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1I3:NNOa A1IN3:H WVlllIM dO AHdV1IDOIHOlnV 3:Hl
_r\
THE AUTOBIOGRAPHY
OF
WILLIAM HENRY
1864-1953
SAN FRANCISCO
1973
CONTENTS
Preface page vii
Acknowledgments ix
Introduction by Dora Donner Ide xi
Foreword by WHD xv
The Autobiography of William Henry Donner 1
Addenda 12
9
PHOTOGRAPHS
WHD in his seventies Frontispiece
Delta Tau Delta Fraternity, Phi Chapter, Hanover College. Page 9
October 11, 1882. WHD first left, back row.
Bicycle type used by WHD and associates in the races of 188S 2 S
(The Stanford University Museum of Art)
WHD in his thirties 4S
Mr. and Mrs Frederick Donner with their grandchild, 7S
WilUam Henry Donner, Jr.
WHD in his fifties 99
The Donner home in Columbus, Indiana I 19
The President's Residence at Hanover College. 139
One of five buildings constructed with the aid of Donner funds
c
It is a great pleasure and privilege to have this limited edition of the
autobiography written by my father, William Henry Donner, privately
printed.
Several months after he passed away, his attorney gave galley proofs
of his autobiography to a few people. During the nineteen thirties at
the urging of his family and friends, father had commenced the task
of writing his memoirs, and he had continued to work on them from
time to time for approximately sixteen years. They span an era of great
growth and industrialization in this country.
His autobiography was to have been printed shortly after his death,
and I had expected to have this done, but life with its pressures delays
many intended projects.
On June I I, 1972, an article appeared in the San Francisco Examiner
and Chronicle, entitled 'Fine Printers in the City,' by Elaine Ratner.
It seemed to be the perfect place and an opportune time to under
take this project.
, ~ ~
ACKNOWLEDGMENTS
I mentioned the project of father's autobiography to Mr. Stephen Gale
Herrick, the former president of the Herrick Iron Works, who is a
bibliophile & a bookbinder. He was acquainted with the various crafts
men referred to in 'Fine Printers in the City' by Elaine Ratner, & kindly
showed me examples of their books from his collection. As he evinced
such an interest in this project, I mentioned that my father had been
in the steel business also, and gave him the autobiography to read. He
was most enthusiastic about it, and lowe more than I can express to
him for his kindness and for his highly esteemed assistance in helping
me to plan and edit this book.
Several photostats ofnewspaper clippings regarding father's decease
were sent to me by the late Robert N. Donner.
I should like to thank Mrs. Robert H. Cromwell, Mrs. Reed Gerard
and Miss Elizabeth Jorzick for their invaluable photographs and help
ful information.
I am beholden to Mr. C. Kenneth Baxter, father's friend & trusted
business adVisor, who gave me valued aid. My deep appreciation is due
to Mrs. Mildred Goodwin Maclachlan, the executive secretary to Mr.
Baxter, who gave unstintingly of her time.
An overwhelming debt of gratitude is owed to Mrs. Katharine M.
Parker and to Dr. T. Grier Miller.
I am under great obligation to Dr. John E. Horner, president of
Hanover College, who provided important photographs and other per
tinent material.
I am thankful to Mr. David l. Ison & Mrs. Alma F. Bergmann, for
. ~
merly of the Park & Recreation Department, Columbus, Indiana, who
showed me relevant pictures and furnished interesting data. ix
My sincere gratitude is due to Mr. Lee D. Lagessie, Public Relations
Representative, Republic Steel Corporation, Chicago District, for his
kindness in providing a photocopy ~ f , 'The Story of the Donner-Hanna
Coke Corporation 1917-1956' by Philip S. Savage.
Several anecdotes in the Introduction were derived from the late
Bob Gordon's Columbus Comment in the Columbus Evening Repub
lican of November 4, 1953, and from the late Laura Long's Horse and
Buggy Days in the Columbus Herald of October I, 1965.
Warm thanks are hereby extended to the Bartholomew County His
torical Society, Columbus, Indiana; Mr. Ross G. Crump; Dr. Lorenz
Eitner, Director of the Stanford University Museum of Art; Mrs. Betty
M. Gale, Senior Administrative Assistant of the Donner Laboratory
Business Office, Berkeley; Mr. E. Dixon Heise; Dr. J. R. Nolan, Medi
cal Director of the Southern California Cancer Center, Los Angeles;
Dr. Eugene P. Pendergrass; Mr. Guy Preston; Mrs. Irene B. Sheldon; Mr.
James G. Shields; Mrs.Clementine!. Tangeman; Mr. NormanF.Wesley,
Public Relations Office of the U. S. Steel Corporation, Pittsburgh Dis
trict; Mr. Darrell Williams; and to the many others who have so kindly
helped with this project.
Without the secretarial assistance of Miss Claudine Aubelay & later
Mrs. Nora McGowan, this book could not have been completed.
INTRODUCTION
William H. Donner's autobiography relates the life and experiences of a
notable man with singular personal courage & individual initiative who
was destined to become one of the great steel men of his era. Born in
1864 in Columbus, Indiana, father lived there until he was thirty years
of age. He never forgot the happy memories of his youth & when in
dulging in reminiscences with friends about Columbus one could per
haps discern in him a feeling of nostalgia for those early years. Numer
ous benefactions made later in life expressed his continuing esteem
for that community.
His parents, who were happily married for sixty-two years, were in
fluential in their family & community. They were prominent members
of the Presbyterian Church, & Frederick Donner taught Sunday School
for his entire adult life. His wife Mary was a dainty and petite lady who,
although a very active person, had a serene and tranquil nature. A
cousin who remembers her long ago wrote me that she was so under
standing, infinitely kind and thoughtful that she seemed to the child to
be rather like an angel. I understand that while my grandmother was
tending her small children she stUI found time to study trigonometry.
These varied aspects of her character may explain in part why William
H. Donner said of her in his understated way, 'My mother was a re
markable woman.' Father was the first of their five children.
Father was educated in the public schools and early in his career xi
showed his initiative by delivering the daily newspaper. Perhaps the
money he made in this venture went into his first speculation, which
was a dismal failure.
As the story goes, he conceived the notion of buying up all the avail
able eggs in Columbus and holding them for a price rise. Someone had
told him that eggs placed in brine and put away in open casks would
keep. So, he invested his savings in eggs and cornered the Columbus
market so far as possible. Having stored away the casks in the basement
of his home, the young financier sat back to wait for the price of eggs
to rise. But instead, the eggs began going up themselves
l
and on inves
tigating the popping noises in the basement he found it necessary to
hold his nose and run. It took the combined efforts of several people
to clean the rotten eggs out of the basement.
In 1890, William H. Donner married Adelia May Newsom. They had
four children: Robert, Joseph, Mary and Margaret. In 1909, following
their separation, father married Dora Browning Rodgers, a widow with
two small children, Dorothy & Katherine. Their union produced three
children: William, Elizabeth and Dora. I am the last mentioned and the
youngest.
An industrious & determined individual, father's success in life was
due to his own efforts and may be partly attributed to the perseverance,
thoroughness, ingenuity & foresight which he applied to every under
taking. He was an altruistic and generous person who provided finan
cial help for many people as well as for his own immediate family.
William H. Donner once stated to his friend the Reverend George
Pence that looking over his long and successful career, he was most
proud of his success in managing his father's milling business.
Father's powers of concentration were noteworthy and when in
terrupted at work his blue eyes would look enquiringly at you over the
rimless half lens pince-nez perched on his nose.
He was a very spruce person and behind the lapel of his coat he al
ways carried a straight pin which he deftly used to remove items of
interest from the newspapers.
As the youngest child and therefore still living with my parents after
father retired from the steel business in 1929, it was my good fortune
to be included in many trips to Europe before I was married in 1940.
During our travels, his keen insight and enquiring mind delved into
the economic problems of other nations, and being an observant per
son he also learned a good deal about the lives and customs of the na
tives. So as to keep abreast with cancer research and therapy, we often
visited hospitals and laboratories in various parts of the world. In 1938
father took my mother and me on a particularly memorable voyage
which included India, Ceylon, Java, Bali, Siam and Cambodia. His first
trip around the world was in 19 I 0 - I I.
William H. Donner bought many works of art during his lifetime.
Among his finest acquisitions were a Whistler Nocturne and a Winter
halter portrait of Queen Victoria as a young woman. In accordance
with his wishes the Winterhalter portrait was given to the National Gal
lery in Washington in 1954. Mrs. John F. Kennedy found the painting
in storage at The Smithsonian and at her request it was hung in the
White House during the Kennedy years.
Father was a very active person of medium build and his erect, trim
figure changed little over the years. A temperate indiVidual, he neither
smoked nor drank. He had a relaxed and tranquil attitude toward life
and no trouble sleeping, which he attributed to his clear conscience.
Outliving many of his stronger friends, he admitted that this might
have been due to his wise choice of parents.
A qUiet, benevolent and unassuming gentleman with considerable
charm, W. H. Donner had a wealth of stories about his experiences
which he enjoyed telling. The theater was a preferred diversion. xiii
Another favorite form of relaxation was playing bridge in the evening
with his family and friends.
Upright, sagacious and humane, father had good judgment and a
sound sense of values. Although his success in business enabled him to
enjoy the luxuries of life, his basic wants remained simple.
Dora Donner Ide
San Francisco, California
October 1973
FOREWORD
As an explanation and apology for this conglomeration, I want to say
that when my mother was about seventy years old she persuaded me
to start my autobiography. She lived to be almost ninety-two and re
peatedlyasked me to finish it. But being busy, a poor writer and a good
procrastinator, active work on it was postponed. The one person in the
world who thinks more of you than you deserve is your mother.
It may be cowardly to fasten part of the blame on my youngest child,
but to understand Dora is difficult. With her own money she bought
a typewriter and insisted on helping me. She asked me questions and
made copies of the answers, one of which she gave to me, keeping the
other, which she put in her trust box so it would not be lost.
I hope that anyone who wades through this incoherent mass will
not be too bored, will overlook some of the trivial incidents mentioned
and will take into consideration that when most of this data was com
piled, I had passed three score years and ten.
We absorb the little knowledge that we accumulate from what we
see, hear, read & can deduce from experience. Ordinary, unimportant
events sometimes make deep impressions that later help us to cope
with future problems. If we are observing, it is remarkable how much
information we unconsciously absorb that becomes useful. Trivial in
cidents frequently influence our future lives much more than we real
ize at the time they happen.
I have never kept a diary and have related only a few experiences &
observations. In order to refresh my memory as to dates, facts, & fig
ures which were common knowledge in the iron and ~ t e e l industry, I
consulted friends, referred to my files & well known books. The state
ments herein I believe are correct & have been secured from memory
or 'derived from sources considered reliable but not guaranteed.' xv
1I3:NNOa A1IN3:H WVlllIM dO AHdV1IDOIHOlnV 3:Hl
Chapter I . MyParents.On May 28, 1836, Frederick Donner, my father,
was born in Stuttgart, Germany, where his grandparents and parents
had been born and lived their lives. In 1844, when he was eight years
old, his mother, who was widowed, decided to come out to Ohio and
bring her son with her. She had relatives there. Later she remarried a
Mr. Diehl. He was not kind to his stepson. When my father was four
teen years old, he bound himself out as an apprentice to a watchmaker
for three years. For his services he was given his room and board plus
$25 the first year, $50 the second year and $75 the third year. His
mother had expected to help him out while he was putting in his ap
prenticeship, but she was not permitted to do so, and father had a dif
ficult time.
My mother, Mary jane johnson, was born in Pittsford, New York,
on the 23 rd of December, 1836. Her parents were born in Mossley,
near Manchester, England. Her father, job johnson, was a blacksmith.
He took a trip to America to look conditions over and decided to make
his home in the United States. It had been his intention to return to
England and marry the girl he was engaged to, but as travel was slow
and expensive he wrote her and suggested that she join him in America
and be married here, thereby saving time and money, which she did.
My parents lived simply in Columbus, Indiana, compared with many
families there today. Candles were used and some coal oil lamps were
quite good. We had a music box and an organ. Of course, in later years,
gas, electric lights, etc., followed.
Chapter 2. Life Begins Me.
On
May 2 I, 1864, at one o'clock in the
morning, I arrived in ~ o l u m b u s , Indiana, about two weeks earlier than
I had been expected; I weighed 7 ~ pounds. As the hospital nearest to
Columbus was situated in Indianapolis, 4 I miles distant, with few trains
operating between these points and the only other means of traveling
being by horse and buggy, babies were usually born at home. I
My parent's home, a brick dwelling at the corner of Franklin and
Eighth Streets, where I was born, remains but has been remodeled sever
al times. It was a comfortable house, and I slept constantly unless dis
turbed by hunger or colic pains. The room mother and I occupied was
pleasant. It had a sheet-iron stove for burning wood. I was provided
with plenty of clothes and covers. The stove was seldom used except
when I was bathed, which I am told occurred too often to please me,
and I protested as vigorously as I could. Even after I was a big boy, it
seemed to me that mother insisted I wash my face and hands much
more frequently than was necessary.
During the first months of my life, I was given the food nature pro
vides for babies and later cow's milk was added. The milk was strained
but not pasturized, homogenized nor certified. My Aunt Minnie told
me that before and after I was a year old, I would put anything I could
into my month, including my toes. I probably needed more vitamins,
but they had not been discovered then and could not be purchased.
Having selected long-lived parents probably helped me to survive.
Father and mother said I was a beautiful baby and a nice little boy;
they never exaggerated and were truthful. Is it not remarkable that I
outgrew these prominent traits?
Chapter 3. My Family. I was the second child born to my parents in a
family of eight. They had lost a baby girl, Ella, a victim of scarlet fever
while they were living in Hope, Bartholomew County, Indiana, before
they moved to Columbus.
Chapter 4. Early Memories. One of my earliest recollections is my
mother advising when I did not understand anything to ask questions
as that was the way I would learn, and when I heard new words, to re
peat them so that I would remember them. Needless to say, I asked her
many questions which she tried very hard to explain in such a way
that I would understand. She was always patient with me.
When I was five years old, I was playing in the back yard and saw a
teamster trying to drive a pair of mules over a pile of sand. One mule
refused to go. After several trials, the driver gotangry and beat the mule
many times with a black-snake whip and said, 'You G-- d--- s-- of a b----.'
And the mule obeyed. I repeated these magic words continually so that
I would remember them. On entering the house, I saw mama getting
ready to bathe the baby and asked, 'What are you going to do?' She re
plied, 'Bathe little sister.' I tried my new words saying, 'You G-- d--- s-
of a b----.' Her look of astonishment told me that I had said something!
She laid the baby on the bed and asked, 'Where did you hear those ter
riblewords?' I replied, 'In the alley.' Mama then said, 'Never repeat those
words. That is swearing.' My Aunt Minnie who had been present dur
ing the conversation almost laughed and left the room, and mama soon
joined her. Aunt Minnie told mama that she did not think that I could
remember so many new words. (She did not know that mama had
taught me to repeat words so that I could remember and use them.)
They did not realize that I could hear them talking. Their laughing
made me think that I had done nothing very bad. During the next few
days', I looked through the fence many times and saw the teamster &
his mules, but I was very much disappointed that the mules obeyed. I
wanted the excitement repeated. Even now, when I hear that expres
sion, I recall how parrotlike I repeated exactly what I heard.
Mother had a friend who had but little money. She raised chickens
and sold them, as well as eggs, to help pay their expenses: One day
mother needed two dozen eggs & had me buy them from her friend.
The price of eggs was twenty cents a dozen. She gave me forty cents
to pay for them, suggested that I put the money in a pail so I would not
lose it, and cautioned me to be careful not to fall and break the eggs.
She crossed the street with me saying, 'When you come back I will meet
you here, and we will go home together.' When she met me and saw 3
the eggs she said, 'These are bantam eggsl' I replied, 'Yes, she carefully
picked them for me because bantam eggs are sweeter than other eggs.'
Mama said, 'I am surprised she told you such nonsense. Bantam eggs
are not sweeter than other eggs. Sugar is not used in eggs; some per
sons put in salt or pepper or both. Small eggs contain a less amount of
food than large ones and for that reason are not worth as much. She
cheated my little boy. I will have nothing to do with a woman who
cheats a child.' I then asked, 'Mama, what does cheating mean?' She
replied, 'If three or four years from now a man tries to sell your little
sister a small piece of candy which he breaks off a big piece, and tells
her that it is sweeter than the big piece, what would you do?' 'I don't
know,' I said, 'but I think I would like to hit him, because he would be
trying to cheat my sister.' Mama said, 'I am glad you understand now
what cheating is.'
I remember mother telling me that I vyas the only chUd she had who
thought out loud, and my thoughts were not always complimentary.
I asked her what complimentary meant. She answered, 'Not flattering
nor pleasant,' but said I was always honest.
I have always enjoyed the circus which was an annual, well-adver
tised event in Columbus, Indiana, when I was a child. Father took me
when I was quite young, as he said, 'to see the animals,' but as we always
remained to see the performance, mother laughed & teased him, saying
'His son is only an excuse.' In later years, I took Dora, my youngest
child, & when in my eighties, I managed to attend several of the great
shows.
When a child, I was provided with tickets for the Columbus Lecture
Bureau & encouraged to attend. Hotel accommodations were poor in
Columbus and important people were frequently invited to private
homes. I remember among those we entertained was Paul Duchaillu.
His adventures in Africa & talks about the gorilla were most interesting.
He wrote a book describing his trip that I thoroughly enjoyed reading.
To School, To Work, Back to School and Hanover College.
Years I 87 I - I 882. I did not start school as young as most children as I
was not strong when a child. I first artended a local private school for
about two years, but it was not well managed and my parents decided
to send me to the Columbus public high school. I graduated from high
school in May 1882.
In February 188 I, I had to leave school to assist my father. He had
traded Indianapolis real estate for a flour mill in Columbus. Any time
he devoted to the mill interfered with his regular business and worried
him. I never knew the amount of his investment and doubt if he did.
The building was of wood construction and its rate of fire insurance
was 4 percent. He operated the mill under a partnership arrange
ment so that he was equally responsible fQr any gains or losses. The mill
made a little profit the previous year, but my father found his partner
was a peculiar old gentleman and exceedingly careless in financial mat
ters; instead of depositing their money in a bank, he kept it in the pock
'ets of his trousers. Father believed his intentions were honest, but his
methods were exceedingly crude and he had but few records. The old
miller was an elder in the Presbyterian Church, as was my father. His
daughter was my Sunday school teacher, a very fine person, as were her
father and mother.
Becoming dissatisfied, father asked the mIller to buy or rent the
mill. He refused and stated he would not rent the mill at any price be
cause it was not located on a railroad. Father replied, 'If you do not
have enough confidence in the mill to offer any rent for it, I will not
continue our partnershIp beyond the last of February, 188 I.' He had
me at the mill the last week of February as he would soon have it on
his hands.
On March I, 188 I, I was selected to temporarily manage the mill. !;
It was a small one but my job was heavy for a boy my age-not quite
seventeen. The new miller father had engaged was a splendid judge of
wheat. He helped me as much as he could, but had no business ex
perience. Buying the wheat and com, selling the flour, meal and feed,
collecting accounts and looking after the books, kept me busy. I made
numerous mistakes but worked diligently to learn the business.
In July, my mother's brother, Joseph Johnson, a farmer, came from
Michigan to take over the work in the mill so that I could return to
school. He was about forty-five years of age, a fine man, but had no
experience in the milling business. Not knowing many of the customers
made him reluctant to solicit orders & collect accounts as I had done,
so he had the teamster, who delivered flour to grocers, solicit orders
and make collections as he was in their vicinity frequently. This was
a good idea. He was paid by the week, had plenty of time and liked to
solicit orders, make collections, etc.
Until school started in September I continued at the mill but when
ever there was an opportunity I worked with the city or county engi
neers, for which I received one dollar per day. On Saturdays & on eve
nings during the week, I collected accounts and solicited orders as my
uncle requested.
I rejoined my class in the Columbus High School. Having been away
almost three months, I was behind in my studies and kept very busy.
From September 188 I to May 1882, I had to work diligently to catch
up with my class. Professor A. H. Graham was most kind in tutoring me
during that period.
In 188 I and I 882 the Columbus High School had but one teacher in
language who taught only Latin, so I could not take German. I had one
year of German in the private school I attended, and I am sure I would
have passed in that subject if it had been taught. The school was at
fault in not having a teacher, & because of this I was allowed to gradu
ate without credit in a modern language in May 1882. In September
1882, when I entered Hanover College, I had to be examined in every
thing or enter college as a senior prep because I was not qualified in
German or Latin. I chose to be examined in all subjects.
When I was being examined in mathematics, Professor Morse in
quired what geometry I studied. I replied, 'Davies,' which pleased him.
He asked me to go to the blackboard and demonstrate theorem num
ber twelve. I replied, 'I do not remember theorems by number, but if
you will read it, I will demonstrate it.' Much to my surprise, he read a
theorem that was new to me. I hesitated and asked him to please read
it again, which he did. I repl1ed, 'That theorem is not in my book.' He
smiled and acted like the theorem was in the book and I could not solve
it. I stated that if he would give me a few minutes I thought I could de
monstrate it. He said, 'All right, take your own time & raise your hand
when ready,' but he looked so skeptical as to my ability to succeed that
I was determined to solve it.
After struggl1ng a long time, I raised my hand. He told me to go to
the blackboard & proceed. After I finished, he smiled pleasantly & said,
'Your demonstration is very awkward, but correct. You certainly never
found that solution in any book. Let me see your geometry.' I went
downstairs &secured it. After examining it, he said, 'It is an elementary
book written by Davies, the author of Davies-Legendere, which we
use.' He then gave me another theorem from Davies-Legendere which
he knew was not in my book. I solved it in a few minutes. This pleased
him. He remarked, 'Your solution is an improvement over the last one
but it is not the one in Davies-Legendere. What arithmetic and algebra
did you study?' After I answered he said, 'You are a freshman in mathe
matics without any conditions.' One of the seniors who was in the room !
said to me afterwards, 'You are solid with Professor Morse through
college unless you commit murder.' 7
I passed all the other examinations and was eligible as a freshman,
with the exception of Latin, in which I was a senior prep.
I intended to be an engineer, and it was only for this reason that I
decided to change to Lehigh University or Boston Tech. Dr. Fisher,
president of Hanover College, was not pleased with my decision, but
when I explained my reason to Professor Morse, he was very sympa
thetic & said, 'I am sorry to see you leave Hanover, but I understand
your reason.' I was very fond of Hanover; it was beautifully situated
above the Ohio River.
Much to my surprise, Father wrote me in December and asked me
to go home and take charge of the flour mill as my Uncle Joe was not
well. He stated, however, that the next year I could go to Lehigh or
Boston Tech, whichever I preferred.
Chapter I 2-1 Shortly after I returned to
Columbus, I learned that the mill had been losing money. My uncle
was sick about the situation, considered the mill out of date and an im
possible proposition. I thought that with some improvements & care
ful management, it could be made to pay.
The mill had five employees-the miller, engineer, teamster, mill
hand and myself. I employed an office girl immediately. Occasionally
we had an extra laborer. The coal was hauled from the railroad by con
tract. To manage the mill, I studied. every machine, its operation and
adjustments. In a short time I was able to relieve the miller during his
lunch hour.
The grinding of wheat with buhrs or stones had almost disappeared
because the flour manufactured by the roller process was superior and
made white bread. Our competitor had installed rolls more than two
years previously and had practically all the business in Columbus. We
could not compete. The mill must be improved or closed down per
manently.
The miller advised father that a combination stone and roller system
would make flour just as white as that manufactured by the full roller
process. To get information on the subject, I called on Mr. John A.
Thompson of Edinburg, a banker, who owned an up-to-date mill. He
was very kind and allowed me to stay in his mill several days to study
the roller process and gave me good advice. I told father the miller was
mistaken. I knew that Mr. Thompson had first tried that system, but
abandoned it as a mistake and installed the full roller process. Father,
however, adopted the miller's plan because it would cost about half as
much as the full roller process, but he decided that I should purchase
the machinery. I found that the miller had been gUided almost entirely
by the machinery salesman and he did not have me meet him. When
the miller was busy, I saw the salesman and insisted on specifications
of the machinery proposed and the flow of the mill. With that infor
mation, I secured a competitive bid from Nordyke and Marmon Com
pany, Indianapolis. Judging from the prices submitted by the miller &
those I secured, there must have been a commission of at least $ 1,000.
Father was delighted. A large part of the machinery I purchased was
the same and part of it was superior.
Soon after the mill was started, it was evident that there was no im
provement in the flour. Father saw that he had made a serious mistake;
six month's time and about $2,000 in money had been wasted even if
he used the machinery purchased, which had cost about $ 3,000. The
millwright work was a total loss. Father recognized that he must make
further improvements or close the mill. If he followed the latter course
he would incur an enormous loss, as the mill and eqUipment would
be unsalable. He therefore authorized me to buy the machinery neces
sary to make the mill a success, stating, 'I will give you for your services
your board and a third of the profits from the mill.' This offer stimu
lated me. I was of the opinion that the mill should make $ 3,000 or I I
$4,000 per year, notwithstanding that it had been losing money over
the last two years.
I secured prices on the additional machinery required from E. PAllis
and Company, Milwaukee, and Nordyke and Marmon Company, and
placed the order with the latter firm. Their salesman represented that
the installation of machinery including millwright work would cost
$ 8,000 and for another $ I ,000 the capacity of the mill could be in
creased from sixty-five barrels to one hundred barrels, which would
mean a saving in the cost of manufacture. I thought that with a better
flour we should enlarge the business and spend the $ 1,000 extra. To
my surprise, I found that the improvements would cost $I I ,Soo in
stead of $9,000.
About two weeks before the mill was ready to start, father told me
that he was in financial trouble as he could borrow no more money
from the First National Bank. Last year's improvements in the mill were
a failure which hurt his credit. One of the directors of the bank offered
to lend him $ S,000 provided he was given a mortgage on the mill, but
he must pay the bank's loan of $2,soo. His total liabilities were now
$ I I ,SOOt He was rated in Bradstreet from $ 10,000 to $ 20,000. His in
debtedness was too large to make a financial statement. The question
of money had never occurred to me. I had i:hought, of course, that he
could get the money at the bank. Father was troubled and mother was
terribly worried. I saw the treasurer of Nordyke and Marmon Com
pany and explained that I was responsible for increasing the capacity
of the mill to one hundred barrels, which they had recommended at
an extra cost of $ 1,000, but that the total cost of the improvements
amounted to $2 ,SOO more than their representative's estimate. Their
regular terms were three years, which I had not questioned, but in view
of their mistakes, I thought that they should reduce the first year's pay
ments to one-quarter instead of one-third &spread the payments over
four years instead of three. The treasurer of the company refused; I
saw the president and he granted me substantially my request. Fortu
nately, father secured a loan of $5,000 from a friend in Cincinnati,
which eased money matters with him. I realized that if the mill was not
successful, father was in a serious financial position.
When the mill was started, the flour proved satisfactory, but natu
rally was no better than that of our competitor. He had supplied prac
ticallyall the flour in Columbus for three years &retained the bUSiness.
I was deeply disappointed in not being able to secure a few of our pre
vious customers. The discouraging feature was that I made no pro
gress. I was sensitive. If a grocer had none of our flour in stock and
refused to give me an order, it was with difficulty that I could refrain
from tears.
On account of higher costs, we could not sell the carload buyers in
competition with the merchant mills. I made an effort to sell the small
er buyers in nearby towns. I visited North Vernon weekly. I would take
the 4: 30 P.M. train, remain overnight and return to Columbus the next
morning. Every two weeks I went to Jeffersonville, New Albany, and
Louisville. I would catch the 4:50 A.M. train and return late at night
so as to be away from the mill as little as possible. When home, I was
at the mill from seven A.M. until six P.M. I never heard of the eight
hour day. I went to Indianapolis occaSionally for a day, when I could
sell a carload at about cost to a baker.
I found that I could get more orders from strangers than in Colum
bus, which I thought was because when away from home I had more
confidence in myself. I learned to do a better job in soliCiting orders
on which we had to pay the freight, but met with no success at home.
The mill lost about $1,200 in four months. I was quite discouraged
&regretted having enlarged the mill. I began to fear that my Uncle Joe
was right. I 3
Chapter 7. A Few Experiences as a Young Man. At the age of sixteen
years, I expected to become a civil engineer and on Saturdays, holidays
and during summer vacation, when opportunity offered, I carried the
rod and chain for the city and county engineers. I never became an
engineer, but the knowledge gained was useful to me in later years.
In those years danCing was not countenanced by most churches, but
roller skating was permissible and popular. Mother did not oppose my
taking dancing lessons or going to private dances, but objected strong
ly to my skating with certain girls, although I explained that it was be
cause they were the best skaters that I selected them as partners. My
explanation was only partially accepted. I must admit that several of
the girls to whom she objected were good looking in addition to being
good skaters. She looked much further than I did regarding them and
their families as well as associates. She criticized me so fairly and in
such a nice way that it was a pleasure to comply with her wishes.
ProgreSSive euchre parties at that time were quite popular. It was cus
tomary to give prizes, but no one played for money. The game was
severely criticized as gambling by some churches. One day I brought
home a very nice plush collar & handkerchief box, which mother saw in
my room. She suspected where I had got it and questioned me. I asked
her if she understood euchre and she admitted that she did not. At
that time spelling matches were quite common, and I explained that
progreSSive euchre parties were similiar to them, but in euchre it was
problems that had to be solved instead of words to be spelled; that the
game was played by partners (boy and girl) against two opponents at
each table, the partners being changed at every table each game, and
the successful partners progreSSing to the next table. I, with the help
of my different partners, had been successful in solVing the greatest
number of euchre problems and making the most progreSSions. Con
sequently, as a 'reward of merit,' I had secured the prize to which she
referred. I do not recall what the lady received. The Presbyterian Sun
day School gave 'rewards of merit' to scholars answering the largest
number of Bible questions and that was the reason I referred to the
euchre prize as a 'reward of merit.' I explained that it was much more
ofa game and fun to compete for a 'reward of merit' at a euchre party
than in a Sunday school class. Mother was amused by my explanation.
She did not think I had done anything very bad. Cards were never
played in our home, neither was there any dancing.
Some years later, when I was living in Anderson, Indiana, Robert &
Joseph, my sons, visited my parents. I was shocked when they returned
to find that they had a pack of cards which their grandmother had
bought them because they wanted to play 'Snap Jack' and 'Old Maid.'
On my next trip to Columbus, I told mother that she was not nearly
as strict as when I was a boy. She was quite surprised, saying that I was
mistaken. I stated she had purchased a pack of cards for my boys and
permitted them to play cards in her home, a privilege I never had. She
was amused, & admitted she had changed her views on many questions.
Father was an elder in the Presbyterian Church, or probably both
cards and dancing might have been permitted. He was a skilled watch
maker and also in the Jewelry business. He built a photograph gallery
in the rear of his building for photographs and tintypes, owning the
equipment. The photographer received half the profits. In some twenty
years, father had saved enough out of his business to own his stock of
merchandise, the building he occupied, the home in which we lived
and several thousand dollars worth of real estate. He generally was in
debt several thousand dollars. He traded real estate at various times:
once for land in Texas and once for an Indianapolis property. Father
never had an accurate set of books, but they were not so necessary in
that period, as there were no income taxes, and bookkeeping was not
so essential as it is today. IS
Chapter 8. A Good Investment. Year 1883- One Saturday, while in a
barber shop, I bought a warehouse for $225. The building and its im
provements probably cost $1,500, but the salvage value was probably
not worth more than $150. It was located on land leased from the
Pennsylvania Railroad at $75 per year. I heard that the owner of the
building had received notice to vacate, but I knew the superintendent
of the railroad and thought that I could have the lease extended from
year to year, which I succeeded in dOing.
The property had been rented at $25 per month for a feed store, but
the tenant was retiring from business. I was not aware of this. After
learning of it I suggested to Frank Everroad, an employee of the tenant,
that he take over the feed business. He laughed and said, 'I would like
to, but have no money.' He went on to say that he would gladly work
for me at $10 per week-the wages he was receiving. I had done
some business with the tenant, had seen Everroad several times, and
had formed a favorable impression as to his ability. I proceeded to
make several inquiries regarding him and, as all replies were favorable,
I asked him to call and see me. He knew quite a lot about the business
and again offered to work for me at $loa week. I made him the fol
lowing proposition: 'Ifyou work for me, I will guarantee that you make
at least $10 per week on the following plan - First: You are to run the
business in your name. It is not to be known that I have any interest in
it. Second: You are to draw $10 per week and pay $25 per month rent,
the same as the present tenant. Third: We will divide the profits at the
end of the first year. If you do not make more than $10 per week,
you are to retain that amount and our agreement ends.' His share of
the profits was a little more than $I 8 per week. The business was con
tinued and proved to be satisfactory to both ofus.
Chapter 9. The Shipping of Grain. Year 1884. The mill never shipped
grain until I became its manager. Grain shippers thought we should
buy wheat for milling only & so expressed themselves. Shipping grain
became an important part of our business.
In buying wheat there was usually a profit of two to three cents per
bushel for shippers, but when the millers needed wheat to operate
their mills the profit for shippers of wheat disappeared.
We bought all the wheat we could buy at market prices and carried
) ,000 bushels, and frequently more, when the market was between
6) and 80 cents per bushel, but if the market was in excess of 90 cents
we owned little. This policy was profitable. In corn it was different. A
cerealine mill in Columbus shipped an enormous tonnage of prime
white corn from Illinois to Columbus. It paid a fancy price for good
white corn to encourage local farmers and no yellow corn was raised.
One of the leading farmers in the country wanted to sell 8,000 bush
els of white corn that had been damaged by several heavy rains blow
ing into his cribs. He showed me a half-bushel basket that he con
sidered a fair sample. It was discolored by mould. I explained to him
that if I could see the corn in his cribs I would have a much better idea
of its value and said I would drive out immediately and look at it. I
found that part of the corn was badly discolored, but some was not
damaged. I knew shelling would greatly improve its appearance as it
gets a severe rubbing in going through the sheller. I discovered that
rubbing the corn in your hands removed considerable mould. I se
lected a bushel of the most discolored I could find and ran it through
our sheller. It improved its color even more than I had expected. Load
ing the corn into wagons, shoveling it into cars, transporting it to In
dianapolis, unloading it into the elevator, shelling and transporting it
again to its destination not only thoroughly mixed it, but gave it a lot
of airing and friction and improved its appearance. I concluded that
the corn might sell to a good advantage in some markets.
When I next saw the farmer, he asked me to make a bid on the 17
entire lot. I saw that he was exceedingly anxious to sell. I stated that
the market price on prime corn was forty-three cents per bushel, but
explained that there was considerable uncertainty and risk in buying
damaged grain-where to ship it, how it would grade and its value
but that I was wUling to take the risk and buy the 8,000 bushels at
twenty-five cents per bushel. He asked me how soon I would accept
delivery. He was a man who liked to rush his work. I replied, 'As fast
as you can haul it and load it into boxcars.' This pleased him. He an
swered, 'All right, young man, it's your corn. My teams will start to
morrow morning at 7 o'clock. 'We signed a memorandum accordingly.
I telegraphed an Indianapolis elevator and asked what they would
charge per bushel for shelling about 8,000 bushels of corn in transit.
They quoted a fair rate which I accepted. I shipped the corn to Toledo
with a stop-over in Indianapolis at $3.00 per car. The com graded bet
ter than I had expected. We realized a profit of fifteen cents per bushel
or$I,200.
I learned afterwards that two grain shippers refused to buy the grain
outright, as they considered the risk too great, hq.t offered to handle it
on a commission basis of two cents per bushel. Their timidity made it
easy for me to buy. I bought it probably five cents per bushel less than
I would have paid if there had been keen competition.
When corn is being shelled it receives a rough scouring and a terrific
blowing. I had not thought of the fact that good com would not be
damaged. This was the only lot of damaged corn I ever had a chance
to buy . We purchased prime corn for corn meal, also off-grade wheat
for mixing purposes, but it was handled at fairly close prices.
The farmer from whom I bought this corn was a large grower of
wheat & tookgreat pride in its quality. He had the reputation of being
'as close as the bark on a tree,' but was thoroughly honest. He was sat
isfied with the transaction, and as the other buyers refused to make a
definite offer, it helped me to secure a fair chance in buying his wheat,
which was superior in quality to the average and worth more to us for
milling purposes.
Chapter 10. The Mystery of My Unsuccessful Salesmanship Solved.
We had an understanding, a gentleman's agreement, with our com
petitor in Columbus on the price of flour delivered to the grocers and
bakers. I adhered strictly to those prices and supposed he did the same.
A friend of my mother, Mrs. Sarah George, carried on after her hus
band's death the grocery business he had established. She managed the
business quite successfully and sold a lot of flour that went to Brown
County. One morning she said, 'Will, I want to tell you confidentially
why I have not given you more orders. The reason which influenced
me probably applies to others. At the end of every month, I am allowed
a rebate of ten cents per barrel. Please do not give me away.' I thanked
her and said, 'You need have no fear.' She explained, 'I pay all my bills
by check after the end of each month.' She showed me a receipted
statement for the last month's flour bill and the check with which it
had been paid. In making the check she deducted ten cents per barrel
rebate from the amount in the statement.
I had been stupid and my pride was hurt. Our competitor was old
enough to be my father, and he had put things over me like a tent. I
decided immediately to fight and to continue that fight until we sold
half the flour in Columbus - we were selling only about eight or ten
per cent at this time. The profitable business was here.
I studied our situation. If we only met the cut of ten cents we would
accomplish nothing. The reduction must be as large as we could make
it, so that it woUld be evident that F. Donner and Son were making it,
and there could be no question about it. I reduced the price in Colum
bus five cents per 2Sibs in paper sacks (the package in which most of
the flour was sold). This was equivalent at that time to 4S cents per I 9
barrel. We reduced the price of flour sold in bulk 25 cents per 100 lbs,
which was about the same price as in paper sacks, but as few wooden
barrels were used the reduction on account of the cost of the barrel
was only 25 cents. We exchanged flour for wheat, the price of which
was not affected. We did local advertising which read as follows:
Bread is the Staff of Life! Ifyou want a good substantial
one and the best bread, use Donner's light loaf flour.
After learning that all grocers and bakers who were customers of
our competitor had not received the rebate of ten cents per barrel, I
informed them that some grocers & bakers did. A few were so wrought
up that they were charged more than their competitors that they gave
us subsantial orders and continued to favor us. We promised to treat
them fairly. In order to call on all the buyers on the same day, I skipped
lunch. The mill secured more local orders that day than it had received
in any six weeks since F. Donner and Son had started in business. Our
business was growing. The reductions applied only to light loaf flour.
We had different grades and brands in other markets.
I called on our competitor and stated, 'Since you have given private
rebates of ten cents per barrel, I give you our new reduced prices. I
want you to understand that we intend to sell fifty per cent of the flour
sold in Columbus and will continue low prices until we secure that per
centage.' I was eVidently the first to notify him. He was so flabbergasted
that he hesitated. He then admitted that in a few instances he had given
ten cents per barrel for cash only. I replied, 'You are a liar; you have not
given that reduction only as a cash discount.' He became pale & angry,
saying, 'You are a d--- fool. I will see your father.' I replied, 'Go ahead. If
you do not play fair, remember, we will reduce prices further.'
When I had finished, I saw father and explained what I had done.
He was greatly surprised at the size and number of orders I had secured.
At first he thought that I had made prices lower than necessary, but I
argued that if we had only met the ten cent rebate and cash discount,
we would have received no consideration from the favored buyers &
secured few orders; whereas we had taken enough business to make a
deep impression on our competitor and all buyers. We had also estab
lished a favorable position with the consumers. I explained to father
that the reduction of forty-five cents still left us a margin of fifteen to
twenty cents per barrel or as much profit as where we paid the freight.
He concluded that I was right and said, 'Finish the job you started.' I
said, 'It may be necessary to sell flour at low prices and fight until we
obtain half the trade, but as we have practically nothing to lose and so
much business to gain I shall enjoy continuing this war until we accom
plish the results for which we are fighting.'
The next morning, the gentleman called on father and asked him
to agree on a price twenty-five cents higher per barrel. He tried to con
vince father that his son did not know what he was dOing. He argued,
'Your prices are now so low that you can make no money.' Father ex
plained that his son received no salary, only a percentage of the profits,
and if the mill made no money for a year or two, it would teach the
young man a lesson. I thought that father's answer was perfect. We
telegraphed and quoted the nearby out-of-town stores and secured a
number of orders in that way.
I was in such a belligerent mood that fighting for business made me
forget my timidity and sensitiveness. Several months later the price of
wheat declined and our competitor called on me to say, 'There is no
need to reduce the price of flour.' Five cents per bushel was the eqUiva
lent of about twenty-five cents per barrel .. I hesitated and finally said,
'I was thinking about twenty-five cents per barrel. However, I will give
you a trial. Today's prices will be all right if you play fair, but if you do
not, look out!' We now had a fair profit and almost half of the local
business and our trade was grOWing. 2 I
There were several grain buyers who bought and shipped wheat
from Columbus and nearby railroad stations. I refused to enter into any
understanding with them as to the prices we would pay for the dif
ferent grades of wheat, because there were too many differences in
opinions as to gradings. We would use our ownjudgment as to the price
we would pay in Columbus and nearby stations. I did not consider
that an arrangement as to the price at nearby railroad stations would
be desirable, since many farmers preferred to deliver their wheat to
nearby stations because it was a shorter haul than to Columbus. We
would be foolish not to pay an extra price for delivery to our mill, be
cause if we bought it in the general market we would pay a higher price,
the freight to Columbus, and the cost of hauling it from the railroad to
the mill. The mill lost $1,200 the first four months, but had a profit of
slightly more than two thousand dollars for the year. I do not think
that we ever encountered a more difficult situation.
It requires as much work to succeed in a small business as in a larger
one-the fundamentals are the same.
Chapter I L A Grain Purchase Mr. Irwin Wanted Explained and Our
Reward. Years 1884- I88S. Mr.Irwin, our banker, said to me one day,
'You must have made a lot of money this year.' I said, 'We have made
no more than last year at this time.' He said, 'I do not understand. Last
year you owed me about $2,000. This year you have money in the
bank and soo barrels of flour worth about $2 ,soo stored in my buggy
house.' I replied, 'But the wheat it is made from is not paid for and its
price not yet determined. I will show you, confidentially, my contract.'
I explained that a gentleman, Mr. X, had part ofhis wheat crop from
last year and the year before, amounting to 10,000 bushels, & he had
said that as the roads were very good he would like to get it hauled at
that time. Wheat was very scarce in Bartholomew County and I was
anxious to secure this lot of wheat as I thought we might not be able
to operate the mill unless we did. The market at that time justified a
price of ninety-seven cents, but as it was a nice lot of wheat I offered
ninety-eight cents per bushel for it. Mr. X said, 'I want $ I .00 per bush
el.' I laughed and said he would want more when he could get that
price. Mr. X said, 'No, I wUI agree to sell when I can get $ 1.00.' I re
plied, 'Under those conditions, I wUI store your wheat free of charge
and will agree to pay you three cents under the Indianapolis price of
No.2 red wheat and you must consider the wheat sold whenever the
market price reaches $ I .03 in Indianapolis. Under these conditions, I
will haul the wheat now.' I wrote a simple agreement, which we signed.
There was no active demand for flour, but I could sell bran at high
prices and a little flour that would net us $ I . 10 for the wheat sold. It
will be noted that Mr. X wanted to sell the wheat at $ I .00 per bushel
net to him, & we agreed to store it free of cost untU the market reached
$1.03- If the price had reached $1.03 Mr. X would have received ex
actly what he wanted.
The prospects for spring & winter wheat were good but soon prices
declined rapidly. When the No.2 red wheat reached eighty-three cents
in Indianapolis, Mr. X closed it out at eighty cents.
Mr. Irwin said it was a nice contract and was quite pleased. He said
that I could not lose. He further said, 'Hereafter, I will charge you six
per cent on your daUy average overdrafts at the end of the month.
Since some of your checks are not cashed promptly you will have quite
a saving on this arrangement.' I used this credit as if we had $5",000
in the bank .
. Chapter 12. Bicycle RaceS-Popular Sport. Years 1884- I 885. During
this time the high wheel bicycle was very popular _Columbus had more
bicycles than many cities much larger. This was brought about through
the activities of Charles Smith, who had the state agency of the Pope
Manufacturing Company, makers of the Columbia bicycle. 23
j
Will Irwin and I were enthusiastic bicyclists. We interested Dr. Rice,
Charlie Green, and Charles Smith to join us in starting bicycle races in
Columbus. In 1884 we rented the fair grounds, which had a good half
mile track, and advertised a race meet quite extensively. We visited
nearby towns on our wheels for advertising purposes, but mixed those
trips with pleasure as there were some very attractive girls in Seymour
& Edinburgh. Several times we were detained so late that we returned
via train.
The prizes given to the nonprofessionals were silver cups and gold
medals. We had a number of contestants from Louisville, Indianapolis,
and several from Cleveland and Chicago. Many visitors came from
Indianapolis, Louisville and other Indiana towns. After all expenses
were paid, not including anything for our time, there remained a prof
it of $2 82. So. The races brought so many people to Columbus that
the merchants asked us to have the races the next year. In 188S we in
creased the number of events and gave more expensive prizes. We ad
vertised in Louisville & Indianapolis which was costly. The Fair Ground
Association raised the rent, so our expenses were much higher than
in 1884.
As Will Irwin and I continued our advertising trips on our wheels,
we made contacts which necessitated long distance telephone calls.
Instead of telephoning from Irwin's bank to make our personal engage
ments, we would go to the telephone exchange so that our conver
sations would be more private. Will phoned one day and made arrange
ments to talk with a young lady in five minutes, by which time he ex
pected to be at the telephone exchange, but she was on the line before
Will & I reached there & was connected with Irwin's bank. Mr. Joseph
I. Irwin answered the phone just as we arrived at the exchange. Will
was immediately connected and heard his father ask the young lady
her name. When she told him he replied, 'You have a nice voice. I am
Will's father.' Will broke in quickly, but the father enjoyed that con
versation more than the son.
Will Irwin won the half-mile race and received a gold medal for that
event. I won the 100 yard race and a gold medal. I defeated Prince Wells
of Louisville who later became a professional and was well known in
Indiana and Kentucky. When I mentioned to one of my Philadelphia
friends, more than fifty years later, that in 188S I won a 100 yard race
he was surprised and said he could not imagine my being such an ath
lete. This made it necessary for me to explain that the event was a
new type of race, being a slow race for 100 yards. The track was di
vided by strings into courses 10 feet wide. A contestant who touched
a string, stood still, or fell off fouled and was disqualified. It was easy
to stand still, but difficult to continue at a slow gait. The danger points
were when the pedals of your wheel were near their high & low points,
because if you exerted sufficient pressure to move the wheel beyond
those critical points, you were likely to pick up speed, run on the foul
line, or fall off. I discovered that when the pedals were near those points
I could take hold of the rim of the wheel with my hand and push it
slowly and maintain my balance. It was that little trick which gave me
the race. My competitors attempted to go too slowly & were all quick
ly disqualified with the exception of Prince Wells. Finally he looked
back to see me and when he discovered that I was pushing the wheel
with my hand part of the time, he laughed and fell off, so that I had
no competitor the last half of the race. Prince Wells later became a fan
cy trick rider. He and a Mr. Canary gave exhibitions throughout the
country in skating rinks. Roller skating was a craze for a time. Small
towns throughout the country had their skating rinks.
IfWells had thought of pushing the wheel with his hand and had an
hour or two to practice, I would have had no chance against him.
The meeting was a big success & we had many visiting wheelmen. 27
JohnClark and Albert Bush had joined our group so that there were
seven sponsors, but after all expenses were paid there remained a prof
it of only $20 to be divided among seven. We were fortunate that
the weather had been fine, for if it had rained, there would have been
a loss of about $1,000. We discontinued the races the next year as
they would involve more time than we could spare. Indianapolis and
Louisville were also having races so we decided to retire from the field.
Chapter I 3. A Farmer Became a Grocer. Years 1884- I 885"' A retired
farmer entered the grocery business in Columbus. He was an honest &
nice man and extended credit to many customers. He was too liberal
in this respect and it was my opinion, with many others, that he would
probably fail. When our account with him reached $100, I ordered
Enoch, our teamster, who solicited the orders, to accept only cash or
ders from him and to try to collect the amount past due. One day he
asked Enoch to deliver to him five barrels of flour, promising to pay for
it in the morning in addition to the $100. Our driver took the chance,
which I approved. I was on the job promptly the next morning. The
grocer was making out a deposit slip and asked me to accompany him
to the bank, which I did. I saw him make the deposit & presented the
check but was told it was not good. I think the grocer thought the
check was good. I went to the rear of the bank and saw Will Schriber,
the bookkeeper, and told him what had happened. He said, 'I cannot
tell you the amount of his balance, but if you had not included the last
five barrels in the account, it would have been paid.'
I started out of the bank and it occurred to me that it might take
time to locate the grocer, so I returned and took the liberty of depos
iting $25" to his account & again presented my check. When I had col
lected the $I 25", the president of the bank came to me with the check
in his hand and said, 'You had no right to make that deposit of $25""
I stated, 'You accepted the $25" and paid me the $I 25". It is a closed
transaction. You can collect the money from your depositor.' He be
came angry. Several persons were in the bank & the incident became
gossip. My banker, Mr. Irwin, heard about it and asked me if it was a
fact. I answered, 'Yes.'
Afterwards, I went to the grocer's assistant and explained exactly
what I had done. I offered to buy groceries to the amount of the de
posit slip. He thanked me for the order and delivered the groceries.
Mother asked me why I had purchased so many groceries. I explained.
She asked if Mr. Irwin said anything & I said, 'No, but he winked at me.'
Chapter 14. Burning of the Donner Flour Mill in Columbus. Year 1887.
The Donner flour mill fronted south on Fifth Street and west on Syca
more Street. There was a small one-story dwelling on the rear of the
property, the balance of which was used for storing wood, coal and for
the convenience of the customers with teams. It was a splendid loca
tion for a residence or church, but a poor site for a flour mlll as it had
no railroad facilities.
In May, 1887, a fire started in the mill shortly after I 2 o'clock noon
in the very top of the bUilding. Many men & boys were just out from
work and school and were on their way home to lunch. They volun
teered their assistance and we organized them for transferring flour &
wheat across the street. The fire began at the top of one of the moving
elevators with cups. They were a total loss, excepting the wheels and
spindles of several that went into the basement, but most of them
stopped above the first floor.
Our loss would have been greater if it had not occurred at the time
of day it did, when the employees of the mlll were present, and the fire
had water put on it at the time it did. Fire spreads very rapidly in an old
flour mill, as the wood is so thoroughly dry.
The mlll and its contents were well insured, but everything on and
above the second floor was a total loss. The insurance adjusters 29
said that they had never seen such a total loss above the second floor
nor a greater percentage of salvage on and below the second floor.
The shafting, bearings, stock of paper sacks and the small corn mill,
corn sheller, flour packer, trucks, tools, moveable & fixed scales were
not damaged nor the office furniture and fixtures and supplies. Wheat
in bins below the first floor was not damaged.
Two hundred barrels of flour in 2 S Ib paper sacks (1,600 packages)
and 2S barrels in cooperage were taken across the street. There were
about 2 S barrels in process of manufacture burned, including material
that was to be fed from choke-ups. No damage was suffered in the en
gine and boiler room.
Chapter IS. An Invitation to Build a Mill in Hastings, Neb. Year 1887.
Shortly after our mill burned, we received a letter from the secretary
of the Chamber of Commerce, Hastings, Nebraska, which he described
as a growing city. He informed us that their flour mill had been des
troyed by fire some time before, and invited us to visit Hastings, with
a view to building a modern 200 barrel flour mill. He also stated that
the city was prepared to give a desirable site on a railroad & $I 0,000
cash to a responsible party building such a mill. The offer sounded at
tractive. Father and mother were interested , but did not want to leave
Columbus. They thought, however, that if the inducements were suf
'ficient I could move there. It was therefore decided that I should go
to Hastings & look the situation over, after which we could consider
the proposition. I wrote the secretary promising to visit them within a
few days. He telegraphed me, asking me to wire him the date & time
of my arrival. I did not answer as I had decided to look the situation
over first by myself in an effort to find out if there were any reasons
against building a mill there. I knew that they would point out the
good ones.
My train arrived about five o'clock in the morning. A farmer and I
alighted from the same Pullman & entered the one hack at the station.
I asked my companion the name of the best hotel. He told me but sug
gested that I join him at the restaurant near the hotel, where I could
get a good breakfast for twenty-five cents. He said that the same break
fast would cost me fifty cents at the hotel and I would have to wait
around for nearly three hours before it was served. I thanked him and
told him I would gladly join him. During breakfast, I inCidentally in
quired if there was a flour mill in Hastings. He said that it had burned
down and he feared no one would build another. Upon asking why,
he explained that Hastings was in a poor wheat section-it seemed to
be between areas in which both winter and spring wheat were success
fully grown, but that the farmers there never knew which to plant
spring or winter; occasionally one crop was good and the other poor.
A few miles to the north of Hastings, at St. Paul, spring wheat did well
and a short distance to the south, around Red Cloud, good crops of
winter wheat were raised, but their city seemed to be betwixt and be
tween. One of the towns, I think it was Red Cloud, sold most of the
flour and feed in Hastings and would exchange flour for either kind
of wheat.
After breakfast, I called at the warehouse and had a talk with the
manager. He told me he understood that the Chamber of Commerce
would give $10,000 to anyone who would build a 200 barrel flour
mill, provided it was located on a certain tract of land which was quite
far out, but that anyone familiar with the wheat in this section would
not build a mill in Hastings even if the Dest site in town was offered.
In view of this unfavorable information, we decided not to build
at this point.
I had a little experience while in Hastings which I found extremely
interesting. About ten o'clock I called on the secretary of the Chamber
of Commerce. He was very cordial and took me over to meet the 3 I
president of the bank who promised to see me in an hour or so. The
banker did not know who I was or why I was in Hastings. He took me
into his private office, explaining that he was in the midst of an un
pleasant job, which he would tell me about later. He afterwards ex
plained that the man he had been doing business with was transferring
all his property & equities therein under rather unusual circumstances,
and would have but little left. The banker felt sorry for him, and said
that he formerly had, I think, 160 acres ofland & improvements which
cost him about $ 10,000, but after the boom in real estate started he
sold it for $80,000, realizing $70,000 quickly. He then began dealing
extensively in real estate, buying and selling a considerable number of
properties. It was the custom to make a small payment & to give notes
maturing in one, two, three, and even four years for the balance. He
bought properties in this manner and in some instances assumed o u t ~
standing mortgages. When he sold, the buyer assumed the notes and
mortgages on the property. He also bought a number of properties &
gave mortgages.
For several years, he made many sales and purchases in this manner
and had large paper profits. He was looked upon as a rich man & was
supposed to be worth over $200,000. This was not to his advantage
when the situation in regard to real estate changed - people filed judg
ments against him to protect themselves. Even where he had some
property almost free, the eqUities were so tied up that he could not
realize on them. He lost almost everything.
Chapter 16. Rebuilding the Mill in Columbus. Year 1887. Good loca
tions on the railroad in Columbus were scarce. We were offered a grain
elevator in the central part of town for $ 6,000. The real estate alone
was worth about $4,000. It meant removing the bins from one half of
the elevator to install the mill in that part, and using the other half as
an elevator. Father thought we had better buy it at $6,000, but I finally
succeeded in getting it for $5 ,ood. The advantages in this property
were as follows:
I. The best location we could secure.
2. I thought it would displace the elevator as a competitor in buying
grain.
3. It gave us a mill cheaper than we could build one in any suitable
location.
4. It gave us storage for about 18,000 bushels of wheat.
The disadvantage was a higher rate of two per cent on fire insurance
than on a brick building, which we could afford to absorb.
I purchased from Nordyke and Marmon Company the necessary
. equipment for a hundred barrel mill, using all the machinery salvaged
from the fire. The building, location, & facilities for storing & shipping
wheat were important improvements. We built a warehouse at the
rear of the propertyon our railroad siding for storing flour, supplies, etc.
Another mill had been built previously but it was distant and incon
venient for about three quarters of the farmers around Columbus. The
previous owner of our elevator built a small one, but the location was
not as good as ours so the new mill & elevator were not serious com
petitors. Our location was central and much more convenient for buy
ing wheat and exchanging flour for wheat.
Chapter 17. A Lesson in Experience Cost $360. Year 1887. Shortly
after acquiring the Columbus elevator, I purchased from Mr. X 4,000
bushels of No.2 red wheat, F.O.B. cars jonesville at eighty cents per
bushel, weight and grade guaranteed. We each signed a memorandum
accordingly. The market was strong and advanced fully three cents. I
expected a profit of six cents per bushel.
A local grain dealer asked me if I had any wheat to sell. I offered
him 4,000 bushels of No.2 red wheat at eighty-six cents per bushel.
He asked me where it was. I answered, 'JoneSVille.' He had bought33
lots of wheat in that vicinity and knew there was only one man there
who could deliver 4,000 bushels and immediately went to see him &
offered him eighty-three cents per bushel delivered Jonesville. Mr. X
came to see me and said he was offered eighty-three cents per bushel
delivered JonesvUle. I told him the market had advanced three cents
per bushel and was now worth that price delivered Jonesville. He then
said, 'I will deliver the wheat to you in Jonesville, but I refuse to guaran
tee the weights and grade.' I answered that he had already so agreed in
writing. He replied, 'I now refuse. You cannot afford to sue me.'
I was provoked, and saw Colonel Simeon Stanis fer for legal advice.
He asked me if I could accept the wheat at his offer & make any profit.
I answered, 'On account of the expense of weighing and receiving the
grain in JonesvUle, the profit will be small, probably $ So if it grades No.
2 red, but according to our contract there would be a profit of $240.'
Colonel Stanis fer adVised, 'Will, you had better take the wheat on the
revised basis. It is unfair, but Mr. X is not an honorable man. Knowing
your father and mother, I advise you to accept his offer. I will charge
you no fee, but if you sue and win you w1l110se money because of my
fee and in addition waste your time.' I accepted my friend's advice be
cause he was kind and honest.
The wheat failed to grade NO.2 red. By talking too much, instead
of making $360, we lost $I 20. Competitors are not often as unfair,
and neither are the majority of sellers as unscrupulous as Mr. X, but
wIiat others do not know about your business will never hurt you. This
mistake was an expensive lesson. I made numerous mistakes, but this
is the most stupid one I can remember.
Chapter 18. Trouble Gave Me an Idea Out of Which Came an Offer
From Mr. Marmon to Work for His Company. Year 1887. In 1887,
the old mill had the most serious choke-up I ever witnessed. The miller
had gone to lunch and I was on duty. The exit spout from the purifier
choked, so that the quantity of material increased. The larger amount
of material required greater power to revolve and churn the increased
quantity in its conveyor. It finally caused the belt to run off and the
purifier stopped, after which the elevator became so overloaded that
it almost choked down. I discovered the trouble only a few minutes
before the miller returned and viewed the awful mess in the mill. He
assumed I was to blame and became very disgusted, angry and profane.
I thought that probably the trouble had started before the miller de
parted for lunch but, since I was not certain, refrained from expressing
myself. I told the miller I would help get the purifier running and the
material cleaned up before returning to the office, & that I was sorry
to see him in so much trouble. I left about two sacks of clean material
to be fed into the purifier when conditions permitted. It dawned on
me that if there was more material in the elevator than in the purifier,
the latter had stopped first.
The next day, immediately after the miller went to lunch, I diverted
the material from the purifier to the floor. Upon his return I explained
what I had done and said that I proposed to learn if the trouble started
yesterday while he was on duty or after he went to lunch. I reasoned
that with the purifier stopped, the material in the elevator to the puri
fier had no exit except at its top into one of the elevator boots; it could
go no other place. I explained that if the material secured from the ele
vator yesterday was a larger quantity than I ran on the floor today, it
would be obvious to me that the purifier stopped before he went to
lunch. He studied and hesitated several minutes. Finally, he laughed &
stated, 'I secured several times as much material in the elevator as you
found in the purifier. No amount of talk could have convinced me yes
terday that the mill was in trouble before I went to lunch, because I
honestly believed everything was running, but you have proved to me
that I was mistaken.' 3S
The spouts were made of wood. To know that the material was flow
ing, it was necessary to open one of the hand holes and see or feel it
running. This was easier to do by daylight than with a lantern. Certain
spouts never gave any trouble. This applied to those in which the ma
terial was granular and ran freely-similar to sand. If the material was
soft, however, or resembled flour, it was more liable to clog and cause
choke-ups. In such cases, the incline of the spout had to be correct &
very exact. Our mill had three floors &a basement. It was not designed
for the machinery it contained and consequently the engineers were
handicapped in properly placing the different machines which were
crowded into the old building. Some passages that the miller had to
use were narrow and badly lighted, making his task very difficult. He
had to do a lot of walking, running up and down stairs, and had many
troublesome choke-ups.
As I have stated before, I helped the miller during his lunch hour, &
being inclined to be lazy, thought up a way to avert choke-ups. I fash
ioned an electric device with an annunciator to detect and locate the
trouble at its inception, thereby avoiding serious choke-ups. I made an
application for a patent on this device. In 1889 I made a model. It con
sisted of a spout with a slide which could be moved and stop the flow
of the material in the same manner as a choke-up, causing it to back
up, come in contact with the swinging plate and lift it. The arm of the
shaft on which it hung would, by this means, close the circuit and ring
the electric bell the same as a choke-up.
I had an exaggerated idea of the importance of this device, and em
ployed a salesman at $100 per month and his expenses to sell it. I re
tained him for two months, during which time he wrote me enthu
siastic letters but never forwarded an order. I was quite disappointed.
I showed the model to Nordyke & Marmon Company of Indianapolis.
Mr. Nordyke, the preSident, was favorably impressed with the idea, but
Mr. Marmon was not. He admitted that the device would work and
detect choke-ups, but doubted if it could be sold - he considered it un
necessary. He telephoned their engineering department and got plans
of our mill. He said that mUls should be properly designed and the dif
ferent machines located with sufficient incline in all spouts, so that
choke-ups would not occur, and that belts should be kept tight and in
good repair, so that they would not run off, thereby stopping machines
and causing trouble. I realized the truth in what he said.
During our conversation, Mr. Marmon asked me how much I was
making. I stated the mill was making an average of $4,,5"00 per year, for
which I received one-third of the profits, or about $I ,5'00 per year for
my services. He said, 'You are doing remarkably well for such a small
mill, taking into consideration that you are off the railroad & crowded
into an unsuitable buUding.' He operated a small mill in Richmond &
a larger one in NoblesvUle, Indiana. It was buUt as a model for the Nor
dyke and Marmon Company. He offered me $3,000 for the first year
if I would join them, and added, 'You will have good opportunities for
advancement.' I thanked him and told him how much I appreciated
his offer but explained that my father was a watchmaker & depended
upon me to look after the flour mill, so that I was unable to leave at the
present time but that I would see him some time in the near future.
Strong competition with superior facilities, including a mill to grind
feed, had started recently in a more central location than the ware
house in which the feed business I owned was operated, and the profit
in our business had disappeared. I wanted to wind it up, but we had
done so well that Frank Everroad, my partner, did not see the situation
as I did. His brother joined with him and they offered me $300 for the
warehouse, cost for our inventory and book value for our accounts. I
accepted their offer. In a little over four years I had received a profit
of more than $5' ,000 from the feed business, and over $ 1,200 rent 3 7
from the warehouse, for which I had paid $22 S. This was a big profit.
It was a disappointment to me that Everroad would not close out
the business and join me in the mill. However, it was only a short time
until he realized that there was no future to their feed business. I per
suaded him to take a position in the mill, & explained that I would like
to go with Nordyke and Marmon Company, and hoped that he could
take my place.
A few weeks later Mr. Nordyke sent for me. He wanted me to take
his son's place while he went to Mexico. He offered me $300 a month.
I explained that my father's business was in such shape that I could
not give them all of my time. He offered me $I SO per month for such
time as I could give them. I talked it over with father and mother and
they consented to my giving it a trial.
Young Nordyke's job gave me access to all departments. I simplified
the work in his department so that I could do a better job & have time
to spend in other departments that interested me. I had never worked
in a large organization before, and the knowledge & experience I ob
tained were quite an education.
Their sales manager wanted me to try selling and remodeling small
mills. I handled a number. In several instances I sold the spout alarm
(the electric device to detect choke-ups) and thereby recovered near
ly all the money I had put in it, including the salary and expense I had
paid the salesman, but not including the expense I sustained when I
equipped a mill on trial. The fact that no one else sold a spout alarm
convinced me that Mr. Marmon was right in his opinion of it.
The profits from the mill depended largely upon the buying of grain
and the selling of flour and wheat. It was quite a trading proposition.
I found that the profits were declining and that I could not be away
from the mill so much. At the end of five months I gave up my posi
tion with Nordyke and Marmon Company.
Mr. Marmon immediately offered me $s,000 per year and said he
would make it more interesting if I would go to Toledo. The mill did
not make $4,SoO per year while I was away. I decided that I must get
my father's business organized so that I could leave it. If that could not
be done, I must find a buyer for it.
Chapter 19. My First Trip Abroad. Year 189 I. In the spring of 189 I,
Mr. D. M. Marmon of Indianapolis phoned me to come and see him.
Upon my arrival, he explained that he would like me to join the millers'
excursion to England which was being organized by the Northwestern
Millers of Minneapolis, and that Nordyke & Marmon Company would
pay all of my expenses. He stated that the trip would be interesting &
might prove a valuable experience. I told him I hoped to go and would
give him a definite answer the next day. I consulted my parents that
evening & as they were willing for me to go, I accepted Mr. Marmon's
kind offer. He wanted to procure some information of a confidential
nature which he thought I might obtain from a gentleman who would
be making the trip. I learned that the gentleman was ill and was taking
the 'cure' in Carlsbad so I left the party and went on there, meeting
with better success in four days than would have been possible if the
man had been with us. His company handled a very large milling busi
ness & the information Mr. Marmon desired was in connection with it.
I would not have had the opportunity to talk with him at such length
if he had been a member of the party.
Our steamer was the 'City of Paris.' When you were at sea in 189 I,
you were cut off from the world, as there were no Marconigrams nor
telephone connections. Many of the members of our party were more
important men in the milling and grain business than I had previously
met. Normally, these men were in constant contact with the grain mar
kets in the United States and Liverpool and missed it very much. After
the second or third day out from New York, I listened to them 3 9

several times guessing as to the price of July wheat in Chicago-what
it would sell for in June, and giving their opinions as to the September
price. It was very interesting to me (a small town miller) to hear them
analyze the situation and to learn how they reached their conclusions.
On this voyage I saw a large iceberg & had a splendid view of a whale
spouting water. I did not see a whale on my next five crossings.
We had interesting visits in Liverpool & Edinburgh. I was fascinated
with London. We also took excursions from each of these cities. We
met many men of distinction in the flour and grain business &came in
contact with many prominent persons, including the Lord Mayor of
London. Messrs. Edgar and Gregory made sure that their friends had
a wonderful trip.
On the return voyage to New York our ship, the 'City of New York,'
was signaled to stop & stand by another ship that had a fire in its hold.
The deck was crowded with people. One of the officers of our ship
called on the captain of the ship in distress. He made his visit in a small
boat manned by sailors, which was a much more difficult trip than I
supposed it would be, as the sea was rough and there was a strong wind.
At times our ships were quite far apart. This was unavoidable as our
captain was taking no chances of a collision. There was a lot of excite
ment on our ship; we realized that it would take time and might be an
impossible job to transfer all the passengers and crew to our ship. We
were impressed with the dangers of a fire at sea and the horrors which
might follow. We fervently hoped that the fire would soon be extin
gUished. The anxiety of the ship's passengers must have been intense.
It was several hours before the fire was under control. About that time
another ship arrived. It belonged to the same company as the ship that
was in trouble. Our captain was told to continue his journey.
On a trip abroad, you see many old and new things which are en
lightening. You get away from routine work, meet interesting people,
and have a real rest. You have more time to concentrate, think more
clearly about your own problems and formulate new plans. I learned
that travel is not only a delightful form of relaxation, but broadens
your viewpoint and increases your efficiency. It is an education and a
profitable investment.
Chapter 20. An Opportunity in Real Estate in the Gas Belt. Year 1892.
After the discovery of natural gas in Indiana, several, towns and cities
grew rapidly and real estate naturally advanced in value.
Early in 1892, I was invited by Mr. H. I. Miller, an official of the Penn
sylvania Railroad, to visit a site in the 'gas belt' where he and his asso
ciates were buying about 1,000 acres of land for the purpose of estab
lishing the town of Gas City. He was interested not only in increasing
traffic for the railroad, but in promoting a land company. Several real
estate companies in the 'gas belt' had been very profitable in laying out
new additions to small towns. I was invited to subscribe for stock in
this land company. I thought there was some question as to whether
or not the company could sen Us property for enough to pay the cost
of real estate, gas territory, locating industries, other development work
and earn a profit on its shares. The stock did not appeal to me. I decided,
however, to buy several lots in the old town which I thought the land
company had overlooked. I also considered buying a farm adjacent to
the property of the land company. It seemed to me that nearby land
must increase in value even if the land company's stock did not prove
profitable. I bought a 66' x 132' lot at $600 on Main Street near the
railroad station in the old Village.
I was offered a farm of eighty acres at $I 1,500. The land company
had let its $8,000 option on this property expire. I asked Mr. Miller,
whose guest I jhad been, if he had any objection to my buying this farm.
He replied, 'No, we have all the property we want. If you don't buy it
someone else will.' He said, however, 'I think you would be making 41
a mistake.' I did not agree with him; as the farm had good improve
ments and should be worth almost $8,000 as a farm. Since the land
company had purchased at least 1,000 acres of adjacent property and
was using the balance of its $ 150,000 in development, I concluded the
farm was a good buy at $ I 1,500 and agreed to pay one-third in cash &
the balance in one and two years. My father wanted a quarter interest
and joined me in the purchase.
Frank Everroad was becoming quite helpful at the mill, & I decided
to return to Gas City promptly and inyest $ 10,000 to $ 15,000 more if
I could find good bargains. I went via the Big Four Railroad to Jones
boro, which was across the river and a short distance from Gas City. It
was evident that this old town would be benefited ,by the new town,
as many visitors would come that way. I purchased an old two-story
brick hotel on one of the best corners in Jonesboro at $2,800 cash. The
corner room was rented to the Bank of Jonesboro for $ 15 per month
and the balance as a hotel at $ 25 per month. I made a few minor re
pairs, gave the woodwork a good coat of paint, after which I raised the
rent of the bank to $ 2 5 and the hotel to $50 per month. The hotel was
filled every night and shortly afterwards had the most profitable busi
ness in its history.
I asked $3,000 for the Main Street lot, which had cost me $600.The
customer hesitated about buying and told me that he was short ofcash.
Mr. H. 1. Miller told me that he was worth $ 50,000 to $75,000. I went
to the Bank of Jonesboro, looked him up in Bradstreet, and found he
was rated at $35,000 to $50,000. After a little discussion, I agreed to
take his three notes for $ 8 33.33 each, due in one, two and three years,
secured by a six per cent purchase money mortgage on the property.
This sale encouraged me to buy other properties on Main Street. The
land company was so busy that it had neglected to buy these lots. The
titles were somewhat questionable. The owners were anxious to sell
and I found that they would cooperate in securing affidavits, quit claim
deeds, etc. I secured about ten lots at $6so each, including abstracts,
etc. I was deceived by the owner of one lot and lost $400 on it. I had
to compromise the interest on a number of lots, but I finally realized
a profit of $60,000.
The land company secured a good advertising man and started an
active campaign for securing industries. Several glass factories were lo
cated &a contract was made with the Morewood Company of Swansea,
Wales, to build an eight mill tin plate plant.
The laying of sewers, paving of streets, construction of dwellings,
business houses, a $SO,ooo hotel, and factories made Gas City a busy
place. The land company's opening sale was most successful. Some of
my friends and I were offered a special discount for cash if we would
buy 100 or more lots. I took a few and organized a syndicate which
bought 141 lots. We selected them very carefully. I was chosen mana
ger of the syndicate. I began selling my own lots and some of those be
longing to the syndicate at 3S per cent to So per cent profit. Some of
the members of the syndicate thought I was selling too early and too
cheaply so I had to move more slowly with the syndicate's property
than I would have done.
I studied the situation and realized there were a great many lots be
tween the railroad station and the hotel and decided to sell the Main
Street property I owned in the old part of town. I wanted to be sure of
the present profitable market and was willing to shade prices a little
if necessary.
Some of my profits in Gas City had been reinvested, but as I had no
thought of buying property for a permanent investment, I decided to
make no further purchases and to sell everything. I wanted the money
available for other purposes.
I was disappointed in not being able to sell the eighty acre farm. 43
Real estate had been active but whenever a buyer appeared one or two
other farms would be offered at a lower price and the customer would
lose interest in our farm. I had offered to sell the eighty acres as low as
$ 16,000. It occurred to me that if I owned or had control of the two
competitive farms, my chances for selling the eighty acres, in which
we had an investment of $ 1 1,500, would be greatly improved and its
value enhanced. I did not want to risk buying the two farms, so I se
cured six months' options as follows:"I gave $500 for an option on the
seventy-three acre farm at $ 200 per acre and $ 100 for an option on
the fifty-nine acres at $ 200 per acre. I also secured another option on
a farm of forty acres which was not so well located, for which I paid
only $ 25 for a six months' option at $ 100 per acre. The cash payment
in each instance was to apply as part of the first payment when the op
tion was exercised.
About two weeks after I controlled the other farms, I sold the best
half of the eighty acre farm for $ 20,000, receiving $ 10,000 cash and
two six per centnotes of $ 5 ,000 each, due in one and two years, and
secured by a purchase money mortgage. The other half of the farm
was not as desirable and was difficult to sell. In fact, I had to make sev
eral trades in order to dispose of it. Before the options on the three
farms expired, I sold each of them at $ 300 per acre but received only
one-third in cash. It took time & work to collect the deferred payments.
In fact, I had to throw off part of the interest on the last payments.
The hotel in Jonesboro was sold for $6,000 in a trade.
Chapter 2 I. Story Told MebyH.W.Oliver.Year 1892 or 1893.In 1892
or 1893, Joe Rider, Harry Oliver and I were talking in Peacock Alley
of the Waldorf Astoria. Mr. Oliver had been entertaining us with stories
but was called to the phone. Mr. Rider asked me if I ever heard Oliver
tell about the $ 5 ,000 forged note on the Oliver Iron and Steel Com
pany. I replied that I had not, so Rider asked Oliver to tell me the story.
Mr. Oliver explained that he was careful about keeping a record of
their notes so that those he did not pay would be renewed promptly.
Anote was presented to their bookkeeper for payment one day which
was not on his record and, after he had examined it, he
t
pronounced
it a forgery. The next evening just after dinner the doorbell rang, and
a gentleman asked to see Mr. Oliver. On being shown into the library
by the butler, he gave Mr. Oliver his card and introduced himself as
president of the bank. He said, 'This note was presented at your office
yesterday for payment and your bookkeeper pronounced it a forgery.
Please look at it carefully & tell me if that is your signature.' Mr. Oliver
looked at the note and promptly told him that it was not. The man then
took an envelope from his pocket and gave Mr. Oliver a second note
to examine, due sixty days later. Before he had time to examine it,
another was produced which was due in four months. Mr. Oliver then
exclaimed, 'Waitl It is now my turn. Please explain how you secured
these notes.' The man answered, 'I purchased them from a nice looking
gentleman who represented himself as a note broker.' Mr. Oliver then
said, 'My Godl If I had known my notes were good in your bank, I
would have sold you a bushel of the genuine.'
Chapter 22. An Expensive and Inefficient although Profitable Tin Plant
Caused Me to Build One. Years
18
93 - I 894. Prior to the McKinley
tariff, tin plate was not manufactured in the United States. After it went
into effect, the Norwood Company of Wales built a plant in Gas City.
It was the largest employer of labor in that new town. I was surprised
to see it import heavy mill hOUSings, rolls, equipment, etc. and pay the
duty and ocean freight on these. If these purchases had been made in
the United States, the company would have saved a lot of money. I
thought if I could get my money out of Gas City notes and property
I would enter the tin plate business.
In 1893 I had time to study the manufacture of tin plate which 47
is comparatively simple. Talking with several Welsh tin plate rollers
who held jobs in New Castle, Pennsylvania; Irondale, Ohio; Gas City &:
Elwood, Indiana; I learned they preferred American mills because they
were stronger, produced larger tonnages, and enabled them to earn
more money. I decided that a better plant could be constructed much
cheaper than the one in Gas City.
I made a sketch of a six mill plant showing the location of the build
ings for the steam plant, engines, hot mills, furnaces, opening of plates,
cold mills, pickling, annealing, tinning, assorting boxing warehouse,
railroad sidings, water lines, sewers, etc. I discussed this sketch with a
number of workmen I knew. They gave me some good suggestions,
which caused me to revise my sketch many times. Money matters with
me were such that I could not proceed immediately, but my position
was improving. I decided to enter the tin plate business as soon as I
could collect upwards of $25,000.
Early in 1894 I heard that Phil Matter of Marion, Indiana, wanted
to go into the tin plate business. I called on him and we talked until mid
night. He questioned me as to why I considered it a profitable business.
I answered, 'Because the Gas City plant was expensive to operate, in
effiCiently managed, but profitable.' I considered this good reasoning.
He agreed and asked how much money I would put in. I explained my
financial position to him, stating that I would have $25,000 by the time
it could be used in building and thought I could increase that amount
by $10,000 within a year, depending on my Gas City collections, and
that I wanted the privilege of increasing my interest to $35,000 within
the year. I said we should have a paid-up capital of at least $100,000.
Mr. Matter agreed with me on these provisions. He wanted the plant
located in North Anderson, where he owned a lot of property. He
would donate a good manufacturing site, a number of gas leases, and
subscribe for stock to the amount of $35,000. He gave me a letter to
that effect. Returning home, I stopped to see Mr. Marmon in Indiana
polis. I explained that bullding a tin mill looked more promising than
accepting a position with his company, although I would like to work
for him. I suggested that he might like to take some stock in the new
company. He explained that he had promised to take a $20,000 stock
interest in the Moore Packing Company which was building near them,
but that the Indianapolis Light and Power Company was growing so
rapidly that it could use all his money. He then stated that if I needed
$10,000 or even $2 0,000 to form the company, I could count on him.
He wrote me a letter accordingly.
Will Irwin, who was a close friend of mine, agreed to put in $s,000,
and Joseph I. Irwin subscribed $20,000, which pleased me as the latter
practically confined all his investments to Bartholomew County. A day
or two later, Mr. Irwin told me that D. P. Erwin of Indianapolis wanted
to invest $10,000 with us.
When we had all the money we required, I went to see Mr. Marmon
and told him, adding that I wanted him to feel perfectly free to do just
as he preferred about the stock which he was taking to help me. He
said that under the circumstances he would not take it. I thanked him
for his kindness which had been most helpful. I called on Mr. Marmon
many times after this-in fact, he called me 'one of his boys.' It was
he who gave me my first trip to Europe, offered me $S,ooo per year
when I was making $I,SOO, and later offered me $10,000 to go with
Nordyke and Marmon Company, which spurred me on to getting out
of the milling business.
Chapter 23. See Yourself as Others See You. Year I 895.When living
in Anderson I left a pair of shoes with a cobbler to be repaired, but for
got to pick them up on the way home from work. I needed them that
evening & asked my brother Fred, who was stopping with us & working
in the mill, if he would go down to the cobbler near the post office 49
and get them for me. I explained that Mrs. Donner and I were going
out for dinner, that I needed them and was crowded for time. Fred re
plied, 'Certainly.' He started off, located the cobbler's shop as directed
and asked for Mr. Donner's shoes. He was told, 'I have no shoes for
Mr. Donner.' Fred then asked if there was another cobbler nearby and
was told there wasn't, but there was one two squares away. My brother
concluded that the shoes must be in this shop and looked around. He
discovered a pair which he thought were probably mine. He offered to
pay for the repairs, take them home, and return them in the morning
if they were not his brother's, to which the man agreed. When Fred
brought them home and I said they were mine, he immediately began
to roar with laughter & said that when he asked to whom they belonged
the cobbler stated, 'I don't know the man's name, but he passes here
frequently before seven o'clock in the morning, is always in a hurry,
and looks like a Jew.' Fred thought it was a good joke and circulated
the story among my friends.
Chapter 24. My First Experience ina Manufacturers' Association. Year
18
95"' In 1895" skilled labor in rolling tin plate was controlled by the
Amalgamated Association of Iron and Steel Workers. It fixed the wage
rates per ton and limited the tonnage of each gauge that could be rolled
in eight hours, regardless of the sizes to be rolled or the equipment fur
nished by the manufacturers. If the tonnage exceeded the tonnage set
by the union, the men were fined. The Welsh workmen at that time
predominated, and sometimes made it difficult for American boys to
learn the skilled jobs.
The American Manufacturers Association was formed primarily to
deal with labor. It attempted to fix the prices on tin plate based on the
price in Wales, plus the freight and duty. The railroads made lower rates
on imported tin plate from the seaboard to some interior points nearer
Pittsburgh, than from Pittsburgh to those same seaboard points. Our
company, the National Tin Plate Company, joined the Manufacturers
Association. Wewere kept informed by the secretary as to the prices on
foreign tin plate delivered to the principal points in the United States.
We were also advised as to the delivered prices to many points onwhich
the members of the association tentatively agreed on prices.
I discovered that we could not secure any orders at the prices quoted
so I concluded that they were fictitious. To learn the facts I wrote a
friend, asking him to write to a list of tin plate manufacturers, which
I enclosed, for prices on one minimum carload of the following sizes:
Sizes 14 x 20 and 20 x 28 90# base
Sizes 14 x 20 and 20 x 28 100# base
delivered at this point, & the amount of the cash discount. I also asked
him to forward the replies to me as received. The answers were received
on the morning I arrived to attend the manufacturers' meeting. I had
quotations from three competitors who were attending the meeting.
Their quotations were at lower prices than they stated they were offer
ing for orders. Being younger and a new member, I was not asked by
the secretary of the association to express my views until all the others
had been called upon. Some members had little to say, but several were
quite positive in their statements that they were securing higher prices
than their quotations to Louisville, which I had received.
I stated that I was disappointed in the veracity of some of my tin
plate friends, as we could not secure the prices they purported to re
ceive-and neither did they. I also said that several members present
had quoted lower prices than they stated this morning. I thought that
the association should confine itself to dealing only with labor ques
tions, on which we could probably agree, and abandon the question
of prices.
The secretary of the association, Mr. Jarrett, was very much dis
turbed and requested me to mention the names of any members!; 1
who had shaded prices. I told him that I could not afford to divulge
the source of my information. He insisted that I should do so because
I might be mistaken. I replied that I could not be wrong as I had seen
written quotations from several firms represented there. There was a
long pause. Several members were embarrassed. Finally, Mr. Leeds,
president of the American Tin Plate Company of Elwood, Indiana,
broke the silence. He said, 'Every manufacturer present knows that
Donner has stated facts. Our company in the future will run its mills
to full capacity and make prices that will not permit eastern mills to sell
large tonnages in the west, because if this is allowed to happen our mills,
in order to run, will be compelled to ship to the east, where we are
handicapped by higher freight rates.
The industry grew so rapidly in the United States, and competition
between the American manufacturers became so keen, that the prices
on domestic tin plates became lower on all gauges and sizes than on
the imported article.
Chapter 2!J. Railroads, Freight Rates & an Experience in Chicago. Year
1896. While waiting to see Mr. Smithson, the purchasing agent for
Armours, I was talking to Phil Armour, Jr., whom I had met previously
on several occasions. He stated that for years they had purchased tin
plate only in Wales. But for home consumption their tin plate was now
purchased in this country, while for Great Britain they imported it all,
as they received a drawback of 99 per cent. He asked me how I hap
pened to go into the tin plate business & was quite interested in hearing
about Gas City and my experience in the Indiana gas belt. He laughed
and said it was more surprising that I, after being in the flour mill busi
ness, should go into tin plate than for Armours, after being large con
sumers of tin plate for many years, to go into it.
When I told him I was waiting to see their purchasing agent &hoped
to secure an order for 20,000 boxes, half the amount they were buy
ing, he went into the office, looked over the bids and told me that our
price was in line and lower than all eastern bidders, but that we were
five cents higher than our large neighbors. I told him that I would meet
that price, whereupon he promised me half the order and dictated a
letter accordingly to their purchasing agent. It is needless to say that I
was quite pleased as it was a very nice order.
The next morning Mr. Smithson telephoned and requested me to
change the price to f.o.b. Anderson, reducing the price I I ~ cents per
100 pounds (tariff freight rate to Chicago). I insisted on Chicago de
livery. He asked what reduction I would make f.o.b. Anderson and I
told him 8 ~ cents per 100 pounds, which he accepted. This increased
our price 3 cents per 100 pounds f.o.b. Anderson. I was anxious to see
how it would be routed. The next morning we received shipping in
structions via a railroad in which the tariff rate of I I ~ cents per 100
pounds was charged.
Our plant had connections with two large railroads. There was a
third small railroad that absorbed the switching charge into our plant
and offered a rebate of 4 cents per 100 pounds to only a few points,
but their car supply was so poor that we gave them little business. The
two large railroads charged us full tariff rates, and although I thought
some large shippers were given lower rates, I had no concrete eVidence.
Several days later the representative of the road handling the order
called and solicited our business. I asked him the rate to Chicago and
he said I I ~ cents per 100 pounds. I asked the rates to Milwaukee,
Kansas City, St. Louis, Minneapolis, etc., and he quoted full tariff rates.
I made no comment, but naturally gave his railroad no business. The
follOWing week he called and said that they had not been getting much
of our business. Again, I asked him the rates to Kansas City, Chicago,
etc. He again quoted the full tariff rates. He had learned that we had a
large order for Kansas City and wanted me to promise his railroad . ~ 3
the business. I was noncommittal. A week later he was back and again
informed me that they had not been receiving much of our business,
and would like to know why. I asked him for various rates & he quoted
strictly tariff rates, volunteering the information that no one received
any lower rates. I smiled and stated he knew whether he was telling
the truth, but I would bet him a suit of clothes, an overcoat, and any
thing else he wanted to add, that he was lying. And furthermore, I was
willing to let his local agent, Mr. Ellis, who accompanied him, decide
the bet. He was quite embarrassed and hurriedly left my office. The
next morning he returned and gave me a confidential reduction of 4
cents per 100 pounds below the tariff rate to Chicago & corresponding
reductions to many points. He also provided me with an annual railroad
pass east and west of Pittsburgh, which was continued for several years.
After I started to build the Monessen plant the manager in Anderson
also was provided with a pass.
At that time it was legal for the railroads to give, and the shipper to
accept, rebates, but it was difficult &frequently impossible for the small
shipper to secure as low rates as a competitor with large tonnages. Some
shippers who received no rebates were 'asleep at the switch.' Plants lo
cated on several railroads were in a much better position to secure con
cessions than those without competition. Large concerns frequently
received better treatment than small ones.
Chapter 26. A Method and Process of Rolling Tin Plate and Fine Sheets.
Year I 896. I thought that the first half of the rolling of sheet bars into
tin plate, or fine sheets, should be done by a crew on two pairs of rolls
considered as one mill, with two heating furnaces, & the other half of
the rolling (the finishing-the half requiring the most skill) by another
crew also on two pairs of rolls considered as one mill, with two heating
furnaces. The Roller on the finishing pair of rolls, or mill, would then
have charge of both crews.
When I explained my method, the mill superintendent, Alex Jones,
said I was correct in thinking that less skill was required in the heating
and rolling of the first half of tin plate bars than in the second half, but
that all of the rolling would have to be done on one set of rolls or the
sheets would be welded and could not be opened, because the contour
of the two pairs of rolls would be slightly different. I was skeptical as
to welding, but on questioning several of the best rollers with whom I
was acquainted, who knew nothing about my previous conversation
with the mill superintendent, I found that they had the same idea about
welding if two pairs of rolls were used. I concluded that I might be
wrong in my thinking, but I would have to see a demonstration of the
welding before I believed it.
Mr. Jones explained that it was the regular practice in Wales to break
down the bars on one set of rolls called the roughing mill. This was the
practice in Gas City with which I was familiar. The ,mills in Wales were
usually 18" in diameter, but in the United States they were usually 24"
in diameter, the roughing and finishing being done on one pair of rolls.
The Welsh rollers here, having had experience in both systems, pre
ferred the American practice because larger tonnages could be rolled.
The arrangement of our mill in Anderson was not practical for trying
out my method of rolling. However, about ten o'clock one night I
happened to be in the plant while two adjoining mills were rolling 20"
squares, number 30 gauge, 20" wide by 60" long. The roll broke on
the outside mill and it happened that the furnace back of that broken
pair of rolls was filled with sheets that had been doubled into fours. I
asked Jones, who was with me, whether those sheets doubled into fours
in the furnace in back of the broken mill were now scrap. He said they
were and I told him to have them rolled on the adjoining m i l l ~ since
they were doing all the work on one set of rolls and just ready to roll
them into fours. This would give a perfect demonstration of my S S
idea if the sheets were finished on the adjoining mill rolling same size
and gauge, which was almost ready to start roughing bars. He under
stood exactly what 1 had in mind as we had talked over this method
of rolling on two mills several times. He said, '1 get you.' 1 told him to
have plenty of men and pay them for assisting. He took off his coat &:
helped the roller, taking the fours out of the furnace and over to the
furnace back of the next mill, and did everything he could to help. He
and the roller were astounded that those fours after being rolled were
not welded. Jones afterwards said to me, 'Mr. Donner, 1 was so dumb
founded at the way those sheets opened that you could have knocked
me over with a feather.'
1 explained to Alex that 1 would have him come east to help me
start two mills in our next plant in which we would tryout this system.
1 told him the rolls would be 26" in diameter instead of 24" and the
spindles long so there would be plenty of room. Four mills would be
driven off one engine and the traveling crane would be higher and the
mill as cool and convenient as we could make it.
Chapter 27. I Worked Several Days for John W. Gates, President of the
Illinois Steel Company. Year 1896. One day John W. Gates asked me
to buy a certain property for him. After devoting several days to the
task 1 learned that it could not be bought within the figure 1 was au
thorized to pay, but could be purchased for $2 S,000 higher, and with
some difficulty 1 secured an option on that basis for two days. 1 tried
to get Mr. Gates on the phone but could not reach him as he was ill. 1
talked to his assistant, Mr. Crane, who finally told me to decline the
offer. The property was promptly sold at the price 1 had been quoted.
When Mr. Gates returned to his office and learned the price 1 had
secured on the property, he was quite provoked with his assistant. He
stated that if the offer had been submitted to him it would have been
accepted immediately. He said, 'Donner, I must pay your expenses &
also for your time.' I told him that I only did it for him as a friend and
to forget it. I think he appreciated the attitude I took. He said, 'Donner,
you did the company and me a favor which I appreciate. You can de
pend on me to see that you will always get as cheap steel as your big
competitor in the gas belt and a large buyer of steel billets who is also
a neighbor of yours.' I think he meant exactly what he said. I never
had any reason to complain of the treatment & prices I received from
the Illinois Steel Company. In fact, I know that Mr. Gates went out of
his way to see that I received the same prices as a much larger buyer of
tin plate bars and also of billets who was a neighbor in Anderson.
Chapter 28. My Reasons for Wanting to Build a Plant in the Pittsburgh
District. Year 1897. Anderson's advantage in the tin plate industry was
its natural gas, and the pressure of the wells was getting lower. I knew
that in a few years we would have to burn coal. Our natural gas was so
cheap that if we were given the coal at the mine with no charge for
mining and the railroads were to haul it to Anderson without charge,
the cost of unloading it, stoking it and hauling the ashes would have
amounted to more than the gas cost up to that time. It seems almost
incredible the way gas was wasted. The streets were lighted night and
day as it would cost money to turn it off.
I made comparisons of the cost of tin plate delivered to the princi
pal points of consumption by Pittsburgh and Anderson. I found that
the cost of steel & cheap coal in the Pittsburgh district more than off
set the advantage of the lower cost ofgas because of the higher cost of
our steel. We bought steel in Chicago where it was more expensive to
assemble the raw materials than it was in Pittsburgh, which could de
liver steel in the East cheaper than Chicago.
Anderson had an advantage in the delivery of tin plate to a few wes
tern points, but to many others we were badly handicapped. We could
not competeon the eastern business. Pittsburgh also had lower rates 57
to the Pacific coast than Anderson via the Eastern Seaboard. The Pitts
burgh district was a more favorable location,
Foreign competition in 1897 was of little importance, but American
competition was keen.
It was evident to me that Anderson would become a poor location
for the manufacture of tin plate. I visited Youngstown, Sharon and
Pittsburgh. I learned that I could make a favorable contract for tin plate
bars in Pittsburgh, based on the market price of Bessemer pig iron, with
the Carnegie Steel Company, Limited. This looked so attractive that I
decided to bUild a plant in the Pittsburgh district. I felt that some of my
associates might not want to invest in an eastern plant, but thought I
could secure other capital if necessary. I therefore wrote my associates
and called a meeting in Anderson.
I explained the advantages of building in Pittsburgh as I saw them,
and added that we had been successful in Anderson and I wanted to
build another plant, as I knew we could build a better one. I found that
none of my partners looked '\rvith favor on the building of a tin plate
plant in the East. Mr. Joseph 1. Irwin said that, since we had done so
well in Anderson, he would prefer to enlarge that plant. I mentioned
that on account of the declining pressure in our gas wells, I was willing
to sell my stock in Anderson and put my money in the Pittsburgh dis
trict. Phil Matter, who knew more about the natural gas situation than
I did, & held the same amount of stock that I held before I let a brother
have some at cost, then spoke up. He said, 'What Donner has said about
the natural gas situation is true, but I want him to retain his interest in
Anderson and, ifhe agrees to do this, I will join him in an eastern plant.'
After some discussion, everyone present decided to take stock in an
eastern company. Later, we secured two new stockholders, Mr. Irwin's
daughter and son-in-law, Mr. and Mrs. Z. T. Sweeney. It was decided
that I should investigate possible locations & report in the near future.
I had not mentioned my new method of rolling, for which I had
made an application for a patent, but I was anxious to give this system
(which I have heretofore explained) a trial. If it were successful, we
would have a saving in the cost of rolling & could pay the skilled rollers,
doublers, heaters and catchers as much as they would make in a union
mUI. I also expected to patent the method, which would give us an ad
vantage over the Amalgamated Association of Iron and Steel Workers
which controlled the rolling of tin plate. They were responsible for
many interruptions and shut-downs pending any agreement for a new
scale. The mill was planned so that if my method of rolling was desir
able it could be used & if found not to be desirable, the usual method
could be used. I, of course, would not charge the company any royalty
for the use of the patent in this plant if it were found desirable.
Chapter 29. Selecting a Site for an Eastern Plant. Years 1896-1897. I
visited Youngstown and Sharon, but considered the Pittsburgh district
the best location for an eastern plant. I was greatly influenced by the
fact that I could make a favorable contract for tin plate bars on a sliding
scale, based on the price of Bessemer pig iron in Pittsburgh.
We were offered a site (now Monessen) about forty mUes from Pitts
burgh on the Pittsburgh and Lake Erie RaUroad and the Monongahela
River to build an eight-mill tin plate plant. The P. & L. E. RaUroad agreed
to give us the Pittsburgh rate east & west, switching rates on coal from
nearby mines, and a low rate on billets and bars from Pittsburgh. We
had practically all the advantages of Pittsburgh.
Messrs. Joseph I. Irwin, D. P. Erwin and Phil Matter visited this site
with me. They approved the location and plan of capitalization, etc.
It was agreed that I was to be president and receive $5" ,000 from the
new company in addition to my regular salary of $5" ,000 for Anderson.
I was to continue to manage Anderson and to hold my stock in that
plant, a stipulation made by Phil Matter when he agreed to join me. 5"9
">;
As I was president and the largest stockholder in the new company
and lived near the property, I was authorized to attend to the incor
poration, make a contract for steel with the Carnegie Steel Company,
Ltd., agreements with the East Side Land Company & with the P. & L. E.
Railroad. I asked to have Charles S. Baker of Columbus, Indiana, assist
me in the preparation of a traffic contract with the railroad.
Mr. Andrew Young, Traffic Manager of the American Tin Plate Com
pany, told me in 1898 or 1899 that Monessen had the most favorable
traffic contract in his department .
....... A ........ IJ"...... 30. Building a Tin Mill and Starting a NewTown Was an Inter
esting Experience. Year 1897. Col. J. M, Schoonmaker, Vice President
of the P. & L. E. Railroad and a director of the East Side Land Company,
which owned the townsite where we located, was interested in the
success of our company. He was very kind to me & proposed my name
for the Duquesne Club. He asked Mr. H. C. Frick to name the new
town. He mentioned Essen, an important steel city in Germany. It de
veloped, however, that a small coal town in Pennsylvania had already
preempted that name so Col. Schoonmaker suggested Monessen (Essen
on the Monongahela), which was adopted. In I 897 there were fewer
than twenty-five people, where Monessen now has a population of
about 2,},000.
We purchased the machinery and equipment for an eight-mill tin
plant. Our twenty acres had been staked off and we laid out a twelve
mill plant, so that four mills could be added & completed without the
addition of a railroad siding, water line or a new sewer. We had put in
several piers for our rolling mill building and were getting ready to ex
cavate for the engines and mill foundations when I discovered that the
East Side Land Company was making a serious mistake in laying out the
town. The street parallel to the railroad (Schoonmaker Avenue) was
located on the brow ofthe hill which would be continually slipping,
so that the lots on that street would be practically worthless. I regarded
it as such a serious mistake that I made a special trip to Pittsburgh to
notify Col. Schoonmaker. He called in Mr. Atwood, the chief engineer
of the railroad, who phoned his office to send down a topographical
map of the railroad's property and that adjacent to it. He grasped the
situation immediately & went to Monessen with me on the next train.
To correct the trouble would mean moving the railroad nearer the
river and changing the location of our plant, which it was still possible
for us to do at that time.
The location of the railroad was changed, but they could not move
it quite as much as I recommended because the curve would be too
sharp. The change improved Schoonmaker Avenue and was of great
advantage to the East Side Land Company.
Col. Schoonmaker was very appreciative of the help I gave the East
Side Land Company and, without my knowledge, at the next meeting
of its stockholders arranged to have fifty-six shares of its stock allotted
to me at the cost to the incorporators. When he told me what he had
done, I thanked him but declined to take the stock, explaining that I
was not only putting all the money I had into the plant & a home, but
that I would be considerably in debt. He replied that he wanted me to
have the stock and that he would accept my note with the stock as
collateral and carry it for me at six per cent interest. The stock looked
so attractive that I accepted his kind offer. Stock to the amount of only
$68,000 was issued. My purchase of fifty-six shares netted me a profit
of more/than $So,ooo. I made several tilnes that amount out of addi
tional stock and real estate that I subsequently purchased.
For several months we had to bring in all our labor by train 'as there
were no houses in Monessen. I rented a house in Charleroi on the other
side of the river and started to build a house in Monessen. It was diffi
cult to go to Monessen and return to Charleroi on account of the 6 I
river & bad roads. Atrain from Fayette City to Pittsburgh passed through
East Charleroi at 6:45A.M. It brought nearly all our labor from Fayette
City and Belle Vernon. My brother Perce and I carried our lunches and
used this train until I moved to Monessen. By getting up at 5: 30 we
could eat breakfast, cross the Monongahela in a skiff to East Charleroi,
catch the 6:45 train & arrive in Monessen at 6:50. One morning, how
ever, it was quite foggy and the ferryman, Dave Rankin, instead of
crossing the river, landed me on the same side of the river from which
we started. I had to walk two miles. Several times during high water
we had to start quite early, walking two miles and across the bridge at
Belle Vernon where we caught our train.
Chapter 31. Starting Operations at the Monessen Plant, Trying My
Method of Rolling, and Preparing a Scale of Wages. Years 1897-1898.
I scheduled construction work in Monessen so that we would be able
to start two of the hot mills about three months before the other mills
and the balance of the plant were ready for operation. This was for the
purpose ofgiving my method of rolling a trial. When the two mills were
ready, I had Alex Jones, superintendent of the hot mills in Anderson,
bring out several young men to help start them. The trial proved suc
cessful and the superintendent returned to Anderson.
About a week or so later, when I arrived at the plant on Monday
morning, the mills were shut down. The Amalgamated Association of
Iron and Steel Workers had sent a delegation from Pittsburgh to Mon
essen on Sunday and organized a union, but they knew nothing about
our method of rolling. A committee waited on me and requested that
we sign a scale of wages and recognize the union. I was surprised at
their action at this time as they knew we were only experimenting. I
told them that as they had quit working and shut the mills down, they
could call at the office and get their money. They knew that the plant
could not be ready for about sixty days and that there was no profit in
running only two mills. All the union men left Monessen in twenty
four hours. One of the Anderson boys came into my office and cried.
He admitted that they had not treated me fairly and said he was sorry.
During the short period we operated two mills, I made a careful
study and analysis of the work and skill required on the mills in which
the bars were roughed &the singles rolled. With the help ofAlex jones,
I prepared a scale of wages which he regarded as fair and approved. On
the finishing mill I prepared a scale by which the roller, doubler, heater
and catcher would make the same wages as in a union mill, but they
would have the advantage ofnot being restricted to the union's limited
tonnage, which with our eqUipment could easily be exceeded. After
making a scale on that baSiS, however, I reduced the rates about nine
per cent and explained that everyone who worked faithfully in our hot
mills until December I st would receive, on December loth, a bonus
of ten per cent on the wages he had received to date for that year.
Every man on the mills was employed by my brother Perce or my
self. We tried to select only industrious and reliable men. We promised
to treat them fairly and to run the mill steadily. We explained that we
did not intend to be bothered with strikes. We told each man that un
less he was satisfied with the cooler temperatures and conveniences of
the plant, as well as our method of rolling, wanted steady work, and
had confidence that he would be treated fairly, we hoped he would not
even start to work for us.
I also explained that our method of rolling was being patented and
could not be used in any other plant, unless a license to do so was ob
tained. I based the rates for our method of rolling on the wages paid
skilled rollers, doublers, heaters and catchers under the scale of the
Amalgamated Association of Iron and Steel Workers, taking into con
sideration the skill & labor required, as well as the factthat if the skilled
men on our finishing mills worked faithfully until December 1st, 63
they would receive (including their ten per cent bonus) as high wages
as in a union mill with the s a m ~ tonnages as those mills, and that they
could earn more in our mills because we had no limit as in the union
mills. The standard equipment in most hot mills was rolls 24" in di
ameter, whereas we had nothing smaller than 26" rolls. We pointed out
that our plant would not be closed at the expiration of any existing
scale pending the negotiations between the Amalgamated Association
of Iron and Steel Workers and the manufacturers. We also promised
every employee that if the Amalgamated Association of Iron and Steel
Workers received an increase of wages in the tin mills, our men would
automatically receive the same percentage of increase, but if the union
mills reduced their wages, we would not ask for any greater percentage
of reduction.
Chapter 32. A Strong Sentiment Develops for Consolidation in the
Tin Plate Industry. Years 1897 - I 898. In the latter part of 1897 and
the early part of 1898, we booked sufficient tin plate orders for western
shipment to run Anderson full time and all the intermediate business
we could secure for both Monessen and Anderson. This was a good
policy as Monessen, being a new plant, was at a disadvantage, but one of
our Indianapolis customers was interested in a Baltimore can factory
and through its influence we secured large Baltimore orders. In 1898
the prices on tin plates declined to a point where there was no profit
to the eastern mills on western orders. The western mills could not ship
east. A few plants were obliged to shut down part of the time or oper
ate at a loss. We were fortunate in having sufficient specifications to run
Anderson and Monessen at full capacity.
Close competition almost forced some manufacturers to favor a
consolidation in the tin plate industry. Moore Brothers were known to
sponsor the consolidation, but W. B. Leeds and D. G. Reid were asso
ciated with them. The value of each plant was based on the number of
hot mills, including certain equipment. Market prices were to be paid
for the current assets at the time the options were exercised. The op
tions for the consolidation were taken by H. S. Wheeler of Chicago.
He was well known and popular in the industry. Under the terms of the
option, the seller had the privilege of taking all or part cash in payment,
,but would receive $100 in seven per cent cumulative preferred &$I 00
in common stock for such part as he requested instead of $100 cash.
We had a profitable saving in Monessen's costs over Anderson. Both
companies did well, but in Anderson the natural gas pressure was steadi
ly declining and several of our wells failed. I hoped the consolidation
would succeed as I was afraid of Anderson's future. Phil Matter knew
the gas situation better than any of us. Some of our stockholders pre
ferred not to go into the consolidation as we had been successful, but
after Mr. Matter explained the natural gas situation, all favored selling
Anderson. The matter of prices was left in my hands, as I was the pres
ident and largest shareholder of Monessen & the second largest share
holder in Anderson.
When approached as to the Monessen plant, I explained that we
were working under a system of rolling that was being patented & we
did not want to option it. Mr. Wheeler saw me several times and later
insisted on a price. Finally I consented, explaining that Monessen had
only eight hot mills completed, but plans had been made for twelve
mills and some improvements had already been made for the four other
mills that were not finished. It was not our intention to start them for
about six months, as the men and houses were not available, and the
cost of completing the plant would be deducted in our price.
We preferred not to sell Monessen because of our method ofrolling
at a lower cost. Consequently, when the option was made, I demanded
an extra price and limited the right to use my method ofrolling to the
Monessen plant. I also eliminated the clause in the contract whereby 65
I agreed not to engage in the tin plate business. I explained that only in
the event that they purchased the patent or took a license for sufficient
other mills would I waive my right. Mr. Wheeler said that they would
naturally want to buy the patent if it showed a substantial saving. I did
not divulge the saving because I did not want our advantage known in
case the consolidation did not go through.
Chapter 33. A Kindness of Phil Armour, Jr. that Proved to be Quite
Profitable. Year 1898. I received a telegram from Mr. Phillip Armour ,1r.
reading, 'If you want to make a few thousand dollars, see me tomor
row.' I was willing and replied, 'Will be with you.'
When I called on Mr. Armour, he explained that their tin can fac
tory had burned, and that they looked entirely to the insurance people
for their loss. He thought, however, that most of the tin plate was dam
aged only by water and that it could be retinned, cleaned, and packed
in new boxes, so that it would be just as good as it was originally. ,He
gave me a copy of their inventory. After going over it, I told him that
many of their plates were of such unusual sizes that no one else could
use them without a lot of waste. He replied that if I bought them, they
would pay me the same base price that they would have to pay in the
market at the time of delivery. He stated as follows, 'However, Donner,
you use your own judgment, & if there is any question about the qual
ity, Armour and Company cannot use them at any price.'
I found that the insurance adjusters were wide awake and rather dif
ficult to trade with. I opened up the worst boxes that I could find and
examined them carefully. I felt confident that, after they had been run
through the tin house, they would be just as good as they ever were.
I bought the pig tin a little under the market price, &after a lot of bar
gaining, finally succeeeed in buying the damaged tin plate at a cost
that I thought would be profitable. I knew that our plant could handle
the damaged plates as we had surplus tin house capacity. Upon my
return to Anderson I showed Phil Armour's telegram to Mr. Matter,
president of our company, & told him the prices at which I had bought
the pig tin and the tin plate. Mr. Matter consulted the tin house super
intendent and said he thought the tin plate was somewhat of a gamble,
although probably a good one. He said he wanted to be fair to the com
pany and to me, since I had taken all the risk, and if there was a sub
stantial profit to be made on the tin plate, he thought I should have it.
He suggested that the company take the tin plate at cost, which would
be a saving to them, and that they should run the tin plates through
the tin house for my account at cost plus a profit of ten cents per box.
He asked me if that arrangement would be satisfactory and I told him
it would be. He expressed the hope that I would make a nice profit. The
plates finished in the tin house just about as I had expected. I thought
I could see a profit of $10,000 to $12,000. A large part of this tin plate
was imported. It later occurred to me that if I kept the imported plates
separate so they could be used in their export bUSiness, then Armour
and Company would be entitled to the usual drawback of ninety-nine
per cent of the duty paid. I wrote Phil Armour, Jr. that I thought I
I could save them about $I 0,000 if they would divide the saving with
me. His curiosity was aroused and he asked me to come to Chicago. I
explained that I was marking and keeping the imported tin plate sepa
rate, so that they could collect a drawback of about $I 0,000 when it
was exported. He laughed and said, 'We will divide with you whatever
that saving is.' I made about $15,000 on the whole transaction, which
was a lot of money in those days. The increase in my capital at that
time was of great importance to me.
Chapter 34. Confidence is Necessary in a Non-Union Mill. Year 1898.
To operate an 'open shop' or a non-union mill successfully, it is abso
lutely essential that the men have confidence in the management and
feel that they will be treated fairly. We were very careful to make 67
only statements that were facts We regarded our promises as sacred
obligations. If a man quit before December first under circumstances
which we regarded as unfair, he would not receive a bonus. No em
ployee ever asked the National Tin Plate Company for his bonus-it
was paid promptly. Our men felt they would receive fair treatment and
were satisfied.
Many of the men approved of the bonus plan because they wanted
steady work and liked the idea of saving and having extra money at
Christmas. The tin mill's skilled men worked eight hours per day. The
majority of the men were fair. But the work was hot and strenuous and
some of them would not object to laying off for a couple of weeks in
the summer. I thought that, during the hot weather, a few might be
more easily influenced by labor agitators attempting to make them dis
satisfied, but if they had a bonus of from fifty to two hundred dollars
at stake, it would cause them to think carefully. Furthermore, the men
could afford to employ a helper, which some of them did, & earned
increased wages.
Several little incidents happened before the first bonus was due that
helped us to win the confidence of the men. The wife of one of our
rollers died leaving her husband with several small children. He decided
to return to his former home in McKeesport, where he had lived and
worked, as his wife's mother could look after his children. I looked
him up, told him we were sorry to see him leave under such sad cir
cumstances, and to call at the office where he would receive his bonus
check. At another time one of our best rollers died and we promptly
sent his widow a check for ten per cent ofthe wages her husband would
have received up to that date, if he had lived.
Chapter 35. A Meeting With the Amalgamated Association of Iron &
Steel Workers. Year I 898. There were but few tin plate and sheet mills
in 1898 that were not operated under the scale of wages drawn up by
the Amalgamated Association of Iron and Steel Workers, whose scales
were made to expire July first each year. A short vacation at that time
of the year was not ojectionable to the men.
The Association of Tin Plate Manufacturers met in conference with
the president and a committee of the Amalgamated Association of Iron
and Steel Workers where they bargained on the scale of wages for the
ensuing year. These meetings occasionally ran late into the night and
continued for several days. While interested in Anderson, which was
union, I was now operating Monessen, which was non-union. I sug
gested at a previous meeting of the manufacturers association that I
should not be on the committee, but Mr. D. G. Reid urgently requested
me to serve and I consented. We had several conferences before an
agreement was reached. The president of the Amalgamated Associa
tion of Iron and Steel Workers then announced that he would not al
low the National Tin Plate Company of Anderson, Indiana, to sign the
scale unless Monessen also signed. I admitted that I was interested in
Anderson, but stated that my interest in Monessen was much greater &
further, that the two companies were distinct & separate corporations
& Monessen had some stockholders who had no interest in Anderson.
I explained that the Monessen plant was working on a different system
of rolling, which was being patented, and for which the Amalgamated
Association ofIron and Steel Workers had no scale of wages. Therefore
they had no scale for the National Tin Plate Company of Pennsylvania
to sign. But if the National Tin Plate Company of Indiana could not
sign, it would be up to them to run non-union. I walked out of the
meeting. Mr. W. B. Leeds, President of the American Tin Plate Com
pany, then told the union officials that their position was manifestly
unfair, and as an argument he stated that he did not want to see Ander
son run non-union. He pleaded with the Amalgamated Association
Committee for over an hour. They finally agreed that Anderson 69
could sign the scale. I appreciated Mr. Leed's work. The way Anderson
was laid out, it was not practical to change it to the Monessen system
of rolling without a lot of alterations. I also recognized that it would
be much more difficult to change a union mill over to a non-union one
than it would be to start another mill in a new location, as we had done
in the case of Monessen.
Chapter 36. Giving Thought to a Venture in the Rod, Wire and Nail
Business and a Mediterranean Cruise. Year I 898. In looking for another
tin mill location, I started negotiations for a manufacturing and town
site across the river from Monessen near Webster, as I considered it
the best undeveloped manufacturing and town site available in the
Monongahela Valley. It would be an excellent investment & a splendid
location for the rod, wire and nail mill which I was considering. It was
not far from Monessen. Mr. James McKean, president of the Union
Trust Company of Pittsburgh, asked me whether it was true that I was
trying to buy the property opposite Webster. When I told him I was,
he said, 'Donner, do you expect to build another plant?' I replied, 'Yes,
but not a tin plate milL' He said, 'I will appreciate it if you will keep
hands off, as the parties I represent have already purchased part of that
property. If you promise to do so, I will arrange matters so that you can
have a substantial part of the property on the same basis it costs my
friends. They have already bought several farms at reasonable prices. '
I knew Mr. McKean quite well; he had persuaded me to live in Charleroi
(his home town) and had his brother Andy secure me a comfortable
house. I readily agreed to his proposal, as I was leaVing shortly on a
Mediterrean trip.
I expected to spend about a month in Egypt and the Holy Land. I in
tended to be away two or three months. After my arrival in London, I
I visited the Eagle tin plate works in Wales, largely out of curiosity.
Welsh tin plate workmen in America had informed me that it was the
best plant in Wales. I considered it about equal to the Morewood plant
in Gas City, Indiana.
Upon returning to the Victoria Hotel, London, I happened to meet
John Stevenson, Jr., of New Castle, Pennsylvania. I was intimate with
him as he & I had built summer homes near each other in the vicinity
of Beaumauris, Canada. He was an engineer, a Scot, and enjoyed talking
about the plants he had engineered & constructed. He built a rod,wire
and nail mill in New Castle, Pennsylvania, and told me that if he were
building another, it would have a continuous roughing mill & a Belgian
finishing mill similar to the Joliet plant, which held world records. He
had recently finished building the largest tin plate plant in the world in
New Castle. George Greer had built the first one there. I liked the steel
business, but knew nothing about a rod, wire and nail mill. This fact,
however, did not deter me, as I would employ men who had the 'know
how.' After considering my financial position, I practically decided to
build a rod, wire and nail plant in which I would have a substantial in
terest. I knew that the American Wire and Nail Company of Anderson
and the Consolidated Steel and Wire Company were money makers.
Chapter 37. The Tin Plate Plant in Anderson Was Started Without Op
erating Capital. Year I 898. The National Tin Plate Company was started
without operating capital. We borrowed money from several banks.
Phil Matter's & my signatures were required, but Mr. Matter's endorse
ment was naturally the important factor.
We had some good customers and established a profitable business.
Our largest buyer was In Milwaukee. I studied their requirements and
guaranteed to furnish them tin plates suitable for all their deep stamp
ingjobs or work. Previously, they had imported most of their tin plate.
We used acid open hearth steel for some of their difficult work, but
soft Bessemer in many cases. We rolled a few large sheets in special
qualities and gauges of soft Bessemer and acid open hearth steels, 7 I
from which we thought we could select steel that would do all of their
work. These sheets were privately marked. We experimented until we
found a quality that was suitable for each job of work given us. We
made no charge for the tin plate sheets consumed in making the ex
perimental tests, after which we rolled their orders according to the
sizes and the gauges specified. We guaranteed the quality of our steel
as being satisfactory for the different jobs. We gave them good service
and they were our most profitable customer for two or three years. It
was not known at that time how to make basic open hearth steel sUit
able for rolling sheets and deep stamping. This was developed several
years later by Nevin McConnell at Sharon, Pennsylvania.
During the years 1895", 1896, 1897 and part of 1898, our accumu
lated surplus enabled us to payoff the banks and run at full capacity.
On several occasions, we did not have sufficient orders and ran on
stock sizes or took orders for future delivery. In a few cases, we secured
permission to anticipate delivery with the payments to be made as
called for in the contract, and in this way maintained our operations
at full capacity.
Neither the Anderson nor the Monessen plant paid any dividends
up to the time we sold out to the American Tin Plate Company. The
surpluses were used to advantage. There was no federal income tax.
Chapter 38. The American Tin Plate Company Takes Over All the Tin
Plate Plants in the United States. Year 1899. In 1899, the American
Tin Plate Company was organized and capitalized on a fairly conserva
tive basis. Moore Brothers had the stock underwritten, and those ac
cepting stocks faired much better than those who demanded all cash.
For several weeks the officers of the new company were busy com
pleting their organization. We were making a very substantial saving in
Monessen. I hoped to license the company to use my patent or sell it
for $15"0,000. I had talked with the officers several times but could get
no satisfaction. Several very practical men in the company stated that
my system of rolling would not work, as the contour of the two pairs
of rolls would be dIfferent, but Mr. Arms, a vice president, told them
they were mistaken and that he had seen the mills working very suc
cess fully. They were surprised and skeptical.
One day, while waiting in a room adjoining his office to see an offi
cial of the American Tin Plate Company, with whom I had an appoint
ment in regard to the purchase of the patent, I heard him receive in
structions to treat me nicely, but to put me off for another week. The
speaker went on to say that after theyhad all the rolling mill machinery
people tied up, they would let me whistle. A few minutes later I faced
the man who had received these instructions. He told me he was very
sorry to put me off again for another week. I consented to the post
ponement and secured Pullman accomodations for Pittsburgh.
The next morning I called on George Mesta, president of the Mesta
Machine Company, and purchased eight hot mills, the necessary cold
mills, squaring shears, doubling shears, bar shears, pickling machine,
spare rolls, roll lathe, etc. After a little dickering, I purchased practi
cally everything that was needed in an eight mill plant, with the ex
ception of the buildings & power plant. I had several locations in mind
and began looking for a site.
About four or five days later, I received a telegram from the Ameri
can Tin Plate Company, asking me to be in Chicago the next mornIng.
I wired them that I was too busy and wished to resign my positIon with
the company. Messrs. Reid and Leeds, the president and vice president,
wired me to meet them in Pittsburgh at the Duquesne Club the next
mornIng, which I agreed to do. Upon being asked why I had purchased
the eight tin mIlls from Mesta, I told them the complete story. They
admitted that I had not been treated fairly. Mr. Reid said that he had
not seen Monessen's costs until the previous day, & that he wanted 73
me to remain with the American Tin Plate Company and be responsible
for the operation of the Monessen plant. They would assume the con
tract that I had made with Mesta and make some arrangement in regard
to the patent. He explained that jealousy was largely responsible for the
situation in regard to Monessen. I refused, stating that I preferred to
operate independently.
Mr. Reid finally offered to pay me $150,000 and assume the Mesta
contract, with the understanding that I was to remain with the firm
at a salary of $10,000 & live in Pittsburgh. He stated that they needed
my services to continue Monessen on the present plan of operation,
or they might be in a difficult situation with the union. Messrs. Reid &
Leeds were obliged to return to Chicago that night. They urged me to
accompany them, adding that they were certain. that, with )the aid of
Judge Moore, the situation could be adjusted to my satisfaction. I fi
nally consented to go.
When in Chicago, I explained to Mr. D. C. Reid that I might build a
rod, wire and nail mill near Monessen and could not agree to give them
all of my time. I suggested that my brother Perce should be the active
man on the job and I would be responsible for Monessen's operation.
When they were satisfied on those points, they agreed to my taking the
Mediterranean trip & making a stop in Europe before I returned. They
stipulated, however, that I should a g r ~ e not to manufacture any tin
plate in the United States, except in the states of Arizona and Florida.
They also asked me to guarantee the patent, which I refused to do. The
contract was becoming a little complicated, so I telephoned Messrs.
Knox and Reed of Pittsburgh to send George B. Motheral to Chicago
to help me. Within several hours after his arrival, we fixed up a con
tract with the American Tin Plate Company to our mutual satisfaction.
I received negotiable notes bearing six per cent interest for $150,000
from the American Tin Plate Company.
Chapter 39. I Received a Surprise During the Organization of theUnion
Steel Company. Year 1899. Upon my return from the Mediterranean
cruise, I learned that the persons represented byJames McKean were
Messrs. A. W. & R. B. Mellon. In my second interview with Mr. A. W.
Mellon in connection with the organizing of a rod, wire and nail mill,
he showed me the cost of their two properties-one above Charleroi,
and the other opposite Webster. He said James McKean or Charles
Thompson would give me all the details. He asked me which location
I preferred. I told him I favored the one near Webster, as a good profit
could be made out of the real estate adjoining the manufacturing site.
The other location was practically a suburb of Charleroi, which would
derive all the benefit from the payroll. I stated that a lot of money had
been made out of the real estate in Monessen, but from the topography
of the property opposite Webster, it appeared to be a much better town
site. It appealed to me, as I had made my first $60,000 out of real estate
in a new town in the Indiana gas belt.
I explained further to Mr. Mellon that while we could start with
$ 2,000,000 it might be necessary to build an open hearth steel works
as well as a blooming & a billet mill, which would require more money.
He replied, 'I think that the manufacture of iron and steel is being con
centrated into such strong companies that it may be dangerous not to
fully protect yourself by building a blast furnace, probably two open
hearth furnaces, a blooming mill, a billet mill and other finishing mills.
This will also necessitate the purchase of fuel coal, coking coal, coke
ovens, ore properties, etc.'
He asked me what salary I had received from the tin plate plants I
had organized and managed. I explained that I had started at $ 5 ,000 in
Anderson and three years later had received $5,000 a year from Mon
essen during its construction & operation, making a total of $ 10,000. I
stated that I had not accumulated my money out of salaries, but 77
had made it from real estate, profits in the plants I had managed, a few
trades, and out of the patent I had sold recently for $ 150,000.
Mr. Mellon then asked me if he had understood me to say that I
would put in $500,000 in our first interview. I answered, 'That is cor
rect.' He then said he and his brother Dick would put in $ I ,500,000
& more as needed, with the understanding that I would put in $ 500,000
and devote all of my time to the business at a fixed salary of $ 10,000
as president of the company. As more capital would be needed than
$ 2,000,000, he and his brother would carry my twenty-five per cent
interest with the company at the rate of five per cent interest until the
amount of money needed would be determined, after which the com
pany would be capitalized and financed. I said that the $ 10,000 salary
under these conditions would be satisfactory, but that I must advise
them that I was under contract with the American Tin Plate Company
to protect the patent I sold the Monessen plant, for which I was receiv
ing $ I 0,000 per year. However, I would arrange to have that amount
cut in half as I preferred to act only in an advisory capacity, which
would reqUire little of my time. I told them that my brother Perce was
with me during Monessen's construction and was competent to handle
the job, but that Mr. D. G. Reid had insisted on a contract for my ser
vices at the time I sold them the patent. Mr. Mellon said that this ar
rangement would satisfy them. We agreed tentatively on the Webster
site. It was decided that I should buy the necessary eqUipment for a
rod, wire & nail mill as soon as I decided on the machinery we needed.
There was no written contract. I was so surprised at the confidence
which Mr. Mellon showed that I was almost dumbfounded.
I was delighted to be associated with the Mellons, although I knew
them only by reputation. I told Mr. Mellon I wanted them to know that
all the experience I had had in the steel business was in the building
and operating of two tin plate plants-one in Anderson, Indiana, the
other in Monessen, Pennsylvania. He replied that he was aware of this,
but also knew that I had operated a flour mill and grain business suc
cessfully for some years, as well as real estate investments in the Indiana
gas ,belt and in Monessen, which was good experience, and they were
willing to take their chances with me. I do not know where he secured
his information, but probably through their Indianapolis correspond
ent, the Indiana National Bank. Mr. Mallot knew me slightly, but was
well acquainted w:ith Joseph 1. Irwin, our banker in Columbus, Indiana.
Mr. Irwin was a stockholder, as was his son, William G. Irwin, in the
first tin plate plant I built in Anderson, Indiana, &also in the Monessen
plant. His daughter and her husband, Mr. and Mrs. Z. T. Sweeney, were
shareholders in Monessen.
Mr. Mellon stated that he would like to have the company named
the linion Steel Company, and have a Pennsylvania Charter secured
with a nominal capital of $ I ,000,000 of which only the legal require
ment-ten per cent, or $I oO,ooo-would be issued in stock. The next
$ I ,900,000 would be evidenced by the company's notes at current
rates of interest. All further payments to the company would be evi
denced by additional notes of the company, in the same manner, until
the capitalization was determined.
The company would notrequire any credit as it would start with vir
tually $2,000,000 cash, and would then be financed by Mr. Mellon &
his brother through loans to the company as needed. One job of fi
nancing would save the company a lot of money and result in a better
financial statement.
I was sorry that I could not offer stock to some of my associates.
However, it was a case in which the Mellons owned a town and manu
facturing site and allowed me to buy a twenty-five per cent interest at
their cost, while retaining seventy-five per cent of the capital stock in
the enterprise. 79
About July I, 1899, I proceeded to get busy. I secured the engi
neering services of Garrett and Cromwell of Cleveland. John Garrett
had been a rod mill roller and was well known in the industry, having
been associated with the construction of the Joliet rod mill. It held the
world's record for tonnages. Mr. Garrett was not an engineer, but a
roller and a very practical rod-mill man. His partner, Mr. Cromwell,
was an engineer. They had been the engineers for the rod mill in Ash
land, Kentucky, which I visited before employing them. They were also
the engineers for the Schulers, who were building a rod mill in Bir
minghan1. They claimed it would be the best rod mill in the world and
would start operations about the last of the year. They promised to in
corporate its best features in our plant.
I rented a house on Wallingford Street, Pittsburgh, but as I had a lot
of traveling to do, I used the Duquesne Club as my address. My office
was with my hat until September, when we opened an office in the
Carnegie Building, starting with a stenographer as my secretary . I placed
orders that month for two high-speed Southwark Foundry & Machine
Company's engines and several other orders, including the rod mill
building. In November, a Pennsylvania Charter was secured for the
Union Steel Company with a nominal capital of $I ,000,000, but only
ten percent, the legal requirement, was applied to the stock of the
company.
Real estate matters required so much of my attention that I was away
from the office a large part of the time. The location of the Union
Steel Company's plant so far as the public was concerned was in the
air for several months, because an announcement would have inter
fered with the purchasing of the additional property we desired.
Chapter 40. Recollections in Securing Donora Real Estate. Years 1899
1900. Mr. Mellon & I came to the deCision that \ve .should buy all the
property we could in the old town of West Columbia, and all the prop
erty between the railroad and the river that we could secure, because
it would be needed for blast fUrnaces, railroad yards, etc., in connection
with the rod, wire and nail mill we were erecting for the Union Steel
Company. We would also buy the 140 acre farm owned by Mrs. Heslup.
Mr. Mellon was afraid from Mr. James McKean's report that the latter
could not be secured until after Mrs. Heslup's death. I called on Mr.
McKean and asked him whether there would be any objection to my
seeing Mrs. Heslup in connection with her property. He laughed and
said, 'Certainly not, go ahead.'
I called on her about eight or ten times and was becoming quite dis
couraged. I did not seem to be making any headway in finding out
what her objection was to selling the property. I believed she was in
terested in making the sale, as otherwise she would have treated me
ruthlessly for being so persistent, but she was always very pleasant to
me and invited me on several occasions to stay for meals. When I ex
plained to her that she could sell the farm and invest the proceeds at
only 4 ~ percent and have a good income, she replied, 'Mr. Donner,
I'm sorry to have to keep saying "no" to you.' I believed in her honesty.
I think she was being as kind as she knew how to be in declining my
offer so politely. Mr. McKean, in whom I had great confidence, told
Mr. Mellon that he was surprised at my wasting time on Mrs Heslup;
Mr. Mellon even said that he feared I was working on a hopeless job.
These remarks were discouraging.
There was a very small deposit of drift coal on the property which
was of no value to us but it occurred to me to make her an offer for it.
I said, 'Would you sell half the coal if I gave you a fair price?' She re
plied, 'I won't sell any coal. It is all in the hill.' It then dawned on me
that she might be willing to sell the remainder of the property if she
could keep the seventy acres in which the hill and its coal, as well as
her home and garden property, were located, and I asked her if she 8 I
would. She answered, 'You might make an offer.' At last I was begin
ning to get an opening. I said, 'I will pay you $3 7 S per acre.' She replied,
'You paid $400 per acre for one property.' I admitted we did, but ex
plained that Mr. Allen's property was the largest acreage in this vicinity.
Mrs. Heslup stated, 'I positively will not sell at that price. Will you raise
your offer?' I hesitated and offered $4S0 per acre for the seventy acres.
She replied, 'I will sell the seventy acres at $SOO per acre and not one
cent less.' It was difficult to resist this offer, but I thought that it was
prudent to defer for the present. Her daughter invited me to stay for
supper and I accepted. Before leaving, I agreed to pay $ 3 S, 000 for the
seventy acres. Mrs. Heslup stipulated that she must have $Soo in gold
to bind the bargain before noon the next day. I agreed to bring that
amount and an engineer to survey the property. The next morning I
placed $Soo in gold on her table. She threw up her hands &exclaimed,
'Take it away! I could never sleep with that much money in the house.
Pay the full amount when you receive the deed.' I agreed to do this. The
engineer stayed to complete the survey. Afterward, Mrs. Heslup said,
'My lawyer, Mr. Murdock, of Washington, Pennsylvania, will prepare
the agreement of sale.' She and all her children signed it.
Mrs. Heslup told me that according to some custom (I cannot recall
the details of it) we should also present her with the silk for a dress. I
agreed that we would do this. I had a friend purchase a suitable piece
of black silk which I brought her the next day. She was delighted. Her
lawyer prepared the deed and a plan of procedure so that Mrs. Heslup
understood every step in the proceedings. He was a good lawyer and
a fine gentleman. I had never met him before. He was present when
the money was paid & the deed delivered. Mr. Murdock recommended
that the $ 3 S ,000 be deposited in a Washington trust company at four
per cent interest, to which Mrs. Hesulp agreed. I doubt if she ever used
a dollar of the amount, unless it was to pay her lawyer.
Mrs. Heslup was a sincere and interesting character. She loved her
home, her garden & the hill, but it took me a long time to understand
the coal mystery. Her son mined and sold a little coal in the neighbor
hood. It is possible that her husband may have said manyyears before
that the coal in the hill was valuable and they would keepit. His widow
played her part well. The land for farming use was not worth more than
$ 100 per acre, so $ 300 or $400 per acre was considered a good price.
I am sure she enjoyed securing $I 00 per acre more than her neighbor,
Mr. Allen. Her property was so important to our plans that we would
have paid $2,000 per acre if necessary. Fortunately, Mrs. Heslup never
knew that we had an option on Mr. Castner's ten acres adjoining her
property at $2,5",000.
Mr. A. W. Mellon was pleased and surprised when he heard that I
had purchased half of the Heslup property. He understood my diffi
culties. Mr. R. B. Mellon laughed and said he would like a phrenologist
to show him my bump of perseverance. When James McKean learned
that I had been able to get half of the property he was astonished. He
said that he would have been willing to bet twenty toone that I would
not succeed.
Chapter 41. A Disturbing and Embarrassing Discovery. Year 1899. I
had a slight acquaintance with a Mr. X, master mechanic of the Ameri ..
can Wire and Nail Company of Anderson, Indiana-a company suc
cessfullyengaged in the rod, wire and nail business. I had so much con
fidence in the president, Mr. E. J. Buffington, that I thought anyone
who had worked in his organization for several years would have re
ceived anexcellent training &would be a valuable man. Mr.
later became president of the Illinois Steel Company after the organi
zation of the United States Steel Corporation. I interviewed Mr. X &
then employed him for three years at $,5",000 per year. He arrived in
Pittsburgh before we really needed him as we had not secured all the 83
property we required for the Union Steel Company. I placed him in an
office adjoining mine with my stenographer. He was a fair draughts
man and I gave him some work in that line. I was purchasing the prop
erties we required, and was away from the office on several occasions.
During my absence, he talked with salesmen he would not ordinarily
have met, and he took advantage of those opportunities to secure com
missions on equipment he was helping me to select.
One day I was informed by a friend in the Duquesne Club that the
engineer in my office was attempting to secure a commission on the
steam pumps I was buying for the company. I had confidence in Mr. X
and this information gave me an unpleasant shock. Thereafter, I put all
quotations & important papers in my desk, which I kept locked. Mr. X
had some work on the draughtingboard which was only partly finished
and I could not let him go without a lot of inconvenience. It was diffi
cult for me to conceal my feelings and treat him nicely. I was embar
rassed that I had selected such an unscrupulous person. I explained
my predicament to Mr. Mellon and his only comment was, 'You are
lucky that you found him out so soon. Be on your guard and suit your
own convenience in getting rid of him. '
Several days later I received a second shock. I had recently placed
an order with E. A. Kinsey & Company of Cincinnati for machine tools
amounting to about $20,000. The salesman who had taken the order
phoned me from his hotel and asked if he could see me privately. I in
vited him to meet me at the Duquesne Club. He seemed quite errtbar
rassed and finally told me that our Mr. X had asked him a few weeks
before for a ten per cent commission. They allowed some agents a ten
per cent commission and, as Mr. X said he could guarantee him the
business, he had foolishly agreed to this request. When he turned in
the order at Cincinnati, Mr. Shea, their new president, asked whether
W. H. Donner was from Anderson, Indiana. When informed that he
was, Mr. Shea stated that he had traveled in Indiana, knew me quite
well, and had sold me a quantity of machine tools. He said they could
not accept an order from my company and pay one of my employees
a ten per cent commission. Mr. Shea told the salesman ~ Q return at
once to Pittsburgh, tell me all the facts and to say that he had sent him.
Mr. Shea further told him to advise me that his company would give
us a ten per cent reduction in the price. The salesman then gave me a
letter from Mr. X written in pencil on a sheet of yellow paper from a
scratch pad and signed by him. It read about as follows: 'I am at home &
it is raining very hard. Donner has had his desk locked for several days
and I have not been able to see the other bids, but I will see to it that
you get the order.'
I told the salesman to say nothing about the matter to anyone. At the
first opportunity, I told Mr. Mellon the facts and showed him Mr .X's
letter. He called in Mr. R. B. Mellon to see it. All that he said was, 'It
pays to have good friends. Andy and I know a man who is so damn
mean that he is without any friends-no one ever tells him anything.'
I explained the situation to my attorney, John Beal" and asked him
how I should handle the matter. I thought I would probably have to
pay Mr. X a year's salary. My attorney immediately informed me that
I did not have to pay him anything as dishonesty vitiates any contract.
About two months later, I let Mr. X go and paid him a month's salary.
I told him I was sorry to terminate his contract as I had never had a sim
ilar experience, but our reason for doing it was that we could not re
tain an employee who was attempting to secure commissions on eqUip
ment that we were buying. He appeared highly indignant and declared
that he had never received or attempted to secure a commission from
anyone. He employed a reputable attorney & a few days later brought
suit, claiming the amount due for the balance of the time for which
he had been employed. 8S
When the case came to trial, he was examined by his attorney and
appeared to good advantage. Mr. Beal remarked to me, 'He is a good
witness and a clever liar, but his attorney does not dream of the facts.'
Mr. Beal then asked him whether he had had a key to the Union Steel
Company's office in the Carnegie building. He replied, 'Yes, sir.' 'Did
Mr. Donner consult you in regard to machinery and equipment for the
Union Steel Company?' 'Yes, sir.' 'Did you write any letters pertaining
to the machinery and equipment that the company is buying?' 'Yes, sir.'
'Did you write them or dictate them to a stenographer?' '1 dictated
them.' 'Were all the letters copied in a letter book?' 'Yes, sir.' 'Did you
have access to the company's files.' 'Yes, sir.' 'Did you ever write pri
vately to any salesman with whom the company was negotiating for
machinery?' 'No, sir.' 'Did you have a key to Mr. Donner's desk?' 'No,
sir.' Mr. Beal then showed him his Signature to the letter addressed to
the salesman in Cincinnati which he had written, and asked him if it
was his Signature. He blushed, hesitated, & finally admitted that it was.
Mr. Beal read the letter in a very humorous and sarcastic manner'.
Mr. X's attorney asked to see the letter ana Mr. Beal gave it to him.
He went over and whispered to his client and immediately dropped
the case.
Chapter 42. Helping Friends Proved Profitable. Years 1899-1900. Some
time after 1 became associated with the Mellons, A. W. Mellon asked
me whether or not 1 knew Charles D. Marshall and H. H. McClintock
of the Shiffler Bridge Company. 1told him that 1did-since 1894. He
then inquired what I thought of them. I replied, 'They are graduates
of Lehigh University, fine young men, and in my opinion, the best en
gineers in the structural field.' 1explained that in I 8941 had figured with
them on bUildings for the National Tin Plate Company. 1 wanted to give
them the order but their price was about ten per cent too high. They
asked to be allowed to check their figures. They then said that I would
find that their competitor had either made an error in his figures or es
timated on a lighter building. Mr. McClintock explained that the weight
of the buildings could easily be reduced but that they would not rec
ommend a lighter construction.
The man from whom I received the lower bid gave me his weights
verbally. In accepting, I specified the weight. When the material arrived
I had the weights on each car carefully checked. It developed that the
buildIngs were ten per cent lighter than the seller represented. I there
fore reduced the price accordingly. The seller did not object, as he
knew I was in the right.
I told Mr. Mellon that in 1897, after an agreement had been reached
for a price on the proposed buildings in Monessen, Mr. Marshall had
suggested a few changes whIch he had seen in New Castle. It called for
some addItional expense & alterations which he itemIzed. The changes
were of such a practical advantage that I adopted them and thanked
him for his suggestions. Their work was most satisfactory.
Through my dealings with them, we had become good friends. One
day, Mr. Marshall said that their positions with the Shiffler Bridge Com
pany were unsatisfactory. They hoped to get theIr money out and in
vest it where they would have a substantial interest in the plant and
management. Mr. Marshall asked me how my partnership wIth the Mel
Ions was working out. I replied, 'Most satisfactorily.' A short tIme after
my talk with Mr. Mellon, Messrs. Marshall & McClintock called on me,
explaining that they had almost sold their stock in the Shiffler BrIdge
Company at $150 per share, when Mr. Walker, the president, spoke
to their buyer so discouragingly about the prospects of the company
that the sale was called off. They then explained that a second custom
er had practically purchased their stock at $135 per share but, after
talking with Mr . Walker, backed out. They were quite discouraged &
asked me what they should do under the circumstances. I asked 87
Mr. Marshall to let me see the balance sheet and record of earnings of
the company over the past few years. He produced the figures. They
were well compiled, and I was greatly impressed as to the value of the
stock. I said to them, 'You should find a purchaser who relies on his
own judgment. I will give you $100 per share & if I buy it, Mr. Walker
will not learn of the fact, unless you tell him, until I present the stock
for transfer.' Messrs. Marshall and McClintock walked to a corner of
my office, talked privately for about a minute and then stated that the
stock was mine. I was surprised, but gave them a check for $30,800.
This was on February 14, 1900.
It occurred to me afterwards that I should not have bought the stock
without consulting Mr. Mellon, as I had promised to devote all my time
to the Union Steel Company, so I went down to see him and told him
what I had done. He was not pleased and said, 'Don't you think you
acted hastily?' I answered, 'Perhaps I did, but the stock was such a bar
gain at the price, that I did not give the matter a second thought but
purchased it on the spur of the moment. All I will have to do is hold
the stock, examine the statements, attend a few meetings and wait.'
Mr. Mellon smiled. I then asked.him to look over the statements and
balance sheet and take half of the stock with me. He placed them in
his pocket, asking me to see him the next day. In the morning when I
called, he said, 'There is no question but that the stock is a bargain. It
is all right for you to keep it under the circumstances, but I don't want
you to devote any time to outside interests. We are backing you as
agreed upon because you are giving the business your undivided atten
tion.' I then told him that I would be glad to have him take half the
stock, and I would actually feel better if he would. He replied, 'If you
really feel that way, I will take it, but keep it all in your name, handling
mine as you do your own.' He gave me a check for $1 S,400 and we
signed a memorandum accordingly.
One day Mr. Mellon telephoned me to come down to the bank and,
on my arrival, he introduced me to Mr . Henry Clay Frick. He informed
me that he & his brother were letting Mr. Frick have a third of their in
terest in the Union Steel Company enterprise, which he thought would
be to my advantage as well as theirs, as we would have the benefit of
his advice.
The Messrs. A. W. & R. B. Mellon, because of their interests in real
estate, banking, coal, oil, the Aluminum Company, Standard Steel Car
Company, Carborundum Company, etc., were exceedingly busy men.
They divided their work, but frequently discussed matters between
themselves. My contacts had nearly all been with Mr. A. W. Mellon.
I did not know Mr. R. B. well until after A. W. went abroad. I had many
problems on which I wanted his advice. He was a very likeable person
and never lacked words for something to say. R. B. had the reputation
of being easier to get acquainted with than A. W., although I never ex
perienced any difficulty with either in that respect.
Before Mr. A. W. sailed in April 1900 to be married, I had become
quite well acquainted with him. We had many conferences. He did not
want to be bothered with details of the plant, as that was my responsi
bility. He urged me to try to secure ore, but wanted to be consulted
as to the buying of coal and ore properties. It was well known that the
iron ore deposits on the Mesabi Range had been leased or purchased
by the large consumers of ore & the mining companies. Prices advanced
and no good mines or leases were available. It was distinctly a sellers'
market with no offerings.
Shortly after Mr. Mellon went to England, the American Bridge Com
pany was active in acquiring properties. Mr. Walker, president of the
Shiffler Bridge Company, called and asked me to agree to change my
$30,800 stock of Shiffler Bridge Company for $100,000 of American
Bridge Company seven per cent preferred stock, and $100,000 of 89
American Bridge Company common stock. This I refused to do until
I saw a statement of the American Bridge Company showing exactly
what its stock represented, including a list of its properties, cash, assets
and all liabilities. Mr. Walker then had Judge Reed call to see me. The
latter was very surprised to learn that I had never seen the original op
tion Walker had signed, & was amazed at the way he had proceeded.
In 1899 stocks were being issued very rapidly, and I refused to buy
stocks which I had no opportunity to analyze. I told Judge Reed that
I had no idea of the worth of American Bridge Company common and
preferred stocks and that I would not agree to the exchange, but that
I would accept $100,000 in cash. They paid me this amount.
When Mr. Mellon returned from England, I gave him a check for
$5"0,000. His investment of $15",400 for four months resulted in a
much greater profit than I had any reason to expect. Needless to say,
he was quite surprised. In 1900 consolidations were very common.
The Messrs. A. W. and R. B. Mellon purchased the Pottstown plant
and organized the McClintock-Marshall Construction Company. A. W.
Mellon and R. B. Mellon each had thirty per cent and McClintock and
Marshall each had twenty per cent. It became one of the most success
ful enterprises in theUnited States. The Mellons, McClintock & Marshall
have all made millions of dollars out of that enterprise. Of course, I did
not know at the time I purchased their Shiffler stock that they would
soon be associated with the Mellons in the Pottstown bridge plant.
Mr. Marshall was a very reliable business man, but a little hard of
hearing. Mr. Julian Kennedy once remarked, 'If Charlie is negotiating
and desires more time to consider, he will put his hand up to his ear &
stall, but if he is buying he can hear a low price instantly.'
Chapter 43. Contract for Steel with the Carnegie Steel Company Lim
i t e d ~ Year 1900. My negotiations with Mr. Charles M. Schwab, presi
dent of the Carnegie Steel Company,Limited, for a contract on steel
proceeded smoothly until he saw the plan of our continuous roughing
mill. It had a finishing rod mill on the right hand side. The space on the
left side was blocked out for a dupl1cate mill. Mr. Schwab was a won
derful salesman. He wanted us to build the second finishing mill at once
so as to enlarge our contract for steel. To influence me, he reduced the
price on the larger tonnage, but I would not consIder a second rod mill
at that time. Mr. Schwab was so insistent on a larger tonnage that I made
no progress. After discussing the question for several weeks, I asked
him, 'Mr. Schwab, you know I am constructing a large rod mill in a new
town twenty miles from any other rod mIll or even a steel works, and
securing a new organization to operate it. As a practical steel manufac
turer, an experienced operator and a friend, do you recommend that I
double our rod mill at thIs time?' Mr. Schwab answered, 'You win! I will
increase the minimum tonnage 2,000 tons & the maximum 4,000 tons
more than you requested, and quote the same price as on the increased
tonnage. If you cannot use this increased minimum I will guarantee
that you will have no trouble on that score.' There was, of course, no
liability on the increased maximum. I immediately thanked him and
accepted his offer. The contract was rewritten and closed shortlyafter
wards on March 15", 1900. The contract and supplement addition to
same were not dated. This was before the formation of the new Car
negie Steel Company, and more than a year prior to the in,ception of
the United States Steel Corporation. Mr. Schwab was president of each
of these companies when they started business. This contract was for
a period of ten years from January I, 1901, but could be cancelled by
one year's written notice, given by either the buyer or seller. The notIce
was to be gIven on or before the first day of any twelve months' period
begInning on or after January 1,1902, & the buyers agreed to pay the
sellers for such material at a price per ton based upon the average price
of standard Bessemer pig iron per ton. 9 I
The prices contemplated on this contract for Bessemer steel billets
were fixed for each three months' period, beginning January I, 190 I,
& were determined from the average market prIce of standard Besse
mer pig iron, free on board cars at Pittsburgh, for the next preceeding
three months. The average market price of pIg Iron for each month was
first ascertaIned, and from these monthly prIces the average prIce for
the three months ascertained. The average monthly price was agreed
upon within one week from the end of each month.
Any dispute as to the price of Bessemer pig iron was to be referred
to Mr. Albert H. Childs as arbiter, etc.
Payment was made by the buyers on the 15th of each month for the
preceeding calendar month's shipments.
Deliveries were to be not less than 10,000 gross tons nor more than
16,000 gross tons per month.
In case of any changes in the business organization of the parties
hereto, this contract was to be assumed by the successors.
It was a condition of this contract that the buyers would not resell
any of the material furnished without first putting it through a process
of manufacture at their works.
These were the main features of the contract which was signed by
O. M. Schwab and L. O. Phillips, managers of the Carnegie Steel Com
pany, Ltd. & accepted by me as preSident of the Union Steel Company.
There was also a side agreement which would be quite an advantage
in the event the market price of pig iron in any month declined below
the average price that had been established. Then the price of billets
would be based on such lower prIce of pig Iron. The following letter
from Mr. O. M. Schwab covers this feature:
Referring to the agreement this day entered into between us,
as a supplement and addition to the same, it is further understood
& agreed that in case, at any time during the life of the contract,
the market price of pig in anyone month of a quarter falls below
the average price for such quarter as established under the pro
visions of the Agreement, the price ofbillets for such months shall
be based on such lower price of pig. To illustrate: if the average
price for pig in January, February and March should be, say $24,
which price would be the governing rate for the succeeding quar
ter, and in the month of May the market price of pig should drop
to $2 2, the price of billets for the month of May should be based
on such lower figure.
The intent of this provision is to enable you to meet competi
tion, where you are compelled to guarantee prices.
In consideration of the foregoing, it is understood and agreed
by you that in no case shall we be required to make a reduction
in the price of billets, should the market price at any time be less
than the minimum figure obtained under the provisions of the
contract, namely, the market price for pig plus the correspond
ing figure for conversion.
Chapter 44. Developing Donora (Union Steel Company). Year 1900.
The property we purchased at Donora had a frontage of over two miles
on the Monongahela River. The land between the Pennsylvania Rail
road & the river was an excellent manufacturing site. It provided space
for a larger plant than we proposed to build. We acquired the lowlands
for dumping slag, and located the ore yards, blast furnaces, steel works,
blooming mill, billet mill, rod mill, finishing mill, etc., for the econom
ical handling of raw materials, semi-finished and finished products. We
had ample room for future expansion.
The property above the railroad was taken over by the Union Im
provement Company. I secured the services of J. H. Mullen as general
sales agent. He was a capable person, had been successful in business
and handled the sales in a satisfactory manner. 93
A topographical map of the property enabled us to layout the town
of Donora to good advantage, but I secured a second engineer to help
revise the first plan. As soon as plans were ready, we let contracts for
building sewers, paving streets, and laying pipes for water and gas.
Mr. Gordon, a competent man, offered to subscribe $25,000 to
wards the building of a hotel, provided we would subscribe for the same
amount. The Union Improvement Company accepted this offer.
A bank was organized, which agreed to erect a suitable bank bulld
ing. The Mellons subscribed for a substantial block of its stock & agreed
to take all that was not wanted in Donora.
A Mr. Claybaugh proposed to erect a two-story brick building for a
store and post office, if we would recommend him for the position of
postmaster, which we did.
Squire Castner, whose farm formed part of Donora, was one of the
school trustees. He was very interested in the welfare and success of
Donora. I told him I regretted that the school district was not in a po
sition to issue bonds & construct a suitable school building, as we would
need it before it could be erected. I explained the troubles I had ex
perienced in Monessen because there was no school. I asked him what
he thought of the school trustees supervising the bullding of a school
to cost about $50,000, provided the Union Improvement Company
would finance it until such time as the school trustees could have bonds
legally issued to pay for it. I made it a condition that the school would
secure all materials at the prices paid by the Union Steel Company and
would pay interest only on money actually invested until the town of
Donora was in a position to issue bonds to pay for it. He thought it was
a splendid idea. I promised to consult Mr. Mellon and to let him hear
from me shortly.
When I suggested the plan to Mr. Mellon he did not favor it, but
after I explained that it would be an asset to the Union Steel Company
in helping us to secure a good organization more promptly, he said,
'I had not thought of it from that angle. If you consider it good busi
ness and approve of the Union Improvement Company financing it,
go ahead.'
The Union Improvement Company also helped to finance a brick
hotel near the entrance to the plant. It contained small rooms suitable
for men employed in the mill, but had no bar. It cost about $22,000
&was urgently needed. This company also built more than 100 homes,
paved the streets, put in water mains, gas pipes, etc. The Union Steel
Company's activities in building the rod, wire and nail plant and later
the blast furnaces, steel plant, etc., gave Donora a good start. The rail
road was to build a passenger & freight station. The work being done by
Donora's new property owners made it a very busy place. The various
investments of the Union Improvement Company were profitable.
After work began to show on the school house, Mr. J. H. Mullin said,
'That schoolhouse is the best advertisement I ever saw. People are say
ing if the Mellons have confidence enough to start a school, Donora
is going to be a good town.' This was a pleasant surprise as I had never
thought of it in that light, but knew from experience that it was neces
sary. Later we built a much larger school in the same manner.
The Union Improvement Company had its first sale of lots in Don
ora on August 10, 1900. It realized a little over $ 225,000 from that
sale. The building of the two schools was a great help to Donora and
the Union Steel Company.
Chapter 45. Problems Encountered by the Union Steel Company. Year
1900. From the time we broke ground in Donora, we were busy with
construction on the rod, wire and nail mill, open hearth steel works,
blooming mill, billet mill and blast furnaces. Part of my time was taken
up in obtaining ore for the company.
I was fortunate in securing William H. Farrell as superintendent 95
of the rod, wire and nail mill. With his practical mill experience and
the help of Chauncy Morrison, chief clerk, he was able to form a com
petent organization for the different departments. We made satisfac
tory products at low costs for a new plant and they were qUickly ana
lyzed. We secured John Miller, who was helpful in the rod mill. Farrell
ran the plant and gradually increased production and decreased costs.
The Cleveland firm of Garrett and Cromwell were the only engineers
employed in the rod mill.
Nevin McConnell was superintendent of the open hearth steel plant.
He was well qualified for the position. He had with Carnegie Steel
Company, Ltd., and had planned and superintended the construction
of the Sharon Steel Company's open hearth plant. I also retained Julian
Kennedy for the blast furnaces. His furnaces had world records.
The American Steel & Wire Company had bought up all the barbed
wire machines and patents and had a monopoly. The Bates machine was
considered the best because of its speed. Many dealers wanted to buy
barbed wire with nails and we were to make it. Many of our
customers bought from jobbers.
We were offered a barbed wire machine, whose product Farrell and
several of his men pronounced good. They considered the machine
novel, but slower than the Bates machine. We bought eight machines.
The barbed wire proved to be of excellent quality . We subsequently
bought an additional fourteen. Barbed wire was profitable and helped
to secure other orders. We soon received a surprise: the American Steel
&Wire Company sued us for infringing on one oftheir barbed wire pat
ents. The trade was fully advised of this suit. I secured three sets of all
patents issued on barbed wire machines, gave a set to Farrell and Mont
Hughes, a draughtsman, and retained a copy. We examined our ma
chine & studied the patents cited. We found we were infringing on their
patent, but hoped to find a way of avoiding it. After three days' study
Mont Hughes reported that he could change the machine so that it
would not infringe on their patent & would increase its speed &capac
ity fifty per cent. I asked him how long it would take to change one ma
chine. He said it would take about five days. I had him work night and
day on one machine. He changed one in three days. It avoided the pat
ents and increased capacity as he had stated. We changed all our ma
chines. I was sure Mont Hughes had a brilliant future. He superintended
the construction of the McDonald Mills in Youngstown and later be
came president of the Carnegie Steel Company.
After all our barbed wire machines had been changed & were run
ning, I met Mr. W. P. Palmer, president of the American Steel and Wire
Company, in the Duquesne Club and thanked him for getting after us.
He asked what I meant and I said that I was referring to their barbed
wire patent suit. He replied that Mr. Bennett handled those matters. I
then told him that his suit had inspired us to change our barbed wire
machines, with the result that our capaCity was increased fifty per cent.
I suggested that Mr. Bennett dismiss his detective and send a represent
ative to Donora, so that our superintendent could show him the ma
chines. The suit was dropped, and we ran all our barbed wire machines
night and day. Many customers were so pleased with our success that
they favored us.
For a whUe the jobbers in the Northwest gave us no business, but
moved large tonnages of nails and barbed wire via the Great Lakes and
stored them with the raUroads in Duluth. This gave them quite a freight
advantage after the close of navigation. One of the railroads offered to
accomodate us likewise. We stored naUs & barbed wire in Duluth, but
a much smaller tonnage than our competitors. We considered it good
policy to distribute our product throughout the country, but the job
bers in the Northwest refused to give us any business. To combat, we
prepared a list of the principal buyers west of Duluth &quoted prices 97
based f. o. b. Pittsburgh, plus the lake freight to Duluth. These prices
brought consternation. A large jobber, who had refused to give us busi
ness, wired for prices. After receiving these, he wired, 'You are quoting
us the same prices that you would to small buyers.' We replied, 'True,
but we propose to sell a reasonable tonnage in your territory direct to
the trade, since you and all the jobbers refuse to handle our product.'
Frank Bachus, general manager of sales, & D. A. Merriam, his assist
ant, were popular with the trade and nice fellows, but jealous of their
customers and made it difficult for us to get a foothold.
Chapter 46. Charles M. Schwab. Year 190 I. Mr. Charles M. Schwab was
a fine looking man, and in his youth had been a clerk in a store at Brad
dock. Capt. Wm. H. Jones, known as 'Capt. Bill,' president of the Car
negie Steel Company, liked him and offered him a job driving stakes for
the engineers at $I per day. Mr. Schwab was mechanically inclined, an
apt pupil, and made rapid progress. Capt. Bill became so fond of him
that in a short time he made him his assistant. Capt. Bill was a wonder
ful preceptor, as he was a genius at handling men and in producing re
sults. He was the most practical steel operator in the world at that time.
Mr. Schwab had a magnetic personality. The only other man I ever
met to equal him in charm and personality was Franklin Delano Roose
velt, whom I first saw when he was in the Navy, but did not meet until
some years later. Mr. Roosevelt and I are the grandparents of William
Donner Roosevelt &, of course, I cannot critize my grandson'S grand
parent. When you know that Mr. Roosevelt carried twenty pounds of
steel braces and suffered, you have to admire his great courage, charm
ing voice and remarkable personality.
Mr. Schwab knew that the iron and steel industry was growing by
leaps & bounds. He was a firm believer in its future, a natural optimist,
and a great booster for the industry. To illustrate what I mean-he gave
a speech in which he said, in substance: 'Iron ore requires thousands
of years to grow and only a very few crops have grown in the United
States.' The iron and steel men for many years had been scouring this
country for iron ore. Mr. Schwab said, 'Iron ore in the ground is worth
$I per ton,' but no one ever purchased iron ore in the ground at that
price during Mr. Schwab's lifetime. Nearly all the iron ore in the United
States is controlled by leases. During the term of the lease, the fee own
er pays the taxes, but the lessee pays the annual amount necessary to
continue his lease. After sufficient ore is discovered to justify opening
a mine, the lessee pays the lease-holder the price stipulated in his lease
for the land required for railroad tracks, shafts, buildings, etc., neces
sary for developing the property & conducting mining operations. The
lease also sets forth the minimum tonnage that must be mined annually
at the fixed rate per ton to prevent the forfeiture of the lease. Increased
tonnage of ore would have to be paid for at the specified rate per ton.
On May 16, 190 I, Mr. Schwab testified before a Congressional In
dustrial Commission in an attempt to justify the capitalization of the
United States Steel Corporation as follows, 'We own something like
60,000 acres of Connellsville coal. You could not buy it for $60,000
an acre, for there is no more Connellsville coal. Capitalization depends
largely on the value you put on your raw materials.' Judge Gary, when
questioned in October 1899 by a similar commission, told them how
various properties had increased in value. He said that I, 132 acres of
Connellsville coal put down in the books of Federal Steel at $soo per
acre were now selling at $ I ,000. The United States Steel Corporation
was formed on April I, 190 I . In December 1902, Mr. Frick said that
Connellsville coal was worth $ 1,000 per acre & Klondike coal $900.
The Union Steel Company, in its merger with Sharon, received $900
per acre for its Klondike coal, which was taken over by Sharon Steel
Company. On December I , 1902, it was purchased by the United States
Steel Corporation at the same price. 101
Chapter 47. An Attempt to Get Another Executive. Year 190 I. In the
latter part of 190 I, Mr. A. W. Mellon asked me if I knew of a desirable
man that we could add to our organization. He said, 'I mean somone
who can be helpful & share part of your responsibility.' He stated that
our plans were now so extensive that we should have a larger organi
zation so that if anything happened to me the company might not suf
fer and be placed in a difficult position for a time. I thoroughly appre
ciated this statement & agreed with him. He said, 'It will be necessary
to pay a higher salary than you are receiving. How will you feel about
that?' I replied, 'That will be all right.' I regarded my quarter interest in
the company, financed the way it was, as worth many times my salary.
Mr. Mellon then told me to propose the best man I could find. I sug
gested that Mr. Frick, in view of his experience and knowledge of the
steel bUSiness, was better qualified to select the right man than I was.
After several days, Mr. Frick suggested a man who was an officer in
one of the subsidiaries of the United States Steel Corporation. He asked
me to see him and said, 'We will probably have to pay him a salary of
$ 2 0,000 to $ 2 5,000 and give him the privilege of investing his money
on a basis of our cost-it will probably not be more than $ 100,000. In
addition, I think we should carry him for at least a $ 100,000 invest
ment, charging him five per cent interest. This would be good business
under the circumstances.' I knew the man he had mentioned slightly
and was delighted with Mr. Frick's selection and suggestions.
I learned that the man selected was receiving a salary of $ 18,000 &
offered him $20,000. I also asked whether he would care to invest any
money on a basis which would permit him to sharein the profits of his
investment on the same basis as the Mellons and myself. I explained
that the bonds and stock could be issued to him as soon as the amount
of money required was determined. He stated that he would like to in
vest, but had very little money. I then proposed that we carry him for
$100,000 in addition to any money he could raise. He seemed quite
pleased during the interview. I thought he would join us, but after con
sidering the matter for a few days, he informed me that he had decided
to make no change. I asked him if more salary or a larger interest in the
company would be an inducement. He answered that it would not, as
he wanted to remain with his employer. I admitted being disappointed
and said, 'If you will reconsider, you can have a salary of $2.),000 and
we will carry $200,000 as an investment for you.' I had the satisfac
tion about a year later, however, of having him tell me that he regretted
he had not joined us. When I reported this conversation to Mr. Mellon
and Mr. Frick they were pleased but surprised that he would mention
it. A few days later, Mr. Frick advised me that he had just received the
same information I had given him.
The United States Steel Corporation was powerful and many persons
within its organization considered that it had many advantages. They
thought that an independent company would have rough sailing.
Chapter 48. The United States Steel Corporation Considered Buying
Union Steel Company But Abandoned the Idea. Year 1902. In the fall
of I902,Mr.j. P. Morgan and judge Gary attempted to have Mr. Frick
join the board of the United States Steel Corporation, but he declined
because of his interest in the Union Steel Company. They were so anx
ious to have him that they said, 'We might buy the Union Steel Com
pany.' With that object in view, judge Gary, GeorgeW. Perkins and
quite a delegation came to Pittsburgh in a private car and visited the
plant at Donora.
They knew that we had just purchased the Penobscot Mine. In order
to determine the value of our ore, I was asked to go to Duluth & sub
mit maps and drillings of our properties to the Oliver Mining Company.
Oscar Rohn accompanied me and we supplied their engineers with full
data. During this visit judge Gary made a remark, the exact words 103
of which I cannot recall, but in his canny way he stated, in substance,
'It is all right for any corporation to grow and expand, but I question
whether as a matter of policy, it is wise for the United States Steel Cor
poration to buy all the assets of any competitor.'
Shortly after my return to Pittsburgh, Mr. John Galey, vice president
of the United States Steel Corporation, phoned me to come to New
York and see him. When I called on him, he showed me the tonnages
and value of our ore properties as estimated by their engineers. I con
sidered the price suggested for the Donora mines too low. The tonnage
of the Penobscot Mine was practically the same as the estin1ate made
by E. J. Longyear for the Eddy Brothers some years before. I called his
attention to the fact that we now owned the Penobscot in fee, which
his engineers had overlooked-this was a ridiculous mistake. He ad
mitted that fact & said, 'You will hear from me shortly.' Several weeks
passed and nothing was heard from his.corporation. I recalled Judge
Gary's remark and we supposed the matter had been dropped.
Chapter 49. A Merger With the Sharon Steel Company. Year 1902
Several weeks after the negotiations with the United States Steel Cor
poration had been dropped, Senator Flynn and George Darr, who were
interested in the Sharon Steel Company, approached Mr. Mellon to
merge their company with the Union Steel Company. The Mellons,
Mr. Frick and I thought that the two companies united would have a
larger and more diversified line of products, which would be to our ad
vantage, & we would have a stronger organization. The merger looked
desirable if it could be made on a fair basis.
In the negotiations with Sharon which were signed November 20,
1902, it was agreed that the v a ~ u e of the blast furnaces, steel works,
blooming mill, finishing mills, machinery, equipment, buHdings, inven
tories, etc., of each company were to be figured at actual cost as of
December I, 1902.
Each company had other assets that were worth more than their
cost. It was agreed that the current values of the ore, coal, ore vessels
and real estate were to govern. These values were subject to mutual
approval.
The agreed values for the Sharon properties were as follows: The
Sharon Mine (Sharon asked a higher valuation, but Union contended
for $ ~ ,000,000, and agreed that all its ore properties and its contract
for ore would go in at that price, to which they agreed.)-$~ ,000,000;
excess value over cost of 1,600 acres of developed coal-$600,000;
and 400 acres of land at Sharon-$400,000.
The agreed values on the Union properties were as follows: Union's
ore properties-$~ ,000,000; Republic Coke Company's 3 d 12 acres of
coking coal (this valuation was questioned, but after learning that its
coal analysis was better than some mines in the Connellsville region &
Sharon's coal, Sharon was satisfied.)-$2,880,000; two lake vessels,
the Shaw & the Murphy (Union had bought these boats for $600,000
in September 1892.)-$600,000; River Coal Company's 1,178 acres
on the Monongahela River-$72o,000; & a manufacturing site front
ing more than two miles on the Monongahela River (There was some
discussion of the value of this property, but after Darr &Flynn learned
that few sites were available on the river &that Carnegie Steel Company
and others had paid higher prices, Sharon was satisfied.)-$ 1,000,000.
Our contract for steel with the Carnegie Steel Company was very
valuable. More than 100,000 tons of billets were due us under this con
tract based on the price of pig iron at lower than the then current rates.
Our steel in stock and due us was worth several dollars per ton above
cost. We also had a contract for ore with Corrigan-McKinney and Com
pany, with nine years to run, which would save a lot of money over the
market price of ore, but no such anticipated profits were considered.
All other values of Union, including its earnings, were subject to lOS
the verification &approval of auditors selected by Sharon, and all other
values of Sharon, including its earnings, were subject to the verification
and approval of auditors selected by Union.
Mr. John Stevenson, Jr., president of the Sharon Steel Company, did
some reminiscing after the basis of the merger had been determined.
He stated that he had sold each of his other three steel enterprises on
a higher basis of value in 1898 and 1899 than the appraised value of the
Sharon and Union properties, and that the Union Steel Company was
capitalized on a more conservative basis than either of the three com
panies to which he had sold, unless Union Steel Company's bonds were
worth more than par. He was referring to the American Tin Plate Com
pany, the National Steel Company and the American Steel and Wire
Company.
Chapter 50. The Last School We Financed in Donora. Year 1903. In
1903, after the Union Steel Company had been sold to the United
States Steel Corporation some of its former employees and citizens of
Donora were disgruntled. The Union Improvement Company had fi
nanced the building & paid all the bills for the Castner School and they
knew that the stocks of the Union Steel Company and the Union Im
provement Company were owned by the same persons. They decided
that they would block the sale of the schoolhouse to the town so that
its owners would be saddled with it. The school trustees unanimously
favored purchasing the property, but they were powerless Without the
approval of the city officials.
The school trustees asked me what they should do under the circum
stances. I asked, 'Does the town really need a school?' They replied,
'Many children cannot attend school this fall unless the Castner School
is opened.' I then answered, 'We will not keep any children in Donora
out of school. Use it as intended and pay rent until you are able to take
title and carryout your plans.' I left the entire matter in the hands of
the school trustees. The men blocking the purchase were disappointed
by our avoiding any controversy with them. The school board bought
the furniture for the school & paid rent equal to interest on the bonds.
While attending a large reception in Pittsburgh, a gentleman I knew
only slightly approached me and asked, 'What is Donora School com
mon worth?' I was quite surprised, but happened to see Mr. R. B. Mellon
watching me and laughing. I then knew it was one of his jokes. He had
had his friend ask me the question. I replied, 'They are worth par but
difficult to buy. Mr. Mellon might help you.'
The founders of Donora were A. W. Mellon, R. B. Mellon and my
self. The Mellons sold a third of their interest to Mr. H. C. Frick, making
the four interests equal. The town's name, Donora, had been suggested
by H. C. Frick from the names Donner and Nora, the latter being the
first name of Miss McMullen, the lady Mr. A. W. Mellon subsequently
married.
In 1907, the school trustees sold the bonds and made a payment of
a little over $85",000 in full settlement. During the interim, Mr. R. B.
Mellon frequently kidded me about our owning a school. He thought
it quite a joke.
Chapter 5" I. An Amusing Experience. Year 1903. One evening my tel
ephone rang in the Waldorf Astoria and I was asked by a pleasant fem
inine voice whether she was talking to Mr. Donner. I replied, 'You are.'
The voice responded, 'This is Mabel, can I see you downstairs?' I asked,
'Mabel who?' She replied, 'I want to see you & you will know me when
you see me.' I did not like the appearance of things and replied, 'I am
invited to a dinner and am late. I am leaving as soon as I dress & have
no time to see you.'
I left the hotel, joined my friends for dinner, went to the theater &
never gave the phone call another thought. After the theater, I took
my friends to Rector's restaurant. When I returned to the hotel it 107
was twelve o'clock. I had an engagement to breakfast with Mr. Frick
and hurriedly went to my room.
In the bedrooms in the old Waldorf, there were large chandeliers
controlled by two button switches; one lighted all the bulbs & the other
just one. On entering, I pressed the button which lighted one light,
leaving the room poorly lit. I took off my coat and vest, hung them in
the closet and sat in an easy chair to remove my shoes. Just as I was
getting up, I saw a lady's hat on the bed and at the same time I noticed
that the bathroom door was closed. I remembered that I had left it
open when I went out to dinner. I recalled the conversation with Mabel
and became terribly frightened. I had visions ofbeing framed-no coat
or vest on, one shoe off and one in my hand. I rushed to the door and
hailed a bell boy in the hall and asked him to come in & open my bath
room door. He saw I was excited and asked, 'What's the matter?' I said,
'No one is to occupy this room but me.' I pointed to the lady's hat on
the bed and told him about the phone call. He looked rather uneasy,
but cautiously opened the bathroom door. It was an exciting moment.
No one was in the bathroom.
He said, 'This is very strange. Bolt your door and I will report the
matter to the house detective immediately.' He examined the hat; a
small piece of paper pinned to it read, 'For room 60S,' which was one
floor above mine. The hat had been delivered one floor below where
intended by mistake, which explained why it was in my room.
Mr. Frick usually retired early and had the habit each morning of
leisurely eating his breakfast and reading the papers. I joined him the
next morning as arranged and told him about my experience. He was
very much interested and amused. I never saw him laugh more heartily.
Chapter S2. Mr. H. H. Rogers and His Comments on Russia. Years
19
0
3- 19
0
4. Shortly after our sale of the Union Steel Company to the
United States Steel Corporation, December 1,1902, Mr. H. H. Rogers,
one of the directors of the corporation and also of the Standard Oil
Company, invited me to a dinner at the Waldorf Astoria Hotel. The
guests included some younger men in the U. S. Steel Corporation and
myself. He questioned us as to the permanency and future of iron and
steel. We were all optimistic. All the guests agreed that the consump
tion of rails, shapes, plates, bars, sheets, tin plate, rods, wire and nails
was growing & had increased steadily over a comparatively short space
of time. The building of steel railroad cars was mentioned as an impor
tant recent example.
Mr. Rogers asked whether the use of Portland cement would not
displace steel. It was explained that it would increase the consumption
of cement and steel because good concrete work was reinforced with
steel. He then asked if the U. S. Steel Corporation did not have a de
cided advantage over its competitors because of its superior mills. Sev
eral around the table answered, 'Yes.' When it came to me, I answered,
'No.' I argued that larger & superior mills are only a temporary advan
tage because all mills become obsolete in time. I explained that good
engineers can duplicate any mill and incorporate improvements which
experience has proved. Most of the guests had 'yessed' him, but two
or three supported my contention. I remember W. P. Palmer was one.
I said that the strength of the corporation was in its large iron ore re
serves and that it owned the cream of the depOSits. I stated further that
the only question that had given the Union Steel Company any anxiety
was the ore problem. Mr. ,Rogers' guests all agreed that the iron & steel
Industry had a great future, especially in the United States, on account
of the large ore deposits which could be mined very cheaply when com
pared to costs in England and Germany.
For conversation after the above, I asked Mr. Rogers which country
in the world had the greatest future. With enthusiasm he said, 'Russia.
If I were a young man I might be tempted to go there.' He said that I 09
Russia has large timber areas and enormous rich agricultural lands, as
well as the natural resources of gold, silver, copper, manganese, coal,
iron and oil. What he said about her resources Is true. Russia's terrible
troubles since that time have often made me think of his remarks. He
did not see the revolution that was coming.
Through the courtesy of Mr. Rogers on another occasion, I had the
pleasure of meeting & dining with Mr. Samuel Clemens (Mark Twain).
He was a distinguished looking person in his white evening clothes &
quite agreeable, but to my disappointment he was not in the mood to
display any of his humor.
Chapter 53. A Trip to Peru. Year 1904. In 1904, H. C. Frick and sev
eral of his friends had a substantial investment in the Cerro de Pasco
Mining Company. Its properties were located in the Andes Mountains
of Peru at an altitude of 14,300 feet above the sea. They offered me
an attractive fee to visit the mine and make a report. I accepted with
the understanding that I would have an assistant, a secretary, a mining
engineer & a geologist to work with me. I discussed the situation with
Mr. H. McK. Twombly, who knew more about the property than any
one else present at the Vanderbilt house. I then decided that I should
have the approval of my physician before going because of the altitude.
On March 4th in Lima, several days after our arrival in Peru, an earth
quake occurred early in the morning. My brother Perce, who accom
panied me as my assistant, and I occupied a comer room on the fourth
floor of the hotel. The shocks were so severe that water bottles with
large bases were upset on the tables in the dining room of the fifth floor.
Some of the statues on the cornices of the cathedral across the street
toppled off. Many people clad in their night clothes ran screaming
down the middle of the street to the open square-the plaza. We were
badly frightened. Our room was quite a distance from both the elevator
& the stairway. We were afraid to pass through the long narrow hall as
the building might collapse. We considered dropping from our window
to the roof of the adjacent building about twelve feet below, but we
could not see how we could get off its roof. We studied the situation.
After hesitating for some time, the shocks became less frequent and
finally ceased. We hurriedly put on a few clothes and rushed down
stairs. Several hours later, I was asked how long I thought the shocks
continued. I replied, 'Fifteen or twenty minutes.' Instruments recorded
the exact time as one minute and fifty-eight seconds.
In Lima you are given many opportunities to purchase lottery tick
ets. The sand is very dry and I had to change my clothes several times
on account of fleas. You finally become used to them. In sunny out-of
the-way places you can see old women picking lice out of the children's
hair, one at a time, and putting them in their mouths. I do not know
whether they like them or do that to save extra work.
After the earthquake, we either had to wait several months in Lima
until the railroad bridge at Oroya was repaired or ride up the Andes on
horses and mules. We decided to ride and in this way came in contact
with many natives. The ride on the mountain trails was strenuous and
appeared more dangerous than it realiy was, because our animals in
sisted on taking the path near the edge of the precipice. They took that
route to protect themselves. They were accustomed to carrying packs
and they thereby avoided hitting any brush and being thrown down
the mountains. Our gUide was not much of a horseman. One of the
animals absolutely refused to move. Perce said immediately that some
thing was wrong. He quickly found the animal had blinders which had
slipped down. Instead of tying them, they let down these blinders and
the animals were afraid to move. It was one of the most interesting trips
I ever took. It has been said that Cerro de Pasco had no weather-only
samples. I have seen sunshine, rain, hail, snow and lightning and heard
thunder within an hour. I I I
Shortly after leaving Oroya, we were met by Mr. Impetit in his pri
vate car. He said he would loan us his upholstered handcar if we would
let his man handle it, as it was very dangerous unless used carefully by
someone who knew the grades, switchbacks, etc. He told us that they
had a lot of workmen repairing the tracks and there was danger of
running over one of their dogs, being thrown off the track and down
the mountainside. We were glad to change to an upholstered seat and
found it much more comfortable than the back of a horse or mule.
We carried stones to throw at the dogs to get them off the track.
On the Cerro de Pasco trip nearly all our food was in tin cans and for
several years afterwards I disliked the Sight of a sardine. On the return
trip down the Andes we saw an Indian hut which looked clean. We in
quired if we could get a meal for three. The Cholo woman agreed to
serve us lunch. She was finally ready and the meal tasted good. It con
sisted of stewed meat, potatoes and dumplings. The potatoes were fine
and the dumplings nice and light, but the meat puzzled me. The only
animals we had seen were horses, mules and llamas and I knew it was
not one of these as the bones were too small. I thought it was sqUirrel,
but I had not seen one and we were above the timber line. With the aid
of a Spanish pocket dictionary, I told the Indian woman we liked her
lunch and asked the kind of meat we were eating. She understood,
rushed to the kitchen & returned with two live guinea pigs. It was too
much for Oscar Rohn, a husky six footer who accompanied me as my
mining engineer. He could eat no more. Perce and I enjoyed our lunch.
In Lima the food in Cerro de Pasco is reported to be exceedingly bad.
On our return, Rohn was asked by a friend how he liked the food. He
replied, 'I had only one good meal in the mountains & Donner's damn
curiosity spoiled it.'
The Cerro de Pasco Company built a railroad from Cerro de Pasco
to Oroya without first having a contract or understanding with the
railroad at Oroya as to what they would charge for transportation from
there to the seaboard. I do not think it was approved by Mr. Haggin.
While I was at the mine, I was with Bruce Turner most of the time.
He was a Scot and a clever engineer. Just before leaving Cerro de Pasco,
Turner mentioned that he was afraid of the banks in Peru and asked if
I would take a little money to the States and deposit it in a good safe
bank where he would receive 3 J{ per cent or 4 per cent interest. I
supposed he would have three or four thousand dollars and told him
I would be glad to put it in the Union Trust Company in Pittsburgh,
where he would secure four per cent interest on a time deposit. Before
leaving Lima, he appeared with several thousand dollars in gold, U. S.
currency and several New York checks on the Cerro de Pasco Mining
Company, totaling about $14,000. This was much more than I ex
pected. I bought our return tickets for the three of us to New York
with part of the gold and then had so much left that I put it in two old
pants' legs which I tied as tight as I could so that it would not rattle
much and placed it in an old steamer trunk under my berth. Perce was
in an adjacent room and Williams, my secretary, was nearby.
Perce and I visited the markets early one morning in Guayaquil,
Ecuador, & Williams watched my room. You could buy a parrot cheaper
than a chicken and monkeys also were cheap. The c a p t ~ i n of the ship
was provoked and criticized us severely for going ashore as diseases of
all kinds were prevalent. He said it was the worst pest hole in the world.
On arriving in Pittsburgh, I learned that Union Steel Company five
per cent Gold Bonds had declined from 98 and the market was 83.
I then concluded to buy these bonds for Turner. I wrote and explained
that the bonds were a first mortgage on the properties of the Union.
Steel Company and each bond was guaranteed as to principal & interest
by the United States Steel Corporation. I considered them perfectly
good, as did Mr. Mellon and Mr. Frick, but if he preferred to have I 13
a four per cent tIme deposIt with the Union Trust Company not to hesi
tate to say so. I would take the bonds and allow him four per cent from
the date I purchased them upon receipt of his letter or cable and have
the Union Trust Company issue a certificate accordingly. He wrote &
thanked me for buying the bonds. The bonds afterwards sold In the
nineties. Turner never sold any of them until they were above par.
I wrote to the Union Trust Company & enclosed a letter from Turner
with his signature for identification purposes. I also enclosed a key to
his trust box in the Union Trust Company and a list of his bonds with
the numbers so that If anything happened to me, Turner would be pro
tected. A carbon copy of this letter was sent to Turner.
After Turner returned to the United States, he visited several copper
mines and wrote me that the Utah copper properties were very valu
able but stated that they were large mining and manufacturing propo
sitions as theIr equipment was so extensive.
Through the information Mr. Turner gave me, I made $5'0,000. It
would be interesting to learn how much Mr. Frick made from this in
formation as he went into things more extensively than I did.
Chapter!) 4. How I Became Interested in the Cambria Steel Company.
Year 195'. Mr. H. C. Frick was a large stockholder and a director of the
Pennsylvania Railroad Company. He noticed that the earnings of the
two steel companies, namely Cambria Steel Company and Pennsylvania
Steel Company, control ofwhich was owned by the railroad company,
were surprisingly small. He mentioned this to Mr. A. J. Cassatt, presi
dent ofthe railroad company, & Mr. Cassatt asked for advice. Mr. Frick
first recommended that Mr. Julian Kennedy of Pittsburgh be consulted.
When Mr. Cassatt told him that the Cambria Steel Company several
years previously had consulted Mr. Kennedy and had expended about
$4,000,000 upon his advice, Mr. Frick suggested that Mr. Cassatt have
me look over their plants and make a report.
In the fall of 1905", Mr. Frick, at a meeting arranged to discuss the
matter with me, said, 'I will appreciate it if you will call on Mr. Cassatt
and arrange to make a report.' When I called on Mr. Cassatt, he gave
me letters to Mr. Powell Stackhouse, president of Cambria, &Mr. Edgar
C. Felton, president of Pennsylvania. Both of these gentlemen extended
every courtesy to me. I was shown all of the properties of the company
and given their detailed costs, which in each case were high, and par
ticularly in the case of the Cambria Steel Company.
Since the United States Steel Corporation uses the same card of ac
counts in all of its plants, costs can be readily compared.
In the Cambria and Pennsylvania Steel Companies the cards of ac
counts were different so that comparisons could not be made with
each other or with the United States Steel Corporation. One used the
Carnegie Steel Company's card of accounts. I found that Cambria and
Pennsylvania Steel Companies' cost of basic and Bessemer pig iron,
Bessemer & basic billets, rails, shapes, plates, bars and rods were higher
than those of the United States Steel Corporation and other steel com
panies such as Bethlehem, Youngstown Steel & Tube Company, Inland
Steel Company and others.
Chapter 5"5". The Water Plants of Charleroi, Monessen and Donora.
Year 1906. Prior to the filtration of its water supply, Pittsburgh had
many cases of typhoid fever, but after filtration was started the disease
became so rare that when a patient suffering from it entered a hospital,
nurses were called to observe it.
When we started Monessen in 1897, Monongahela River water was
pure, but sulfur from the new coal mines above Fayette City and sew
age from towns on the river polluted it.
During the years 1903 to 1906 typhoid fever occurred in Charleroi,
Monessen and Donora and the number of cases was increasing. The
Mellons controlled the Charleroi plant & had a fifty percent interest I 15"
in Donora. I owned the controlling interest in Monessen and a quarter
of the Donora plant. It occurred to me that a consolidation of these
plants with a single pumping and filtration plant above Charleroi would
effect quite an economy in the operation compared with the cost of
operating three separate filtration plants.
With typhOid increasing in these towns it would have been criminal
to postpone filtration. I spoke to Mr. Mellon, who agreed with me and
said, 'I think under the circumstances it is our duty, and no one can do
the job as economically as we can.' He suggested that I secure estimates
on present values of each of the three plants. I engaged the services of
Mr. J. W. Chester, a waterworks engineer, to prepare them.
Charleroi was the oldest plant and well developed. It had a profitable
past, but no prospects for further expansion. Monessen had a larger
population, needed more houses & large extensions to its present water
mains. Donora had the next best prospect for future expansion.
Mr. Mellon asked me if I approved the values fixed by Mr. Chester
on the three plants. I thought they were fair. He thought the value of
Charleroi was too low. Since I owned Monessen, he asked me if I was
willing to sell it on the basis proposed. I answered, 'Yes,' and he said, 'I
will take it.' This made consolidation of the three plants and filtration
a simple matter. The Mellons owned Charleroi and a share of Monessen
and Donora was owned by the Mellons, H. C. Frick and me.
Chapter 56. An Experience Brought About by the Panic of 197. The
Westinghouse Electric Manufacturing Company & the Westinghouse
Machine Company had borrowed heaVily not only from Pittsburgh
banks, but from many others for several years prior to 197. They had
also sold notes through brokers which were widely distributed through
out the country. Financial conditions changed in 1907. Note brokers
could not sell commercial paper. Payment was demanded on the notes
sold by brokers at maturity. Mr. George Westinghouse was in finanCial
trouble. Several of his companies could not meet their obligations.
Receiverships followed.
There was an unusual business depression. Currency commanded a
premium over 'certified checks payable through the clearing house.'
On October 23, 1907, I was appointed one of the receivers of the
Westinghouse Machine Company. The other receivers were Messrs.
William McConway, H. S. A. Stewart, John C. Chapman & E. E. Keller.
My position brought me in contact with the receivers of other West
inghouse companies, their organizations, Mr. George Westinghouse,
Mr. Herman Westinghouse, bankers and lawyers. Numerous problems
had to be solved. We had many interesting experiences.
The Westinghouse Machine Company had sold several 10,000 kw
turbo generators which were giving trouble. We considered them enor
mousmachines, but today they are comparatively small. Both the West
inghouse & the General Electric Company have built many 5"0,000 kw
machines and even 100,000 kw units are not uncommon.
The Westinghouse Machine Company took a large contract for gas
blowing engines for the Gary Works of the United States Steel Corpo
ration. It was the first engine of this type that the company ever built.
There was some anxiety among several of the receivers as to gas
blowing engines. Mr. West, who designed the engines, had left the
Westinghouse Machine Company & was employed by the Bethlehem
Steel Company. Gas blOWing engines were very successful in Europe.
The engineers of the United States Steel Corporation had carefully
checked over the plans so there was no reason to question the design of
these engines. I insisted that we must fulfill the Gary contract. The cor
poration had made its payments according to the contract. If we aban
doned it, we would have had to refund their money and would have
been liable for heavy damages. Furthermore, our work would be scrap,
and our expenditures a complete loss. 1 17
Cash was difficult to secure & we had to be very careful in spending
money. We had to resort to paying the employees with checks. These
passed as cash among the merchants of Pittsburgh. A lot of time, work
and money was required to complete the engines. Our only honorable
course was to complete the contract.
Mr. George Westinghouse was a likeable man, but if interested in
some new idea, he attempted going ahead regardless of expense. With
difficulty, we prevented expenditures ofno advantage to the company.
We were the servants of the court and had to say, 'No.'
Mr. Paul D. Cravath, personal attorney for Mr. Westinghouse, and
his brother Herman
1
helped me privately several times in my relations
with Mr. Westinghouse .. I was the youngest of the receivers and was
the only one at the plant most of the time, with the exception of an
employee, Mr. Keller. I had the advice of the other receivers which
was very helpful, but they were men of affairs and busy with other
matters. Several times I was the only one in Pittsburgh to confer with
Mr . Westinghouse and had to give the decision of the receivers. One
of his old friends was purposefully out of the city in two instances and
I was the spokesman. Mr. Westinghouse finally appreciated my posi
tion, was more reasonable and we became good friends.
A few years ago I met Mr. Miller in Europe. He had married the wid
ow of Mr. Herman Westinghouse. He was associated with Mr. George
Westinghouse in the Switch and Signal Company. In talking about
Mr . Westinghouse and the troubles of 1907 I stated that I thought the
Westinghouse Air Brake Company had made money so fast that it had
ruined Mr. Westinghouse for any ordinary business. He agreed with
me and said that my remarks reminded him of the following incident:
He & Mr. Westinghouse were returning from New York to Pittsburgh
in the railroad observation car. As they were approaching the plant of
the Westinghouse Air Brake Company in East Pittsburgh, a stranger
sitting next to Mr. Westinghouse asked, 'What plant is that?' Mr. West
inghouse replied, 'I think it is the mint, but perhaps Mr. Miller can tell
you more as he knows Pittsburgh better than I do.' There was more
humor to me in that answer than in any remark I ever heard from him.
Occasionally I came in contact with the officials of the General
Electric Company, and became well acquainted with several of them.
If Mr. George Westinghouse had had a financial man with one-half the
ability of Mr. Coffin of the General Electric Company, and entrusted
the financial management of his enterprises to him, he would have
been a very rich man. He was a great genius but not a financier.
After the receivership was lifted, several of the bankers asked me to
remain with the company, but I asked to be relieved as I had other
business that required my attention. I said that there were others better
qualified to fill my position. Someone asked me to name two. I replied,
'George Mesta and Isaac Frank.' Mr. R. Wardrupimmediatelysaid, 'But
we cannot get either of these men.' I replied, 'I only answered your
question. Whether you can get them is your business.'
The General Electric Company built electric apparatus, motors, gen
erators & complete turbo-generators. The Westinghouse Electric Man
ufacturing Company built the same line of equipment, except steam
turbines. However, it furnished the generators to the Westinghouse
Machine Company which bUilt steam turbines & sold turbo-generators.
From what I saw, it was apparent that the building of turbo-generators
should be done by one organization. The plants of the two Westing
house companies were adjacent and the machine company was much
smaller, but its plant organization was just as complete and larger in
proportion to its size and extravagant in some departments. Each com
pany had separate engineering organizations, sales departments and
offices in many of the same cities.
The receiverships were lifted in about six months. I had told 121
Mr. Westinghouse that if the electric and machine companies were to
consolidate there would be an enormous saving in the operati/0D of
the two companies and greater efficiency. \
Mr. Westinghouse regained control of the two companies and ap
pointed a brother of Mr. E. M. Herr president of the electric company
so I was relieved. About three years later I was pleased to learn that the
two companies had been consolidated.
Shortly after the receivership in 1908, the electric company and the
machine company had small net current assets for such a large busi
ness, and upwards of $33,000,000 in bonds.
The electric company in 1942 had no bonds & net current assets of
about $165,Ooo,ooo-a most remarkable change.
Chapter 57. How I Happened to Buy a Steel Plant in Buffalo. Year 19 15.
On a trip around the world in 191 I, I met Mr. Frank Baird of Buffalo
on the SS 'Carmania' between New York and Alexandria, Egypt. He
was president of the Buffalo Union Furnace Company and one of the
leading citizens of Buffalo. I also saw him a number of times in Shep
heard's Hotel, Cairo and in Luxor. Both of us being manufacturers of
iron, we had many mutual friends and became quite well acquainted.
In the years I 9 14 and I 9 15, I received several letters from Baird
suggesting that I come to Buffalo and look over the plant of the New
York Steel Company. I wrote him that I was not interested and could
not consider it. Near the last of September in 19 15, Mr. Baird phoned
and requested that I come to Buffalo on the night train on that date or
the next as a special favor to him. He said that he would meet me upon
my arrival, take me to breakfast, motor me out to the plant, take care
of me during the day and put me on the night train to Philadelphia,
where I was then liVing. He explained that the plant was then owned
by a bondholders' committee and could be secured at a great bargain.
Out of courtesy to Mr. Baird I agreed to go the next day, and I asked
him to meet me at the Iroquois Hotel at 9: 2 0 a.m. Mr. Baird called &
drove me out to the plant. We walked over the property and through
the works.It consisted of a tract of sixty-seven acres within the city
of Buffalo and located on the Niagra River. It had dock facilities for
receiving ore and limestone directly from the Great Lakes.
The plant had two S00 ton blast furnaces, three large open hearth
furnaces, traveling cranes, blooming mill, machine shop and the usual
equipment of a plant that size. The ore dock & blast furnaces needed
some repairs. There was an active demand for pig iron at attractive
prices. The blooming mill could run 14S mm steel bars, for which there
was an enormous demand at profitable prices. I considered the property
a bargain at $3,000,000. I thought that it would be a valuable property
for the Cambria Steel Company, of which I was then president, as it
could use some of its Mahoning ore on which it would have a profit of
several dollars per ton, aside from realizing other good earnings from
its operations, but there was no time for delay. To take the proposition
up with the board of directors and make a report for them to consider
before buying the property was out of the question as that would re
quire too much time. I thought that one blast furnace could be success
fully started by January I, 1916, if sufficient ore could be secured be
fore the close of navigation to last from January I st to the opening of
navigation. I explained to Mr. Baird that there was no point in buying
the property at this time unless that could be done. He replied, 'Your
idea of starting one furnace so soon never occurred to me and would
require quick action, but I am sure that we could spare you two car
goes of ore and let you use our dock facilities without any charge, ex
cept the actual cost of the extra labor involved.' He also said he was
confident that Mr. Noonan, president of the Buffalo Rochester & Penn
sylvania Railroad, would let us use their dock facilities. The Buffalo fur
naces and its dock were nearby, which would be quite helpful. 123
We phoned Mr. Noonan, whom I knew, & he was most cooperative.
We visited the plant of the Buffalo Union Furnaces & went to lunch.
At lunch I proposed the purchase of the assets of the company with
$ 2 ,500,000 first mortgage five per cent bonds secured by a mortgage
on the property. The bonds were to be issued by a company organized
by me, with an authorized issue of $2,500,000 of capital stock to be
paid for in cash. If they were prepared to entertain this proposition I
would either accept or reject it by noon the following day. After lunch,
I met several of the bondholders' committee. They rejected my pro
posal but an hour or so later offered to sell the property for $ 3,000,000
in bonds and gave me ten days to accept or reject this proposition. I
told them that if I did not buy it before noon the following day I would
not be interested, and that I would not consider any price above the
one I had proposed.
The committee asked to talk with Mr. Baird privately. After talking
with him they phoned several absent members of the committee and
agreed to sell me the property on the terms I had proposed. Mr. Baird
told me afterwards that in their conference with him they had wanted
to know if I really had no interest in buying the property if it could
not be bought immediately. He had explained that my position was sin
cere since I thought I could start one of the blast.furnaces by January I,
1916. He had also informed them that he was not sure that I could do
this: He had added that he had promised to let m,e have two cargoes
of ore ~ n d would help me in any way he could if I purchased the prop
erty. He had them prepare an offer on the basis of my suggestion. In
accordance with my promise I wired before noon the next day, accept
ing their offer. As I had to personally take all of the risk in buying the
property, I decided that it would be fair for me to retain a forty-nine
per cent interest in the company & let Cambria have fifty-one per cent.
Before all the details of the arrangement were completed and I had
sufficient data prepared for Cambria to properly consider the purchase
of a fifty-one per cent interest in the Buffalo plant, a syndicate bought
a substantial block of Cambria's stock. Only one man in the syndicate
had any experience in a steel plant, and his duties had been quite lim
ited. He knew nothing about merchant pig iron or 14~ mm bars, but
he was an excellent salesman. When lspoke to him about the Buffalo
plant, he stated that he personally would oppose Cambria Steel Com
pany taking any interest in a Buffalo plant. Previously a matter of such
importance would have been studied carefully by Mr. E. B. Morris and
Mr. Ely & if they thought favorably we would have consulted Mr. Rea,
who was then president of the Pennsylvania Railroad. Since I had pur
chased the property on my own responsibility, I dropped the question.
I was willing to take the Buffalo plant and let some of my friends have
an interest in it.
Chapter 58. How My Interest in Cancer Research Began. Year 1929
In May 1929, I became quite worried about my son Joseph's health.
He had not been well for six months. Physicians in Buffalo could find
nothing wrong with him. He visited Philadelphia and Johns Hopkins
in Baltimore with the same result. He had been previously advised to
let up on work and rest, which he had been dOing, but his condition
did not improve.
I had business in Detroit and asked Joe if he would liketo accom
pany me. I suggested that we could run over to Battle Creek and if not
satisfied we could visit Rochester, Minnesota, and see the Mayos. He
said, 'That would be fine.'
My son Robert heard of my plans and came to see me that evening.
He said, 'Father we know what is wrong with Joe now, and I have not
wanted to worry you.' I enquired what it was. He replied, 'A tumor.'
I asked him whether it was malignant. He said, 'Yes, and we want to
get him to Baltimore to have a second radium treatment.' I 2 ~
Dr. Theodore Wright of Buffalo had examined Joe in December &
could find nothing the matter with him, but in May when going up in
the elevator with Joe at the Saturn Club he noticed a slight swelling in
one of the glands of his throat. He asked him whether he had a cold or
a sore throat & Joe answered, 'No.' Dr. Wright then told him that one
of his glands was a little swollen & suggested that he step into his office
after lunch. When he called, Dr. Wright under some pretext secured
a small section of the swollen gland, which under a microscope showed
that it was a metastasis of a malignant tumor.
I was having trouble with a duodenal ulcer and planned to go to
Baltimore to see Dr. Tom Brown. It was arranged for Joe to accom
pany me and to see Dr. Kelly about further radium treatments. Upon
arriving in Baltimore Joe insisted that we see Brown first, & he remained
with me during my examination. We then went to Dr. Kelly'S, where
for two days Joe received radium treatments. He made several trips
with me to see Dr. Brown and Dr. Kelly.
In the summer of 1929 it became apparent to me that very little
was known about cancer and I decided that someday I would give a
substantial amount for cancer research. On September 29th, I sold
Donner Steel Company and set aside some $2,000,000 for charitable
purposes, primarily for cancer research. I devoted about two years to
studying how to use that money and found it a difficult problem. There
were plenty of applicants who were perfectly willing and anxious to
accept the money, but several of them did not know any more about
cancer research than I did, which was very little.
The doctors were never able to locate the primary tumor. After Joe's
death, December 9, 1929, I wanted an autopsy made, to which his
wife consented. It was found that he had cancer of the lung, which at
that time was not nearly as commonly known as it is today-probably
because it had not been recognized & diagnosed as well as it is now.
V O N 3 : 0 0 V
William H. Donner lived to a great age and he continued to be active
mentally and physically. After his retirement, he was able to satisfy his
humanitarian instincts more fully and, as he was a modest man, I hope
the reader wUI bear with the length of the Addenda because it seemed
to me that a few of father's outstanding benefactions should be de
scribed. Their influence continues today & wUI be felt for generations.
Here are some examples:
Perhaps sometime in the future, a young man with a tumor of the
lung may have a better chance of recovery due to the research pro
jects financed by the former International Cancer Research Founda
tion in PhUadelphia.
A young woman from a small town in Texas needs X-ray therapy
after the removal of a tumor. She is taken for treatment to a hospital
in Fort Worth where excellent facUities have been provided by the
Donner Foundation.
The University of Pennsylvania Hospital in Philadelphia provides
help to a disturbed young person, who is suffering from gastrointesti
nal upsets, by having her discuss her problem with a psychiatrist as well
as with an internist.
Many famed experiments have taken place in the building provided
for research at the University of California in Berkeley. A young doc
tor in the Donner Laboratory works on his project with radioactive
isotopes which he hopes wUI benefit his fellow man.
At the renowned Montreal Neurological Institute, an eminent doc
tor who wishes to do neurochemical research may proceed with his
experimental work due to a yearly grant from the Donner Canadian
Foundation.
The magnificent pool in Donner Park provides a country club atmos
phere which can be enjoyed by an underprivUeged chUd of Columbus.
As he prepares for his future, a brUliant young student on a I 29
scholarship profits mentally and physically from the well-planned cam
pus facilities of Hanover College.
Philanthropy. It behooves me to mention the foundations created by
my father for charitable purposes. Devoting close attention to a pru
dent distribution of funds for worthy causes he particularly favored
'challenge' giving, in which the donor promises to match or surpass
funds raised by the donations of others in a given period.
On April 25',1932, he created the International Cancer Research
Foundation. This was not only to aid in research into the causes and
cure of cancer, but was also to assist in obtaining cooperation among
scientists engaged insimilar work throughout the world. No more than
sixty percent of its funds were to be allotted within the United States
and not less than thirty-five percent outside of this country.
The deep interest father evinced in cancer research was typical of
him, and he became acquainted with some of the great specialists of
that period.
Radiology. Berlin, Germany. While in Berlin in 1935', father went to
the Siemens Company to ask for a catalogue & the price of the Chaoul
X-ray machine. The salesman inquired whether he would like to meet
Dr. Chaoul, and father said he would be delighted. Recalling this exper
ience in a letter to me of May 14, 195'2, he stated:
Dr. Chaoul was from Serbia and spoke no English or German so
I could not communicate with him. All I could get was a state
ment by a German in bad English that Dr. Chaoul would see me
shortly. In a few minutes, two nuns came in and threw a white
gown over me and I saw the doctor get ready to treat a cancer of
the bowel. I always fainted at the sight of blood, but I made up
my mind at this time that I must brace myself & not faint, which
I did, and have never fainted since.
Philadelphia, Pennsylvania. Dr. Eugene P. Pendergrass, the former head
of the Department of Radiology of theUniversity of Pennsylvania Hos
pital, was sent by father to London &: Berlin to learn at first hand about
Dr. Chaoul's X-ray machine. In a letter to Dr. T. Grier Miller of July 20,
1972, confirming that my memory was correct about his having made
the trip, Dr. Pendergrass made the following interesting observations.
Several years before WUliam H. Donner's death in 195"3, his
continuing interest in X-ray therapy caused him to arrange for
the Donner Foundation to order a dozen two million volt units.
They were to be sent to cities without radiological equipment
where there were people who had the expertise and staff to use
them, and with Dr. Pendergrass' help, a list of radiotherapists was
accordingly prepared. A unit was sent to Dr. Thomas Bond in Fort
Worth, Texas, where the hospitals &: the city banded together to
bUild a therapy department in juxtaposition to one of the hospi
tals, and that unit became the therapy division for the entire com
munity. The staff, which consisted of qualified members from the
various hospitals, was directed by Dr. Bond. That powerful exper
iment &: demonstration of cooperation between hospitals using
a single X-ray unit has been pointed to with pride throughout the
United States and the world.
Research. Berkeley, California. The construction of the Donner Labo
ratory of Medical Physics &: Biophysics at the University of California,
Berkeley in 1942 stemmed from father's high regard for the medical
and scientific work being done by Dr. Ernest Lawrence and his associ
ates. His brother, Dr. John Lawrence was the director of the Donner
Laboratory from 1948 to 1970.
Early in the nineteen thirties, Dr. Ernest Lawrence, a newly ap
pointed professor of physics at the University, designed a 'mag
netic resonance accelerator' (the cyclotron) to speed up nuclear
particles to high energy. The laboratory was founded to carry I 3 I
out the program in nuclear medicine & biology of the Lawrence
Radiation Laboratory, applying to research on medical & biologi
cal problems the basic sciences of physics, chemistry and mathe
matics. This was the actual beginning ofthe new science of atomic
medicine. (Excerpt from The Report on Donner Laboratory; Re
gents' Meeting, November 16, 1962.)
Psychiatry. Philadelphia, Pennsylvania. On October I), 1943, father
established at the University of Pennsylvania Hospital in Philadelphia
the Donner Fund for Needy Patients. This temporary fund was to be
under the supervision of Dr. T. Grier Miller, the renowned physician &
founder of the Gastrointestinal Clinic at the University of Pennsylvania
Hospital and its chief until his retirement. The income was to be ex
pended for special facilities for charity patients as well as to assist in
clinical research and experiments in hospital administration.
The most gratifying result was perhaps the beginning of the psychi
atric treatment of patients in the Gastrointestinal Section. Dr. Miller
was one of the first to realize that psychosomatic problems could create
gastrointestinal disturbances, and that the symptoms could be allevi
ated by psychological treatment of the patients. The success of this
work led to the creation of a Psychiatric Unit in the University of
Pennsylvania Hospital.
The following excerpts are from the 'Memoir of William Henry
Donner,' by father's friend & physician, Dr. Miller. (Prepared and pub
lished at the request of the Council of the College October 6, 19)4.
Reprinted from Transactions and Studies of the College of Physicians
of Philadelphia 4 SER., VOL. 22, NO.4, April 19)).)
... Mr. Donner's benefactions indicate his intense interest in the
advancement of medical sCience, the amelioration of human suf
fering & the promotion of social welfare. Incidentally, they illus
trate his devotion to his family and friends; also, his regard for the
localities in which he had lived, received his education and pro
fited by his business associations.
Mr. Donner had much personal charm. He was a quiet, unas
suming &gracious gentleman. He was tolerant of others' opinions
but was not easily influenced ... , He had an original mind and
initiated many important procedures in the steel industry. He was
admitted to Honorary Associate Fellowship in our College, how
ever, because of his interest in the art and science of medicine &
in humanity, and he will be remembered longest for the contri
bUtions he made in support of these objectives,
Donner Foundation. On July 2 S, 194S, father established the Donner
Foundation as the successor organization to the International Cancer
Research Foundation. The Donner Fund for Needy Patients was ter
minated in 1949 and its assets transferred to the Donner Foundation.
The Donner foundation's purpose, as stated in the Certificate of
Incorporation, was to use and apply its property and the income there
from exclusively in such charitable, benevolent, sCientific and educa
tional activities as would promote the well-being of mankind and the
alleviation of human suffering. Thus, the funds were consolidated and
the objectives were broadened.
Recreation. Columbus, Indiana. In his youth, father often went to play
in Perry's Grove, a pastoral area near Columbus which is now sur
rounded by the residential section. He purchased in 19 I 6 the major
part of this open space, amounting to about twenty-five acres, & gave
it to the city of Columbus as a public park in honor of his mother. It is
to be noted that this was not a memorial as his mother lived until 193 5"'
Father's recollections of the danger of swimming in streams when
he was young inspired him to have the Donner Foundation give funds
to Columbus in 1946 for what turned out to be one of the ten finest
pools in the country. Various pools were studied before a decision 133
on the specifications was made. The Donner Center pool can accom
modate people of all ages. There are a separate kiddies' pool, a junior
pool and an Olympic-size pool with a diving well of ten feet. The large
deck area around the pool is excellent for swim meets, spectators and
sunbathers. Father stressed that the pool must provide free periods
daily for all children, & from that request has developed the outstand
ing swimming instruction program of the Midwest. A building beside
the pool is equipped with dressing rooms and has a spectators' gallery
on the roof.
Father felt that the swimming pool which he gave to Columbus was
one of the most gratifying of his many benefactions.
Canadian Philanthropy. Montreal, Canada. Dr. Wilder Penfield, the
famed neurologist and director of the Montreal Neurological Institute,
was held in high esteem by my father. He was one of several physicians
who took care of my mother during her last illness. Inspired by him &
by the research work being done by Dr. K. A. C. Elliot and other de
voted SCientists, father gave McGill University a building to house var
ious laboratories.
Tribute was paid by the late Chief Justice O. S. Tyndale, Chancellor
ofMcGill University, at the laying of the cornerstone on September 27,
1947. (Excerpts from the Montreal Star of November 4, 19S3.)
This building, destined to house various laboratories for re
search in medicine and biophysics, will perpetuate in Montreal
the name of William Henry Donner of Philadelphia, to whose
generosity its existence is due.
Bom in a small Indiana town, Mr. Donner at an early age en
tered the steel industry, in which he rose in due course to be one
of the leading figures. He is one of that distinguished group of
United States citizens who so generously devote to good works
the funds accumulated by their industry & business acumen ....
The Donner Canadian Foundation was created on December 2 1 ,
19So, through a gift from the Donner Foundation. A plaque on the
wall of the Montreal Neurological Institute reads:
Research in Neurochemistry is supported by the Donner Cana
dian Foundation as long as such experimental work continues in
the Montreal Neurological Institute. The Donner Laboratory of
Experimental Neurochemistry is named as a tribute to the con
structive interest in medical research of William Henry Donner.
The Donner-Hanna Coke Corporation. The details of the follOWing ma
jor industrial project which was brought to my attention seemed also
worthy of inclusion. In response to my letter, Mr. Lee D. Lagessie, a
public relations representative of Republic Steel, wrote on February 6,
1973:
' ... I am happy to tell you that our Buffalo District is still in full oper
ation....
'You will be interested to know that our President and Chief Execu
tive Officer, W. B. Boyer was reared in the Buffalo area while his father,
the late P. F. Boyer was employed by Donner Steel. ...'
Due to Mr. Lagessie' s kindness, I am happy to have a photocopy of
'The Story of the Donna-Hanna Coke Corporation, Buffalo, N. Y. 19 I 7
I9S6' by Mr. Philip S. Savage. The following information was derived
from it.
The Donner Union Coke Company was formed on June I, 19 I 7,
and among the original incorporators were William Henry Donner &
Frank B. Baird, president of the Union Furnace Company. An agree
ment was proposed at the small meeting of prominent Buffalonians
which was a new &, to some, a rather startling concept of joint owner
ship-an equal partnership of two corporations. It was recommended
that the new company be owned in equal shares by each of the two
owning companies, and that each owning company hold three 13 S
directorships. The wisdom of such a method of joint ownership has
now been demonstrated by nearly forty years of successful & harmon
ious operation with only one disagreement that could not be solved
by the directors.
Shortly after the United States joIned the European War in 1917,
the United States government desired to have increased supplies of
certain coke oven products such as tolnol, benzol and sulfate of am
monIa. Hence Congress appropriated $.5"0,000,000 and these funds
were allocated to build by-product coke plants to replace the wasteful
beehive coke still being used. William Henry Donner qUickly saw the
wisdom of taking advantage of this opportunity, and he acquired lands
totaling fifty acres south of the Donner Steel Company plant. On find
ing that it would be more economical and desirable from the govern
ment's point of view to build a larger plant, Mr. Baird was interested &
the deal was consumated,
An unusually able staff was gathered from various plants throughout
the country, including Mr. H. P. Zeller, the outstanding coke oven en
gineer of his day. With his assistance, William Henry Donner negotiated
a gas company contract which was a very important event in the his
tory of the plant & helped the owning companies during the lean years.
Mr. Wayne Hancock, who joined Mr. Donner at Donora, was inval
uable to the coke company from its founding, and Mr. Philip S. Savage,
who wrote 'The Story of the Donner-Hanna Coke Corporation 1917
19.5"6' joined the company in 1919.
The good faith shown by the founders in each other extended to
the management, supervisors & employees. It has produced a notable
record over these nearly forty years. Good working conditions and
friendly relations in the organization since it was formed have resulted
in an unusually low turnover both in supervisors and other employees.
This was at least partly accounted for by its forward looking employee
relations which started the plant on an eight hour shift basis in 1920,
established sick benefits and hospitalization in 1922 and paid vacations
to hourly employees with five years' service records in 1926.
Encomiums. Father died on November 3, I9S3, in his ninetieth year.
Innumerable people have profited and many more will benefit for a
long time to come from his years of industry and from his generosity
to individuals and to philanthropic institutions.
The folloWing are excerpts from an editorial appearing in The Eve
ning Republican, Columbus, Indiana on November 4, 19S3:
When William Henry Donner left Columbus in 1894 at the age
of thirty to found Hoosierland's tin plate industry, he was con
vinced that the days for making big fortunes were at an end....
But the man who had doubted that America was still the land
of opportunity found differently. Through his initiative, he went
on to fame and fortune ....
Excerpt from an editorial in the Indianapolis Star, November S, 19 S 3:
Cheap fuel, when natural gas was plentiful in the Anderson
Elwood region, gave Mr. Donner his start in industry. From tin
plate in Indiana, he went into steel in Pennsylvania, founding the
town of Monessen. He became one of the nation's foremost fig
ures in steel. A modest, retiring man, he minimized his many ben
efactions. His career was marked not only by the wealth he made
but by the gracious manner in which he gave much of it away.
Excerpt from the obituary in the Buffalo Evening News of Novem
ber 4, 195"3:
Mr. Donner was one of the older group of iron & steel masters
who helped to establish in Pennsylvania, New York and Ohio the
solid foundation of one of the country's major industries ....
Excerpts from an editorial in the Buffalo Courier Express of N ovem
ber6,I95"3! 137
The career of William Henry Donner, philanthropist, steel
magnate and multi-millionnaire, who died yesterday at the age of
ninety, paralleled the tremendous growth of the steel industry in
America, the foundation of its vast industrial production today.
He began working in a steel plant in his native State of Indiana
shortly after leaving Hanover College, and early developed new
ideas on the manufacture of tin plate which impressed Andrew
W. Mellon and Henry C. Frick....
The steel industry owes much to Mr. Donner for his initiative
and organizational ability; he often had been described as one of
the 'best steel men in the world....'
The following is a tribute paid to father by Dr. Wilder Penfield, former
director of the Montreal Neurological Institute (Montreal Star of No
vember 4, 1953):
The medical profession and all those interested in humanity
must admire the late Mr. Donner not only for his magnificent
gifts to medical research, but for the great personal interest he
always showed in its progress.
His annual grant to the Montreal Neurological Institute proves
his great insight. With this grant he perpetuated his concern with
neurochemistry, an important field of medical research which
held his abiding interest.
Mr. Donner was a splendid example of the self-made business
man who, in his later years, spent so much time helping hospitals
and individuals.
Medicine here and in the United States is forever in debt to his
warm heart and generous support.
Education. Hanover, Indiana. Hanover College, founded in 1827, is a
private, coeducational, liberal arts college, affiliated with the United
Presbyterian Church. It now has over one thousand students.
Dr. Albert G. Parker, Jr., a Presbyterian Minister, was president of
the college from 1929 to 19 S 8. Prior to that time he was a missionary
and Professor of SOCiology at the Cheeloo University in Tsinan, China
(1920-1928). Father had a close and happy relationship with Dr. and
Mrs. Parker. Three of their four children were born in China.
Mrs. Katherine McAfee Parker (A.B. Vassar College 1917) is a gifted
writer whose eulogy to father was published in the December 19S3
Bulletin of Hanover College. Excerpts from her lyrical tribute follow:
The story of the steel industry in America cannot be told with
out William Henry Donner. Nor can the story of philanthropy,
for like many men of wealth, he spent the years after his retire
ment from business in active & eager concern for worthy causes,
and in giving generously to them....
And to Hanover College, where he had once been a student,
long, long ago, he gave and gave and gave so much and so much
and so Wisely that he changed the whole course of its life.
From the very beginning he was eager that Hanover should be
come a strikingly beautiful campus, worthy of its magnificent
setting on this headland 'high above a stately river.'
Mr. Donner was a quiet man, the son of God-fearing parents,
who helped build into him the temperate, disciplined habits of
body and mind which characterized him all his life ....
He gave Hanover College the benefit, not only of money, but
also of his long experience and keen judgment. He had been as
tute in the business world and he was equally careful with the
money he gave away. He gave it only where he had confidence
in the people who were going to spend it.
Mr. Donner's own gifts to the college & the gifts of his family
and of the Donner Foundation, since 1937, total over one and a
half million dollars. And because so much of it was given as it 141
was, in 'challenge' offers, it has called forth the giving of other
people to a total of over two and a half million dollars more. The
Challenge Funds made lots ofwork, but we blessed Mr. Donner for
giving that way, thus making occasions for hundreds of friends,
old and new, to have a significant part in building up Hanover
College.
On one of his last visits to the campus, we stood with Mr.
Donner on the porch of the Auditorium as the students came to
the building for the morning assembly. He had been ill and felt
unable to go inside to the platform, but he stood a few moments
outside, quiet, erect, dignified, looking intently at the dream he
had helped to translate into bricks and stones & grass and trees,
and into opportunity and challenge for young people. There was
the campus as he had seen it on paper & as he had thought about
it for many years.
Over the walks and up the steps came the stream of students,
one of the many generations of the college family who would use
what he had given and had challenged others to give. The stu
dents, I declare, never looked more bright and good and full of
promise than that fine morning when they poured past the man
they did not know, to whom they owed so much.
Mr. Donner was never one to spend words. He didn't say
much that morning and neither did we. But I am sure he was
glad then, as I am sure he is glad now in heaven, that he gave
this college his gifts of money and time and thought.
So his life here on earth is ended. But his good works go right
on working for good, & the mark of his spirit is on many a place.
THE AUTOBIOGRAPHY OF WILLIAM HENRY DONNER
has been privately printed in an edition of one hundred copies by
Clifford Burke at Cranium Press, San Francisco. The type is a var
iant of Eric Gill's Perpetua from the Stephenson Blake Foundry, set
by hand. It is printed on hand made Tovil, from the English mill
of Bareham Green. The photographic prints were made by Larry
Kunkel, who also supplied the photograph on page 2S. The binding
was designed & executed at the press by Diane Burke. Fall 1973.