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BUSINESS LIFE IN CLEVELAND
In Mr. Robert R. Rhodes's statement describing his business relations with Mark Hanna and the latter's business characteristics, Mr. Rhodes has explained in the following words the success of Rhodes & Co.: "Mark Hanna was a shrewd man. Much of the credit for the prosperity of Rhodes & Co. must attach to his individual efforts. But my idea about the success of the firm, aside from Mr. Hanna's personal contribution to it, is that we took over the business at an opportune time. Economic conditions offered us unusual opportunities for growth. We started at the right moment." It is essential, consequently, to an understanding of Mark Hanna's business career that some account be given of the economic conditions and opportunities, which confronted Cleveland business men in the decade or two immediately succeeding the war.
When Dr. Leonard Hanna moved to Cleveland in 1852, it was a small but thriving city, containing a little over 20,000 inhabitants. Its rapid growth had been due to its situation on Lake Erie at the northern terminus of the Ohio Canal. Produce of all kinds, originating not merely in Ohio, but along the Ohio and Mississippi rivers, were shipped by river and canal to Cleveland, which became an important distributing and collecting agency for the district reached by the Great Lakes. Agricultural staples were sent to the terminus of the Erie Canal at Buffalo — either for Eastern consumption or for export. The pioneer settlements in the Northwest were supplied with the few necessaries they could afford to purchase, and their products were carried to markets farther east. Its business, consequently, was commercial rather than industrial, and depended for its growth chiefly upon the increasing importance of the Great Lakes in the American system of transportation.
During the fifties the volume of lake commerce increased by leaps and bounds, chiefly because of the rapid settlement of the region in the Northwest tributary to the Great Lakes. The population of Cleveland more than doubled during the decade, and its industry and commerce not only throve, but became much more diversified. Nevertheless, even in 1860 its population was less than one-fourth that of Cincinnati, and the conditions which account for its present place in the national commercial system were barely beginning to be conspicuous. The great trade routes still lay along the navigable rivers like the Ohio and Mississippi, and the combination of lake and railroad transportation, which was to constitute the backbone of American domestic commerce, had not yet been formed.
The Civil War accelerated the predestined change in commercial routes. Navigation of the Mississippi, except for military purposes, suddenly ceased. The bond between the South and the agricultural states of the Middle and Northwest was cut. The tide of commerce began running east and west. The railroads and the Lakes took the place of the rivers and the canals. Chicago as the distributing and collecting centre for the rapidly growing states tributary to the head waters of the Mississippi and Missouri leaped into its position as the leading commercial and industrial city of its own region. Its enormous increase in population and business was due chiefly to the benefit which it obtained from the agricultural development of the West and the Northwest — a benefit dependent more upon its railroad connections than its situation on Lake Michigan, but partly on both.
Cleveland had little to gain, except indirectly, from the increase in the grain trade and the new course it was taking; and it had less to gain than had Chicago from the growing importance of railroad transportation. Its peculiar place in American domestic commerce depended upon its central and convenient location on the Lakes. It needed the railroads chiefly as supplementary to water routes. Its great opportunity came when the industrial expansion of the Middle West created a demand for crude manufacturing materials, adapted to transportation in bulk. Its merchants assembled the basic materials necessary to the industrial life of the Middle West. They brought coal from the mines in Ohio and western Pennsylvania, and sold it in the different markets on or near the Lakes. They 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