Thane had been reporting laconically on the Twenty-ninth Street mill.
It now was in action and the nails were piling up. John had not been
out to see it. Their contacts had become irregular; generally they
met by accident in the hotel lobby, rarely in the dining room. This
was owing partly to John’s absorption in his scheme and partly to the
resolve he had made to avoid Agnes. He had not once been close enough
to speak to her since that third morning when his haggard true self
met his anti-self in the mirror, saying: “She is his.” The only way
he could put her out of his mind at all was to involve himself in
difficulties. Trouble was a cave of refuge. As during those two nights
of struggle with his anti-self, when it had almost conquered him,
he played absently at faro and increased his bets to make the game
absorbing, so afterward in business, wilfully at first and then by
habit, he preferred the hazardous alternative; he seemed to seek those
situations in which the chance was all or none. This made his ways
uncanny. Luck seems to favor one who doesn’t care. Or it may be that
one who doesn’t care sees more clearly than the rest, being free of
fear.
“Better come and sight it,” said Thane, one morning in the lobby. “I’m
worried where to put the nails.”
“We’ll go now,” said John. “Anyhow, I want to talk to you. I don’t
know about this Twenty-ninth Street mill. It’s a poor layout. Maybe
we’d better shut it up. Now don’t get uneasy. Wait till I’m through.
The company--(and, by the way, you are a director and there’s some
stock in your name)--it has bought nearly all the nail mills there
are. Over a hundred, big and little, all over the place. The idea is
to combine the nail industry in one organization and put it back on a
paying basis. I want you to go around with me and have a look at mills.
Some of them we’ll throw away. The trouble was too many of them.”
He went on talking to take up Thane’s injured silence. That he was
a director in the company, that he had stock in it, that his salary
was to be doubled,--none of this availed against the puddler’s pride
in what he had done with the Twenty-ninth Street mill. The thought
of now shutting it up hurt him in his middle. John on his side was
disappointed in Thane’s inability to rise to an opportunity. So they
came to the mill.
“Sounds busy,” said John.
Thane held his thoughts.
On beholding the scene of action within, almost at a glance, John
placed the puddler where he belonged. Here was the work of a master
superintendent. Nothing was as it had been except the engine and
furnace. Everything else had been relocated with one aim in view, which
was to eliminate all unnecessary human motion and shorten the train
of events from the raw material straight through to the finished nail
packed in the keg and stored. Besides the physical achievement, which
alone was very notable, there was a subtle psychic relation between
Thane and his men. They worked on their toes and liked doing it for him.
“Shake,” said John, holding out his hand. “No, we won’t shut her up.
We’ll take her as a pattern. If you can do this with all the mills
we’ll walk away with it. Have you figured your costs? They must be
fine.”
“In my head,” said Thane.
They stood at a little greasy box-desk screwed to the wall under a
window dim with cobwebs.
“I’ll show you how to figure them,” said John. “Iron, so much; fuel, so
much; kegs, so much; oil, and so forth, so much; wear and tear of tools
and plant, so much; labor, so much; total, so much. Then kegs of nails,
so many. Divide that by that and you have the cost per keg. Let’s see
how it will work out.”
It worked out nearly as Thane had it in his head and John was
sentimental with pride and satisfaction.
“Come on,” he said, impatiently. “Leave a man in charge of this, and
we’ll see the other mills.”
Starting with more than a hundred mills, they scrapped twenty outright,
saving only their contracts, raw material and stock on hand; others
they consolidated. In the end they had fifty well equipped plants
strategically placed to supply the trade by the shortest routes.
They had all to be overhauled according to Thane’s ideas. He turned
the Twenty-ninth Street plant into a training station and sent men
from there to work the other mills. It was a large and complicated
program. He carried it through so skillfully that he was appointed
vice-president in charge of manufacturing, and John was free to
organize the company’s business and function executively.
He raised the price of nails, first twenty-five cents a keg, then
fifty, then seventy-five cents, and stopped. At that price there was
a good profit. Thane was steadily reducing costs by improving plant
practice and that increased profits in another way.
A dividend was paid on the preferred stock in the third month. The
omens were fine. Still, John was uneasy. No New Damascus nails had been
received under their contract with Enoch. The making of nails had not
stopped at New Damascus. He made sure of that. No New Damascus nails
were coming on the market, either, for John knew everything about the
trade. Then what was to be expected?
The answer when it came did not surprise him. He had guessed it already.
One day the nail market was knocked in the head. Enoch was offering
nails to the hardware trade at a price seventy-five cents lower than
the combine’s price. That meant he was selling them for fifty cents a
keg less than the combine had agreed to pay him for his whole output.
He had never tendered one ten-penny nail on that contract. Instead,
working his plant at high speed, he had accumulated thousands of kegs
expressly for the irrational purpose of casting them suddenly on sale
to break the combine’s market--John Breakspeare’s market--_Aaron’s
market_! John was the only person who understood it. Everyone else was
dazed.
Slaymaker sent for John.
“What’s the matter with that man at New Damascus?”
“He’s out of his mind,” said John.
“Better buy him up at his own price,” said Slaymaker. “That’s what he
wants.”
John knew better. However, to satisfy Slaymaker, he sent Awns to see
Enoch again.
“You’re right,” Awns reported. “The old man is clean crazy. He won’t
sell at any price. All he would do was to point to that stipulation in
the contract and laugh at me.”
The combine stood aside until the trade had absorbed the New Damascus
nails and then tried to go on without reducing its own price; but the
trade became very ugly about it, the combine began to be denounced, and
Congress, hearing from the farmers, threatened to take the import duty
off nails and let the foreign product in. The combine had to let down
the price and wait.
Three months later the preposterous act was repeated, Enoch flooding
the market with nails at fifty cents a keg less than the combine’s
price. There was no doubt this time that he was selling nails at a
ruinous loss, and everyone’s amazement grew. Only John knew why he did
it.
The combine was now in a very awkward dilemma. If it met Enoch’s price
it not only would be selling its own nails at a loss but selling them
at a price far below that at which it was obliged to take Enoch’s
entire output in case he should choose to deliver to the combine
instead of selling direct to the trade.
“Whipsawed,” said John to Awns, “if you know what that means.”
For the N. A. M. Co., Ltd. from then on it was a race with bankruptcy,
Gib pursuing. He sold Damascus nails lower and lower until it was
thought he would give them away. He might ultimately go broke, of
course, but that was nothing the combine could wait for. He was very
rich,--nobody knew how rich,--and nail making after all was a small
part of his business.
Under these unnatural circumstances John won the incognizable
Slaymaker’s glassy admiration, for in trouble he was dogged and
enormously resourceful.
“If we’ve got to live on the sweat of our nails,” he said, “we can’t
afford to buy iron.”
Thereupon at a bankrupt price he negotiated the purchase of a blast
furnace and puddling mill over which two partners were quarrelling in
a suicidal manner. No cash was involved. He paid for it with notes.
In Thane’s hands, and with luck that was John’s, the plant performed
one of those miracles that made Pittsburgh more exciting than a mining
camp. It paid for itself the first year out of its own profits. Then
John turned it over to the N. A. M. Co., Ltd., at cost. On seeing him
do this, Slaymaker, who had never parted with his first stock holdings,
privately increased them.
There was a profit in ore back of the iron. John went to that. He got
hold of a small Mesaba ore body on a royalty basis and had then a
complete chain from the ore to the finished nail. There was still one
profit. That was in the kegs. So cooper shops were added.
What with all this integration, as the word came to be for that method
of working back to one’s raw material and articulating the whole
series of profits, and what at the same time with Thane’s skill in
manufacture, developing to the point of genius, the N. A. M. Company
got the cost of nails down very low,--even lower as John one day
discovered than it was in Europe. This gave him an idea. There was no
profit in nails at home, owing to Enoch’s mad policy of slaughter, but
there was the whole world to sell nails in. The N. A. M. Co. invaded
the export field. This was a shock to the European nail makers. They
met it angrily with reprisals. John went to Europe with a plan to form
an international pool in which the nail business of the earth should be
divided up,--allotting so much to Great Britain, so much to Germany, so
much to Belgium, so much to the United States, and so on. If they would
do that everybody might make a little money.
He returned unexpectedly and appeared one morning in Slaymaker’s office.
“Did you get your pool born?”
“Chucked the idea,” said John. “I found this.”
He laid on the banker’s desk a bright, thin, cylindrical object.
“What’s that?” Slaymaker asked, looking at it but not touching it.
“That,” said John, “is a steel wire nail. It will drive the iron nail
out. It’s just as good and costs much less to make. You feed steel wire
into one end of a machine and nails come out at the other like wheat.”
“Well?” said the banker.
“The machines both for drawing the wire and making the nails are
German,” John continued. “I’ve bought all the American rights on a
royalty basis.”
“What will you do with them?”
“I bought them for the N. A. M.,” said John.
“If this is going to be such a God Almighty nail why not form a new
company to make it?” asked Slaymaker.
“I’d rather pull the horse we’ve got out of the ditch,” said John.
Slaymaker regarded him with an utterly expressionless stare.
“Go ahead,” he said.
Enter the steel wire nail. It solved the N. A. M. Company’s problem.
Enoch could not touch it. The combine steadily reduced its output
of iron nails, until it was nominal, and flooded the trade with the
others. Enoch could make any absurd price he liked for iron nails, but
as his output, though a formidable bludgeon with which to beat down
prices, was only a fraction of what the country required, and as the
remainder of the demand was met with the combine’s new product, wire
nails superseded iron nails four or five kegs to one. They could sell
at a higher price than iron nails without prejudice because they were
different, and John, putting a selling campaign behind them, proved
that they were also better. That probably was not so. But people had to
have them.