The annual statement of the company at the end of the year showed beyond
the peradventure of a doubt that the company had kept the faith, but it
was left with a very attenuated surplus. Then business began to grow by
leaps and bounds. The bread which had been cast upon the waters was
returning and another problem now confronted the company--to protect
the reserves on the rapidly increasing income. This required a working
surplus and meant more assessments which seemed to be adding insult to
injury. The stockholders had already provided the funds to pay losses
and to now ask for more money for any other than loss-paying purposes,
gallant as was the spirit of those directly interested, seemed
dangerous. The directors and some of the more prominent stockholders met
informally and discussed the situation and the concensus of opinion was
that the honor of the company demanded that it continue to the end to
accomplish to the fullest that for which so many financial sacrifices
had been made--to take any other course, to discontinue, to fall down,
or to break faith with those who had given us their confidence would be
suicidal. In this deduction proof was given of the sound judgment and
business acumen of those who bore the brunt of the burden in those hot
days of battle. They took the position that the reputation which the
company had already builded was an asset of almost unlimited value and
realized that the peak of the mountain was just a few steps further
on--that summit from which the company could look out upon the valley of
success and reap the full reward for all the sacrifices its stockholders
had made. Plan after plan was submitted for financing, change after
change was suggested, but for a time concerted action seemed almost
impossible of attainment. Finally, I called upon the largest stockholder
and treasurer of the company, Mr. Geo. L. Payne, in his office at the
Payne Bolt Works. I laid before him the plan of increasing the capital
stock from six thousand shares to ten thousand shares by the sale of
four thousand shares at sixty dollars per share which would realize for
the company a total amount of $240,000 of which $160,000 could be
applied to capital, bringing that item up to $400,000, and $80,000 to
surplus. While this did not make the surplus as much as was desirable,
we were used to economies, to making every dollar count. This has always
been a feature of the management of the company. With this sum and by a
continuance of conservative methods and proper management we believed it
possible to provide for all contingencies. Mr. Payne listened quietly, a
pad of paper before him and a pencil in his hand. When I had exhausted
every argument and made the best possible statement of the exact
conditions, he stated that he realized fully the gravity of the position
and then came the flood. He said that, if it became necessary, he, as
the largest stockholder in the company, would endorse the proposition to
the extent of taking the entire issue. The balance of the consummation
of the idea was merely a matter of detail. Another meeting of the
stockholders was called and of the many meetings that we had gone
through, this stands out brightest of all. The plan was presented and as
might naturally be expected invoked little enthusiasm and did not appear
to interest anybody. Mr. Payne quietly rose to his feet, explained the
position of the company as he saw it and then shocked the assemblage
into activity by making public the announcement of his willingness to
take the entire issue of additional stock. That was a flash of
optimistic lightning the bolt of which apparently struck every man in
the room. They sat up, took notice, and awoke to the fact that they were
possibly missing something worth while. The outcome was that Mr. Payne
was only able to secure his pro rata as the entire issue was promptly
over subscribed by the stockholders, it being understood that the right
of subscription should be confined rigidly to stockholders of record.
Never in my business career have I seen the value or virtue of a leader
expressed in so forceful a manner as in the effect of Mr. Payne's offer
upon that meeting. It was the greatest evidence of applied psychology
that ever it has been my good fortune to experience.