CHAPTER V

THE BUILDING OF THE REAPER BUSINESS

Of all the cities that Cyrus McCormick had seen in his 3,000-mile journey, Chicago was unquestionably the youngest, the ugliest, and the most forlorn. It lacked the comforts of ordinary life, and many of the necessities. For the most part, it was the residuum of a broken land boom; and most of its citizens were remaining in the hope that they might persuade some incoming stranger to buy them out.

The little community, which had absurdly been called a city ten years before, had at this time barely ten thousand people--as many as are now employed by a couple of its department stores. It was exhausted by a desperate struggle with mud, dust, floods, droughts, cholera, debt, panics, broken banks, and a slump in land values. Other cities ridiculed its ambitions and called it a mudhole. Its harbor, into which six small schooners ventured in 1847, was obstructed by a sand-bar. And the entire region, for miles back from the lake, was a dismal swamp--the natural home of frogs, wild ducks, and beavers.

The six years between 1837 and 1843 had been to Illinois a period of the deepest discouragement. There was little or no money that any one could accept with confidence. Trade was on a barter basis. The State was hopelessly in debt. It had borrowed $14,000,000 in the enthusiasm of its first land boom, and now had no money to pay the interest. Even as late as 1846 there was only $9,000 in the State treasury.

Buffalo was at this time the chief grain market of the United States. We were selling a little wheat to foreign countries--much less than is grown to-day in Oklahoma. Hulled corn was the staff of life in Iowa. The Mormons had just started from Illinois on their 1,500-mile pilgrimage to the West, through a country that had not a road, a village, a bridge, nor a well. The sewing-machine had recently been invented by Howe, and the use of ether had been announced by Dr. Morton; but there was no Hoe press, nor Bessemer steel, nor even so much as a postage stamp. And in the Old World the two most impressive figures, perhaps, were Livingstone, the missionary, who was groping his way to the heart of the Dark Continent, and DeLesseps, the master-builder of canals, who was now cutting a channel through the hot sand at Suez.

In Chicago, there was at this time no Board of Trade. The first wheat had been exported nine years before--as much as would load an ordinary wagon. There was no paved street, except one short block of wooden paving. The houses were rickety, unpainted frame shanties, which had not even the dignity of being numbered. There was a school, a jail, a police force of six, a theatre, and a fire-engine. But there was no railroad, nor telegraph, nor gas, nor sewer, nor stock-yards. The only post-office was a little frame shack on Clark Street, with one window and one clerk; and one of the lesser hardships of the citizens was to stand in line here on rainy days.

Prosperity was still an elusive hope in 1847, but the spirit of depression was being overcome. The Federal bankrupt law of 1842 had broken the deadlock, and the Legislature had passed several "Hard Times" measures for the relief of debtors. To such an extent had the little community recovered its confidence that it opened a new theatre, welcomed its first circus, founded a law-school, launched a new daily paper called the _Tribune_, and organized a regiment for the Mexican War.

There were two Chicago events in this year which must have deeply impressed Cyrus McCormick. The first was the arrival of a horde of hunger-driven immigrants from Ireland. The famine of 1846, which had caused 210,000 deaths in that unfortunate island, was driving the survivors to America; and the people of Chicago showed the warmest sympathy towards these gaunt, sad-faced newcomers. Even in the depth of her own depression, Chicago called a special meeting to consider what could be done to alleviate the suffering of the Irish, and gave several thousand dollars for their relief.

The second event was the holding of the great "River and Harbor Convention" in Chicago. This was the first formal recognition of Chicago by Congress, and gave the greatest possible amount of delight and reassurance to its citizens. Abraham Lincoln, who had just been elected to Congress, was there; and Horace Greeley and Thurlow Weed. There was a grand procession in the muddy little main street. A ship under full sail was hauled through the city on wheels. The newly organized firemen, in the glory of red shirts and leather hats, threw a stream of water over the flag-staff in the public square, and Thurlow Weed, in a peroration that aroused the utmost enthusiasm, prophesied that "on the shores of these lakes is a vast country that will in fifty years support one-quarter of a million people." It is interesting to notice that had Thurlow Weed lived fifty years after the delivery of that optimistic prophecy, he would have seen one-quarter of a million school children in the city of Chicago alone.

As a matter of history, the arrival of McCormick was a much more important event for Chicago than the "River and Harbor Convention." He was the first of its big manufacturers. His factory was the largest and the busiest; and the Reapers that it produced were a most important factor in the growth of Chicago. Every Reaper shipped to the West was a feeder of the city. It brought back more wheat. It opened up new territory. The Reaper gave the farmers of the Middle West an ideal weapon with which to win wealth from the prairies. And it established the primary greatness of Chicago as the principal wheat market of the world.

This incoming flood of wheat gave Chicago its start as a railway and shipping centre. Chicago was never obliged to give money, or to lend it, to railroad companies. The railroads came into Chicago without the inducement of subsidies, because they wanted to carry its wheat. And ships, too, came more and more readily to Chicago when they found that they could be sure of a return cargo.

The choice of Chicago as his centre of operations was one of the master-strokes of McCormick's career. At that time, Cleveland, Milwaukee, and St. Louis were more prosperous cities; but McCormick considered one thing only--the making and selling of his Reaper, and he saw that Chicago, with all its mud and shabbiness, was the link between the Great Lakes and the Great West. Here he could best assemble his materials--steel from Sheffield, pig iron from Scotland and Pittsburg, and white ash from Michigan. And here he could best ship his finished machines to both East and West.

Chicago, in fact, and the McCormick Reaper, had many characteristics in common. Both were born at very nearly the same time. Both were cradled in adversity. Both were unsightly to the artistic eye. Both were linked closely with the development of the West. And both inevitably achieved success, because they were fundamentally right--Chicago in location and the Reaper in design.

At the time that he began to build his Chicago factory, Cyrus McCormick was no longer a country youth. He was thirty-eight years of age, and a tall powerful Titan of a man, with a massive head and broad shoulders. His upper lip was clean-shaven, but he had a thick, well-trimmed beard, and dark, wavy hair, worn fairly long. His nose was straight and well-shaped, his mouth firm, and his eyes brown-gray and piercing. In manner he was resolute and prompt, with a rigid insistence that could not be turned aside. He had won the prize in the contest of reaper-inventors; and he was now about to enter a second contest, against overwhelming odds, with a number of aggressive and competent business men who had determined that, by right or by might, they would manufacture McCormick Reapers and sell them to the farmers.

As McCormick had neither money nor credit, it was evident to him that his first step in business-building must be to secure a partner who had both of these. He looked about him and selected the man who was unquestionably the first citizen of Chicago--William B. Ogden. Ogden had been the first mayor of the little city. He had been from the beginning its natural leader. He had built the first handsome house, promoted the first canal, and was now busy in the building of the first railroad from Chicago to Galena.

William Butler Ogden had been born in the little New York hamlet of Walton, four years earlier than the birth of McCormick. To use his own picturesque words, he "was born close to a saw-mill, was early left an orphan, christened in a mill-pond, taught at a log school-house, and at fourteen fancied that nothing was impossible, which ever since, and with some success, I have been trying to prove." Once in Chicago he quickly made a fortune in real estate, and was generally looked to as the leader in any large enterprise that promised to help Chicago.

He was a tall man of striking appearance. At that time he wore no beard, and with his keen eyes, high forehead, long straight nose, and masterful under-lip, he would attract attention in any assemblage. By his hospitality and courtly manners he made many friends for the city. Among his guests were Webster, Van Buren, Bryant, Tilden, and Miss Martineau. And when Cyrus McCormick came to him and proposed the building of a Reaper factory, Ogden was as quick as a flash to see its value to Chicago. "You are the man we want," said he to McCormick. "I'll give you $25,000 for a half interest, and we'll start to build the factory at once."

This partnership helped McCormick greatly. It gave him at once capital, credit, prestige, and a factory. It enabled him to escape from the tyranny of small anxieties. It set him free from contract-breaking manufacturers, who looked upon the making of Reapers merely as business, and not, as McCormick did, as a mission. He now had his chance to manufacture on a large scale; and he immediately made plans to sell 500 Reapers for the harvest of 1848. He built the largest factory in Chicago, on the spot where John Kinzie had built the first house in 1804, and thus once for all was solved the problem of where and how his Reapers should be made.

For two years it was one of the sights of Chicago to see McCormick and Ogden walking together to their factory. They were both tall, powerful, dominating men, and were easily the chief citizens--the Romulus and Remus of a city that was destined to be more populous than Rome.

But they were not suited as co-workers. Each was too strong-willed for co-operative action. Also, Ogden was a man of many interests, while McCormick was absorbed in his Reaper. There was no open quarrel, but in 1849 McCormick said: "I will pay you back the $25,000 that you invested, and give you $25,000 for profits and interest." Ogden accepted, well pleased to have doubled his money in two years; and from that time onward McCormick had no partners except the members of his own family.

Moving at once from one obstacle to another, as McCormick did throughout the whole course of his life, he now began to create the best possible _system_ of selling his Reapers to the farmers. This he had to do, for the reason that there was no means at that time whereby he could offer them for sale. The village blacksmith was too busy at his anvil to become an agent. The village storekeeper was not a mechanic, and was too careful of his reputation among the farmers to offer for sale a machine that he did not understand. Therefore, McCormick bent all his energies to this new task of devising a mode of action. He began to develop what he was apt to call "the finger-ends of the business." And he created a new species of commercial organization which is by many thought to be fully as remarkable as his invention of the Reaper.

First, he gave a _Written Guarantee_ with every machine. He had conceived of this inducement as early as 1842. He "warranted the performance of the Reaper in every respect," and by this means made seven sales in that year. In 1848 he had his guarantee printed like an advertisement, with a picture of the Reaper at the top, and blank spaces for the farmer, the agent, and two witnesses to sign. The price of the machine was to be $120. The farmer was to pay $30 cash, and the balance in six months, on condition that the Reaper would cut one and a half acres an hour, that it would scatter less grain than the grain-cradle, that it was well made, and that the raking off could easily be done from a raker's seat. If the Reaper failed to fulfil these promises, it was to be brought back and the $30 was to be refunded.

This idea of giving a free trial, and returning the money to any dissatisfied customer, was at that time new and revolutionary. To-day it is the code of the department store, and even the mail-order establishments are in many instances adopting it. It has become one of the higher laws of the business world. It has driven that discreditable maxim, "Let the buyer beware," out of all decent commercialism. To McCormick, who had never studied the selfish economic theories of his day, there was no reason for any antagonism between buyer and seller. He trusted his Reaper and he trusted the farmers. And he built his business foursquare on this confidence.

Second, he sold his Reapers at a _Known Price_. He announced the price in newspapers and posters. This, too, has since become an established rule in business; but it was not so sixty years ago. The Oriental method of chaffering and bargaining was largely in vogue. The buyer got as high a price as he could in each case. Among merchants, A. T. Stewart was probably the first to abolish this practice of haggling, and to mark his goods in plain figures. And in the selling of farm machinery, it was McCormick who laid down the principle of equal prices to all and special rebates to none--a principle which has been very generally followed ever since, except during periods of over-strenuous competition.

Third, he was one of the first American business men who believed heartily in a policy of _Publicity_. As early as September 28, 1833, he began to advertise his Reaper; and his advertisement was nearly a column in length. Also, in the same paper, he had a half-column advertisement of his hillside plow. This was publicity on a large scale, according to the ideas of advertising that were then prevalent. Even George Washington, when advertising an extensive land scheme in 1773, had not thought of using more than half a column of a Baltimore paper.

McCormick was an efficient advertiser, too, as well as an enterprising one. When he talked to farmers, he knew what to say. He told the story of what one of his Reapers had done, and named the time and the farm and the farmers. He made great use of the argument that the Reaper pays for itself, and showed that it would cost the farmer less to buy it than _not_ to buy it.

Among the many testimonials that he got from farmers the one that pleased him most, and which he scattered broadcast, was one in which a farmer said: "My Reaper has more than paid for itself in one harvest."

In 1849, when the rush to the new gold mines of California began, he was quick to see his opportunity. This sudden exodus of a hundred thousand men to the Pacific coast meant much to him, and he knew it. It meant a decrease in the number of farm laborers and an increase in the amount of money in circulation. More than this, it meant that Chicago was no longer a city of the Far West. It was _central_. It was the link between the banks and factories of the East and the gold mines and prairies of the West. So McCormick quickly prepared an elaborate advertisement, warning the farmers that labor would now become scarce and expensive, that the coming grain crop promised to be a large one, and giving the names and addresses of ninety-two farmers who were now using his machines.

The fourth factor in the McCormick System was the appointment of a _Responsible Agent_ and the building of a storage warehouse at every competitive point. He did not wait for the business to grow. He pushed it. He thrust it forward by sending an agent to every danger-spot on the firing-line. As one of his competitors complained, in an 1848 lawsuit, McCormick "flooded the country with his machines." He knew that many farmers would be undecided until the very hour of harvest, when there would be no time to get a Reaper from Chicago; and therefore he had supplies of machines stored in various parts of the country. By 1849 he had nineteen of these agencies.

His plan, with regard to these agents, was to fasten them to him by exclusive contracts, which forbade them to sell Reapers made by any other manufacturers. Each agent was given free scope. He was not worried by detail instructions. He was picked out for his aggressive, self-reliant qualities, and the whole responsibility of a certain territory was put upon him. Once a month he made a report; but he stood or fell by the final showing for the year, which he made in October. This plan of leaving his men free and putting them upon their mettle, developed their mental muscle to the utmost. Also, it made them intensely loyal and combative--a regiment, not of private soldiers, but generals, each one in charge of his own province, blamed for his defeats and rewarded for his victories.

The fifth factor in the McCormick System was the _Customers' Good-Will_. For the good-will of other capitalists or for the applause of the public in general, no men cared less than McCormick. But he always stood well with the farmers. "I have never yet sued a farmer for the price of a Reaper," he said in 1848. This heroic policy he pursued as long as possible, knowing the fear that all farmers have of contracts that may lead them into litigation. More than this, he freely gave them credit, without being safeguarded by any Dun or Bradstreet. He allowed them to pay with the money that was saved during the harvest. "It is better that I should wait for the money," he said, "than that you should wait for the machine that you need." So he borrowed money in Chicago to build the Reapers, borrowed more money to pay the freight, and then sold them on time to the farmers.

In some cases he lost heavily, as in Kansas and North Dakota, where the first settlers were driven off by drought. But as a rule he lost little by bad debts. Immigrants of twenty nationalities swarmed westward upon the free land offered to them by the United States Government, and usually each man found waiting for him at the nearest town one of the McCormick agents, ready to supply him with a Reaper, whether he had the money to pay for it or not. As may be imagined, the effect of this policy upon the settlement and welfare of the West was magical. There are to-day tens of thousands of Western farmers who date the era of their prosperity from the day when a McCormick Reaper arrived in all the glory of its red paint and shining blade, and held its first reception in the barn-yard.

One instance of this deserves to be embodied in the history of the Reaper. In 1855 a poor tenant farmer, who had been evicted from his rented land in Ayrshire, Scotland, arrived with his family at the banks of the Mississippi. There was then no railroad nor stage-coach, so the whole family walked to a quarter section of land farther west, not far from where the city of Des Moines stands to-day. The first year they cut the wheat with the cradle and the scythe, and the following year they bought a McCormick Reaper. They prospered. The father went back for a visit to Ayrshire and paid all his creditors. And the eldest son, James, became first Speaker of the Iowa Legislature, then a professor in an agricultural college, and finally the founder of the Department of Agriculture in all its present completeness. To-day we know him as the Honorable James Wilson, the first official farmer of the United States.

There was one other method in the marketing of farm machinery, which seems to have been originated by McCormick--the _Field Test_. As a means of stirring up interest in an indifferent community, this was the most electrical in its effects of any plan that has ever been devised. As a pioneering advertisement, it was unsurpassed. It was nothing less than a contest in a field of ripe grain between several machines that belonged to rival manufacturers. Sometimes there were only two machines, and in one grand tournament there were forty. And all the farmers in the county were invited to come and witness the battle free of charge.

The first of these field tests occurred near Richmond in 1844. McCormick had challenged Obed Hussey, a Baltimore sailor who had invented a practical mowing-machine, and who was offering it for sale to cut grain as well as grass. In this instance McCormick won easily. The judges said that while the Hussey machine was stronger and simpler, having no reel nor divider, the McCormick Reaper was lighter, cheaper, scattered less grain, and was better at cutting grain that was wet and in its method of delivering the grain.

"Meet Hussey whenever you can and put him down," Cyrus McCormick wrote to his brothers. In one letter, written the following year, he is so enthusiastically aggressive in the pursuit of Hussey that he proposes to his brothers a grand final contest. Hussey is to be dared to sign an agreement that in case of defeat, he will pay McCormick $10,000 and become the Maryland agent for the McCormick Reaper. McCormick, on his part, is to agree that if he is beaten he will pay Hussey $10,000 and become the Virginia agent for the Hussey machine. Nothing came of this confident proposal, either because it was not put into effect by McCormick, because Hussey refused to accept it.

But the field test flourished for more than forty years. It did more in the earlier days than any other one thing to make talk about the Reaper and to move the farmers out of the old-fashioned ruts. It provided the vaudeville element which is necessary in salesmanship where people are not interested in the commodity itself. As often happens, it was in the end carried too far. It became the most costly weapon of competition. It introduced all manner of unfairness and often violence. The most absurd tests were frequently agreed to. Mowers would be chained back to back and then forcibly torn apart. Reapers were driven into groves of saplings. Machines of special strength were made secretly. And so the warfare raged, until by general consent the field test was abandoned.

These six factors of the McCormick System became the six commandments of the farm machinery business. They were largely adopted by his competitors, and exist to-day, with the exception of the exclusive contract and the field test.

By 1850 McCormick had not only solved the problem of the Reaper; he had worked out a method of distribution. He had established a new business. But even this was not enough. He was now beset by a swarm of manufacturers who sought to deprive him of his patents and of a business which he naturally regarded as his own. It remained to be seen whether he could stand his ground when opposed by several hundred rivals; and whether he could duplicate in the courts the victories that he had won in the fields.