The Harris-Ingram Experiment Part 3

"On the ceiling of the reading-room of the Liverpool Cotton Exchange is painted the pregnant words:--'O Lord, how manifold are thy works, in wisdom hast thou made them all; the earth is full of thy riches.' Under divine inspiration, therefore, English capital seeks investment everywhere, and with cheap capital, cheap labor, and cheap raw materials, she finds herself able to compete successfully with the world. It is possibly pardonable then that the British manufacturer and politician should seek earnestly the fourth requisite, viz., a large market abroad.

Hence the necessity of free trade.

"To advocate publicly that other nations should adopt free trade, that England might have an increased number of buyers, and consequently greater profit on her products, perhaps would not be judicious; so the principle of free trade for the world at large must be sugar-coated, to be acceptable. Therefore your philanthropic and alert Richard Cobden, and John Bright, and your skilled writers, both talked and wrote much about the 'brotherhood of mankind,' hoping that the markets of the world might willingly open wide their doors to British traders. Of course, advocates of free trade reason that the larger the number of buyers the larger the prices.

"Mr. Searles, whenever America can command, as Great Britain does to-day, cheap capital, cheap labor, and cheap raw materials, she too may vociferously advocate free trade, and that other nations shall open wide their markets for the sale of American products.

"Don't you see, Mr. Searles, that protection and free trade are equally selfish and not philanthropic principles?"

"Mr. Harris you are right," shouted several of the by-standers.

But Hugh Searles did not reply. Possibly because it was late or, it may be, he did not wish to further antagonize Colonel Harris with whom he hoped in the morning to drive a good bargain, and it may be that he hoped some time in America to operate mills himself and make money under a protective tariff.

Both Searles and Harris retired for the night with an agreement to meet at nine o'clock in the morning and talk over business. Searles rose with the sun, and after eggs, bacon, and tea, he walked to the Battery and back, before nine, the appointed hour for his first business conference with Reuben Harris.

A good sleep had refreshed Colonel Harris and at breakfast he appeared in a joking mood. While he smoked, he glanced at the _Tribune_ and again examined Searles's letter of introduction from Messrs. Guerney & Barring.

At nine o'clock promptly, Mr. Searles came and Colonel Harris exhibited to him a brief statement of the business of the Harrisville Iron & Steel Co., extending over the last ten years, and showing the company's annual profits.

"A very good business your company did, and you made large profits, Colonel Harris," said Searles. "And am I to understand that you have made in your statement a proper allowance for depreciation of values in buildings and machinery, also for all losses and cost of insurance, and that after these deductions are made the company's net profits annually amounted to an average of over one hundred thousand pounds, or a half million dollars?"

"Yes," replied the colonel.

And Mr. Searles remarked, "Colonel Harris, if your arguments last evening did not fully convert me to the decided advantage which Americans gain by protection, this statement of the Harrisville Iron & Steel Co. does. A year ago, some Americans in London called our attention to your profitable plant, hence our first letter of inquiries. Your replies confirmed the report and so we cabled for this initial meeting between us.

"Messrs. Guerney & Barring have been most successful in financiering some of the largest business interests in the world, and thus they have achieved a splendid reputation. It was their wish that I should secure for them your most favorable terms with an option of purchase of your plant, the same to hold good for two months, or for a sufficient length of time to allow them to organize a syndicate, and float necessary debentures to buy the stock, or a controlling interest in your company, and so continue the business."

"Mr. Searles, we Americans are not anxious to sell, especially to foreigners, our best paying concerns. We ought to keep them under our own control. However, of late, I have been inclined to indulge my family in a little foreign travel, and myself in more leisure for books, and possibly for politics, believing that not enough of our good citizens enter Congress. I might, on certain conditions, name a price for all the stock of the Harrisville Iron & Steel Co."

"Please state the price and the conditions."

"Well, let me think a moment. The capital stock of the company is not now as large as it should be.

Total Capital Stock $2,000,000 Par value of shares 100 Present Value per Share, 300

"The entire property and good-will of the Company is worth at least $6,000,000, and my "fixed price," as the English say, is $5,000,000."

Mr. Searles looked puzzled, for he had hoped to get the stock for less money. He hesitated, as if in deep study, but not long, for he believed that, if the Harrisville Iron & Steel Co. for ten successive years could pay $500,000 or an average annual dividend of 25% on its stock of $2,000,000, the plant re-organized could easily be marketed at a neat advance, say for 1,400,000 or $7,000,000, in London, where even sound 3% investments are eagerly sought; so Mr. Searles inquired again: "Colonel Harris, you omitted to state your conditions." Harris answered, "I must have cash enough to guarantee the sale, and short time payments for the balance."

"Well, Colonel Harris, how would the following terms please you?

One-eighth cash $625,000 One-eighth 30 days 625,000 One-fourth 60 days 1,250,000 One-fourth 90 days 1,250,000 One-fourth, Preferred Shares, 6% dividends guaranteed 1,250,000 _________ Total price named 5,000,000

"Colonel Harris, before you answer, please let me outline our London plan. Suppose I should take for Messrs. Guerney & Barring a contract, or option of purchase on the property with payments as named, the purchase to be conditioned upon a verification of the correctness of your statements. Our experts can examine and report soon on your accounts for ten years back, and on buildings, machinery, stock on hand, land, etc."

"Mr. Searles, please explain further your 'London plan' of reorganization."

"Colonel Harris, we would modify the old firm name, so as to read--'The Harrisville Iron & Steel Co., Limited, of London, England,' and capitalize it at 1,400,000, or $7,000,000.

Par value of shares 20 or $100 Number of shares 70,000

"When our experts shall have verified your statements at Harrisville, then the option of purchase is to be signed by us and forwarded to London, where it will be signed by Messrs. Guerney & Barring, the first payment made, and the contract underwritten or guaranteed by the Guardian, Executor & Trust a.s.sociation, Limited, of London, whose capital is $5,000,000. The a.s.sociation will also underwrite the bonds and preference shares. This will practically complete the purchase."

"But what about the last one-fourth payment in preferred shares of $1,250,000?"

"Pardon me, Colonel Harris, that is just what I desire to explain further. The new company will issue debentures or bonds, running 30 years, at 4%, for 800,000 or $4,000,000; preference shares 400,000 or $2,000,000; with dividends 6% guaranteed, and a preference in distribution of property, if company is dissolved. Ordinary shares 1,200,000 or $6,000,000. And our London prospects will show that the ordinary shares can earn at least 5%. For the last one-fourth we wish you to take 12,500 preferred shares, or $1,250,000.

"London holders, of course, will elect all the officers, a managing board of directors, with general office in London. For a time they will expect you to advise in the management of the business at Harrisville."

After some further explanations, Harris agreed to sign a contract or option of purchase, drawn as specified, if after investigation, he should become satisfied with the responsibility of the London parties. On Tuesday morning, contracts in duplicates were presented for Colonel Harris's inspection. After twice carefully reading the contract, he gave his approval and wrote Mr. Searles a letter of introduction to Mr. B.C.

Wilson, his manager at Harrisville, requesting the latter to permit Mr.

Searles and his experts to examine all property and accounts of the Harrisville Iron & Steel Co. for ten years back.

It was also arranged that on Wednesday, at 12 o'clock noon, Mr. Searles should see the Harrises off to Europe, then Mr. Searles and his experts were to go to Harrisville in Colonel Harris's private car. Later Mr.

Searles and Colonel Harris were to meet in London, and then, if everything was mutually satisfactory, all parties were to affix their signatures to the agreement, and the cash payment was to be made at the London office of Guerney & Barring.

Wednesday, Colonel Harris rose early as had been his habit from childhood. He was exacting in his family, and also as a manager of labor.

Every morning at six o'clock all the family had to be at the breakfast table. Colonel Harris always asked the blessing. Its merit was its brevity: sometimes he only said--"Dear Lord, make us grateful and good to-day. Amen." Thirty minutes later, summer and winter, his horses and carriage stood at his door, and punctually at fifteen minutes of seven o'clock he would reach his great mills. His first duty was to walk through his works, as his skilled laborers with dinner pails entered the broad gates and began the day's work. Devotion like this usually brings success.

After breakfast, Mrs. Harris and her daughters walked down Fifth Avenue to make a few purchases. Alfonso and Leo hurried off to get their baggage to the "Majestic," while Jean busied himself in seeing that a transfer was made to the steamer of all the trunks, valises, etc., left at the depot and hotel.

At ten o'clock Jean called at the dock to learn if the half-dozen steamer chairs and as many warm blankets had arrived, and he found everything in readiness. It was 10:30 o'clock when the Waldorf bill was paid, and the good-bye given. The young people were jubilant, as the long hoped-for pleasure trip to Europe was about to be realized.

The carriages for the steamer could not go fast enough to satisfy the old, or the young people. Several schoolmates, artists, business and society friends met them on the dock. Many fas.h.i.+onable people had already arrived to say "_Bon Voyage_" to the Harrises and to Leo. Hundreds of others had come to see their own friends off. It was all excitement among the pa.s.sengers, and carriages kept coming and going.

Not so with the English officers and sailors of the "Majestic." They were calm and ready for the homeward pa.s.sage.

The last mail bag had been put aboard, and the receipts to the government hurriedly signed. Mr. Searles had said good-bye, and last of all to Colonel Harris. As the colonel went up the gangway, the bell rang and the cries "All aboard" were given. For once, Colonel Harris felt a sense of great relief to thus cut loose from his business, and take his first long vacation, in twenty-five years from hard work.

"Now, I shall have a good time, and a much needed rest," he said. But just as he stepped into the steamer's dining-saloon, Mr. Searles, who had hastily followed, touched him on the shoulder and said. "Here, Colonel Harris, is a telegram for you."

Harris quickly tore it open. It was from Wilson, his manager, and it read as follows:--

Harrisville, June 9, 18--.

_Colonel Reuben Harris, Steamer Majestic, New York_.

Our four thousand men struck this morning for higher wages. What shall we do?

B.C. Wilson.

Harris was almost paralyzed. His wife and daughters ran to him. The steamer's big whistle was sounding. All was now confusion. There was only a moment to decide, but Harris proved equal to the situation. He stepped to the purser, surrendered his pa.s.sage ticket, kissed his wife and two daughters, saying to his son, "Alfonso, take charge of the party as I go back to Harrisville."

Gertrude, insisting, accompanied her father, and remained ash.o.r.e. On the dock stood Colonel Harris, Gertrude, and Mr. Searles, all three waving their white handkerchiefs to Mrs. Harris, Lucille, Alfonso, and Leo. What a bad send-off!

The best laid schemes o' mice an' men, Gang aft a-gley, And leave us nought but grief and pain, For promised joy.

The Harrises on the steamer, and the Harrises on the pier had heavy hearts, especially Colonel Harris and Gertrude so suddenly disappointed.

It was soon agreed that the three should start that evening for Harrisville.