THE DIFFICULT ART OF GETTING
To my father I owe a great debt in that he himself trained me to
practical ways. He was engaged in different enterprises; he used to
tell me about these things, explaining their significance; and he
taught me the principles and methods of business. From early boyhood I
kept a little book which I remember I called Ledger A--and this little
volume is still preserved--containing my receipts and expenditures as
well as an account of the small sums that I was taught to give away
regularly.
Naturally, people of modest means lead a closer family life than those
who have plenty of servants to do everything for them. I count it a
blessing that I was of the former class. When I was seven or eight
years old I engaged in my first business enterprise with the
assistance of my mother. I owned some turkeys, and she presented me
with the curds from the milk to feed them. I took care of the birds
myself, and sold them all in business-like fashion. My receipts were
all profit, as I had nothing to do with the expense account, and my
records were kept as carefully as I knew how.
We thoroughly enjoyed this little business affair, and I can still
close my eyes, and distinctly see the gentle and dignified birds
walking quietly along the brook and through the woods, cautiously
stealing the way to their nests. To this day I enjoy the sight of a
flock of turkeys, and never miss an opportunity of studying them.
My mother was a good deal of a disciplinarian, and upheld the standard
of the family with a birch switch when it showed a tendency to
deteriorate. Once, when I was being punished for some unfortunate
doings which had taken place in the village school, I felt called upon
to explain after the whipping had begun that I was innocent of the
charge.
"Never mind," said my mother, "we have started in on this whipping,
and it will do for the next time." This attitude was maintained to its
final conclusion in many ways. One night, I remember, we boys could
not resist the temptation to go skating in the moonlight,
notwithstanding the fact that we had been expressly forbidden to
skate at night. Almost before we got fairly started we heard a cry for
help, and found a neighbour, who had broken through the ice, was in
danger of drowning. By pushing a pole to him we succeeded in fishing
him out, and restored him safe and sound to his grateful family. As we
were not generally expected to save a man's life every time we skated,
my brother William and I felt that there were mitigating circumstances
connected with this particular disobedience which might be taken into
account in the final judgment, but this idea proved to be erroneous.
STARTING AT WORK
Although the plan had been to send me to college, it seemed best at
sixteen that I should leave the high school in which I had nearly
completed the course and go into a commercial college in Cleveland for
a few months. They taught bookkeeping and some of the fundamental
principles of commercial transactions. This training, though it lasted
only a few months, was very valuable to me. But how to get a job--that
was the question. I tramped the streets for days and weeks, asking
merchants and storekeepers if they didn't want a boy; but the offer
of my services met with little appreciation. No one wanted a boy, and
very few showed any overwhelming anxiety to talk with me on the
subject. At last one man on the Cleveland docks told me that I might
come back after the noonday meal. I was elated; it now seemed that I
might get a start.
I was in a fever of anxiety lest I should lose this one opportunity
that I had unearthed. When finally at what seemed to me the time, I
presented myself to my would-be employer:
"We will give you a chance," he said, but not a word passed between us
about pay. This was September 26, 1855. I joyfully went to work. The
name of the firm was Hewitt & Tuttle.
In beginning the work I had some advantages. My father's training, as
I have said, was practical, the course at the commercial college had
taught me the rudiments of business, and I thus had a groundwork to
build upon. I was fortunate, also, in working under the supervision of
the bookkeeper, who was a fine disciplinarian, and well disposed
toward me.
When January, 1856, arrived, Mr. Tuttle presented me with $50 for my
three months' work, which was no doubt all that I was worth, and it
was entirely satisfactory.
For the next year, with $25 a month, I kept my position, learning the
details and clerical work connected with such a business. It was a
wholesale produce commission and forwarding concern, my department
being particularly the office duties. Just above me was the bookkeeper
for the house, and he received $2,000 a year salary in lieu of his
share of the profits of the firm of which he was a member. At the end
of the first fiscal year when he left I assumed his clerical and
bookkeeping work, for which I received the salary of $500.
As I look back upon this term of business apprenticeship, I can see
that its influence was vitally important in its relations to what came
after.
To begin with, my work was done in the office of the firm itself. I
was almost always present when they talked of their affairs, laid out
their plans, and decided upon a course of action. I thus had an
advantage over other boys of my age, who were quicker and who could
figure and write better than I. The firm conducted a business with so
many ramifications that this education was quite extensive. They owned
dwelling-houses, warehouses, and buildings which were rented for
offices and a variety of uses, and I had to collect the rents. They
shipped by rail, canal, and lake. There were many different kinds of
negotiations and transactions going on, and with all these I was in
close touch.
Thus it happened that my duties were vastly more interesting than
those of an office-boy in a large house to-day. I thoroughly enjoyed
the work. Gradually the auditing of accounts was left in my hands. All
the bills were first passed upon by me, and I took this duty very
seriously.
One day, I remember, I was in a neighbour's office, when the local
plumber presented himself with a bill about a yard long. This
neighbour was one of those very busy men. He was connected with what
seemed to me an unlimited number of enterprises. He merely glanced at
this tiresome bill, turned to the bookkeeper, and said:
"Please pay this bill."
As I was studying the same plumber's bills in great detail, checking
every item, if only for a few cents, and finding it to be greatly to
the firm's interest to do so, this casual way of conducting affairs
did not appeal to me. I had trained myself to the point of view
doubtless held by many young men in business to-day, that my check on
a bill was the executive act which released my employer's money from
the till and was attended with more responsibility than the spending
of my own funds. I made up my mind that such business methods could
not succeed.
Passing bills, collecting rents, adjusting claims, and work of this
kind brought me in association with a great variety of people. I had
to learn how to get on with all these different classes, and still
keep the relations between them and the house pleasant. One particular
kind of negotiation came to me which took all the skill I could master
to bring to a successful end.
We would receive, for example, a shipment of marble from Vermont to
Cleveland. This involved handling by railroad, canal, and lake boats.
The cost of losses or damage had to be somehow fixed between these
three different carriers, and it taxed all the ingenuity of a boy of
seventeen to work out this problem to the satisfaction of all
concerned, including my employers. But I thought the task no hardship,
and so far as I can remember I never had any disagreement of moment
with any of these transportation interests. This experience in
conducting all sorts of transactions at such an impressionable age,
with the helping hand of my superiors to fall back upon in an
emergency--was highly interesting to me. It was my first step in
learning the principle of negotiation, of which I hope to speak later.
The training that comes from working for some one else, to whom we
feel a responsibility, I am sure was of great value to me.
I should estimate that the salaries of that time were far less than
half of what is paid for equivalent positions to-day. The next year I
was offered a salary of $700, but thought I was worth $800. We had not
settled the matter by April, and as a favourable opportunity had
presented itself for carrying on the same business on my own account,
I resigned my position.
In those days, in Cleveland, everyone knew almost everyone else in
town. Among the merchants was a young Englishman named M.B. Clark,
perhaps ten years older than I, who wanted to establish a business and
was in search of a partner. He had $2,000 to contribute to the firm,
and wanted a partner who could furnish an equal amount. This seemed a
good opportunity for me. I had saved up $700 or $800, but where to get
the rest was a problem.
I talked the matter over with my father, who told me that he had
always intended to give $1,000 to each of his children when they
reached twenty-one. He said that if I wished to receive my share at
once, instead of waiting, he would advance it to me and I could pay
interest upon the sum until I was twenty-one.
"But, John," he added, "the rate is ten."
At that time, 10 per cent. a year interest was a very common rate for
such loans. At the banks the rate might not have been quite so high;
but of course the financial institutions could not supply all the
demands, so there was much private borrowing at high figures. As I
needed this money for the partnership, I gladly accepted my father's
offer, and so began business as the junior partner of the new firm,
which was called Clark & Rockefeller.
It was a great thing to be my own employer. Mentally I swelled with
pride--a partner in a firm with $4,000 capital! Mr. Clark attended to
the buying and selling, and I took charge of the finance and the
books. We at once began to do a large business, dealing in carload
lots and cargoes of produce. Naturally we soon needed more money to
take care of the increasing trade. There was nothing to do but to
attempt to borrow from a bank. But would the bank lend to us?
THE FIRST LOAN
I went to a bank president whom I knew, and who knew me. I remember
perfectly how anxious I was to get that loan and to establish myself
favourably with the banker. This gentleman was T.P. Handy, a sweet and
gentle old man, well known as a high-grade, beautiful character. For
fifty years he was interested in young men. He knew me as a boy in the
Cleveland schools. I gave him all the particulars of our business,
telling him frankly about our affairs--what we wanted to use the money
for, etc., etc. I waited for the verdict with almost trembling
eagerness.
"How much do you want?" he said.
"Two thousand dollars."
"All right, Mr. Rockefeller, you can have it," he replied. "Just give
me your own warehouse receipts; they're good enough for me."
As I left that bank, my elation can hardly be imagined. I held up my
head--think of it, a bank had trusted me for $2,000! I felt that I was
now a man of importance in the community.
For long years after the head of this bank was a friend indeed; he
loaned me money when I needed it, and I needed it almost all the time,
and all the money he had. It was a source of gratification that later
I was able to go to him and recommend that he should make a certain
investment in Standard Oil stock. He agreed that he would like to do
so, but he said that the sum involved was not at the moment available,
and so at my suggestion I turned banker for him, and in the end he
took out his principal with a very handsome profit. It is a pleasure
to testify even at this late date to his great kindness and faith in
me.
STICKING TO BUSINESS PRINCIPLES
Mr. Handy trusted me because he believed we would conduct our young
business on conservative and proper lines, and I well remember about
this time an example of how hard it is sometimes to live up to what
one knows is the right business principle. Not long after our concern
was started our best customer--that is, the man who made the largest
consignments--asked that we should allow him to draw in advance on
current shipments before the produce or a bill of lading were actually
in hand. We, of course, wished to oblige this important man, but I,
as the financial member of the firm, objected, though I feared we
should lose his business.
The situation seemed very serious; my partner was impatient with me
for refusing to yield, and in this dilemma I decided to go personally
to see if I could not induce our customer to relent. I had been
unusually fortunate when I came face to face with men in winning their
friendship, and my partner's displeasure put me on my mettle. I felt
that when I got into touch with this gentleman I could convince him
that what he proposed would result in a bad precedent. My reasoning
(in my own mind) was logical and convincing. I went to see him, and
put forth all the arguments that I had so carefully thought out. But
he stormed about, and in the end I had the further humiliation of
confessing to my partner that I had failed. I had been able to
accomplish absolutely nothing.
Naturally, he was very much disturbed at the possibility of losing our
most valued connection, but I insisted and we stuck to our principles
and refused to give the shipper the accommodation he had asked. What
was our surprise and gratification to find that he continued his
relations with us as though nothing had happened, and did not again
refer to the matter. I learned afterward that an old country banker,
named John Gardener, of Norwalk, O., who had much to do with our
consignor, was watching this little matter intently, and I have ever
since believed that he originated the suggestion to tempt us to do
what we stated we did not do as a test, and his story about our firm
stand for what we regarded as sound business principles did us great
good.
About this time I began to go out and solicit business--a branch of
work I had never before attempted. I undertook to visit every person
in our part of the country who was in any way connected with the kind
of business that we were engaged in, and went pretty well over the
states of Ohio and Indiana. I made up my mind that I could do this
best by simply introducing our firm, and not pressing for immediate
consignments. I told them that I represented Clark & Rockefeller,
commission merchants, and that I had no wish to interfere with any
connection that they had at present, but if the opportunity offered we
should be glad to serve them, etc., etc.
To our great surprise, business came in upon us so fast that we hardly
knew how to take care of it, and in the first year our sales amounted
to half a million dollars.
Then, and indeed for many years after, it seemed as though there was
no end to the money needed to carry on and develop the business. As
our successes began to come, I seldom put my head upon the pillow at
night without speaking a few words to myself in this wise:
"Now a little success, soon you will fall down, soon you will be
overthrown. Because you have got a start, you think you are quite a
merchant; look out, or you will lose your head--go steady." These
intimate conversations with myself, I am sure, had a great influence
on my life. I was afraid I could not stand my prosperity, and tried to
teach myself not to get puffed up with any foolish notions.
My loans from my father were many. Our relations on finances were a
source of some anxiety to me, and were not quite so humorous as they
seem now as I look back at them. Occasionally he would come to me and
say that if I needed money in the business he would be able to loan
some, and as I always needed capital I was glad indeed to get it, even
at 10 per cent. interest. Just at the moment when I required the
money most he was apt to say:
"My son, I find I have got to have that money."
"Of course, you shall have it at once," I would answer, but I knew
that he was testing me, and that when I paid him, he would hold the
money without its earning anything for a little time, and then offer
it back later. I confess that this little discipline should have done
me good, and perhaps did, but while I concealed it from him, the truth
is I was not particularly pleased with his application of tests to
discover if my financial ability was equal to such shocks.
INTEREST AT 10 PER CENT.
These experiences with my father remind me that in the early days
there was often much discussion as to what should be paid for the use
of money. Many people protested that the rate of 10 per cent. was
outrageous, and none but a wicked man would exact such a charge. I was
accustomed to argue that money was worth what it would bring--no one
would pay 10 per cent., or 5 per cent., or 8 per cent. unless the
borrower believed that at this rate it was profitable to employ it. As
I was always the borrower at that time, I certainly did not argue for
paying more than was necessary.
Among the most persistent and heated discussions I ever had were those
with the dear old lady who kept the boarding-house where my brother
William and I lived when we were away from home at school. I used to
greatly enjoy these talks, for she was an able woman and a good
talker, and as she charged us only a dollar a week for board and
lodging, and fed us well, I certainly was her friend. This was about
the usual price for board in the small towns in those days, where the
produce was raised almost entirely on the place.
This estimable lady was violently opposed to loaners obtaining high
rates of interest, and we had frequent and earnest arguments on the
subject. She knew that I was accustomed to make loans for my father,
and she was familiar with the rates secured. But all the arguments in
the world did not change the rate, and it came down only when the
supply of money grew more plentiful.
I have usually found that important alterations in public opinion in
regard to business matters have been of slow growth along the line of
proved economic theory--very rarely have improvements in these
relationships come about through hastily devised legislation.
One can hardly realize how difficult it was to get capital for active
business enterprises at that time. In the country farther west much
higher rates were paid, which applied usually to personal loans on
which a business risk was run, but it shows how different the
conditions for young business men were then than now.
A NIMBLE BORROWER
Speaking of borrowing at the banks reminds me of one of the most
strenuous financial efforts I ever made. We had to raise the money to
accept an offer for a large business. It required many hundreds of
thousands of dollars--and in cash--securities would not answer. I
received the message at about noon and had to get off on the
three-o'clock train. I drove from bank to bank, asking each president
or cashier, whomever I could find first, to get ready for me all the
funds he could possibly lay hands on. I told them I would be back to
get the money later. I rounded up all of our banks in the city, and
made a second journey to get the money, and kept going until I secured
the necessary amount. With this I was off on the three-o'clock train,
and closed the transaction. In these early days I was a good deal of
a traveller, visiting our plants, making new connections, seeing
people, arranging plans to extend our business--and it often called
for very rapid work.
RAISING CHURCH FUNDS
When I was but seventeen or eighteen I was elected as a trustee in the
church. It was a mission branch, and occasionally I had to hear
members who belonged to the main body speak of the mission as though
it were not quite so good as the big mother church. This strengthened
our resolve to show them that we could paddle our own canoe.
Our first church was not a very grand affair, and there was a mortgage
of $2,000 on it which had been a dispiriting influence for years.
The holder of the mortgage had long demanded that he should be paid,
but somehow even the interest was barely kept up, and the creditor
finally threatened to sell us out. As it happened, the money had been
lent by a deacon in the church, but notwithstanding this fact, he felt
that he should have his money, and perhaps he really needed it.
Anyhow, he proposed to take such steps as were necessary to get it.
The matter came to a head one Sunday morning, when the minister
announced from the pulpit that the $2,000 would have to be raised, or
we should lose our church building. I therefore found myself at the
door of the church as the congregation came and went.
As each member came by I buttonholed him, and got him to promise to
give something toward the extinguishing of that debt. I pleaded and
urged, and almost threatened. As each one promised, I put his name and
the amount down in my little book, and continued to solicit from every
possible subscriber.
This campaign for raising the money which started that morning after
church, lasted for several months. It was a great undertaking to raise
such a sum of money in small amounts ranging from a few cents to the
more magnificent promises of gifts to be paid at the rate of
twenty-five or fifty cents per week. The plan absorbed me. I
contributed what I could, and my first ambition to earn more money was
aroused by this and similar undertakings in which I was constantly
engaged.
But at last the $2,000 was all in hand and a proud day it was when the
debt was extinguished. I hope the members of the mother church were
properly humiliated to see how far we had gone beyond their
expectations, but I do not now recall that they expressed the surprise
that we flattered ourselves they must have felt.
The begging experiences I had at that time were full of interest. I
went at the task with pride rather than the reverse, and I continued
it until my increasing cares and responsibilities compelled me to
resign the actual working out of details to others.