trict to western Pennsylvania was handled by these docks and carried to Pittsburgh by the Pennsylvania Railroad Company. The docks were equipped with ore-handling machinery by Rhodes & Co., and they transacted a very large business. In accordance with its usual policy of participating in the ownership as well as in the handling of the products it sold, a furnace was bought in 1879 at Sharpsville, Pennsylvania. At a later date M. A. Hanna & Co. also leased and equipped the Pennsylvania docks both at Cleveland and at Erie.

The vessels owned and operated by the Cleveland Transportation Company were, of course, built of wood, and their tonnage was comparatively small. Vessels carrying twelve or eighteen hundred tons were considered to be good-sized ships. It was Melville rather than Mark Hanna who first reached the conclusion that larger vessels should be built, and steel substituted for wood. Before acting on the conclusion he investigated the matter for two years, and employed experts to help him in testing the practicability of steel vessels from every essential point of view. When he was wholly convinced, Melville and Mark Hanna and J. F. Pankhurst bought the Globe Ship Building Company, and the keel of the first steel vessel to be navigated on the Great Lakes was soon laid. Her name was the Cambria, and she carried twenty-six or twenty-seven hundred gross tons. The Corsica, Coronia and Coralia, which were slightly larger, and which together with the Cambria were furnished for the first time with triple expansion engines, soon followed. These vessels were specially equipped for the economical transportation and handling of iron ore, and they were a success from the very start. They were, however, so much of a success that they immediately provoked extensive imitation and improvement. The Globe Company obtained orders for twelve steel vessels in one year, and the transportation methods on the Great Lakes were revolutionized.

Thus a very complicated and diversified business was gradually built up; but diversified as it was, its several parts were carefully adjusted and tied together. Its core was the copartnership of Rhodes & Co., and later of M. A. Hanna & Co., and the essential purpose of all the separate enterprises was to create an abundant business for the firm as commission mer

chants. To this end alliances were established covering every aspect of the production, the handling and transportation of the coal, iron ore and pig-iron. The firm itself owned coal mines in the several bituminous districts in Ohio. Its individual partners also owned mines. In other cases merely an interest had been purchased in mines operated independently. In still other cases the coal of wholly independent operators was bought outright and sold. Most of this coal was placed on the market in Cleveland, and a large part of it was carried up the Lakes in steamers owned in part by members of the firm as individuals. The same methods were repeated in the iron ore district. Iron mines were owned both by the firm, by its individual members and by outsiders to whom capital had been advanced. The firm profited from the sale of their ore, and frequently from its handling and transportation, while at the same time it transported and sold large quantities of ore for other producers.

The volume and the diversity of the business was a great help to its economic and efficient transaction. Vessels which carried iron ore down the Lakes could carry coal back. The alliance with the Pennsylvania Railroad Company was of great assistance to the selling end of the business. The large quantities of materials sold justified the development of one of the ablest sales-organizations in the country. The firm had unsurpassed opportunities of keeping in touch with every aspect of the coal and iron business and of making both its purchases and its sales to the best advantage. Finally it always consumed a certain part of the raw materials it produced or sold, and it possessed in this way a safety valve for its business. It could either sell the raw material or convert it according to the comparative opportunities of profit. A large and increasing part of the business of the firm consisted of mining its own coal and ore, transporting them in its own boats, unloading them on docks which it leases and operates, and (sometimes) smelting the ore in its own furnaces. Pig-iron, however, was its most finished product. The firm never went into the manufacture of steel, although certain of its members entered the directorate of steelproducing companies - partly in order to secure business for the copartnership.

An organization of this kind is rare, if not unique, in the history of American business. Essentially it consisted of a partnership, which constituted the nucleus of a widely ramified system of corporate and firm properties, individual properties, and personal and corporate alliances. Throughout the territory embraced by the operations of the firm, all the roads led back to the partnership itself, which gathered toll from the crossing of every bridge, the passage of every turnpike, and the safe arrival at every destination. Yet these tolls were cheerfully paid, because the firm always served its customers fairly and efficiently, and because its policy was never either grasping or disloyal. The organization has the appearance of being perilously complicated, of being dependent upon too many fluctuating conditions, and upon too many merely personal alliances. But as a matter of fact, it has stood excellently the test of long and hard wear. For over forty years, during which time the conditions of its business have been radically changed, the firm has succeeded, not merely in holding its own, but in using these very changes to make its own position stronger.

Particularly during the last thirteen years conditions in the coal and iron industry have not been favorable to commission merchants. The tendency has been to do away with the middleman, and to organize under one ownership every phase of the process of converting iron ore into finished steel products; but in spite of this tendency the organization of the firm was such that it could be adapted to the new conditions. Its alliances were strengthened by increasing the range and amount of its ownership in the products it sold; and its own business became to an even larger extent a matter of selling its own pig-iron rather than the basic materials thereof. To be sure, this development took place largely after M. A. Hanna had retired from active business; but his successors were able to meet effectively the new situation as it developed, partly because Mr. Hanna had established the business on sound foundations and made it both a tough and a flexible instrument.

The salient fact, consequently, about the organization developed by Mr. Hanna was its peculiar personal character. Although transacting a volume of business very much larger than that of many big corporations, and although it has formed

many corporations for the purpose of owning particular branches of its business, it has remained essentially a copartnership. A corporate organization demands impersonality of methods and policy. It is most effective when its operations can become automatic and be reduced to rule. But the business of M. A. Hanna & Co. was the creation of sound and enterprising individual management; and it has continued to demand management of this kind. Mark Hanna made it personal; and personal it has remained. It was successful under his management, because of the excellence of his judgment, the soundness of his policy and the absolute personal confidence which he inspired among his associates. It has continued to be prosperous under his successors, because they were able to bring similar qualities to its direction. Although it is twentyfive years since Mark Hanna was actively connected with the business which bears his name, his personality still lives in it and determines the forms of its activity.

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CHAPTER VIII

MISCELLANEOUS BUSINESS INTERESTS

IN the account given of the business which Mr. Hanna and his partners gradually built up, no attention has been paid to other contemporaneous business interests. This particular aspect of his life has a unity of its own and can best be treated independently both of his political career and his miscellaneous business engagements. The coal and iron selling agency constituted, of course, the foundation of his business structure. Until 1894 it consumed most of his time and energy. Throughout his life it provided him with his sinews of war. It made him a wealthy man, and he needed the power which only wealth can give. But important as it was in his life, and clearly as the quality of the man was expressed in the contribution he made to the success of the firm, the actual sequence of events in his business career is for the most part irrelevant to the main current of his life.

From 1867 until 1880 he appears to have devoted practically all his time to coal and iron. The first six of these years were consumed in making himself a master of the business and in broadening its basis. The next five years constituted a period of general trade depression, during which Mr. Hanna had to struggle in order to maintain the ground which had already been won. But late in the seventies business revived, and Rhodes & Co. began to reap the reward which a period of active trade brings to a well-established and well-managed business. Mr. Hanna found himself possessed of means, which enabled him to undertake a number of other enterprises of some importance. He had become, indeed, one of the most conspicuous and prosperous of Cleveland business men, whose coöperation was usually expected in matters of local business importance.

The first of these miscellaneous ventures was nothing less than a plunge into the newspaper business; and as the incident