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Title: Random Reminiscences of Men and Events

Author: John D. Rockefeller

Release date: November 18, 2005 [eBook #17090]
Most recently updated: December 12, 2020

Language: English

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*** START OF THE PROJECT GUTENBERG EBOOK RANDOM
REMINISCENCES OF MEN AND EVENTS ***

MR. JOHN D. ROCKEFELLER AT THE AGE OF EIGHTEEN.

Random Reminiscences

of Men and Events

BY

JOHN D. ROCKEFELLER

New York

Doubleday, Page & Company

1909

COPYRIGHT, 1908, 1909, BY DOUBLEDAY, PAGE & COMPANY

PREFACE
Probably in the life of every one there comes a time when he is inclined to
go over again the events, great and small, which have made up the incidents
of his work and pleasure, and I am tempted to become a garrulous old man,
and tell some stories of men and things which have happened in an active
life.
In some measure I have been associated with the most interesting people
our country has produced, especially in business—men who have helped
largely to build up the commerce of the United States, and who have made
known its products all over the world. These incidents which come to my
mind to speak of seemed vitally important to me when they happened, and
they still stand out distinctly in my memory.
Just how far any one is justified in keeping what he regards as his own
private affairs from the public, or in defending himself from attacks, is a
mooted point. If one talks about one's experiences, there is a natural
temptation to charge one with traveling the easy road to egotism; if one
keeps silence, the inference of wrong-doing is sometimes even more
difficult to meet, as it would then be said that there is no valid defence to be
offered.
It has not been my custom to press my affairs forward into public gaze; but
I have come to see that if my family and friends want some record of things
which might shed light on matters that have been somewhat discussed, it is
right that I should yield to their advice, and in this informal way go over
again some of the events which have made life interesting to me.
There is still another reason for speaking now: If a tenth of the things that
have been said are true, then these dozens of able and faithful men who
have been associated with me, many of whom have passed away, must have
been guilty of grave faults. For myself, I had decided to say nothing, hoping
that after my death the truth would gradually come to the surface and
posterity would do strict justice; but while I live and can testify to certain
things, it seems fair that I should refer to some points which I hope will

help to set forth several much-discussed happenings in a new light. I am
convinced that they have not been fully understood.
All these things affect the memories of men who are dead and the lives of
men who are living, and it is only reasonable that the public should have
some first-hand facts to draw from in making up its final estimate.
When these Reminiscences were begun, there was of course no thought that
they should ever go so far as to appear between the covers of a book. They
were not prepared with the idea of even an informal autobiography, there
was little idea of order or sequence, and no thought whatever of
completeness.
It would have been a pleasure as well as a satisfaction to dwell with some
fulness upon the stories of daily and intimate companionship which existed
for so many years with my close partners and associates, but I realize that
while these experiences have always been to me among the great pleasures
of my life, a long account of them would not interest the reader, and thus it
happens that I have but mentioned the names of only a few of the scores of
partners who have been so active in building up the business interests with
which I have been associated.
J.D.R.
March,1909.

CONTENTS

Chapter Page
I Some Old Friends 3
II The Difficult Art of
Getting 33
III The Standard Oil
Company 55
IV Some Experiences in the
Oil Business 79
V Other Business
Experiences and
Business Principles 115
VI The Difficult Art of
Giving 139
VII The Benevolent Trust--
The Value of the
Cooperative Principle in
Giving 165

CHAPTER I
Some Old Friends

Since these Reminiscences are really what they profess to be, random and
informal, I hope I may be pardoned for setting down so many small things.
In looking back over my life, the impressions which come most vividly to
my mind are mental pictures of my old associates. In speaking of these
friends in this chapter, I would not have it thought that many others, of
whom I have not spoken, were less important to me, and I shall hope to
refer to this subject of my early friends in a later chapter.
It is not always possible to remember just how one first met an old friend or
what one's impressions were, but I shall never forget my first meeting with
Mr. John D. Archbold, who is now a vice-president of the Standard Oil
Company.
At that time, say thirty-five or forty years ago, I was travelling about the
country visiting the point where something was happening, talking with the
producers, the refiners, the agents, and actually getting acquainted.
One day there was a gathering of the men somewhere near the oil regions,
and when I came to the hotel, which was full of oil men, I saw this name
writ large on the register:
John D. Archbold, $4.00 a bbl.
He was a young and enthusiastic fellow, so full of his subject that he added
his slogan, "$4.00 a bbl.," after his signature on the register, that no one
might misunderstand his convictions. The battle cry of $4.00 a barrel was
all the more striking because crude oil was selling then for much less, and
this campaign for a higher price certainly did attract attention—it was much
top good to be true. But if Mr. Archbold had to admit in the end that crude
oil is not worth "$4,00 a bbl.," his enthusiasm, his energy, and his splendid
power over men have lasted.

He has always had a well-developed sense of humour, and on one serious
occasion, when he was on the witness stand, he was asked by the opposing
lawyer:
"Mr. Archbold, are you a director of this company?"
"I am."
"What is your occupation in this company?"
He promptly answered, "To clamour for dividends," which led the learned
counsel to start afresh on another line.
I can never cease to wonder at his capacity for hard work. I do not often see
him now, for he has great affairs on his hands, while I live like a farmer
away from active happenings in business, playing golf, planting trees; and
yet I am so busy that no day is long enough.
Speaking of Mr. Archbold leads me to say again that I have received much
more credit than I deserve in connection with the Standard Oil Company. It
was my good fortune to help to bring together the efficient men who are the
controlling forces of the organization and to work hand in hand with them
for many years, but it is they who have done the hard tasks.
The great majority of my associations were made so many years ago, that I
have reached the age when hardly a month goes by (sometimes I think
hardly a week) that I am not called upon to send some message of
consolation to a family with whom we have been connected, and who have
met with some fresh bereavement. Only recently I counted up the names of
the early associates who have passed away. Before I had finished, I found
the list numbered some sixty or more. They were faithful and earnest
friends; we had worked together through many difficulties, and had gone
through many severe trials together. We had discussed and argued and
hammered away at questions until we came to agree, and it has always been
a happiness to me to feel that we had been frank and aboveboard with each
other. Without this, business associates cannot get the best out of their work.
It is not always the easiest of tasks to induce strong, forceful men to agree.
It has always been our policy to hear patiently and discuss frankly until the
last shred of evidence is on the table, before trying to reach a conclusion

and to decide finally upon a course of action. In working with so many
partners, the conservative ones are apt to be in the majority, and this is no
doubt a desirable thing when the mere momentum of a large concern is
certain to carry it forward. The men who have been very successful are
correspondingly conservative, since they have much to lose in case of
disaster. But fortunately there are also the aggressive and more daring ones,
and they are usually the youngest in the company, perhaps few in number,
but impetuous and convincing. They want to accomplish things and to move
quickly, and they don't mind any amount of work or responsibility. I
remember in particular an experience when the conservative influence met
the progressive—shall I say?—or the daring side. At all events, this was the
side I represented in this case.
ARGUMENTS VERSUS CAPITAL
One of my partners, who had successfully built up a large and prosperous
business, was resisting with all his force a plan that some of us favoured, to
make some large improvements. The cost of extending the operations of
this enterprise was estimated at quite a sum—three million dollars, I think it
was. We had talked it over and over again, and with several other associates
discussed all the pros and cons; and we had used every argument we could
command to show why the plan would not only be profitable, but was
indeed necessary to maintain the lead we had. Our old partner was
obdurate, he had made up his mind not to yield, and I can see him standing
up in his vigorous protest, with his hands in his pockets, his head thrown
back, as he shouted "No."
It's a pity to get a man into a place in an argument where he is defending a
position instead of considering the evidence. His calm judgment is apt to
leave him, and his mind is for the time being closed, and only obstinacy
remains. Now these improvements had to be made—as I said before, it was
essential. Yet we could not quarrel with our old partner, but a minority of us
had made up our minds that we must try to get him to yield, and we
resolved to try another line of argument, and said to him:
"You say that we do not need to spend this money?"
"No," he replied, "it will probably prove to be many years before such a
sum must be spent. There is no present need for these facilities you want to

create, and the works are doing well as they are—let's let well enough
alone."
Now our partner was a very wise and experienced man, older and more
familiar with the subject than some of us, and all this we admitted to him;
but we had made up our minds, as I have said, to carry out this idea if we
could possibly get his approval, and we were willing to wait until then. As
soon as the argument had calmed down, and when the heat of our
discussion had passed, the subject was brought up again. I had thought of a
new way to approach it. I said:
"I'll take it, and supply this capital myself. If the expenditure turns out to be
profitable the company can repay me; and, if it goes wrong, I'll stand the
loss."
That was the argument that touched him. All his reserve disappeared and
the matter was settled when he said:
"If that's the way you feel about it, we'll go it together. I guess I can take the
risk if you can."
It is always, I presume, a question in every business just how fast it is wise
to go, and we went pretty rapidly in those days, building and expanding in
all directions. We were being confronted with fresh emergencies constantly.
A new oil field would be discovered, tanks for storage had to be built
almost over night, and this was going on when old fields were being
exhausted, so we were therefore often under the double strain of losing the
facilities in one place where we were fully equipped, and having to build up
a plant for storing and transporting in a new field where we were totally
unprepared. These are some of the things which make the whole oil trade a
perilous one, but we had with us a group of courageous men who
recognized the great principle that a business cannot be a great success that
does not fully and efficiently accept and take advantage of its opportunities.
How often we discussed those trying questions! Some of us wanted to jump
at once into big expenditures, and others to keep to more moderate ones. It
was usually a compromise, but one at a time we took these matters up and
settled them, never going as fast as the most progressive ones wished, nor

quite so carefully as the conservatives desired, but always made the vote
unanimous in the end.
THE JOY OF ACHIEVEMENT
The part played by one of my earliest partners, Mr. H.M. Flagler, was
always an inspiration to me. He invariably wanted to go ahead and
accomplish great projects of all kinds, he was always on the active side of
every question, and to his wonderful energy is due much of the rapid
progress of the company in the early days.
It was to be expected of such a man that he should fulfil his destiny by
working out some great problems at a time when most men want to retire to
a comfortable life of ease. This would not appeal to my old friend. He
undertook, single handed, the task of building up the East Coast of Florida.
He was not satisfied to plan a railroad from St. Augustine to Key West—a
distance of more than six hundred miles, which would have been regarded
as an undertaking large enough for almost any one man—but in addition he
has built a chain of superb hotels to induce tourists to go to this newly
developed country. Further than this, he has had them conducted with great
skill and success.
This one man, by his own energy and capital, has opened up a vast stretch
of country, so that the old inhabitants and the new settlers may have a
market for their products. He has given work to thousands of these people;
and, to crown all, he has undertaken and nearly completed a remarkable
engineering feat in carrying his road on the Florida Keys into the Atlantic
Ocean to Key West, the point set out for years ago.
Practically all this has been done after what most men would have
considered a full business life, and a man of any other nationality situated
as he was would have retired to enjoy the fruits of his labour.
I first knew Mr. Flagler as a young man who consigned produce to Clark &
Rockefeller. He was a bright and active young fellow full of vim and push.
About the time we went into the oil business Mr. Flagler established himself
as a commission merchant in the same building with Mr. Clark, who took
over and succeeded the firm of Clark & Rockefeller. A little later he bought
out Mr. Clark and combined his trade with his own.

Naturally, I came to see more of him. The business relations which began
with the handling of produce he consigned to our old firm grew into a
business friendship, because people who lived in a comparatively small
place, as Cleveland was then, were thrown together much more often than
in such a place as New York. When the oil business was developing and we
needed more help, I at once thought of Mr. Flagler as a possible partner, and
made him an offer to come with us and give up his commission business.
This offer he accepted, and so began that life-long friendship which has
never had a moment's interruption. It was a friendship founded on business,
which Mr. Flagler used to say was a good deal better than a business
founded on friendship, and my experience leads me to agree with him.
For years and years this early partner and I worked shoulder to shoulder;
our desks were in the same room. We both lived on Euclid Avenue, a few
rods apart. We met and walked to the office together, walked home to
luncheon, back again after luncheon, and home again at night. On these
walks, when we were away from the office interruptions, we did our
thinking, talking, and planning together. Mr. Flagler drew practically all our
contracts. He has always had the faculty of being able to clearly express the
intent and purpose of a contract so well and accurately that there could be
no misunderstanding, and his contracts were fair to both sides. I can
remember his saying often that when you go into an arrangement you must
measure up the rights and proprieties of both sides with the same yardstick,
and this was the way Henry M. Flagler did.
One contract Mr. Flagler was called upon to accept which to my surprise he
at once passed with his O.K. and without a question. We had concluded to
purchase the land on which one of our refineries was built and which was
held on a lease from John Irwin, whom we both knew well. Mr. Irwin drew
the contract for the purchase of this land on the back of a large manila
envelope that he picked up in the office. The description of the property ran
as such contracts usually do until it came to the phrase "the line runs south
to a mullen stalk," etc. This seemed to me a trifle indefinite, but Mr. Flagler
said:
"It's all right, John. I'll accept that contract, and when the deed comes in,
you will see that the mullen stalk will be replaced by a proper stake and the
whole document will be accurate and shipshape." Of course it turned out

exactly as he said it would. I am almost tempted to say that some lawyers
might sit at his feet and learn things about drawing contracts good for them
to know, but perhaps our legal friends might think I was partial, so I won't
press the point.
Another thing about Mr. Flagler for which I think he deserves great credit
was that in the early days he insisted that, when a refinery was to be put up,
it should be different from the flimsy shacks which it was then the custom
to build. Every one was so afraid that the oil would disappear and that the
money expended in buildings would be a loss that the meanest and cheapest
buildings were erected for use as refineries. This was the sort of thing Mr.
Flagler objected to. While he had to admit that it was possible the oil supply
might fail and that the risks of the trade were great, he always believed that
if we went into the oil business at all, we should do the work as well as we
knew how; that we should have the very best facilities; that everything
should be solid and substantial; and that nothing should be left undone to
produce the finest results. And he followed his convictions of building as
though the trade was going to last, and his courage in acting up to his
beliefs laid strong foundations for later years.
There are a number of people still alive who will recall the bright,
straightforward young Flagler of those days with satisfaction. At the time
when we bought certain refineries at Cleveland he was very active. One day
he met an old friend on the street, a German baker, to whom he had sold
flour in years gone by. His friend told him that he had gone out of the
bakery business and had built a little refinery. This surprised Mr. Flagler,
and he didn't like the idea of his friend investing his little fortune in a small
plant which he felt sure would not succeed. But at first there seemed
nothing to do about it. He had it on his mind for some days. It evidently
troubled him. Finally he came to me and said:
"That little baker man knows more about baking than oil refining, but I'd
feel better if we invited him to join us—I've got him on my conscience."
I of course agreed. He talked to his friend, who said he would gladly sell if
we would send an appraiser to value his plant, which we did, and then there
arose an unexpected difficulty. The price at which the plant was to be
purchased was satisfactory, but the ex-baker insisted that Mr. Flagler should

advise him whether he should take his pay in cash or Standard Oil
certificates at par. He told Mr. Flagler that if he took it in cash it would pay
all his debts, and he would be glad to have his mind free of many anxieties;
but if Mr. Flagler said the certificates were going to pay good dividends, he
wanted to get into and keep up with a good thing. It was rather a hard
proposition to put up to Mr. Flagler, and at first he declined to advise or
express any opinion, but the German stuck to him and wouldn't let him
shirk a responsibility which in no way belonged to him. Finally Mr. Flagler
suggested that he take half the amount in cash and pay 50 per cent. on
account of his debts, and put the other half in certificates, and see what
happened. This he did, and as time went on he bought more certificates, and
Mr. Flagler never had to apologize for the advice he gave him. I am
confident that my old partner gave this affair as much time and thought as
he did to any of his own large problems, and the incident may be taken as a
measure of the man.
THE VALUE OF FRIENDSHIPS
But these old men's tales can hardly be interesting to the present generation,
though perhaps they will not be useless if even tiresome stories make young
people realize how, above all other possessions, is the value of a friend in
every department of life without any exception whatsoever.
How many different kinds of friends there are! They should all be held
close at any cost; for, although some are better than others, perhaps, a friend
of whatever kind is important; and this one learns as one grows older. There
is the kind that when you need help has a good reason just at the moment,
of course, why it is impossible to extend it.
"I can't indorse your note," he says, "because I have an agreement with my
partners not to."
"I'd like to oblige you, but I can explain why at the moment," etc., etc.
I do not mean to criticize this sort of friendship; for sometimes it is a matter
of temperament; and sometimes the real necessities are such that the friend
cannot do as he would like to do. As I look back over my friends, I can
remember only a few of this kind and a good many of the more capable

sort. One especial friend I had. His name was S.V. Harkness, and from the
first of our acquaintance he seemed to have every confidence in me.
One day our oil warehouses and refinery burned to the ground in a few
hours—they were absolutely annihilated. Though they were insured for
many hundred thousands of dollars, of course, we were apprehensive about
collecting such a large amount of insurance, and feared it might take some
time to arrange. That plant had to be rebuilt right away, and it was necessary
to lay the financial plans. Mr. Harkness was interested with us in the
business, and I said to him:
"I may want to call upon you for the use of some money. I don't know that
we shall need it, but I thought I'd speak to you in advance about it."
He took in the situation without much explaining on my part. He simply
heard what I had to say and he was a man of very few words.
"All right, J.D., I'll give you all I've got." This was all he said, but I went
home that night relieved of anxiety. As it turned out, we received the check
of the Liverpool, London & Globe Insurance Company for the full amount
before the builders required the payments; and while we didn't need his
money, I never shall forget the whole-souled way in which he offered it.
And this sort of experience was not, I am grateful to say, rare with me. I
was always a great borrower in my early days; the business was active and
growing fast, and the banks seemed very willing to loan me the money.
About this time, when our great fire had brought up some new conditions, I
was studying the situation to see what our cash requirements would be. We
were accustomed to prepare for financial emergencies long before we
needed the funds.
Another incident occurred at this time which showed again the kind of real
friends we had in those days, but I did not hear the full story of it until long
years after the event.
There was one bank where we had done a great deal of business, and a
friend of mine, Mr. Stillman Witt, who was a rich man, was one of the
directors. At a meeting, the question came up as to what the bank would do
in case we wanted more money. In order that no one might doubt his own
position on the subject, Mr. Witt called for his strong-box, and said:

"Here, gentlemen, these young men are all O.K., and if they want to borrow
more money I want to see this bank advance it without hesitation, and if
you want more security, here it is; take what you want."
We were then shipping a large quantity of oil by lake and canal, to save in
transportation, and it took additional capital to carry these shipments; and
we required to borrow a large amount of money. We had already made
extensive loans from another bank, whose president informed me that his
board of directors had been making inquiries respecting our large line of
discounts, and had stated that they would probably want to talk with me on
the subject. I answered that I would be very glad of the opportunity to meet
the board, as we would require a great deal more money from the bank.
Suffice it to say, we got all we wanted, but I was not asked to call for any
further explanations.
But I fear I am telling too much about banks and money and business. I
know of nothing more despicable and pathetic than a man who devotes all
the waking hours of the day to making money for money's sake. If I were
forty years younger, I should like to go into business again, for the
association with interesting and quick-minded men was always a great
pleasure. But I have no dearth of interests to fill my days, and so long as I
live I expect to go on and develop the plans which have been my inspiration
for a lifetime.
During all the long period of work, which lasted from the time I was sixteen
years old until I retired from active business when I was fifty-five, I must
admit that I managed to get a good many vacations of one kind or another,
because of the willingness of my most efficient associates to assume the
burdens of the business which they were so eminently qualified to conduct.
Of detail work I feel I have done my full share. As I began my business life
as a bookkeeper, I learned to have great respect for figures and facts, no
matter how small they were. When there was a matter of accounting to be
done in connection with any plan with which I was associated in the earlier
years, I usually found that I was selected to undertake it. I had a passion for
detail which afterward I was forced to strive to modify.
At Pocantico Hills, New York, where I have spent portions of my time for
many years in an old house where the fine views invite the soul and where

we can live simply and quietly, I have spent many delightful hours,
studying the beautiful views, the trees, and fine landscape effects of that
very interesting section of the Hudson River, and this happened in the days
when I seemed to need every minute for the absorbing demands of business.
So I fear after I got well started, I was not what might be called a diligent
business man.
This phrase, "diligent in business," reminds me of an old friend of mine in
Cleveland who was devoted to his work. I talked to him, and no doubt
bored him unspeakably, on my special hobby, which has always been what
some people call landscape gardening, but which with me is the art of
laying out roads and paths and work of that kind. This friend of thirty-five
years ago plainly disapproved of a man in business wasting his time on
what he looked upon as mere foolishness.
One superb spring day I suggested to him that he should spend the
afternoon with me (a most unusual and reckless suggestion for a business
man to make in those days) and see some beautiful paths through the woods
on my place which I had been planning and had about completed. I went so
far as to tell him that I would give him a real treat.
"I cannot do it, John," he said, "I have an important matter of business on
hand this afternoon."
"That may all be," I urged, "but it will give you no such pleasure as you'll
get when you see those paths—the big tree on each side and ----"
"Go on, John, with your talk about trees and paths. I tell you I've got an ore
ship coming in and our mills are waiting for her." He rubbed his hands with
satisfaction—"I'd not miss seeing her come in for all the wood paths in
Christendom." He was then getting $120 to $130 a ton for Bessemer steel
rails, and if his mill stopped a minute waiting for ore, he felt that he was
missing his life's chance.
Perhaps it was this same man who often gazed out into the lake with every
nerve stretched to try to see an ore ship approaching. One day one of his
friends asked him if he could see the boat.
"No-o, no-o," he reluctantly admitted, "but she's most in sight."

This ore trade was of great and absorbing interest at Cleveland. My old
employer was paid $4 a ton for carrying ore from the Marquette regions
fifty years ago, and to think of the wickedness of this maker of woodland
paths, who in later years was moving the ore in great ships for eighty cents
a ton and making a fortune at it.
All this reminds me of my experiences in the ore business, but I shall come
to that later. I want to say something about landscape gardening, to which I
have devoted a great deal of time for more than thirty years.
THE PLEASURES OF ROAD PLANNING
Like my old friend, others may be surprised at my claim to be an amateur
landscape architect in a small way, and my family have been known to
employ a great landscape man to make quite sure that I did not ruin the
place. The problem was, just where to put the new home at Pocantico Hills,
which has recently been built. I thought I had the advantage of knowing
every foot of the land, all the old big trees were personal friends of mine,
and with the views of any given point I was perfectly familiar—I had
studied them hundreds of times; and after this great landscape architect had
laid out his plans and had driven his lines of stakes, I asked if I might see
what I could do with the job.
In a few days I had worked out a plan so devised that the roads caught just
the best views at just the angles where in driving up the hill you came upon
impressive outlooks, and at the ending was the final burst of river, hill,
cloud, and great sweep of country to crown the whole; and here I fixed my
stakes to show where I suggested that the roads should run, and finally the
exact place where the house should be.
"Look it all over," I said, "and decide which plan is best." It was a proud
moment when this real authority accepted my suggestions as bringing out
the most favoured spots for views and agreed upon the site of the house.
How many miles of roads I have laid out in my time, I can hardly compute,
but I have often kept at it until I was exhausted. While surveying roads, I
have run the lines until darkness made it impossible to see the little stakes
and flags. It is all very vain of me to tell of these landscape enterprises, but
perhaps they will offset the business talks which occupy so much of my
story.

My methods of attending to business matters differed from those of most
well-conducted merchants of my time and allowed me more freedom. Even
after the chief affairs of the Standard Oil Company were moved to New
York, I spent most of my summers at our home in Cleveland, and I do still. I
would come to New York when my presence seemed necessary, but for the
most part I kept in touch with the business through our own telegraph wires,
and was left free to attend to many things which interested me—among
others, the making of paths, the planting of trees, and the setting out of little
forests of seedlings.
Of all the profitable things which develop quickly under the hand, I have
thought my young nurseries show the greatest yield. We keep a set of
account books for each place, and I was amazed not long ago at the increase
in value that a few years make in growing things, when we came to remove
some young trees from Westchester County to Lakewood, New Jersey. We
plant our young trees, especially evergreens, by the thousand—I think we
have put in as many as ten thousand at once, and let them develop, to be
used later in some of our planting schemes. If we transfer young trees from
Pocantico to our home in Lakewood, we charge one place and credit the
other for these trees at the market rate. We are our own best customers, and
we make a small fortune out of ourselves by selling to our New Jersey place
at $1.50 or $2.00 each, trees which originally cost us only five or ten cents
at Pocantico.
In nursery stock, as in other things, the advantage of doing things on a large
scale reveals itself. The pleasure and satisfaction of saving and moving
large trees—trees, say, from ten to twenty inches in diameter, or even more
in some cases—has been for years a source of great interest. We build our
movers ourselves, and work with our own men, and it is truly surprising
what liberties you can take with trees, if you once learn how to handle these
monsters. We have moved trees ninety feet high, and many seventy or
eighty feet. And they naturally are by no means young. At one time or
another we have tried almost all kinds of trees, including some which the
authorities said could not be moved with success. Perhaps the most daring
experiments were with horse-chestnuts. We took up large trees, transported
them considerable distances, some of them after they were actually in
flower, all at a cost of twenty dollars per tree, and lost very few. We were so
successful that we became rather reckless, trying experiments out of season,

but when we worked on plans we had already tried, our results were
remarkably satisfactory.
Taking our experiences in many hundreds of trees of various kinds in and
out of season, and including the time when we were learning the art, our
total loss has been something less than 10 per cent., probably more nearly 6
or 7 per cent. A whole tree-moving campaign in a single season has been
accomplished with a loss of about 3 per cent. I am willing to admit that in
the case of the larger trees the growth has been retarded perhaps two years,
but this is a small matter, for people no longer young wish to get the effects
they desire at once, and the modern tree-mover does it. We have grouped
and arranged clumps of big spruces to fit the purposes we were aiming for,
and sometimes have completely covered a hillside with them. Oaks we have
not been successful with except when comparatively young, and we don't
try to move oaks and hickories when they have come near to maturity; but
we have made some successful experiments with bass wood, and one of
these we have moved three times without injury. Birches have generally
baffled us, but evergreens, except cedars, have been almost invariably
successfully handled.
This planning for good views must have been an early passion with me. I
remember when I was hardly more than a boy I wanted to cut away a big
tree which I thought interfered with the view from the windows of the
dining-room of our home. I was for cutting it down, but some other
members of the family objected, though my dear mother, I think,
sympathized with me, as she said one day: "You know, my son, we have
breakfast at eight o'clock, and I think if the tree were felled some time
before we sat down to table, there would probably be no great complaint
when the family saw the view which the fallen tree revealed."
So it turned out.

CHAPTER II
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.

CHAPTER III
The Standard Oil Company

It would be surprising if in an organization which included a great number
of men there should not be an occasional employee here and there who
acted, in connection with the business or perhaps in conducting his own
affairs, in a way which might be criticized. Even in a comparatively small
organization it is well-nigh impossible to restrain this occasional man who
is over-zealous for his own or his company's advancement. To judge the
character of all the members of a great organization or the organization
itself by the actions of a few individuals would be manifestly unfair.
It has been said that I forced the men who became my partners in the oil
business to join with me. I would not have been so short-sighted. If it were
true that I followed such tactics, I ask, would it have been possible to make
of such men life-long companions? Would they accept, and remain for
many years in positions of the greatest trust, and finally, could any one have
formed of such men, if they had been so browbeaten, a group which has for
all these years worked in loyal harmony, with fair dealing among
themselves as well as with others, building up efficiency and acting in
entire unity? This powerful organization has not only lasted but its
efficiency has increased. For fourteen years I have been out of business, and
in eight or ten years went only once to the company's office.
In the summer of 1907 I visited again the room at the top of the Standard
Oil Company's building, where the officers of the company and the heads of
departments have had their luncheon served for many years. I was surprised
to find so many men who had come to the front since my last visit years
ago. Afterward I had an opportunity to talk with old associates and many
new ones, and it was a source of great gratification to me to find that the
same spirit of coöperation and harmony existed unchanged. This practice of
lunching together, a hundred or more at long tables in most intimate and
friendly association, is another indication of what I contend, slight as it may
seem to be at first thought. Would these people seek each other's

companionship day after day if they had been forced into this relation?
People in such a position do not go on for long in a pleasant and congenial
intimacy.
For years the Standard Oil Company has developed step by step, and I am
convinced that it has done well its work of supplying to the people the
products from petroleum at prices which have decreased as the efficiency of
the business has been built up. It gradually extended its services first to the
large centres, and then to towns, and now to the smallest places, going to
the homes of its customers, delivering the oil to suit the convenience of the
actual users. This same system is being followed out in various parts of the
world. The company has, for example, three thousand tank wagons
supplying American oil to towns and even small hamlets in Europe. Its own
depots and employees deliver it in a somewhat similar way in Japan, China,
India, and the chief countries of the world. Do you think this trade has been
developed by anything but hard work?
This plan of selling our products direct to the consumer and the
exceptionally rapid growth of the business bred a certain antagonism which
I suppose could not have been avoided, but this same idea of dealing with
the consumer directly has been followed by others and in many lines of
trade, without creating, so far as I recall, any serious opposition.
This is a very interesting and important point, and I have often wondered if
the criticism which centred upon us did not come from the fact that we were
among the first, if not the first, to work out the problems of direct selling to
the user on a broad scale. This was done in a fair spirit and with due
consideration for every one's rights. We did not ruthlessly go after the trade
of our competitors and attempt to ruin it by cutting prices or instituting a
spy system. We had set ourselves the task of building up as rapidly and as
broadly as possible the volume of consumption. Let me try to explain just
what happened.
To get the advantage of the facilities we had in manufacture, we sought the
utmost market in all lands—we needed volume. To do this we had to create
selling methods far in advance of what then existed; we had to dispose of
two, or three, or four gallons of oil where one had been sold before, and we
could not rely upon the usual trade channels then existing to accomplish

this. It was never our purpose to interfere with a dealer who adequately
cultivated his field of operations, but when we saw a new opportunity or a
new place for extending the sale by further and effective facilities, we made
it our business to provide them. In this way we opened many new lines in
which others have shared. In this development we had to employ many
comparatively new men. The ideal way to supply material for higher
positions is, of course, to recruit the men from among the youngest in the
company's service, but our expansion was too rapid to permit this in all
cases. That some of these employees were over-zealous in going after sales
it would not be surprising to learn, but they were acting in violation of the
expressed and known wishes of the company. But even these instances, I
am convinced, occurred so seldom, by comparison with the number of
transactions we carried on, that they were really the exceptions that proved
the rule.
Every week in the year for many, many years, this concern has brought into
this country more than a million dollars gold, all from the products
produced by American labour. I am proud of the record, and believe most
Americans will be when they understand some things better. These
achievements, the development of this great foreign trade, the owning of
ships to carry the oil in bulk by the most economical methods, the sending
out of men to fight for the world's markets, have cost huge sums of money,
and the vast capital employed could not be raised nor controlled except by
such an organization as the Standard is to-day.
To give a true picture of the early conditions, one must realize that the oil
industry was considered a most hazardous undertaking, not altogether
unlike the speculative mining undertakings we hear so much of to-day. I
well remember my old and distinguished friend, Rev. Thomas W. Armitage,
for some forty years pastor of a great New York church, warning me that it
was worse than folly to extend our plants and our operations. He was sure
we were running unwarranted risks, that our oil supply would probably fail,
the demand would decline, and he, with many others, sometimes I thought
almost everybody, prophesied ruin.
None of us ever dreamed of the magnitude of what proved to be the later
expansion. We did our day's work as we met it, looking forward to what we
could see in the distance and keeping well up to our opportunities, but

laying our foundations firmly. As I have said, capital was most difficult to
secure, and it was not easy to interest conservative men in this adventurous
business. Men of property were afraid of it, though in rare cases capitalists
were induced to unite with us to a limited extent. If they bought our stock at
all, they took a little of it now and then as an experiment, and we were
painfully conscious that they often declined to buy new stock with many
beautiful expressions of appreciation.
The enterprise being so new and novel, on account of the fearfulness of
certain holders in reference to its success, we frequently had to take stock to
keep it from going begging, but we had such confidence in the fundamental
value of the concern that we were willing to assume this risk. There are
always a few men in an undertaking of this kind who would risk all on their
judgment of the final result, and if the enterprise had failed, these would
have been classed as visionary adventurers, and perhaps with good reason.
The 60,000 men who are at work constantly in the service of the company
are kept busy year in and year out. The past year has been a time of great
contraction, but the Standard has gone on with its plans unchecked, and the
new works and buildings have not been delayed on account of lack of
capital or fear of bad times. It pays its workmen well, it cares for them
when sick, and pensions them when old. It has never had any important
strikes, and if there is any better function of business management than
giving profitable work to employees year after year, in good times and bad,
I don't know what it is.
Another thing to be remembered about this so-called "octopus" is that there
has been no "water" introduced into its capital (perhaps we felt that oil and
water would not have mixed); nor in all these years has any one had to wait
for money which the Standard owed. It has suffered from great fires and
losses, but it has taken care of its affairs in such a way that it has not found
it necessary to appeal to the general public to place blocks of bonds or
stock; it has used no underwriting syndicates or stock-selling schemes in
any form, and it has always managed to finance new oil field operations
when called upon.
It is a common thing to hear people say that this company has crushed out
its competitors. Only the uninformed could make such an assertion. It has

and always has had, and always will have, hundreds of active competitors;
it has lived only because it has managed its affairs well and economically
and with great vigour. To speak of competition for a minute: Consider not
only the able people who compete in refining oil, but all the competition in
the various trades which make and sell by-products—a great variety of
different businesses. And perhaps of even more importance is the
competition in foreign lands. The Standard is always fighting to sell the
American product against the oil produced from the great fields of Russia,
which struggles for the trade of Europe, and the Burma oil, which largely
affects the market in India. In all these various countries we are met with
tariffs which are raised against us, local prejudices, and strange customs. In
many countries we had to teach the people—the Chinese, for example—to
burn oil by making lamps for them; we packed the oil to be carried by
camels or on the backs of runners in the most remote portions of the world;
we adapted the trade to the needs of strange folk. Every time we succeeded
in a foreign land, it meant dollars brought to this country, and every time we
failed, it was a loss to our nation and its workmen.
One of our greatest helpers has been the State Department in Washington.
Our ambassadors and ministers and consuls have aided to push our way into
new markets to the utmost corners of the world.
I think I can speak thus frankly and enthusiastically because the working
out of many of these great plans has developed largely since I retired from
the business fourteen years ago.
The Standard has not now, and never did have a royal road to supremacy,
nor is its success due to any one man, but to the multitude of able men who
are working together. If the present managers of the company were to relax
efforts, allow the quality of their product to degenerate, or treat their
customers badly, how long would their business last? About as long as any
other neglected business. To read some of the accounts of the affairs of the
company, one would think that it had such a hold on the oil trade that the
directors did little but come together and declare dividends. It is a pleasure
for me to take this opportunity to pay tribute to the work these men are
doing, not only for the company they serve, but for the foreign trade of our
country; for more than half of all the product that the company makes is
sold outside of the United States. If, in place of these directors, the business

were taken over and run by anyone but experts, I would sell my interest for
any price I could get. To succeed in a business requires the best and most
earnest men to manage it, and the best men rise to the top. Of its origin and
early plans I will speak later.
THE MODERN CORPORATION
Beyond question there is a suspicion of corporations. There may be reason
for such suspicion very often; for a corporation may be moral or immoral,
just as a man may be moral or the reverse; but it is folly to condemn all
corporations because some are bad, or even to be unduly suspicious of all,
because some are bad. But the corporation in form and character has come
to stay—that is a thing that may be depended upon. Even small firms are
becoming corporations, because it is a convenient form of partnership.
It is equally true that combinations of capital are bound to continue and to
grow, and this need not alarm even the most timid if the corporation, or the
series of corporations, is properly conducted with due regard for the rights
of others. The day of individual competition in large affairs is past and gone
—you might just as well argue that we should go back to hand labour and
throw away our efficient machines—and the sober good sense of the people
will accept this fact when they have studied and tried it out. Just see how
the list of stockholders in the great corporations is increasing by leaps and
bounds. This means that all these people are becoming partners in great
businesses. It is a good thing—it will bring a feeling of increased
responsibility to the managers of the corporations and will make the people
who have their interests involved study the facts impartially before
condemning or attacking them.
On this subject of industrial combinations I have often expressed my
opinions; and, as I have not changed my mind, I am not averse to repeating
them now, especially as the subject seems again to be so much in the public
eye.
The chief advantages from industrial combinations are those which can be
derived from a coöperation of persons and aggregation of capital. Much that
one man cannot do alone two can do together, and once admit the fact that
coöperation, or, what is the same thing, combination, is necessary on a
small scale, the limit depends solely upon the necessities of business. Two

persons in partnership may be a sufficiently large combination for a small
business, but if the business grows or can be made to grow, more persons
and more capital must be taken in. The business may grow so large that a
partnership ceases to be a proper instrumentality for its purposes, and then a
corporation becomes a necessity. In most countries, as in England, this form
of industrial combination is sufficient for a business co-extensive with the
parent country, but it is not so in America. Our Federal form of government
making every corporation created by a state foreign to every other state,
renders it necessary for persons doing business through corporate agency to
organize corporations in some or many of the different states in which their
business is located. Instead of doing business through the agency of one
corporation they must do business through the agencies of several
corporations. If the business is extended to foreign countries, and
Americans are not to-day satisfied with home markets alone, it will be
found helpful and possibly necessary to organize corporations in such
countries, for Europeans are prejudiced against foreign corporations, as are
the people of many of our states. These different corporations thus become
coöperating agencies in the same business and are held together by common
ownership of their stocks.
It is too late to argue about advantages of industrial combinations. They are
a necessity. And if Americans are to have the privilege of extending their
business in all the states of the Union, and into foreign countries as well,
they are a necessity on a large scale, and require the agency of more than
one corporation.
The dangers are that the power conferred by combination may be abused,
that combinations may be formed for speculation in stocks rather than for
conducting business, and that for this purpose prices may be temporarily
raised instead of being lowered. These abuses are possible to a greater or
less extent in all combinations, large or small, but this fact is no more of an
argument against combinations than the fact that steam may explode is an
argument against steam. Steam is necessary and can be made comparatively
safe. Combination is necessary and its abuses can be minimized; otherwise
our legislators must acknowledge their incapacity to deal with the most
important instrument of industry.

In the hearing of the Industrial Commission in 1899, I then said that if I
were to suggest any legislation regarding industrial combinations it would
be: First, Federal legislation under which corporations may be created and
regulated, if that be possible. Second, in lieu thereof, state legislation as
nearly uniform as possible, encouraging combinations of persons and
capital for the purpose of carrying on industries, but permitting state
supervision, not of a character to hamper industries, but sufficient to
prevent frauds upon the public. I still feel as I did in 1899.
THE NEW OPPORTUNITIES
I am far from believing that this will adversely affect the individual. The
great economic era we are entering will give splendid opportunity to the
young man of the future. One often hears the men of this new generation
say that they do not have the chances that their fathers and grandfathers
had. How little they know of the disadvantages from which we suffered! In
my young manhood we had everything to do and nothing to do it with; we
had to hew our own paths along new lines; we had little experience to go
on. Capital was most difficult to get, credits were mysterious things.
Whereas now we have a system of commercial ratings, everything was then
haphazard and we suffered from a stupendous war and all the disasters
which followed.
Compare this day with that. Our comforts and opportunities are multiplied a
thousand fold. The resources of our great land are now actually opening up
and are scarcely touched; our home markets are vast, and we have just
begun to think of the foreign peoples we can serve—the people who are
years behind us in civilization. In the East a quarter of the human race is
just awakening. The men of this generation are entering into a heritage
which makes their fathers' lives look poverty-stricken by comparison. I am
naturally an optimist, and when it comes to a statement of what our people
will accomplish in the future, I am unable to express myself with sufficient
enthusiasm.
There are many things we must do to attain the highest benefit from all
these great blessings; and not the least of these is to build up our reputation
throughout the whole world.

The great business interests will, I hope, so comport themselves that foreign
capital will consider it a desirable thing to hold shares in American
companies. It is for Americans to see that foreign investors are well and
honestly treated, so that they will never regret purchases of our securities.
I may speak thus frankly, because I am an investor in many American
enterprises, but a controller of none (with one exception, and that a
company which has not been much of a dividend payer), and I, like all the
rest, am dependent upon the honest and capable administration of the
industries. I firmly and sincerely believe that they will be so managed.

THE AMERICAN BUSINESS MAN

You hear a good many people of pessimistic disposition say much about
greed in American life. One would think to hear them talk that we were a
race of misers in this country. To lay too much stress upon the reports of
greed in the newspapers would be folly, since their function is to report the
unusual and even the abnormal. When a man goes properly about his daily
affairs, the public prints say nothing; it is only when something
extraordinary happens to him that he is discussed. But because he is thus
brought into prominence occasionally, you surely would not say that these
occasions represented his normal life. It is by no means for money alone
that these active-minded men labour—they are engaged in a fascinating
occupation. The zest of the work is maintained by something better than the
mere accumulation of money, and, as I think I have said elsewhere, the
standards of business are high and are getting better all the time.
I confess I have no sympathy with the idea so often advanced that our basis
of all judgments in this country is founded on money. If this were true, we
should be a nation of money hoarders instead of spenders. Nor do I admit
that we are so small-minded a people as to be jealous of the success of
others. It is the other way about: we are the most extraordinarily ambitious,
and the success of one man in any walk of life spurs the others on. It does
not sour them, and it is a libel even to suggest so great a meanness of spirit.
In reading the newspapers, where so much is taken for granted in
considering things on a money standard, I think we need some of the sense
of humour possessed by an Irish neighbour of mine, who built what we

regarded as an extremely ugly house, which stood out in bright colours as
we looked from our windows. My taste in architecture differed so widely
from that affected by my Irish friend, that we planted out the view of his
house by moving some large trees to the end of our property. Another
neighbour who watched this work going on asked Mr. Foley why Mr.
Rockefeller moved all these big trees and cut off the view between the
houses. Foley, with the quick wit of his country, responded instantly: "It's
invy, they can't stand looking at the ividence of me prosperity."
In my early days men acted just as they do now, no doubt. When there was
anything to be done for general trade betterment, almost every man had
some good reason for believing that his case was a special one different
from all the rest. For every foolish thing he did, or wanted to do, for every
unbusiness-like plan he had, he always pleaded that it was necessary in his
case. He was the one man who had to sell at less than cost, to disrupt all the
business plans of others in his trade, because his individual position was so
absolutely different from all the rest. It was often a heart-breaking
undertaking to convince those men that the perfect occasion which would
lead to the perfect opportunity would never come, even if they waited until
the crack o' doom.
Then, again, we had the type of man who really never knew all the facts
about his own affairs. Many of the brightest kept their books in such a way
that they did not actually know when they were making money on a certain
operation and when they were losing. This unintelligent competition was a
hard matter to contend with. Good old-fashioned common sense has always
been a mighty rare commodity. When a man's affairs are not going well, he
hates to study the books and face the truth. From the first, the men who
managed the Standard Oil Company kept their books intelligently as well as
correctly. We knew how much we made and where we gained or lost. At
least, we tried not to deceive ourselves.
My ideas of business are no doubt old-fashioned, but the fundamental
principles do not change from generation to generation, and sometimes I
think that our quick-witted American business men, whose spirit and energy
are so splendid, do not always sufficiently study the real underlying
foundations of business management. I have spoken of the necessity of
being frank and honest with oneself about one's own affairs: many people

assume that they can get away from the truth by avoiding thinking about it,
but the natural law is inevitable, and the sooner it is recognized, the better.
One hears a great deal about wages and why they must be maintained at a
high level, by the railroads, for example. A labourer is worthy of his hire, no
less, but no more, and in the long run he must contribute an equivalent for
what he is paid. If he does not do this, he is probably pauperized, and you at
once throw out the balance of things. You can't hold up conditions
artificially, and you can't change the underlying laws of trade. If you try,
you must inevitably fail. All this may be trite and obvious, but it is
remarkable how many men overlook what should be the obvious. These are
facts we can't get away from—a business man must adapt himself to the
natural conditions as they exist from month to month and year to year.
Sometimes I feel that we Americans think we can find a short road to
success, and it may appear that often this feat is accomplished; but real
efficiency in work comes from knowing your facts and building upon that
sure foundation.
Many men of wealth do not retire from business even when they can. They
are not willing to be idle, or they have a just pride in their work and want to
perfect the plans in which they have faith, or, what is of still more
consequence, they may feel the call to expand and build up for the benefit
of their employees and associates, and these men are the great builders up
in our country. Consider for a moment how much would have been left
undone if our prosperous American business men had sat down with folded
hands when they had acquired a competency. I have respect for all these
reasons, but if a man has succeeded, he has brought upon himself
corresponding responsibilities, and our institutions devoted to helping men
to help themselves need the brain of the American business man as well as
part of his money.
Some of these men, however, are so absorbed in their business affairs that
they hardly have time to think of anything else. If they do interest
themselves in a work outside of their own office and undertake to raise
money, they begin with an apology, as if they are ashamed of themselves.
"I am no beggar," I have heard many of them say, to which I could only
reply: "I am sorry you feel that way about it."

I have been this sort of beggar all my life and the experiences I have had
were so interesting and important to me that I will venture to speak of them
in a later chapter.

CHAPTER IV
Some Experiences in the Oil Business

During the years when I was just coming to man's estate, the produce
business of Clark & Rockefeller went on prosperously, and in the early
sixties we organized a firm to refine and deal in oil. It was composed of
Messrs. James and Richard Clark, Mr. Samuel Andrews, and the firm of
Clark & Rockefeller, who were the company. It was my first direct
connection with the oil trade. As the new concern grew the firm of Clark &
Rockefeller was called upon to supply a large special capital. Mr. Samuel
Andrews was the manufacturing man of the concern, and he had learned the
process of cleansing the crude oil by the use of sulphuric acid.
In 1865 the partnership was dissolved; it was decided that the cash assets
should be collected and the debts paid, but this left the plant and the good-
will to be disposed of. It was suggested that they should go to the highest
bidder among ourselves. This seemed a just settlement to me, and the
question came up as to when the sale should be held and who would
conduct it. My partners had a lawyer in the room to represent them, though
I had not considered having a legal representative; I thought I could take
care of so simple a transaction. The lawyer acted as the auctioneer, and it
was suggested that we should go on with the sale then and there. All agreed,
and so the auction began.
I had made up my mind that I wanted to go into the oil trade, not as a
special partner, but actively on a larger scale, and with Mr. Andrews wished
to buy that business. I thought that I saw great opportunities in refining oil,
and did not realize at that time that the whole oil industry would soon be
swamped by so many men rushing into it. But I was full of hope, and I had
already arranged to get financial accommodation to an amount that I
supposed would easily pay for the plant and good-will. I was willing to give
up the other firm of Clark & Rockefeller, and readily settled that later—my
old partner, Mr. Clark, taking over the business.

The bidding began, I think, at $500 premium. I bid a thousand; they bid two
thousand; and so on, little by little, the price went up. Neither side was
willing to stop bidding, and the amount gradually rose until it reached
$50,000, which was much more than we supposed the concern to be worth.
Finally, it advanced to $60,000, and by slow stages to $70,000, and I almost
feared for my ability to buy the business and have the money to pay for it.
At last the other side bid $72,000. Without hesitation I said $72,500. Mr.
Clark then said:
"I'll go no higher, John; the business is yours."
"Shall I give you a check for it now?" I suggested.
"No," Mr. Clark said, "I'm glad to trust you for it; settle at your
convenience."
The firm of Rockefeller & Andrews was then established, and this was
really my start in the oil trade. It was my most important business for about
forty years until, at the age of about fifty-six, I retired.
The story of the early history of the oil trade is too well known to bear
repeating in detail. The cleansing of crude petroleum was a simple and easy
process, and at first the profits were very large. Naturally, all sorts of people
went into it: the butcher, the baker, and the candlestick-maker began to
refine oil, and it was only a short time before more of the finished product
was put on the market than could possibly be consumed. The price went
down and down until the trade was threatened with ruin. It seemed
absolutely necessary to extend the market for oil by exporting to foreign
countries, which required a long and most difficult development; and also to
greatly improve the processes of refining so that oil could be made and sold
cheaply, yet with a profit, and to use as by-products all of the materials
which in the less-efficient plants were lost or thrown away.
These were the problems which confronted us almost at the outset, and this
great depression led to consultations with our neighbors and friends in the
business in the effort to bring some order out of what was rapidly becoming
a state of chaos. To accomplish all these tasks of enlarging the market and
improving the methods of manufacture in a large way was beyond the
power or ability of any concern as then constituted. It could only be done,

we reasoned, by increasing our capital and availing ourselves of the best
talent and experience.
It was with this idea that we proceeded to buy the largest and best refining
concerns and centralize the administration of them with a view to securing
greater economy and efficiency. The business grew faster than we had
anticipated.
This enterprise, conducted by men of application and ability working hard
together, soon built up unusual facilities in manufacture, in transportation,
in finance, and in extending markets. We had our troubles and set-backs; we
suffered from some severe fires; and the supply of crude oil was most
uncertain. Our plans were constantly changed by changed conditions. We
developed great facilities in an oil centre, erected storage tanks, and
connected pipe-lines; then the oil failed and our work was thrown away. At
best it was a speculative trade, and I wonder that we managed to pull
through so often; but we were gradually learning how to conduct a most
difficult business.

FOREIGN MARKETS

Several years ago, when asked how our business grew to such large
proportions I explained that our first organization was a partnership and
afterward a corporation in Ohio. That was sufficient for a local refining
business. But, had we been dependent solely upon local business, we should
have failed long since. We were forced to extend our markets into every
part of the world. This made the sea-board cities a necessary place of
business, and we soon discovered that manufacturing for export could be
more economically carried on there; hence refineries were established at
Brooklyn, at Bayonne, at Philadelphia, at Baltimore, and necessary
corporations were organized in the different states.
We soon discovered, as the business grew, that the primary method of
transporting oil in barrels could not last. The package often cost more than
the contents, and the forests of the country were not sufficient to supply
cheaply the necessary material for an extended time. Hence we devoted
attention to other methods of transportation, adopted the pipe-line system,

and found capital for pipe-line construction equal to the necessities of the
business.
To operate pipe-lines required franchises from the states in which they were
located—and consequently corporations in those states—just as railroads
running through different states are forced to operate under separate state
charters. To perfect the pipe-line system of transportation required many
millions of capital. The entire oil business is dependent upon the pipe-line.
Without it every well would be less valuable and every market at home and
abroad would be more difficult to serve or retain, because of the additional
cost to the consumer. The expansion of the whole industry would have been
retarded without this method of transportation.
Then the pipe-line system required other improvements, such as tank-cars
upon railroads, and finally the tank-steamer. Capital had to be furnished for
them and corporations created to own and operate them.
Every one of the steps taken was necessary if the business was to be
properly developed, and only through such successive steps and by a great
aggregation of capital is America to-day enabled to utilize the bounty which
its land pours forth, and to furnish the world with light.

THE START OF THE STANDARD OIL COMPANY

In the year 1867 the firms of William Rockefeller & Co., Rockefeller &
Andrews, Rockefeller & Co., and S.V. Harkness and H.M. Flagler united in
forming the firm of Rockefeller, Andrews & Flagler.
The cause leading to the formation of this firm was the desire to unite our
skill and capital in order to carry on a business of greater magnitude with
economy and efficiency in place of the smaller business that each had
heretofore conducted separately. As time went on and the possibilities
became apparent, we found further capital to be necessary; then we
interested others and organized the Standard Oil Company, with a capital of
$1,000,000. Later we saw that more money could be utilized, found persons
who were willing to invest with us, and increased our capital to $2,500,000,
in 1872, and afterward in 1874 to $3,500,000. As the business grew, and
markets were obtained at home and abroad, more persons and capital were

added to the business, and new corporate agencies were obtained or
organized, the object being always the same—to extend our operations by
furnishing the best and cheapest products.
I ascribe the success of the Standard Oil Company to its consistent policy of
making the volume of its business large through the merit and cheapness of
its products. It has spared no expense in utilizing the best and most efficient
method of manufacture. It has sought for the best superintendents and
workmen and paid the best wages. It has not hesitated to sacrifice old
machinery and old plants for new and better ones. It has placed its
manufactories at the points where they could supply markets at the least
expense. It has not only sought markets for its principal products, but for all
possible by-products, sparing no expense in introducing them to the public
in every nook and corner of the world. It has not hesitated to invest millions
of dollars in methods for cheapening the gathering and distribution of oils
by pipe-lines, special cars, tank-steamers, and tank-wagons. It has erected
tank-stations at railroad centres in every part of the country to cheapen the
storage and delivery of oil. It has had faith in American oil and has brought
together vast sums of money for the purpose of making it what it is, and for
holding its market against the competition of Russia and all the countries
which are producers of oil and competitors against American products.

THE INSURANCE PLANS

Here is an example of one of the ways in which we achieved certain
economies and gained real advantage. Fires are always to be reckoned with
in oil refining and storage, as we learned by dear experience, but in having
our plants distributed all over the country the unit of risk and possible loss
was minimized. No one fire could ruin us, and we were able thus to
establish a system of insuring ourselves. Our reserve fund which provided
for this insurance could not be wiped out all at once, as might be the case
with a concern having its plants together or near each other. Then we
studied and perfected our organization to prevent fires, improving our
appliances and plans year after year until the profit on this insurance feature
became a very considerable item in the Standard earnings.
It can easily be seen that this saving in insurance, and minimizing the loss
by fire affected the profits, not only in refining, but touched many other

associated enterprises: the manufacture of by-products, the tanks and
steamers, the pumping-stations, etc.
We devoted ourselves exclusively to the oil business and its products. The
company never went into outside ventures, but kept to the enormous task of
perfecting its own organization. We educated our own men; we trained
many of them from boyhood; we strove to keep them loyal by providing
them full scope for their ability; they were given opportunities to buy stock,
and the company itself helped them to finance their purchases. Not only
here in America, but all over the world, our young men were given chances
to advance themselves, and the sons of the old partners were welcomed to
the councils and responsibilities of the administration. I may say that the
company has been in all its history, and I am sure it is at present, a most
happy association of busy people.
I have been asked if my advice is not often sought by the present managers.
I can say that if it were sought it would be gladly given. But the fact is that
since I retired it has been very little required. I am still a large stockholder,
indeed I have increased my holdings in the company's stock since I
relinquished any part in its management.

WHY THE STANDARD PAYS LARGE DIVIDENDS

Let me explain what many people, perhaps, fully appreciate, but some, I am
sure, do not. The Standard pays four dividends a year: the first in March,
which is the result of the busiest season of the whole twelvemonth, because
more oil is consumed in winter than at other seasons, and three other
dividends later, at about evenly divided periods. Now, these dividends run
up to 40 per cent. on the capital stock of $100,000,000, but that does not
mean that the profit is 40 per cent. on the capital invested. As a matter of
fact, it represents the results of the savings and surplus gained through all
the thirty-five or forty years of the workings of the companies. The capital
stock could be raised several hundred per cent. without a penny of over-
capitalization or "water"; the actual value is there. If this increase had been
made, the rate would represent a moderate dividend-paying power of about
6 to 8 per cent.

A NORMAL GROWTH

Study for a moment the result of what has been a natural and absolutely
normal increase in the value of the company's possessions. Many of the
pipe-lines were constructed during a period when costs were about 50 per
cent. of what they are now. Great fields of oil lands were purchased as
virgin soil, which later yielded an immense output. Quantities of low-grade
crude oil which had been bought by the company when it was believed to
be of little value, but which the company hoped eventually to utilize, were
greatly increased in value by inventions for refining it and for using the
residues formerly considered almost worthless. Dock property was secured
at low prices and made valuable by buildings and development. Large
unimproved tracts of land near the important business centres were
acquired. We brought our industries to these places, made the land useful,
and increased the value, not only of our own property, but of the land
adjacent to it to many times the original worth. Wherever we have
established businesses in this and other countries we have bought largely of
property. I remember a case where we paid only $1,000 or so an acre for
some rough land to be used for such purposes, and, through the
improvements we created, the value has gone up 40 or 50 times as much in
35 or 40 years.
Others have had similar increases in the value of their properties, but have
enlarged their capitalization correspondingly. They have escaped the
criticism which has been directed against us, who with our old-fashioned
and conservative notions have continued without such expansion of
capitalization.
There is nothing strange or miraculous in all this; it was all done through
this natural law of trade development. It is what the Astors and many other
large landholders did.
If a man starts in business with $1,000 capital and gradually increases his
property and investment by retaining in his concern much of his earnings,
instead of spending them, and thus accumulates values until his investment
is, say, $10,000, it would be folly to base the percentage of his actual profits
only on the original $1,000 with which he started. Here, again, I think the
managers of the Standard should be praised, and not blamed. They have set

an example for upbuilding on the most conservative lines, and in a business
which has always been, to say the least, hazardous, and to a large degree
unavoidably speculative. Yet no one who has relied upon the ownership of
this stock to pay a yearly income has been disappointed, and the stock is
held by an increasing number of small holders the country over.

THE MANAGEMENT OF CAPITAL

We never attempted, as I have already said, to sell the Standard Oil stock on
the market through the Stock Exchange. In the early days the risks of the
business were great, and if the stock had been dealt in on the Exchange its
fluctuations would no doubt have been violent. We preferred to have the
attention of the owners and administrators of the business directed wholly
to the legitimate development of the enterprise rather than to speculation in
its shares. The interests of the company have been carefully conserved. We
have been criticized for paying large dividends on a capitalization which
represents but a small part of the actual property owned by the company. If
we had increased the capitalization to bring it up to the real value, and listed
the shares on the Exchange, we might have been criticized then for
promoting a project to induce the public to invest. As I have indicated, the
foundations of the company were so thoroughly established, and its affairs
so conservatively managed, that, after the earlier period of struggle to
secure adequate capital and in view of the trying experiences through which
we then passed, we decided to pursue the policy of relying upon our own
resources. Since then we have never been obliged to lean very heavily upon
the financial public, but have sought rather to hold ourselves in position not
only to protect our own large and important interests, but to be prepared in
times of stress to lend a helping hand to others. The company has suffered
from the statements of people who, I am convinced, are not familiar with all
the facts. As I long ago ceased to have any active part in the management of
its affairs perhaps I may venture the opinion that men who devote
themselves to building up the sale of American products all over the world,
in competition with foreign manufacturers should be appreciated and
encouraged.
There have been so many tales told about the so-called speculations of the
Standard Oil Company that I may say a word about that subject. This

company is interested only in oil products and such manufacturing affairs as
are legitimately connected therewith. It has plants for the making of barrels
and tanks; and building pumps for pumping oil; it owns vessels for carrying
oil, tank-cars, pipes for transporting oil, etc., etc.—but it is not concerned in
speculative interests. The oil business itself is speculative enough, and its
successful administration requires a firm hand and a cool head.
The company pays dividends to its stockholders which it earns in carrying
on this oil trade. This money the stockholders can and do use as they think
fit, but the company is in no way responsible for the disposition that the
stockholders make of their dividends. The Standard Oil Company does not
own or control "a chain of banks," nor has it any interest directly or
indirectly in any bank. Its relations are confined to the functions of ordinary
banking, such as other depositors have. It buys and sells its own exchange;
and these dealings, extending over many years, have made its bills of
exchange acceptable all over the world.

CHARACTER THE ESSENTIAL THING

In speaking of the real beginning of the Standard Oil Company, it should be
remembered that it was not so much the consolidation of the firms in which
we had a personal interest, but the coming together of the men who had the
combined brain power to do the work, which was the actual starting-point.
Perhaps it is worth while to emphasize again the fact that it is not merely
capital and "plants" and the strictly material things which make up a
business, but the character of the men behind these things, their
personalities, and their abilities; these are the essentials to be reckoned with.
Late in 1871, we began the purchase of some of the more important of the
refinery interests of Cleveland. The conditions were so chaotic and
uncertain that most of the refiners were very desirous to get out of the
business. We invariably offered those who wanted to sell the option of
taking cash or stock in the company. We very much preferred to have them
take the stock, because a dollar in those days looked as large as a cart-
wheel, but as a matter of business policy we found it desirable to offer them
the option, and in most cases they were even precipitate in their choice of
the cash. They knew what a dollar would buy, but they were very sceptical

in regard to the possibilities of resurrecting the oil business and giving any
permanent value to these shares.
These purchases continued over a period of years, during which many of
the more important refineries at Cleveland were bought by the Standard Oil
Company. Some of the smaller concerns, however, continued in the
business for many years, although they had the same opportunity as others
to sell. There were always, at other refining points which were regarded as
more favourably located than Cleveland, many refineries in successful
operation.

THE BACKUS PURCHASE

All these purchases of refineries were conducted with the utmost fairness
and good faith on our part, yet in many quarters the stories of certain of
these transactions have been told in such form as to give the impression that
the sales were made most unwillingly and only because the sellers were
forced to make them by the most ruthless exertion of superior power. There
was one transaction, viz., the purchase of the property of the Backus Oil
Company, which has been variously exploited, and I am made to appear as
having personally robbed a defenceless widow of an extremely valuable
property, paying her therefor only a mere fraction of its worth. The story as
told is one which makes the strongest appeal to the sympathy and, if it were
true, would represent a shocking instance of cruelty in crushing a
defenceless woman. It is probable that its wide circulation and its
acceptance as true by those who know nothing of the facts has awakened
more hostility against the Standard Oil Company and against me personally
than any charge which has been made.
This is my reason for entering so much into detail in this particular case,
which I am exceedingly reluctant to do, and for many years have refrained
from doing.
Mr. F.M. Backus, a highly respected citizen of Cleveland and an old and
personal friend of mine, had for several years prior to his death in 1874
been engaged in the lubricating oil business which was carried on after his
death as a corporation known as the Backus Oil Company. In the latter part
of 1878, our company purchased certain portions of the property of this

company. The negotiations which led to this purchase extended over several
weeks, being conducted on behalf of Mrs. Backus, as the principal
stockholder, by Mr. Charles H. Marr, and on behalf of our company by Mr.
Peter S. Jennings. I personally had nothing to do with the negotiations
except that, when the matter first came up, Mrs. Backus requested me to
call at her house, which I did, when she spoke of selling the property to our
company and requested me to personally conduct the negotiations with her
with reference to it. This I was obliged to decline to do, because, as I then
explained to her, I was not familiar with the details of the business. In that
conversation I advised her not to take any hasty action, and when she
expressed fears about the future of the business, stating, for example, that
she could not get cars to transport sufficient oil, I said to her that, though we
were using our cars and required them in our business, yet we would loan
her any number she needed, and do anything else in reason to assist her, and
I did not see why she could not successfully prosecute her business in the
future as in the past. I told her, however, that if after reflection she desired
to pursue negotiations for the sale of her property some of our people,
familiar with the lubricating oil business, would take up the question with
her. As she still expressed a desire to have our company buy her property,
negotiations were taken up by Mr. Jennings, and the only other thing that I
had to do with the matter was that when our experts reported that in their
judgment the value of the works, good will, and successorship which we
had decided to buy were worth a certain sum, I asked them to add $10,000,
in order to make doubly sure that she received full value. The sale was
consummated, as we supposed, to the entire satisfaction of Mrs. Backus,
and the purchase price which had been agreed upon was paid.
To my profound astonishment, a day or two after the transaction had been
closed, I received from her a very unkind letter complaining that she had
been unjustly treated. After investigating the matter I wrote her the
following letter:
November 13, 1878.
Dear Madam:
I have held your note of the 11th inst., received yesterday, until to-day, as I
wished to thoroughly review every point connected with the negotiations

for the purchase of the stock of the Backus Oil Company, to satisfy myself
as to whether I had unwittingly done anything whereby you could have any
right to feel injured. It is true that in the interview I had with you I
suggested that if you desired to do so, you could retain an interest in the
business of the Backus Oil Company, by keeping some number of its
shares, and then I understood you to say that if you sold out you wished to
go entirely out of the business. That being my understanding, our
arrangements were made in case you concluded to make the sale that
precluded any other interests being represented, and therefore, when you
did make the inquiry as to your taking some of the stock, our answer was
given in accordance with the facts noted above, but not at all in the spirit in
which you refer to the refusal in your note. In regard to the reference that
you make as to my permitting the business of the Backus Oil Company to
be taken from you, I say that in this as in all else you have written in your
letter of the 11th inst., you do me most grievous wrong. It was but of little
moment to the interests represented by me whether the business of the
Backus Oil Company was purchased or not. I believe that it was for your
interest to make the sale, and am entirely candid in this statement, and beg
to call your attention to the time, some two years ago, when you consulted
Mr. Flagler and myself as to selling out your interests to Mr. Rose, at which
time you were desirous of selling at considerably less price, and upon time,
than you have now received in cash, and which sale you would have been
glad to have closed if you could have obtained satisfactory security for the
deferred payments. As to the price paid for the property, it is certainly three
times greater than the cost at which we could now construct equal or better
facilities; but wishing to take a liberal view of it, I urged the proposal of
paying $60,000, which was thought much too high by some of our parties. I
believe that if you would reconsider what you have written in your letter, to
which this is a reply, you must admit having done me great injustice, and I
am satisfied to await upon your innate sense of right for such admission.
However, in view of what seems to be your present feeling, I now offer to
restore to you the purchase made by us, you simply returning the amount of
money which we have invested, and leaving us as though no purchase has
been made.
Should you not desire to accept this proposal, I offer to you 100, 200 or 300
shares of the stock at the same price that we paid for the same, with this

addition, that if we keep the property we are under engagement to pay into
the treasury of the Backus Oil Company any amount which added to the
amount already paid would make a total of $100,000 and thereby make the
shares $100 each.
That you may not be compelled to hastily come to a conclusion, I will leave
open for three days these propositions for your acceptance or declination,
and in the meantime believe me,
Yours very truly,
John D. Rockefeller.
Neither of these offers was accepted. In order that this may not rest on my
unsupported assertion, I submit the following documents: The first is a
letter from Mr. H.M. Backus, a brother of Mrs. Backus's deceased husband,
who had been associated with the business and had remained with the
company after his death. The letter was written without any solicitation
whatever on my part, but I have since received permission from Mr. Backus
to print it. It is followed by extracts from affidavits made by the gentleman
who conducted the negotiations on behalf of Mrs. Backus. I have no wish to
reprint the complimentary allusion to myself in Mr. Backus's letter, but have
feared to omit a word of it lest some misunderstanding ensue:
Bowling Green, Ohio,
September 18, '03.
Mr. John D. Rockefeller,
Cleveland, Ohio.
I do not know whether you will ever receive this letter or not, whether your
secretary will throw it into the waste-basket or not, but I will do my part
and get it off my mind, and it will not be my fault if you do not receive or
read it. Ever since the day that my deceased brother's wife, Mrs. F.N.
Backus, wrote you the unjust and unreasonable letter in reference to the sale
of the property of the old Backus Oil Company, in which I had a small
interest, I have wanted to write you and record my disapproval of that letter.
I lived with my brother's family, was at the house the day you called to talk
the matter of the then proposed purchase of the property with Mrs. Backus

by her request, as she told Mr. Jennings that she wanted to deal through
you. I was in favour of the sale from the first.
I was with Mrs. Backus all through the trouble with Mr. Rose and with Mr.
Maloney, did what I could to encourage her, and to prevent Mr. Rose from
getting the best of her. Mrs. Backus, in my opinion, is an exceptionally
good financier, but she does not know and no one can convince her that the
best thing that ever happened to her financially was the sale of her interest
in the Backus Oil Company to your people. She does not know that five
more years of the then increasing desperate competition would have
bankrupted the company, and that with the big debt that she was carrying on
the lot on Euclid Avenue, near Sheriff Street, she would have been
swamped, and that the only thing that ever saved her and the oil business
generally was the plan of John D. Rockefeller. She thinks that you literally
robbed her of millions, and feeds her children on that diet three times a day
more or less, principally more, until it has become a mania with her, and no
argument that any one else can suggest will have any effect upon her. She is
wise and good in many ways, but on that one subject she is one-sided, I
think. Of course, if we could have been assured of continued dividends, I
would have been opposed to selling the business, but that was out of the
question. I know of the ten thousand dollars that was added to the purchase
price of the property at your request, and I know that you paid three times
the value of the property, and I know that all that ever saved our company
from ruin was the sale of its property to you, and I simply want to ease my
mind by doing justice to you by saying so. After the sale to your company I
was simple enough to go to Buffalo and try it again, but soon met with
defeat and retired with my flag in the dust. I then went to Duluth, and was
on the top wave, till the real-estate bubble broke, and I broke with it. I have
had my ups and downs, but I have tried to take my medicine and look
pleasant instead of sitting down under a juniper tree and blaming my losses
to John D. Rockefeller.
I suppose I would have put off writing this letter for another year or more as
I have done so long, had it not been for a little chat that I had with Mr.
Hanafin, Superintendent of the Buckeye Pipe Line Company, a day or two
since when I was relating the sale, etc., of the old B.O. Co.'s business, and
in that way revived the intention that had lain dormant since the last good

resolution in regard to writing it was made. But it's done now, and off my
mind.
With much respect and admiration to John D. Rockefeller I remain,
Yours truly,
H.M. Backus.
It appears from the affidavits that the negotiations were conducted on behalf
of Mrs. Backus and her company by Charles H. Marr, who had been in the
employ of the Backus Company for some time, and by Mr. Maloney, who
was the superintendent of the company from the time of its organization and
was also a stockholder; and on behalf of the Standard Oil Company by Mr.
Peter S. Jennings.
There has been an impression that the Standard Oil Company purchased for
$79,000 property which was reasonably worth much more, and that this
sacrifice was occasioned by threats and compulsion. Mr. Jennings requested
Mr. Marr to submit a written proposition giving the price put by the Backus
Company upon the several items of property and assets which it desired to
sell. This statement was furnished and was annexed to Mr. Jennings's
affidavit. The Standard Oil Company finally decided not to purchase all of
the assets of the company, but only the oil on hand, for which it paid the full
market price, amounting to about $19,000, and the item "works, good-will,
and successorship," which were offered by Mr. Marr at $71,000, and for
which the Standard offered $60,000, which was promptly accepted. Mr.
Marr made affidavit as follows:
"Charles H. Marr, being duly sworn, says that, in behalf of the Backus Oil
Company, he conducted the negotiations which led to the sale of its works,
good-will, and stock of oils and during same when said company had
offered to sell its entire stock for a gross sum, to wit, the sum of one
hundred and fifty thousand dollars ($150,000), which was to include cash
on hand, accrued dividends, accounts, etc., said Jennings requested said
company to submit an itemized proposition fixing values upon different
articles proposed to be sold, and that he, after full consideration with Mrs.
Backus and with her knowledge and consent, submitted the written
proposition attached to said Jennings's affidavit; that the same is in his

handwriting, and was copied at the office of the American Lubricating Oil
Company from the original by himself at the request of said Jennings, and
said original was submitted by affiant to Mrs. Backus.
"That she was fully cognizant of all the details of said negotiations and the
items and values attached thereto in said proposition, consulted with at
every step thereof, none of which were taken without her advice, as she was
by far the largest stockholder in said Backus Oil Company, owning about
seven-tenths (7/10) of said company's stock, and she fully approved of said
proposition, and accepted the offer of said Jennings to pay sixty thousand
dollars ($60,000) for the item works, good-will, and successorship without
any opposition, so far as affiant knows. And affiant says that the amount
realized from the assets of the Backus Oil Company, including purchase
price, has been about one hundred and thirty-three thousand dollars
($133,000), and a part of its assets have not yet been converted into money
as affiant is informed."
Mr. Marr, who was, it will be remembered, the widow's representative,
refers to the negotiations leading up to the purchase and says:
"But affiant says that nothing that was said by Mr. Jennings or anybody else
during their progress could be construed into a threat, nor did anything that
was said or done by said Jennings hasten or push forward said trade."
He also says:
"Affiant says that the negotiations extended over a period of from two to
three weeks ... and during their pendency that Mrs. Backus frequently urged
affiant to bring the same to a conclusion as she was anxious to dispose of
said business and relieve herself from further care and responsibility
therewith. And when the said offer of purchase by said Jennings upon the
terms aforesaid was conveyed to her by affiant, she expressed herself as
entirely satisfied therewith."
Mr. Maloney made an affidavit that he was superintendent of the Backus
Oil Company from the time of its organization, and also a stockholder in the
company, and had been associated in business with Mr. Backus for many
years previous to his death; that he took part in the negotiations for the sale,

representing Mrs. Backus in the matter. After speaking of the negotiations,
he says:
"Finally, after consultation, the proposition was made by her to dispose of
the works, good-will, and successorship for $71,000. A few days after the
proposal was made to her to pay the sum of $60,000 for works and good-
will, and to take the oil on hand at its market price, which proposition she
accepted, and the sale was concluded.
"During these negotiations Mrs. Backus was anxious to sell, and was
entirely satisfied with the sale after it was concluded. I know of the fact that
about a year and a half previous she had offered to sell out the stock of the
Backus Oil Company at from 30 to 33 per cent. less than she received in the
sale referred to, and the value of the works and property sold had not
increased in the meantime. I was well acquainted with the works of the
Backus Oil Company and their value. I could at the time of the sale have
built the works new for $25,000. There were no threats nor intimidations,
nor anything of the kind used to force the sale. The negotiations were
pleasant and fair, and the price paid in excess of the value, and satisfactory
to Mrs. Backus and all concerned for her."
So far as I can see, after more than 30 years have elapsed, there was nothing
but the most kindly and considerate treatment of Mrs. Backus on the part of
the Standard Oil Company. I regret that Mrs. Backus did not take at least
part of her pay in Standard certificates, as we suggested she should do.

THE QUESTION OF REBATES

Of all the subjects which seem to have attracted the attention of the public
to the affairs of the Standard Oil Company, the matter of rebates from
railroads has perhaps been uppermost. The Standard Oil Company of Ohio,
of which I was president, did receive rebates from the railroads prior to
1880, but received no advantages for which it did not give full
compensation. The reason for rebates was that such was the railroads'
method of business. A public rate was made and collected by the railroad
companies, but, so far as my knowledge extends, was seldom retained in
full; a portion of it was repaid to the shippers as a rebate. By this method
the real rate of freight which any shipper paid was not known by his

competitors nor by other railroad companies, the amount being a matter of
bargain with the carrying company. Each shipper made the best bargain that
he could, but whether he was doing better than his competitor was only a
matter of conjecture. Much depended upon whether the shipper had the
advantage of competition of carriers.
The Standard Oil Company of Ohio, being situated at Cleveland, had the
advantage of different carrying lines, as well as of water transportation in
the summer; taking advantage of those facilities, it made the best bargains
possible for its freights. Other companies sought to do the same. The
Standard gave advantages to the railroads for the purpose of reducing the
cost of transportation of freight. It offered freights in large quantity, car-
loads and train-loads. It furnished loading facilities and discharging
facilities at great cost. It provided regular traffic, so that a railroad could
conduct its transportation to the best advantage and use its equipment to the
full extent of its hauling capacity without waiting for the refiner's
convenience. It exempted railroads from liability for fire and carried its own
insurance. It provided at its own expense terminal facilities which permitted
economies in handling. For these services it obtained contracts for special
allowances on freights.
But notwithstanding these special allowances, this traffic from the Standard
Oil Company was far more profitable to the railroad companies than the
smaller and irregular traffic, which might have paid a higher rate.
To understand the situation which affected the giving and taking of rebates
it must be remembered that the railroads were all eager to enlarge their
freight traffic. They were competing with the facilities and rates offered by
the boats on lake and canal and by the pipe-lines. All these means of
transporting oil cut into the business of the railroads, and they were
desperately anxious to successfully meet this competition. As I have stated
we provided means for loading and unloading cars expeditiously, agreed to
furnish a regular fixed number of car-loads to transport each day, and
arranged with them for all the other things that I have mentioned, the final
result being to reduce the cost of transportation for both the railroads and
ourselves. All this was following in the natural laws of trade.

PIPE-LINES VS. RAILROADS

The building of the pipe-lines introduced another formidable competitor to
the railroads, but as oil could be transported by pumping through pipes at a
much less cost than by hauling in tank-cars in a railroad train the
development of the pipe-line was inevitable. The question was simply
whether the oil traffic was sufficient in volume to make the investment
profitable. When pipe-lines had been built to oil fields where the wells had
ceased to yield, as often happened, they were about the most useless
property imaginable.
An interesting feature developed through the relations which grew up
between the railroads and the pipe-lines. In many cases it was necessary to
combine the facilities of both, because the pipes reached only part of the
way, and from the place where they ended the railroad carried the oil to its
final destination. In some instances a railroad had formerly carried the oil
the entire distance upon an agreed rate, but now that this oil was partly
pumped by pipe-lines and partly carried by rail, the freight payment was
divided between the two. But, as a through rate had been provided, the
owners of the pipe-line agreed to remit a part of its charges to the railroad,
so we had cases where the Standard paid a rebate to the railroad instead of
the reverse—but I do not remember having heard any complaint of this
coming from the students of these complicated subjects.
The profits of the Standard Oil Company did not come from advantages
given by railroads. The railroads, rather, were the ones who profited by the
traffic of the Standard Oil Company, and whatever advantage it received in
its constant efforts to reduce rates of freight was only one of the many
elements of lessening cost to the consumer which enabled us to increase our
volume of business the world over because we could reduce the selling
price.
How general was the complicated bargaining for rates can hardly be
imagined; everyone got the best rate that he could. After the passage of the
Interstate Commerce Act, it was learned that many small companies which
shipped limited quantities had received lower rates than we had been able to
secure, notwithstanding the fact that we had made large investments to
provide for terminal facilities, regular shipments, and other economies. I
well remember a bright man from Boston who had much to say about
rebates and drawbacks. He was an old and experienced merchant, and

looked after his affairs with a cautious and watchful eye. He feared that
some of his competitors were doing better than he in bargaining for rates,
and he delivered himself of this conviction:
"I am opposed on principle to the whole system of rebates and drawbacks—
unless I am in it."

CHAPTER V
Other Business Experiences and Business Principles

Going into the iron-ore fields was one of those experiences in which one
finds oneself rather against the will, for it was not a deliberate plan of mine
to extend my cares and responsibilities. My connection with iron ores came
about through some unfortunate investments in the Northwest country.
These interests had included a good many different industries, mines, steel
mills, paper mills, a nail factory, railroads, lumber fields, smelting
properties, and other investments about which I have now forgotten. I was a
minority stockholder in all these enterprises, and had no part in their
management. Not all of them were profitable. As a matter of fact, for a
period of years just preceding the panic of 1893, values were more or less
inflated, and many people who thought they were wealthy found that the
actual facts were quite different from what they had imagined when the
hard experiences of that panic forced upon them the unpalatable truth.
Most of these properties I had not even seen, having relied upon the
investigation of others respecting their worth; indeed, it has never been my
custom to rely alone upon my own knowledge of the value of such plants. I
have found other people who knew much better than I how to investigate
such enterprises.
Even at this time I had been planning to relieve myself of business cares,
and the panic only caused me to postpone taking the long holiday to which I
had been looking forward. I was fortunate in making the acquaintance of
Mr. Frederick T. Gates, who was then engaged in some work in connection
with the American Baptist Education Society, which required him to travel
extensively over the country, north, south, east, and west.
It occurred to me that Mr. Gates, who had a great store of common sense,
though no especial technical information about factories and mills, might
aid me in securing some first-hand information as to how these concerns
were actually prospering. Once, as he was going South, I suggested that he

look over an iron mill in which I had some interest which happened to be on
his route.
His report was a model of what such a report should be. It stated the facts,
and in this case they were almost all unfavourable. A little later he happened
to be going West, and I gave him the name and address of property in that
region in which I held a minority interest. I felt quite sure that this particular
property was doing well, and it was somewhat of a shock to me to learn
through his clear and definite account that it was only a question of time
before this enterprise, too, which had been represented as rolling in money,
would get into trouble if things kept on as they were going.

NURSING THE COMMERCIALLY ILL

I then arranged with Mr. Gates to accept a position whereby he could help
me unravel these tangled affairs, and become, like myself, a man of
business, but it was agreed between us that he should not abandon his larger
and more important plans for working out some philanthropic aspirations
that he had.
Right here I may stop to give credit to Mr. Gates for possessing a
combination of rare business ability, very highly developed and very
honourably exercised, overshadowed by a passion to accomplish some great
and far-reaching benefits to mankind, the influence of which will last. He is
the chairman of the General Education Board and active in many other
boards, and for years he has helped in the various plans that we have been
interested in where money was given in the hope that it would do something
more than temporary service.
Mr. Gates has for many years been closely associated with my personal
affairs. He has been through strenuous times with me, and has taken cares
of many kinds off my shoulders, leaving me more time to play golf, plan
roads, move trees, and follow other congenial occupations. His efforts in the
investigations in connection with our educational contributions, our medical
research, and other kindred works have been very successful. During the
last ten or twelve years my son has shared with Mr. Gates the responsibility
of this work, and more recently Mr. Starr J. Murphy has also joined with us

to help Mr. Gates, who has borne the heat and burden of the day, and has
well earned some leisure which we have wanted him to enjoy.
But to return to the story of our troubled investments: Mr. Gates went into
the study of each of these business concerns, and did the best he could with
them. It has been our policy never to allow a company in which we had an
interest to be thrown into the bankruptcy court if we could prevent it; for
receiverships are very costly in many ways and often involve heavy
sacrifices of genuine values. Our plan has been to stay with the institution,
nurse it, lend it money when necessary, improve facilities, cheapen
production, and avail ourselves of the opportunities which time and
patience are likely to bring to make it self-sustaining and successful. So we
went carefully through the affairs of these crippled enterprises in the hard
times of 1893 and 1894, carrying many of them for years after; sometimes
buying the interests of others and sometimes selling our own interest, but all
or nearly all escaped the expenses and humiliation of bankruptcy,
receivership, and foreclosure.
Before these matters were entirely closed up we had a vast amount of
experience in the doctoring of the commercially ill. My only excuse for
dwelling upon the subject at this late day is to point out the fact to some
business men who get discouraged that much can be done by careful and
patient attention, even when the business is apparently in very deep water. It
requires two things: some added capital, put in by one's self or secured from
others, and a strict adherence to the sound natural laws of business.

THE ORE MINES

Among these investments were some shares in a number of ore mines and
an interest in the stocks and bonds of a railroad being built to carry the ore
from the mines to lake ports. We had great faith in these mines, but to work
them the railroad was necessary. It had been begun, but in the panic of 1893
it and all other developments were nearly ruined. Although we were
minority holders of the stock, it seemed to be "up to us" to keep the
enterprise alive through the harrowing panic days. I had to loan my personal
securities to raise money, and finally we were compelled to supply a great
deal of actual cash, and to get it we were obliged to go into the then greatly
upset money market and buy currency at a high premium to ship west by

express to pay the labourers on the railroad and to keep them alive. When
the fright of the panic period subsided, and matters became a little more
settled, we began to realize our situation. We had invested many millions,
and no one wanted to go in with us to buy stock. On the contrary,
everybody else seemed to want to sell. The stock was offered to us in
alarming quantities—substantially all of the capital stock of the companies
came without any solicitation on our part—quite the contrary—and we paid
for it in cash.
We now found ourselves in control of a great amount of ore lands, from
some of which the ore could be removed by a steam shovel for a few cents
a ton, but we still faced a most imperfect and inadequate method of
transporting the ore to market.
When we realized that events were shaping themselves so that to protect
our investments we should be obliged to go into the business of selling in a
large way, we felt that we must not stop short of doing the work as
effectively as possible; and having already put in so much money, we
bought all the ore land that we thought was good that was offered to us. The
railroad and the ships were only a means to an end. The ore lands were the
crux of the whole matter, and we believed that we could never have too
many good mines.
It was a surprise to me that the great iron and steel manufacturers did not
place what seemed to be an adequate value on these mines. The lands which
contained a good many of our best ore mines could have been purchased
very cheaply before we became interested. Having launched ourselves into
the venture, we decided to supply ore to every one who needed it, by
mining and transporting with the newest and most effective facilities, and
our profits we invested in more ore lands.
Mr. Gates became the president of the various companies which owned the
mines and the railroad to the lake to transport the ores, and he started to
learn and develop the business of ore mining and transportation. He not
only proved to be an apt scholar, but he really mastered the various
complexities of the business. He did all the work, and only consulted me
when he wished to; yet I remember several interesting experiences
connected with the working out of these problems.

BUILDING THE SHIPS

After this railroad problem was solved, it was apparent that we needed our
own ships to transport the ore down the lakes. We knew absolutely nothing
of building ships for ore transportation, and so, following out our custom,
we went to the man who, in our judgment, had the widest knowledge of the
subject. He was already well known to us, but was in the ore transportation
business on a large scale on his own account and, of course, the moment we
began to ship ore we realized that we would become competitors. Mr. Gates
got into communication with this expert, and came with him one evening to
my house in New York just before dinner. He said he could stay only a few
minutes, but I told him that I thought we could finish up our affairs in ten
minutes and we did. This is the only time I remember seeing personally any
one on the business of the ore company. All the conferences, as I said
before, were carried on by Mr. Gates, who seemed to enjoy work, and he
has had abundant privileges in that direction.
We explained to this gentleman that we were proposing to transport our ore
from these Lake Superior lands ourselves, and that we should like to have
him assume charge of the construction of several ships, to be of the largest
and most approved type, for our chance of success lay in having boats
which could be operated with the greatest efficiency. At that time the largest
ships carried about five thousand tons, but in 1900, when we sold out, we
had ships that carried seven thousand or eight thousand tons, and now there
are some that transport as much as ten thousand tons and more.
This expert naturally replied that as he was in the ore-carrying trade
himself, he had no desire to encourage us to go into it. We explained to him
that as we had made this large investment, it seemed to us to be necessary
for the protection of our interests to control our own lake carriers, so we had
decided to mine, ship, and market the ore; that we came to him because he
could plan and superintend the construction of the best ships for us, and that
we wanted to deal with him for that reason; that notwithstanding that he
represented one of the largest firms among our competitors, we knew that
he was honest and straightforward; and that we were most anxious to deal
with him.

EMPLOYING A COMPETITOR

He still demurred, but we tried to convince him that we were not to be
deterred from going into the trade, and that we were willing to pay him a
satisfactory commission for looking after the building of the ships.
Somebody, we explained, was going to do the work for us, and he might as
well have the profit as the next man. This argument finally seemed to
impress him and we then and there closed an agreement, the details of
which were worked out afterward to our mutual satisfaction. This
gentleman was Mr. Samuel Mather of Cleveland. He spent only a few
minutes in the house, during which time we gave him the order for about
$3,000,000 worth of ships and this was the only time I saw him. But Mr.
Mather is a man of high business honour, we trusted him implicitly
although he was a competitor, and we never had occasion to regret it.
At that time there were some nine or ten shipbuilding companies located at
various points on the Great Lakes. All were independent of each other and
there was sharp competition between them. Times were pretty hard with
them; their business had not yet recovered from the panic of 1893, they
were not able to keep their works in full operation; it was in the fall of the
year and many of their employees were facing a hard winter. We took this
into account in considering how many ships we should build, and we made
up our minds that we would build all the ships that could be built and give
employment to the idle men on the Great Lakes. Accordingly we instructed
Mr. Mather to write to each firm of shipbuilders and ascertain how many
ships they could build and put in readiness for operation at the opening of
navigation the next spring. He found that some companies could build one,
some could build two, and that the total number would be twelve.
Accordingly we asked him to have constructed twelve ships, all of steel, all
of the largest capacity then understood to be practicable on the Great Lakes.
Some of them were to be steamships and some consorts, for towing, but all
were to be built on substantially the same general pattern, which was to
represent the best ideals then prevalent for ore-carrying ships.
In giving such an order he was exposed, of course, to the risk of paying
very high prices. This would have been certain if Mr. Mather had
announced in advance that he was prepared to build twelve ships and asked
bids on them. Just how he managed it I was not told until long after, and

though it is now an old story of the lakes I repeat it as it may be new to
many. Mr. Mather kept the secret of the number of ships he wished to
construct absolutely to himself. He sent his plans and specifications, each
substantially a duplicate of the others, to each of the firms, and asked each
firm to bid on one or two ships as the case might be. All naturally supposed
that at most only two ships were to be built, and each was extremely eager
to get the work, or at least one of the two vessels.
On the day before the contracts were to be let, all the bidders were in
Cleveland on the invitation of Mr. Mather. One by one they were taken into
his private office for special conference covering all the details preparatory
to the final bid. At the appointed hour the bids were in. Deep was the
interest on the part of all the gentlemen as to who would be the lucky one to
draw the prize. Mr. Mather's manner had convinced each that somehow he
himself must be the favoured bidder, yet when he came to meet his
competitors in the hotel lobby the beams of satisfaction which plainly
emanated from their faces also compelled many heart searchings.
At last the crucial hour came, and at about the same moment each
gentleman received a little note from Mr. Mather, conveying to him the
tidings that to him had been awarded a contract sufficient to supply his
works to their utmost capacity. They all rushed with a common impulse to
the hotel lobby where they had been accustomed to meet, each bent on
displaying his note and commiserating his unsuccessful rivals, only to
discover that each had a contract for all he could do, and that each had been
actually bidding against nobody but himself. Great was the hilarity which
covered their chagrin when they met and compared notes and looked into
each others' faces. However, all were happy and satisfied. But it may be
said in passing that these amiable gentlemen all united subsequently in one
company, which has had a highly satisfactory career, and that we paid a
more uniform price for our subsequent purchases of ships after the
combination had been made.

A LANDSMAN FOR SHIP MANAGER

With these ships ordered, we were fairly at the beginning of the ore
enterprise. But we realized that we had to make some arrangement to
operate the ships, and we again turned to our competitor, Mr. Mather, in the

hope that he would add this to his cares. Unfortunately, because of his
obligations to others, he felt that this was impractical. I asked Mr. Gates one
day soon after this:
"How are we to get some one to run these big ships we have ordered? Do
you know of any experienced firm?"
"No," said Mr. Gates, "I do not know of any firm to suggest at the moment,
but why not run them ourselves?"
"You don't know anything about ships, do you?"
"No," he admitted, "but I have in mind a man who I believe could do it,
although when I tell you about him I fear you will think that his
qualifications are not the best. However, he has the essentials. He lives up
the state, and never was on a ship in his life. He probably wouldn't know the
bow from the stern, or a sea-anchor from an umbrella, but he has good
sense, he is honest, enterprising, keen, and thrifty. He has the art of quickly
mastering a subject even though it be new to him and difficult. We still have
some months before the ships will be completed, and if we put him to work
now, he will be ready to run the ships as soon as they are ready to be run."
"All right," I said, "let's give him the job," and we did.
That man was Mr. L.M. Bowers; he came from Broome County, New York.
Mr. Bowers went from point to point on the lakes where the boats were
building, and studied them minutely. He was quickly able to make valuable
suggestions about their construction, which were approved and adopted by
the designers. When the vessels were finished, he took charge of them from
the moment they floated, and he managed these and the dozens which
followed with a skill and ability that commanded the admiration of all the
sailors on the lakes. He even invented an anchor which he used with our
fleet, and later it was adopted by other vessels, and I have heard that it is
used in the United States Navy. He remained in his position until we sold
out. We have given Mr. Bowers all sorts of hard tasks since we retired from
the lake traffic and have found him always successful. Lately the health of a
member of his family has made it desirable for him to live in Colorado, and
he is now the vigorous and efficient vice-president of the Colorado Fuel and
Iron Company.

The great ships and the railroad put us in possession of the most favourable
facilities. From the first the organization was successful. We built up a huge
trade, mining and carrying ore to Cleveland and other lake ports. We kept
on building and developing until finally the fleet grew until it included
fifty-six large steel vessels, This enterprise, in common with many other
important business undertakings in which I was interested, required very
little of my personal attention, owing to my good fortune in having active,
competent, and thoroughly reliable representatives who assumed so largely
the responsibilities of administration. It gives me pleasure to state that the
confidence which I have freely given to business men with whom I have
been associated has been so fully justified.

SELLING TO THE STEEL COMPANY

The work went on uninterruptedly and prosperously until the formation of
the United States Steel Corporation. A representative of this corporation
came to see us about selling the land, the ore, and the fleet of ships. The
business was going on smoothly, and we had no pressing need to sell, but as
the organizer of the new company felt that our mines and railroads and
ships were a necessary part of the scheme, we told him we would be
pleased to facilitate the completion of the great undertaking. They had, I
think, already closed with Mr. Carnegie for his various properties. After
some negotiation, they made an offer which we accepted, whereby the
whole plant—mines, ships, railway, etc.—should become a part of the
United States Steel Corporation. The price paid was, we felt, very moderate
considering the present and prospective value of the property.
This transaction bids fair to show a great profit to the Steel Company for
many years, and as our payment was largely in the securities of the
company we had the opportunity to participate in this prosperity. And so,
after a period of about seven years, I went out of all association with the
mining, the transporting, and the selling of iron ore.

FOLLOW THE LAWS OF TRADE

Going over again in my mind the events connected with this ore experience
that grew out of investments that seemed at the time, to say the least, rather

unpromising, I am impressed anew with the importance of a principle I
have often referred to. If I can make this point clear to the young man who
has had the patience to follow these Reminiscences so far, it will be a
satisfaction to me and I hope it may be a benefit to him.
The underlying, essential element of success in business affairs is to follow
the established laws of high-class dealing. Keep to broad and sure lines, and
study them to be certain that they are correct ones. Watch the natural
operations of trade, and keep within them. Don't even think of temporary or
sharp advantages. Don't waste your effort on a thing which ends in a petty
triumph unless you are satisfied with a life of petty success. Be sure that
before you go into an enterprise you see your way clear to stay through to a
successful end. Look ahead. It is surprising how many bright business men
go into important undertakings with little or no study of the controlling
conditions they risk their all upon.
Study diligently your capital requirements, and fortify yourself fully to
cover possible set-backs, because you can absolutely count on meeting set-
backs. Be sure that you are not deceiving yourself at any time about actual
conditions. The man who starts out simply with the idea of getting rich
won't succeed; you must have a larger ambition. There is no mystery in
business success. The great industrial leaders have told again and again the
plain and obvious fact that there can be no permanent success without fair
dealing that leads to wide-spread confidence in the man himself, and that is
the real capital we all prize and work for. If you do each day's task
successfully, and stay faithfully within these natural operations of
commercial laws which I talk so much about, and keep your head clear, you
will come out all right, and will then, perhaps, forgive me for moralizing in
this old-fashioned way. It is hardly necessary to caution a young man who
reads so sober a book as this not to lose his head over a little success, or to
grow impatient or discouraged by a little failure.

PANIC EXPERIENCES

I had desired to retire from business in the early nineties. Having begun
work so young, I felt that at fifty it was due me to have freedom from
absorption in active business affairs and to devote myself to a variety of
interests other than money making, which had claimed a portion of my time

since the beginning of my business career. But 1891-92 were years of
ominous outlook. In 1893 the storm broke, and I had many investments to
care for, as I have already related. This year and the next was a trying
period of grave anxiety to every one. No one could retire from work at such
a time. In the Standard we continued to make progress even through all
these panic years, as we had large reserves of cash on account of our very
conservative methods of financing. In 1894 or 1895 I was able to carry out
my plans to be relieved from any association with the actual management of
the company's affairs. From that time, as I have said, I have had little or no
part in the conduct of the business.
Since 1857 I can remember all the great panics, but I believe the panic of
1907 was the most trying. No one escaped from it, great or small. Important
institutions had to be supported and carried through the time of distrust and
unreasoning fear. To Mr. Morgan's real and effective help I should join with
other business men and give great praise. His commanding personality
served a most valuable end. He acted quickly and resolutely when
quickness and decision were the things most needed to regain confidence,
and he was efficiently seconded by many able and leading financiers of the
country who coöperated courageously and effectively to restore confidence
and prosperity. The question has been asked if I think we shall revive
quickly from the panic of October, 1907. I hesitate to speak on the subject,
since I am not a prophet nor the son of a prophet; but as to the ultimate
outcome there is, of course, no doubt. This temporary set-back will lead to
safer institutions and more conservative management upon the part of every
one, and this is a quality we need. It will not long depress our wonderful
spirit of initiative. The country's resources have not been cut down nor
injured by financial distrust. A gradual recovery will only tend to make the
future all the more secure, and patience is a virtue in business affairs as in
other things.
Here again I would venture to utter a word of caution to business men. Let
them study their own affairs frankly, and face the truth. If their methods are
extravagant, let them realize the facts and act accordingly. One cannot
successfully go against natural tendencies, and it is folly to fail to recognize
them. It is not easy for so impressionable and imaginative a people as we
Americans are to come down to plain, hard facts, yet we are doing it
without loss of self-esteem or prestige throughout the world.

CHAPTER VI
The Difficult Art of Giving

It is, no doubt, easy to write platitudes and generalities about the joys of
giving, and the duty that one owes to one's fellow men, and to put together
again all the familiar phrases that have served for generations whenever the
subject has been taken up.
I can hardly hope to succeed in starting any new interest in this great
subject when gifted writers have so often failed. Yet I confess I find much
more interest in it at this time than in rambling on, as I have been doing,
about the affairs of business and trade. It is most difficult, however, to dwell
upon a very practical and business-like side of benefactions generally,
without seeming to ignore, or at least to fail to appreciate fully, the spirit of
giving which has its source in the heart, and which, of course, makes it all
worth while.
In this country we have come to the period when we can well afford to ask
the ablest men to devote more of their time, thought, and money to the
public well-being. I am not so presumptuous as to attempt to define exactly
what this betterment work should consist of. Every man will do that for
himself, and his own conclusion will be final for himself. It is well, I think,
that no narrow or preconceived plan should be set down as the best.
I am sure it is a mistake to assume that the possession of money in great
abundance necessarily brings happiness. The very rich are just like all the
rest of us; and if they get pleasure from the possession of money, it comes
from their ability to do things which give satisfaction to someone besides
themselves.

LIMITATIONS OF THE RICH

The mere expenditure of money for things, so I am told by those who
profess to know, soon palls upon one. The novelty of being able to purchase

anything one wants soon passes, because what people most seek cannot be
bought with money. These rich men we read about in the newspapers
cannot get personal returns beyond a well-defined limit for their
expenditure. They cannot gratify the pleasures of the palate beyond very
moderate bounds, since they cannot purchase a good digestion; they cannot
lavish very much money on fine raiment for themselves or their families
without suffering from public ridicule; and in their homes they cannot go
much beyond the comforts of the less wealthy without involving them in
more pain than pleasure. As I study wealthy men, I can see but one way in
which they can secure a real equivalent for money spent, and that is to
cultivate a taste for giving where the money may produce an effect which
will be a lasting gratification.
A man of business may often most properly consider that he does his share
in building up a property which gives steady work for few or many people;
and his contribution consists in giving to his employees good working
conditions, new opportunities, and a strong stimulus to good work. Just so
long as he has the welfare of his employees in his mind and follows his
convictions, no one can help honouring such a man. It would be the
narrowest sort of view to take, and I think the meanest, to consider that
good works consist chiefly in the outright giving of money.

THE BEST PHILANTHROPY

The best philanthropy, the help that does the most good and the least harm,
the help that nourishes civilization at its very root, that most widely
disseminates health, righteousness, and happiness, is not what is usually
called charity. It is, in my judgment, the investment of effort or time or
money, carefully considered with relation to the power of employing people
at a remunerative wage, to expand and develop the resources at hand, and to
give opportunity for progress and healthful labour where it did not exist
before. No mere money-giving is comparable to this in its lasting and
beneficial results.
If, as I am accustomed to think, this statement is a correct one, how vast
indeed is the philanthropic field! It may be urged that the daily vocation of
life is one thing, and the work of philanthropy quite another. I have no

sympathy with this notion. The man who plans to do all his giving on
Sunday is a poor prop for the institutions of the country.
The excuse for referring so often to the busy man of affairs is that his help
is most needed. I know of men who have followed out this large plan of
developing work, not as a temporary matter, but as a permanent principle.
These men have taken up doubtful enterprises and carried them through to
success often at great risk, and in the face of great scepticism, not as a
matter only of personal profit, but in the larger spirit of general uplift.

DISINTERESTED SERVICE THE ROAD TO SUCCESS

If I were to give advice to a young man starting out in life, I should say to
him: If you aim for a large, broad-gauged success, do not begin your
business career, whether you sell your labour or are an independent
producer, with the idea of getting from the world by hook or crook all you
can. In the choice of your profession or your business employment, let your
first thought be: Where can I fit in so that I may be most effective in the
work of the world? Where can I lend a hand in a way most effectively to
advance the general interests? Enter life in such a spirit, choose your
vocation in that way, and you have taken the first step on the highest road to
a large success. Investigation will show that the great fortunes which have
been made in this country, and the same is probably true of other lands,
have come to men who have performed great and far-reaching economic
services—men who, with great faith in the future of their country, have
done most for the development of its resources. The man will be most
successful who confers the greatest service on the world. Commercial
enterprises that are needed by the public will pay. Commercial enterprises
that are not needed fail, and ought to fail.
On the other hand, the one thing which such a business philosopher would
be most careful to avoid in his investments of time and effort or money, is
the unnecessary duplication of existing industries. He would regard all
money spent in increasing needless competition as wasted, and worse. The
man who puts up a second factory when the factory in existence will supply
the public demand adequately and cheaply is wasting the national wealth
and destroying the national prosperity, taking the bread from the labourer
and unnecessarily introducing heartache and misery into the world.

Probably the greatest single obstacle to the progress and happiness of the
American people lies in the willingness of so many men to invest their time
and money in multiplying competitive industries instead of opening up new
fields, and putting their money into lines of industry and development that
are needed. It requires a better type of mind to seek out and to support or to
create the new than to follow the worn paths of accepted success; but here
is the great chance in our still rapidly developing country. The penalty of a
selfish attempt to make the world confer a living without contributing to the
progress or happiness of mankind is generally a failure to the individual.
The pity is that when he goes down he inflicts heartache and misery also on
others who are in no way responsible.

THE GENEROSITY OF SERVICE

Probably the most generous people in the world are the very poor, who
assume each other's burdens in the crises which come so often to the hard
pressed. The mother in the tenement falls ill and the neighbour in the next
room assumes her burdens. The father loses his work, and neighbours
supply food to his children from their own scanty store. How often one
hears of cases where the orphans are taken over and brought up by the poor
friend whose benefaction means great additional hardship! This sort of
genuine service makes the most princely gift from superabundance look
insignificant indeed. The Jews have had for centuries a precept that one-
tenth of a man's possessions must be devoted to good works, but even this
measure of giving is but a rough yardstick to go by. To give a tenth of one's
income is wellnigh an impossibility to some, while to others it means a
miserable pittance. If the spirit is there, the matter of proportion is soon lost
sight of. It is only the spirit of giving that counts, and the very poor give
without any self-consciousness. But I fear that I am dealing with
generalities again.
The education of children in my early days may have been straightlaced, yet
I have always been thankful that the custom was quite general to teach
young people to give systematically of money that they themselves had
earned. It is a good thing to lead children to realize early the importance of
their obligations to others but, I confess, it is increasingly difficult; for what
were luxuries then have become commonplaces now. It should be a greater

pleasure and satisfaction to give money for a good cause than to earn it, and
I have always indulged the hope that during my life I should be able to help
establish efficiency in giving so that wealth may be of greater use to the
present and future generations.
Perhaps just here lies the difference between the gifts of money and of
service. The poor meet promptly the misfortunes which confront the home
circle and household of the neighbour. The giver of money, if his
contribution is to be valuable, must add service in the way of study, and he
must help to attack and improve underlying conditions. Not being so
pressed by the racking necessities, it is he that should be better able to
attack the subject from a more scientific standpoint; but the final analysis is
the same: his money is a feeble offering without the study behind it which
will make its expenditure effective.
Great hospitals conducted by noble and unselfish men and women are doing
wonderful work; but no less important are the achievements in research that
reveal hitherto unknown facts about diseases and provide the remedies by
which many of them can be relieved or even stamped out.
To help the sick and distressed appeals to the kind-hearted always, but to
help the investigator who is striving successfully to attack the causes which
bring about sickness and distress does not so strongly attract the giver of
money. The first appeals to the sentiments overpoweringly, but the second
has the head to deal with. Yet I am sure we are making wonderful advances
in this field of scientific giving. All over the world the need of dealing with
the questions of philanthropy with something beyond the impulses of
emotion is evident, and everywhere help is being given to those heroic men
and women who are devoting themselves to the practical and essentially
scientific tasks. It is a good and inspiring thing to recall occasionally the
heroism, for example, of the men who risked and sacrificed their lives to
discover the facts about yellow fever, a sacrifice for which untold
generations will bless them; and this same spirit has animated the
professions of medicine and surgery.

SCIENTIFIC RESEARCH

How far may this spirit of sacrifice properly extend? A great number of
scientific men every year give up everything to arrive at some helpful
contribution to the sum of human knowledge, and I have sometimes thought
that good people who lightly and freely criticize their actions scarcely
realize just what such criticism means. It is one thing to stand on the
comfortable ground of placid inaction and put forth words of cynical
wisdom, and another to plunge into the work itself and through strenuous
experience earn the right to express strong conclusions.
For my own part, I have stood so much as a placid onlooker that I have not
had the hardihood even to suggest how people so much more experienced
and wise in those things than I should work out the details even of those
plans with which I have had the honour to be associated.
There has been a good deal of criticism, no doubt sincere, of experiments
on living dumb animals, and the person who stands for the defenceless
animal has such an overwhelming appeal to the emotions that it is perhaps
useless to allude to the other side of the controversy. Dr. Simon Flexner, of
the Institute for Medical Research, has had to face exaggerated and even
sensational reports, which have no basis of truth whatever. But consider for
a moment what has been accomplished recently, under the direction of Dr.
Flexner in discovering a remedy for epidemic cerebro-spinal meningitis. It
is true that in discovering this cure the lives of perhaps fifteen animals were
sacrificed, as I learn, most of them monkeys; but for each one of these
animals which lost its life, already scores of human lives have been saved.
Large-hearted men like Dr. Flexner and his associates do not permit
unnecessary pain to defenceless animals.
I have been deeply interested in the story of a desperate experiment to save
a child's life, told in a letter written by one of my associates soon after the
event described; and it seems worthy of repeating. Dr. Alexis Carrel has
been associated with Dr. Flexner and his work, and his wonderful skill has
been the result of his experiments and experiences.

A WONDERFUL SURGICAL OPERATION
"Dr. Alexis Carrel, one of the Institute's staff, has been making some
interesting studies in experimental surgery, and has successfully
transplanted organs from one animal to another, and blood vessels from one
species to another. He had the opportunity recently of applying the skill thus
acquired to the saving of a human life under circumstances which attracted
great interest among the medical fraternity of this city. One of the best
known of the younger surgeons in New York had a child born early last
March, which developed a disease in which the blood, for some reason,
exudes from the blood vessels into the tissues of the body, and ordinarily
the child dies of this internal hemorrhage. When this child was five days old
it was evident that it was dying. The father and his brother, who is one of
the most distinguished men in the profession, and one or two other doctors
were in consultation with reference to it, but considered the case entirely
hopeless.
"It so happened that the father had been impressed with the work which Dr.
Carrel had been doing at the Institute, and had spent several days with him
studying his methods. He became convinced that the only possibility of
saving the child's life was by the direct transfusion of blood. While this has
been done between adults, the blood vessels of a young infant are so
delicate that it seemed impossible that the operation could be successfully
carried on. It is necessary not only that the blood vessels of the two persons
should be united together, but it must be done in such a way that the interior
lining of the vessels, which is a smooth, shiny tissue, should be continuous.
If the blood comes in contact with the muscular coat of the blood vessels, it
will clot and stop the circulation.
"Fortunately, Dr. Carrel had been experimenting on the blood vessels of
some very young animals, and the father was convinced that if any man in
the country could perform the operation successfully, it would be he.
"It was then the middle of the night. But Dr. Carrel was called on, and when
the situation was explained to him, and it was made clear that the child
would die anyhow, he readily consented to attempt the operation, although
expressing very slight hope of its successful outcome.

"The father offered himself as the person whose blood should be furnished
to the child. It was impossible to give anæsthetics to either of them. In a
child of that age there is only one vein large enough to be used, and that is
in the back of the leg, and deep seated. A prominent surgeon who was
present exposed this vein. He said afterward that there was no sign of life in
the child, and expressed the belief that the child had been, to all intents and
purposes, dead for ten minutes. In view of its condition he raised the
question whether it was worth while to proceed further with the attempt.
The father, however, insisted upon going on, and the surgeon then exposed
the radial artery in the surgeon's wrist, and was obliged to dissect it back
about six inches, in order to pull it out far enough to make the connection
with the child's vein.
"This part of the work the surgeon who did it afterward described as the
'blacksmith part of the job.' He said that the child's vein was about the size
of a match and the consistency of wet cigarette paper, and it seemed utterly
impossible for anyone to successfully unite these two vessels. Dr. Carrel,
however, accomplished this feat. And then occurred what the doctors who
were present described as one of the most dramatic incidents in the history
of surgery. The blood from the father's artery was released, and began to
flow into the child's body, amounting to about a pint. The first sign of life
was a little pink tinge at the top of one of the ears, then the lips, which had
become perfectly blue, began to change to red, and then suddenly, as though
the child had been taken from a hot mustard bath, a pink glow broke out all
over its body, and it began to cry lustily. After about eight minutes the two
were separated. The child at that time was crying for food. It was fed, and
from that moment began to eat and sleep regularly, and made a complete
recovery.
"The father appeared before a legislative committee at Albany, in opposition
to certain bills which were pending at the last session to restrict animal
experimentation, and told this incident, and said at the close that when he
saw Dr. Carrel's experiments he had no idea that they would so soon be
available for saving human life; much less did he imagine that the life to be
saved would be that of his own child."

THE FUNDAMENTAL THING IN ALL HELP

If the people can be educated to help themselves, we strike at the root of
many of the evils of the world. This is the fundamental thing, and it is worth
saying even if it has been said so often that its truth is lost sight of in its
constant repetition.
The only thing which is of lasting benefit to a man is that which he does for
himself. Money which comes to him without effort on his part is seldom a
benefit and often a curse. That is the principal objection to speculation—it
is not because more lose than gain, though that is true—but it is because
those who gain are apt to receive more injury from their success than they
would have received from failure. And so with regard to money or other
things which are given by one person to another. It is only in the
exceptional case that the receiver is really benefited. But, if we can help
people to help themselves, then there is a permanent blessing conferred.
Men who are studying the problem of disease tell us that it is becoming
more and more evident that the forces which conquer sickness are within
the body itself, and that it is only when these are reduced below the normal
that disease can get a foothold. The way to ward off disease, therefore, is to
tone up the body generally; and, when disease has secured a foothold, the
way to combat it is to help these natural resisting agencies which are in the
body already. In the same way the failures which a man makes in his life are
due almost always to some defect in his personality, some weakness of
body, or mind, or character, will, or temperament. The only way to
overcome these failings is to build up his personality from within, so that
he, by virtue of what is within him, may overcome the weakness which was
the cause of the failure. It is only those efforts the man himself puts forth
that can really help him.
We all desire to see the widest possible distribution of the blessings of life.
Many crude plans have been suggested, some of which utterly ignore the
essential facts of human nature, and if carried out would perhaps drag our
whole civilization down into hopeless misery. It is my belief that the
principal cause for the economic differences between people is their
difference in personality, and that it is only as we can assist in the wider
distribution of those qualities which go to make up a strong personality that
we can assist in the wider distribution of wealth. Under normal conditions
the man who is strong in body, in mind, in character, and in will need never

suffer want. But these qualities can never be developed in a man unless by
his own efforts, and the most that any other can do for him is, as I have said,
to help him to help himself.
We must always remember that there is not enough money for the work of
human uplift and that there never can be. How vitally important it is,
therefore, that the expenditure should go as far as possible and be used with
the greatest intelligence!
I have been frank to say that I believe in the spirit of combination and
coöperation when properly and fairly conducted in the world of commercial
affairs, on the principle that it helps to reduce waste; and waste is a
dissipation of power. I sincerely hope and thoroughly believe that this same
principle will eventually prevail in the art of giving as it does in business. It
is not merely the tendency of the times developed by more exacting
conditions in industry, but it should make its most effective appeal to the
hearts of the people who are striving to do the most good to the largest
number.

SOME UNDERLYING PRINCIPLES

At the risk of making this chapter very dull, and I am told that this is a fault
which inexperienced authors should avoid at all hazards, I may perhaps be
pardoned if I set down here some of the fundamental principles which have
been at the bottom of all my own plans. I have undertaken no work of any
importance for many years which, in a general way, has not followed out
these broad lines, and I believe no really constructive effort can be made in
philanthropic work without such a well-defined and consecutive purpose.
My own conversion to the feeling that an organized plan was an absolute
necessity came about in this way.
About the year 1890 I was still following the haphazard fashion of giving
here and there as appeals presented themselves. I investigated as I could,
and worked myself almost to a nervous break-down in groping my way,
without sufficient guide or chart, through this ever-widening field of
philanthropic endeavour. There was then forced upon me the necessity to
organize and plan this department of our daily tasks on as distinct lines of

progress as we did our business affairs; and I will try to describe the
underlying principles we arrived at, and have since followed out, and hope
still greatly to extend.
It may be beyond the pale of good taste to speak at all of such a personal
subject—I am not unmindful of this—but I can make these observations
with at least a little better grace because so much of the hard work and hard
thinking are done by my family and associates, who devote their lives to it.
Every right-minded man has a philosophy of life, whether he knows it or
not. Hidden away in his mind are certain governing principles, whether he
formulates them in words or not, which govern his life. Surely his ideal
ought to be to contribute all that he can, however little it may be, whether of
money or service, to human progress.
Certainly one's ideal should be to use one's means, both in one's
investments and in benefactions, for the advancement of civilization. But
the question as to what civilization is and what are the great laws which
govern its advance have been seriously studied. Our investments not less
than gifts have been directed to such ends as we have thought would tend to
produce these results. If you were to go into our office, and ask our
committee on benevolence or our committee on investment in what they
consider civilization to consist, they would say that they have found in their
study that the most convenient analysis of the elements which go to make
up civilization runs about as follows:
1st. Progress in the means of subsistence, that is to say, progress in
abundance and variety of food-supply, clothing, shelter, sanitation, public
health, commerce, manufacture, the growth of the public wealth, etc.
2nd. Progress in government and law, that is to say, in the enactment of
laws securing justice and equity to every man, consistent with the largest
individual liberty, and the due and orderly enforcement of the same upon
all.
3rd. Progress in literature and language.
4th. Progress in science and philosophy.
5th. Progress in art and refinement.

6th. Progress in morality and religion.
If you were to ask them, as indeed they are very often asked, which of these
they regard as fundamental, they would reply that they would not attempt to
answer, that the question is purely an academic one, that all these go hand
in hand, but that historically the first of them—namely, progress in means
of subsistence—had generally preceded progress in government, in
literature, in knowledge, in refinement, and in religion. Though not itself of
the highest importance, it is the foundation upon which the whole
superstructure of civilization is built, and without which it could not exist.
Accordingly, we have sought, so far as we could, to make investments in
such a way as will tend to multiply, to cheapen, and to diffuse as universally
as possible the comforts of life. We claim no credit for preferring these lines
of investment. We make no sacrifices. These are the lines of largest and
surest return. In this particular, namely, in cheapness, ease of acquirement,
and universality of means of subsistence, our country easily surpasses that
of any other in the world, though we are behind other countries, perhaps, in
most of the others.
It may be asked: How is it consistent with the universal diffusion of these
blessings that vast sums of money should be in single hands? The reply is,
as I see it, that, while men of wealth control great sums of money, they do
not and cannot use them for themselves. They have, indeed, the legal title to
large properties, and they do control the investment of them, but that is as
far as their own relation to them extends or can extend. The money is
universally diffused, in the sense that it is kept invested, and it passes into
the pay-envelope week by week.
Up to the present time no scheme has yet presented itself which seems to
afford a better method of handling capital than that of individual ownership.
We might put our money into the Treasury of the Nation and of the various
states, but we do not find any promise in the National or state legislatures,
viewed from the experiences of the past, that the funds would be expended
for the general weal more effectively than under the present methods, nor
do we find in any of the schemes of socialism a promise that wealth would
be more wisely administered for the general good. It is the duty of men of
means to maintain the title to their property and to administer their funds

until some man, or body of men, shall rise up capable of administering for
the general good the capital of the country better than they can.
The next four elements of progress mentioned in the enumeration above,
namely, progress in government and law, in language and literature, in
science and philosophy, in art and refinement, we for ourselves have
thought to be best promoted by means of the higher education, and
accordingly we have had the great satisfaction of putting such sums as we
could into various forms of education in our own and in foreign lands—and
education not merely along the lines of disseminating more generally the
known, but quite as much, and perhaps even more, in promoting original
investigation. An individual institution of learning can have only a narrow
sphere. It can reach only a limited number of people. But every new fact
discovered, every widening of the boundaries of human knowledge by
research, becomes universally known to all institutions of learning, and
becomes a benefaction at once to the whole race.
Quite as interesting as any phase of the work have been the new lines
entered upon by our committee. We have not been satisfied with giving to
causes which have appealed to us. We have felt that the mere fact that this
or the other cause makes its appeal is no reason why we should give to it
any more than to a thousand other causes, perhaps more worthy, which do
not happen to have come under our eye. The mere fact of a personal appeal
creates no claim which did not exist before, and no preference over other
causes more worthy which may not have made their appeal. So this little
committee of ours has not been content to let the benevolences drift into the
channels of mere convenience—to give to the institutions which have
sought aid and to neglect others. This department has studied the field of
human progress, and sought to contribute to each of those elements which
we believe tend most to promote it. Where it has not found organizations
ready to its hand for such purpose, the members of the committee have
sought to create them. We are still working on new, and, I hope, expanding
lines, which make large demands on one's intelligence and study.
The so-called betterment work which has always been to me a source of
great interest had a great influence on my life, and I refer to it here because
I wish to urge in this connection the great importance of a father's keeping
in close touch with his children, taking into his confidence the girls as well

as the boys, who in this way learn by seeing and doing, and have their part
in the family responsibilities. As my father taught me, so I have tried to
teach my children. For years it was our custom to read at the table the
letters we received affecting the various benevolences with which we had to
do, studying the requests made for worthy purposes, and following the
history and reports of institutions and philanthropic cases in which we were
interested.

CHAPTER VII
The Benevolent Trust—the Value of the Coöperative
Principle in Giving

Going a step farther in the plan of making benefactions increasingly
effective which I took up in the last chapter under the title of "The Difficult
Art of Giving," I am tempted to take the opportunity to dwell a little upon
the subject of combination in charitable work, which has been something of
a hobby with me for many years.
If a combination to do business is effective in saving waste and in getting
better results, why is not combination far more important in philanthropic
work? The general idea of coöperation in giving for education, I have felt,
scored a real step in advance when Mr. Andrew Carnegie consented to
become a member of the General Education Board. For in accepting a
position in this directorate he has, it seems to me, stamped with his approval
this vital principle of coöperation in aiding the educational institutions of
our country.
I rejoice, as everybody must, in Mr. Carnegie's enthusiasm for using his
wealth for the benefit of his less fortunate fellows and I think his devotion
to his adopted land's welfare has set a striking example for all time.
The General Education Board, of which Mr. Carnegie has now become a
member, is interesting as an example of an organization formed for the
purpose of working out, in an orderly and rather scientific way, the problem
of helping to stimulate and improve education in all parts of our country.
What this organization may eventually accomplish, of course, no one can
tell, but surely, under its present board of directors, it will go very far. Here,
again, I feel that I may speak frankly and express my personal faith in its
success, since I am not a member of the board, and have never attended a
meeting, and the work is all done by others.

There are some other and larger plans thought out on careful and broad
lines, which I have been studying for many years, and we can see that they
are growing into definite shape. It is good to know that there are always
unselfish men, of the best calibre, to help in every large philanthropic
enterprise. One of the most satisfactory and stimulating pieces of good
fortune that has come to me is the evidence that so many busy people are
willing to turn aside from their work in pressing fields of labour and to give
their best thoughts and energies without compensation to the work of
human uplift. Doctors, clergymen, lawyers, as well as many high-grade men
of affairs, are devoting their best and most unselfish efforts to some of the
plans that we are all trying to work out.
Take, as one example of many similar cases, Mr. Robert C. Ogden, who for
years, while devoting himself to an exacting business, still found time,
supported by wonderful enthusiasm, to give force by his own personality to
work done in difficult parts of the educational world, particularly to
improving the common school system of the South. His efforts have been
wisely directed along fundamental lines which must produce results through
the years to come.
Fortunately my children have been as earnest as I, and much more diligent,
in carefully and intelligently carrying out the work already begun, and agree
with me that at least the same energy and thought should be expended in the
proper and effective use of money when acquired as was exerted in the
earning of it.
The General Education Board has made, or is making, a careful study of the
location, aims, work, resources, administration, and educational value,
present and prospective, of the institutions of higher learning in the United
States. The board makes its contributions, averaging something like two
million dollars a year, on the most careful comparative study of needs and
opportunities throughout the country. Its records are open to all. Many
benefactors of education are availing themselves of these disinterested
inquiries, and it is hoped that more will do so.
A large number of individuals are contributing to the support of educational
institutions in our country. To help an inefficient, ill-located, unnecessary
school is a waste. I am told by those who have given most careful study to

this problem that it is highly probable that enough money has been
squandered on unwise educational projects to have built up a national
system of higher education adequate to our needs if the money had been
properly directed to that end. Many of the good people who bestow their
beneficence on education may well give more thought to investigating the
character of the enterprises that they are importuned to help, and this study
ought to take into account the kind of people who are responsible for their
management, their location, and the facilities supplied by other institutions
round about. A thorough examination such as this is generally quite
impossible for an individual, and he either declines to give from lack of
accurate knowledge, or he may give without due consideration. If, however,
this work of inquiry is done, and well done, by the General Education
Board, through officers of intelligence, skill, and sympathy, trained to the
work, important and needed service is rendered. The walls of sectarian
exclusiveness are fast disappearing, as they should, and the best people are
standing shoulder to shoulder as they attack the great problems of general
uplift.

ROMAN CATHOLIC CHARITIES

Just here it occurs to me to testify to the fact that the Roman Catholic
Church, as I have observed in my experience, has advanced a long way in
this direction. I have been surprised to learn how far a given sum of money
has gone in the hands of priests and nuns, and how really effective is their
use of it. I fully appreciate the splendid service done by other workers in the
field, but I have seen the organization of the Roman Church secure better
results with a given sum of money than other Church organizations are
accustomed to secure from the same expenditure. I speak of this merely to
point the value of the principle of organization, in which I believe so
heartily. It is unnecessary to dwell upon the centuries of experience which
the Church of Rome has gone through to perfect a great power of
organization.
Studying these problems has been a source of the greatest interest to me.
My assistants, quite distinct from any board, have an organization of
sufficient size to investigate the many requests that come to us. This is done
from the office of our committee in New York. For an individual to attempt

to keep any close watch of single cases would be impossible. I am called
upon to explain this fact many times. To read the hundreds of letters daily
received at our office would be beyond the power of any one man, and
surely, if the many good people who write would only reflect a little, they
must realize that it is impossible for me personally to consider their
applications.
The plan that we have worked out, and I hope improved upon year after
year, has been the result of experience, and I refer to it now only as one
contribution to a general subject which is of such great moment to earnest
people; and this must be my excuse for speaking so frankly.

THE APPEALS THAT COME

The reading, assorting, and investigating of the hundreds of letters of appeal
which are received daily at my office are attended to by a department
organized for this purpose. The task is not so difficult as at first it might
seem. The letters are, to be sure, of great variety, from all sorts of people in
every condition of life, and indeed, from all parts of the world. Four-fifths
of these letters are, however, requests for money for personal use, with no
other title to consideration than that the writer would be gratified to have it.
There remain numbers of requests which all must recognize as worthy of
notice. These may be divided, roughly, as follows:
The claims of local charities. The town or city in which one lives has a
definite appeal to all its citizens, and all good neighbours will wish to
coöperate with friends and fellow townsmen. But these local charities,
hospitals, kindergartens, and the like, ought not to make appeal outside the
local communities which they serve. The burden should be carried by the
people who are on the spot and who are, or should be, most familiar with
local needs.
Then come the national and international claims. These properly appeal
especially to men of large means throughout the country, whose wealth
admits of their doing something more than assist in caring for the local
charities. There are many great national and international philanthropic and
Christian organizations that cover the whole field of world-wide charity;

and, while people of reputed wealth all receive appeals from individual
workers throughout the world for personal assistance, the prudent and
thoughtful giver will, more and more, choose these great and responsible
organizations as the medium for his gifts and the distribution of his funds to
distant fields. This has been my custom, and the experience of every day
serves only to confirm its wisdom.
The great value of dealing with an organization which knows all the facts,
and can best decide just where the help can be applied to the best
advantage, has impressed itself upon me through the results of long years of
experience. For example, one is asked to give in a certain field of
missionary work a sum, for a definite purpose—let us say a hospital. To
comply with this request will take, say, $10,000. It seems wise and natural
to give this amount. The missionary who wants this money is working
under the direction of a strong and capable religious denomination.
Suppose the request is referred to the manager of the board of this
denomination, and it transpires that there are many good reasons why a new
hospital is not badly needed at this point, and by a little good management
the need of this missionary can be met by another hospital in its
neighbourhood; whereas another missionary in another place has no such
possibility for any hospital facilities whatever. There is no question that the
money should be spent in the place last named. These conditions the
managers of all the mission stations know, although perhaps the one who is
giving the money never heard of them, and in my judgment he is wise in
not acting until he has consulted these men of larger information.
It is interesting to follow the mental processes that some excellent souls go
through to cloud their consciences when they consider what their duty
actually is. For instance, one man says: "I do not believe in giving money to
street beggars." I agree with him, I do not believe in the practice either; but
that is not a reason why one should be exempt from doing something to
help the situation represented by the street beggar. Because one does not
yield to the importunities of such people is exactly the reason one should
join and uphold the charity organization societies of one's own locality,
which deal justly and humanely with this class, separating the worthy from
the unworthy.

Another says: "I don't give to such and such a board, because I have read
that of the money given only half or less actually gets to the person needing
help." This is often not a true statement of fact, as proved again and again,
and even if it were true in part it does not relieve the possible giver from the
duty of helping to make the organization more efficient. By no possible
chance is it a valid excuse for closing up one's pocketbook and dismissing
the whole subject from one's mind.

INSTITUTIONS AS THEY RELATE TO EACH OTHER

Surely it is wise to be careful not to duplicate effort and not to inaugurate
new charities in fields already covered, but rather to strengthen and perfect
those already at work. There is a great deal of rivalry and a vast amount of
duplication, and one of the most difficult things in giving is to ascertain
when the field is fully covered. Many people simply consider whether the
institution to which they are giving is thoughtfully and well managed,
without stopping to discover whether the field is not already occupied by
others; and for this reason one ought not to investigate a single institution
by itself, but always in its relation to all similar institutions in the territory.
Here is a case in point:
A number of enthusiastic people had a plan for founding an orphan asylum
which was to be conducted by one of our strongest religious denominations.
The raising of the necessary funds was begun, and among the people who
were asked to subscribe was a man who always made it a practice to study
the situation carefully before committing himself to a contribution. He
asked one of the promoters of the new institution how many beds the
present asylums serving this community provided, how efficient they were,
where located, and what particular class of institution was lacking in the
community.
To none of these questions were answers forthcoming, so he had this
information gathered on his own account with the purpose of helping to
make the new plan effective. His studies revealed the fact that the city
where the new asylum was to be built was so well provided with such
institutions that there were already vastly more beds for children than there
were applicants to fill them, and that the field was well and fully covered.
These facts being presented to the organizers of the enterprise, it was shown

that no real need for such an institution existed. I wish I might add that the
scheme was abandoned. It was not. Such charities seldom are when once
the sympathies of the worthy people, however misinformed, are heartily
enlisted.
It may be urged that doing the work in this systematic and apparently cold-
blooded way leaves out of consideration, to a large extent, the merits of
individual cases. My contention is that the organization of work in
combination should not and does not stifle the work of individuals, but
strengthens and stimulates it. The orderly combination of philanthropic
effort is growing daily, and at the same time the spirit of broad philanthropy
never was so general as it is now.

THE CLAIM OF HIGHER EDUCATION

The giver who works out these problems for himself will, no doubt, find
many critics. So many people see the pressing needs of every-day life that
possibly they fail to realize those which are, if less obvious, of an even
larger significance—for instance, the great claims of higher education.
Ignorance is the source of a large part of the poverty and a vast amount of
the crime in the world—hence the need of education. If we assist the
highest forms of education—in whatever field—we secure the widest
influence in enlarging the boundaries of human knowledge; for all the new
facts discovered or set in motion become the universal heritage. I think we
cannot overestimate the importance of this matter. The mere fact that most
of the great achievements in science, medicine, art, and literature are the
flower of the higher education is sufficient. Some great writer will one day
show how these things have ministered to the wants of all the people,
educated and uneducated, high and low, rich and poor, and made life more
what we all wish it to be.
The best philanthropy is constantly in search of the finalities—a search for
cause, an attempt to cure evils at their source. My interest in the University
of Chicago has been enhanced by the fact that while it has comprehensively
considered the other features of a collegiate course, it has given so much
attention to research.

DR. WILLIAM R. HARPER

The mention of this promising young institution always brings to my mind
the figure of Dr. William R. Harper, whose enthusiasm for its work was so
great that no vision of its future seemed too large.
My first meeting with Dr. Harper was at Vassar College, where one of my
daughters was a student. He used to come, as the guest of Dr. James M.
Taylor, the president, to lecture on Sundays; and as I frequently spent week-
ends there, I saw and talked much with the young professor, then of Yale,
and caught in some degree the contagion of his enthusiasm.
When the university had been founded, and he had taken the presidency,
our great ambition was to secure the best instructors and to organize the
new institution, unhampered by traditions, according to the most modern
ideals. He raised millions of dollars among the people of Chicago and the
Middle West, and won the personal interest of their leading citizens. Here
lay his great strength, for he secured not only their money but their loyal
support and strong personal interest—the best kind of help and coöperation.
He built even better than he knew. His lofty ideals embodied in the
university awakened a deeper interest in higher education throughout the
Central West, and stirred individuals, denominations, and legislatures to
effective action. The world will probably never realize how largely the
present splendid university system of the Central Western States is due
indirectly to the genius of this man.
With all his extraordinary power of work and his executive and organizing
ability, Dr. Harper was a man of exquisite personal charm. We count it
among the rich and delightful experiences of our home-life that Dr. and
Mrs. Harper could occasionally spend days together with us for a brief
respite from the exacting cares and responsibilities of the university work.
As a friend and companion, in daily intercourse, no one could be more
delightful than he.
It has been my good fortune to contribute at various times to the University
of Chicago, of which Dr. Harper was president, and the newspapers not
unnaturally supposed at such times that he used the occasions of our
personal association to secure these contributions. The cartoonists used to

find this a fruitful theme. They would picture Dr. Harper as a hypnotist
waving his magic spell, or would represent him forcing his way into my
inner office where I was pictured as busy cutting coupons and from which
delightful employment I incontinently fled out of the window at sight of
him; or they would represent me as fleeing across rivers on cakes of
floating ice with Dr. Harper in hot pursuit; or perhaps he would be
following close on my trail, like the wolf in the Russian story, in
inaccessible country retreats, while I escaped only by means of the slight
delays I occasioned him by now and then dropping a million-dollar bill,
which he would be obliged to stop and pick up.
These cartoons were intended to be very amusing, and some of them
certainly did have a flavour of humour, but they were never humorous to
Dr. Harper. They were in fact a source of deep humiliation to him, and I am
sure he would, were he living, be glad to have me say, as I now do, that
during the entire period of his presidency of the University of Chicago, he
never once either wrote me a letter or asked me personally for a dollar of
money for the University of Chicago. In the most intimate daily intercourse
with him in my home, the finances of the University of Chicago were never
canvassed or discussed.
The method of procedure in this case has been substantially the same as
with all other contributions. The presentation of the needs of the university
has been made in writing by the officers of the university, whose special
duty it is to prepare its budgets and superintend its finances. A committee of
the trustees, with the president, have annually conferred, at a fixed time,
with our Department of Benevolence, as to its needs. Their conclusions
have generally been entirely unanimous and I have found no occasion
hitherto seriously to depart from their recommendations. There have been
no personal interviews and no personal solicitations. It has been a pleasure
to me to make these contributions, but that pleasure has arisen out of the
fact that the university is located in a great centre of empire; that it has
rooted itself in the affections and interest of the people among whom it is
located; that it is doing a great and needed work—in fine, that it has been
able to attract and to justify the contributions of its patrons East and West. It
is not personal interviews and impassioned appeals, but sound and
justifying worth, that should attract and secure the funds of philanthropy.

The people in great numbers who are constantly importuning me for
personal interviews in behalf of favourite causes err in supposing that the
interview, were it possible, is the best way, or even a good way, of securing
what they want. Our practice has been uniformly to request applicants to
state their cases tersely, but nevertheless as fully as they think necessary, in
writing. Their application is carefully considered by very competent people
chosen for this purpose. If, thereupon, personal interviews are found
desirable by our assistants, they are invited from our office.
Written presentations form the necessary basis of investigation, of
consultation, and comparison of views between the different members of
our staff, and of the final presentation to me.
It is impossible to conduct this department of our work in any other way.
The rule requiring written presentation as against the interview is enforced
and adhered to not, as the applicant sometimes supposes, as a cold rebuff to
him, but in order to secure for his cause, if it be a good one, the careful
consideration which is its due—a consideration that cannot be given in a
mere verbal interview.

THE REASON FOR CONDITIONAL GIFTS

It is easy to do harm in giving money. To give to institutions which should
be supported by others is not the best philanthropy. Such giving only serves
to dry up the natural springs of charity.
It is highly important that every charitable institution shall have at all times
the largest possible number of current contributors. This means that the
institution shall constantly be making its appeals; but, if these constant
appeals are to be successful, the institution is forced to do excellent work
and meet real and manifest needs. Moreover, the interest of many people
affords the best assurance of wise economy and unselfish management as
well as of continued support.
We frequently make our gifts conditional on the giving of others, not
because we wish to force people to do their duty, but because we wish in
this way to root the institution in the affections of as many people as
possible who, as contributors, become personally concerned, and thereafter

may be counted on to give to the institution their watchful interest and
coöperation. Conditional gifts are often criticized, and sometimes, it may
be, by people who have not thought the matter out fully.
Criticism which is deliberate, sober, and fair is always valuable and it
should be welcomed by all who desire progress. I have had at least my full
share of adverse criticism, but I can truly say that it has not embittered me,
nor left me with any harsh feeling against a living soul. Nor do I wish to be
critical of those whose conscientious judgment, frankly expressed, differs
from my own. No matter how noisy the pessimists may be, we know that
the world is getting better steadily and rapidly, and that is a good thing to
remember in our moments of depression or humiliation.

THE BENEVOLENT TRUSTS

To return to the subject of the Benevolent Trusts, which is a name for
corporations to manage the business side of benefactions. The idea needs,
and to be successful must have, the help of men who have been trained
along practical lines. The best men of business should be attracted by its
possibilities for good. When it is eventually worked out, as it will be in
some form, and probably in a better one than we can now forecast, how
worthy it will be of the efforts of our ablest men!
We shall have the best charities supported generously and adequately,
managed with scientific efficiency by the ablest men, who will gladly he
held strictly accountable to the donors of the money, not only for the correct
financing of the funds, but for the intelligent and effective use of every
penny. To-day the whole machinery of benevolence is conducted upon more
or less haphazard principles. Good men and women are wearing out their
lives to raise money to sustain institutions which are conducted by more
less or unskilled methods. This is a tremendous waste of our best material.
We cannot afford to have great souls who are capable of doing the most
effective work slaving to raise the money. That should be a business man's
task, and he should be supreme in managing the machinery of the expenses.
The teachers, the workers, and the inspired leaders of the people should be
relieved of these pressing and belittling money cares. They have more than
enough to do in tilling their tremendous and never fully occupied field, and

they should be free from any care which might in any wise divert them
from that work.
When these Benevolent Trusts come into active being, such organizations
on broad lines will be sure to attract the brains of the best men we have in
our commercial affairs, as great business opportunities attract them now.
Our successful business men as a class, and the exceptions only prove the
truth of the assertion, have a high standard of honour. I have sometimes
been tempted to say that our clergymen could gain by knowing the
essentials of business life better. The closer association with men of affairs
would, I think, benefit both classes. People who have had much to do with
ministers and those who hold confidential positions in our churches have at
times had surprising experiences in meeting what is sometimes practised in
the way of ecclesiastical business, because these good men have had so
little of business training in the work-a-day world.
The whole system of proper relations, whether it be in commerce, or in the
Church, or in the sciences, rests on honour. Able business men seek to
confine their dealings to people who tell the truth and keep their promises;
and the representatives of the Church, who are often prone to attack
business men as a type of what is selfish and mean, have some great lessons
to learn, and they will gladly learn them as these two types of workers grow
closer together.
The Benevolent Trusts, when they come, will raise these standards; they
will look the facts in the face; they will applaud and sustain the effective
workers and institutions; and they will uplift the intelligent standard of good
work in helping all the people chiefly to help themselves. There are already
signs that these combinations are coming, and coming quickly, and in the
directorates of these trusts you will eventually find the flower of our
American manhood, the men who not only know how to make money, but
who accept the great responsibility of administering it wisely.
A few years ago, on the occasion of the decennial anniversary of the
University of Chicago, I was attending a university dinner, and having been
asked to speak I had jotted down a few notes.
When the time arrived to stand up and face these guests—men of worth and
position—my notes meant nothing to me. As I thought of the latent power

of good that rested with these rich and influential people I was greatly
affected. I threw down my notes and started to plead for my Benevolent
Trust plan.
"You men," I said, "are always looking forward to do something for good
causes. I know how very busy you are. You work in a treadmill from which
you see no escape. I can easily understand that you feel that it is beyond
your present power carefully to study the needs of humanity, and that you
wait to give until you have considered many things and decided upon some
course of action. Now, why not do with what you can give to others as you
do with what you want to keep for yourself and your children: Put it into a
Trust? You would not place a fortune for your children in the hands of an
inexperienced person, no matter how good he might be. Let us be as careful
with the money we would spend for the benefit of others as if we were
laying it aside for our own family's future use. Directors carry on these
affairs in your behalf. Let us erect a foundation, a Trust, and engage
directors who will make it a life work to manage, with our personal
coöperation, this business of benevolence properly and effectively. And I
beg of you, attend to it now, don't wait."
I confess I felt most strongly on the subject, and I feel so now.

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