race meet quite extensively. We visited
nearby towns on our wheels for advertising purposes, but mixed those
trips with pleasure as there were some very attractive girls in Seymour
& Edinburgh. Several times we were detained so late that we retured
via train.
The prizes given to the nonprofessionals were silver cups and gold
medals. We had a number of contestants from Louisville, Indianapolis,
and several from Cleveland and Chicago. Many visitors came from
Indianapolis, Louisville and other Indiana towns. After all expenses
were paid, not including anything for our time, there remained a prof­
it of $ 2 8 2 . _0. The races brought so many people to Columbus that
the merchants asked us to have the races the next year. In I 8 8 s we in­
creased the number of events and gave more expensive prizes. We ad­
vertised in Louisville & Indianapolis which was costly. The Fair Ground
Association raised the rent, so our expenses were much higher than
in I 8 84.
As Will Irwin and I continued our advertising trips on our wheels,
we made contacts which necessitated long distance telephone calls.
Instead of telephoning from Irwin' s bank to make our personal engage­
ments, we would go to the telephone exchange so that our conver­
sations would be more private. Will phoned one day and made arrange­
ments to talk with a young lady in fve minutes, by which time he ex­
pected to be at the telephone exchange, but she was on the line before
Will & I reached there & was connected with Irwin' s bank. Mr. Joseph
I. Irwin answered the phone just as we arrived at the exchange. Will
was immediately connected and heard his father ask the young lady
her name. When she told him he replied, 'You have a nice voice. I am
Will' s father. ' Will broke in quickly, but the father enoyed that con­
versation more than the son.
Will Irwin won the half-mile race and received a gold medal for that
event. I won the I oo yard race and a gold medal. I defeated Prince Wells
of Louisville who later became a professional and was well known in
Indiana and Kentucky. When I mentioned to one of my Philadelphia
friends, more than ffty years later, that in I 8 8 � I won a I oo yard race
he was surprised and said he could not imagine my being such an ath­
lete. This made it necessary for me to explain that the event
w
as a
new type of race, being a slow race for I oo yards. The track was di­
vided by strings into courses I o feet wide. A contestant who touched
a string, stood still, or fell of fouled and was disqualifed. It was easy
to stand still, but difcult to continue at a slow gait. The danger points
were when the pedals of your wheel were near their high & low points,
because if you exerted sufcient pressure to move the wheel beyond
those critical points, you were likely to pick up speed, run on the foul
line, or fall of. I discovered that when the pedals were near those points
I could take hold of the rim of the wheel with my hand and push it
slowly and maintain my balance. It was that little trick which gave me
the race. My competitors attempted to go too slowly & were all quick­
ly disqualifed with the exception of Prince Wells. Finally he looked
back to see me and when he discovered that I was pushing the wheel
with my hand part of the time, he laughed and fell of, so that I had
no competitor the last half of the race. Prince Wells later became a fan­
cy trick rider. He and a Mr. Canary gave exhibitions throughout the
country in skating rinks. Roller skating was a craze for a time. Small
towns throughout the country had their skating rinks.
IfW ells had thought of pushing the wheel with his hand and had an
hour or two to practice, I would have had no chance against him.
The meeting was a big success & we had many visiting wheelmen. 2 7
John Clark and Albert Bush had joined our group so that there were
seven sponsors, but after all expenses were paid there remained a prof­
it of only $2 o to be divided among seven. We were fortunate that
the weather had been fne, for if it had rained, there would have been
a loss of about $ I , ooo. We discontinued the races the next year as
they would involve more time than we could spare. Indianapolis and
Louisville were also having races so we decided to retire from the feld.
Chapter I 3 . A Farmer Became a Grocer. Years I 8 84- I 8 8 5. A retired
farmer entered the grocery business in Columbus. He was an honest &
nice man and extended credit to many customers. He was too liberal
in this respect and it was my opinion, with many others, that he would
probably fail . When our account with him rea
c
hed $ I oo, I ordered
Enoch, our teamster, who solicited the orders, to accept only cash or­
ders from him and to try to collect the amount past due. One day he
asked Enoch to deliver to him fve barrels of four, promising to pay for
it in the morning in addition to the $ I oo. Our driver took the chance,
which I approved. I was on the j ob promptly the next morning. The
grocer was making out a deposit slip a
?
d asked me to accompany him
to the bank, which I did. I saw him make the deposit & presented the
check but was told it was not good. I think the grocer thought the
check was good. I went to the rear of the bank and saw Will Schriber,
t
he bookkeeper, and told him what had happened. He said, 'I cannot
tell you the amount of his balance, but if you had not included the last
fve barrels in the account, it would have been paid. '
I started out of the bank and it occurred to me that it might take
time to locate the grocer, so I returned and took the liberty of depos­
iting $ 2 s to his account & again presented my check. When I had col­
lected the $ I 2 s, the president of the bank came to me with the check
in his hand and said, 'You had no right to make that deposit of $2 5.
'
I stated, ' You accepted the $2 s and paid me the $ I 2 s. It is a closed
transaction. You can collect the money from your depositor. ' He be­
came angry. Several persons were i the bank & the incident became
gossip. My banker, Mr. Irwin, heard about it and asked me if it was a
fact. I answered, 'Yes. '
Afterwards, I went to the grocer' s assistant and explained exactly
what I had done. I ofered to buy groceries to the amount of the de­
posit slip. He thanked me for the order and delivered the groceries.
Mother asked me why I had purchased so many groceries . I explained.
She asked if Mr. Irwin said anything & I said, 'No, but he winked at me. '
Chapter 1 4. Burning of the Donner Flour Mill in Columbus. Year I 887.
The Donner four mill fronted south on Fifth Street and west on Syca­
more Street. There was a small one-story dwelling on the rear of the
property, the balance of which was used for storing wood, coal and for
the convenience of the customers with teams . It was a splendid loca­
tion for a residence or church, but a poor site for a four mill as it had
no railroad facilities.
In May, I 8 8 7, a fre started in the mill short! y after I 2 o' clock noon
in the very top of the building. Many men & boys were just out from
work and school and were on their way home to lunch. They volun­
teered their assistance and we organized them for transferrig four &
wheat across the street. The fre began at the top of one of the moving
elevators with cups. They were a total loss, excepting the wheels and
spindles of several that went into the basement, but most of them
stopped above the frst foor.
Our loss would have been greater if it had not occurred at the time
of day it did, when the employees of the mill were present, and the fre
had water put on it at the time it did. Fire spreads very rapidly in an old
four mill, as the wood is so thoroughly dry.
The mill and its contents were well insured, but everything on and
above the second foor was a total loss. The insurance adjusters 2 9
said that they had never seen such a total loss above the second foor
nor a greater percentage of salvage on and below the second foor.
The shafting, bearings, stock of paper sacks and the small corn mill,
corn sheller, four packer, trucks, tools, moveable & fxed scales were
not damaged nor the ofce furniture and fxtures and supplies. Wheat
in bins below the frst foor was not damaged.
Two hundred barrels of four In 2 _ lb paper sacks ( 1 , 6oo packages)
and 2 s barrels In cooperage were taken across the street. There were
about 2 s barrels in process of manufacture burned, including material
that was to be fed from choke-ups. No damage was sufered in the en­
gine and boiler room.
Chapter I s. An Invitation to Build a Mill in Hastings, Neb. Year I 8 8
7
.
Shortly after our mill burned, we received a letter from the secretary
of the Chamber of Commerce, Hastings, Nebraska, which he described
as a growing city. He informed us that their four mill had been des­
troyed by fre some time before, and invited us to visit Hastings, with
a view to building a modern 2 oo barrel four mill. He also stated that
the city was prepared to give a desirable site on a railroad & $ I o, ooo
cash to a responsible party building such a mill. The ofer sounded at­
tractive. Father and mother were interested, but did not want to leave
Columbus. They thought, however, that if the inducements were suf­
fcient I could move there. It was therefore decided that I should go
to Hastings & look the situation over, after which we could consider
the proposition. I wrote the secretary promising to visit them within a
few days. He telegraphed me, asking me to wire hi m the date & time
of my arrival. I did not answer as I had decided to look the situation
over frst by myself in an efort to fnd out if there were any reasons
against building a mill there. I knew that they would point out the
good ones.
My train arrived about fve o' clock in the morning. A farmer and I
alighted from the same Pullman & entered the one hack at the station.
I asked my companion the name of the best hotel . He told me but sug­
gested that I join him at the restaurant near the hotel, where I could
get a good breakfast for twenty-fve cents. He said that the same break­
fast would cost me ffty cents at the hotel and I woud have to wait
around for nearly three hours before it was served. I thanked him and
told him I would gladly join him. During breakfast, I incidentally in­
quired if there was a four mill i Hastings. He said that it had burned
down and he feared no one would build another. Upon asking why,
he explained that Hastings was in a poor wheat section-it seemed to
be between areas i which both winter and spring wheat were success­
fully grown, but that the farmers there never knew which to plant­
spring or winter; occasionally one crop was good and the other poor.
A few miles to the north of Hastings, at St. Paul, spring wheat did well
and a short distance to the south, around Red Cloud, good crops of
winter wheat were raised, but their city seemed to be betwixt and be­
tween. One of the towns, I think it was Red Cloud, sold most of the
four and feed in Hastings and woud exchange four for either kind
of wheat.
After breakfast, I called at the warehouse and had a talk with the
manager. He told me he understood that the Chamber of Commerce
would give $ 1 o, ooo to anyone who would build a 2 oo barrel four
mill, provided it was located on a certain tract of land which was quite
far out, but that anyone familiar with the wheat in this section would
not build a mill in Hastings even If the best site in town was ofered
.
In view of this unfavorable information, we decided not to build
at this point.
I had a little experience while in Hastings which I found extremely
interesting. About ten o' clock I called on the secretary of the Chamber
of Commerce. He was very cordial and took me over to meet the 3 1
president of the bank who promised to see me in an hour or so. The
banker did not know who I was or why I was in Hastings. He took me
into his private ofce, explaining that he was in the midst of an un­
pleasant j ob, which he would tell me about later. He afterwards ex­
plained that the man he had been doing business with was transferring
all his property & equities therein under rather unusual circumstances,
and would have but little left. The banker felt sorry for him, and said
that he formerly had, I think, I 6o acres of land & improvements which
cost him about $ I o, ooo, but after the boom in real estate started he
sold it for $ 8o, ooo, realizing $7o, ooo quickly. He then began dealing
extensively in real estate, buying and selling a considerable number of
properties. lt was the custom to make a small payment & to give notes
maturing in one, two, three, and even four years for the balance. He
bought properties in this manner and in some instances assumed out­
standing mortgages. When he sold, the buyer assumed the notes and
mortgages on the property. He also bought a number of properties &
gave mortgages.
For several years, he made many sales and purchases in this manner
and had large paper profts. He was looked upon as a rich man & was
supposed to be worth over $ 2 oo, ooo. This was not to his advantage
when the situation in regard to real estate changed-people fled judg­
ments against him to protect themselves. Even where he had some
property al most free, the equities were so tied up that he could not
realize on them. He lost almost everything.
Chapter I 6. Rebuilding the Mill in Columbus. Year I 8 8 7. Good loca­
tions on the railroad in Columbus were scarce. We were ofered a grain
elevator in the central part of town for $ 6, ooo. The real estate alone
was worth about $4, ooo. It meant removing the bins from one hal f of
the elevator to install the mill in that part, and using the other half as
an elevator. Father thought we had better buy it at $ 6, ooo, but I fnally
succeeded in getting it for $5 , ood. The advantages in this property
were as follows :
I. The best location we could secure.
2. I thought it would displace the elevator as a competitor in buying
grain.
3
. It gave us a mill cheaper than we could build one in any suitable
location.
4· It gave us storage for about I 8 , ooo bushels of wheat.
The disadvantage was a higher rate of two per cent on fre insurance
than on a brick building, which we could aford to absorb.
I purchased from Nordyke and Marmon Company the necessary
equipment for a hundred barrel mill, using all the machinery salvaged
from the fre. The building, location, & facilities for storing & shipping
wheat were important improvements . We built a warehouse at the
rear of the property on our railroad siding for storing four, supplies, etc.
Another mill had been built previously but it was distant and incon­
venient for about three quarters of the farmers around Columbus. The
previous owner of our elevator built a small one, but the location was
not as good as ours so the new mill & elevator were not serious com­
petitors. Our location was central and much more convenient for buy­
ing wheat and exchanging four for wheat.
Chapter I 7. A Lesson in Experience Cost $ 3
6o. Year I 8 87. Shortly
after acquiring the Columbus elevator, I purchased from Mr. X 4, ooo
bushels of No. 2 red wheat, F. O. B. cars Jonesville at eighty cents per
bushel, weight and grade guaranteed. We each signed a memorandum
accordingly. The market was strong and advanced fully three cents . I
expected a proft of six cents per bushel.
A local grain dealer asked me if I had any wheat to sell. I ofered
him 4, ooo bushels of No. 2 red wheat at eighty-six cents per bushel .
He asked me where it was. I answered, 'Jonesville. ' He had bought
3 3
lots of wheat in that vicinity and knew there was only one man there
who could deliver 4, ooo bushels and immediately went to see him &
ofered him eighty-three cents per bushel delivered Jonesville. Mr. X
came to see me and said he was ofered eighty-three cents per bushel
delivered Jonesville. I told him the market had advanced three cents
per bushel and was now worth that price delivered Jones ville. He then
said, 'I will deliver the wheat to you in Jonesville, but I refuse to guaran­
tee the weights and grade. ' I answered that he had already so agreed in
writing. He replied, 'I now refuse. You cannot aford to sue me. '
I was provoked, and saw Colonel Simeon Stanisfer for legal advice.
He asked me if I could accept the wheat at his ofer & make any proft.
I answered, ' On account of the expense of weighing and receiving the
grain in Jonesville, the proft will be small, probably $ 50 if it grades No.
2 red, but according to our contract there would be a proft of $ 240. '
Colonel Stanisfer advised, 'Will, you had better take the wheat on the
revised basis. It is unfair, but Mr. X is not an honorable man. Knowing
your father and mother, I advise you to accept his ofer. I will charge
you no fee, but if you sue and win you will lose money because of my
fee and in addition waste your time. ' I accepted my friend' s advice be­
cause he was kind and honest.
The wheat failed to grade No. 2 red. By talking too much, instead
of making $ 3 6o, we lost $ I 2o. Competitors are not often as unfair,
and neither are the majority of sellers as unscrupulous as Mr. X, but
wlat others do not know about your business will never hurt you. This
mistake was an expensive lesson. I made numerous mistakes, but this
is the most stupid one I can remember.
Chapter I 8. Trouble Gave Me an Idea Out of Which Came an Ofer
From Mr. Marmon to Work for His Company. Year I 8 87. In I 88J,
the old mill had the most serious choke-up I ever witnessed. The miller
had gone to lunch and I was on duty. The exit spout from the purifer
choked, so that the quantity of material increased. The larger amount
of material required greater power to revolve and churn the increased
quantity in its conveyor. It fnally caused the belt to run of and the
purifer stopped, after which the elevator became so overloaded that
it almost choked down. I discovered the trouble only a few minutes
before the miller returned and viewed the awful mess in the mill . He
assumed I was to blame and became very disgusted, angry and profane.
I thought that probably the trouble had started before the miller de­
parted for lunch but, since I was not certain, refrained from expressing
myself. I told the miller I woud help get the purifer running and the
material cleaned up before returning to the ofce, & that I was sorry
to see him in so much trouble. I left about two sacks of clean material
to be fed into the purifer when conditions permitted. It dawned on
me that if there was more material in the elevator than in the purifer,
the latter had stopped frst.
The next day, immediately after the miller went to lunch, I diverted
the material from the purifer to the foor. Upon his return I explained
what I had done and said that I proposed to learn if the trouble started
yesterday while he was on duty or after he went to lunch. I reasoned
that with the purifer stopped, the material in the elevator to the puri­
fer had no exit except at its top into one of the elevator boots; it could
go no other place. I explained that if the material secured from the ele­
vator yesterday was a larger quantity than I ran on the foor today, it
woud be obvious to me that the purifer stopped before he went to
lunch. He studied and hesitated several minutes. Finally, he laughed &
stated, 'I secured several times as much material in the elevator as you
found in the purifer. No amount of talk could have convinced me yes­
terday that the mill was in trouble before I went to lunch, because I
honestly believed everything was running, but you have proved to me
that I was mistaken. '
3
S
The s-pouts were made of wood. To know that the material was fow­
ing, it was necessary to open one of the hand holes and see or feel it
running. This was easier to do by daylight than with a lantern. Certain
spouts never gave any trouble. This applied to those in which the ma­
terial was granular and ran freely-similar to sand. If the material was
soft, however, or resembled four, it was more liable to clog and cause
choke-ups. In such cases, the incline of the spout had to be correct &
very exact. Our mill had three foors & a basement. It was not designed
for the machinery it contained and consequently the engineers were
handicapped in properly placing the diferent machines which were
crowded into the old building. Some passages that the miller had to
use were narrow and badly lighted, making his task very difcult. He
had to do a lot of walking, running up and down stairs, and had many
troublesome choke-ups.
As I have stated before, I helped the miller during his lunch hour, &
being inclined to be lazy, thought up a way to avert choke-ups. I fash­
ioned an electric device with an annunciator to detect and locate the
trouble at its inception, thereby avoiding serious choke-ups. I made an
application for a patent on this device. In I 889 I made a model. It con­
sisted of a spout with a slide which could be moved and stop the fow
of the material in the same manner as a choke-up, causing it to back
up, come in contact with the swinging plate and lift it. The arm of the
shaft on which it hung would, by this means, close the circuit and ring
the electric bell the same as a choke-up.
I had an exaggerated idea of the importance of this device, and em­
ployed a salesman at $ I oo per month and his expenses to sell it. I re­
tained him for two months, during which time he wrote me enthu­
siastic letters but never forwarded an order. I was quite disappointed.
I showed the model to Nordyke & Marmon Company of Indianapolis.
Mr. Nordyke, the president, was favorably impressed with the idea, but
Mr. Marmon was not. He admitted that the device would work and
detect choke-ups, but doubted if it could be sold-he considered it un­
necessary. He telephoned their engineering department and got plans
of our mill. He said that mills should be properly designed and the dif­
ferent machines located with sufcient incline in all spouts, so that
choke-ups would not occur, and that belts should be kept tight and in
good repair, so that they would not run of, thereby stopping machines
and causing troubl e. I realized the truth in what he said.
During our conversation, Mr. Marmon asked me how much I was
making. I stated the mill was making an average of $4, soo per year, for
which I received one-third of the profts , or about $ I , soo per year for
my services . He said, 'You are doing remarkably well for such a small
mill, taking into consideration that you are of the railroad & crowded
into an unsuitable building. ' He operated a small mill in Richmond &
a larger one in Noblesville, Indiana. It was built as a model for the Nor­
dyke and Marmon Company. He ofered me $3 , ooo for the frst year
if I would join them, and added, 'You will have good opportunities for
advancement. ' I thanked him and told him how much I appreciated
his ofer but explained that my father was a watchmaker & depended
upon me to look after the four mill, so that I was unable to leave at the
present time but that I would see him some time in the near future.
Strong competition with superior facilities, including a mill to grind
feed, had started recently in a more central location than the ware­
house in which the feed business I owned was operated, and the proft
in our business had disappeared. I wanted to wind it up, but we had
done so well that Frank Everroad, my partner, did not see the situation
as I did. His brother j oined with him and they ofered me $
3
oo for the
warehouse, cost for our inventory and book value for our accounts. I
accepted their ofer. In a little over four years I had received a proft
of more than $s, ooo from the feed business, and over $ I , 2 oo rent 3 7
from the warehouse, for which I had paid $ 2 2 �. This was a big proft.
It was a disappointment to me that Everroad would not close out
the business and j oin me in the mill. However, it was only a short time
until he realized that there was no future to their feed business. I per­
suaded him to take a position in the mUl, & explained that I would like
to go with Nordyke and Marmon Company, and hoped that he could
take my place.
A few weeks later Mr. Nordyke sent for me. He wanted me to take
his son' s place whlle he went to Mexico. He ofered me $
3
oo a month.
I explained that my father's business was in such shape that I could
not give them all of my time. He ofered me $ 1 so per month for such
time as I could give them. I talked it over with father and mother and
they consented to my giving it a trial.
Young Nordyke' s job gave me access to all departments . I simplifed
the work in his department so that I could do a better job & have time
to spend in other departments that interested me. I had never worked
in a large organization before, and the knowledge & experience I ob­
tained were quite an education.
Their sales manager wanted me to try selling and remodeling small
mills. I handled a number. In several instances I sold the spout alarm
(the electric device to detect choke-ups) and thereby recovered near­
ly all the money I had put in it, including the salary and expense I had
paid the salesman, but not including the expense I sustained when I
equipped a mill on trial. The fact that no one else sold a spout alarm
convinced me that Mr. Marmon was right in his opinion of it.
The profts from the mill depended largely upon the buying of grain
and the selling of four and wheat. It was quite a trading proposition.
I found that the profts were declining and that I could not be away
from the mill so much. At the end of fve months I gave up my posi­
tion with Nordyke and Marmon Company.
Mr. Marmon immediately ofered me $ � , ooo per year and said he
would make it more interesting if I would go to Toledo. The mill did
not make $4, �00 per year while I was away. I decided that I must get
my father's business organized so that I could leave it. If that could not
be done, I must fnd a buyer for it.
Chapter I 9. My First Trip Abroad. Year I 89 1 . In the spring of I 89 I ,
Mr. D. M. Marmon of Indianapolis phoned me to come and see him.
Upon my arrival, he explained that he would like me to j oin the millers'
excursion to England which was being organized by the Northwestern
Millers of Minneapolis, and that Nordyke & Marmon Company would
pay all of my expenses. He stated that the trip would be interesting &
might prove a valuable experience. I told him I hoped to go and would
give him a defnite answer the next day. I consulted my parents that
evening & as they were willing for me to go, I accepted Mr. Marmon' s
kind ofer. He wanted to procure some information of a confdential
nature which he thought I might obtain from a gentleman who would
be making the trip. I learned that the gentleman was ill and was taking
the ' cure' in Carlsbad so I left the party and went on there, meeting
with better success in four days than would have been possible if the
man had been with us. His company handled a very large milling busi­
ness & the information Mr. Marmon desired was in connection with it.
I would not have had the opportunity to talk with him at such length
if he had been a member of the party.
Our steamer was the ' City of Paris. ' When you were at sea in I 8 9 I ,
you were cut of from the world, as there were no Marconigrams nor
telephone connections. Many of the members of our party were more
important men in the milling and grain business than I had previously
met. Normally, these men were in constant contact with the grain mar­
kets i the United States and Liverpool and missed it very much. After
the second or third day out from New York, I listened to them 3
9
.
several times guessing as to the price of july wheat in Chicago-what
it would sell for in june, and giving their opinions as to the September
price. It was very interesting to me (a small town miller) to hear them
analyze the situation and to learn how they reached their conclusions.
On this voyage I saw a large iceberg & had a splendid view of a whale
spouting water. I did not see a whale on my next fve crossings.
We had interesting visits in Liverpool & Edinburgh. I was fasciated
with London. We al so took excursions from each of these cities. We
met many men of distinction in the four and grain business & came in
contact with many prominent persons, including the Lord Mayor of
London. Messrs . Edgar and Gregory made sure that their friends had
a wonderful trip.
On the return voyage to NewYork our ship, the ' City ofNewYork, '
was signaled to stop & stand by another ship that had a fre in its hold.
The deck was crowded with people. One of the ofcers of our ship
called on the captain of the ship in distress. He made his visit in a small
boat manned by sailors, which was a much more difcult trip than I
supposed it would be, as the sea was rough and there was a strong wind.
At times our ships were quite far apart. This was unavoidable as our
captain was taking no chances of a collision. There was a lot of excite­
ment on our ship; we realized that it would take time and might be an
- impossible job to transfer all the passengers and crew to our ship. We
were impressed with the dangers of a fre at sea and the horrors which
might follow. We fervently hoped that the fre would soon be extin­
guished. The anxiety of the ship' s passengers must have been intense.
It was several hours before the fre was under control. About that time
another ship arrived. It belonged to the same company as the ship that
was in trouble. Our captain was told to continue his j ourey.
On a trip abroad, you see many old and new things which are en­
lightening. You get away from routine work, meet interesting people,
and have a real rest. You have more time to concentrate, think more
clearly about your own problems and formuate new plans. I leared
that travel is not only a delightful form of relaxation, but broadens
your viewpoint and increases your efciency. I is an education and a
proftable investment.
Chapter 2 o. An Opportunity ln Real Estate in the Gas Belt. Year 1 892.
After the discovery of natural gas in Indiana, several
,
towns and cities
grew rapidly and real estate naturally advanced in value.
Early in I 892 , I was invited by Mr. H. I. Miller, an ofcial ofthe Penn­
sylvania Railroad, to visit a site in the 'gas belt' where he and his asso­
ciates were buying about I , ooo acres of land for the purpose of estab­
lishing the town of Gas City. He was interested not only in increasing
trafc for the railroad, but in promoting a land company. Several real
estate companies in the 'gas belt' had been very proftable in laying out
new additions to small towns . I was invited to subscribe for stock in
this land company. I thought there was some question as to whether
or not the company coud sell its property for enough to pay the cost
of real estate, gas territory, locating industries , other development work
and earn a proft on its shares. The stock did not appeal to me. I decided,
however, to buy several lots in the old town which I thought the land
company had overlooked. I also considered buying a farm adjacent to
the property of the land company. It seemed to me that nearby land
must increase in value even if the land company's stock did not prove
proftable. I bought a 66' x I
3
2 ' lot at $ 6oo on Main Street near the
raUroad station in the old village.
I was ofered a farm of eighty acres at $ I I , soo. The land company
had let its $ 8, ooo option on this property expire. I asked Mr. Miller,
whose guest I
,
had been, if he had any objection to my buying this farm.
He replied, ' No, we have all the property we want. If you don' t buy it
someone else will. ' He said, however, ' I think you would be making 41
a mistake. ' I did not agree with him; as the farm had good improve­
ments and shoud be worth almost $ S, ooo as a farm. Since the land
company had purchased at least I , ooo acres of adjacent property and
was using the balance of its $ I _o, ooo in development, I concluded the
farm was a good buy at $ I I , _oo and agreed to pay one-third in cash &
the balance in one and two years. My father wanted a quarter interest
and joined me in the purchase.
Frank Everroad was becoming quite helpfu at the mill, & I decided
to return to Gas City promptly and inyest $ I o, ooo to $ I . , ooo more if
I coud fnd good bargains. I went via the Big Four Railroad to Jones­
bora, which was across the river and a short distance from Gas City. It
was evident that this old town would be benefted . by the new town,
as many visitors would come that way. I purchased an old two-story
brick hotel on one of the best corners in Jonesboro at $ 2 , Soo cash. The
corner room was rented to the Bank of Jonesboro for $ I . per month
and the balance as a hotel at $ 2 . per month. I made a few minor re­
pairs, gave the woodwork a good coat of paint, after which I raised the
rent of the bank to $ 2 . and the hotel to $ _0 per month. The hotel was
flled every night and shortly afterwards had the most proftable busi­
ness in its history.
I asked $ 3 , ooo for the Main Street lot, which had cost me $ 6oo. The
customer hesitated about buying and told me that he was short of cash.
Mr. H. I . Miler told me that he was worth $ _o, ooo to $ 7 . , ooo. I went
to the Bank of Jonesboro, looked him up in Bradstreet, and found he
was rated at $ 3. , ooo to $ _o, ooo. After a little discussion, I agreed to
take his three notes for $ 8 3 3. 3 3 each, due in one, two and three years,
secured by a six per cent purchase money mortgage on the property.
This sale encouraged me to buy other properties on Main Street. The
land company was so busy that it had neglected to buy these lots. The
titles were somewhat questionable. The owners were anxious to sell
and I found that they would cooperate in securing afdavits, quit claim
deeds, etc. I secured about ten lots at $ 6so each, including abstracts,
etc. I was deceived by the owner of one lot and lost $4oo on it. I had
to compromise the interest on a number of lots, but I fnally realized
a proft of $ 6o, ooo.
The land company secured a good advertising man and started an
active campaign for securing industries. Several glass factories were lo­
cated & a contract was made with the Morewood Company of Swansea,
Wales, to build an eight mill tin plate plant.
The laying of sewers, paving of streets, construction of dwellings,
business houses, a $ so, ooo hotel , and factories made Gas City a busy
place. The land company' s opening sale was most successful . Some of
my friends and I were ofered a special discount for cash if we would
buy I oo or more lots. I took a few and organized a syndicate which
bought I 4 I lots. We selected them very carefuly. I was chosen mana­
ger of the syndicate. I began selling my own lots and some of those be­
longing to the syndicate at
3
s per cent to so per cent proft. Some of
the members of the syndicate thought I was selling too early and too
cheaply so I had to move more slowly with the syndicate' s property
than I woud have done.
I studied the situation and realized there were a great many lots be­
tween the railroad station and the hotel and decided to sell the Main
Street property I owned in the old part of town. I wanted to be sure of
the present proftable market and was willing to shade prices a little
if necessary.
Some of my profts In Gas City had been reinvested, but as I had no
thought of buying property for a permanent investment, I decided to
make no further purchases and to sell everything. I wanted the money
available for other purposes.
I was disappointed in not being able to sell the eighty acre farm.
4
3
Real estate had been active but whenever a buyer appeared one or two
other farms would be ofered at a lower price and the customer would
lose interest in our farm. I had ofered to sell the eighty acres as low as
$ I 6, ooo. It occurred to me that if I owned or had control of the two
competitive farms, my chances for selling the eighty acres, in which
we had an investment of $ I I , soo, would be greatly improved and its
value enhanced. I did not want to risk buying the two farms, so I se­
cured six months' options as follows:"! gave $ soo for an option on the
seventy-three acre farm at $ 2 oo per acre and $ I oo for an option on
the ffty-nine acres at $ 2 oo per acre. I also secured another option on
a farm of forty acres which was not so well located, for which I paid
only $ 2 S for a six months' option at $ I oo per acre. The cash payment
in each instance was to apply as part of the frst payment when the op­
tion was exercised.
Ab
o
ut two weeks after I controlled the other farms, I sold the best
half of the eighty acre farm for $ 2 o, ooo, receiving $ I o, ooo cash and
two six per cent notes of $ S , ooo each, due in one and two years, and
secured by a purchase money mortgage. The other half of the farm
was not as desirable and was difcult to sell. In fact, I had to make sev­
eral trades in order to dispose of it. Before the options on the three
farms expired, I sold each of them at $ 3 oo per �ere but received only
one-third in cash. It took time & work to collect the deferred payments.
In fact, I had to throw of part of the interest on the last payments.
The hotel in Jonesboro was sold for $ 6, ooo in a trade.
Chapter 2 I . StoryTold Me by H. W. Oliver. Year I 892 or I 893 . In I 892
or I 893 , Joe Rider, Harry Oliver and I were talking in Peacock Aley
of the Waldorf Astoria. Mr. Oliver had been entertaining us with stories
but was called to the phone. Mr. Rider asked me if I ever heard Oliver
tell about the $ S , ooo forged note on the Oliver Iron and Steel Com­
pany. I replied that I had not, so Rider asked Oliver to tell me the story.
Mr. Oliver explained that he was careful about keeping a record of
their notes so that those he did not pay would be renewed promptly.
A note was presented to their bookkeeper for payment one day which
was not on his record and, after he had examined it, he# pronounced
it a forgery. The next evening just after dinner the doorbell rang, and
a gentleman asked to see Mr. Oliver. On being shown into the library
by the butler, he gave Mr. Oliver his card and introduced himself as
president of the bank. He said, ' This note was presented at your ofce
yesterday for payment and your bookkeeper pronounced it a forgery.
Please look at it carefully & tell me if that is your signature. ' Mr. Oliver
looked at the note and promptly tol d him that it was not. The man then
took an envelope from his pocket and gave Mr. Oliver a second note
to examine, due sixty days later. Before he had time to examine it,
another was produced which was due in four months . Mr. Oliver then
exclaimed, ' Wait1 It is now my turn. Please explain how you secured
these notes. ' The man answered, 'I purchased them from a nice looking
gentleman who represented himsel f as a note broker. ' Mr. Oliver then
said, ' My God! If I had known my notes were good in your bank, I
would have sold you a bushel of the genuine. '
Chapter 2 2. An Expensive and Inefcient although Proftable Tin Plant
Caused Me to Build One. Years I 893 - I 8 94. Prior to the McKinley
tarif, tin plate was not manufactured in the United States. After it went
into efect, the Norwood Company of Wales built a plant in Gas City.
It was the largest employer of labor in that new town. I was surprised
to see it import heavy mill housings, rolls, equipment, etc. and pay the
duty and ocean freight on thes'e. If these purchases had been made in
the United States, the company would have saved a lot of money. I
thought if I could get my money out of Gas City notes and property
I would enter the tin plate business.
In 1 8 9
3
I had time to study the manufacture of tin plate which47
is comparatively simple. Talking with several Welsh tin plate rollers
who held jobs in New Castle, Pennsylvania; Irondale, Ohio; Gas City &
Elwood, Indiana; I learned they preferred American mils because they
were stronger, produced larger tonnages, and enabled them to earn
more money. I decided that a better plant could be constructed much
cheaper than the one in Gas City.
I made a sketch of a six mill plant showing the location of the buil d­
ings for the steam plant, engines, hot mills, furnaces , opening of plates ,
cold mills, pickling, annealing, tinning, assorting boxing warehouse,
railroad sidings , water lines, sewers , etc. I discussed this sketch with a
number of workmen I knew. They gave me some good suggestions,
which caused me to revise my sketch many times. Money matters with
me were such that I could not proceed immediately, but my position
was improving. I decided to enter the tin plate business as soon as I
could collect upwards of $ 2 s, ooo.
Early i n I 894 I heard that Phil Matter of Marion, Indiana, wanted
to go into the tin plate business. I called on him and we talked until mid­
night. He questioned me as to why I considered it a proftable business .
I answered, ' Because the Gas City plant was expensive to operate, in­
efciently managed, but
p
roftable. ' I considered this good reasoning.
He agreed and asked how much money I would put in. I ex
p
lained my
fnancial position to him, stating that I would have $ 2 s , coo by the time
it could be used in building and thought I could increase that amount
by $ I o, ooo within a year, depending on my Gas City collections, and
that I wanted the privilege of increasing my interest to $ 3 s , coo within
the year. I said we should have a paid-up ca
p
ital of at least $ I oo, ooo.
Mr. Matter agreed with me on these provisions . He wanted the plant
located in North Anderson, where he owned a lot of property. He
would donate a good manufacturing site, a number of gas leases, and
subscribe for stock to the amount of $3 s, ooo. He gave me a letter to
that efect. Returing home, I stopped to see Mr. Marmon in Indiana­
polls. I explained that building a tin mill looked more promising than
accepting a position with his company, although I woud like to work
for him. I suggested that he might like to take some stock in the new
company. He explained that he had promised to take a $ 2 o, ooo stock
interest in the Moore Packing Company which was building near them,
but that the Indianapolis Light and Power Company was growing so
rapidly that it could use all his money. He then stated that if I needed
$ I o, ooo or even $ 2 o, ooo to form the company, I could count on him.
He wrote me a letter accordingly.
Will Irwin, who was a close friend of mine, agreed to put in $ s , ooo,
and Joseph I. Irwin subscribed $ 2 o, ooo, which pleased me as the latter
practically confed all his investments to Bartholomew County. A day
or two later, Mr. Irwin told me that D. P. Erwin of Indianapolis wanted
to invest $ I o, ooo with us.
When we had all the money we required, I went to see Mr. Marmon
and told him, adding that I wanted him to feel perfectly free to do just
as he preferred about the stock which he was taking to help me. He
said that under the circumstances he woud not take it. I thanked him
for his kindness which had been most helpful. I called on Mr. Marmon
many times after this-in fact, he called me ' one of his boys. ' It was
he who gave me my frst trip to Europe, ofered me $ s , ooo per year
when I was making $ I , soo, and later ofered me $ I o, ooo to go with
Nordyke and Marmon Company, which spurred me on to getting out
of the milling business.
Chapter 2 3 . See Yourself as Others See You. Year I 89_·When living
in Anderson I left a pair of shoes with a cobbler to be repaired, but for­
got to pick them up on the way home from work. I needed them that
evening & asked my brother Fred, who was stopping with us & working
in the mill, if he would go down to the cobbler near the post ofce 49
and get them for me. I explained that Mrs. Donner and I were going
out for dinner, that I needed them and was crowded for time. Fred re­
plied, ' Certainly. ' He started of, located the cobbler' s shop as directed
and asked for Mr. Donner' s shoes . He was told, 'I have no shoes for
Mr. Donner. ' Fred then asked if there was another cobbler nearby and
was told there wasn' t, but there was one two squares away. My brother
concluded that the shoes must be in this shop and looked around. He
discovered a pair which he thought were probably mine. He ofered to
pay for the repairs, take them home, and return them in the morning
if they were not his brother' s, to which the man agreed. When Fred
brought them home and I said they were mine, he immediately began
to roar with laughter & said that when he asked to whom they belonged
the cobbler stated, 'I don' t know the man' s name, but he passes here
frequently before seven o' clock in the morning, is always in a hurry,
and looks like a Jew. ' Fred thought it was a good j oke and circulated
the story among my friends.
Chapter 24. My First Experience in a Manufacturers' Association. Year
I 8 9 �.
In I 89 � skilled labor in rolling tin plate was controlled by the
Amalgamated Association of Iron and Steel Workers . lt fxed the wage
rates per ton and limited the tonnage of each gauge that could be rolled
in eight hours, regardless of the sizes to be rolled or the equipment fur­
nished by the manufacturers. If the tonnage exceeded the tonnage set
by the uion, the men were fned. The Welsh workmen at that time
predominated, and sometimes made it difcult for American boys to
learn the skiled j obs.
The American Manufacturers Association was formed primarily to
deal with labor. It attempted to fx the prices on tin plate based on the
price in Wales, plus the freight and duty. The railroads made lower rates
on imported tin plate from the seaboard to some interior points nearer
Pittsburgh, than from Pittsburgh to those same seaboard points. Our
company, the National Tin Plate Company, j oined the Manufacturers
Association. We were kept Informed by the secretary as to the prices on
foreign tin plate delivered to the principal points in the United States.
We were al so advised as to the delivered prices to many points on which
the members of the association tentatively agreed on prices.
I discovered that we could not secure any orders at the prices quoted
so I concluded that they were fctitious. To learn the facts I wrote a
friend, asking him to write to a list of tin plate manufacturers, which
I enclosed, for prices on one minimum carload of the following sizes:
Sizes 1 4 x 2 o and 2 o x 2 8 90# base
Sizes 1 4 x 2 o and 2o x 2 8 I oo# base
delivered at this point, & the amount of the cash discount. I also asked
him to forward the replies to me as received. The answers were received
on the morning I arrived to attend the manufacturers' meeting. I had
quotations from three competitors who were attending the meeting.
Their quotations were at lower prices than they stated they were ofer­
ing for orders. Being younger and a new member, I was not asked by
the secretary of the association to express my views until all the others
had been called upon. Some members had little to say, but several were
quite positive in their statements that they were securing higher prices
than their quotations to Louisville, which I had received.
I stated that I was disappointed in the veracity of some of my tin
plate friends, as we could not secure the prices they purported to re­
ceive-and neither did they. I also said that several members present
had quoted lower prices than they stated this morning. I thought that
the association should confne itself to dealing only with labor ques­
tions, on which we could probably agree, and abandon the question
of prices .
The secretary of the association, Mr. Jarrett, was very much dis­
turbed and requested me to mention the names of any mertbers � 1
who had shaded prices. I told him that I could not aford to divulge
the source of my information. He insisted that I should do so because
I might be mistaken. I replied that I could not be wrong as I had seen
written quotations from several frms represented there. There was a
long pause. Several members were embarrassed. Finally, Mr. Leeds,
president of the American Tin Plate Company of Elwood, Indiana,
broke the silence. He said, ' Every manufacturer present knows that
Donner has stated facts. Our company in the future will run its mills
to full capacity and make prices that will not permit eastern mills to sell
large tonnages in the west, because if this is allowed to happen our mills,
in order to run, will be compelled to ship to the east, where we are
handicapped by higher freight rates.
The industry grew so rapidly in the United States, and competition
between the American manufacturers became so keen, that the prices
on domestic tin plates became lower on all gauges and sizes than on
the imported article.
Chapter 2 �. Railroads, Freight Rates & an Experience in Chicago. Year
I 8
9
6. While waiting to see Mr. Smithson, the purchasing agent for
Armours, I was talking to Phil Armour, Jr. , whom I had met previously
on several occasions. He stated that for years they had purchased tin
plate only in Wales. But for home consumption their tin plate was now
purchased in this country, whUe for Great Britain they imported it all,
as they received a drawback of
9
9 per cent. He asked me how I hap­
pened to go into the tin plate business & was quite interested in hearing
about Gas City and my experience in the Indiana gas belt. He laughed
and said it was more surprising that I, after being in the four mill busi­
ness, should go into tin plate than for Armours, after being large con­
sumers of tin plate for many years, to go into it.
When I told him I was waiting to see their purchasing agent & hoped
to secure an order for 2 o, ooo boxes, half the amount they were buy-
ing, he went into the ofce, looked over the bids and told me that our
price was in line and lower than all eastern bidders, but that we were
fve cents higher than our large neighbors. I told him that I would meet
that price, whereupon he promised me half the order and dictated a
letter accordingly to their purchasing agent. It is needless to say that I
was quite pleased as it was a very nice order.
The next morning Mr. Smithson telephoned and requested me to
change the price to f. o. b. Anderson, reducing the price I I 3 cents per
I oo pounds (tarif freight rate to Chicago). I insisted on Chicago de­
livery. He asked what reduction I would make f. o. b. Anderson and I
told him 8 3 cents per I oo pounds, which he accepted. This increased
our price 3 cents per I oo pounds f. o. b. Anderson. I was anxious to see
how it would be routed. The next morning we received shipping in­
structions via a railroad in which the tarif rate of I I 3 cents per I oo
pounds was charged.
Our plant had connections with two large railroads. There was a
third small railroad that absorbed the switching charge into our plant
and ofered a rebate of 4 cents per I oo pounds to only a few points,
but their car supply was so poor that we gave them little business. The
two large railroads charged us full tarif rates, and although I thought
some large shippers were given lower rates, I had no concrete evidence.
Several days later the representative of the road handling the order
called and solicited our business. I asked him the rate to Chicago and
he said I I 3 cents per I oo pounds. I asked the rates to Milwaukee,
Kansas City, St. Louis, Minneapolis, etc. , and he quoted full tarif rates.
I made no comment, but naturally gave his railroad no business. The
following week he called and said that they had not been getting much
of our business. Again, I asked him the rates to Kansas City, Chicago,
etc. He again quoted the full tarif rates. He had learned that we had a
large order for Kansas City and wanted me to promise his railroad .� 3
the business. I was noncommittal. A week later he was back and again
informed me that they had not been receiving much of our business,
and would like to know why. I asked him for various rates & he quoted
strictly tarif rates, volunteering the information that no one received
any lower rates. I smiled and stated he knew whether he was telling
the truth, but I would bet him a suit of clothes , an overcoat, and any­
thing else he wanted to add, that he was lying. And furthermore, I was
willing to let his local agent, Mr. Ellis , who accompanied him, decide
the bet. He was quite embarrassed and hurriedly left my ofce. The
next morning he returned and gave me a confdential reduction of 4
cents per I oo pounds below the tarif rate to Chicago & corresponding
reductions to many points . He also provided me with an annual railroad
pass east and west of Pittsburgh, which was continued for several years.
After I started to build the Monessen plant the manager in Anderson
also was provided with a pass.
At that time it was legal for the railroads to give, and the shipper to
accept, rebates, but it was difcult & frequently impossible for the small
shipper to secure as low rates as a competitor with large tonnages. Some
shippers who received no rebates were 'asleep at the switch. ' Plants lo­
cated on several railroads were in a much better position to secure con­
cessions than those without competition. Large concerns frequently
received better treatment than small ones.
Cha
p
ter 2 6. A Method and Process of Rolling Tin Plate and Fine Sheets.
Year I 896. I thought that the frst hal f of the rolling of sheet bars into
tin plate, or fne sheets, should be done by a crew on two pairs of rolls
considered as one mill, with two heating furnaces, & the other half of
the rolling (the fnishing-the half requiring the most skil) by another
crew also on two pairs of rolls considered as one mill, with two heating
furaces. The Roller on the fnishing pair of rolls, or mill, would then
have charge of both crews.
When I explained my method, the mill superintendent, Alex Jones,
said I was correct in thinking that less skill was required in the heating
and rolling of the frst half of tin plate bars than in the second half, but
that all of the rolling would have to be done on one set of rolls or the
sheets would be welded and could not be opened, because the contour
of the two pairs of rolls would be slightly diferent. I was skeptical as
to welding, but on questioning several of the best rollers with whom I
was acquainted, who knew nothing about my previous conversation
with the mill superintendent, I found that they had the same idea about
welding if two pairs of rolls were used. I concl uded that I might be
wrong in my thinking, but I would have to see a demonstration of the
welding before I believed it.
Mr. Jones explained that it was the regular practice in Wales to break
down the bars on one set of rolls called the roughing mill. This was the
practice in Gas City with which I was familiar. The ,mills in Wales were
usually 1 8" in diameter, but in the United States they were usually 24"
in diameter, the roughing and fnishing being done on one pair of rolls.
The Welsh rollers here, having had experience in both systems, pre­
ferred the American practice because larger tonnages could be rolled.
The arrangement of our mill in Anderson was not practical for trying
out my method of rolling. However, about ten o' clock one night I
happened to be in the plant while two adjoining mills were rolling 2 o"
squares, number 3 o gauge, 2 o" wide by 6o" long. The roll broke on
the outside mill and it happened that the furnace back of that broken
pair of rolls was flled with sheets that had been doubled into fours. I
asked Jones, who was with me, whether those sheets doubled into fours
in the furnace in back of the broken mill were now scrap. He said they
were and I told him to have them rolled on the adjoining mill� since
they were doing all the work on one set of rolls and just ready to roll
them into fours. This would give a perfect demonstration of my � �
idea if the sheets were fnished on the adjoining mill rolling same size
and gauge, which was almost ready to start roughing bars . He under­
stood exactly what I had in mind as we had talked over this method
of rolling on two mills several times. He said, 'I get you. ' I told him to
have plenty of men and pay them for assisting. He took of his coat &
helped the roller, taking the fours out of the furnace and over to the
furnace back of the next mil, and did everything he could to help. He
and the roller were astounded that those fours after being rolled were
not welded. Jones afterwards said to me, ' Mr. Donner, I was so dumb­
founded at the way those sheets opened that you could have knocked
me over with a feather. '
I explained to Aex that I would have him come east to help me
start two mills in our next plant in which we would try out this system.
I told him the rolls would be 2 6" In diameter instead of 24" and the
spindles long so there would be plenty of room. Four mills would be
driven of one engine and the traveling crane would be higher and the
mill as cool and convenient as we could make It.
Chapter 2 7. I Worked Several Days for John W. Gates, President of the
Illinois Steel Company. Year I 896. One day John W. Gates asked me
to buy a certain property for him. After devoting several days to the
task I learned that it could not be bought within the fgure I was au­
thorized to pay, but could be purchased for $ 2 5", ooo higher, and with
some difculty I secured an option on that basis for two days . I tried
to get Mr. Gates on the phone but could not reach him as he was ill. I
talked to his assistant, Mr. Crane, who fnally told me to decline the
ofer. The property was promptly sold at the price I had been quoted.
When Mr. Gates returned to his ofce and learned the price I had
secured on the property, he was quite provoked with his assistant. He
stated that If the ofer had been submitted to him it would have been
accepted immediately. He said, ' Donner, I must pay your expenses &
also for your time. ' I told him that I only did it for him as a friend and
to forget it. I think he appreciated the attitude I took. He said, ' Donner,
you did the company and me a favor which I appreciate. You can de­
pend on me to see that you will always get as cheap steel as your big
competitor in the gas belt and a large buyer of steel bilets who is also
a neighbor of yours. ' I think he meant exactly what he said. I never
had any reason to complain of the treatment & prices I received from
the Illinois Steel Company. In fact, I know that Mr. Gates went out of
his way to see that I received the same prices as a much larger buyer of
tin plate bars and also of billets who was a neighbor in Aderson.
Chapter 2 8 . My Reasons for Wanting to Build a Plant in the Pittsburgh
District. Year I 8 97. Anderson's advantage in the tin plate industry was
its natural gas, and the pressure of the wells was getting lower. I knew
that in a few years we would have to burn coal. Our natural gas was so
cheap that if we were given the coal at the mine with no charge for
mining and the railroads were to haul it to Anderson without charge,
the cost of unloading it, stoking it and hauling the ashes would have
amounted to more than the gas cost up to that time. It seems almost
incredible the way gas was wasted. The streets were lighted night and
day as it would cost money to turn it of.
I made comparisons of the cost of tin plate delivered to the princi­
pal points of consumption by Pittsburgh and Anderson. I found that
the cost of steel & cheap coal in the Pittsburgh district more than of­
set the advantage of the lower cost of gas because of the higher cost of
our steel. We bought steel in Chicago where it was more expensive to
assemble the raw materials than it was in Pittsburgh, which could de­
liver steel in the East cheaper than Chicago.
Anderson had an advantage in the delivery of tin plate to a few wes­
tern points, but to many others we were badly handicapped. We could
not compete on the eastern business. Pittsburgh also had lower rates 5
7
to the Pacifc coast than Anderson via the Eastern Seaboard. The Pitts­
burgh district was a more favorable location,
Foreign competition in 1 897 was of little importance, but American
competition was keen.
It was evident to me that Anderson would become a poor location
for the manufacture of tin plate. I visited Youngstown, Sharon and
Pittsburgh. I leared that I could make a favorable contract for tin plate
bars in Pittsburgh, based on the market price of Bessemer pig iron, with
the Carnegie Steel Company, Limited. This looked so attractive that I
decided to build a plant in the Pittsburgh district. I felt that some of my
associates might not want to invest in an eastern plant, but thought I
could secure other capital if necessary. I therefore wrote my associates
and called a meeting in Anderson.
I explained the advantages of building in Pittsburgh as I saw them,
and added that we had been successful in Anderson and I wanted to
build another plant, as I knew we could build a better one. I found that
none of my partners looked \Vith favor on the building of a tin plate
plant in the East. Mr. Joseph I. Irwin said that, since we had done so
well in Anderson, he would prefer to enlarge that plant. I mentioned
that on account of the declining pressure in our gas wells, I was willing
to sell my stock in Anderson and put my money in the Pittsburgh dis­
trict. Phil Matter, who knew more about the natural gas situation than
I did, & held the same amount of stock that I held before I let a brother
have some at cost, then spoke up. He said, ' What Donner has said about
the natural gas situation is true, but I want him to retain his interest in
Anderson and, if he agrees to do this, I will j oin him in an eastern plant. '
After some discussion, everyone present decided to take stock in an
eastern company. Later, we secured two new stockholders, Mr. Irwin' s
daughter and son-in-law, Mr. and Mrs. Z. T. Sweeney. It was decided
that I should investigate possible locations & report in the near future.
I had not mentioned my new method of rolling, for which I had
made an application for a patent, but I was anxious to give this system
(which I have heretofore explained) a trial. If it were successful, we
would have a saving In the cost of rolling & could pay the skilled rollers,
doublers, heaters and catchers as much as they would make in a union
mill. I also expected to patent the method, which would give us an ad­
vantage over the Amalgamated Association of Iron and Steel Workers
which controlled the rolling of tin plate. They were responsible for
many interruptions and shut-downs pending any agreement for a new
scale. The mill was planned so that if my method of rolling was desir­
able It could be used & if found not to be desirable, the usual method
could be used. I, of course, would not charge the company any royalty
for the use of the patent in this plant if it were found desirable.
Chapter 2
9
. Selecting a Site for an Eastern Plant. Years 1 8 96- 1 897·
I
visited Youngstown and Sharon, but considered the Pittsburgh district
the best location for an eastern plant. I was greatly infuenced by the
fact that I could make a favorable contract for tin plate bars on a sliding
scale, based on the price of Bessemer pig iron in Pittsburgh.
We were ofered a site (now Monessen) about forty mUes from Pitts­
burgh on the Pittsburgh and Lake Erie Railroad and the Monongahela
River to build an eight-mUl tin plate plant. The P. & L. E. Railroad agreed
to give us the Pittsburgh rate east & west, switching rates on coal from
nearby mines, and a low rate on billets and bars from Pittsburgh. We
had practically all the advantages of Pittsburgh.
Messrs. Joseph I. Irwin, D. P. Erwin and Phil Matter visited this site
with me. They approved the location and plan of capitalization, etc.
It was agreed that I was to be president and receive $ s , ooo from the
new company In addition to my regular salary of $ s , ooo for Anderson.
I was to continue to manage Anderson and to hold my stock in that
plant, a stipulation made by Phil Matter when he agreed to join me.
s
9
As I was president and the largest stockholder in the new company
and lived near the property, I was authorized to attend to the incor­
poration, make a contract for steel with the Carnegie Steel Company,
Ltd. , agreements with the East Side Land Company & with the P. & L. E.
Railroad. I asked to have Charles S. Baker of Columbus, Indiana, assist
me in the preparation of a trafc contract with the railroad.
Mr. Andrew Young, Trafc Manager of the American Tin Plate Com­
pany, told me in I 898 or I 899 that Monessen had the most favorable
trafc contract in his department.
Chapter 3 0. Building a Tin Mill and Starting a NewTown Was an Inter­
esting Experience. Year 1 897. Col . 1. M, Schoonmaker, Vice President
of the P. & L. E. Railroad and a director of the East Side Land Company,
which owned the town site where we located, was interested in the
success of our company. He was very kind to me & proposed my name
for the Duquesne Club. He asked Mr. H. C. Frick to name the new
town. He mentioned Essen, an important steel city in Germany. It de­
veloped, however, that a small coal town in Pennsylvania had already
preempted that name so Col . Schoonmaker suggested Monessen (Essen
on the Monongahela), which was adopted. In I 897 there were fewer
than twenty-fve people, where Monessen now has a population of
about 2_, ooo.
We purchased the machinery and equipment for an eight-mill tin
plant. Our twenty acres had been staked of and we laid out a twelve­
mill plant, so that four mills could be added & completed without the
addition of a railroad siding, water line or a new sewer. We had put in
several piers for our rolling mill building and were getting ready to ex­
cavate for the engines and mill foundations when I discovered that the
East Side Land Company was making a serious mistake in laying out the
town. The street parallel to the railroad (Schoonmaker A venue) was
located on the brow of the hill which would be continually slipping,
so that the lots on that street would be practically worthl ess. I regarded
it as such a serious mistake that I made a special trip to Pittsburgh to
notify Col . Schoonmaker. He called in Mr. Atwood, the chief engineer
of the rallroad, who phoned his ofce to send down a topographical
map of the railroad' s property and that adjacent to it. He grasped the
situation immediately & went to Monessen with me on the next train.
To correct the trouble would mean moving the railroad nearer the
river and changing the location of our plant, which it was still possible
for us to do at that time.
The location of the railroad was changed, but they could not move
it quite as much as I recommended because the curve would be too
sharp. The change improved Schoonmaker A venue and was of great
advantage to the East Side Land Company.
Col . Schoonmaker was very appreciative of the help I gave the East
Side Land Company and, without my knowledge, at the next meeting
of its stockholders arranged to have ffty-six shares of its stock allotted
to me at the cost to the incorporators. When he told me what he had
done, I thanked him but declined to take the stock, explaining that I
was not only putting all the money I had into the plant & a home, but
that I would be considerably in debt. He replied that he wanted me to
have the stock and that he would accept my note with the stock as
collateral and carry it for me at six per cent interest. The stock looked
so attractive that I accepted his kind ofer. Stock to the amount of only
$68, ooo was issued. My purchase of ffty-six shares netted me a proft
of more,than $ so, ooo. I made several thnes that amount out of addi­
tional stock and real estate that I subsequently purchased.
For several months we had to bring in all our labor by train ·as there
were no houses in Monessen. I rented a house in Charleroi on the other
side of the river and started to build a house in Monessen. It was dif­
cult to go to Monessen and return to Charleroi on account of the 6 I
river & bad roads. A train from Fayette City to Pittsburgh passed through
East Charleroi at 6: 45 A. M. It brought nearly all our labor from Fayette
City and Belle Vernon. My brother Perce and I carried our lunches and
used this train until I moved to Monessen. By getting up at 5: 3 o we
could eat breakfast, cross the Monongahela in a skif to East Charleroi,
catch the 6:4 5 train & arrive in Monessen at 6: 50. One moring, how­
ever, it was quite foggy and the ferryman, Dave Rankin, instead of
crossing the river, landed me on the same side of the river from which
we started. I had to walk two miles. Several times during high water
we had to start quite early, walking two miles and across the bridge at
Belle Vernon where we caught our train.
Chapter 3 1 . Starting Operations at the Monessen Plant, Trying My
Method of Rolling, and Preparing a Scale of Wages. Years I 8 97- I 8 9 8 .
I scheduled construction work in Monessen s o that we would be able
to start two of the hot mills about three months before the other mills
and the balance of the plant were ready for operation. This was for the
purpose of giving my method of rolling a trial . When the two mills were
ready, I had Alex Jones, superintendent of the hot mills in Anderson,
bring out several young men to help start them. The trial proved suc­
cessful and the superintendent retured to Anderson.
About a week or so later, when I arrived at the plant on Monday
morning, the mills were shut down. The Amalgamated Association of
Iron and Steel Workers had sent a delegation from Pittsburgh to Mon­
essen on Sunday and organized a union, but they knew nothing about
our method of rolling. A committee waited on me and requested that
we sign a scale of wages and recognize the union. I was surprised at
their action at this time as they knew we were only experimenting. I
told them that as they had quit working and shut the mills down, they
could call at the ofce and get their money. They knew that the plant
could not be ready for about sixty days and that there was no proft in
running only two mills. Al the union men left Monessen in twenty­
four hours . One of the Anderson boys came into my ofce and cried.
He admitted that they had not treated me fairly and said he was sorry.
During the short period we operated two mills, I made a careful
study and analysis of the work and skill required on the mills in which
the bars were roughed & the singles rolled. With the help of Aex Jones,
I prepared a scale of wages which he regarded as fair and approved. On
the fnishing mill I prepared a scale by which the roller, doubler, heater
and catcher would make the same wages as in a union mill, but they
would have the advantage of not being restricted to the union' s limited
tonnage, which with our equipment could easily be exceeded. After
making a scale on that basis, however, I reduced the rates about nine
per cent and explained that everyone who worked faithfully in our hot
mills until December I st would receive, on December I oth, a bonus
of ten per cent on the wages he had received to date for that year.
Every man on the mills was employed by my brother Perce or my­
self. We tried to select only industrious and reliable men. We promised
to treat them fairly and to run the mill steadily. We explained that we
did not intend to be bothered with strikes . We told each man that un­
less he was satisfed wlth the cooler temperatures and conveniences of
the plant, as well as our method of rolling, wanted steady work, and
had confdence that he would be treated fairly, we hoped he would not
even start to work for us .
I also explained that our method of rolling was being patented and
could not be used in any other plant, unless a license to do so was ob­
tained. I based the rates for our method of rolling on the wages paid
skilled rollers, doublers, heaters and catchers under the scale of the
Amalgamated Association of Iron and Steel Workers , taking into con­
sideration the skill & labor required, as well as the fact that if the skilled
n1en on our fnishing mills worked faithfully until Decerber I st, 6 3
they would receive (including their ten per cent bonus) as high wages
as in a union mill with the sam� tonnages as those mills, and that they
could earn more in our mills because we had no limit as in the union
mills . The standard equipment in most hot mills was rolls 24" in di­
ameter, whereas we had nothing smaller than 2 6" rolls . We pointed out
that our plant would not be closed at the expiration of any existing
scale pending the negotiations between the Amalgamated Association
of Iron and Steel Workers and the manufacturers . We also promised
every employee that if the Amalgamated Association of Iron and Steel
Workers received an increase of wages in the tin mills, our men would
automatically receive the same percentage of increase, but if the union
mills reduced their wages, we would not ask for any greater percentage
of reduction.
Chapter 3 2 . A Strong Sentiment Develops for Consolidation in the
Tin Plate Industry. Years I 897 - 1 898. In the latter part of 1 8 97 and
the early part of I 8 98, we booked sufcient tin plate orders for western
shipment to run Anderson full time and all the intermediate business
we could secure for both Monessen and Anderson. This was a good
policy as Monessen, being a new plant, was at a disadvantage, but one of
our Indianapolis customers was interested in a Baltimore can factory
and through its infuence we secured large Baltimore orders. In I 8 98
the prices on tin plates declined to a point where there was no proft
to the easter mills on western orders. The western mills could not ship
east. A few plants were obliged to shut down part of the time or oper­
ate at a loss. We were fortunate in having sufcient specifcations to run
Anderson and Monessen at full capacity.
Close competition almost forced some manufacturers to favor a
consolidation in the tin plate industry. Moore Brothers were known to
sponsor the consolidation, but W. B. Leeds and D. G. Reid were asso­
ciated with them. The value of each plant was based on the nurLber of
hot mills, including certain equipment. Market prices were to be paid
for the current assets at the time the options were exercised. The op­
tions for the consolidation were taken by H. S. Wheeler of Chicago.
He was well known and popular in the industry. Under the terms of the
option, the seller had the privilege of taking all or part cash in payment,
,
b
ut would receive $ I oo in seven per cent cumulative preferred & $ I oo
in common stock for such part as he requested instead of $ I oo cash.
We had a proftable saving in Monessen's costs over Anderson. Both
companies did well, but in Anderson the natural gas pressure was steadi­
ly declining and several of our wells failed. I hoped the consolidation
would succeed as I was afraid of Anderson's future. Phil Matter knew
the gas situation better than any of us. Some of our stockholders pre­
ferred not to go into the consolidation as we had been successful, but
after Mr. Matter explained the natural gas situation, all favored selling
Anderson. The matter of prices was left in my hands , as I was the pres­
ident and largest shareholder of Monessen & the second largest share­
holder in Anderson.
When approached as to the Monessen plant, I explained that we
were working under a system of rolling that was being patented & we
did not want to option it. Mr. Wheeler saw me several times and later
insisted on a price. Finally I consented, explaining that Monessen had
only eight hot mills completed, but plans had been made for twelve
mills and some improvements had already been made for the four other
mills that were not fnished. It was not our intention to start them for
about six months, as the men and houses were not available, and the
cost of completing the plant would be deducted in our price.
We preferred not to sell Monessen because of our method of rolling
at a lower cost. Consequently, when the option was made, I demanded
an extra price and limited the right to use my method of rolling to the
Monessen plant. I also eliminated the clause in the contract whereby 6 5
I agreed not to engage in the tin plate business. I explained that only in
the event that they purchased the patent or took a license for sufcient
other mills would I waive my right. Mr. Wheeler said that they would
naturally want to buy the patent if it showed a substantial saving. I did
not divulge the saving because I did not want our advantage known in
case the consolidation did not go through.
Chapter 3 3 · A Kindness of Phil Armour, Jr. that Proved to be Quite
Proftable. Year I 8 9 8. I received a telegram from Mr. Phillip Armour , Jr.
reading, ' If you want to make a few thousand dollars, see me tomor­
row. ' I was willing and replied, 'Will be with you. '
When I called on Mr. Armour, he explained that their tin can fac­
tory had burned, and that they looked entirely to the insurance people
for their loss. He thought, however, that most of the tin plate was dam­
aged only by water and that it could be retinned, cleaned, and packed
in new boxes, so that it would be just as good as it was originally. ,He
gave me a copy of their inventory. After going over it, I told him that
many of their plates were of such unusual sizes that no one else could
use them without a lot of waste. He replied that if I bought them, they
would pay me the same base price that they would have to pay in the
market at the time of delivery. He stated as follows, ' However, Donner,
you use your own judgment, & if there is any question about the qual­
ity, Armour and Company cannot use them at any price. '
I found that the insurance adjusters were wide awake and rather dif­
fcult to trade with. I opened up the worst boxes that I could fnd and
examined them carefully. I felt confdent that, after they had been run
through the tin house, they would be just as good as they ever were.
I bought the pig tin a little under the market price, & after a lot of bar­
gaining, fnally succeeeed in buying the damaged tin plate at a cost
that I thought would be proftable. I knew that our plant could handle
the damaged plates as we had surplus tin house capacity. Upon my
return to Anderson I showed Phil Armour' s telegram to Mr. Matter,
president of our company, & told him the prices at which I had bought
the pig tin and the tin plate. Mr. Matter consulted the tin house super­
intendent and said he thought the tin plate was somewhat of a gamble,
although probably a good one. He said he wanted to be fair to the com­
pany and to me, since I had taken all the risk, and if there was a sub­
stantial proft to be made on the tin plate, he thought I should have it.
He suggested that the company take the tin plate at cost, which would
be a saving to them, and that they should run the tin plates through
the tin house for my account at cost plus a proft of ten cents per box.
He asked me if that arrangement would be satisfactory and I told him
it would be. He expressed the hope that I would make a nice proft. The
plates fnished in the tin house just about as I had expected. I thought
I could see a proft of $ I o, ooo to $ I 2 , coo. A large part of this tin plate
was imported. It later occurred to me that if I kept the imported plates
separate so they could be used i their export business, then Armour
and Company would be entitled to the usual drawback of ninety-nine
per cent of the duty paid. I wrote Phil Armour, Jr. that I thought I
I could save them about $ I o, ooo if they would divide the saving with
me. His curiosity was aroused and he asked me to come to Chicago. I
explained that I was marking and keeping the imported tin plate sepa­
rate, so that they could collect a drawback of about $ I o, ooo when it
was exported. He laughed and said, ' We will divlde with you whatever
that saving is. ' I made about $ I � , coo on the whole transaction, which
was a lot of money in those days. The increase in my capital at that
time was of great importance to me.
Chapter 34· Confdence is Necessary in a Non-Union Mill. Year I 898.
To operate an ' open shop' or a non-union mill successfully, it is abso­
lutely essential that the men have confdence in the management and
feel that they will be treated fairly. We were very careful to make 67
only statements that were facts We regarded our promises as sacred
obligations. If a man quit before December frst under circumstances
which we regarded as unfair, he would not receive a bonus. No em­
ployee ever asked the National Tin Plate Company for his bonus -it
was paid promptly. Our men felt they would receive fair treatment and
were satisfed.
Many of the men approved of the bonus plan because they wanted
steady work and liked the idea of saving and having extra money at
Christmas. The tin mill' s skilled men worked eight hours per day. The
majority of the men were fair. But the work was hot and strenuous and
some of them would not object to laying of for a couple of weeks in
the summer. I thought that, during the hot weather, a few might be
more easily infuenced by labor agitators attempting to make them dis­
satisfed, but If they had a bonus of from ffty to two hundred dollars
at stake, it would cause them to think carefully. Furthermore, the men
could aford to employ a helper, which some of them did, & earned
increased wages.
Several little incidents happened before the frst bonus was due that
helped us to win the confdence of the men. The wife of one of our
rollers died leaving her husband with several small children. He decided
to retur to his former home in McKeesport, where he had lived and
worked, as his wife' s mother could look after his children. I looked
him up, told him we were sorry to see him leave under such sad cir­
cumstances , and to call at the ofce where he would receive his bonus
check. At another time one of our best rollers died and we promptly
sent his widow a check for ten per cent of the wages her husband would
have received up to that date, if he had lived.
Chapter 3 s. A Meeting With the Amalgamated Association of Iron &
Steel Workers . Year 1 898. There were but few tin plate and sheet mills
in 1 898 that were not operated under the scale of wages drawn up by
the Amalgamated Association of Iron and Steel Workers, whose scales
were made to expire July frst each year. A short vacation at that time
of the year was not ojectionable to the men.
The Association of Tin Plate Manufacturers met in conference with
the president and a committee of the Amalgamated Association of Iron
and Steel Workers where they bargained on the scale of wages for the
ensuing year. These meetings occasionally ran late into the night and
continued for several days. While interested in Anderson, which was
union, I was now operating Monessen, which was non-union. I sug­
gested at a previous meeting of the manufacturers association that I
should not be on the committee, but Mr. D. G. Reid urgently requested
me to serve and I consented. We had several conferences before an
agreement was reached. The president of the Amalgamated Associa­
tion of Iron and Steel Workers then announced that he would not al­
low the National Tin Plate Company of Anderson, Indiana, to sign the
scale unless Monessen also signed. I admitted that I was interested in
Anderson, but stated that my interest in Monessen was much greater &
further, that the two companies were distinct & separate corporations
& Monessen had some stockholders who had no interest in Anderson.
I explained that the Monessen plant was working on a diferent system
of rolling, which was being patented, and for which the Amalgamated
Association of Iron and Steel Workers had no scal e of wages . Therefore
they had no scale for the National Tin Plate Company of Pennsylvania
to sign. But if the National Tin Plate Company of Indiana could not
sign, it would be up to them to run non-union. I walked out of the
meeting. Mr. W. B. Leeds, President of the American Tin Plate Com­
pany, then told the union ofcials that their position was manifestly
unfair, and as an argument he stated that he did not want to see Ander­
son run non-union. He pleaded with the Amalgamated Association
Committee for over an hour. They fnally agreed that Anderson 69
could sign the scale. I appreciated Mr. Leed' s work. The way Anderson
was laid out, it was not practical to change it to the Monessen system
of rolling without a lot of alterations. I also recognized that it would
be much more difcult to change a union mill over to a non-union one
than it would be to start another mill in a new location, as we had done
in the case of Monessen.
Chapter 3 6. Giving Thought to a Venture in the Rod, Wire and Nail
Business and a Mediterranean Cruise. Year 1 8 9 8. In looking for another
tin mill location, I started negotiations for a manufacturing and town
site across the river from Monessen near Webster, as I considered it
the best undeveloped manufacturing and town site available in the
Monongahela Valley. It would be an excellent investment & a splendid
location for the rod, wire and nail mill which I was considering. It was
not far from Monessen. Mr. 1 ames McKean, president of the Union
Trust Company of Pittsburgh, asked me whether it was true that I was
trying to buy the property opposite Webster. When I told him I was,
he said, ' Donner, do you expect to build another plant?' I replied, ' Yes,
but not a tin plate mill. ' He said, 'I will appreciate it if you will keep
hands of, as the parties I represent have already purchased part of that
property. If you promise to do so, I will arrange matters so that you can
have a substantial part of the property on the same basis it costs my
friends. They have already bought several farms at reasonable prices. '
I knew Mr. McKean quite well ; he had persuaded me to live in Charleroi
(his home town) and had his brother Andy secure me a comfortable
house. I readily agreed to his proposal, as I was leaving shortly on a
Mediterrean trip.
I expected to spend about a month in Egypt and the Holy Land. I in­
tended to be away two or three months. After my arrival in London, I
I visited the Eagle tin plate works i Wales, largely out of curiosity.
Welsh tin plate workmen in America had informed me that it was the
best plant in Wales. I considered it about equal to the Morewood plant
in Gas City, Indiana.
Upon returning to the Victoria Hotel , London, I happened to meet
John Stevenson, Jr. , of New Castle, Pennsylvania. I was intimate with
him as he & I had built summer homes near each other in the vicinity
of Beaumaurls, Canada. He was an engineer, a Scot, and enjoyed talking
about the plants he had engineered & constructed. He built a rod, wire
and nail mill in New Castle, Pennsylvania, and told me that if he were
building another, it would have a continuous roughing mill & a Belgian
fnishing mill similar to the Joliet plant, which held world records. He
had recently fnished building the largest tin plate plant in the world in
New Castle. George Greer had built the frst one there. I liked the steel
business, but knew nothing about a rod, wire and nail mill . This fact,
however, did not deter me, as I would employ men who had the ' know
how. ' After considering my fnancial position, I practically decided to
build a rod, wire and nail plant in which I would have a substantial in­
terest. I knew that the American Wire and Nail Company of Anderson
and the Consolidated Steel and Wire Company were money makers.
Chapter 3 7· The Tin Plate Plant in Anderson Was Started Without Op­
erating Capital. Year I 898. The National Tin Plate Company was started
without operating capital . We borrowed money from several banks.
Phil Matter' s & my signatures were required, but Mr. Matter' s endorse­
ment was naturally the important factor.
We had some good customers and established a proftable business.
Our largest buyer was in Milwaukee. I studied their requirements and
guaranteed to furnish them tin plates suitable for all their deep stamp­
ing j obs or work. Previously, they had Imported most of their tin plate.
We used acid open hearth steel for some of their difcult work, but
soft Bessemer in many cases. We rolled a few large sheets in special
qualities and gauges of soft Bessemer and acid open hearth steels, 7 I
from which we thought we could select steel that would do all of their
work. These sheets were privately marked. We experimented until we
found a quality that was suitable for each j ob of work given us. We
made no charge for the tin plate sheets consumed in making the ex­
perimental tests, after which we rolled their orders according to the
sizes and the gauges specifed. We guaranteed the quality of our steel
as being satisfactory for the diferent jobs. We gave them good service
and they were our most proftable customer for two or three years. It
was not known at that time how to make basic open hearth steel suit­
able for rolling sheets and deep stamping. This was developed several
years later by Nevin McConnell at Sharon, Pennsylvania.
During the years I 89., I 896, I 897 and part of I 898, our accumu­
lated surplus enabled us to pay of the banks and run at full capacity.
On several occasions, we did not have sufcient orders and ran on
stock sizes or took orders for future delivery. In a few cases, we secured
permission to anticipate delivery with the payments to be made as
called for in the contract, and in this way maintained our operations
at full capacity.
Neither the Anderson nor the Monessen plant paid any dividends
up to the time we sold out to the American Tin Plate Company. The
surpluses were used to advantage. There was no federal income tax.
Chapter 3 8. The American Tin Plate Company Takes Over All the Tin
Plate Plants in the United States. Year I 899. In I 899, the American
Tin Plate Company was organized and capitalized on a fairly conserva­
tive basis. Moore Brothers had the stock underwritten, and those ac­
cepting stocks faired much better than those who demanded all cash.
For several weeks the ofcers of the new company were busy com­
pleting their organization. We were making a very substantial saving in
Monessen. I hoped to license the company to use my patent or sell it
for $ I _o, ooo. I had talked with the ofcers several times but could get
no satisfaction. Several very practical men in the company stated that
my system of rolling would not work, as the contour of the two pairs
of rolls would be diferent, but Mr. Arms, a vice president, told them
they were mistaken and that he had seen the mills working very suc­
cessfully. They were surprised and skeptical.
One day, while waiting in a room adjoining his ofce to see an of­
cial of the American Tin Plate Company, with whom I had an appoint­
ment in regard to the purchase of the patent, I heard him receive in­
structions to treat me nicely, but to put me of for another week. The
speaker went on to say that after they had all the rolling mill machinery
people tied up, they would let me whistle. A few minutes later I faced
the man who had received these instructions. He told me he was very
sorry to put me of again for another week. I consented to the post­
ponement and secured Pullman accomodations for Pittsburgh.
The next morning I called on George Mesta, president of the Mesta
Machine Company, and purchased eight hot mills, the necessary cold
mills, squaring shears, doubling shears, bar shears, pickling machine,
spare rolls, roll lathe, etc. After a little dickering, I purchased practi­
cally everything that was needed in an eight mill plant, with the ex­
ception of the buildings & power plant. I had several locations in mind
and began looking for a site.
About four or fve days later, I received a telegram from the Ameri­
can Tin Plate Company, asking me to be in Chicago the next moring.
I wired them that I was too busy and wished to resign my position with
the company. Messrs. Reid and Leeds, the president and vice president,
wired me to meet them in Pittsburgh at the Duquesne Club the next
morning, which I agreed to do. Upon being asked why I had purchased
the eight tin mills from Mesta, I told them the complete story. They
admitted that I had not been treated fairly. Mr. Reid said that he had
not seen Monessen's costs until the previous day, & that he wanted
7 3
me to remain with the American Tin Plate Company and be responsible
for the operation of the Monessen plant. They would assume the con­
tract that I had made with Mesta and make some arrangement in regard
to the patent. He explained that j ealousy was largely responsible for the
situation i regard to Monessen. I refused, stating that I preferred to
operate independently.
Mr. Reid fnally ofered to pay me $ I so, ooo and assume the Mesta
contract, with the understanding that I was to remain with the frm
at a salar
y
of $ I o, ooo & live in Pittsburgh. He stated that they needed
my services to continue Monessen on the present plan of operation,
or they might be in a difcult situation with the union. Messrs. Reid &
Leeds were obliged to return to Chicago that night. They urged me to
accompany them, adding that they were certain that, with \he aid of
Judge Moore, the situation could be adj usted to my satisfaction. I f­
nally consented to go.
When in Chicago, I explained to Mr. D. C. Reid that I might build a
rod, wire and nail mill near Monessen and could not agree to give them
all of my time. I suggested that my brother Per
c
e should be the active
man on the j ob and I would be responsible for Monessen' s operation.
When they were satisfed on those points, they agreed to my taking the
Mediterranean trip & making a stop in Europe before I returned. They
stipulated, however, that I should agree not to manufacture any tin
plate in the United States, except in the states of Arizona and Florida.
They also asked me to guarantee the patent, which I refused to do. The
contract was becoming a little complicated, so I telephoned Messrs.
Knox and Reed of Pittsburgh to send George B. Motheral to Chicago
to help me. Within several hours after his arrival , we fxed up a con­
tract with the American Tin Plate Company to our mutual satisfaction.
I received negotiable notes bearing six per cent interest for $ I so, ooo
from the American Tin Plate Company.
Chapter
3
9· I Received a Surprise During the Organization of the Union
Steel Company. Year I 899. Upon my return from the Mediterranean
cruise, I learned that the persons represented by James McKean were
Messrs. A. W. & R. B. Mellon. In my second interview with Mr. A. W.
Mellon in connection with the organizing of a rod, wire and nail mill,
he showed me the cost of their two properties-one above Charleroi,
and the other opposite Webster. He said 1 ames McKean or Charles
Thompson would give me all the details. He asked me which location
I preferred. I told him I favored the one near Webster, as a good proft
could be made out of the real estate adjoining the manufacturing site.
The other location was practically a suburb of Charleroi, which would
derive all the beneft from the payroll. I stated that a lot of money had
been made out of the real estate in Monessen, but from the topography
of the property opposite Webster, it appeared to be a much better town
site. It appealed to me, as I had made my frst $6o,ooo out of real estate
in a new town in the Indiana gas belt.
I explained further to Mr. Mellon that while we coud start with
$2 ,ooo,ooo it might be necessary to build an open hearth steel works
as well as a blooming & a billet mill, which would require more money.
He replied, 'I think that the manufacture of iron and steel is being con­
centrated into such strong companies that it may be dangerous not to
fully protect yourself by building a blast furnace, probably two open
hearth furnaces, a blooming mill, a billet mill and other fnishing mills.
This will also necessitate the purchase of fuel coal, coking coal, coke
ovens, ore properties, etc. '
He asked me what salary I had received from the tin plate plants I
had organized and managed. I explained that I had started at $5 ,ooo in
Anderson and three years later had received $5 ,ooo a year from Mon­
essen during its construction & operation, making a total of $ I o,ooo. I
stated that I had not accumulated my money out of salaries, but 77
had made it from real estate, profts in the plants I had managed, a few
trades, and out of the patent I had sold recently for $ I so, ooo.
Mr. Mellon then asked me if he had understood me to say that I
would put in $ soo, ooo in our frst interview. I answered, ' That is cor­
rect. ' He then said he and his brother Dick would put in $ I , soo, ooo
& more as needed, with the understanding that I would put in $ soo, ooo
and devote all of my time to the business at a fxed salary of $ I o, ooo
as president of the company. As more capital would be needed than
$ 2 , ooo, ooo, he and his brother would carry my twenty-fve per cent
interest with the company at the rate of fve per cent iterest until the
amount of money needed would be determined, after which the com­
pany would be capitalized and fnanced. I said that the $ I o, ooo salary
under these conditions would be satisfactory, but that I must advise
them that I was under contract with the American Tin Plate Company
to protect the patent I sold the Monessen plant, for which I was receiv­
ing $ I o, ooo per year. However, I would arrange to have that amount
cut in half as I preferred to act only in an advisory capacity, which
would require little of my time. I told them that my brother Perce was
with me during Monessen' s construction and was competent to handle
the job, but that Mr. D. G. Reid had insisted on a contract for my ser­
vices at the time I sold them the patent. Mr. Mellon said that this ar­
rangement would satisfy them. We agreed tentatively on the Webster
site. It was decided that I should buy the necessary equipment for a
rod, wire & nail mill as soon as I decided on the machinery we needed.
There was no written contract. I was so surprised at the confdence
which Mr. Mellon showed that I was almost dumbfounded.
I was delighted to be associated with the Mellons, although I knew
them only by reputation. I told Mr. Mellon I wanted them to know that
all the experience I had had in the steel business was in the building
and operatig of two tin plate plants-one in Anderson, Indiana, the
other in Monessen, Pennsylvania. He replied that he was aware of this,
but al so knew that I had operated a four mill and grain business suc­
cessfully for some years, as well as real estate investments in the Indiana
gas belt and in Monessen, which was good experience, and they were
willing to take their chances with me. I do not know where he secured
his information, but probably through their Indianapolis correspond­
ent, the Indiana National Bank. Mr. Mallot knew me slightly, but was
well acquainted with joseph I. Irwin, our banker in Columbus , Indiana.
Mr. Irwin was a stockholder, as was his son, William G. Irwin, in the
frst tin plate plant I built in Anderson, Indiana, & also in the Monessen
plant. His daughter and her husband, Mr. and Mrs. Z. T. Sweeney, were
shareholders in Monessen.
Mr. Mellon stated that he would like to have the company named
the Union Steel Company, and have a Pennsylvania Charter secured
with a nominal capital of $ I , ooo; ooo of which only the legal require­
ment-ten per cent, or $ 1 oo, ooo-would be issued in stock. The next
$ I ,
9
oo, ooo would be evidenced by the company' s notes at current
rates of interest. Al further payments to the company would be evi­
denced by additional notes of the com
p
any, in the same manner, until
the capitalization was determined.
The company would notrequire any credit as it would start with vir­
tually $ 2 , ooo, ooo cash, and would then be fnanced by Mr. Mellon &
his brother through loans to the company as needed. One job of f­
nancing would save the company a lot of money and result in a better
fnancial statement.
I was sorry that I could not ofer stock to some of my associates.
However, it was a case in which the Mellons owned a town and manu­
facturing site and allowed me to buy a twenty-fve per cent interest at
their cost, while retaining seventy-fve per cent of the capital stock in
the enterprise.
7
9
About July I , I 899, I proceeded to get busy. I secured the engi­
neering services of Garrett and Cromwell of Cleveland. John Garrett
had been a rod mill roller and was well known in the industry, having
been associated with the construction of the Joliet rod mill . It held the
world' s record for tonnages . Mr. Garrett was not an engineer, but a
roller and a very practical rod-mill man. His partner, Mr. Cromwell ,
was an engineer. They had been the engineers for the rod mill in Ash­
land, Ke.ntucky, which I visited before employing them. They were also
the engineers for the Schulers , who were building a rod mill in Bir­
mingham. They claimed it would be the best rod mill in the world and
would start operations about the last of the year. They promised to in­
corporate its best features in our plant.
I rented a house on Wallingford Street, Pittsburgh, but as I had a lot
of traveling to do, I used the Duquesne Club as my address. My ofce
was with my hat until September, when we opened an ofce in the
Carnegie Building, starting with a stenographer as my secretary. I placed
orders that month for two high-speed Southwark Foundry & Machine
Company' s engines and several other orders, including the rod mill
building. In November, a Pennsylvania Charter was secured for the
Union Steel Company with a nominal capital of $ I , ooo, ooo, but only
ten percent, the legal requirement, was applied to the stock of the
company.
Real estate matters required so much of my attention that I was away
from the ofce a large part of the time. The location of the Union
Steel Company's plant so far as the public was concerned was in the
air for several months, because an announcement would have inter­
fered with the purchasing of the additional property we desired.
Chapter 40. Recollections in Securing Donora Real Estate. Years I 899-
I 900. Mr. Mellon & I came to the decision that \Ve .should buy all the
property we could in the old town of West Columbia, and all the prop-
erty between the railroad and the river that we could secure, because
it would be needed for blast furnaces, railroad yards, etc. , in connection
with the rod, wire and nail mill we were erecting for the Union Steel
Company. We would also buy the I 40 acre farm owned by Mrs. Heslup.
Mr. Mellon was afraid from Mr. 1 ames McKean's report that the latter
could not be secured until after Mrs. Heslup' s death. I called on Mr.
McKean and asked him whether there would be any objection to my
seeing Mrs. Heslup in connection with her property. He laughed and
said, 'Certainly not, go ahead.'
I called on her about eight or ten times and was becoming quit
e
dis­
couraged. I did not seem to be making any headway in fnding out
what her objection was to selling the property. I believed she was in­
terested in making the sale, as otherwise she would have treated me
ruthlessly for being so persistent, but she was always very pleasant to
me and invited me on several occasions to stay for meals. When I ex­
plained to her that she could sell the farm and invest the proceeds at
only 4 } percent and have a good income, she replied, 'Mr. Donner,
I' m sorry to have to keep saying "no'' to you. ' I believed in her honesty.
I think she was being as kind as she knew how to be in declining my
ofer so politely. Mr. McKean, in whom I had great confdence, told
Mr. Mellon that he was surprised at my wasting time on Mrs Heslup;
Mr. Mellon even said that he feared I was working on a hopeless job.
These remarks were discouraging.
There was a very small deposit of drift coal on the property which
was of no value to us but it occurred to me to make her an ofer for it.
I said, 'Would you sell half the coal if I gave you a fair price?' She re­
plied, 'I won't sell any coal. It Is all in the hill. ' It then dawned on me
that she might be willing to sell the remainder of the property if she
could keep the seventy acres in which the hill and its coal, as well as
her home and garden property, were located, and I asked her if she
8 r
would. She answered, 'You might make an ofer. ' At last I was begin­
ning to get an opening. I said, 'I will pay you $ 3 7 5 per acre. ' She replied,
'You paid $4oo per acre for one property. ' I admitted we did, but ex­
plained that Mr. Allen' s property was the largest acreage in this vicinity.
Mrs. Heslup stated, 'I positively will not sell at that price. Will you raise
your ofer?' I hesitated and ofered $450 per acre for the seventy acres.
She replied, ' I will sell the seventy acres at $500 per acre and not one
cent less. ' It was difcult to resist th
i
s ofer, but I thought that it was
prudent to defer for the present. Her daughter invited me to stay for
supper and I accepted. Before leaving, I agreed to pay $ 35 , ooo for the
seventy acres. Mrs. Heslup stipulated that she must have $500 in gold
to bind the bargain before noon the next day� I agreed to bring that
amount and an engineer to survey the property. The next morning I
placed $500 in gold on her table. She threw up her hands & exclaimed,
' Take it away! I could never sleep with that much money in the house.
Pay the full amount when you receive the deed. ' I agreed to do this. The
engineer stayed to complete the survey. Afterward, Mrs. Heslup said,
' My lawyer, Mr. Murdock, of Washington, Pennsylvania, will prepare
the agreement of sale. ' She and all her children signed it.
Mrs. Heslup told me that according to some custom (I cannot recall
the details of it) we should also present her with the silk for a dress. I
agreed that we would do this. I had a friend purchase a suitable piece
of black silk which I brought her the next day. She was delighted. Her
lawyer prepared the deed and a plan of procedure so that Mrs. Heslup
understood every step in the proceedings. He was a good lawyer and
a fne gentleman. I had never met him before. He was present when
the money was paid & the deed delivered. Mr. Murdock recommended
that the $ 3 5, ooo be deposited in a Washington trust company at four
per cent interest, to which Mrs. Hesulp agreed. I doubt if she ever used
a dollar of the amount, unless it was to pay her lawyer.
Mrs . Heslup was a sincere and interesting character. She loved her
home, her garden & the hill , but it took me a long time to understand
the coal mystery. Her son mined and sold a little coal in the neighbor­
hood. It is possible that her husband may have said many years before
that the coal in the hill was valuable and they would keep it. His widow
played her part well. The land for farming use was not worth more than
$ I oo per acre, so $3 oo or $4oo per acre was considered a good price.
I am sure she enjoyed securing $ I oo per acre more than her neighbor,
Mr. All en. Her property was so important to our plans that we would
have paid $2 , ooo per acre if necessary. Fortunately, Mrs. Heslup never
knew that we had an option on Mr. Castner's ten acres adjoining her
property at $ 2_, ooo.
Mr. A. W. Mellon was pleased and surprised when he heard that I
had purchased half of the Heslup property. He understood my dif­
culties . Mr. R. B. Mellon laughed and said he would like a phrenologist
to show him my bump of perseverance. When james McKean learned
that I had been able to get half of the property he was astonished. He
said that he would have been willing to bet twenty to one that I would
not succeed.
Chapter 4 1 . A Disturbing and Embarrassing Discovery. Year 1 899. I
had a slight acquaintance with a Mr. X, master mechanic of the Ameri­
can Wire and Nail Company of Anderson, Indiana-a company suc­
cessfully engaged in the rod, wire and nail business. I had so much con­
fdence in the president, Mr. E. ). Bufngton, that I thought anyone
who had worked in his organization for several years would have re­
ceived an excellent training & would be a valuabl e man. Mr. Bufngton
later became president of the Illinois Steel Company after the organi­
zation of the United States Steel Corporation. I interviewed Mr. X &
then employed him for three years at $ s , ooo per year. He arrived in
Pittsburgh before we really needed him as we had not secured all the 8 3
property we required for the Union Steel Company. I placed him in an
ofce adjoining mine with my stenographer. He was a fair draughts­
man and I gave him some work in that line. I was purchasing the prop­
erties we required, and was away from the ofce on several occasions.
During my absence, he talked with salesmen he would not ordinarily
have met, and he took advantage of those opportunities to secure com­
missions on equipment he was helping me to select.
One day I was informed by a friend in the Duquesne Club that the
engineer in my ofce was attempting to secure a commission on the
steam pumps I was buying for the company. I had confdence in Mr. X
and this information gave me an unpleasant shock. Thereafter, I put all
quotations & important papers in my desk, which I kept locked. Mr. X
had some work on the draughting board which was only partly fnished
and I could not let him go without a lot of inconvenience. It was dif­
cult for me to conceal my feelings and treat him nicely. I was embar­
rassed that I had selected such an unscrupulous person. I explained
my predicament to Mr. Mellon and his only comment was, ' You are
lucky that you found him out so soon. Be on your guard and suit your
own convenience in getting rid of him. '
Several days later I received a second shock. I had recently placed
an order with E. A. Kinsey & Company of Cincinnati for machine tools
amounting to about $ 2 o, ooo. The salesman who had taken the order
phoned me from his hotel and asked if he could see me privately. I in­
vited him to meet me at the Duquesne Club. He seemed quite ernbar­
rassed and fnally told me that our Mr. X had asked him a few weeks
before for a ten per cent commission. They allowed some agents a ten
per cent commission and, as Mr. X said he could guarantee him the
business, he had foolishly agreed to this request. When he turned in
the order at Cincinnati, Mr. Shea, their new president, asked whether
W. H. Donner was from Anderson, Indiana. When informed that he
was, Mr. Shea stated that he had traveled in Indiana, knew me quite
well, and had sold me a quantity of machine tools. He said they could
not accept an order from my company and
p
ay one of my employees
a ten per cent commission. Mr. Shea told the salesman to return at
once to Pittsburgh, tell me all the facts and to say that he had sent him.
Mr. Shea further told him to advise me that his company would give
us a ten per cent reduction in the price. The salesman then gave me a
letter from Mr. X written in pencil on a sheet of yellow
p
aper from a
scratch pad and signed by him. It read about as follows: 'I am at home &
it is raining very hard. Donner has had his desk locked for several days
and I have not been able to see the other bids, but I will see to it that
you get the order. '
I told the salesman to say nothing about the matter to anyone. At the
frst opportunity, I told Mr. Mellon the facts and showed him Mr . X' s
letter. He called in Mr. R. B. Mellon to see it. All that he said was, ' It
pays to have good friends. Andy and I know a man who is so damn
mean that he is without any friends-no one ever tells him anything. '
I explained the situation to my attorney, John Beal ,, and asked him
how I should handle the matter. I thought I would probably have to
pay Mr. X a year' s salary. My attorney immediately informed me that
I did not have to pay him anythig as dishonesty vitiates any contract.
About two months later, I let Mr. X go and paid him a month' s salary.
I told him I was sorry to terminate his contract as I had never had a sim­
ilar experience, but our reason for doing it was that we could not re­
tain an employee who was attempting to secure commissions on equip­
ment that we were buying. He appeared highly indignant and declared
that he had never received or attempted to secure a commission from
anyone. He employed a reputable attorney & a few days later brought
suit, claiming the amount due for the balance of the time for which
he had been employed. 8)
When the case came to trial , he was examined by his attorney and
appeared to good advantage. Mr. Beal remarked to me, ' He is a good
witness and a clever liar, but his attorey does not dream of the facts . '
Mr. Beal then asked him whether he had had a key to the Union Steel
Company' s ofce in the Carnegie building. He replied, 'Yes , sir. ' ' Did
Mr. Donner consult you in regard to machinery and equipment for the
Union Steel Company?' ' Yes, sir. ' ' Did you write any letters pertaining
to the n1achinery and equipment that the company is buying?' ' Yes, sir. '
' Did you write them or dictate them to a stenographer?' 'I dictated
them. ' ' Were all the letters copied in a letter book?' ' Yes, sir. ' ' Did you
have access to the company' s fles. ' 'Yes, sir. ' ' Did you ever write pri­
vately to any salesman with whom the company was negotiating for
machinery?' 'No, sir. ' ' Did you have a key to Mr. Donner's desk?' 'No,
sir. ' Mr. Beal then showed him his signature to the letter addressed to
the salesman in Cincinnati which he had written, and asked him if it
was his signature. He blushed, hesitated, & fnally admitted that it was.
Mr. Beal read the letter in a very humorous and sarcastic manner.
Mr. X's attorney asked to see the letter ana Mr. Beal gave it to him.
He went over and whispered to his client and immediately dropped
the case.
Chapter 4 2 . Helping Friends Proved Proftable. Years 1 899- 1 900. Some
time after I became associated with the Mellons, A. W. Mellon asked
me whether or not I knew Charles D. Marshall and H. H. McClintock
of the Shifer Bridge Company. I told him that I did-since 1 894. He
then inquired what I thought of them. I replied, ' They are graduates
of Lehigh University, fne young men, and in my opinion, the best en­
gineers in the structural feld. ' I explained that in 1 894 I had fgured with
them on buildings for the National Tin Plate Company. I wanted to give
them the order but their price was about ten per cent too high. They
asked to be allowed to check their fgures. They then said that I would
fnd that their competitor had either made an error in his fgures or es­
timated on a lighter building. Mr. McClintock explained that the weight
of the buildings could easUy be reduced but that they would not rec­
ommend a lighter construction.
The man from whom I received the lower bid gave me his weights
verbally. In accepting, I specifed the weight. When the material arrived
I had the weights on each car carefully checked. It developed that the
buildings were ten per cent lighter than the seller represented. I there­
fore reduced the price accordingly. The seller did not object, as he
knew I was in the right.
I told Mr. Mellon that in 1 897, after an agreement had been reached
for a price on the proposed buildings in Monessen, Mr. Marshall had
suggested a few changes which he had seen in New Castle. It called for
some additional expense & alterations which he itemized. The changes
were of such a practical advantage that I adopted them and thanked
him for his suggestions. Their work was most satisfactory.
Through my dealings with them, we had become good friends. One
day, Mr. Marshall said that their positions with the Shifer Bridge Com­
pany were unsatisfactory. They hoped to get their money out and in­
vest it where they would have a substantial interest in the plant and
management. Mr. Marshall asked me how my partnership with the Mel­
Ions was working out. I replied, ' Most satisfactorily. ' A short time after
my talk with Mr. Mellon, Messrs. Marshall & McClintock called on me,
explaining that they had almost sold their stock in the Shifer Bridge
Company at $ I .O per share, when Mr. Walker, the president, spoke
to their buyer so discouragingly about the prospects of the company
that the sale was called of. They then explained that a second custom­
er had practically purchased their stock at $ 1 35 per share but, after
talking wlth Mr. Walker, backed out. They were quite discouraged &
asked me what they should do under the circumstances. I asked s7
Mr. Marshall to let me see the balance sheet and record of earnings of
the company over the past few years. He produced the fgures. They
were well compiled, and I was greatly impressed as to the value of the
stock. I said to them, ' You should fnd a purchaser who relies on his
own judgment. I will give you $ 1 oo per share & if I buy it, Mr. Walker
will not learn of the fact, unless you tell him, until I present the stock
for transfer. ' Messrs. Marshall and McClintock walked to a corner of
my ofce, talked privately for about a minute and then stated that the
stock was mine. I was surprised, but gave them a check for $ 3 o, 8oo.
This was on February 1 4, 1 900.
It occurred to me afterwards that I should not have bought the stock
without consulting Mr. Mellon, as I had promised to devote all my time
to the Union Steel Company, so I went down to see him and told him
what I had done. He was not pleased and said, ' Don't you think you
acted hastily?' I answered, ' Perhaps I did, but the stock was such a bar­
gain at the price, that I did not give the matter a second thought but
purchased it on the spur of the moment. All I will have to do is hold
the stock, examine the statements, attend a few meetings and wait. '
Mr. Mellon smiled. I then asked him to look over the statements and
balance sheet and take half of the stock with me. He placed them in
his pocket, asking me to see him the next day. In the morning when I
called, he said, ' There is no question but that the stock is a bargain. It
is all right for you to keep it under the circumstances, but I don' t want
you to devote any time to outside interests. We are backing you as
agreed upon because you are giving the business your undivided atten­
tion. ' I then told him that I would be glad to have him take half the
stock, and I would actually feel better if he would. He replied, 'If you
really feel that way, I will take it, but keep it all in your name, handling
mine as you do your own. ' He gave me a check for $ x s,4oo and we
signed a memorandum accordingly.
One day Mr. Mellon telephoned me to come down to the bank and,
on my arrival, he introduced me to Mr. Henry Clay Frick. He informed
me that he & his brother were letting Mr. Frick have a third of their In­
terest in the Union Steel Company enterprise, which he thought would
be to my advantage as well as theirs, as we would have the beneft of
his advice.
The Messrs. A. W. & R. B. Mellon, because of their interests i n real
estate, banking, coal, oll , the Aluminum Company, Standard Steel Car
Company, Carborundum Company, etc. , were exceedingly busy men.
They divided their work, but frequently discussed matters between
themselves. My contacts had nearly all been with Mr. A. W. Mellon.
I did not know Mr. R. B. well until after A. W. went abroad. I had many
problems on which I wanted his advice. He was a very likeable person
and never lacked words for something to say. R. B. had the reputation
of being easier to get acquainted with than A. W. , although I never ex­
perienced any difculty with either in that respect.
Before Mr. A. W. sailed In April I 900 to be married, I had become
quite well acquainted with him. We had many conferences. He did not
want to be bothered with details of the plant, as that was my responsi­
bility. He urged me to try to secure ore, but wanted to be consulted
as to the buying of coal and ore properties. It was well known that the
iron ore deposits on the Mesabi Range had been leased or purchased
by the large consumers of ore & the mining companies. Prices advanced
and no good mines or leases were avail abl e. It was distinctly a sellers'
market with no oferings.
Shortly after Mr. Mellon went to England, the American Bridge Com­
pany was active in acquiring properties. Mr. Walker, president of the
Shifer Bridge Company, called and asked me to agree to change my
$3 o, Soo stock of Shifer Bridge Company for $ I oo, ooo of American
Bridge Company seven per cent preferred stock, and $ I oo, ooo of
8
9
American Bridge Company common stock. This I refused to do until
I saw a statement of the American Bridge Company showing exactly
what its stock represented, including a list of its properties, cash, assets
and all liabilities. Mr. Walker then had Judge Reed call to see me. The
latter was very surprised to learn that I had never seen the original op­
tion Walker had signed, & was amazed at the way he had proceeded.
In I 899 stocks were being issued very rapidly, and I refused to buy
stocks which I had no opportunity to analyze. I told Judge Reed that
I had no idea of the worth of American Bridge Company common and
preferred stocks and that I would not agree to the exchange, but that
I would accept $ I oo, ooo in cash. They paid me this amount.
When Mr. Mellon returned from England, I gave him a check for
$ so, ooo. His investment of $ I s , 400 for four months resulted in a
much greater proft than I had any reason to expect. Needless to say,
he was quite surprised. In I 900 consolidations were very common.
The Messrs. A. W. and R. B. Mellon purchased the Pottstown plant
and organized the McClintock-Marshall Construction Company. A. W.
Mellon and R. B. Mellon each had thirty per cent and McClintock and
Marshall each had twenty per cent. It became one of the most success­
ful enterprises in the United States. The Mellons, McClintock & Marshall
have all made millions of dollars out of that enterprise. Of course, I did
not know at the time I purchased their Shifer stock that they would
soon be associated with the Mellons in the Pottstown bridge plant.
Mr. Marshall was a very reliable business man, but a little hard of
hearing. Mr. Julian Kennedy once remarked, 'If Charlie is negotiating
and desires more time to consider, he will put his hand up to his ear &
stall, but if he is buying he can hear a low price instantly. '
Chapter 4 3. Contract for Steel with the Carnegie Steel Company Lim­
ited: Year I 900. My negotiations with Mr. Charles M. Schwab, presi­
dent of the Carnegie Steel Company, Limited, for a contract on steel
proceeded smoothly until he saw the plan of our continuous roughing
mill. It had a fnishing rod mill on the right hand side. The space on the
left side was blocked out for a duplicate mill. Mr. Schwab was a won­
derful salesman. He wanted us to build the second fnishing mill at once
so as to enlarge our contract for steel . To infuence me, he reduced the
price on the larger tonnage, but I would not consider a second rod mill
at that time. Mr. Schwab was so insistent on a larger tonnage that I made
no progress. After discussing the question for several weeks, I asked
him, ' Mr. Schwab, you know I am constructing a large rod mill in a new
town twenty miles from any other rod mill or even a steel works, and
securing a new organization to operate it. As a practical steel manufac­
turer, an experienced operator and a friend, do you recommend that I
double our rod mill at this time? ' Mr. Schwab answered, ' You win1 I will
increase the minimum tonnage 2 , ooo tons & the maximum 4, ooo tons
more than you requested, and quote the same price as on the increased
tonnage. If you cannot use this increased minimum I will guarantee
that you will have no trouble on that score. ' There was, of course, no
liability on the increased maximum. I i mmediately thanked him and
accepted his ofer. The contract was rewritten and closed shortly after­
wards on March I 5, I 9oo. The contract and supplement addition to
same were not dated. This was before the formation of the new Car­
negie Steel Company, and more than a year prior to the inception of
the United States Steel Corporation. Mr. Schwab was president of each
of these companies when they started business. This contract was for
a period of ten years from January I , I 90 I , but could be cancelled by
one year' s written notice, given by either the buyer or seller. The notice
was to be given on or before the frst day of any twelve months' period
beginning on or after January I , I 902 , & the buyers agreed to pay the
sellers for such material at a price per ton based upon the average price
of standard Bessemer pig iron per ton. 9 I
The prices contemplated on this contract for Bessemer steel billets
were fxed for each three months' period, beginning January I , I 901 ,
& were determined from the average market price of standard Besse­
mer pig iron, free on board cars at Pittsburgh, for the next preceeding
three months. The average market price of pig iron for each month was
frst ascertained, and from these monthly prices the average price for
the three months ascertained. The average monthly price was agreed
upon within one week from the end of each month.
Any dispute as to the price of Bessemer pig iron was to be referred
to Mr. Albert H. Childs as arbiter, etc.
Payment was made by the buyers on the I ,th of each month for the
preceeding calendar month' s shipments.
Deliveries were to be not less than I o, ooo gross tons nor more than
I 6, ooo gross tons per month.
In case of any changes in the business organization of the parties
hereto, this contract was to be assumed by the successors .
It was a condition of this contract that the buyers would not resell
any of the material furnished without frst putting it through a process
of manufacture at their works.
These were the main features of the contract which was signed by
0. M. Schwab and L. 0. Phillips, managers of the Carnegie Steel Com­
pany, Ltd. & accepted by me as president of the Union Steel Company.
There was also a side agreement which would be quite an advantage
in the event the market price of pig iron in any month declined below
the average price that had been established. Then the price of billets
would be based on such lower price of pig iron. The following letter
from Mr. 0. M. Schwab covers this feature:
Referring to the agreement this day entered into between us,
as a supplement and addition to the same, it is further understood
& agreed that in case, at any time during the life of the contract,
the market price of pig in any one month of a quarter falls below
the average price for such quarter as established uder the pro­
visions of the Agreement, the price of billets for such months shall
be based on such lower price of pig. To illustrate: if the average
price for pig i January, February and March shoud be, say $ 24,
which price would be the governing rate for the succeeding quar­
ter, and in the month of May the market price of pig shoud drop
to $ 2 2 , the price of billets for the month of May should be based
on such lower fgure.
The intent of this provision is to enable you to meet competi­
tion, where you are compelled to guarantee prices.
In consideration of the foregoing, it is understood and agreed
by you that in no case shall we be required to make a reduction
in the price of billets, should the market price at any time be less
than the minimum fgure obtained under the provisions of the
contract, namely, the market price for pig plus the correspond­
ing fgure for conversion.
Chapter 44· Developing Donora (Union Steel Company). Year 1 900.
The property we purchased at Donora had a frontage of over two miles
on the Monongahela River. The land between the Pennsylvania Rail­
road & the river was an excellent manufacturing site. It provided space
for a larger plant than we proposed to build. We acquired the lowlands
for dumping slag, and located the ore yards, blast furnaces, steel works,
blooming mill , billet mill, rod mill, fnishing mill, etc. , for the econom­
ical handling of raw materials, semi-fnished and fnished products. We
had ample room for future expansion.
The property above the railroad was taken over by the Union Im­
provement Company. I secured the services of }. H. Mullen as general
sales agent. He was a capable person, had been successfu in business
and handled the sales in a satisfactory manner.
9
3
A topographical map of the property enabled us to lay out the town
of Donora to good advantage, but I secured a second engineer to help
revise the frst plan. As soon as plans were ready, we let contracts for
building sewers, paving streets, and laying pipes for water and gas .
Mr. Gordon, a competent man, ofered to subscribe $ 2 s , ooo to­
wards the building of a hotel, provided we would subscr:ibe for the same
amount. The Union Improvement Company accepted this ofer.
A bank was organized, which agreed to erect a suitable bank build­
ing. The Mellons subscribed for a substantial block of its stock & agreed
to take all that was not wanted in Donora.
A Mr. Claybaugh proposed to erect a two-story brick building for a
store and post ofce, if we would recommend him for the position of
postmaster, which we did.
Squire Castner, whose farm formed part of Donora, was one of the
school trustees. He was very interested in the welfare and success of
Donora. I told him I regretted that the school district was not in a po­
sition to issue bonds & construct a suitable school building, as we would
need it before it could be erected. I explained the troubles I had ex­
perienced in Monessen because there was no school . I asked him what
he thought of the school trustees supervising the building of a school
to cost about $so, ooo, provided the Union Improvement Company
would fnance it unti such time as the school trustees could have bonds
legally issued to pay for it. I made it a condition that the school would
secure all materials at the prices paid by the Union Steel Company and
would pay interest only on money actually invested until the town of
Donora was in a position to issue bonds to pay for it. He thought it was
a splendid idea. I promised to consult Mr. Mellon and to let him hear
from me shortly.
When I suggested the plan to Mr. Mellon he did not favor it, but
after I explained that it would be an asset to the Union Steel Company
in helping us to secure a good organization more promptly, he said,
'I had not thought of it from that angle. If you consider it good busi­
ness and approve of the Union Improvement Company fnancing it,
go ahead. '
The Union Improvement Company also helped t o fnance a brick
hotel ne
a
r the entr
a
nce to the plant. I contained small rooms suitable
for men employed in the mill , but had no bar. It cost about $ 2 2 , ooo
& was urgently needed. This company also built more than I oo homes,
paved the streets, put in water mains, gas pipes, etc. The Union Steel
Company' s activities in building the rod, wire and nail plant and later
the blast furnaces, steel plant, etc. , gave Donora a good start. The rail­
road was to build a passenger & freight station. The work being done by
Donora' s new property owners made it a very busy place. The various
investments of the Union Improvement Company were proftable.
After work began to show on the school house, Mr. 1. H. Mullin said,
' That schoolhouse is the best advertisement I ever saw. People are say­
ing if the Mellons have confdence enough to start a school, Donora
is going to be a good town. ' This was a pleasant surprise as I had never
thought of it in that light, but knew from experience that it was neces­
sary. Later we built a much larger school in the same manner.
The Union Improvement Company had its frst sale of lots in Don­
ora on August I o, I 900. It realized a little over $ 2 2 5 , ooo from that
sale. The building of the two schools was a great help to Donora and
the Union Steel Company.
Chapter 45· Problems Encountered by the Union Steel Company. Year
I 900. From the time we broke ground in Donora, we were busy with
construction on the rod, wire and nail mill, open hearth steel works,
blooming mill , billet mill and blast furnaces. Part of my time was taken
up in obtaining ore for the company.
I was fortunate in securing William H. Farrell as superintendent 9 5
of the rod, wire and nail mill. With his practical mill experience and
the help of Chauncy Morrison, chief clerk, he was able to form a com­
petent organization for the diferent departments. We made satisfac­
tory products at low costs for a new plant and they were quickly ana­
lyzed. We secured John Miller, who was helpful in the rod mill . Farrell
ran the plant and gradually increased production and decreased costs.
The Cleveland frm of Garrett and Cromwell were the only engineers
employed in the rod mill.
Nevin McConnell was superintendent of the open hearth steel plant.
He was well qualifed for the position. He had been with Carnegie Steel
Company, Ltd. , and had planned and superintended the construction
of the Sharon Steel Company' s open hearth plant. I also retained Julian
Kennedy for the blast furnaces. His furnaces had world records.
The American Steel & Wire Company had bought up all the barbed
wire machines and patents and had a monopoly. The Bates machine was
considered the best because of its speed. Many dealers wanted to buy
barbed wire with nails and we were anx�ous to make it. Many of our
customers bought from jobbers.
We were ofered a barbed wire machine, whose product Farrell and
several of his men pronounced good. They considered the machine
novel , but slower than the Bates machine. We bought eight machines.
The barbed wire proved to be of excellent quality. We subsequently
bought an additional fourteen. Barbed wire was proftable and helped
to secure other orders. We soon received a surprise: the American Steel
& Wire Company sued us for infringing on one of their barbed wire pat­
ents. The tra
d
e was fully advised of this suit. I secured three sets of all
patents issued on barbed wire machines, gave a set to Farrell and Mont
Hughes, a draughtsman, and retained a copy. We examined our ma­
chine & studied the patents cited. We found we were infringing on their
patent, but hoped to fnd a way of avoiding it. After three days' study
Mont Hughes reported that he could change the machine so that it
would not infringe on their patent & would increase its speed & capac­
ity ffty per cent. I asked him how long it would take to change one ma­
chine. He said it would take about fve days. I had him work night and
day on one machine. He changed one in three days. It avoided the pat­
ents and increased capacity as he had stated. We changed all our ma­
chines. I was sure Mont Hughes had a brilliant future. He superintended
the construction of the McDonald Mills in Youngstown and later be­
came president of the Carnegie Steel Company.
After all our barbed wire machines had been changed & were run­
ning, I met Mr. W. P. Palmer, president of the American Steel and Wire
Company, in the Duquesne Club and thanked him for getting after us .
He asked what I meant and I said that I was referring to their barbed
wire patent suit. He replied that Mr. Bennett handled those matters . I
then told him that his suit had inspired us to change our barbed wire
machines, with the result that our capacity was increased ffty per cent.
I suggested that Mr. Bennett dismiss his detective and send a represent­
ative to Donora, so that our superintendent could show him the ma­
chines . The suit was dropped, and we ran all our barbed wire machines
night and day. Many customers were so pleased with our success that
they favored us.
For a while the jobbers in the Northwest gave us no business, but
moved large tonnages of nails and barbed wire via the Great Lakes and
stored them with the railroads in Duluth. This gave them quite a freight
advantage after the close of navigation. One of the railroads ofered to
accomodate us likewise. We stored nails & barbed wire in Duluth, but
a much smaller tonnage than our competitors. We considered it good
policy to distribute our product throughout the country, but the job­
bers in the Northwest refused to give us any business. To combat, we
prepared a list of the principal buyers west of Duluth & quoted prices 97
based f. o. b. Pittsburgh, plus the lake freight to Duluth. These prices
brought consternation. A large j obber, who had refused to give us busi­
ness, wired for prices. After receiving these, he wired, ' You are quoting
us the same prices that you would to small buyers. ' We replied, ' True,
but we propose to sell a reasonable tonnage in your territory direct to
the trade, since you and all the j obbers refuse to handle our product. '
Frank Bachus, general manager of sales, & D. A. Merriam, his assist­
ant, were popular with the trade and nice fellows, but j ealous of their
customers and made it difcult for us to get a foothold.
Chapter 46. Charles M. Schwab. Year I 90 I . Mr. Charles M. Schwab was
a fne looking man, and in his youth had been a clerk in a store at Brad­
dock. Capt. Wm. H. Jones, known as ' Capt. Bill , ' president of the Car­
negie Steel Company, liked him and ofered him a job driving stakes for
the engineers at $ 1 per day. Mr. Schwab was mechanically inclined, an
apt pupil, and made rapid progress. Capt. Bill became so fond of him
that in a short time he made him his assistant. Capt. Bill was a wonder­
ful preceptor, as he was a genius at handling men and in producing re­
sults. He was the most practical steel operator in the world at that time.
Mr. Schwab had a magnetic personality. The only other man I ever
met to equal him in charm and personality was Franklin Delano Roose­
velt, whom I frst saw when he was in the Navy, but did not meet until
some years later. Mr. Roosevelt and I are the grandparents of William
Donner Roosevelt &, of course, I cannot critize my grandson' s grand­
parent. When you know that Mr. Roosevelt carried twenty pounds of
steel braces and sufered, you have to admire his great courage, charm­
ing voice and remarkable personality.
Mr. Schwab knew that the iron and steel industry was growing by
leaps & bounds. He was a frm believer in its future, a natural optimist,
and a great booster for the industry. To illustrate what I mean-he gave
a speech in which he said, in substance: ' Iron ore requires thousands
of years to grow and only a very few crops have grown in the United
States . ' The iron and steel men for many years had been scouring this
country for iron ore. Mr. Schwab said, ' Iron ore in the ground is worth
$ I per ton, ' but no one ever purchased iron ore in the ground at that
price during Mr. Schwab's lifetime. Nearly all the iron ore in the United
States is controlled by leases. During the term of the lease, the fee own­
er pays the taxes, but the lessee pays the annual amount necessary to
continue his lease. After sufcient ore is discovered to justify opening
a mine, the lessee pays the lease-holder the price stipulated in his lease
for the land required for railroad tracks, shafts, buildings, etc. , neces­
sary for developing the property & conducting mining operations. The
lease also sets forth the minimum tonnage that must be mined annually
at the fxed rate
p
er ton to prevent the forfeiture of the lease. Increased
tonnage of ore would have to be paid for at the specifed rate per ton.
On May I 6, I 90 I , Mr. Schwab testifed before a Congressional In­
dustrial Commission in an attempt to justify the capitalization of the
United States Steel Corporation as follows, 'We own something like
6o, ooo acres of Connellsville coal. You could not buy it for $6o, ooo
an acre, for there is no more Connellsville coal. Capitalization depends
largely on the value you put on your raw materials. ' judge Gary, when
questioned in October I 8 99 by a similar commission, told them how
various properties had increased in value. He said that I , I 3 2 acres of
Connellsville coal put down in the books of Federal Steel at $ soo per
acre were now selling at $ I , ooo. The United States Steel Corporation
was formed on April I , I 90 1 . In December I 9o2 , Mr. Frick said that
Connellsville coal was worth $ I , ooo per acre & Klondike coal $ 900.
The Union Steel Company, in its merger with Sharon, received $900
per acre for its Klondike coal, which was taken over by Sharon Steel
Company. On December I , I 902 , it was purchased by the United States
Steel Corporation at the same price.
1 o 1
Chapter 4 7 . An Attempt to Get Another Executive. Year I 90 I . In the
latter part of 1 90 1 , Mr. A. W. Mellon asked me if I knew of a desirable
man that we could add to our organization. He said, 'I mean somone
who can be helpful & share part of your responsibility. ' He stated that
our plans were now so extensive that we should have a larger organi­
zation so that if anything happened to me the company might not suf­
fer and be placed in a difcult position for a time. I thoroughly appre­
ciated this statement & agreed with him. He said, 'It will be necessary
to pay a higher salary than you are receiving. How will you feel about
that?' I replied, ' That will be all right. ' I regarded my quarter interest in
the company, fnanced the way it was, as worth many times my salary.
Mr. Mellon then told me to propose the best man I could fnd. I sug­
gested that Mr. Frick, in view of his experience and knowledge of the
steel business, was better qualifed to select the right man than I was.
After several days, Mr. Frick suggested a man who was an ofcer in
one of the subsidiaries of the United States Steel Corporation. He asked
me to see him and said, ' We will probably have to pay him a salary of
$ 2 o, ooo to $ 2 f, ooo and give him the privilege of investing his money
on a basis of our cost-it will probably not be more than $ I oo, ooo. In
addition, I think we should carry him for at least a $ I oo, ooo invest­
ment, charging him fve per cent interest. This would be good business
under the circumstances. ' I knew the man he had mentioned slightly
and was delighted with Mr. Frick' s selection and suggestions.
I learned that the man selected was receiving a salary of $ I S, ooo &
ofered him$ 2 o, ooo. I also asked whether he would care to invest any
money on a basis which would permit him to share in the profts of his
investment on the same basis as the Mellons and myself. I explained
that the bonds and stock could be issued to him as soon as the amount
of money required was determined. He stated that he would like to in­
vest, but had very little money. I then proposed that we carry him for
$ 1 oo, ooo in addition to any money he could raise. He seemed quite
pleased during the interview. I thought he would join us, but after con­
sidering the matter for a few days, he informed me that he had decided
to make no change. I asked him if more salary or a larger interest in the
company would be an inducement. He answered that it would not, as
he wanted to remain with his employer. I admitted being disappointed
and said, ' If you will reconsider, you can have a salary of $ 2 5 , ooo and
we will carry $ 2 oo, ooo as an investment for you. ' I had the satisfac­
tion about a year later, however, of having him tell me that he regretted
he had not j oined us. When I reported this conversation to Mr. Mellon
and Mr. Frick they were pleased but surprised that he would mention
it. A few days later, Mr. Frick advised me that he had just received the
same information I had given him.
The United States Steel Corporation was powerful and many persons
within its organization considered that it had many advantages. They
thought that an independent company would have rough sailing.
Chapter 48. The United States Steel Corporation Considered Buying
Union Steel Company But Abandoned the Idea. Year 1 902 . In the fall
of 1 902 , Mr. J. P. Morgan and Judge Gary attempted to have Mr. Frick
j oin the board of the United States Steel Corporation, but he declined
because of his interest in the Union Steel Company. They were so anx­
ious to have him that they said, ' We might buy the Union Steel Com­
pany. ' With that object in view, Judge Gary, George W. Perkins and
quite a delegation came to Pittsburgh in a private car and visited the
plant at Donora.
They knew that we had just purchased the Penobscot Mine. In order
to determine the value of our ore, I was asked to go to Duluth & sub­
mit maps and drillings of our properties to the Oliver Mining Company.
Oscar Rohn accompanied me and we supplied their engineers with full
data. During this visit Judge Gary made a remark, the exact words 1 o 3
of which I cannot recall, but in his canny way he stated, in substance,
'It is all right for any corporation to grow and expand, but I question
whether as a matter of policy, it is wise for the United States Steel Cor­
poration to buy all the assets of any competitor. '
Shortly after my return to Pittsburgh, Mr. John Galey, vice president
of the United States Steel Corporation, phoned me to come to New
York and see him. When I called on him, he showed me the tonnages
and value of our ore properties as estimated by their engineers. I con­
sidered the price suggested for the Donora mines too low. The tonnage
of the Penobscot Mine was practically the same as the estin1ate made
by E. J. Longyear for the Eddy Brothers some years before. I called his
attention to the fact that we now owned the Penobscot in fee, which
his engineers had overlooked-this was a ridiculous mistake. He ad­
mitted that fact & said, 'You will hear from me shortly. ' Several weeks
passed and nothing was heard from his corporation. I recalled Judge
Gary' s remark and we supposed the matter had been dropped.
Chapter 49· A Merger With the Sharon Steel Company. Year 1 902 .
Several weeks after the negotiations with the United States Steel Cor­
poration had been dropped, Senator Flynn and George Darr, who were
interested in the Sharon Steel Company, approached Mr. Mellon to
merge their company with the Union Steel Company. The Mellons ,
Mr. Frick and I thought that the two companies united would have a
larger and more diversifed line of products, which would be to our ad­
vantage, & we would have a stronger organization. The merger looked
desirable if it could be made on a fair basis.
In the negotiations with Sharon which were signed November 2 0,
I 902 , it was agreed that the va�ue of the blast furnaces, steel works ,
blooming mill, fnishing mills , machinery, equipment, buildings, inven­
tories, etc. , of each com
p
an
y
were to be fgured at actuaJ cost as of
December I , I 90 2 .
Each company had other assets that were worth more than their
cost. It was agreed that the current values of the ore, coal, ore vessels
and real estate were to govern. These values were subject to mutual
approval.
The agreed values for the Sharon properties were as follows: The
Sharon Mine (Sharon asked a higher valuation, but Union contended
for $ s , ooo,ooo, and agreed that all its ore properties and its contract
for ore would go in at that price, to which they agreed. )-$ s , ooo,ooo;
excess value over cost of I , 6oo acres of developed coal -$ 6oo,ooo;
and 400 acres of land at Sharon-$4oo, ooo.
The agreed values on the Union properties were as follows: Union's
ore properties-$ s , ooo, ooo; Republic Coke Company's 3 , 3 I 2 acres of
coking coal (this valuation was questioned, but after learning that its
coal analysis was better than some mines in the Connellsville region &
Sharon' s coal, Sharon was satisfed.)-$ 2 , 88o, ooo; two lake vessels,
the Shaw & the Murphy (Union had bought these boats for $6oo, ooo
i n September I 892. )-$ 6oo, ooo; River Coal Company's I , I 78 acres
on the Monongahela River-$72 o,ooo; & a manufacturing site front­
ing more than two miles on the Monongahela River (There was some
discussion of the value of this property, but after Darr & Flynn learned
that few sites were available on the river & that Carnegie Steel Company
and others had paid higher prices, Sharon was satisfed. )-$ I , ooo, ooo.
Our contract for steel with the Carnegie Steel Company was very
valuable. More than I oo, ooo tons of billets were due us under this con­
tract based on the price of pig iron at lower than the then current rates.
Our steel in stock and due us was worth several dollars per ton above
cost. We also had a contract for ore with Corrigan-McKinney and Com­
pany, with nine years to run, which would save a lot of money over the
market price of ore, but no such anticipated profts were considered.
All other values of Union, including its earnings, were subject to r
o
s
the verifcation & approval of auditors selected by Sharon, and all other
values of Sharon, including its earnings , were subject to the verifcation
and approval of auditors selected by Union.
Mr. John Stevenson, Jr. , president of the Sharon Steel Company, did
some reminiscing after the basis of the merger had been determined.
He stated that he had sold each of his other three steel enterprises on
a higher basis of value in 1 898 and I 899 than the appraised value of the
Sharon and Union properties, and that the Union Steel Company was
capitalized on a more conservative basis than either of the three com­
panies to which he had sold, unless Union Steel Company's bonds were
worth more than par. He was referring to the American Tin Plate Com­
pany, the National Steel Company and the American Steel and Wire
Company.
Chapter so. The Last School We Financed in Donora. Year 1 903 . In
I 90 3 , after the Union Steel Company had been sold to the United
States Steel Corporation some of its former employees and citizens of
Donora were disgruntled. The Union Improvement Company had f­
nanced the building & paid all the bills for the Castner School and they
knew that the stocks of the Union Steel Company and the Union Im­
provement Company were owned by the same persons. They decided
that they would block the sale of the schoolhouse to the town so that
its owners would be saddled with it. The school trustees unanimously
favored purchasing the property, but they were powerless without the
approval of the city ofcials .
The school trustees asked me what they should do under the circum­
stances. I asked, ' Does the town really need a school?' They replied,
' Many children cannot attend school this fall unless the Castner School
is opened. ' I then answered, ' We will not keep any children in Donora
out of school . Use it as intended and pay rent until you are able to take
title and carry out your plans. ' I left the entire matter in the hands of
the school trustees. The men blocking the purchase were disappointed
by our avoiding any controversy with them. The school board bought
the furniture for the school & paid rent equal to interest on the bonds.
While attending a large reception in Pittsburgh, a gentleman I knew
only slightly approached me and asked, 'What is Donora School com­
mon worth?' I was quite surprised, but happened to see Mr. R. B. Mellon
watching me and laughing. I then knew it was one of his jokes. He had
had his friend ask me the question. I replied, ' They are worth par but
difcult to buy. Mr. Mellon might help you. '
The founders of Donora were A. W. Mellon, R. B. Mellon and my­
self. The Mellons sold a third of their interest to Mr. H. C. Frick, making
the four interests equal . The town' s name, Donora, had been suggested
by H. C. Frick from the names Donner and Nora, the latter being the
frst name of Miss McMullen, the lady Mr. A. W. Mellon subsequently
married.
In 1 907, the school trustees sold the bonds and made a payment of
a little over $ 8_, ooo in full settlement. During the interim, Mr. R. B.
Mellon frequently kidded me about our owning a school. He thought
it quite a j oke.
Chapter _ r . An Amusing Experience. Year 1 903 . One evening my tel­
ephone rang in the Waldorf Astoria and I was asked by a pleasant fem­
inine voice whether she was talking to Mr. Donner. I replied, 'You are. '
The voice responded, ' This i s Mabel , can I see you downstairs?' I asked,
' Mabel who?' She replied, 'I want to see you & you will know me when
you see me. ' I did not like the appearance of things and replied, 'I am
invited to a dinner and am late. I am leaving as soon as I dress & have
no time to see you. '
I left the hotel , joined my friends for dinner, went to the theater &
never gave the phone call another thought. After the theater, I took
my friends to Rector' s restaurant. When I returned to the hotel it I 07
was twelve o' clock. I had an engagement to breakfast with Mr. Frick
and hurriedly went to my room.
In the bedrooms in the old Waldorf, there were large chandeliers
controlled by two button switches; one lighted all the bulbs & the other
just one. On entering, I pressed the button which lighted one light,
leaving the room poorly lit. I took of my coat and vest, hung them in
the closet and sat in an easy chair to remove my shoes. Just as I was
getting up, I saw a lady' s hat on the bed and at the same time I noticed
that the bathroom door was closed. I remembered that I had left it
open when I went out to dinner. I recalled the conversation with Mabel
and became terribly frightened. I had visions of being framed-no coat
or vest on, one shoe of and one in my hand. I rushed to the door and
hailed a bell boy in the hall and asked him to come in & open my bath­
room door. He saw I was excited and asked, ' What' s the matter?' I said,
' No one is to occupy this room but me. ' I pointed to the lady' s hat on
the bed and told him about the phone call. He looked rather uneasy,
but cautiously opened the bathroom door. It was an exciting moment.
No one was in the bathroom.
He said, ' This is very strange. Bolt your door and I will report the
matter to the house detective immediately. ' He examined the hat; a
small piece of paper pinned to it read, ' For room 6os, ' which was one
foor above mine. The hat had been delivered one foor below where
intended by mistake, which explained why it was in my room.
Mr. Frick usually retired early and had the habit each morning of
leisurely eating his breakfast and reading the papers. I j oined him the
next moring as arranged and told him about my experience. He was
very much interested and amused. I never saw him laugh more heartily.
Chapter s2 . Mr. H. H. Rogers and His Comments on Russia. Years
1 90 3
- 1 904
.
Shortly after our sale of the Union Steel Company to the
United States Steel Corporation, December 1 , 1 902 , Mr. H. H. Rogers,
one of the directors of the corporation and also of the Standard Oil
Company, invited me to a dinner at the Waldorf Astoria Hotel . The
guests included some younger men in the U. S. Steel Corporation and
myself. He questioned us as to the permanency and future of iron and
steel. We were all optimistic. All the guests agreed that the consump­
tion of rails , shapes, plates, bars , sheets, tin plate, rods, wire and nails
was growing & had increased steadily over a comparatively short space
of time. The building of steel railroad cars was mentioned as an impor­
tant recent example.
Mr. Rogers asked whether the use of Portland cement would not
displace steel . It was explained that it would increase the consumption
of cement and steel because good concrete work was reinforced with
steel . He then asked if the U. S. Steel Corporation did not have a de­
cided advantage over its competitors because of its superior mills . Sev­
eral around the table answered, 'Yes. ' When it came to me, I answered,
' No. ' I argued that larger & superior mills are only a temporary advan­
tage because all mills become obsolete in time. I explained that good
engineers can duplicate any mill and incorporate improvements which
experience has proved. Most of the guests had 'yessed' him, but two
or three supported my contention. I remember W. P. Palmer was one.
I said that the strength of the corporation was in its large iron ore re­
serves and that it owned the cream of the deposits. I stated further that
the only question that had given the Union Steel Company any anxiety
was the ore problem. Mr. ,Rogers' guests all agreed that the iron & steel
industry had a great future, especially in the United States, on account
of the large ore deposits which could be mined very cheaply when com­
pared to costs in England and Germany.
For conversation after the above, I asked Mr. Rogers which country
in the world had the greatest future. With enthusiasm he said, ' Russia.
If I were a young man I might be tempted to go there. ' He said that 1 09
Russia has large timber areas and enormous rich agricultural lands, as
well as the natural resources of gold, silver, copper, manganese, coal,
iron and oil. What he said about her resources i s true. Russia' s terrible
troubles since that time have often made me think of his remarks. He
did not see the revolution that was coming.
Through the courtesy of Mr. Rogers on another occasion, I had the
pleasure of meeting & dining with Mr. Samuel Clemens (Mark Twain).
He was a distinguished looking person in his white evening clothes &
quite agreeable, but to my disappointment he was not in the mood to
display any of his humor.
Chapter .3 · A Trip to Peru. Year 1 904. In 1 904, H. C. Frick and sev­
eral of his friends had a substantial ivestment in the Cerro de Pasco
Mining Company. Its properties were located in the Andes Mountains
of Peru at an altitude of 1 4, 3 00 feet above the sea. They ofered me
an attractive fee to visit the mine and make a report. I accepted with
the understanding that I would have an assistant, a secretary, a mining
engineer & a geologist to work with me. I discussed the situation with
Mr. H. McK. Twombly, who knew more about the property than any­
one else present at the Vanderbilt house. I then decided that I should
have the approval of my physician before going because of the altitude.
On March 4th i n Lima, several days after our arrival i n Peru, an earth­
quake occurred early in the morning. My brother Perce, who accom­
panied me as my assistant, and I occupied a comer room on the fourth
foor of the hotel. The shocks were so severe that water bottles with
large bases were upset on the tables in the dining room of the ffth foor.
Some of the statues on the cornices of the cathedral across the street
toppled of. Many people clad in their night clothes ran screaming
down the middle of the street to the open square-the plaza. We were
badly frightened. Our room was quite a distance from both the elevator
& the stairway. We were afraid to pass through the long narrow hall as
the building might collapse. We considered dropping from our window
to the roof of the adjacent building about twelve feet below, but we
could not see how we could get of its roof. We studied the situation.
After hesitating for some time, the shocks became less frequent and
fnally ceased. We hurriedly put on a few clothes and rushed down­
stairs. Several hours later, I was asked how long I thought the shocks
continued. I replied, 'Fifteen or twenty minutes. ' Instruments recorded
the exact time as one minute and ffty-eight seconds.
In Lima you are given many opportunities to purchase lottery tick­
ets. The sand is very dry and I had to change my clothes several times
on account of feas. You fnally become used to them. In sunny out-of­
the-way places you can see old women picking lice out of the children's
hair, one at a time, and putting them in their mouths. I do not know
whether they like them or do that to save extra work.
After the earthquake, we either had to wait several months in Lima
until the railroad bridge at Oroya was repaired or ride up the Andes on
horses and mules. We decided to ride and in this way came in contact
with many natives. The ride on the mountain trails was strenuous and
appeared more dangerous than it real
i
y was, because our animals in­
sisted on taking the path near the edge of the precipice. They took that
route to protect themselves. They were accustomed to carrying packs
and they thereby avoided hitting any brush and being thrown down
the mountains. Our guide was not much of a horseman. One of the
animals absolutely refused to move. Perce said immediately that some­
thing was wrong. He quickly found the animal had blinders which had
slipped down. Instead of tying them, they let down these blinders and
the animals were afraid to move. It was one of the most interesting trips
I ever took. It has been said that Cerro de Pasco had no weather-only
samples. I have seen sunshine, rain, hail, snow and lightning and heard
thunder within an hour. 1 r 1
Shortly after leaving Oroya, we were met by Mr. Impetit in his pri­
vate car. He said he would loan us his upholstered handcar if we would
let his man handle it, as it was very dangerous unless used carefully by
someone who knew the grades, switchbacks, etc. He told us that they
had a lot of workmen repairing the tracks and there was danger of
running over one of their dogs, being thrown of the track and down
the mountainside. We were glad to change to an upholstered seat and
found it much more comfortable than the back of a horse or mule.
We carried stones to throw at the dogs to get them of the track.
On the Cerro de Pasco trip nearly all our food was in tin cans and for
several years afterwards I disliked the sight of a sardine. On the return
trip down the Andes we saw an Indian hut which looked clean. We in­
quired if we could get a meal for three. The Cholo woman agreed to
serve us lunch. She was fnally ready and the meal tasted good. It con­
sisted of stewed meat, potatoes and dumplings. The potatoes were fne
and the dumplings nice and light, but the meat puzzled me. The only
animals we had seen were horses, mules and llamas and I knew lt was
not one of these as the bones were too small. I thought it was squirrel,
but I had not seen one and we were above the timber line. With the aid
of a Spanish pocket dictionary, I told the Indian woman we liked her
lunch and asked the kind of meat we were eating. She understood,
rushed to the kitchen & returned with two live guinea
p
igs. It was too
much for Oscar Rohn, a husky six footer who accompanied me as my
mining engineer. He could eat no more. Perce and I enoyed our lunch.
In Lima the food in Cerro de Pasco is reported to be exceedingly bad.
On our return, Rohn was asked by a friend how he liked the food. He
replied, 'I had only one good meal in the mountains & Donner' s damn
curiosity spoiled it. '
The Cerro de Pasco Company built a railroad from Cerro de Pasco
to Oroya without frst having a contract or understanding with the
railroad at Oroya as to what they would charge for transportation from
there to the seaboard. I do not think it was approved by Mr. Haggin.
While I was at the mine, I was with Bruce Turer most of the time.
He was a Scot and a clever engineer. Just before leavig Cerro de Pasco,
Turner mentioned that he was afraid of the banks in Peru and asked i f
I would take a little money to the States and deposit it in a good safe
bank where he would receive 3 � per cent or 4 per cent interest. I
supposed he would have three or four thousand dollars and told him
I would be glad to put it in the Union Trust Company in Pittsburgh,
where he would secure four per cent interest on a time deposit. Before
leaving Lima, he appeared with several thousand dollars in gold, U. S.
currency and several New York checks on the Cerro de Pasco Mining
Company, totaling about $ I 4, ooo. This was much more than I ex­
pected. I bought our return tickets for the three of us to New York
with part of the gol d and then had so much left that I put it in two old
pants' legs which I tied as tight as I could so that it would not rattle
much and placed it in an old steamer trunk under my berth. Perce was
in an adjacent room and Williams, my secretary, was nearby.
Perce and I visited the markets early one morning in Guayaquil,
Ecuador, & Williams watched my room. You could buy a parrot cheaper
than a chicken and monkeys also were cheap. The captain of the ship
was provoked and criticized us severely for going ashore as diseases of
all kinds were prevalent. He said it was the worst pest hol e i n the world.
On arriving in Pittsburgh, I learned that Union Steel Company fve
per cent Gold Bonds had declined from 9 8 and the market was 8 3 .
I then concluded to buy these bonds for Turner. I wrote and explained
that the bonds were a frst mortgage on the properties of the Union
Steel Company and each bond was guaranteed as to principal & interest
by the United States Steel Corporation. I considered them perfectly
good, as did Mr. Mellon and Mr. Frick, but if he preferred to have I I 3
a four per cent time deposit with the Union Trust Company not to hesi­
tate to say so. I would take the bonds and allow him four per cent from
the date I purchased them upon receipt of his letter or cable and have
the Union Trust Company issue a certifcate accordingly. He wrote &
thanked me for buying the bonds. The bonds afterwards sold in the
nineties. Turner never sold any of them until they were above par.
I wrote to the Union Trust Company & enclosed a letter from Turer
with his signature for identifcation purposes. I also enclosed a key to
his trust box in the Union Trust Company and a list of his bonds with
the numbers so that if anything happened to me, Turer would be pro­
tected. A carbon copy of this letter was sent to Turner.
After Turner returned to the United States, he visited several copper
mines and wrote me that the Utah copper properties were very valu­
able but stated that they were large mining and manufacturing propo­
sitions as their equipment was so extensive.
Through the information Mr. Turner gave me, I made $.o, ooo. It
would be interesting to learn how much Mr. Frick made from this in­
formation as he went into things more extensively than I did.
Chapter 54· How I Became Interested in the Cambria Steel Company.
Year 1 90.. Mr. H. C. Frick was a large stockholder and a director of the
Pennsylvania Railroad Company. He noticed that the earnings of the
two steel companies, namely Cambria Steel Company and Pennsylvania
Steel Company, control of which was owned by the railroad company,
were surprisingly small. He mentioned this to Mr. A. }. Cassatt, presi­
dent of the railroad company, & Mr. Cassatt asked for advice. Mr. Frick
frst recommended that Mr. Julian Kennedy of Pittsburgh be consulted.
When Mr. Cassatt told him that the Cambria Steel Company several
years previously had consulted Mr. Kennedy and had expended about
$4, ooo, ooo upon his advice, Mr. Frick suggested that Mr. Cassatt have
me look over their plants and make a report.
In the fall of I 90S, Mr. Frick, at a meeting arranged to discuss the
matter with me, said, 'I will appreciate it if you will call on Mr. Cassatt
and arrange to make a report. ' When I called on Mr. Cassatt, he gave
me letters to Mr. Powell Stackhouse, president ofCanbria, & Mr. Edgar
C. Felton, president of Pennsylvania. Both of these gentlemen extended
every courtesy to me. I was shown all of the properties of the company
and given their detailed costs, which In each case were high, and par­
ticularly In the case of the Cambria Steel Company.
Since the United States Steel Corporation uses the same card of ac­
counts ln all of Its plants, costs can be readily compared.
In the Cambria and Pennsylvania Steel Companies the cards of ac­
counts were diferent so that comparisons could not be made with
each other or with the United States Steel Corporation. One used the
Carnegie Steel Company' s card of accounts. I found that Cambria and
Pennsylvania Steel Companies' cost of basic and Bessemer pig iron,
Bessemer & basic billets, rails, shapes, plates, bars and rods were higher
than those of the United States Steel Corporation and other steel com­
panies such as Bethlehem, Youngstown Steel & Tube Company, Inland
Steel Company and others.
Chapter s s. The Water Plants of Charleroi, Monessen and Donora.
Year I 906. Prior to the fltration of lts water supply, Pittsburgh had
many cases of typhoid fever, but after fltration was started the disease
became so rare that when a patient sufering from it entered a hospital,
nurses were called to observe it.
When we started Monessen in I 897, Monongahela River water was
pure, but sulfur from the new coal mines above Fayette City and sew­
age from towns on the river polluted it.
During the years I 90 3 to I 906 typhoid fever occurred In Charleroi,
Monessen and Donora and the number of cases was Increasing. The
Mellons controlled the Charleroi plant & had a ffty percent interest I I s
in Donora. I owned the controlling interest in Monessen and a quarter
of the Donora plant. It occurred to me that a consolidation of these
plants with a single pumping and fltration plant above Charleroi would
efect quite an economy in the operation compared with the cost of
operating three separate fltration plants.
With typhoid increasing in these towns it would have been criminal
to postpone fltration. I spoke to Mr. Mellon, who agreed with me and
said, 'I think under the circumstances it is our duty, and no one can do
the j ob as economically as we can. ' He suggested that I secure estimates
on present values of each of the three plants. I engaged the services of
Mr. }. W. Chester, a waterworks engineer, to prepare them.
Charleroi was the oldest plant and well developed. It had a proftable
past, but no prospects for further expansion. Monessen had a larger
popuation, needed more houses & large extensions to its present water
mains . Donora had the next best prospect for future expansion.
Mr. Mellon asked me if I approved the values fxed by Mr. Chester
on the three plants. I thought they were fair. He thought the value of
Charleroi was too low. Since I owned Monessen, he asked me if I was
willing to sell it on the basis proposed. I answered, 'Yes, ' and he said, 'I
will take it. ' This made consolidation of the three plants and fltration
a simple matter. The Mellons owned Charleroi and a share of Monessen
and Donora was owned by the Mellons, H. C. Frick and me.
Chapter s6. An Experience Brought About by the Panic of 1 907 . The
Westinghouse Electric Manufacturing Company & the Westinghouse
Machine Company had borrowed heavily not only from Pittsburgh
banks, but from many others for several years prior to 1 907. They had
also sold notes through brokers which were widely distributed through­
out the country. Financial conditions changed in 1 907. Note brokers
coud not sell commercial paper. Payment was demanded on the notes
sold by brokers at maturity. Mr. George Westinghouse was in fnancial
trouble. Several of hs companies could not meet their obligations.
Receiverships followed.
There was an unusual business depression. Currency commanded a
premium over 'certifed checks payable through the clearing house. '
On October 2 3, 1 907, I was appointed one of the receivers of the
Westinghouse Machine Company. The other receivers were Messrs.
William McConway, H. S. A. Stewart, John C. Chapman & E. E. Keller.
My position brought me in contact with the receivers of other West­
inghouse companies, their organizations, Mr. George Westinghouse,
Mr. Herman Westinghouse, bankers and lawyers. Numerous problems
had to be solved. We had many interesting experiences.
The Westinghouse Machine Company had sold several I o, ooo kw
turbo generators which were giving trouble. We considered them enor­
mous machines, but today they are comparatively small. Both the West­
inghouse & the General Electric Company have built many so, ooo kw
machines and even I oo, ooo kw units are not uncommon.
The Westinghouse Machine Company took a large contract for gas
blowing engines for the Gary Works of the United States Steel Corpo­
ration. It was the frst engine of this type that the company ever built.
There was some anxiety among several of the receivers as to gas
blowing engines. Mr. West, who designed the engines, had left the
Westinghouse Machine Company & was employed by the Bethlehem
Steel Company. Gas blowig engines were very successful in Europe.
The engineers of the United States Steel Corporation had carefully
checked over the plans so there was no reason to question the design of
these engines. I insisted that we must fulfll the Gary contract. The cor­
poration had made its payments according to the contract. If we aban­
doned it, we would have had to refund their money and would have
been liable for heavy damages. Furthermore, our work would be scrap,
and our expenditures a complete loss.
1 1 7
Cash was difcult to secure & we had to be very careful in spending
money. We had to resort to paying the employees with checks . These
passed as cash among the merchants of Pittsburgh. A lot of time, work
and money was required to complete the engines. Our only honorable
course was to complete the contract.
Mr. George Westinghouse was a likeable man, but if Interested in
some new idea, he attempted going ahead regardless of expense. With
difculty, we prevented expenditures of no advantage to the company.
We were the servants of the court and had to say, 'No. '
Mr. Paul D. Cravath, personal attorey for Mr. Westinghouse, and
his brother Herman, helped me privately several times in my relations
with Mr. Westinghouse. I was the youngest of the receivers and was
the only one at the plant most of the time, with the exception of an
employee, Mr. Keller. I had the advice of the other receivers which
was very helpful, but they were men of afairs and busy with other
matters. Several times I was the only one in Pittsburgh to confer with
Mr. Westinghouse and had to give the decision of the receivers. One
of his old friends was purposefully out of the city in two instances and
I was the spokesman. Mr. Westinghouse fnally appreciated my posi­
tion, was more reasonable and we became good friends.
A few years ago I met Mr. Miller in Europe. He had married the wid­
ow of Mr. Herman Westinghouse. He was associated with Mr. George
Westinghouse in the Switch and Signal Company. In talking about
Mr. Westinghouse and the troubles of 1 907 I stated that I thought the
Westinghouse Air Brake Company had made money so fast that it had
ruined Mr. Westinghouse for any ordinary business. He agreed with
me and said that my remarks reminded him of the following incident:
He & Mr. Westinghouse were returning from New York to Pittsburgh
in the railroad observation car. As they were approaching the plant of
the Westinghouse Air Brake Company in East Pittsburgh, a stranger
sitting next to Mr. Westinghouse asked, ' What plant is that?' Mr. West­
inghouse replied, 'I think it is the mint, but perhaps Mr. Miller can tell
you more as he knows Pittsburgh better than I do. ' There was more
humor to me in that answer than in any remark I ever heard from him.
Occasionally I came in contact with the ofcials of the General
Electric Company, and became well acquainted with several of them.
If Mr. George Westinghouse had had a fnancial man with one-half the
ability of Mr. Cofn of the General Electric Company, and entrusted
the fnancial management of his enterprises to him, he would have
been a very rich man. He was a great genius but not a fnancier.
After the receivership was lifted, several of the bankers asked me to
remain with the company, but I asked to be relieved as I had other
business that required my attention. I said that there were others better
qualifed to fll my position. Someone asked me to name two. I replied,
'George Mesta and Isaac Frank. ' Mr. R. Wardrupimmediately said, ' But
we cannot get either of these men.' I replied, 'I only answered your
question. Whether you can get them is your business. '
The General Electric Company built electric apparatus, motors, gen­
erators & complete turbo-generators. The Westinghouse Electric Man­
ufacturing Company built the same line of equipment, except steam
turbines. However, it furnished the generators to the Westinghouse
Machine Company which built steam turbines & sold turbo-generators.
From what I saw, it was apparent that the building of turbo-generators
should be done by one organization. The plants of the two Westing­
house companies were adjacent and the machine company was much
smaller, but its plant organization was just as complete and larger in
proportion to its size and extravagant in some departments. Each com­
pany had separate engineering organizations, sales departments and
ofces in many of the same cities.
The receiverships were lifted in about six months. I had told
I 2 I
Mr. Westinghouse that if the electric and machine companies were to
consolidate there would be an enormous saving in the operatt0n of
the two companies and greater efciency.
1
Mr. Westinghouse regained control of the two companies and ap­
pointed a brother of Mr. E. M. Herr president of the electric company
so I was relieved. About three years later I was pleased to learn that the
two companies had been consolidated.
Shortly after the receivership in I 908 , the electric company and the
machine company had small net current assets for such a large busi­
ness, and upwards of $3 3 , ooo, ooo in bonds.
The electric company in I 94 2 had no bonds & net current assets of
about $ I 65 , ooo, ooo-a most remarkable change.
Chapter 57. How I Happened to Buy a Steel Plant in Bufalo. Year I 9 I 5.
On a trip around the world in I 9 I I , I met Mr. Frank Baird of Bufalo
on the SS ' Carmania' between New York and Alexandria, Egypt. He
was president of the Bufalo Union Furnace Company and one of the
leading citizens of Bufalo. I also saw him a number of times in Shep­
heard' s Hotel, Cairo and in Luxor. Both of us being manufacturers of
iron, we had many mutual friends and became quite well acquainted.
In the years I 9 I 4 and I 9 I 5, I received several letters from Baird
suggesting that I come to Bufalo and look over the plant of the New
York Steel Company. I wrote him that I was not interested and could
not consider it. Near the last of September in 1 9 I 5, Mr. Baird phoned
and requested that I come to Bufalo on the night train on that date or
the next as a special favor to him. He said that he would meet me upon
my arrival , take me to breakfast, motor me out to the plant, take care
of me during the day and put me on the night train to Philadelphia,
where I was then living. He explained that the plant was then owned
by a bondholders' committee and could be secured at a great bargain.
Out of courtesy to Mr. Baird I agreed to go the next day, and I asked
him to meet me at the Iroquois Hotel at 9: 2 0 a. m. Mr. Baird called &
drove me out to the plant. We walked over the property and through
the works . It consisted of a tract of sixty-seven acres within the city
of Bufalo and located on the Niagra River. It had dock facilities for
receiving ore and limestone directly from the Great Lakes.
The plant had two .OO ton blast furnaces, three large open hearth
furnaces, traveling cranes, blooming mill, machine shop and the usual
equipment of a plant that size. The ore dock & blast furnaces needed
some repairs. There was an active demand for pig iron at attractive
prices. The blooming mill could run 1 4 . mm steel bars, for which there
was an enormous demand at proftable prices. I considered the property
a bargain at $ 3 , ooo, ooo. I thought that it would be a valuable property
for the Cambria Steel Company, of which I was then president, as it
could use some of its Mahoning ore on which it would have a proft of
several dollars per ton, aside from realizing other good earnings from
its operations, but there was no time for delay. To take the proposition
up with the board of directors and make a report for them to consider
before buying the property was out of the question as that would re­
quire too much time. I thought that one blast furnace could be success­
fully started by January I , I 9 1 6, if sufcient ore could be secured be­
fore the close of navigation to last from January 1 st to the opening of
navigation. I explained to Mr. Baird that there was no point in buying
the property at this time unless that could be done. He replied, ' Your
idea of starting one furnace so soon never occurred to me and would
require quick action, but I am sure that we could spare you two car­
goes of ore and let you use our dock facilities without any charge, ex­
cept the actual cost of the extra labor involved. ' He also said he was
confdent that Mr. Noonan, president of the Bufalo Rochester & Penn­
sylvania Railroad, would let us use their dock facilities. The Bufalo fur­
naces and its dock were nearby, which would be quite helpful. I 2 3
We phoned Mr. Noonan, whom I knew, & he was most cooperative.
We visited the plant of the Bufalo Union Furnaces & went to lunch.
At lunch I proposed the purchase of the assets of the company with
$ 2 ,
_
oo, ooo frst mortgage fve per cent bonds secured by a mortgage
on the property. The bonds were to be issued by a company organized
by me, with an authorized issue of $ 2 ,
_
oo, ooo of capital stock to be
paid for in cash. If they were prepared to entertain this proposition I
would either accept or reject it by noon the following day. After lunch,
I met several of the bondholders' committee. They rejected my pro­
posal but an hour or so later ofered to sell the propert
y
for $ 3 , ooo, ooo
i n bonds and gave me ten days to accept or reject this proposition. I
told them that if I did not buy it before noon the following day I would
not be interested, and that I would not consider any price above the
one I had proposed.
The committee asked to talk with Mr. Baird privately. After talking
with him they phoned several absent members of the committee and
agreed to sell me the property on the terms I had proposed. Mr. Baird
told me afterwards that in their conference with him they had wanted
to know if I really had no interest in buying the property if it could
not be bought immediately. He had explained that my position was sin­
cere since I thought I could start one of the blast_furnaces by January I ,
I 9 I 6. He had also informed them that he was not sure that I could do
this: He had added that he had promised to let m.e have two cargoes
of ore �nd would help me in any way he could if I purchased the prop­
erty. He had them prepare an ofer on the basis of my suggestion. In
accordance with my promise I wired before noon the next day, accept­
ing their ofer. As I had to personally take all of the risk in buying the
property, I decided that it would be fair for me to retain a forty-nne
per cent interest in the company & let Cambria have ffty-one per cent.
Before all the details of the arrangement were completed and I had
sufcient data prepared for Cambria to properly consider the purchase
of a ffty-one per cent interest in the Bufalo plant, a syndicate bought
a substantial block of Cambria' s stock. Only one man in the syndicate
had any experience in a steel plant, and his duties had been quite lim­
ited. He knew nothing about merchant pig iron or 1 4. mm bars, but
he was an excellent salesman. When I. spoke to him about the Bufalo
plant, he stated that he personally would oppose Cambria Steel Com­
pany taking any interest in a Bufalo plant. Previously a matter of such
importance would have been studied carefully by Mr. E. B. Morris and
Mr. Ely & if they thought favorably we would have consulted Mr. Rea,
who was then president of the Pennsylvania Railroad. Since I had pur­
chased the property on my own responsibility, I dropped the question.
I was willing to take the Bufalo plant and let some of my friends have
an interest in it.
Chapter 58. How My Interest in Cancer Research Began. Year 1
9
2 9.
In May 1 92 9, I became quite worried about my son Joseph' s health.
He had not been well for six months. Physicians in Bufalo could fnd
nothing wrong with him. He visited Philadelphia and Johns Hopkins
in Baltimore with the same result. He had been previously advised to
let up on work and rest, which he had been doing, but his condition
did not improve.
I had business in Detroit and asked Joe if he would like to accom­
pany me. I suggested that we could run over to Battle Creek and if not
satisfed we could visit Rochester, Minnesota, and see the Mayos. He
said, ' That would be fne. '
My son Robert heard of my plans and came to see me that evening.
He said, ' Father we know what is wrong with Joe now, and I have not
wanted to worry you. ' I enquired what it was. He replied, 'A tumor. '
I asked him whether i t was malignant. He said, ' Yes, and we want to
get him to Baltimore to have a second radium treatment. ' 1 2 5
Dr. Theodore Wright of Bufalo had examined Joe in December &
could fnd nothing the matter with him, but in May when going up in
the elevator with Joe at the Saturn Club he noticed a slight swelling in
one of the glands of his throat. He asked him whether he had a cold or
a sore throat & Joe answered, ' No. ' Dr. Wright then told him that one
of his glands was a little swollen & suggested that he step into his ofce
after lunch. When he called, Dr. Wright under some pretext secured
a small section of the swollen gland, which under a microscope showed
that it was a metastasis of a malignant tumor.
I was having trouble with a duodenal ulcer and planned to go to
Baltimore to see Dr. Tom Brown. It was arranged for Joe to accom­
pany me and to see Dr. Kelly about further radium treatments. Upon
arriving in Baltimore Joe insisted that we see Brown frst, & he remained
with me during my examination. We then went to Dr. Kelly' s, where
for two days Joe received radium treatments. He made several trips
with me to see Dr. Brown and Dr. Kelly.
In the summer of I 929 it became apparent to me that very little
was known about cancer and I decided that someday I would give a
substantial amount for cancer research. On September 2 9th, I sold
Donner Steel Company and set aside some $ 2 , ooo, ooo for charitable
purposes, primarily for cancer research. I devoted about two years to
studying how to use that money and found it a difcult problem. There
were plenty of applicants who were perfectly willing and anxious to
accept the money, but several of them did not know any more about
cancer research than I did, which was very little.
The doctors were never able to locate the primary tumor. After Joe' s
death, December 9, I 929, I wanted an autopsy made, to which his
wife consented. It was found that he had cancer of the lung, which at
that time was not nearly as commonly known as it is today-probably
because it had not been recognized & diagnosed as well as it is now.
ADDENDA
William H. Donner lived to a great age and he continued to be active
mentally and physically. After his retirement, he was able to satisfy his
humanitarian instincts more fully and, as he was a modest man, I hope
the reader will bear with the length of the Addenda because it seemed
to me that a few of father' s outstanding benefactions should be de­
scribed. Their infuence continues today & will be felt for generations.
Here are some examples:
Perhaps sometime in the future, a young man with a tumor of the
lung may have a better chance of recovery due to the research pro­
j ects fnanced by the former International Cancer Research Founda­
tion in Philadelphia.
A young woman from a small town in Texas needs X-ray therapy
after the removal of a tumor. She is taken for treatment to a hospital
in Fort Worth where excellent facilities have been provided by the
Donner Foundation.
The University of Pennsylvania Hospital in Philadelphia provides
help to a disturbed young person, who is sufering from gastrointesti­
nal upsets, by having her discuss her problem with a psychiatrist as well
as with an internist.
Many famed experiments have taken place in the building provided
for research at the University of California in Berkeley. A young doc­
tor in the Donner Laboratory works on his proj ect with radioactive
isotopes which he hopes will beneft his fellow man.
At the renowned Montreal Neurological Institute, an eminent doc­
tor who wishes to do neurochemical research may proceed with his
experimental work due to a yearly grant from the Donner Canadian
Foundation.
The magnifcent pool in Donner Park provides a country club atmos­
phere which can be enj oyed by an underprivileged child of Columbus.
As he prepares for his future, a brilliant young student on a I 2 9
scholarship profts mentally and physically from the well-planned cam­
pus facilities of Hanover College.
Philanthropy. It behooves me to mention the foundations created by
my father for charitable purposes. Devoting close attention to a pru­
dent distribution of funds for worthy causes he particularly favored
' challenge' giving, in which the donor promises to match or surpass
funds raised by the donations of others in a given period.
On April 2 5, I 9 3 2 , he created the International Cancer Research
Foundation. This was not only to aid in research into the causes and
cure of cancer, but was also to assist in obtaining cooperation among
scientists engaged in similar work throughout the world. No more than
sixty percent of its funds were to be allotted within the United States
and not less than thirty-fve percent outside of this country.
The deep interest father evinced i n cancer research was typical of
him, and he became acquainted with some of the great specialists of
that period.
Radiology. Berlin, Germany. Whie in Berlin in I 9 3 5, father went to
the Siemens Company to ask for a catalogue & the price of the Chaoul
X-ray machine. The salesman inquired whether he would like to meet
Dr. Chaoul, and father said he would be delighted. Recalling this exper­
ience In a letter to me of May I 4, 1 952 , he stated:
Dr. Chaoul was from Serbia and spoke no English or German so
I could not communicate with him. All I could get was a state­
ment by a German in bad English that Dr. Chaoul would see me
shortly. In a few minutes, two nuns came ln and threw a white
gown over me and I saw the doctor get ready to treat a cancer of
the bowel . I always fainted at the sight of blood, but I made up
my mind at this time that I must brace myself & not faint, which
I did, and have never fainted since.
Philadelphia, Pennsylvania. Dr. Eugene P. Pendergrass, the former head
of the Department of Radiology of the University of Pennsylvania Hos­
pital, was sent by father to London & Berlin to learn at frst hand about
Dr. Chaoul ' s X-ray machine. In a letter to Dr. T. Grier Miller of July 2 o,
I 97 2 , confrming that my memory was correct about his having made
the trip, Dr. Pendergrass made the following interesting observations.
Several years before William H. Donner's death in I 9.' , his
continuing interest in X-ray therapy caused him to arrange for
the Donner Foundation to order a dozen two million volt uits.
They were to be sent to cities without radiological equipment
where there were people who had the expertise and staf to use
them, and with Dr. Pendergrass' help, a list of radiotherapists was
accordingly prepared. A unit was sent to Dr. Thomas Bond in Fort
Worth, Texas, where the hospitals & the city banded together to
build a therapy department in juxtaposition to one of the hospi­
tals, and that unit became the therapy division for the entire com­
munity. The staf, which consisted of qualifed mem hers from the
various hospitals, was directed by Dr. Bond. That powerful exper­
iment & demonstration of cooperation between hospitals using
a single X-ray unit has been pointed to with pride throughout the
United States and the world.
Research. Berkeley, California. The construction of the Donner Labo­
ratory of Medical Physics & Biophysics at the University of California,
Berkeley i I 942 stemmed from father' s high regard for the medical
and scientifc work being done by Dr. Ernest Lawrence and his associ­
ates. His brother, Dr. John Lawrence was the director of the Donner
Laboratory from I 948 to I 9JO.
Early in the nineteen thirties, Dr. Ernest Lawrence, a newly ap­
pointed professor of physics at the University, designed a
'
mag­
netic resonance accelerator' (the cyclotron) to speed up nuclear
particles to high energy. The laboratory was founded to carry r . I
out the program in nuclear medicine & biology of the Lawrence
Radiation Laboratory, applying to research on medical & biologi­
cal problems the basic sciences of physics, chemistry and mathe­
matics. This was the actual beginning of the new science of atomic
medicine. (Excerpt from The Report on Donner Laboratory; Re­
gents ' Meeting, November 1 6, 1 962 . )
Psychiatry. Philadelphia, Pennsylvania. On October 1 _, 1 943 , father
established at the University of Pennsylvania Hospital in Philadelphia
the Donner Fund for Needy Patients. This temporary fund was to be
under the supervision of Dr. T. Grier Miller, the renowned physician &
founder of the Gastrointestinal Clinic at the University of Pennsylvania
Hospital and its chief until his retirement. The income was to be ex­
pended for special facilities for charity patients as well as to assist in
clinical research and experiments in hospital administration.
The most gratifying result was perhaps the beginning of the psychi­
atric treatment of patients in the Gastrointestinal Section. Dr. Miller
was one of the frst to realize that psychosomatic problems could create
gastrointestinal disturbances, and that the symptoms could be allevi­
ated by psychological treatment of the patients. The success of this
work led to the creation of a Psychiatric Unit in the University of
Pennsylvania Hospital .
The following excerpts are from the ' Memoir of William Henry
Donner, ' by father' s friend & physician, Dr. Miller. (Prepared and pub­
lished at the request of the Council of the College October 6, 1 9.4·
Reprinted from Transactions and Studies of the College of Physicians
of Philadelphia 4 SER. , VOL. 2 2 , No. 4, April 1 9..· )
. . . Mr. Donner's benefactions indicate his intense interest in the
advancement of medical science, the amelioration of human suf­
fering & the promotion of social welfare. Incidentally, they illus­
trate his devotion to his family and friends; also, his regard for the
localities in which he had lived, received his education and pro­
fted by his business associations.
Mr. Donner had much personal charm. He was a quiet, unas­
suming & gracious gentleman. He was tolerant of others' opinions
but was not easily infuenced . . . . He had an original mind and
initiated many important procedures in the steel industry. He was
admitted to Honorary Associate Fellowship in our College, how­
ever, because of his interest In the art and science of medicine &
In humanity, and he will be remembered longest for the contri­
butions he made in support of these objectives.
Donner Foundation. On July 2 �, I 94 �, father established the Donner
Foundation as the successor organization to the International Cancer
Research Foundation. The Donner Fund for Needy Patients was ter­
minated in I 949 and its assets transferred to the Donner Foundation.
The Donner .oundation's purpose, as stated in the Certifcate of
Incorporation, was to use and apply its property and the income there­
from exclusively in such charitable, benevolent, scientifc and educa­
tional activities as would promote the well-being of mankind and the
alleviation of human sufering. Thus , the funds were consolidated and
the objectives were broadened.
Recreation. Columbus , Indiana. In his youth, father often went to play
in Perry' s Grove, a pastoral area near Columbus which is now sur­
rounded by the residential section. He purchased in I 9 I 6 the major
part of this open space, amounting to about twenty-fve acres, & gave
it to the city of Columbus as a public park In honor of his mother. It is
to be noted that this was not a memorial as his mother lived until I 9 3 f.
Father' s recollections of the danger of swimming i n streams when
he was young inspired him to have the Donner Foundation give funds
to Columbus in I 946 for what turned out to be one of the ten fnest
pools in the country. Various pools were studied before a decision 1 3 3
on the specifcations was made. The Donner Center pool can accom­
modate people of all ages. There are a separate kiddies' pool, a j unior
pool and an Olympic-size pool with a diving well of ten feet. The large
deck area around the pool is excellent for swim meets, spectators and
sunbathers. Father stressed that the pool must provide free periods
daily for all children, & from that request has developed the outstand­
ing swimming instruction program of the Midwest. A building beside
the pool is equipped with dressing rooms and has a spectators' gallery
on the roof.
Father felt that the swimming pool which he gave to Columbus was
one of the most gratifying of his many benefactions.
Canadian Philanthropy. Montreal, Canada. Dr. Wilder Penfeld, the
famed neurologist and director of the Montreal Neurological Institute,
was held In high esteem by my father. He was one of several physicians
who took care of my mother during her last illness. Inspired by him &
by the research work being done by Dr. K. A. C. Elliot and other de­
voted scientists, father gave McGill University a building to house var­
ious laboratories.
Tribute was paid by the late Chief Justice 0. S. Tyndale, Chancellor
of McGill University, at the laying of the cornerstone on September 2 7,
1 94 7 . (Excerpts from the Montreal Star of November 4, 1 9 s 3 .)
This building, destined to house various laboratories for re­
search in medicine and biophysics, will perpetuate in Montreal
the name of William Henry Donner of Philadelphia, to whose
generosity its existence is due.
Bor in a small Indiana town, Mr. Donner at an early age en­
tered the steel industry, in which he rose in due course to be one
of the leading fgures. He is one of that distinguished group of
United States citizens who so generously devote to good works
the funds accumulated by their industry & business acumen. . . .
The Donner Canadian Foundation was created on December 2 I ,
1 9_0, through a gift from the Donner Foundation. A plaque on the
wall of the Montreal Neurological Institute reads:
Research in Neurochemistry is supported by the Donner Cana­
dian Foundation as long as such experimental work continues in
the Montreal Neurological Institute. The Donner Laboratory of
Experimental Neurochemistry is named as a tribute to the con­
structive interest in medical research of William Henry Donner.
The Donner-Hanna Coke Corporation. The details of the following ma­
jor industrial proj ect which was brought to my attention seemed also
worthy of inclusion. In response to my letter, Mr. Lee D. Lagessie, a
public relations representative of Republic Steel, wrote on February 6,
I 973 =
' . . . I am happy to tell you that our Bufalo District is still in full oper-
ation . . . .
'You will be interested to know that our President and Chief Execu­
tive Ofcer, W. B. Boyer was reared in the Bufalo area while his father,
the late P. F. Boyer was employed by Donner Steel. . . . '
Due to Mr. Lagessie' s kindness, I am happy to have a photocopy of
' The Story of the Donna-Hanna Coke Corporation, Bufalo, N. Y. I 9 1 7-
I 956' by Mr. Philip S. Savage. The following information was derived
from it.
The Donner Union Coke Company was formed on June I , 1 9 I 7,
and among the original incorporators were William Henry Donner &
Frank B. Baird, president of the Union Furnace Company. An agree­
ment was proposed at the small meeting of prominent Bufalonians
which was a new &, to some, a rather startling concept of j oint owner­
ship-an equal partnership of two corporations. It was recommended
that the new company be owned in equal shares by each of the two
owning companies, and that each owning company hold three 1 3 5
directorships. The wisdom of such a method of joint ownership has
now been demonstrated by nearly forty years of successful & harmon­
ious operation with only one disagreement that could not be solved
by the directors.
Shortly after the United States j oined the European War in I 9 I 7,
the United States government desired to have increased supplies of
certain coke oven products such as tolnol, benzol and sulfate of am­
monia. Hence Congress appropriated $ so, ooo, ooo and these funds
were allocated to build by-product coke plants to replace the wasteful
beehive coke still being used. William Henry Donner quickly saw the
wisdom of taking advantage of this opportunity, and he acquired lands
totaling ffty acres south of the Donner Steel Company plant. On fnd­
ing that it would be more economical and desirable from the govern­
ment' s point of view to build a larger plant, Mr. Baird was interested &
the deal was consumated,
An unusually able staf was gathered from various plants throughout
the country, including Mr. H. P. Zeller, the outstanding coke oven en­
gineer of his day. With his assistance, William Henry Donner negotiated
a gas company contract which was a very important event in the his­
tory of the plant & helped the owning companies during the lean years.
Mr. Wayne Hancock, who j oined Mr. Donner at Donora, was inval­
uable to the coke con1pany from its founding, and Mr. Philip S. Savage,
who wrote ' The Story of the Donner-Hanna Coke Corporation I 9 I 7-
I 9 s6' j oined the company in I 9 I 9·
The good faith shown by the founders in each other extended to
the management, supervisors & employees. It has produced a notable
record over these nearly forty years. Good working conditions and
friendly relations in the organization since it was formed have resulted
in an unusually low turnover both in supervisors and other employees.
This was at least partly accounted for by its forward looking employee
relations which started the
p
lant on an eight hour shift basis in 1 92 0,
established sick benefts and hos
p
italization in 1 9 2 2 and
p
aid vacations
to hourly em
p
loyees with fve years' service records in 1 92 6.
Encomiums. Father died on November 3 , 1 9 � 3 , in his ninetieth year.
Innumerable
p
eo
p
le have
p
rofted and many more will beneft for a
long time to come from his years of industry and from his generosity
to individuals and to
p
hilanthro
p
ic institutions.
The following are excer
p
ts from an editorial a
pp
earing in The Eve­
ning Re
p
ublican, Columbus, Indiana on November 4, 1 9�3 :
When William Henry Donner left Columbus in 1 894 at the age
of thirty to found Hoosierland's tin
p
late industry, he was con­
vinced that the days for making big fortunes were at an end . . . .
But the man who had doubted that America was still the land
of o
pp
ortunity found diferently. Through his initiative, he went
on to fame and fortune . . . .
Excer
p
t from an editorial in the Indiana
p
olis Star, November �, 1 9 � 3 :
Chea
p
fuel, when natural gas was
p
lentiful in the Anderson­
Elwood region, gave Mr. Donner his start in industry. From tin
p
late in Indiana, he went into steel in Pennsylvania, founding the
town of Monessen. He became one of the nation' s foremost fg­
ures in steel. A modest, retiring man, he minimized his many ben­
efactions . His career was marked not only by the wealth he made
but by the gracious manner in which he gave much of it away.
Excer
p
t from the obituary in the Bufalo Evening News of N ovem­
ber 4, 1 9�3 :
Mr. Donner was one of the older grou
p
of iron & steel masters
who hel
p
ed to establish in Pennsylvania, New York and Ohio the
solid foundation of one of the country' s maj or industries . . . .
Excer
p
ts from an editorial in the Bufalo Courier Ex
p
ress of N ovem-
ber 6, 1 9�3 :
1
3
7
The career of William Henry Donner, philanthropist, steel
magnate and multi-millionnaire, who died yesterday at the age of
ninety, paralleled the tremendous growth of the steel industry in
America, the foundation of its vast industrial production today.
He began working in a steel plant in his native State of Indiana
shortly after leaving Hanover College, and early developed new
ideas on the manufacture of tin plate which impressed Andrew
W. Mellon and Henry C. Frick . . . .
The steel industry owes much to Mr. Donner for his initiative
and organizational abllity; he often had been described as one of
the ' best steel men in the world . . . . '
The following is a tribute paid to father by Dr. Wilder Penfeld, former
director of the Montreal Neurological Institute (Montreal Star of No­
vember 4, I 953):
The medical profession and all those interested in humanity
must admire the late Mr. Donner not only for his magnifcent
gifts to medical research, but for the great personal interest he
always showed in its progress.
His annual grant to the Montreal Neurological Institute proves
his great insight. With this grant he perpetuated his concern with
neurochemistry, an important feld of medical research which
held his abiding interest.
Mr. Donner was a splendid example of the self-made business
man who, in his later years, spent so much time helping hospitals
and individuals.
Medicine here and in the United States is forever in debt to his
warm heart and generous support.
Education. Hanover, Indiana.
Hanover College, founded in I 8 2 7, is a
private, coeducational , liberal arts college, afliated with the United
Presbyterian Church. It now has over one thousand students.
Dr. Albert G. Parker, Jr. , a Presbyterian Minister, was president of
the college from I 92 9 to I 9_8. Prior to that time he was a missionary
and Professor of Sociology at the Cheeloo University in Tsinan, China
( I 92 0- I 92 8). Father had a close and happy relationship with Dr. and
Mrs. Parker. Three of their four children were born in China.
Mrs. Katherine McAfee Parker (A. B. Vassar College I 9 I 7
)
is a gifted
writer whose eulogy to father was published in the December I 9 5 3
Bulletin of Hanover College. Excerpts from her lyrical tribute follow:
The story of the steel industry in America cannot be told with­
out William Henry Donner. Nor can the story of philanthropy,
for like many men of wealth, he spent the years after his retire­
ment from business in active & eager concer for worthy causes,
and in giving generously to them . . . .
And to Hanover College, where he had once been a student,
long, long ago, he gave and gave and gave so much and so much
and so wisely that he changed the whole course of its life.
From the very beginning he was eager that Hanover should be­
come a strikingly beautiful campus, worthy of its magnifcent
setting on this headland 'high above a stately river. '
Mr. Donner was a quiet man, the son of God-fearing parents,
who helped build into him the temperate, disciplined habits of
body and mind which characterized him all his life . . . .
He gave Hanover College the beneft, not only of money, but
also of his long experience and keen judgment. He had been as­
tute in the business world and he was equally careful with the
money he gave away. He gave it only where he had confdence
in the people who were going to spend it.
Mr. Donner' s own gifts to the college & the gifts of his family
and of the Donner Foundation, since I 93 7, total over one and a
half million dollars. And because so much of it was given as it 1 4 1
was, in ' challenge' ofers, it has called forth the giving of other
people to a total of over two and a half million dollars more. The
Challenge Funds made lots of work, but we blessed Mr. Donner for
giving that way, thus making occasions for hundreds of friends,
old and new, to have a signifcant part in building up Hanover
College.
On one of his last visits to the campus, we stood with Mr.
Donner on the porch of the Auditorium as the students came to
the building for the morning assembly. He had been ill and felt
unable to go inside to the platform, but he stood a few moments
outside, quiet, erect, dignifed, looking intently at the dream he
had helped to translate into bricks and stones & grass and trees,
and into opportunity and challenge for young people. There was
the campus as he had seen it on paper & as he had thought about
it for many years.
Over the walks and up the steps came the stream of students,
one of the many generations of the college family who would use
what he had given and had challenged others to give. The stu­
dents, I declare, never looked more bright and good and full of
promise than that fne morning when they poured past the man
they did not know, to whom they owed so much.
Mr. Donner was never one to spend words. He didn't say
much that moring and neither did we. But I am sure he was
glad then, as I am sure he is glad now in heaven, that he gave
this college his gifts of money and time and thought.
So his life here on earth is ended. But his good works go right
on working for good, & the mark of his spirit is on many a place.
THE AUTOBIOGRAPHY OF WI LLIAM HENRY DONNER
has been privately printed i n an edition of one hundred copies by
Cliford Burke at Cranium Press , San Francisco. The type is a var­
iant of Eric Gill's Perpetua from the Stephenson Blake Foundry, set
by hand. It is printed on hand made Tovil, from the English mill
of Bareham Green. The photographic prints were made by Larry
Kunkel, who also supplied the photograph on page 2 �. The binding
was designed & executed at the press by Diane Burke. Fall 1 97 3 .

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