While Thane was thinking how to set the nail mill in order, John, sitting in the hotel lobby with his feet in the window, gnawing a cigar, was reflecting in another sphere. His problem was the nail industry at large. It was in a parlous way. Although cut iron nails had been made by automatic machines for a long time there had recently appeared a machine that displaced all others, because it made the nail complete, head and all, in one run, and was very fast. This machine coming suddenly into use had caused an over-production of nails. The price had fallen to a point where there was actually a loss instead of a profit in nail making unless one produced one’s own iron and got a profit there. The Twenty-ninth Street plant had to buy its iron. The probability of running it at a profit was nil. His meditations carried him far into the night. The lights were put out and still he sat with his feet in the window, musing, reflecting, dreaming, with a relaxed and receptive mind. An idea came to him. It will be important to consider what that idea was for it became afterward a classic pattern. It had the audacity of great simplicity. He would combine the whole nail making industry in his North American Manufacturing Company, Ltd. Then production could be[212] suited to demand and the price of nails could be advanced to a paying level.
He took stock of his capital. It was fifteen thousand dollars. Maybe it could be stretched to twenty. In his work with Gib, selling rails, he had acquired a miscellaneous lot of very cheap and highly speculative railroad shares, some of which were beginning to have value. But twenty thousand dollars would be the outside measurement, and to think of setting out with that amount of capital to acquire control of the nail making industry, worth perhaps half a million dollars, was at a glance fantastic. But one’s capital may exist in the idea. John already understood the art of finance.
Leaving the Twenty-ninth Street plant in Thane’s hands, with funds for overhauling it, he consulted with Jubal Awns and set out the next morning on his errand.
The nail makers were responsive for an obvious reason. They were all losing money. In a short time John laid before Awns a sheaf of papers.
“There’s the child,” he said. “Examine it.”
He had got options in writing on every important nail mill in the country save one. The owners agreed to sell out to the North American Manufacturing Co., Ltd., taking in payment either cash or preferred shares at their pleasure. The inducement to take preferred shares was that if they did they would receive a bonus of fifty per cent. in common stock.
“But they will take cash in every case,” said Awns, “and where will you find it?”
“They won’t,” said John. “I’ll see to that. What have you done with Gib?”
[213]
Awns had been to see Enoch. The New Damascus mill produced in its nail department a fifth of all the nails then made. There was no probability of buying him out. John well knew that. Yet his nail output had to be controlled in some way, else the combine would fail. So he had sent Awns to him with alternative propositions. The first was to buy him out of the nail making business. And when he had declined to sell, as of course he would, Awns was to negotiate for his entire output under a long term contract.
“He wouldn’t sell his nail business,” said Awns.
“I knew that,” said John.
“But I’ve got a contract for all his nails,” said Awns, handing over the paper. “The price is stiff,—fifty cents a keg more than nails are worth. It was the best I could do.”
“That’s all right,” said John reading the agreement. “We are going to add a dollar a keg to nails. This phrase—‘unless the party of the second part,’ (that’s Gib), ‘wishes to sell nails at a lower price to the trade’—who put that in?”
“He did,” said Awns. “I couldn’t see any point in objecting to it. No man is going to undersell his own contract.”
John handed the agreement back and sat for several minutes musing.
“There’s a loose wheel in your scheme, if I’m not mistaken,” said Awns. “If you add a dollar a keg to nails won’t you bring in a lot of new competition? Anybody can make nails if it pays. These same people[214] who sell out to you may turn around and begin again. You’ll be holding the umbrella for everybody else.”
“Anybody can’t make nails,” said John. “I’ve looked at that.”
“Why not?”
“Nail making machines are covered by patents. There are only four firms that make them. I’ve made air tight contracts with them. We take all their machines at an advance of twenty-five per cent. over present prices and they bind themselves to sell machines to nobody else during the life of the contract. So we’ve got the bag sewed up top and bottom. They were glad to do it because there isn’t any profit in machines either with the nail makers all going busted.”
Awns stared at him with doubt and admiration mingled.
“Well, that is showing them something,” he said. “If you go far with that kind of thing laws will be passed to stop it.”
“It’s legal, isn’t it?”
“There’s no law against it,” said Awns.
“We’re not obliged to be more legal than the law,” said John. “Tell me, what do you know about bankers in Pittsburgh? I’ve got to do some business in that quarter.”
Pittsburgh at this time was not a place prepared. It was a sign, a pregnant smudge, a state of phenomena. The great mother was undergoing a C?sarian operation. An event was bringing itself to pass. The steel age was about to be delivered.
Men performed the office of obstetrics without[215] knowing what they did. They could neither see nor understand it. They struggled blindly, falling down and getting up. Forces possessed them. Their psychic condition was that of men to whom fabulous despair and extrava............