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transported the iron ore and pig copper which was already being produced in considerable quantities in the upper Lake region to the furnaces and factories south and southeast of Lake Erie. They built the vessels needed for this constantly increasing commerce. Ship building gradually became their most important single industry, but this complicated branch of manufacturing brought many subordinate industries with it. Cleveland has always been remarkable for the diversity of its manufacturing interests and the wholesome balance of its economic life.
When Mark Hanna entered the firm of Rhodes & Co. in 1867, the commercial and industrial revolution roughly sketched above was still in its infancy. The Middle West, and particularly the state of Ohio, had passed out of its period of pioneer agriculture, but it was just beginning its period of industrial pioneering. Of course many experiments had already been made, and many local industries had already been founded. But these industries had depended upon means of transportation which were now being superseded, and consequently the conditions of industrial success in the Middle West were being turned upside down. A piece of industrial and commercial patch-work had to be converted to an organic system, not only well articulated within, but properly adapted to the national economic system. It was a world of industry and commerce in the making, and offered extraordinary opportunities to an enterprising, aggressive, energetic, quick-witted, flexible and indomitable man.
The business which Rhodes & Co. took over from Rhodes, Card & Co. was well established, but its development was only embryonic. The bulk of its business consisted in the mining and selling of coal, — an industry with which Daniel P. Rhodes had been associated from the start. As early as 1845 the Brierhill mine, near Youngstown, Ohio, had been opened up by Mr. Rhodes and David Tod. Their output was some fifty tons of bituminous coal a week, which was gradually increased and which was brought to Cleveland by canal until 1856, when the completion of the Cleveland and Mahoning Railroad gave the trade a great impetus. Soon after, the opening of the Cleveland and Pittsburg Railroad made the coal-fields of Columbiana
County accessible; and in 1860 the great Massillon district, with which Mr. Hanna's firm became closely identified, was opened for production. By 1867 the railroad, steamboat and manufacturing industries in and about Cleveland were already justifying the shipment of some 600,000 or 700,000 tons of coal a year to that market.
While the mining and sale of their own coal constituted a considerable part of the initial business of Rhodes & Co. in 1867, it by no means constituted the whole of it. The firm also owned a furnace and some iron properties at Canal Dover in the Tuscawaras district; and it sold its own pig-iron and its own ore. Furthermore it carried on a considerable commission business in all these products, and it was on the whole more interested in the selling than it was in the operating aspect of its several-sided business. Under the management of Mr. Hanna and his new partners it did not change in that respect. Indeed little by little it became more than ever a commission business. Whenever either the firm or its individual members became interested in the production of coal, of iron ore or of pig-iron it was chiefly for the purpose of securing material which could be sold by Rhodes & Co.
The kind of business described above was admirably adapted to the peculiar business abilities of Mark Hanna. He was not the man to work patiently and persistently in building up stone by stone the structure of a particular industry. He liked diversity of occupation and work, constant movement and the excitement of new undertakings. The business of Rhodes & Co. developed, consequently, not along any one line, but along many lines. It became fundamentally a selling agency for a variety of products; and as a selling agency it could transact a much larger business on a certain amount of capital than it could if it were handling only the output of its iron furnaces or mines.
At the same time every possible precaution was taken to provide against the dangers to which a mere commission business was exposed — the danger of losing control of the product sold. In order to become certain of being able to handle as agent large quantities of coal, iron ore and pig-iron, Rhodes & Co., either as a firm or by the action of its individual members, extended widely its interests in mines, furnaces and later in means of transportation. It did not always own a mine or a furnace outright, but an interest in many such enterprises was purchased — always with the understanding that the product should be sold through Rhodes & Co. This method of creating business for Rhodes & Co. as a selling agency became more and more an essential part of the policy of the firm.
During the days of Robert Hanna & Co., Mark Hanna had, as we have seen, been much interested in the Lake Superior ore country. After the dissolution of the firm his brother, Howard Melville Hanna, continued to conduct a forwarding and commission business in the products and supplies of that district. It was natural, consequently, for Mark Hanna to extend the business of Rhodes & Co. into such a familiar region. He added to the connections of the firm a number of iron mines in the Northwest; and little by little he obtained control of the sale of most of the charcoal iron produced in the district. This innovation made an essential change in the scope and the balance of the firm's business. Its interests, instead of being confined almost exclusively to Ohio, were established in a strong position on the great highway of American domestic commerce.
The extension into the Lake Superior district was immediately followed by another development in the firm's business, which also naturally followed from Mark Hanna's early experience. The connection built up with the Lake Superior district soon involved the firm in the transportation as well as the sale of iron ore and coal. Rhodes & Co., or its partners individually, acquired interests in every aspect of the handling and the transport of the products, which they sold on commission.
No other extension of the business of the firm did so much as did its early interest in lake transportation to fortify its position and enable it to reap the full advantage of its opportunities. The place of Cleveland in the economic system of the Middle West was, as I have said, primarily commercial. It was excellently situated for the handling, the collection and the distribution of the basic materials of industrial production, but its situation placed it at a disadvantage in shipping finished products to the markets either in the East or the West. Its manu