factures have, indeed, always been diversified and thrifty; and the Cleveland Rolling Mills Company was early one of the most progressive and prosperous manufacturers of finished steel products in the United States. But as a producer of steel the Cleveland district has never competed except in a small way with Chicago or the Pittsburgh district. Consequently in obtaining an interest so early in the sale, the transport and the handling of the basic materials necessary to the iron and steel industries, Rhodes & Co. established themselves under Mark Hanna's direction near the heart of Cleveland's growth and prosperity.

The extension of the business of Rhodes & Co. mentioned above was effected soon after Mark Hanna's entrance into the firm. Before 1870 a regular iron ore transport service was established, in which were interested, not only Rhodes & Co., but the three partners individually and Howard Melville Hanna. For many years Melville Hanna was associated with his brother in many ship-operating and ship-building enterprises, although this association did not include the other branches of Mark Hanna's business. Melville Hanna was an expert in both the technical and the commercial aspects of lake transportation and his coöperation was invaluable.

Another useful associate in his early venture in the transportation of iron ore was the Cleveland Iron Mining Company. This corporation was one of the largest shippers of ore in the Lake Superior district. A contract was made with the company for the transportation of its ore for three years, and on the strength of this contract four steamers and four tows were built and operated. Each of the several partners of Rhodes & Co., except, perhaps, Mr. Warmington, also owned and operated vessels for his individual benefit. One ship, owned by Mark Hanna and his brother, was named Leonard Hanna after their father. Eventually the Cleveland Transportation Company was organized to conduct this branch of the business, and later still the early association was dissolved and the Orient Transportation Company was formed, which assumed ownership, not only of all the original fleet, but of a number of new vessels.

In the meantime the other aspects of the business were not being neglected. Under modern conditions water transpor

tation is only to a very small extent independent of transportation by rail. It was just as essential for a firm like Rhodes & Co. to have advantageous connections with railroads as it was to control mines and vessels, for almost all of the materials it produced, manufactured, sold on commission or carried by water was handled by a railroad at some point of its transfer from the mines or furnaces to the consumer. The Pennsylvania Railroad Company was inevitably the corporation with which Rhodes & Co. had most reason to be closely associated. It was the company which owns the roadway leading from the firm's mines to Lake Erie. It was the only company which at that time could convey the ore brought by boat from Lake Superior to the furnaces of western Pennsylvania. Close relations were consequently established with this railroad early in the seventies, and they have continued until the present day. The firms of Rhodes' & Co.1 and M. A. Hanna & Co. have always been known as Pennsylvania Railroad shippers. Of course, their business was not exclusively transacted with that company, but it was their first choice. The firm in which Mr. Hanna was a partner has always stood for the Pennsylvania interest on the south shore of Lake Erie. Mark Hanna himself became a director both of the Cleveland and Pittsburg Railroad, (one of the Pennsylvania's leased lines) and later of the Pittsburg, Fort Wayne and Chicago.

His firm profited very much from this connection. It leased the docks of the Pennsylvania Railroad Company at Ashtabula on the south shore of Lake Erie about sixty miles east of Cleveland, and much of the ore shipped from the Lake Superior dis

1 The firm continued to conduct its business under the name of Rhodes & Co. until 1885, but in the meantime Mr. Hanna's interest in it was constantly being increased. In 1875 Leonard Colton Hanna, Mark's youngest brother, entered the firm; and at about the same time it was joined by James Ford Rhodes, another son of Daniel P. Rhodes, and subsequently the historian of the United States from the Compromise of 1850. In the meantime Mr. Robert R. Rhodes and Mr. Warmington retired, and in 1885 Mr. James Ford Rhodes also withdrew. Thereafter the Rhodes interest was eliminated, and the firm name became M. A. Hanna & Co. Mr. A. C. Saunders was at one time admitted to partnership, and at a considerably later date, but during his father's life Mr. Daniel Rhodes Hanna entered the firm.

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