HOBSON S HARD START
How the Hamilton Steel Master Made His Debut
THE time has long passed when business was thought devoid of romance. It is seen now that the amazing kaleidoscope of modern business offers more intense drama and more picturesque phases than can be found in any other direction: Any man who has won his way to the top rung of the industrial ladder—no matter howr hardheaded and prosaic he may appear—must have lived through experiences that, for sheer interest, exceed anything in fiction. Most of our industrial captains would probably deny this, but catch any one of them in a reminiscent mood and the stories that drop forth will be sufficient proof.
Take, for instance, the story of how Robert Hobson came to go into the iron business and the struggle he had to establish himself there. Mr. Hobson is to-day the president of the Steel Company of Canada and easily figures among the first half-dozen industrial magnates of the Dominion. A little over twenty years ago he knew practically nothing about iron and steel and had absolutely no intention of ever engaging in any business outside of railroading. The story of his jump and of the fight he found himself engaged in is one of intense interest, even when sketched in bare outlines. Perhaps some day Mr. Hobson will be induced to tell it himself. In the meantime, let us present the story as far as it has been possible to trace it.
First Engaged in Railroading
O OBERT Hobson was the son of Joseph Hobson, the famous railroad engineer who left the St. Clair tunnel as a monument to his skill. It was natural that the son should choose to follow in the footsteps of the father, and for twenty years Robert Hobson was employed in the engineering department, first of the Great Western and later of the Grand Trunk. When Charles M. Hays became president of the latter road, he placed Mr. Hobson senior in charge of the engineering department. This necessitated a move to Montreal for both. Robert Hobson had been in Montreal a few days only when he received an urgent message from his father-in-law, Hon. A. T. Wood of Hamilton, to return to that city as Secretary-Treasurer of a new company which had been formed, the Hamilton Iron and Steel Co.
He was not anxious to make the change, in fact, he was very loth to undertake the new proposition. He liked railroading; and he didn’t know anything about iron; he perhaps distrusted his ability to make a success in that line. Nevertheless, after due reflection, he decided to try it and so returned to Hamilton after a stay of only fifteen days in Montreal.
The Company Was Shaky '"pHIS was in January 1896, and the business world after emerging half-heartedly from the black depression of 1893 was slipping down hill again toward the depression of ’97. It was a bad time for business generally; and most particularly bad for the Hamilton Iron and Steel Co. The new SecretaryTreasurer soon found himself in rather a sorry plight.
>■ It wasn’t so much that he knew nothing about iron. The worst feature of it was that the company was in badly involved condition and the plant required a complete reorganization. The formation of the concern dates so far back that it can be stated now without hurting anybody’s feelings that $he promotion had been loosely carried out. A
group of Americans had come and promoted the pi’oposition, interesting Hamilton capital for the most part.
After putting up a plant along the Bay—on the site of the present enormous steel plant—they had drawn out themselves and left the local men holding the bag. It was a rather forlorn proposition all around.
Mr. Hobson had not been on the ground long before he found out a number of things about the concern. He went to the local men who were most heavily interested.
“We’re practically insolvent,” he told them. “There will have to be a reorganization of the company and new capital. That’s your problem. So far we haven’t produced pig iron of a quality that can be sold, so we'll have to completely reorganize our production plans.
That’s my problem.”
The fact of the matter was that the promoters had not attempted to put the concern on a going basis. They had drawn in local capital cn the plea that all Canadian ores could be used. Much of the ore being used when the new Secretary-Treasurer took charge came from Eastern Ontario. These ores were not sufficient by themselves to produce a satisfactory
pig iron, being sulphurous magnetic.
Mr. Hobson’s first step was to go to Cleveland, where he called upon Colonel Pickands, the president of Pickands, Mather & Co., the greatest ore handling concern in the world. He found the Colonel a very courteous old gentleman who had fought with distinction for the North through the Civil War and who carried into business the most highly chivalrous principles. His reception was most cordial.
“Colonel,” he said, “I have just been put in charge of an iron plant that’s in pretty bad shape. I don’t know the first thing about iron and, so far as I know yet, I’m not a business man. So I’ve come to you.” “In that case,” said Colonel Pickands with a twinkle in his eye, “it looks as though we would have to look after you. Just what can we do?”
“All I want is some information,” said Hobson. “I want to find out how to make pig iron.”
Colonel Pickands called in his experts and, when they had found out the kind of pig iron to be produced, they told the visitor what ores to use, where to buy them, and how to combine them to get the desired result. He relied so implicitly on the information thus secured that he proceeded to place orders for the required ores before proceeding back to Canada.
Although there have been close relations between the two concerns ever since, Mr. Hobson never saw Colonel Pickands again. The fine old soldier died shortly after.
Finding a Market Difficult
CO the future Steel president returned to Hamilton ^ with the first of his difficulties solved. He had found out the right kinds of ore to use and he had contracts in his pocket for adequate supplies. The next step was to produce the pig iron. The head furnace man who had been placed in charge by the promoters was a good-natured Southerner and the plant was not well organized or efficiently run. He had to be replaced. In fact, several changes had to he made; and finally the staff was organized on a basis that made satisfactory production possible. The pay roll at this time numbered 112 in all.
Having at last an article that could be offered for sale, the next problem was to find a market. The office staff numbered three—Mr. Hobson, a book keeper and an office boy ;nevertheless the hard working Secretary-Treasurer decided to constitute himself a sales force as well. His first serious effort to secure business took the form of a trip to Montreal. He called first on the head buyer of one of the large manufacturing plants. The man looked at him in amazement when he learned his errand.
“Good Gad. man,” he exclaimed. “Peop e como to Montreal to bay iron, not to sell it.”
This, of course, was a fair statement of fact. Most of the pig iron used in Ganada at that time came from the Maritimes ami from England and Scotland. It came in to Montreal, which thus served as a distributing point for all of Canada.
“I know,” returned the man from Hamilton.” but I am in a position to sell—even to Montreal.’’
He was. The plant was now producing a grade of iron that could be marketed at a price that made it worth while even in the centre of the iron industry. Mr. Hobson returned with orders in his pocket and the first glimmerings of hope in his mind. In the meantime, the company had been reorganized and the name changed to the Hamilton Blast Furnace Co. The difficulties which threatened to swamp the venture at the start had thus been overcome one by one. They were not entirely out of the woods, of course, for times were very bad indeed and business hard to get. The work that fell on the shoulders of the Secretary-Treasurer was enormous, but his capacity was equal to the strain. He was, and still is, a hard worker.
Continued on page 86
Hobson’s Hard Start
Continved f rom page 13
The company paid four per cent, dividends the first two years that he handled it. In 1899, when business conditions had become extremely bright again, the dividend was increased to eight per cent.
The Beginning of Amalgamations
THAT year saw the first of the amalgamations which resulted finally in the present industrial colossus known as the Steel Company of Canada. The Hamilton Blast Furnace Co. joined hands with the Ontario Rolling Mills Co. and the united concern took the name of the Hamilton Steel & Iron Co. Mr. Hobson was made Secretary and Assistant General Manager, the General Manager being C. S. Wilcox who had been in charge of the Rolling Mills. The new company began to make steel, two 15-ton furnaces being erected for the purpose. The company has to-day, by the way, no fewer than 11 furnaces, some of which have a capacity of 70 tons.
Under the new arrangement Mr. Hobson's interest ran most directly to the sales end of the business. Competition was very keen. The .Pittsburgh concerns had pretty well monopolized the market, except for the business that went down East to the Nova Scotia Iron and Steel Co. It was not, therefore, easy work for the new firm to break in.
Bringing Home the Bacon
THERE is at no time a wide spread in the prices of steel. Quotations from various firms can be depended upon to run very closely together and, where there is competition for a big order, the element of personality comes strongly into play. The new steel firm got its first big impetus through a large order secured from the C.P.R. in 1901. Mr. Hobson put the deal through personally.
It was known that the C.P.R. would place an order for the year’s supply of angle bars. This was a big order; big enough to get the firm away to a prosperous and busy year. The first step was to make a number of angle bars to the specifications and figure on the production cost. It was found that an attractive price could be quoted so Mr. Hobson boarded the tran for Montreal without a day’s delay. The next day he saw Alex. Henry, who was handling that branch of the purchasing for the C.P.R., and he took the return train for Hamilton that night with the order in his pocket.
There was jubilation on his return, for Hamilton had been put on the steel map!
The story of the building of the Steel Company of Canada is not the story of Robert Hobson, for a number of men figured in this enterprise as prominently as he did. It is interesting to trace his part, however. The amalgamation was effected in 1910 and he became General Manager and Vice-President, Mr. Wilcox being President. In 1916, the latter was made Chairman of the Board, and Mr. Hobson was promoted to the Presidency. Under the leadership, the concern is showing rapid strides and a future that may be described as boundless lies before. An important development has just been completed in the purchase of 1,600 acres in the coal fields of Pennsylvania to control and safeguard the fuel supply of the company.
Landing the Record Order
EVERY executive has an especial fondness for some one branch of the business and, as stated before, Mr. Hobson’s hobby is the sales department. He has always been a believer in the gospel of “getting out” for everyone from the 'President down and, whenever a real •opportunity for business arrives, he has always been only too glad to clear off his desk and strike out on the trail.
It was decided in 1915 to negotiate for an order of mammoth proportions with the Munitions Board. By building a new open-hearth plant it was reckoned -that the company could produce 8.2 and 9.2 shells for the War Office in large quantities. Mr. Hobson went down to Ottawa and proposed a contract for •eight and » half million dollars!
was taking a tremendous chance. The successful carrying out of this huge contract w-ould depend on the speedy building of the new open-hearth plant and the successful operation of it after it was built. In order to make sure that the plant could be built and equipped on time he had secured options on machinery and supplies in advance. These cost money and, had the deal fallen through, a heavy loss would have resulted. The greatest danger lay, however, in the element of doubt which necessarily existed as to the possibility of producing on time and profitably. Mr. Hobson was “taking a big chance.” Had he failed, his head would have been in the basket.
The deal went through although it took a month to complete it. The Munitions Board was in the transition stage at the time, the reorganization under Flavelle not having been completed. Mr. Hobson dealt with Lord Rhondda and Charles Hitchens and for various reasons these representatives of the War Office held off from signing. Mr. Hobson practically lived in Ottawa and on Pullman trains for the month. It was an anxious time for him because the options which he had placed for machinery and supplies were continually lapsing and, with the machinery market on the rapid upgrade, each lapse meant an advance in price. Finally, how-ever, the contract had been negotiated to a point where it was satisfactory to the Imperial representatives and the signatures were duly appended. The total was eight and one half millions!
Then began a mad scramble to get the plant in shape to start. Many of the contracts were let within a few days of the signing of the order and within a week the work had begun. It was seven months before an actual start could be made but this constituted a record in building a plant of this description.
The initial order was successfully filled within a year and repeats were secured up to the time of the signing of the armistice so that the company used for war purposes over one half million tons of steel.
Unpreparedness in 1913
ONE of the officials with whom he dealt at Ottawa told him on one occasion of a striking evidence of Britain’s unpreparedness for war. They were discussing a certain size of shell which was being made in enormous quantities both in England and Canada at the time.
“The firm I am connected with in a civil capacity,” said this official,” has an order this year for 750,000 of these shells. Of course, there are lots of other orders placed as well. How many shells of that size do you suppose the War Office ordered in 1913? Exactly six hundred!”
In the Staff Lies Success
MR. HOBSON believes that much of the success of the Steel Company of Canada can be traced to the fact that the staff has been very carefully built up and maintained. It is a well-established truth that most men who have scored outstanding successes have achieved their results because of their ability to pick men to work with them. An organization cannot be a one-man concern. In the rush and hurly-burly cf modern business, a carefully organized staff without any weak links is an absolute necessity.
Recognizing this, the Steel Company have always paid close attention to the matter of maintaining a strong personnel in all departments. In the operating branches of the business, the heads have almost without exception been with the company or with one of its component parts for from ten to fifteen years.
Three of the qualities which their men must show to get ahead are, loyalty, capacity for hard work and powers of observation. The first two go without saying. After all, a man does not get far anywhere unless he is prepared to work hard and with the utmost loyalty. On the third score, Mr. Hobson lays special stress. He believes that the man who possesses the power to observe and to put into application what be learns in that way cannot be kept down.