For fifty years the Harvester Kings fought one another in the open field of competition. Their armies of agents, drilled in the arts of rivalry, waged a war in which quarter was neither given nor sought. It was a fight almost of extermination. Out of two hundred companies that went to battle with flags waving and drums beating, less than a dozen came home. David M. Osborne backed a new self-binder, lost a million, and died of heartbreak. J. S. Morgan, who had a small factory at Brockport, saw the immense McCormick and Deering plants and quit. Even the great Whiteley fell, and Lewis Miller, the father-in-law of Edison and the founder of Chautauqua, went down “like a great tree upon the hills.” Walter A. Wood, after forty years of success, took Governor Merriam and James J. It is a common opinion among harvester men that from first to last there has been more money put into the business than has ever been taken out—so enormously wasteful were these years of competition. By 1902 the harvester business was merely a terrific and destructive war. The agents were tearing the whole industry to shreds and tatters. So far as the Harvester Men could see, they must choose between combination and ruin. Not one of them was personally in favour of combination. They were individualists through and through. The spirit of competition had been bred in the bone. So, when several of them came together to check this warfare, it was not of their own free will. It was because they could do nothing else. They were hurled together by social forces over which they had no control. There were four of them—Cyrus H. McCormick, Charles Deering, J. J. Glessner, and W. H. Jones—and all of them added to the strong preference for competition a definite opposition to trusts, monopolies, and stock speculation. They were not the Wall Street type of millionaire. In that time of booming optimism, they might have made more money in one year by selling stock than they had made in thirty years by selling harvesters. But no one of them had
No wonder that the financiers who undertook to organise them were driven almost to distraction by their obstinate independence. They had as many contradictory opinions as a Russian Duma; and it was soon clear that the only possible way to proceed was to keep them apart until all possible preliminaries were arranged. So the four Harvester Men went back home until the details of the new combination should be worked out. Then they were summoned again to New York. As was their custom, they went to different hotels, and each man was handled separately until he was in an organisable frame of mind. This master-stroke of diplomacy was accomplished by George W. Perkins—Morgan’s most versatile partner; and it gave The next day Perkins renewed the struggle, but he was too tired to continue the cab driving between hotels. He telephoned the four Harvester Men to meet him at Morgan’s office. As each man climbed up the rusty iron steps of the Morgan Building he was switched by the big Irish doorkeeper into one of those large inner rooms at the rear, on the ground floor, where many a broken business has been mended. Four men in four rooms, with Perkins flying in and out—such was the way that the great harvester company was finished. It was a unique situation, as much like an incident in comic opera as an affair of business. But the To strengthen the new company with a big surplus of ready money, a one-sixth interest was sold for twenty millions to Morgan and several other New York financiers of the “old reliable” sort. Also, a fifth harvester company, in Milwaukee, was bought from Stephen Bull for about five millions. And when the last rivet had been clinched and the last nail driven home, the four Westerners suddenly found themselves sitting around the same table, in the new International Harvester Company, of Chicago. There were several harvester companies that remained independent, but probably not from choice. I do not know of one that has not, at some stage of its career, tried to get into a trust. Fifteen companies were merged by Colonel Conger in 1892, but they were poorly fastened together and soon fell apart. It is also a fact, though one not before made public, that the Mutual Life Insurance Company tried to form a second Harvester “We are big enough now,” said Cyrus H. McCormick. “It is not safe for one company to have a monopoly. What we want to do is to regulate competition, not to destroy it.” Besides the big Osborne Company, which is now the third largest in the combine, the Harvester Company has bought five smaller concerns, and built two new plants—one in Canada and one in Sweden. It is like the original United States—a union of thirteen industrial colonies. Its output has risen to 700,000 harvesting machines a year, including all varieties; and its annual revenue is more than seventy-three million dollars. With its 25,000 employees and 42,000 agents, this one company is supporting as many families as there are in Utah or Its properties are so widespread that no member of the company has seen them all. To run around their circle would be a trip of 15,000 miles. It owns 20,000 acres of coal lands in Kentucky, 100,000 acres of trees in Arkansas, Mississippi, and Missouri, and 40,000,000 tons of ore in the Wisconsin and Mesaba Ranges. It has staked its money—$120,000,000—upon the belief that for fifty years longer, at least, the scientists will find no substitute for bread. The fact that Elbert H. Gary, the official head of the Steel Trust, is one of its directors, has not prevented this self-sufficient company from owning a complete steel plant, where 2,000 Hungarians make iron from ore, and steel from iron. It saws its trees into lumber in Missouri, and roasts its coal into coke in Kentucky. Its domains are so extensive, in fact, that if they were contiguous, they would But the most surprising feature of this unique corporation, to one who sees it for the first time, is the distracting variety of things that pour out of its factories. Its business is by no means to make harvesters and nothing else. Its true character seems to be that of a manufacturing department store for farmers. As a matter of actual count, I found in its factories and warehouses thirty-seven different species of machines, besides all manner of variations of each sort. Here you will see, not only a mower to cut the grass, but a tedder (a kind of steel mule, with an incurably bad temper) to kick and scatter the new-mown hay, so that it will dry in the sun; a rake to gather it together; a loader to swing it on the wagon; and a baler to compress it into bundles. Here are the self-binders, not for the grain only, but for corn and rice as well. For the especial benefit of King Corn, whose tribute to this Republic has lately swollen to twelve hundred millions a year, the company is making machines that pluck the corn from Here is a new machine, much less elegant than useful, for flinging manure over a field. Barefooted women did this work in the old brutal days of hand labour. But now, thanks to the brain of a canny Canadian farmer, Joseph S. Kemp, one worker can feed the hungry fields without so much as soiling the tips of the fingers. The farmer’s wife—and there are 10,000,000 of her in the United States, has been the last one to be considered, in this outpouring of machinery. But I found at Milwaukee a rebuilt factory belonging to the International, where 2,500 men are making fifty cream separators and 100 gasolene engines a day, both designed to make life easier for Mrs. Farmer, as well as for her husband. Also, it will please her to know that she may soon be honking her way to town in an automobile buggy, which the big corporation is making for farmers in a new factory in Akron. “Nothing could be simpler than a tongue,” said Maurice Kane, the chief mechanical expert of the International. “It is a mere pole. If we suited ourselves, we should only make two kinds—one for horses and one for oxen. But the farmers of the world have sixty-one different ideas as to how a tongue ought to be made, and we must give them what they ask for.” The last Minnesota Legislature, in the simplicity of its heart, proposed to establish a complete harvester plant for $200,000. It may surprise the members of that Legislature to know that the International has lately spent twice as much merely to improve one twine factory in St. Paul, and four times as much to build one warehouse in Chicago. Though it began its career with sixty million dollars’ worth of equipment, it has been forced by the pressure of By its very nature, this industry cannot be carried on in a small way. It is as essentially mutual and coÖperative as life insurance or banking. If a malicious “green bug” devours the wheat in Kansas, the loss must be made up by larger sales somewhere else. This, no doubt, is the main reason why every plant that was ever built to supply a local trade has failed. No other manufacturing business carries so many risks or includes so many factors. It is the most comprehensive industry in the world. It is the link between the city and the farm. It is both wholesale and retail, ready-made and made to order, local and international. It must make what the farmer demands, and yet teach him better methods. It is at once a factory, a bank and a university. Thus, of necessity, the Harvester Company represents in the highest degree the new “How many castings did your men make last year?” I asked of the hustling Irish-American who rules over one of the McCormick foundries. “Very nearly 44,000,000, sir,” he replied. “And the gray iron foundry over there uses three times as much iron as we do, and it made more than 12,000,000.” Fifty-six million castings! Merely to count these would take the whole Minnesota Legislature sixteen days, even though every member worked eight hours a day and counted sixty castings a minute. Far, far behind are the simple, old-fashioned days, when a reaping tool was made of two pieces—the handle and the blade. There are When McCormick built his first hundred reapers in 1845, he paid four and a half cents for bolts. That was in the mythical age of hand labour. To-day fifty bolts are made for a cent. So with guard-fingers. McCormick paid twenty-four cents each when James K. Polk was in the White House. Now there is a ferocious machine, which, with the least possible assistance from one man, cuts out 1,300 guard-fingers in ten hours, at a labour-cost of six for a cent. Also, while exploring one of the Chicago factories, I came upon a herd of cud-chewing machines that were crunching out chain-links at the rate of 56,000,000 a year. Nearby were four smaller and more irritable automata, which were biting off pieces of wire and chewing them into linchpins at a speed of 400,000 bites a day. “Take out your watch and time this man,” said Superintendent Brooks of the McCormick plant. “See how long he is in boring five holes in that great casting.” “Exactly six minutes,” I answered. “Well, that’s progress,” observed Brooks. In the immense carpenter shop he pointed to another machine. “There is one of the reasons,” he said, “why the small factories have been wiped out. That machine cost us $2,500. Its work is to shape poles, and it saves us a penny a pole; that is profitable to us because we use 300,000 poles a year.” In one of its five twine mills—a monstrous Bedlam of noise and fuzz, which is by far the largest of its sort in the world—there is enough twine twisted in a single day to make a girdle around the earth. In the paint shop the man with the brush has been superseded—a case of downright trade suicide. In his place is an unskilled Hungarian with a big tank of paint. Souse! Into the tank goes the whole frame of a binder, and the swarthy descendant of Attilla thinks himself slow if he dips less than four hundred of these in a day. The labour-cost of painting wheels is now one-fifth of a cent each. Ten at once, on a wooden axle, are swung into the paint bath without the touch of a finger. And the few belated brush-men who are left work with frantic In the central bookkeeping office of the Harvester Company I found some almost incredible statistics. Here, for instance, are a few of the items in last year’s bill of expenses: Two hundred and thirty-five miles of leather belting, 940 miles of cotton duck, 2,000 grindstones, 3,000 shovels, 10,000 brooms, 1,670,000 buckles, 1,185,000 pounds paint, 4,000,000 pounds wire, 15,000,000 pounds nails. Merely to maintain its experimental department costs this imperial company $7,000 a week. Here are more than two hundred inventors and designers, well housed and well salaried, and not tramping from shop to shop, as inventors did in the good old days. They are paid to think; and the company is mightily proud of them. But the truth is that all large corporations which employ an army of unskilled workmen are being compelled to offset so much mere muscle by a special department of brains. There is, besides, a most elaborate system The chains are tested by a violent pneumatic machine. Every link, even, is branded with a private mark—?. And in the Hamilton plant a new scheme is being tried—the whole packing gang has become a staff of inspection. Whenever a man finds a hundred defective pieces, he gets an extra dollar. One sharp-eyed Scot in the packing-room confided to me that he had made “as high as two shillin’s a week.” Such is the scope of the International Harvester Company, created in 1902. As to the men who control it, I have had the greatest difficulty in penetrating back of the business to their personal characteristics. For they dislike the fierce light that beats upon a rich American. Of its president, Cyrus H. McCormick the Second, the first word to be said is that he is not built on the same lines as his belligerent father. He would fare badly, very likely, if he were in charge of a catch-as-catch-can In all things he is a simple and serious man. I have seen him work from noon until midnight; but in my opinion, if he really had his choice, he would prefer a quiet homestead, in the little town of Princeton, where he could pursue a life devoted to the interests of Princeton University and the Civic Federation. Even now, whenever he can get free from the treadmill of his office, his greatest delight is to escape to a camp in the wild lands of northern Michigan, where he can dress like a fisherman and forget that he is the servitor of a hundred and twenty millions. Harold McCormick, his brother, and a vice-president of the big company, is a Most of the stories told about him illustrate his naÏve boyishness. For instance, when he had become an expert in handling the harvester, an agent-in-chief near Chicago telegraphed for a dozen men. Only eleven experts were available, so Harold volunteered to be the twelfth. He had his working-card made out in the usual form, entitling him to $18 a week. On Saturday night, when the twelve men went to the agent-in-chief for their wages, he said, “I want all of you to come in and have a conference with me to-morrow morning at ten o’clock.” “Sorry to say, Mr. Blank,” said young McCormick, “that I can’t be here until Monday.” The agent stormed. How could anything be more important to a three-dollar-a-day man than his job? “Well, if you really must know the reason,” The third brother—Stanley McCormick, worked his way up from labourer to superintendent of the whole plant. For years he rose at five o’clock every work-day morning, and walked into the factory at six. All three of the McCormicks show a remarkable sense of obligation, almost of gratitude, to their employees. At the time the International was organised, Stanley said to the others: “What about the men? There are some of them that deserve a share in the new company, as much as we do.” So a list of the old employees was made, from Charlie Mulkey, the old watchman, to R. G. Brooks, the superintendent, and $1,500,000 was divided among them. Recently a complete profit-sharing plan, such as Perkins had worked out for the Steel Trust, was put in working order, and about $200,000 of extra money have been scattered through the pay-envelopes. The two Deerings, who are now chairman and vice-president, were disciplined in “Put this young man to work at the bottom rung of the ladder,” said William Deering, when his younger son, James, was graduated from the university. Being in many respects a chip of the old block, James Deering plunged into business with as much energy as though he had to toil for his millions as well as inherit them. He became a field expert, and followed the harvest from Texas to North Dakota. He asked for no favours, but sweltered along among the Western farmers for several summers. Then he went to the foot of the ladder in the factory and wrestled with big iron castings and steel frames. Step by step he worked up, until even his Spartan father was satisfied and made him the manager of the whole plant. At present there is perhaps no man in the harvester industry who has so great a variety of attainments as James Deering. He is a shrewd commercialist, yet he has found time, no one knows how, to master several languages and to run the whole octave of self-culture. Charles Deering, the older of the two The two other vice-presidents of the Harvester Company are battle-worn veterans of the competitive period—J. J. Glessner and William H. Jones. Glessner, beginning as a bookkeeper in Ohio, has for many years been regarded as a sort of unofficial peacemaker and balance-wheel of the trade. Everybody confided in Glessner. He did as much as any one else to harmonise the warring Harvester Kings; but it is also true that it was the gentle Glessner who developed competition to the explosive point by originating the system of canvassing. He poured first oil and then water on the fire. The General Manager of this big anti-famine organisation is a young Illinoisan, named C. S. Funk. “He is the central man,” says Perkins. No other Chicagoan of his age—he is only thirty-five—has pushed up so quickly to so high a place, with nothing to help him except his own grit and ability. To-day he manages a 65,000-man-power corporation; yet it is very little more than twenty years since he was trudging six miles on a hot July day, to ask for his first job in a hay-field. Young as he was, he was then the support of a widowed mother, and there were seven children younger than he. His office, in which I was permitted to take notes for several days, is a nerve-centre of His wide-flung army is officered mainly by farmers’ sons who had a knack for business or for machinery. His assistant, Alex. Legge, is an ex-cowboy from Nebraska. Before the era of peace and unity began, Funk and Legge had fought each other in twenty states. “Legge was one of the best fighters I ever knew,” said Funk; “and I think you might put him down as the most popular man in the company.” Maurice Kane, the company’s Chief Improver, and a fine type of the Irish-American, was born on a small farm near Limerick. He was a farm hand in Wisconsin when he first saw a harvester, and he has pulled himself up every inch of the way by his own abilities. A. E. Mayer, the first of an army of forty thousand These are a few of the men who manage this international empire of bread-machinery. They are all practical men, hard workers, close to the farm and the farmer. They are not fashionable idlers, nor promoters, nor Wall Street speculators. And they have no more use for tickers than for telescopes—a fact which is vitally important, now that they are making more than half the harvesters of the world. Such is the International Harvester Company from the inside. But an outside view is equally necessary. It is of tremendous interest to 10,000,000 American farmers to know the habits and the disposition of this In order to get the facts about it at first hand, I interviewed the four chief competitors of the Harvester Company, three Attorneys-General, seven editors of farm papers, four professors of agricultural colleges, seven or eight implement agents, thirty farmers in Iowa, Minnesota, and Wisconsin, two state governors, and the Federal Bureau of Corporations. Before I had gone far, I learned that the big Harvester Company has been beset by a host of new troubles. It is an evidence of the eternal futility of human ambition, that when a group of warring Harvester Kings had made peace with one another, when they had healed their wounded and buried their dead, and sat down to enjoy a future of prosperous tranquillity, up sprang a host of new enemies, armed and double-armed with weapons from which there seemed to be no sort of defence. Their outposts were shattered by legislative dynamite. Tariff walls were built across their paths. And half a dozen giant The bigger the organisation the more trouble to protect and preserve it. This is what Abraham Lincoln learned—what the whole United States learned, half a century ago; and it is the lesson that the harvester-makers are studying to-day. It is a new phase of an old fact; it is the Tragedy of the Trust. Some foreign nations, too, have taken their cue from American Legislatures, and have become almost as hostile to the Chicago company as though it were exporting roulette wheels and burglars’ jimmies. France taxed half a million from it last year by a penalising tariff. Australia has made it a political issue. Germany takes a toll of $11 on every self-binder, and Austria takes $25. Roumania raised the duty on harvesters several months ago; and there is a general feeling that the time has come to check the supremacy that the United States has always had in this line. Yet the fact that the Harvester Company has been fined in two states does not mean that it has taken advantage of its size to Many of the old methods of the rough-and-tumble days have survived. It is not possible to say “Presto, change!” to 40,000 battling agents, so that they shall at once begin to play fair and coÖperate. But the general opinion is that the Combine has raised the harvester business to a higher level. At one of its branch offices I came accidentally upon a letter written by Cyrus H. McCormick, in which he forbade the taking of rebates from railways. Among the farmers of Iowa and Kansas I found no definite charges against the harvester combine—nothing but that vague dread of bigness which seems natural to the average mind, and which even the great-brained Webster had when he opposed the annexation of Texas and California. Of four farm editors, one was against all “trusts” on general principles; and the other three believed that the evils of harvester competition were much greater than those of consolidation. The bare fact that this one corporation has $120,000,000 of capital alarms the old-timers. Others have become more accustomed to the Big Facts of American business. “Why,” said one implement dealer, “after all, $120,000,000 is less than the American farmers earn in a week.” He might also have said that it was less than the value of one corn crop in Iowa, or half as much as the Iowa farmers have now on deposit in their savings banks. It is very little more than Russell Sage raked in The bulk of the farmers, so far as I could harmonise their opinions, are now too well accustomed to big enterprises among themselves to be scared by the Chicago merger. They have at the present time more than five thousand coÖperative companies of their own. And some of these are of national importance; as, for instance, the powerful Cotton Growers’ Trust, and the Farmers’ Business Congress, which owns 800 elevators for the storage of grain. “My only objection to the International Harvester Company,” said a business man in St. Paul, “is that it sells its machinery cheaper in Europe than it does in the United States.” I investigated this charge, and found it wholly incorrect. The greater expense and risk of foreign trade compels the manufacturers to ask almost as high prices as American farmers had to pay No one accuses the “Trust” of having unreasonably raised prices. On the contrary, it is generally given full credit for holding prices down, in spite of the fact that it is paying from twenty to eighty per cent. more for its labour and raw materials than was paid in 1902. Generally speaking, all farm implements except thrashing-machines are cheaper now than they were in 1880, when the competition was most strenuous. Binders have dropped from $325 to $125; hay-rakes from $25 to $16; and mowers from $80 to $45. “I paid $200 for a self-binding harvester twenty-five years ago,” said a Kansas farmer. “Ten years later I bought another for $140 and in 1907 I bought one from the The International has competitors, too—very active and able ones. Binders are made by 4 large independent companies, mowers by 17, corn-shredders by 18, twine by 26, wagons by 116, and gasolene engines by 124. Of the thirty-seven different machines made by the International there are only three—hemp-reapers, corn-shockers, and rice-binders—that are made by no other company, and even these machines are not protected by any basic patents. Powerful as the International is, it is still far from the place where business is one long sweet dream of monopoly. The four independent companies that make binders seem to have no fear of the “Trust.” “We have no fault to find with it,” said President Atwater, of the Johnson Company. “We don’t want it smashed. Why? Because our business has doubled since it was organised; and because we would sooner compete with one company than with a dozen.” “The ‘Trust’ was the only thing that saved the whole harvester business from annihilation,” said the ex-president of “The big combine has never misused its power,” said a third of the International’s competitors. “Now and then its agents make trouble, just as ours do, no doubt. But the men at the top have always given us a square deal.” So it is my duty to state that on the whole the Harvester Combine is a good combination and not a bad one. I have found it radically different from the get-rich-quick trusts that have been described in recent books and magazine articles. It is not a monopoly. It is an advocate of free trade. Its stock is not watered, nor for sale in Wall Street. And the men at the top are very evidently plain, hard-working, simple-living American citizens, who are quite content to do business in a live-and-let-live way. They are not thoroughly reconciled, even “It was a hurt of the heart. Each of our companies was like a family. Each had a body of loyal agents, who had been comrades through many struggles. But the terrible increase in expenses compelled us to subdue our feelings and to coÖperate with one another.” “I am not a merger man myself,” said William Deering, “although I believe that the International Harvester Company has been a benefit to the farmers.” Cyrus H. McCormick goes still further. He is a “trust-buster” himself, so far as the over-capitalised and oppressive leviathans of business are concerned. He said to me frankly: “Some of the hostility to our company is inspired by worthy motives, growing out of the general opposition to the so-called trusts.” And when a North Dakota congressman proposed in 1904 that the International Harvester Company should be investigated, Cyrus McCormick at once “Yes,” said one of the highest officials of the Roosevelt administration, when I asked him to corroborate this very remarkable story. “It is true that from 1904 it has been the continued desire of the International Harvester Company that we should investigate them. In fact, during the last year (1907) they have urged us with considerable earnestness to make this investigation.” So, this big business has evolved from simple to complex in accordance with the same laws that rule plants and empires. It has probably not yet reached its full maturity, for it is greater than any man or any form of organisation, and the tiny ephemeral atoms who control it to-day are no more than its most obedient retinue. They come and go—quarrel and make friends—live and die. What matter? The big business, once alive, grows on through the short centuries, from generation to generation. And what does it all mean—this federation of thirteen factory cities—this coordina It means bread. It means hunger-insurance for the whole human race. As we shall see in the next chapter, it means that the famine problem has been solved, not only for the United States, but for all the civilised nations of the world. |