Employing a Competitor

Random Reminiscences of Men and Events by John D. Rockefeller is part of HackerNoon’s Book Blog Post series. The table of Links for this book can be found here

He still demurred, but we tried to convince him that we were not to be deterred from going into the trade, and that we were willing to pay him a satisfactory commission for looking after the building of the ships. Somebody, we explained, was going to do the work for us, and he might as well have the profit as the next man. This argument finally seemed to impress him and we then and there closed an agreement, the details of which were worked out afterward to our mutual satisfaction. This gentleman was Mr. Samuel Mather of Cleveland. He spent only a few minutes in the house, during which time we gave him the order for about $3,000,000 worth of ships and this was the only time I saw him. But Mr. Mather is a man of high business honor, we trusted him implicitly although he was a competitor, and we never had occasion to regret it.

At that time there were some nine or ten shipbuilding companies located at various points on the Great Lakes. All were independent of each other and there was sharp competition between them. Times were pretty hard with them; their business had not yet recovered from the panic of 1893, they were not able to keep their works in full operation; it was in the fall of the year and many of their employees were facing a hard winter. We took this into account in considering how many ships we should build, and we made up our minds that we would build all the ships that could be built and give employment to the idle men on the Great Lakes. Accordingly we instructed Mr. Mather to write to each firm of shipbuilders and ascertain how many ships they could build and put in readiness for operation at the opening of navigation the next spring. He found that some companies could build one, some could build two, and that the total number would be twelve. Accordingly we asked him to have constructed twelve ships, all of steel, all of the largest capacity then understood to be practicable on the Great Lakes. Some of them were to be steamships and some consorts, for towing, but all were to be built on substantially the same general pattern, which was to represent the best ideals then prevalent for ore-carrying ships.

In giving such an order he was exposed, of course, to the risk of paying very high prices. This would have been certain if Mr. Mather had announced in advance that he was prepared to build twelve ships and asked bids on them. Just how he managed it I was not told until long after, and though it is now an old story of the lakes I repeat it as it may be new to many. Mr. Mather kept the secret of the number of ships he wished to construct absolutely to himself. He sent his plans and specifications, each substantially a duplicate of the others, to each of the firms, and asked each firm to bid on one or two ships as the case might be. All naturally supposed that at most only two ships were to be built, and each was extremely eager to get the work, or at least one of the two vessels.

On the day before the contracts were to be let, all the bidders were in Cleveland on the invitation of Mr. Mather. One by one they were taken into his private office for special conference covering all the details preparatory to the final bid. At the appointed hour the bids were in. Deep was the interest on the part of all the gentlemen as to who would be the lucky one to draw the prize. Mr. Mather's manner had convinced each that somehow he himself must be the favored bidder, yet when he came to meet his competitors in the hotel lobby the beams of satisfaction which plainly emanated from their faces also compelled many heart searchings.

At last the crucial hour came, and at about the same moment each gentleman received a little note from Mr. Mather, conveying to him the tidings that to him had been awarded a contract sufficient to supply his works to their utmost capacity. They all rushed with a common impulse to the hotel lobby where they had been accustomed to meet, each bent on displaying his note and commiserating his unsuccessful rivals, only to discover that each had a contract for all he could do, and that each had been actually bidding against nobody but himself. Great was the hilarity which covered their chagrin when they met and compared notes and looked into each others' faces. However, all were happy and satisfied. But it may be said in passing that these amiable gentlemen all united subsequently in one company, which has had a highly satisfactory career, and that we paid a more uniform price for our subsequent purchases of ships after the combination had been made.