The history of the Carnegie steel company; an inside review of its humble origin and impressive growth

Front matter

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Preface

This book is the outcome of a magazine article undertaken at an editor's request. Having spent a number of years in the closest intimacy with one of the owners of the great steel works, and enjoyed exceptional opportunities of becoming acquainted with the men who had wrought their success, I entertained little doubt as to my fitness for the task. So recalling the stories I had heard the partners tell, and adding a few I found in the writings of Andrew Carnegie, I wrote my article, and found I had enough material left for a couple more. These also were written, and in due time published.

To my surprise they brought an avalanche of dissent and protest. From distant Oregon and near-by Meadville, from Pittsburg and New York, came word from unknown correspondents that my conventional story was only a repetition of similar publishings, all faulty and all designed to glorify some individual at the expense of his associates. One letter contained an expression so vigorous that it has won a place for itself in this book : " They have filched their laurel wreaths from the tombs of the dead." Another assured me that what I had deemed honorable success was but the outcome of " Macchiavellian astuteness." I was told by one who had played an important part in the early history of the enterprise that "the bad faith, treachery, and chicanery that lie at the bottom of many great fortunes had their parallel in the history of the Carnegie interests." "Dear me!" sighed an unknown Pittsburg correspondent, " the humbug of greatness is so grotesque in the careers of those we know that it makes one wonder at the accidents which happen to men — accidents which elevate mediocrity vi PREFACE

and the commonplace to Olympian heights." In other letters were references to " porcine proclivities," " pachyderm entities," *'a vainglorious medley of contradictions."

Under this interesting stimulus I determined to go to Pittsburg and stay there until I had got at the core of things Carnegian. My experience was at once a disappointment and an encouragement. With documentary proof before me I found that almost every man who had written a line about the events I was investigating had blundered; one in dates, another in sequence of happenings, a third in the placing of credit for inventions and improvements; and of them all I found Andrew Carnegie's own narrative the least trustworthy. Knowing how excellent is his verbal memory, it puzzled me to find him mistaking his own birth-year ; claiming to have been the first in America to operate the Bessemer process of steel-making; to have originated iron railway bridges; to have been the founder of the business that bears his name; to have been ever on the alert to adopt new processes and mechanical improvements; to have maintained without a break the friendliest of relations with his partners ; to have been the principal factor in the gigantic growth of the business ; to have fervently tried to carry his high ideals concerning labor into his own works. Instead of this I everywhere found proof of the contrary ; and when, finally, I was notified that I must agree to submit my manuscript to the usual Carnegie revision before I could count on any assistance of the present officers of the company, my disillusionment was complete.

But it made my work more interesting. To write a conventional history from the official records of the company, with the aid of the company's press agent and under the guidance of an official censor, was a thing any journalistic fledgling could do. To dig into the secrets of the great corporation, to expose its enormous profits, reveal its peculiar business methods, its ways of heading off competitors, its internal strife, to get its first annual reports and even its later balance sheets, and to do

PREFACE vii

all this openly and without a bribe or the betrayal of a confidence, to involve no employee in a covert act or breach of faith — this was a task of no small difficulty. It is for the reader to judge of my success.

Thus disadvantaged, I have not hesitated to use personal letters and private documents as I might not otherwise' have done. Whenever an interesting fact has come to my knowledge, properly authenticated, I have used it without regard to its implications. Yet I have stated nothing that cannot be verified. Often I have risked being tedious in order to quote a corroborative document. In other cases I have kept the proofs by me in case my accuracy should be called into question.

From this independence has resulted a narrative more-truthful than it could otherwise have been. Had the official representatives of the Carnegie Steel Company revised this story, it is certain that many of the statements it contains would never have seen the light of day. More than once the company has accepted a large monetary loss rather than disclose its secrets in court. If, therefore, this book has any value it owes it to its frankness. While the author expects censure for some of his revelations, he is willing to accept it in the cause of truth. The conventional history of the concern, based on benevolent aphorisms and platitudinous maxims about thrift, industry, genius, and super-commercial morality, has been written a hundred times, and will probably be written again and again.

The Carnegie Steel Company, as will be seen from this narrative, is not the creation of any man, nor indeed of any set of men. It is a natural evolution ; and the conditions of its growth are of the same general character as those of the '* flower in the crannied wall." Andrew Carnegie has somewhere said, in effect : Take away all our money, our great works, ore-mines, and coke-ovens, but leave our organization, and in four years I shall have re-established myself. He might have gone a step further and eliminated himself and his organization ; and in less than four years the steel industry would have recovered from viii PREFACE

the loss. This is not the popular conception of industrial evolution, which demands captains, corporals, and other heroes; but it accords with evolutionary conceptions in general.

This inevitableness of industrial growth is frankly recognized by the most far-seeing but least talkative member of the group. " The demands of modern life," says Mr. Frick, " called for such works as ours ; and if we had not met the demands others would have done so. Even without us the steel industry of the country would have been just as great as it is, though men would have used other names in speaking of its leaders." This is a frank acknowledgment, from one of themselves, that the kings of industrialism have no divine right.

Little is here said on the subject of the tariff. The book is neither a protectionist's pleading nor a free-trader's argument. It is simply the story of the growth of a great industry, and the author deems his mission fulfilled in setting forth the facts as he finds them, leaving the reader free to make his own deductions.

As this is not a political tract, neither is it an ethical treatise; and the author considers it no part of his duty either to extenuate or accentuate the lapses from a high moral plane which may occasionally have been suffered by some of the individuals whose efforts are here described. The men who were instrumental in building up this great business were, originally at least, none of them philanthropists. There was hardly a step in their progress which had not the impulse of unqualified selfishness ; and if, in the light of retrospection, some of their actions seem inconsistent with a book morality, it must be remembered that in the fight for industrial life, as in that earlier struggle for physical existence, the victory is not to the gentle and the tender-hearted, but to the others. No great business has yet been built on the beatitudes; and it is not all cynicism that condenses a negative decalogue into a positive exhortation to be successful — " somehow ! "

CHAPTER I The Humijle Beginning

1853-1863 : The little Kloman forge in Girty's P.un — Excellent workmanship of the Kloman brothers — Thomas N. Miller and Henry Phipps join them — Notable extension of business — Prosperity brought by the war — A new mill is built at Twenty-ninth Street — Renewed prosperity — Anthony Kloman sells out — Quarrel among the partners, i

CHAPTER n

"A Most Hazardous Enterprise"

1863-65 : Andrew Carnegie enters as peacemaker — Some particulars of his life — Hi,'- efforts produce fresh discord — Makes agreement under which Miller is forced out — Thomas M, Carnegie gets an interest — Miller and Andrew Carnegie start a rival mill at Thirty-third Street — Its failure — Consolidation of the two mills into Union Iron Mills Company — Andrew Carnegie's disappointment — Reproaches Miller for getting him into the iron business — Calls It a "most hazardous enterprise ", ....... 13

Chapter III

1865 : Phipps and Carnegie go on foreign tour and leave the business — Its narrow escape from disaster — T. M. Carnegie saves it — William Coleman's helpful advice— Phipps' trials on his return — Unfortunate outside venture — Andrew Carnegie's quarrel with Miller — His depreciation of the enterprise — Purchases Miller's stock — The first labor strike — Importations of foreign workmen — Ingenuity of a German — He shows Kloman how to build a "Universal Mill" — Andrew Carnegie's resistance to innovations — " Pioneering don't pay "—Opposes the great slabbing-mill— Its excellent work — Kloraan's inventive genius — Economies of Mr. Phipps — Brings in John Walker, his brother-in-law — Forms company to buy Twenty-ninth Street mill — Wilson, Walker & Co. — Advantages of the change, 25

X CONTENTS

Chapter IV

1865 : Formation of the Keystone Bridge Company — Incorporates previous business of Piper & Shiffler — ^Andrew Carnegie's claims as a pioneer — His strange mistakes — Character of Piper — Iron used in bridges a hundred years before Carnegie — Early iron railroad bridges — Commercial morals and early railroad management — Officials and outside interests— Influential backing of the Keystone Bridge Company — Its early prosperity— A balance sheet — Recent losses, 39

Chapter V

1872 : Schemes for iron-smelting — Phipps and associates invited to join them — Coleman advises construction of independent furnace — Lucy furnace built — Enters upon long rivalry with the Isabella — Interesting struggle for supremacy — Remarkable achievements — Description of old-time methods — Great services of H. M. Curry — Inventor Whitwell's improvements — Valuable discovery by Mr. Phipps — His close trading — Disagreements of partners — Kloman's unfortunate venture — ^The panic of 1873 — On the brink of bankruptcy — 'Kloman leaves the firm — Record of the furnaces, . . 54

CHAPTER VI Beginnings and Growth of the Steel Business

1875 : Erroneous histories published of this event — Vanity of supposed founders—Filching of laurel wreaths from dead men's graves — Coleman the real founder — Secures option, with T. M. Carnegie, of the Braddock site — Gets his friends interested — The elder Carnegie's opposition — Sees progress of Bessemer steel in England- Returns enthusiastic and joins the enterprise— Helpfulness of Colonel Scott and Mr. J. Edgar Thomson — Curious result of strike at Johnstown — Captain Jones made superintendent — His remarkable ability — Letter exemplifying his broad views — Causes of success — Discrimination in freight rates — Shinn's methods of accounting — Disagreements of partners— They lead to construction of blast-furnaces — Wonderful records made in smelting — Also in converting works and rail-mill— Consternation in England, . 71

CHAPTER VII Some Inside Financial History

1875-1888 : Secrecy hitherto maintained concerning profits — No longer necessar}^ — First cost sheets and profits — Andrew Carnegie's enthusiasm — Forty-one per cent, dividends — Carnegie's prophecy of enormous profits— Results even more astonishing— One hundred

CONTENTS xi

and forty per cent, in one year — Beneficent effects of the tariff — A golden stream of dividends— ^irst published statement of yearly profits— Where credit is due— Services of Holley, Jones, Shinn— , Jones' story of rivalries-^Part played by different partners — Mc- Candless. T. M. Carnegie, Stewart, Andrew Carnegie— How the advertising was done, . . . ♦ 94

CHAPTER Vni

Quarrels and "Ejectures"

Internal discord — Dropping out of partners- Andrew Carnepfie's ambition — Interesting letter — Coleman leaves — Then Kloman— ^ Thomas M. Scott — Death of McCandless — Shinn's departure — Resulting lawsuit — Story of the dispute and arbitration — Scott's ejecture — Carnegie's "foresight " — Consolidation with Lucy Furnaces — Important letters from Scott and Shinn — Cost and earnings of the works, , . . . . . . . . . • ii?

Chapter IX

General prevalence of iron ore — Primitive smelting processes — How modern blast-furnaces are operated — The hot-blast — Use of coke — How it is made — Why lime is added — The puddling process — Cast and wrought iron — The direct process of Bessemer steel-making — The Jones mixer — The converter — Brilliant pyrotechnics — Open-hearth steel process — Its rapid growth, , , . .136

CHAPTER X The Rise and Growth of Homestead

1879: Establishment of Amity Homestead byjohn McClure — Kloman's rival rail-mill — Joined by the Pittsburg Bessemer Steel Company —Pathetic death of Klonian — His uninterrupted influence on Carnegie enterprises — Excellent mill and poor management — Trouble with labor ; leads to disagreements in the company ; and final sale to the Carnegies — "Carnegie luck" — Extensions and improvements — Julian Kennedy's skill — Wonderful mechanical perfection — Purchase of the Carrie furnaces, . . . . . .150

CHAPTER XI The Incoming of Henry Clay Prick

1882 : The enterprise attains its majority — Ill-proportioned growth — Lacks mental development— Frick gives coherency and definiteness to plans — Gathers scattered plants into perfected organization—Previous attempts at consolidation — Prick's extraordinary career— His development of the coke industry — His great foresight — Executive and organizing genius— Henceforth the most imposing figure in this history, 167 xii CONTENTS

CHAPTER XII The Capture of the Duquesne Steel Works 1889: Prick's remarkable feat of financiering — Extensive works bought without the outlay of a dollar ; they pay for themselves in a year— Story of their construction ; similar to that of Homestead — Splendidly equipped, badly managed— Labor troubles— Carnegie heads them off desirable contracts — Extraordinary methods of competition — Discouragement of shareholders — Prick's clever bargaining — Amazing success ; buys works for bond issue and pays bonds six times over from profits — Their later development —Enthusiasm of local editor, 174

CHAPTER XIII Labor Contests in Theory and Practice So.me m.oral causes of Homestead strike — Utopianism versus business — The puddler's strike of 1867 — The threatened trouble of 1875 at Edgar Thomson — No sentimentality — Strike at Beaver Falls ; a frank attempt to crush the labor-union — Bad business policy — Andrew Carnegie's idealistic publishings — "Thou shalt not take thy neighbor's job" — Incident in the washerwomen's strike — Pandering to the Knights of Labor ; its effects — Strike at Edgar Thomson works; and employment of Pinkertons — The coke strike of J 887 ; Carnegie's way of settling it — Charges of bad faith ; their justification — Renewed disorder in the coke regions — The troubles at Homestead in 1889 — Description of the hardships of the workmen — Carnegie's embarrassing talks for publication — His cousin illustrates with a parable — Unfortunate settlement at Homestead leads to further difficulties — The labor-unions' joy, . . . 1S4

CHAPTER XIV The Homestead Battle 1892: Andrew Carnegie's chagrin— Prepares for war — Stern measures planned — Secret instructions to Prick — Prick tries conciliation ; its failure — Statement of the differences — Small number of men affected — Closing of the works — Strikers assume military organization ; depose municipal authorities ; other arbitrary acts — Sheriff powerless in presence of mob law — The company's attempt to land watchmen — An all-day battle on the river — Barbarous use of dynamite and burning oil — "No quarter to scabs" — Story of an eye-witness — Surrender of the Pinkerton guards ; brutal treatment of the wounded and defenceless — Homestead in a state of insurrection — The calling out of the National Guard, . 203

CHAPTER XV

Attempted Assassination of Mr. Prick

Purious attack on the chairman ; a desperate struggle in the office —

Thrice shot and repeatedly stabbed. Mr. Prick makes a fight for

his life — He saves the assassin from summary punishment — His

CONTENTS xiii

magnificent clispla}- of courage — His tender thought of Mrs. Frick — World-wide excitement — Th» punishment of mutiny in the soldiers' camp — Carnegie at beautiful Loch Rannoch ; denies himself - to reporters — The interference of politicians — Carnegie's cablegram to Whitelaw Reid — Newspaper comment in Europe and America — Severe condemnation of Carnegie— Prick's unceremonious return to business 224

CHAPTER XVI

Resumption of work at Homestead under protection of militia — Sympathetic strikes at other Carnegie mills — World's interest in Homestead storm-centre — Incidents of camp life and in the mills — Congressional investigations — W. T. Stead's garbled reports — The Knights of Labor on Carnegie idealism — "Thou shalt not take thy neighbor's job" — Despairing violence of the strikers — Attempts at wholesale poisoning of non-union men — Conviction of the criminals — Withdrawal of the militia; renewed violence — Schwab's conciliatorj'^ influence — Carnegie opens another library — Poetical effusions in honor and condemnation — The Republican debacle — Anger of the protectionists against Frick and Carnegie— Some good results of the conflict — Carnegie's return — His repudiation of responsibility, and praise of Frick, 236

CHAPTER XVII

1892-99 : Consolidation of Carnegie works ; effect of industrial war — The Union Railroad — Romantic story of acquisition of Mesaba orefields — Due to Henry W. Oliver — Carnegie's opposition ; leads to coldness with Frick— Interesting letters — Alliance with the Rockefellers — Carnegie's renewed opposition; his amusing prophecy — Free gift of many millions — Frick's railroad projects — Purchase of a line to Lake Erie ; its economical operation — Oliver's project for Lake steamers adopted— The company become self-sufficing — A perfect industrial unit 254

CHAPTER XVIII

The Workings of the Corporate Mind

1899 : The mental evolution of an industrial organism — Workings of machines watched and tabulated, but no regular record kept of Board of Managers— Mr. Frick's changes — Weekly lunches established and full reports kept of deliberations — Spirit of good-fellowship supplants unfriendly rivalries — Secrecy concerning business discussed — Official record of such a meeting — Purchase of Bethlehem machinery — Important and costly additions — New partners admitted ; subject to the iron-clad agreement — Steel car works xiv CONTENTS

projected— Conneaut pipe works recommended — An interesting contract — Arbitration versus litigation — Conneaut furnaces planned — Various reports — The reorganization of the company, . 275

CHAPTER XIX

Carnegie's attempt to sell out to English investors in 1889 ; prompted by reduced profits ; its failure — Great increase in gains under Mr. Prick's management — An amazing record — Secret figures revealed — How these results were reached — Rapid extensions at principal works — The Frick Coke Company ; the use of its credit to finance the Carnegie concern — Fresh attempts to sell out — Carnegie's estimates of values and future profits — Plans a reorganization ; involves retirement of Frick — Fresh overtures for purchase— The famous option; bonus $1, 170,000— Break in money market ; failure of the syndicate's plans — Carnegie refuses extension of option — Impressive description of the company and its amazing profits — Schwab's enthusiasm over future prospects; rails $12 a ton — England out of the race — Other plans of reorganization ; failure of them all, « . . . 293

CHAPTER XX

Carnegie's Attempt to Depose Frick

Born of a quarrel, the company reaches its final form through contention — Causes of Carnegie's animosity — Intolerance of rivalship — Early effort to diminish Prick's prominence — Differences concerning price of coke — Chagrin over the syndicate's failure to complete purchase — Ridiculous publication by Stead — Annoyances caused by advertisers — The coke contract — Carnegie's insinuation — Prick's resentment — The matter becomes official — Entry in minutes of company — Carnegie tries to win Walker to his side — Schwab refuses to transmit Carnegie offer — Prick's resignation — Carnegie not satisfied ; gives his orders to managers ; their reluctance to act — Schwab's difficult position — Frick resists attempt to force him to sell out ; Lovejoy and Phipps side with him— Equity suit instituted — Prick's pleadings and Carnegie's rejoinder — Peace overtures— Conference at Atlantic City, ...... 316

CHAPTER XXI

Validity of the iron-clad agreement — Its history— Devised for control of debtor partners — Interest revocable — New iron-clad of 1892 — Phipps' energetic opposition to it ; not signed by senior partners — Agreement of 1897 ; signed only by Carnegie— Renewed refusal of Phipps to sign — Agreement lies dormant until revived to meet Frick case— Extraordinary ritual to make it effective — The docu-

CONTENTS XV

ment quoted — Schwab's compliance to Carnegie's orders; Lovejoy's independence — Protests of_^ Phipps and Frick — Attempt proves abortive, 336

CHAPTER XXII

The training of junior partners — Lovejoy the only one to resist ; his independence helps to a settlement ; draws up agreement of conciliation — The Board meets at Atlantic City ; adopts Lovejoy agreement — Final transformation of Carnegie Steel Company — Consolidation with the Frick Coke Company — Enormous capitalization — The return of peace — The Society of Carnegie Veterans, . . 346

CHAPTER XXIII

The Billion-Dollar Finale

Frick's plans for Conneaut tube works; revived by Carnegie to force purchase — The famous bankers' dinner — Schwab's speech ; blessings of industrial peace — Morgan impressed — Carnegie's skilful diplomacy — Sale to Steel Trust — Price paid — Growth of Kloman's little business ; from less than $5,000 to nearly $500,000,000, . 358

Appendix

Some extracts from the pleadings of Henry C. Frick in the equity

suit 365

THE Hig'TORY

OF THE

CARNEGIE STEEL COMPANY

Chapter I

IN 1858 a small forge was started at Girty's Run in Millvale, Duquesne Borough, now a part of Alle- ' gheny. It stood on the edge

of the straggling village, and a muddy road ran past it i along the river - bank.

Judged by modern standards it was an insignificant affair, with a little engine and a wooden trip-hammer — that first cumbrous mechanical substitute for the sledge-hammer. The building was a light wooden construction, about a hundred feet long and seventy wide ; but even in these narrow limits the scanty machinery seemed at first lost. It had been brought from the basement of a near-by dwelling where the business was started five years before. In the course of time the vacant corners and empty spaces were gradually filled with axle-bars, small forgings, and iron scrap of various kinds, and the place took on a busy air.

The men who owned this little shop were typical blacksmiths, deep-chested, muscular fellows, who had grown up in the light of the smithy and the music of the anvil. They were Andrew Klowman and his brother Anton, who had come from I I

Treves in Prussia a few years before. In time the superfluous "w" of their name was dropped, and Anton became Anthony.

This little place, which its owners valued, good-will and stock, at ^4,800, was the beginning of one of the greatest industrial aggregates in the world, valued and bought, forty-three years later, for nearly five hundred million dollars !

In character the Kloman brothers were very different. Andrew was a steady, plodding man of preternatural gravity, earnest in his manner and watchful of every detail of cost and

A German trip-hammer.

From the Americaft Manufacturer.

profit. Anthony, although the elder, had no high sense of responsibility. He was careless and free with both money and time; and the beer-can was often raised to his perspiring face. Andrew preferred water, not only as costing less, but as leaving him in better shape for bargaining. And in little things he was a shrewd bargainer. He had been trained in a school where a pfennig — the tenth of a cent — was the unit of expenditure and a mark the equivalent of a dollar. Like the Prussian workmen among whom his youth had been spent, he was suspicious, and, at the outset of his career, more prone to insistence

A THIRD INTEREST FOR $i,6oo 3

on his own rights than solicitous about those of others. Later, he outgrew this ; but the trait led to great happenings.

The workmanship of Kloman Brothers, however, was faultless ; and they soon won a reputation for a reliable product. Their specialty was axles, which they forged out of scrap-iron, and sold to railroads and car-builders in and around Pittsburg. The peculiarity of their product was caused by alternately reversing the direction of the fibres while forging the iron, which gave their axles a superiority soon recognized by the trade. The practice was original with Andrew Kloman.

Among their clients was the Pittsburg, Fort Wayne and Chicago Railway, then called the Ohio and Pennsylvania, which had shops and offices at Allegheny. The purchasing clerk of this company was Thomas N. Miller, who was born in Allegheny in 1835 ^^^ ^^^ grown up with a group of boys who were destined to leave a deep impress upon the industry of their town. Miller early recognized Andrew Kloman's abilities, and frequently put business in his way by introductions and recommendations to manufacturers using axles and forgings; and a certain intimacy was thus established between them.

In 1859 Kloman came to Miller, and told him that his business was growing so rapidly that, if he could get money to install a second trip-hammer, he could double his output and easily market it. He estimated the cost of this addition at $1,600; and he offered Miller a third of the profits of Kloman Brothers if he would put this sum into the business. As Miller was purchasing clerk for a company which dealt with the Kloman Brothers, he had some doubts about the propriety of directly associating himself with them ; and he so expressed himself to Kloman. '' But I have a young friend," he added, " who might represent me; and if you like I'll introduce him to you." Kloman consented ; and Henry Phipps was brought into the negotiation. "

Henry Phipps at this time was just twenty years of age, having been born in Philadelphia on September 27th, 1839. His father was a shoemaker who had moved during Henry's childhood to Allegheny City, where he set up a little shop for himself in Rebecca Street. At the age of thirteen young Phipps was earning a dollar and a quarter a week as general utility boy with a jeweller named Barton, who had a small shop at the corner of Cherry Alley and Liberty Avenue, Pittsburg.

In 1856 he entered the office of Dilworth & Bidwell, who had something to do with iron and iron spikes, and were also the local agents of the Dupont Powder Company. First he was office boy, and later became bookkeeper. In a few years the firm was dissolved, Dilworth taking the spike-mill and Bidwell the powder business ; and young Phipps was taken by the latter into partnership. He was, however, still bookkeeper for Dilworth & Bidwell when Miller proposed that he should take an interest in the Kloman forge.

Young Phipps readily agreed to join Miller in the enterprise, and set out to raise his share of the ^1,600 required by Kloman. The problem was not easy ; and it was only temporarily solved when the elder Phipps agreed to mortgage his house for ^800 ; for, not knowing that this ^800 would grow into ^50,000,000, he presently regretted his offer, and showed such distress that his son felt obliged to release him from his promise. Finally it was arranged that Miller should pay the whole of the ;^ 1,600 required by Kloman, and that Phipps should refund half of this out of his profits in the business. In return he was to have half of Miller's interest, which, for propriety's sake, was put in

Young Phipps, trudging along the canal ban on his way to Kloman's.

HENRY PHIPPS

loman & Co. ; Kloman & Phipps ; Carnegie, Phipps & Co, Ltd.; The Carnegie Steel Co., Ltd,

Plate 11.

PROFITABLE WAR CONTRACTS 5

the name of Phipps. In addition, Phipps was to keep the Kloman books.

This arrangement proved very satisfactory to all parties ; and, the second trip-hammer having been installed, the business grew rapidly. Miller secured the Klomans the preference of the P'ort Wayne business, and recommended them to new firms building cars for the railroad, such as Whittaker & Phillips of Toledo, Haskell & Barker of Detroit, Jessup Kennedy & Co. of Chicago, Barney Parker & Co. of Dayton, and others, from whom the bulk of their trade was soon received. Phipps, with the energy which has always characterized him, walked three miles out to the Kloman shop after his day's work at Dilworth's, posted up the books, and then trudged back along the dark towing-path of the Pennsylvania canal to his father's house on Rebecca Street. And Kloman, with his sleeves rolled up, worked with his brother and half-a-dozen men in the forge.

Then the war broke out, and axles, which had been selling for two cents a pound, jumped to twelve cents a pound. And when it came to filling government orders for parts of gun-carriages, there was no limit to price for quick deliveries. The making of railway supplies dwindled; and soon the firm was working almost exclusively on high-priced government orders.