Part III

 p339  Chapter VII

And the Aftermath

The rest of my story shall be swiftly told. Primarily I intend this book to be a criticism of the Navy's industrial methods, a voice lifted in the wilderness to cry efficiency and reform. If the account of my experiences first as a naval constructor and then as an independent builder of ships both before and during the war has not established my authority as a critic, no elaboration of events since 1918 will do so.

At first I believed thoroughly that shipbuilding would remain a great American industry. My task was to put the Drydocks on a peace-time footing and be ready for the permanent current of business to follow. In our Government contracts there was no cancellation clause, but we were reasonable about it. Four ships on which only a little work had been done were canceled outright, and we came to amicable arrangements with the Shipping Board about the others.

Ship-repair work rose as a major activity. Many merchant vessels which had been fitted as troop-carriers now had to be reconditioned for commercial use. I determined to get our share of this business, which centered in New York, and opened an office at 120 Broadway. Prohibition had come in, and shipping men liked their drink. I looked around for a convenient place in which I could live while in New York and entertain my customers.

On the eighteenth floor of the McAlpin Hotel were two fine apartments which had been arranged one for Coleman Dupont and the other for his wife. General Dupont was using one of them for his New York headquarters. I took the other. Soon I  p340 had the spacious closets stocked with stuff "right off the boat." I gave many a gay party in those rooms and concluded many a business deal. Here, too, I also began a long and pleasant association with General Coleman Dupont. He gave me a look behind the scenes of national politics.

Thus I secured our quota of the large reconditioning jobs. We were low bidder on the job of reconditioning a Luckenbach ship, getting the contract one Saturday morning on a sharp time-limit. Before I could move the ship toward Baltimore I had to place $1,000,000 on her. I phoned a broker to do so and arranged to start the vessel for Baltimore that afternoon.

About noon the broker called me up to say that owing to the time difference London was closed. Furthermore, Monday was to be a bank holiday in England. In the whole rich United States I could not find ship insurance for a million dollars! As a result, I did not dispatch the ship until Tuesday afternoon, and the delay made a big hole in the expected profits.

In the winter of 1918‑19 the great influenza epidemic struck Baltimore. It was especially severe among our workmen. Baltimore ran out of coffins, and we detailed a force of men in our joiner shop to make caskets for our own dead. We lost nearly four hundred men in that dreadful time.

To keep track of everybody and supply medical attention, medicines, and food, we employed a corps of twelve doctors and observers. Every morning the foremen and bosses checked their men, and, if any were missing, competent observers visited their homes. What amazed us was the poverty we found. Men who had had long, steady employment at the highest wages they had ever made or ever would make, were absolutely destitute. The money had gone for luxuries and amusements. One man had two daughters taking music lessons. He bought two pianos, because "the girls might want to practice at the  p341 same time."

The following summer I went abroad to study world shipping conditions. Sir Andrew Scott, Secretary of Lloyd's General Committee in London, steered me through my researches. He had me to luncheon several times in Lloyd's House, and I saw for the first time how London "City" men talked and acted in their own sphere.

Sir Andrew arranged visits for me at important British shipyards. My first stop was in Newcastle. Demobilized troops were still returning, and all English transportation was jammed. Though I held a first-class ticket, I could not find an unoccupied spot in the train and with a half-crown bribed a guard to let me ride with him in the luggage van.

This guard was a talkative fellow. He told me, now that the war was over, labor was going to get its rights, even though that meant bloodshed. I took him seriously. English railway workers, I knew, were a conservative class. When they began talking of bloodshed, it was time to sit up and pay attention.

In Glasgow I had my first and only experience with a jail — not, I hurry to remark, due to any crime or misdemeanor of my own. Ten days before, my London hotel had wired Glasgow's Central Hotel to hold a reservation for me. I reached Glasgow at ten o'clock at night, only to find no room in the Central Hotel. I asked the clerk why he hadn't let me know in London. He said, "Because the Carlton didn't send a reply-paid telegram." How Scotch!

Nor were there any rooms to be had in all Glasgow, even though I applied to Salvation Army headquarters. My taxicab driver finally suggested a police station — they might put me up in a cell. Even a cell was better than no shelter, but the police sergeant did better than that. He placed me in a comfortable chair before a large fire in the assembly room, and I didn't do badly at all. Next day Dr. Montgomery, Lloyd's representative  p342 in Glasgow, pulled a string or two, and I found myself in the best suite in the Central Hotel.

At a new shipyard at Ayr I first met the post‑war canny policy of Scotch labor. This plant had an excellent lay‑out, but I was struck by the dearth of labor-saving devices. For instance, a mammoth set of plate-bending rolls was without jib cranes for handling the heavy plates. Workmen by main strength rolled them along on large wooden barrels. I asked the manager — whose name, of course, was MacGregor — about this.

"What is the use? he said. "Proper cranes cost two thousand pound. If we put them in, we shall not get a penny off the piece price nor get a plate a day more output. No matter what appliances we put in, the output will not be increased. Why spend two thousand pound?"

From Glasgow I went to Belfast, Ireland, being struck by the magnificent physique of the workmen in the great shipyards there. Mr. Payne, the plant manager, told me that he used gangs of eight men to do work which on the Clyde took gangs of ten. The transportation congestion applied also to the Irish Sea. Only on the long sea route from Belfast to Liverpool could I find accommodations, and I secured a stateroom only by dint of a bribe to the purser.

Back in London I found the Majestic booked full two weeks in advance of her sailing. It took my cable to P. A. S. Franklin, president of the International Mercantile Marine, in New York, and his reply to the White Star Line's office in London to pry loose a stateroom for myself.

But I didn't take that ship home after all my trouble. There were rumblings of a strike on the English railways. Remembering what the guard had told me in the luggage van, I decided to leave England immediately. I managed to secure accommodations of a small Dutch liner, soon to sail at Plymouth, and  p343 canceled my passage on the Majestic.

But I was too late about it. The strike broke suddenly, and not a wheel was turning on any English railroad. It was now extremely questionable whether I could get to Plymouth to catch my ship. That fixer of everything, the dignified hall porter of the Carlton Hotel, procured for me a Lancier limousine with chauffeur and also a seaworthy taxicab for my heavy trunk.

With the tops of the cars loaded with tins of petrol (as there were no filling stations then), I left the Carlton in state at 2:15 P.M. — and, on the narrow, winding English roads and counting a dinner stop at Exeter, it was going to take good driving to reach Plymouth by midnight, the sailing hour. However, we were on the pier at 11:15 P.M. The Dutch boat was late, allowing the taxi to arrive with my trunk in time also. The trip from London cost me $505, nearly twice what the rest of the trip from Plymouth to New York was costing.

From London I had brought back rosy reports. All British shipping men were optimistic for the future. My directors agreed that we must now set our house in order. The war had left us in inefficient shape. Government conditions had turned us into a closed union shop. The first thing to do was to change that. We still had a few Government contracts to finish, which meant that labor leaders could appeal to Washington for assistance. I would have to move by degrees.

Our employment office took on an electrician. The electrical foreman at once discharged him because he didn't carry a union card. When I interrogated the foreman, he said he would work no man who didn't belong to the union. My answer was to dismiss the foreman. The electricians went out on strike.

The labor leaders then "required" every member of our supervisory forces to join a union. Some were members already. My reply was to give supervisors a reasonable time in which to  p344 resign from their unions, afterward we would employ no more union supervisors. At that the great body of our men — between 5,000 and 6,000 of them — went out. Enough remained loyal to carry on our repair work, but all new work was suspended.

For the third time in my career I was confronted with a strike. But this was a different kind. There was no grievance here to be arbitrated and settled amicably. No, it was the straight issue of open versus closed shop, and I knew where I stood on that issue and always would stand. I made no attempt to bring about a settlement.

When the strike had gone several weeks and households were beginning to feel the pinch, I decided that it was time to act. I took full pages in all the Baltimore newspapers and addressed a message to the wives, mothers and children of the striking shipyard workers. It was a short message set in large type, so that even young children could read it. I told them that their breadwinners had been earning in the Drydocks from $75 to $100 a week, then inquired what they were striking about. I knew that when these women realized they had exchanged plenty for want on an issue of whether foremen could be union men, they would send their men back to work.

That is precisely what happened immediately. The men came drifting back. As each was re‑employed, he signed a card stating that he had full knowledge that our plant was an open shop. The local labor leaders, alarmed, began to attack me violently in circulars and pamphlets, hoping to stiffen the resolution of the strikers by appealing to class hatred. But pamphlets couldn't stem the tide. The men were coming back in droves. One advertisement had broken the strike.

The leaders appealed to Samuel Gompers, head of the American Federation of Labor. Mr. Gompers wrote asking me to meet him to at all the strike. I replied in a polite letter that the strike was over — and it was. I couldn't employ all the men  p345 now making application for work.

Next I received a letter from J. Barton Payne, now chairman of the Shipping Board. Mr. Payne directed me to see Mr. Gompers at once; if not, he would have us both in his office and arbitrate our differences. Evidently Mr. Payne had forgotten that the war had been over more than a year. I wrote him, again very politely, that our strike was over and declined to see Mr. Gompers. That ended it.

With an open shop establishment, we now made a rapid return to efficiency. During the war the Washington officials had made a great point of the number of rivets driven in a day by the shipyard workers. Our plant stood at the top of the official list, reporting an output of 44 rivets per gang per hour. That was when the labor unions, with the Government's blessing, were running the show. As soon as we began to run it ourselves, we stepped this output right up to 66 rivets per gang per hour.

When the men were working for "the boys over there" and were being flattered and patted on the back and paid towering wages to do their duty, a gang could drive only 44 rivets in an hour. In peace times, under just good executive management, we found we could increase that output fifty per cent. It must make the "boy over there," the now graying doughboys who went through the mud and blood of the trenches for a soldier's wage, a little sick to read things like that.

Hannevig with his millions was branching out into businesses he knew less well than shipping. He established a bank, an insurance company, a motion-picture company in Norway. He bought the Pusey and Jones plant at Wilmington, Del. He built a large shipyard near Camden, N. J.

Then he got into financial difficulties. Taking a verbal contract with the Shell Oil Company for three tankers at $192 a ton, he ordered material and even began construction of the ships at his yard, when the Shell Company, not having signed  p346 anything, backed out. To get out of his scrape, Hannevig wanted to sell us his big Camden shipyard.

I saw the Shell people. They said they wouldn't make a contract with Hannevig because he was shaky financially. However, if we bought the yard, they would give us the same contract for the three tankers at once and would follow it with an order for three more.

Smelling big profits in this, I dickered with Hannevig and finally agreed on $4,200,000 as a fair price for his yard. Then I telegraphed to Clement Smith to come to Baltimore. He investigated the whole deal and approved it. We went to New York to close with Hannevig.

The Camden yard was encumbered, being in debt to the United States Shipping Board, but Hannevig agreed to deliver it free and clear within sixty days. We agreed to pay down, on signing, $750,000, taking all the stock of Pusey and Jones as our security. Before paying, however, I put the whole proposition up to J. Barton Payne, Chairman of the Shipping Board. Mr. Payne said it was all right and repeated this statement to Mr. Williams, our attorney. Whereupon we signed, and I handed Hannevig a check for $750,000, payable to the Pusey and Jones Corporation, of which Mr. Hannevig was president.

As it turned out, Hannevig was unable to clear and deliver the shipyard property to us. He departed for Norway, leaving us holding the stock of the Pusey and Jones Corporation. Pusey and Jones Corporation was an old, well-established builder of paper-making machinery, but at once we discovered that the corporation's stock was poor security for the $750,000 we had given Hannevig. The company was beset with claims, and for a long time it looked as if the transaction had cost our company the better part of a million dollars.

Thanks to the patience and ability of Clement Smith, the tangled affairs of the Pusey and Jones Corporation were finally  p347 straightened out, and in fact we obtained a valuable property — one that has paid good dividends. So, even in my mistakes Lady Luck was faithful to me. Due to that seemingly unfortunate transaction with Hannevig, I now enjoy a comfortable income.

At this time I made a new arrangement with the Drydocks. My income, counting bonuses, had been huge. I was one of the highest-paid executives in the world. It was a boom-times contract I had forced from the former owners, but now we were settling down to stable conditions. I agreed to terminate the old contract, acquire at a satisfactory price one‑fifth interest in the business, and accept a fixed salary of $100,000 a year. This was a good arrangement both for the company and for me.

It had become my practice to give a big party once a year for my customers and friends, usually on the day of the Army-Navy football game. I had contributed liberally to Naval Academy athletics, and it was easy for me to get all the football tickets I wanted. To the 1920 game I took 88 guests to the Polo Grounds and in the evening gave a party for 148 guests at the McAlpin Hotel.

The party was a supper-dance given in the large dining room and adjacent rooms on the hotel's mezzanine floor. The contraband canvasback ducks came up from Baltimore in suitcases. Contraband liquor flowed from the cocktail shakers wielded by four professional bartenders. Among my guests were a number of professional dancing girls, so that those stagging it would always have good partners.

About two o'clock in the morning the head waiter informed me that the supply of champagne was getting low. I gave him the keys to the closets of my apartment above and told him to end reliable men for it. In the early morning, when the party was over, I was taking twenty guests up to my apartment to have breakfast. Somebody remarked that the elevator boy  p348 seemed a little tight. On the 18th floor near the elevator we discovered an unopened bottle of champagne. A little farther on there was an empty bottle. Evidently someone else had been having a party.

A few days later in Baltimore I received an interesting visitor. He was a United States Secret Service man. A competitor, it seemed, had complained to the Federal Trade Commission that my New York parties were "unfair competition." The Secret Service had investigated. Four of the waiters at my party were Government detectives. The report on the champagne with a subterfuge to secure my keys, so that they might search my apartment. Even the champagne bottles were planted in the hall to throw suspicion on the hotel employees, if I discovered anything out of place in my apartment. My visitor informed me that the Secret Service men had reported that my party was just an innocent football blowout and had given me a clean bill of health.

Big business had ruined me for any relish for lesser affairs. The year 1921 brought the post‑war slump. There were no new ships to build, and even the ship-repair work was falling off. After dealing in millions, it was hard for me to get down to the close figuring needed in small repair jobs — work that had once made me so happy. Perhaps the wish fathered the thought, but I considered that the slump was only temporary.

Clement Smith was of a different opinion. He believed we were in for a serious depression and desired a drastic curtailment of our activities. He was right, and I was wrong. Perhaps I would have seen his point of view and acceded, but he suggested a committee from Milwaukee to help me plan for the future. I had visions of Mr. Oliver Fuller reappearing on the scene. Heatedly I told Mr. Smith that if he was going to have such a committee, he could get a new president. He said that was quite possible for him to do, too. I knew that our long  p349 success­ful association was broken and regretted it sincerely.

I resigned as president. Mr. Smith was elected to succeed me. The director offered me $25,000 a year to remain in an advisory capacity, but I declined. I was the largest individual stockholder in the company, but I also resigned from the board of directors. I insisted that it be recorded in the minutes that I had severed all official connection with the company.

The reason was that I had been doing some fast thinking. I thought I saw the opportunity to turn my dismissal from the Drydocks to my financial advantage.

In assessing taxes the Government would not allow proper deductions for war property that had lost its usefulness, unless one made a bona fide sale of it or scrapped it. It is actually true that the Bethlehem Steel Company put magnificent tools bought for war purposes under the steam hammer and broke them up into get the loss deduction. With no more ships to build there, we had either to sell the beauti­ful buildings of our South Plant or raze them. A sale of the entire Drydocks plant seemed preferable; and the logical buyer, since it had a large plant at Sparrow's Point, was the Bethlehem Steel Company.

By severing all official connection with the Drydocks, I could then serve as a broker, sell the plant to Bethlehem, and collect the commission. Although I alone had been studying this tax situation, I felt that when my former associates examined it, they, too, would realize the necessity for the sale.

I approached Mr. Charles Schwab, and he invited me out to see him at his beauti­ful country home at Loretta, arranging for the Broadway Limited to stop at the village. Mr. Schwab was interested in my proposition, and we arranged a meeting in New York.

For the Drydocks Mr. Smith, Mr. Miller, and Mr. George Weems Williams, the company's attorney, attended the meeting.  p350 I was there but now only as the broker. We found in the Bethlehem office Mr. Schwab, Mr. Eugene Grace, and several of Mr. Grace's principal assistants. Mr. Schwab said he had an appointment and left us in the hands of Mr. Grace.

"Evans," Mr. Grace opened the discussion, "you know me, but these other gentlemen may not. You can tell them I am no trader. I never trade. We have gone into this proposition carefully and have arrived at a figure, which is the top price we can pay."

I smiled inwardly at this. Mr. Eugene Grace is probably the shrewdest trader in the United States.

He named his figure. I merely looked at Mr. Smith and rose from my chair. Mr. Miller and Mr. Williams followed suit.

"Well, thank you, Mr. Grace," I said, "but we won't take up any more of your time. We couldn't possibly consider any such proposition."

Mr. Grace suggested that since I had first taken up the sale with Mr. Schwab, we ought to wait for his return and tell him.

"While waiting," he said, "we might examine some of the details of the proposition."

We sat down again. Discussion started, Mr. Grace and his associates giving ground here and there, admitting that this point might have been over­looked, conceding a possible under-calculation at that point. It was the cleverest dickering I ever heard. At the end of an hour, however, when Mr. Schwab returned, Mr. Grace had come up in his price by nearly a million dollars.

Feeling now that Mr. Grace had reached his real top and would go no higher, I suggested that we withdraw for consultation. Among ourselves I urged immediate acceptance. Mr. Miller was for prompt and final rejection. The most they would do was to agree to consider Mr. Grace's offer further.

 p351  Then, as I expected it would, a study of the tax situation convinced them. On October 1, 1921, my old plant, "The Drydocks," became the Baltimore Drydock Plant of the Bethlehem Shipbuilding Corporation. I received $138,500 in Bethlehem bonds for my commission. This sale ended my active business career — and I was not yet fifty years old.

Soon after this I left Baltimore for good and took an apartment on Park Avenue, in New York. My life during the 1920's was, I suppose, about that of any rich man with much time on his hands. Unfortunate speculations in Oklahoma Oil and the crash in the stock market took over two million dollars of my fortune. However, there was enough left to bring me an adequate income. It may be platitudinous but it is the truth that I am happier now than when I had a million a year.

My wife and I love travel, reading, and study. Interests in Alabama, Florida, Baltimore, Philadelphia and Washington require some of my attention and, because they are widely scattered, more of my time. We spend our holidays in a delight­ful place in the County of Hampshire, •eight miles from Winchester, in England. Here there is a small, seventeenth-century, Tudor house, completely modernized inside. Through the garden runs the little river Itchen, on its way to the Solent. Along the banks run the flower borders — with such flowers as only English gardens know. In the distance smiles a lovely countryside. Contentment and happiness are here, and what more does one want?

The End

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