THIS BOOK IS THE GIFT OP Henry Pelouze de Forest Class of 1884 Cornell University Library arW8630 The pulse of the organization, illilli 3 1924 031 473 345 olin,anx « Cornell University B Ubrary The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924031473345 The Pulse of the Organization Edited by Leonhard Felix Fuld, LL. M., Ph. D., Educational Director, Bond Department, Henry L. Doherty &- Company, New York @ New York Henry L. Doherty &■ Company, 1920 Copyright 1920 By Henry L. Doherty &- Company This is No. of 750 numbered copies PREFACE During the past year a committee of executives of the Doherty Organization planned a course of lectures which were delivered to the employees of the Organization on Tuesday afternoons on Company time in an auditorium located near the central office of the Organization. Each member of the Organization, from the members of the co-partnership and the heads of department to the youngest recruit among the junior clerks attended these meetings. In selecting the subjects of the addresses, and in assigning mem- bers of the Organization and in inviting outsiders to address the Organization, an effort was made to furnish to the em|)loyees material which was both inspirational and educational in character. The object sought in the inclusion of each address in this series was stated by the chairman at the commencement of each address, and these introductory remarks of the chairman have been reprinted at the commencement of each chapter of this volume. Each address was reported stenographically. A copy of the address in printed form was distributed to each member of the Organization shortly after the delivery of the address for careful study and permanent preservation. In the hope that this collection of addresses may be found to con- tain some information regarding the Doherty Organization which will be of interest and of practical value to the friends of the Or- ganization and to those who are professionally concerned in the problems of personnel administration, a few sets of these addresses have been bound in book form. LEONHARD FELIX FULD 60 Wall St. New York CONTENTS Cluqiter 1. Personal Business Assets Introduction. Personnel Problem. Co-operation. Service Spirit. Physical Health. Loyalty. Initiative. Broad Perspective. Self- Development. Reasoning Power. Imagination. Self-Development. Personal Overtime. Personal Questions. Chapter 2. Health of the Worker. Introduction. Ignorance and Indifference. Anatomy of Ineffic- iency. Constructiton Too Light or Two Heavy. Muscular Weak- ness. Poor Chest. Weak Feet. Poor Posture. Posture, Economic Value and Efficiency. Walking Advertisements. Conclusion. Chapter 3. General Plan and Description of the Doherty Organi- zation. Mr. Doherty's Early Days. At Madison and Denver. Denver Receivership. Evening Meetings. Doherty Rate. American Light and Traction Company. Henry L. Doherty & Company. Gas Se- curities Company. Cities Service Company. Natural Gas and Oil. British Holdings of Preferred Stock. Financing New Properties Doherty Pay Roll. Man Problem. Responsibility to Stockholders. The Operating Properties. Local Capital. The Bond Department. The Future. Oil Business. Doherty Characteristics. A Self-con- tained Organization. Furnishing Service. Rapid Growth. Chapter 4. Organization of the New York Office Introduction. Brain of the Organization. The Executives. Public Utility Operations. Oil Operations. Bond Department. Banking Department. Auditing Department. Treasury Department. New Business Department. Statistical Department. Corporation Department. Budget Department. Transfer Department. Filing Department. Publicity Department. Stenographic Department. Woman's Department. Personnel Department. Conclusion. Chapter 5. Mexico and the Americans Introduction. Havana Harbor. Progresso. Sisal Plantations. Yucatan Pyramids. Vera Cruz. Mexican Embroidery. Pulque. Lovemaking. Mexico City. Iron Man of Mexico. National Museum. Emperor Maximilian. Mexican White House. Monument, of Independence. Markets. Canals. Church of Guadaloupe. Bull Fighting. Isthmus of Tehuantepec. Mining Section. Mexican Flag. Chapter 6. The Doherty Spirit Introduction. A Small Beginning. An Importatn Trip. The Days of 1907. Expansion. Perpetual Growth. Delegation of Responsibil- ity. Promotion of Employees. Personal vs. Organization Ambition. Boosting. Unselfishness. Men Who Have Succeeded. Opportunities for Women. The Future. Opportunities for Advancement. Courage. Improvement. The Story of the "Big Mogul." The Story of "Freshie." Personal Troubles. The Spirit of Unrest. Selfishness. Love of Ser- vice. A Slogan. Chapter 7. Fundamentals of Electricity Introduction. Fundamentals. Static and Dynamic. Motion Dynamo. Motive Power. Water Power. Engines. Switch- boards. Uses. Chapter 8. Cities Service Finance Where Does the Money Go? We Will Start a Business of Our Own. We Raise the Money. We Take Common Stock and Some Risk. Busi- ness is Good. The Business Gets Ahead of Us. Splendid Profits but Little Cash. Plant Extensions Run Us into Debt. Still We Need More Money. So Much Business We Don't Know What to Do. We Want to Rent Some Money. We Sell Some Preferred Stock. The New Capital Cost Us 8%. We Sell Some Bonds. We Keep Going Ahead. We Make it a National Enterprise. We Need to Finance at Wholesale. We Form a Holding Company. We Sell Preferred Stock of the Holding Com- pany. Cities Service Company. Cities Service Company Goes on Too. Cities Service Common Stock. Cities Service Preferred Stock. Cities Service Preference "B" Stock. The Rental Value of Capital Changes. Chapter 9. The Toledo Traction Situation Introduction. City of Toledo. Newsboys Association. Toledo Railways and Light Company. Electric Department. Gas De- partment. Railway Department. Early History. Purchase by Doherty. Fare Controversy. Free Rides. Publicity Campaign. Federal Injunction Proceedings. Labor Troubles. Ouster Proceed- ings. Return of the Cars. Service at Cost Plan. The Future. Conclusion. Chapter 10. The Natural Gas Industry Introduction. What is Natural Gas? Gas Fields. Production, Transportation and Distribution. Canadian Group. Ohio Group. Oklahoma-Kansas Group. History. Pipe Lines. Rates. Financing. Chapter II. The Bond Department Introduction. Organization. Trading Room. Division of Account- ing and Bookkeeping. Division of Refunding and New' Issues. Div- ision of Branch Offices. Division of Publicity, Complaints and Cor- respondence. Division of Sales and Underwriting Syndicates. Div- ision of Commission Claims. Division of Outgoing Mail. Division of Bonus Commission Claims. Division of Consumers Ownership. School for Securities Salesmen. Office Routine. The Manager. Chapter 12. New York Traction Problem Introduction. The Toledo Situation. Past Conditions. Dangers of Bankruptcy. Transfer System. Leased Lines. Two Cent Trans- fers. Zone Fares. Restrained by the City. Disintegration. Rapid Transit Lines. Five Cent Fare. Readjustment of Contract. Single Operating Company. Flexible Fare. Cost of Service Plan. Valu- ation of Property. Municipal Operation. Strikes. Lack of Cooper- ation. Chapter 13. Employees' Question Box Slow Advancement. Desirability of a Subsidiary. Overhead on Construction Jobs. Status under Anti-Trust Act. Doherty Employees in Doherty Training Schools. Obtaining an Accounting Position. Advancement of the Non-College Man. Production of Oil in Louisiana. Shooting an Oil Well. Encouragement of Savings. Chapter 14. Advancement in the Organization Introduction. The General Staff. Opportunities in the Field. Promotion Policy. Love of Work. Advancement of Henry. L. Doherty. Other Examples. Future Growth. Stewardship. Suggest- ions Welcome. Builders vs. Carpenters. Personal Differences. Win- ning the Game. Doherty Spirit. Unconscious Advancement. Am- bition. CHAPTER ONE PERSONAL BUSINESS ASSETS. By HORATIO N. DRURY, of the firm of Pace &• Pace, New York Introduction. The subject upon which I have been asked to make a few observations is "Personal Business Assets." There are three major con- siderations that at the very outset of my remarks I would call to the attention of every young employee in this Doherty audience who expects to make any aspect of organized effort his or her life work. These con- siderations relate, first, to the personnel problem of nearly every enter- prise; second, to the spirit of cooperation; third, to the spirit of service. A sound grasp of these basic phases of modern business, whatever the nature or the size of the concern, is, in my opinion, an absolutely essen- tial prerequisite to the attainment of success. In introducins the lecturer. Dr. Fuld said: The Doherty Organization has been Tery successful, astonishingly so, and this success has been entirely due to the quality of its personnel, to the kind of men and women who are working with the Organization. There is a reason for this. In most Organizations, the ambitious employee must wait for dead men's shoes. And it seems to the ambitious employee that men never die and seldom resign. That is not true of the Doherty Organization. This Organization has been growing so rapidly, and is growing so rapidly at the present day, that every employee must be ready to go up at all times. It is almost true that the employee who cannot go up in the Doherty Organization must go out. But in order to go up, the employees must be able to deliver the goods, and with H view to assisting the employees of the Organization in delivering the goods this series of Tuesday afternoon addresses has been arranged. Today we have with us Horatio N. Drury, who will speak to us on the subject of "Personal Business Assets." Mr. Horatio N. Drury. PERSONAL BUSINESS ASSETS Personnel Problem. The most important problem that faces every organization of the present day is the problem of personnel. Its im- portance from the organization viewpoint is due to the fact that the suc- cessful progress of every business concern depends upon the character, the training, and the competency of the men and women that perform or direct its activities. If the business is to expand and at the same time become more and more cohesive, systematic provision must be made for the steady inflow of new employees and the equally steady development of employees who have already demonstrated their worth. Once this problem is slighted, the enterprise begins to become stagnant, and the seeds of future decay are sown. It is no wonder, therefore, that prac- tically all future-building firms of the present day are devoting much time, energy, and money to the selection of competent employees, to their vocational adjustment, and to their developmental training through study and practical experience. This matter of personnel is, of course, a vital matter from the view- point of the individual member of it, whether man or woman ; for making the proper kind of business connection means not only an immediate earning capacity, but also the opportunity for usefulness, for develop- ment, and for economic satisfaction. And, so, as regards the develop- ment of personnel, the interests of employers and employees are, in a large sense, one and the same. Cooperation. The personnel problem suggests a word or two about the new spirit that to-day marks the economic relations between employers and employees — the spirit of cooperation. A new preposition has come to the forefront in connection with the verb "work." It is the prepo- sition "with" — not the preposition "for," not the preposition "under," — both "for," and "under" being reflective of conditions existing in a commercial age that is rapidly disappearing. Not long ago I asked a bright-faced office boy (he was not chewing gum, by the way) in a certain organization, what his duties were. He replied at once, "I'm working with Mr. Blank," naming the head of an PERSONAL BUSINESS ASSETS important department. This youngster was working "with" Mr. Blank, mind you, not "for" or "under" him. I predict big things for that lad, because he has fully grasped the cooperative spirit of to-day ; and by the same token I shall not be surprised to hear of the further advancement of Mr. Blank himself. A common-sense analysis of present conditions proves that the co- operative spirit between employers and employees has come to stay as being the only sensible and decent way of working together. Yet candor compels me to remark that many employees apparently think that all this talk about and insistence upon cooperation is a pose of the employers to get more and better work done. While increased productivity undoubt- edly occurs in an organization reflecting the "all-of-us together" spirit, the great majority of employers, who, after all, are human beings and not ogres, believe in cooperation fully as much for the sake of their em- ployees as for their own sake; for cooperation develops morale, and morale is the invisible power that enables every person in an organization to do his work efficiently and enthusiastically. Service Spirit. Just as the cooperative spirit characterizes the relation between employers and employees, just so the spirit of service — genuine, generous service — characterizes, or should characterize, the present- day relations between progressive enterprises and the purchasing public. The pronouns "I" and "we" have largely given way to the pronoun "you." Instead of trying to do something "to" prospective purchasers, business concerns try nowadays to do as much as possible "for" them. This spirit of service many organizations have found to be more of a business-holder and a' business-builder than is even the quality or the price of the wares offered for sale. And so every young man or young woman who aims to go fast and far in business must realize at once that the more intelligently and sympathetically the interests of prospective purchasers can be interpreted and provided for, the bigger the reserve of goodwill that is being stored up to the advantage of the organization ; and goodwill is, of course, in many respects the greatest single asset that any kind of enterprise can accumulate. PERSONAL BUSINESS ASSETS I now pass on to a rapid survey of a few personal business assets — only a few, of course, because the time at my disposal is limited. Physical Health. I put physical health first. Nowadays there is a keen realization of the close connection between bodily fitness and the quality of mental output. Do you recall the old Latin motto, "Mens sana in cor- pore sano" ? Its meaning, "A sound mind in a sound body", certainly applies to modern business life. And there is no logical reason why most of us should not secure and maintain good physical health. Tennis, golf, swimming, gymnasium work, walking — most of these and similar oppor- tunities for physical exercise are available to us all; and we have only ourselves to blame if we permit ourselves to become fat and flabby, and short of breath. Guard, then, your physical health — Personal Business Asset Number One. Loyalty. Directly after physical health I put another totally different kind of personal business asset — loyalty. There are two kinds of loyalty — active and passive. It is only the actively loyal employees, those who believe in the concern they work for, in its wares, its objectives, its meth- ods, and who in what they say and do reflect that belief, that can be termed truly loyal. Loyalty does not mean a disposition to refrain from constructive criticism as respects what you consider to be errors of meth- od and management, so long as you express your views to a respon- sible executive within the organization itself; but loyalty does mean that, so far as the outside world is concerned, you have only words of praise for your employers and the things they are trying to accomplish. Permit me to read an editorial on Loyalty written some time ago by Homer S. Pace, C. P. A., of the organization with which I am personally associated : "Loyalty — what is it? We define the term as devotion to the interests of another — a friend, a sweetheart, or a wife; or devo- tion to the interests of an ideal or an organization — a political party, a business enterprise, or one's country. No sweeter or more wholesome word have we in all the reaches of our mother tongue — a word that expresses constancy, honesty, self-sacrifice, PERSONAL BUSINESS ASSETS affection, and devotion. "Loyalty is a reciprocal quality that knits and holds together the modern business organization. The organization seeks men and women who can become interested in its aims, in its pro- cedures and in its product, and who can work whole-heartedly with their official superiors and with their associates. In short, it seeks men and women who have loyalty, potential or de- veloped. "The employee, on the other hand, seeks to associate himself with the organization that is loyal to its employees— =■ the or- ganization that honestly endeavors in the wage scale, in salary adjustments, in profit distribution, and in educational and other welfare work, to apportion returns on the basis of the effort contributed by each worker. In fine, the employee desires to work with the organization that loyally seeks to promote his interests. "Cultivate loyalty as part of your business education. When the temptation arises — and it will arise times without number — to criticise adversely your organization, your department, your chief, or your associate for the mere sake of airing a supposed grievance, don't do it — be loyal. Focus your energies and your interest and your hopes on the task in hand and on the organization of which you are a part, to the exclusion of competing and distracting ideas — ideas that stifle your development and retard your advancement. Loy- alty to a task or to a chief has carried many a man over dangerous vocational crises, and led him into a position ot re- sponsibility. Nuture and develop this fundamental equality of friendship and success — loyalty, whole-hearted loyalty — in order that the wholesomeness of its qualities may brighten and better your life." Loyalty, then, I regard as Personal Business Asset Number Two. Initiative. Another important quality to be developed by all young men and women who have not yet proved their value is initiative. The trouble with many departmental employees is that, once they have learned the required way of doing their daily work, they give no thought to the respects in which they might improve conditions and methods. Hence they are likely to become mere groove-fillers, rut-dwellers. They should often ask themselves two questions : "Why am I supposed to do this particular piece of work in this way ?" and — "Is there any better way of doing it?" PERSONAL BUSINESS ASSETS An honest attempt to answer these questions will develop the creative faculties — will produce new ideas ; and new ideas are at a greater prem- ium in all divisions of the business world to-day than ever before. So do your daily work, no matter how routine in character, intelligently, thinkingly, and thereby develop initiative — Personal Business Asset Num- ber Three. Broad Perspective. It is not enough in these days of complex and many-sided enterprises for ambitious employees to content themselves with performing narrow-range duties in a manner acceptable to the or- ganization. If they would qualify for advancement to positions of execu- tive responsibility, they must develop not only a broad perspective of the interrelations of the various departments of the concern as a func- tioning entity but also a broad perspective of the fundamental principles and characterizing processes and procedures of business as a science. In this connection, permit me to read something that I once wrote on this very matter: "This is the age of specialization in business, for it is by tneans of specialization that the greatest profit returns are secured. Every large business organization is divided and subdivided into departments and sub-departments, with relatively few managerial positions, and with scores of routine positions filled by routine employees. Each functions in his own narrow groove with no opportunity of widening his persipective of the work of the organization as a whole. "The bookkeeper posts away at his ledger, thinking only of the schedules that must balance. The stock clerk earns his weekly wage by checking up invoices of goods purchased and bills of goods sold, with now and then an inventory of goods on hand. The cashier thinks by day and dreams by night of petty cash, pay rolls, discounted bills, and extensions of notes. The salesman frets over his failure to sell X, Y and Company in the town of Z a double order of worsted fabrics, and spends his mental energy in devising' new methods of selling approach. The publicity man puts his mind day in and day out on newspaper space, pictorial booklets, display type, and special advertising campaigns. "And so it goes, each employee doing his particular work, and trying to do it well, in order that the monthly report of each de- partment to the General Manager may show that it is doing its share in the attainment of the profit object of the organization. PERSONAL BUSINESS ASSETS "Specialization has come to stay, and will doubtless be carried to even greater extremes in the future as enterprises continue to develop and become more complex. There are, however, to-day many signs of the growing conviction on the part of business organizations themselves that individual specialization must be accompanied, or, better still, preceded, by the development of in- dividual perspective. "The progressive business organizations of the present day have come to realize that their future business development — in fact, their future business existence — depends upon the development of managerial capacity in their individual employees. Many organizations, indeed, have turned schoolmaster, and are con- ducting classes on company time and at company cost in order to give selected groups of their employees a broad perspective of business as a whole and as applied to the particular needs and conditions of the organizations themselves. All this is being done because it is realized that no man can be an efficient executive unless he views business in a broad manner." Therefore, give heed to the necessity of studying the activities of your organization in a broad way — develop a broad perspective — Personal Business Asset Number Four. Reasoning Power. No less important than the development of broad perspective is the development of reasoning power — development of the ability to think consecutively and logically. It is astonishing how com- paratively few persons there are, regardless of the extent of their aca- demic training, who, on the basis of a given accumulation of data, can reason straight ahead from sound premises to an inescapable conclusion, uncolored by sympathy, bias, or prejudice. It is a pity that such is the case, for business opportunity is close at hand for all men and women who have demonstrated their ability to assume responsibility on the basis of sound thinking. On this matter, too, I had something to say in a pamphlet which was printed last year, as follows ; "The policy of specialization has not only narrowed the business perspective of the vast majority of organization employees, it has, worse yet, dulled their reasoning power by making it un- necessary for them to think out why they are required to do specified things in a specified way. Many an organization ex- ecutive has short-sightedly said in effect to his subordinates : 'I PERSONAL BUSINESS ASSETS will do the thinking for this department; all you have to do is to follow directions.' Such an attitude, very general until the past few years, has produced the inevitable result — men who cannot think and reason, because they have never been required to think and reason. "To-day the most progressive business enterprises are under- going a complete change of heart in respect to developing the reasoning power of the members of their organization staffs. No one person or group of persons can possibly know all there is to know even about one kind of business. There is an urgent need of men and women who can promote, finance, manage, suggest, and originate ; men and women who can increase sales, reduce ex- penses, devise productive policies, detect errors and rectify them, analyze past records and forecast future development, swell profits expected, and create profits unexpected; men and women who can collect facts and observe facts and figure out facts; and base sound conclusions upon such facts; men and women who can and do think and reason. "To develop such men and women within the organization itself is now a widely accepted policy of business management; and so every progressive business organization is on the alert for keen-minded, ambitious young men and young women who are intent, not only on doing their daily work well, but on push- ing ahead as rapidly as their own developed reasoning power will warrant. This is the new spirit in Modern Business, and Modern Business itself is responsible for it." So give thought to the connection between your individual ad- vancement and the development of reasoning power — Personal Busi- ness Asset Number Five. Imagination. If you aspire to positions of high executive responsibility, you must develop imagination. There was a time when imagination or vision — call this quality whatever you choose — was considered to be the exclusive possession of the poet, the dreamer, the visionary. That time is now happily past, for, in many respects, the big business men are the greatest poets of all. They dream dreams and see visions of future accomplishment on the basis of present conditions and past development. This is true of every worth-while business organization that has reached a position of wide usefulness and financial stability ; it is true, indisputably true, of your own organization. I was deeply in- PERSONAL BUSINESS ASSETS terested in an ejctremely informative and inspiring article on the Do- herty Organization which appeared in The American Magazine a few months ago. Read that article and see for yourselves how your present great Organization is the realization of the early dreams and visions of Henry L. Doherty. Moreover, I venture the opinion that Mr. Doherty and his associated executives are still dreaming — dream- ing of new tasks to be performed, new markets to be conquered, new ideals of service to be made effective. When a business gets to the point where all its dreams have been unfolded and realized, what you might call mental gangrene begins to set in — retrogression be- gins to occur ; for there are only two kinds of movement possible for the individual or the business firm — forward or backward. There is no such thing as standing still. Your organization is, of course, going for- ward — leaping forward, almost ; hence the reasonableness of the assump- tion that it is still being guided by dreams and visions of increased use- fulness. Visualize, then, the history of your organization; familiarize your- selves with what it, as a whole, has done, is doing, and is planning to do; become economic dteamers by developing imagination — iPer- sonal Business Asset Number Six. Self~Development. All that I have said suggests my next point — self- development. There are two ways of securing the kind of mental de- velopment, including, of course, usable knowledge, which is at a high premium during this post-war period — through observation and experi- ence exclusively, and through study practically applied. The first way — the Observation and experience way — usually in- volves a heavy cost of time and judgment-revision before the in- formation thus acquired can be transmuted into accurate and useful knowledge. In the opinion of forward-looking executives, self-de- velopment to-day comes primarily from study. Listen to what Frank A. Vanderlip, for many years president of the National City Bank of New York, and a distinguished economist, once said : "The changed scope, character, and methods of modern busi- ness have united to demand men with a training superior to PERSONAL BUSINESS ASSETS anything that was ever needed before as the successful com- mercial leaders of the future. That training cannot be had in the highly specialized processes, of the routine work of the office. The practical school of experience is too wasteful as a teacher of general principles. There will, of course, be the ex- ceptional man who will come up through that routine training and dominate his field by the force of his intellect, but in the main the new condition of affairs demands a superior training such as only the schools can give." So begin now to interpret your stages of advar^cement in terms of supplementary courses of intensive, purposeful study, which is sure to produce self -development — Personal Business Asset Number Seven. Personal Overtime. Last of all, permit me to point out that for the big majority of employed men and women, self-development depends upon the use that is made of spare hours, personal overtime. Analyze the reasons for the success of any business leader, and you will find that he made productive use of the time that most people are wont to fritter away in one fashion or another. I have long felt so strongly on this matter ithat I once wrote a booklet entitled "Your Personal Overtime." Here are a few excerpts from it : "By personal overtime I mean those many hours outside the compass of the time properly devoted to one's regular occupa- tion, to legitimate and desirable recreation, and to sleep — hours which all too often mean idleness, dissatisfaction, discourage- ment, temptation, and perhaps folly, vice and crime, but which ought to mean intelligent utilization in terms of future efficiency and a future increase in earning capacity. Personal overtime of this kind — one hour of it a day means 6 hours a week and 312 hours a year, and two hours a day means 12 hours a week and 624 hours a year. What an aggregate ! What a power for good or for evil ! "Think of what you can do for your own advancement with all that personal overtime at your disposal I With the country- wide spread of evening educational and training courses of all kinds for the man employed during the day, it is only the man himself who is at fault if he remains mentally stationary year in and year out. "In my own circle of acquaintances I know a vice-president of a big lumber firm who was once a planer in a saw-mill; a cashier of a trust company who was once its messenger; a bank presi- PERSONAL BUSINESS ASSETS dent who was once a typist and stenographer ; a successful lawyer who was once a truck driver ; a doctor with a specialist's practice who was once the proprietor of a cheap stationery store; a college professor who was once a night telegraph operator ; a civil engineer with -a consultant's clientele who was once a dry- goods clerk; an architect of wide fame who was once a stone- cutter; a certified public accountant who was once a 20-dolIar a week bookkeeper ; and a United States Senator who was once a newsboy and bootblack. "And what is perhaps even closer to the point, I can name hundreds of men in the business and the professional worlds to- day who have already won success only a little less exceptional because they have made their personal overtime their servant and not their master. "It is not difificult to set forth at least some of the rewards of the intelligent utilization of one's personal overtime. First of all, there is the matter of financial reward. The better trained the man, tha greater the demand for his service, and the larger his salary. In the second place, there is the reward of a righteous self- satisfaction at a worthy success worthily won — the satisfaction at being spared the ignominy of vain regrets beginning with, 'I had the chance but — ,' 'or if I hadn't been, a fool, I'd — .' And lastly, there is the satisfaction reward of having rendered a measurt of real service to humanity in general — the satisfaction of having done something to lighten the load on the other fellow's back and to kindle again the light of hope in his eye. "Isn't is worth while — this matter of thinking seriously about your personal overtime, young man? Where do you expect to be in the business world to-morrow, next year, five years from now, ten, tw'enty, thirty, when your shoulders have begun to droop and your legs have lost their spring and you find yourself every day looking forward to settling your tired body in the easy chair in front of the crackling fire on the hearth? What are you doing to ward ofif stagnation, deterioration, final and down- right failure? "How are you equipping yourself now in the days of your youth to climb the ladder of success rung by rung? Wherein are you better fitted this month than you were last month for that position ahead which you seek, because its salary is so much better than what you are now getting? Think about these things, think about them hard. And when questions beginning with 'How,' surge through your mind, see if the answer to them all isn't 'my personal overtime.'" Personal Questions. Now permit me to make a very personal reca- pitulation of the thoughts that I have laid before you under the title of "Personal Business Assets." Let the recapitulation take the form PERSONAL BUSINESS ASSETS of eleven pointed questions: 1. What are you doing to help solve the personnel problem of the Dohcrty Organization in its dealings with the purchasing public? 2. To what extent are you exemplifying the cooperative spirit of the Doherty Organization in your daily contacts with your associates? 3. Have you fully grasped the service-rendering ideals of the Do- Doherty Organization? 4. Are you systematically keeping yourself in good bodily and physi- cal condition in order that you may increase your usefulness to the Doherty Organization? 5. Are you positive that you are unswervingly loyal to the Doherty Organization in everything that you say, do, and think, not onh- in the office but everywhere else? 6. Are you trying to develop initiative by doing your daily work in the Doherty Organization in the spirit of inquiring efifort? 7. Are you making a systematic effort to get a broad view of the manifold activities of the Doherty Organization and their interre- lations? 8. Are you thinking intelligently and constructively about the prob- lems, technical, selling, and administrative, that face the Doherty Organization? 9. Are you visualizing some of the aims and objectives which the Doherty Organization doubtless has in mind or might properly have in mind? 10. Are you planning to take developmental courses of studv that will increase your usefulness to the Doherty Organization and thereby insure your advancement? 11. Have you given any intelligent thought to apportioning your spare hours in such a manner that, while having plenty of time for work, sleep, and legitimate recreation, you still have some time left for self-development? If you can answer the above questions truthfully in the affirmative, you are already on the highroad — and probably within the Doherty Organization— to increased capacity, increased usefulness, increased opportunity, increased income, and increased happiness. CHAPTER TWO HEALTH OF THE WORKER By HELEN McKINSTRY Director Department of Physical Education, Central Branch, Young Women's Christian Association, New York City Introduction. Observation and hearsay lead me to believe the Doherty Organization is a democracy — an Organization where re- sponsibility begets freedom, personal success comes with service, and happiness is the net result. From one of your Tuesday addresses by Mr. Drury, on "Personal Business Assets," I have listed those assets in the order in which he gave them : 1. Physical Health. 2. Loyalty. 3. Initiative. 4. Broad Perspective. 5. Reasoning Power. 6. Imagination. 7. Self Development. 8. Use of Personal Overtime. In introducing the lecturer. Dr. Fuld 8Aid: Whether we are men or whether we are women, our first instructor in personal hygiene was our mother. And in every household in the country the health of the worker is in_ the hands of the wife and mother of the household. It is, therefore, entirely fitting and proper that when we seek authoritative advice on health matters, we should turn to a competent woman rather than to a man for it. There are many people who offer advice on health matters. Many of them know so little that most of us know more than they do. Some of them know so much that we seem unable to understand what they try to tell us. Several years ago tliose who are professionally interested in health matters observed the work of a young woman in one of the schools in Brooklyn, whose activities were characterized by such broad sanity of conception, coupled with such great practicality of execution, that straightway in true Emersonian fashion a pathway was cut through the woods of Brooklyn to the doors of her school. She was not permitted to remain long in that school. She was called to the Young Women's Christian Association where she is now directly influencing the physical welfare of ten thousand women annually. The Doherty Organization is fortunate and the Doherty Organization is proud to have with it to-day Miss Helen McKinstry, Directdr, Department of Physical Education, Young Women's Christian Association, New York, who will speak to us on "The Health of the Worker". Ladies and gentlemen. Miss McKinstry. HEALTH OF THE WORKER My task this afternoon is scheduled to deal directly with the first of these, but as I conceive health — ^positive, vitalized, electrified health and not mere negative "absence of disease" health — it cannot be disassociated from practically all the rest of Mr. Drury's listed assets. It is very near that first day of the year when we all make mar- velous new resolutions and greet our friends with wishes for health, success and happiness. My vision of health is so great I could leave out most of that and sum up all my ardent desires in the one word "health". I should get out of my depth very quickly if I tried to talk electricity, but the difference between the health of mere physical soundness and the sort of health I am thinking of is the difference between a perfectly made piece of wire, dead and alive. Health is physical soundness electrified by an imagination so vivi the coupons and all the dividends on the Cities Service Company and all the other securities which are on a dividend basis. The banking department ties in very closely with the bond depart- ment, which as I stated, handles the, securities. The volume of this work is very large and the bank handles the clearances of these transactions as well as clearing the syndicate operations when new securities are put out. The New York Office, by virtue of all these activities necessarily has to have currently very substantial funds of working capital. This capital is raised in numerous ways, but among the various ways are temporary loans among the New York banking interests. This is another function of the bank, to keep and maintain these notes and to give them whatever attention is necessary. The war has made necessary the levying of large taxes by the government, and since reports are required, complicated in form, requiring large masses of information, it has become necessary to delegate some one to make special studies of all the various forms and rulings of the Government, in order to be in a position to inter- pret these matters and direct the filing of the numerous reports of all the companies. This is also another activity of the banking department. Another activity of this department in which we are all very much interested, is the keeping of the payroll. Auditing Department. The auditing department has under its ction all matters of accounting and acounting records of the -^Ipilities, natural gas and refining companies, in fact, all the ^hich the Organization controls. They cooperate with the ORGANIZATION OF THE NEW YORK OFFICE secretaries of these organizations in outlining their policies, and in selecting their men, giving special attention to the development of new material for many of the positions v^rhich are all the time open and which they have great difficulty in filling. The task of the auditing department is the proper accounting and assembling of records for the reporting of the numerous classes of operations of the Organization. In counting up the other day I was astounded with the fact that there are really more than twenty distinct activities on which the auditing department has to provide systems. This means a great amount of work. The auditing depart- ment also has travelling auditors who go about the properties periodically and make the audits of the accounts of the companies. The work of these men and the work of the auditing department, I think we can say, has been very successful, because in all the examinations made by outside auditors of the accounts in the New York Office or in the accounts of the outside companies, in no instance has there ever been an. exception made to the reported figures. There never has been a figure changed in the accounts as they have been rendered, or as they have given them to the public. Another duty which the auditing department has in connection with the engineering department of which I spoke a while ago, is the matter of examinations of new properties. Such examinations cover two different phases: Examination of physical property and exam- ination of the records of the company, to see that the statements submitted correctly reflect the situation. The Treasury Department. The treasurer controls the cash funds of the Organization as a whole and coordinates the workings of parts of other departments which contribute the data on which conclusions are reached. The devising of proper systems for the correct accumu- lation of such information is one of his functions. Cooperation with the bond department in raising funds, cooperation with the bond department in the floating of new security issues and cooperation in the handling and maintaining of the markets after the securities have been issued, is another duty of the treasury department. ORGANIZATION OF THE NEW YORK OFFICE New Business Department. The new business department directs and cooperates in the management of the various commercial depart- ments especially in the utility companies, where these organizations have been in existence for periods of years. These departments have to do with the getting of new business of all kinds, electrical business, gas business, natural or artificial, the selling of appliances of all kinds and acting as intermediaries between customers and the companies in settling disputes and complaints. A branch of the new business activity and one that is growing of great importance is the industrial heating business. The companies are now endeavoring to get on their lines large users of industrial heat, both electric and gas, and it is the duty of these men to go into these plants and see if by some means or other these operations cannot be carried out by the use of the products we have for sale. Another activity of this department is the work of the industrial commissioner. We are always concerned in the growth of the com- munities in which we operate, and one of the best means of seeing that these various communities do grow is to cooperate with the civic bodies in these comunities toward getting in new industries. Of course, we ultimately hope to profit in selling additional service to the increased population which is occasioned thereby or by selling the industry itself, its power or heating requirements. The Statistical Department. This department receives the monthly reports from all of the properties. It checks the reports and carries out the correspondence necessary in making them correct. From these reports it compiles various analyses that are necessary, compiles its monthly operating statistics for distribution among the properties, compiles financial statements which the bond department or which some bank or some investor may require, and compiles the financial and other data that enter into the annual report of the Cities Service Company, and also copoerates in the matter of preparation of the data for the various other departments in the New York Office. The engineering department naturally wants data, the bond department wants data, the treasury department wants data, and the supplying of these needs is one of the chief functions of the statistical depart- ORGANIZATION OF THE NEW YORK OFFICE ment. Investors want to know something about the communities in which we operate. It is necessary to follow this matter and keep up the assembling of information on the business activities in general in the communities in which we operate. The Corporation Department. This department keeps all minute books of the companies that are controlled by us. It looks after seeing that stockholders' meetings are properly advertised, and directors' meetings properly called, and it prepares the documents for drawing bonds and various other corporate activities of this character. Budget Department. In an organization such as ours, where the activities are so numerous and scattered over such a wide range of territory, it is impossible to keep in personal contact with these activities and gather, by any direct means, information concerning the results of operations or what may be expected in the future. A comprehensive system of forms which provide the means to the various companies for expressing these conditions and forecasts in a uniform manner has, of necessity, been developed. The handling of these forms in the New York Office and the accumulations and deduc- tions made therefrom, may be grouped into three general headings and these as a group are generally referred to as the "Budget System." This consists of cash estimate and analysis, construction estimate and stock requisition, and an operating estimate and analysis. The cash estimate and analysis summarizes the cash production of the com- panies resulting from their operations for a month or a period, or to be realized in the future, and takes into account the net results of the other two activities referred to. The statements of all the companies are accumulated and the combined results or forecasts can be ascertained. The construction estimate and requisition work consists of receiv- ing all requisitions for expenditures to be made or stock to be made or stock to be purchased and classifies and accumulates the results of this work for the utilization of the engineering department and the Budget system. The operating analysis work has to do wifh the handling of the operating forms and estimates in accounting for the net earnings ORGANIZATION OF THE NEW YORK OFFICE realized or to be expected for the future estimated periods. These figures are also classified and accumulated for the utilization of the engineering department and the budget system. The Transfer Department. All of these transactions in securities and the selling of new securities, necessitate a large amount of work in drawing up certificates, transferring certificates, maintaining records of various sorts, issuance of dividend checks, and the mailing of the same. The time is getting too short to enumerate all of these activi- ties, but they are very large. The Filing Department. In an organization such as this, there is necessarily a very large volume of letters and other data which must be taken care of. For that purpose we have a filing department, which has under its control the filing of all documents and Tetters coming into the various departments or emanating from them. It is a very large task to cross index and catalogue all these documents so that they can be found readily when requested. The Publicity Department. This department works in conjunction with the bond department in all of their publicity work, and in addi- tion has the issuance of the Doherty Daily News, and the Doherty Monthly News, and cooperates in the outlining of policies in the matter of all advertising work. Stenographic Department. Necessarily, with all the correspondence in the New York Office there is a large amount of stenographic work, and this work requires a large force. The stenographic department handles all the outgoing mail. It does a large proportion of the routine typing work of the office, and supplies stenographers where no special stenographers are assigned. Woman's Department. There has recently been created a woman's department, which has at its head, Mrs. Smith, whose duties are to interview various women applicants for positions and cooperate with the various departments in the selection of this type of help. We also have a representative of the training school. I cannot take the time ORGANIZATION OF THE NEW YORK OFFICE now to explain in detail what this training school is, except to say- that for years the Organization has maintained schools in the proper- ties for the training of technical men. These men are trained in the actual operations of the properties, and it is now quite a large task in following through all the men of this class. I believe that at present the men in training number more than 250. Personnel Department. Another important activity is the personnel work which has to do with the collecting of information of all kinds both as to abihty and character of the employees throughout the Organization, so that when requests come in for men to fill vacancies, this system offers a ready means of determining the man best fitted for this particular work. Conclusion. The enumerating of all these details has taken more time than I thought. I tried to condense it as much as possible, but ther« is at least one more thing of which I wish to speak. You no doubt realize from what I have said that many of the activities of the departments are very much interrelated, and so they are, and it has proved, I think, to be a very successful means of operation. This situation has resulted in many of -the operations being conducted through what we term the committee plan of operation. Represent- atives of the various departments mentioned, meet and discuss the various problems and give their own view points as they relate to their own work, and I believe better conclusions result. We may think that the Organization now represents a pretty complete arrangement for the handling of all the problems which arise, but we have thought that same thing a great many times in the past and only found that new expansions were necessary. So I am sure that in the future there will still be further developments, which will require further talent. New responsibilities will have to be delegated to new people who have the ability to assume them, and I think that therein lies the most promising field to the new members of the Organization. There is still plenty of room and there is no one that wants to make room for the new men more than the older members. New talent discovered in any quarter is always greeted with satisfaction by all the departments and they welcome the rise that any individual is ORGANIZATION OF THE NEW YORK OFFICE able to make. It is this sort of spirit that has always made the Doherty Organization sucessful, and is going to make it more success- ful in the future. I think it is this spirit that created the good fellow- ship that you saw manifested in the outing that we had Saturday. There is no obstacle encountered but what this organization feels that it can be overcome. It is the spirit that never says "Die." It is the spirit that the new members of the Organization, I think, should get if they want to succeed. I know of no better expression by which to characterize this spirit than that by which it is commonly called and which you all know as, "The Doherty Spirit." CHAPTER FIVE MEXICO AND THE MEXICANS By HON. FRANCIS P BENT Former Vice Chairman, Board of Aldermen, New York City Introduction. I may say that in public life, and in business life, I have found, as has been stated, that we know less about our neighbor just across the Rio Grande than we do about most of the countries of Europe. Realizing that condition, I decided to take a vacation some years ago and visit that country. Mayor Gaynor at that time gave me letters of introduction to Mexican officials. We left New York on the Ward Line boat. It was my good fortune to find that the captain of the ship was an old school-mate of mine. He had attended the same school that I had in Connecticut, and before we reached Mexico, we had many pleasant chats about that country standing on the bridge of the ship. Havana Harbor. Our first stop after leaving New York was Havana. Here we found the old and famous Moro Castle, that has guarded the In introducing^ the lecturer, Dr. Fuld said: We know that the Mexicans are diffelrent from the Americans, but we do not know much about thei Mexicans. Knowing that they are different and not knowing much abovit them, wd are not likely to have a very good opinion of them. This is unfortunate, because we of t.ie Doherty Organization have large interests in Mexico. In the Panuco District we produce about 55,000 barrels of oil a d£ty. This is piped to thd Panuco River and is barged down to the mouth of the river at Tampico. From Tampico it is brought in our own tankers to the United States, where it is sold) in New Orleans, in Tampa and in Plicquer- mine, Louisiana, to sugar refineries, to phosphate mines and to other in- dustries for fuel purposes. Our principal subsidiaries in the Panuco District are the National Petroleum Corporation, the Southern FueJ & Refining Company, the Gujf Coast & Oil Company, the Tampicus Oil Company, and tJe newly orga- nized Empire Gas & Fuel Company of Mexico. Because we- feel that we ought to have a larger knowledge of Mexico and the Mexicans, than most of us possess, we have asked a man, who has a great deal larger _ knowledge of Mexico than most of us, to address us this afternoon on this subject. Ladies and Gentlemen, the Honorable Francis P. Bent. MEXICO AND THE MEXICANS entrance to Havana Harbor for many years. The first intimation that one has on reaching Havana is that he is in a distant foreign country. In many respects it resembles old Spain, because the buildings are of Spanish architecture. The most of them are painted pale yellow and many of them are white. There is a beautiful boulevard running through the central part of Havana, and at the end of that we find a large band stand, and thousands of seats, because the Cubans are very fond of music, as are also the Mexicans. Every town of any size has its band, of which it is proud, and two or three public concerts are given every week throughout the year. Progresso. It is a two-days' sail from Havana to Progresso. which is the chief seaport of the State of Yucatan. On arriving at Progresso we were obliged to anchor about six miles from shore, because the water is very shallow, and then, in order to take oflf such freight as is destined for that port, a lighter tows out the scows and they in turn are tied up to our ship. From our ship they proceeded to unload some live stock that had been taken there, being imported from the United States. That shows to some extent the progressive- ness of the residents of Yucatan. Landing at Progresso, in the State of Yucatan, we first observed the tall lighthouse, which serves to guide the mariners while far off shore. I inquired of a native as to the best means of seeing this place. He threw out his chest and said "Well, Signor, we have street cars." And sure enough they had, but one mule and a dilapidated car, was all their equipment, and the round trip on the line took about twenty minutes. Sisal Plantations. We traveled from Progresso inland to Merida, which is the capital of the State of Yucatan, and enroute we passed a great many sisal plantations. The natives cut the leaves of this plant and take them to the warehouse where they have machinery that peels the leaf, presses out the juice and leaves a large mass of fibre. It is then put in the sun to dry. Finally it is pressed into large bales, then stored in large warehouses and afterwards shipped to all parts MEXICO AND THE MEXICANS of the world. They have shipped as much as $40,000,000 of sisal in one year. It is a great industry in that section of Mexico. The sisal is really an inferior quality of hemp and it is used in making cheap rope. The harvesting companies in the west use very large quantities of it when they are harvesting wheat, and it is also used for rugs and matting. They have a little railroad track running from the store- houses to the dock at Progresso. It is then placed on scows that are in turn towed out to the large liners, that transport it to all parts of the world. The Mestiza maidens are a mixture of Indian and Spanish. We find many of this type on the Yucatan Peninsula. The natives in many parts of Mexico are rather loath to use improved machinery or modern implements. These women, for instance, prefer to grind their corn or crush it, between two stones, a very old-fashioned method. Arriving at Merida, which is the capital of the State of Yucatan, we find here the State House, where the Assembly meets and passes laws for the State. We also find at Merida the old cathedral, one of the oldest in Mexico. Yucatan Pyramids. It would be a lecture in itself to tell you much about the pyramids of Yucatan. There is evidence from these pyramids that the very early people there had a wonderful knowledge of architecture, of art, and of the sciences. Much work is now being done in examining these old pyramids. One has a little temple on the top where the priests evidently went to pray. Some of the archeologists tell us that they believe these pyramids antedate the pyramids of Egypt. In time we shall find Americans going there in juts as large numbers as today or in the past they have been going to far away Egypt. Vera Cruz. We returned from Merida to Progresso. There we went aboard the Ward Liner again, and it is another two days' sail from Progresso to Vera Cruz, which is the chief seaport of Mexico, really the New York of that country, because of its large port. It was at this same place that Cortez landed in 1518. You will note the MEXICO AND THE MEXICANS route taken. First we were at Progresso, and then the two days' sail across the Gulf of Mexico to Vera Cruz, and then follow the line and you see that we go on td Mexico City. As we neared the Harbor of Vera Cruz, we saw in the distance Mount Orizaba, which next to Mount McKinley, is the highest peak on the North American Continent. During the latter part of the Diaz Administration, large sums of money were spent in improving this port, so that today we find there a modern up-to-date port. I had been advised not to stay long in Vera Cruz, as it was a most unhealthy place, but I found conditions had changed there, and that they had taken pains to keep things clean. Each day at noon, the prisoners were allowed out for a period of two hours, and were employed in scrubbing the streets. I found that they had men working industriously there, as we had on our streets, and that they had an ash cart that perhaps we might pattern after, because it has iron covers, and when the ashes are dumped into it, the cover is dropped down. This prevents the ashes from being blown into the faces of pedestrians. The railroad running from Vera Cruz to Mexico City crosses many deep ravines and passes through innumerable tunnels. We were at a great height at this point and at times we were even above the clouds. Mexican Embroidbry. The old Spanish Gateway at Cordoba was built during the time of Cortez. The Mexican women are most adept at making drawn work and various embroideries and lace. The embroidered garments that these ladies have would bring a good price on Fifth Avenue today. While they are wearing those garments, they are going barefooted. Still climbing you will notice in the background Mount Orizaba, the peak of which we saw in the distance when we were entering the harbor. Wherever a train stops in Mexico it is immediately sur- rounded by many natives. Some are selling souvenirs, others food, and there are always one or more beggars in the party. "One cent, Signor, for God's sake" appears to be all the English that these beggars know, but that is sufficient, and they always receive many pennies from the passengers. MEXICO AND THE MEXICANS Pulque. Beyond this point, between Esperanza and Mexico City, we find many pulque haciendas or plantations. Here this Mexican plant is cultivated. From this they make the Mexican drink. The method of making this drink is to take the sap from the stalk that grows in the center of the plant. When it has grown three or four feet above the ground, they cut it off and attach a gourd to it, and capture the sap for five or six weeks. Each day they will get from five to six quarts of this milky substance, which they immediately ferment. It is then sent to the shops where it is sold at one cent a glass. It has been well-styled the curse of Mexico and I believe that ^wherever possible they are trying to prevent further sale of it in that country. It produces a form of intoxication comparable to insanity and it has done much to make the Mexican peon the very poorest kind of laborer to be found in the world, not even excepting the Chinese coolie. A different type of Mexican is the fellow with some means. He has a large number of men working for him. He has a saddle that is richly decorated with silver, and on his skin-tight trousers you will notice a double row of silver buttons. This is one of the native cargadores, and he is carrying "a small package" on his back. These fellows, though not strong in appearance, can easily carry four or five hundred pounds on their backs, and can cover more miles in a day than a mule. Love-Making. It may be interesting to note the manner of making love in that country. The native, who has a young lady that he likes, will go to her home and play guitar or some other instrument. If he cannot play, he will sing or whistle under a window or perhaps on the opposite side of the street. As he receives encouragement, he comes nearer, until perhaps after a month, they exchange notes. After two months, with the parents' consent, he will be admitted to the house, but he is always entertained in the parlor, the father and mother, and all the children being present. Should he desire to invite the girl to go to the theatre or to a movie picture show — ^because they have them there now — then he must not alone ask the girl, but he must be sure to invite the mother and father, grandmother and grandfather, and all the children. MEXICO AND THE MEXICANS Mexico City. In the central part of Mexico City we found a great many beautiful plants and trees. They have many beautiful buildings and a great many of them were erected during the latter part of the Diaz Administration. The National Theatre cost about $8,000,000, and is undoubtedly the finest building on the North American continent devoted exclusively to such a purpose. Most of the churches and the beautiful large cathedral belong to the Catholic Church, some of them having been established at the time that Cortez captured that country in 1521. The National Library contains a great many valuable books and many of them were brought over at the time of Cortez. The Commer- cial School and another large school, were all built during the latter part of the Diaz Administration, and were built, most of them by New York contractors. Milliken Brothers, who had large steel works on Staten Island, had several of these contracts. Mexico City is on a high plateau over 7,500 feet above sea level. While it is warm there in the middle part of the day, blankets are required every night in the year in Mexico City. Iron Man of Mexico. Gen. Porfirio Diaz ruled Mexico for nearly 31 years and was called the iron man of that country. He understood ruling the Mexicans better than any one who preceded him or who has followed him. During the latter part of his administration he was not popular, but that was due principally to the fact that he put too much trust in the men who were about him. Many of those who surrounded him in the Cabinet were dishonest. They were guilty of graft that would make some of the grafters of this country look like pikers, and the result was that, when finally Madero started his revolution, the army didn't come to the support of Diaz, as he had expected it to do, and as they always had done before, with the result that in 1911, Madero overthrew the Government, and Diaz was forced to leave the country. Madero unquestionably was honest and sincere. He belonged to one of the rich families there, and he intended to bring about many reforms, but through treachery he was finally assassinated, and then we know what followed, — the Huerta regime, and later the present Carranza government. MEXICO AND THE MEXICANS The rurales are the mounted police of Mexico City. They were organized by Diaz, and did much to clean up the city and the surround- ing country, making it at that time as safe as it would be to go about New York City and its suburbs. National Museum. One of the interesting places to visit is the National Museum. Here we found a great many relics of the past, and a visit there would give you a great deal of interesting history as to Mexico. Cortez came there in 1518, with a small force of men, and in three years time conquered the Mexicans. They outnumbered hi mone hundred to one, and he might not have been successful had he been less determined, or if the Mexicans had not been so anxious to capture him alive so that they might offer him as a human sacrifice to their War God. At one time some of his followers were about to revolt and mutiny, and hearing of it, he sunk his ships in the Harbor of Vera Cruz, so that it was impossible for his men to go back to Spain. We found in this museum many specimens of picture writings. This was the method employed by the Mexicans to keep a record of their early history and Cortez destroyed many of these writings while conquering the Mexicans. I think he did it unintentionally. The Mexicans at that time worshiped various idols and when he was conquering them, the natives would cling to these picture writings Cortez thinking that was some part of their worship ordered them destroyed at the same time with the idols. In the main room of the Museum we find all kinds of idols — the Calendar Stone, also the notorious Sacrificial Stone. Prescott in his "History of Mexico" tells us that on some occasions three or four thousand prisoners would be led to this stone and sacrificed. The priest would lay the victim across this stone and a sharp instrument was drawn across the prisoner's breast. The heart would be torn out and thrown at the feet of the Aztec God of War. They thought that this would please the God and help them to win battles in the future. Those who have studied the Calendar Stone claim that the early Mexicans must have had a com- plete knowledge of astronomy, because, if time were figured today from that stone there would not be more than a few minutes variation in a hundred years. Emperor Maximilian. Emperor Maximilian was the Arch-duke of Austria, and Napoleon the Third in an effort to curry favor with the MEXICO AND THE MEXICANS Austrians in 1863 sent an expedition over to Mexico and took posses- sion of that country, giving as an excuse that they had failed to pay some of their National bonds that virere held by the French investors. This country had watched the proceedings, and finally sent word to Napoleon the Third that we would insist upon the application of the Monroe Doctrine. At that time we had a pretty large force of men for it was toward the close of the civil war. Napoleon the Third thought it better to heed our warning and withdrew his men. Maximilian was dilatory in getting out. He had two or three opportunities of getting away but neglected to take advantage of them and later he was captured by the Mexicans, imprisoned for nearly two years and afterwards executed. The Mexican White House. The Castle of Capultepec is the White House of Mexico, surounded by a large park, and has adjoining it in the rear the Military Academy that they call "the West Point of Mexico." Much money has been expended for improvements and in decorating the interior and the exterior of this castle. Artists have been brought from foreign countries for this purpose. Most of the houses in Mexico of the better class have interior courts, so that there is plenty of light and ventilation. There are many fine monuments in Mexico City and in many other cities throughout that country, including monuments erected in honor of Christopher Columbus, Charles the Fourth, which is conceded by artists to be one of the finest in the world. The latter is so strong that it would possible for a man to stand on the uplifted hoof of the horse. At one time Cortez left Mexico City and returning there found that many of his precious things, such as metals and other things that had a great value, had been hidden. He thought Guantemoc who was the last of the Montezuman Kings should be tortured until he revealed the hiding place. After torturing him for some time, he failed to confess and then the fire was put out. He lived for some years after- wards. A monument has been erected in honor ,of Guantemoc in Mexico City. The Monument of Independence. This monument cost nearly $3,000,000 and took ten years to erect. The Mexicans fought Spain, following the example of the colonies here and in 1821 secured their independence, just 300 years following the conquest of Cortez. MEXICO AND THE MEXICANS A monument has been erected in honor of Benito Juarez, whom they call the George Washington of Mexico, because he was the one that led the Mexicans, when they succeeded in winning their independence from Spain. Markets. The Thieves' Market at one time was a place where stolen goods were disposed of, but now, while it is still called by that name, it takes the place of our five and ten cent stores. Tourists all visit the Thieves Market. They have many beautiful flower markets and the Mexicans are very fond of flowers. You give a little child a few pennies, and he is far more apt to go and buy a flower with it than he is to buy candy. The Mexican women are very adept at making the drawn work which the ladies are very fond of, and which brings a good price wherever it is sold, even in Mexico City. The natives sell potatoes sometimes by weight, but in most cases where you find a market place, the vegetables are spread out on the ground and put in little piles and then sold at so much a pile. Canals. In the days of Cortez, Mexico City was called the Venice of America, because there were so many small lakes and numerous canals, the Mexican plateau being surrounded by mountains. The result was the water would come into the lower parts and keep these canals filled. Since that time there has been a drainage canal built. At first they thought they could cut a slit through the mountain and get rid of the surplus water in that way. Apparently it didn't occur to them that a tunnel could be built. During the Diaz regime, after a great deal of time and labor had been spent, a tunnel was built, and now that entire plateau is drained. The foundation of the Catholic Cathedral of Mexico City was laid on the original site of the Aztec War God. This Cathedral is unquestionably the most beautiful cathedral in North America today. The rails and chancels and many of the decorations are of solid gold and silver. MEXICO AND THE MEXICANS Church of Guadaloupe. The Church of Guadaloupe is just outside of Mexico City. Natives make a pilgrimage here from all parts of Mexico each year. Just back of the altar is the famous tilna "the Virgin of Guadaloupe." It is believed that this picture was made as the result of a miracle and caused the building of a chruch at that point. Many years ago sailors on the Gulf of Mexico were in danger of losing their lives because of a hurricane. They prayed to the Virgin of Guadaloupe to save them, and promised if saved, they would erect a lasting testimonial. These huge sails carved out of stone are the result. Bull-Fighting. What baseball is to the people in this country, the bull-fight is to the Mexicans. The matador waits for the fight to commence. We see them enter the ring — the matadors and all their assistants. The matador is on horseback leading the procession. At each bull-fight six bulls are killed. They go through the same per- formance with each bull. Just as we have innings at a ball game — one inning the same as the other — the same rules govern. One or more horses are killed each time a bull is killed. The idea is to try to put one of those short swords in the shoulder of the bull and then step quickly aside. The matador advances — in his left hand a sword and in his right a red flag which he waves to infuriate the bull, and as a result when the bull lowers his head to charge, the matador drives his sword just back of the shoulder of the bull which punctures his lungs and kills him. Every city of importance in Mexico has a bull ring. Isthmus of Tehuantepec. We next traveled south toward the Isthmus of Tehuantepec, and passed a large tree. It was a large tree at the time of Cortez. It was referred to by him in some of his writings and can be seen at this time — one of the largest trees we have any record of on this continent. Across the Isthmus is a railroad that runs through a tropical country, and we found here all kinds of tropical trees and friut such as the cocoanut tree and the melon tree where melons grow on trees. If they hand you a lemon from the tree of Royal lemons, they hand you a big one. Bananas grow on the Isthmus of Tehuantepec. Some time ago an American colony located there, and they wanted to build a school house. The only wood available was mahogany, and they built it of that. MEXICO AND THE MEXICANS The natives on the Isthmus use a very old style, of plow. Just two pieces of wood that might have been handed down from the days of Moses. The Tehuantepec woman is the best physical type of Mexican woman to be found. As a rule these women are about twice as large as the men, and there are about three women to one man so they rule there, without any question of voting. Mining Section. In concluding our trip we proceeded north from Mexico City through the mining section of that country. You will bear in mind that Mexico is unquestionably the richest country in minerals that can be found in the world. During the last four centuries Mexico has produced about half of the world's supply of silver. When it is possible for these mines to be opened and developed, Mexico will progress more rapidly than it has in the past. One of the largest quartz mines is operated by the Guggenheims, and the largest oil well was first opened up in the Tampico District. This well had a flow of nearly 100,000 barrels a day before they were able to cap it. Today it is well known that the largest amount of oil to be found in any one section is being taken from the Tampico section of Mexico. If it had not been for the oil that the allied forces received from Mexico perhaps tlie war would not have been ended as early as it was. I might state in passing that arrangements are now being made whereby oil from Mexico may be used in this city for heating purposes in place of coke and coal, and it is hoped that this will tend, in one direction at least, to reduce the high cost of living. The little mining village of Gruanajuato is surrounded by a great many hills and very rich mines. The air at this place is such that after bodies are placed in vaults for a certain length of time they mumify. It very often happens that the husband possibly will pass away and the wife will hire one of these vaults, because that is the usual procedure, to hire a vault. After a few years she stops paying the rent; perhaps she has married again. Then those bodies are taken out of the vaults and thrown into a pile, and those that are mumified are stood up along the wall. This happens to the poor fellows because the rent was not paid. Travelling through Mexico and especially the northern part, we come upon many varieties of cactus, so much so that Mexico has been MEXICO AND THE MEXICANS called "Cactus Land." In places they grow as large as trees. Monterey in the northern part, was pointed out to me at that time as one of the most Americanized cities in Mexico, and I asked why they considered it such. They replied "Why, it has a fine brewery." It looks as if some of us would have to go to Monterey in the near future. There is a bridge crossing the Rio Grande at Laredo, and we were pleased to get back on American soil. At San Antonio we visited the famous Alamo, and then, went by train to Galveston. Here we marveled at the wonderful sea wall that has been constructed in Galveston to prevent further "Galveston floods." Mexican Flag. In closing I would call your attention to the Mexican flag. In the centre you will find the eagle standing on a cactus plant with a snake in its mouth. The early Mexicans emigrated from some part of what is now New Mexico or Texas or perhaps Arizona. They were looking for a suitable place to start a new settlement. When they arrived at this beautiful spot where Mexico City is located — because there is no better climate in the world than this plateau — when they arrived there, they saw an eagle standing on a cactus plant, just as you see it there on their flag. They thought that was a good omen and they adopted it as their National emblem, and it has been used ever since. Let me say in closing, that while we do not want any trouble with Mexico — we do not want any of their territory — we do believe that those who have interests there should be properly protected. We do believe that all of those who go there, whether they go from this country or from any other part of the world, should receive the same protection for life, liberty and the pursuit of happiness, under the Mexican flag, as they find today under the American flag. CHAPTER SIX THE DOHERTY SPIRIT By MILAN R. BUMP, Chief Engineer, Henry L. Doherty £r Co. Introduction. In the first place I am trying to exhibit the Doherty Spirit by appearing this afternoon to fill in for another Doherty man who had suddenly become incapacitated and could not appear today. Being as usual one of those good natured Doherty fools, you will excuse me if I am not as prepared as I would otherwise have been, and had I at least three hours notice, I might have done a little better. The subject I felt was one that did not require preparation. I thought you all knew the subject so well that simply to name it was to tell the whole story I would give — that every one knows the story In introducing the lecturer. Dr. Fuld said: The Doherty Organization owns a trolley line in New York City. It runs from the Manhattan end of the Queensborough Bridge to Jamaica and return; and like most trolley lines of this city it is bankrupt. It is in the hands of a receiver. But if you should happen to board one of the cars of this company you will realize at once that it is different from any other trolley line in this city. In the first place the conductor will treat you with unusual courtesy. You will observe that he is unusually careful to avoid accidents. You will notice, too, that the m.otorman is very economical in the use of power, which is a good thing for the company. And if you should happen to talk to one of these men about their boss, as they call the superintendent, you will notice a very peculiar sparkle in hisi eyes — they evidently have some affection for their superintendent. As a matter of fact they are working for less pay at present than any other trolley employees in this city. That shows that they have some regard for their company and their superintendent. If, on the other hand, you talk to the superintendent about his men you will almost be convinced that he is not employing men, but an aggregation of demigods; and if you speak to him about the two conductorettes on- the line you will be very glad that he met his wife before there were any con- ductorettes on his line. That trolley line, gentlemen, typifies the Doherty Spirit. It is very hard to define what the Doherty Spirit is, but we all appreciate that' there is such a spirit. Mr. Milan Bump, our chief engineer, will address us this afternoon on "The Doherty Spirit." Mr. Bump. THE DOHERTY SPIRIT and knows the meaning of the Doherty Spirit as well as I might be able to tell it to you. A Small Beginning. I might go back for a moment to the beginning, to the first little crowd that we had in this office, when there were four or five of us all told and when the auditor called on the engineer to help make reports at the end of the month, and the engineer called on the auditor to go out and help to list the lines that he examined. We were all one department and one little family and what was one fellow's problem was everybody's problem. I can remember very well George Williams in the early days going around checking pole lines for me. I can remember Paul Jones doing the same thing, and I can remember helping Paul take the figures off the books. And Scotty would always insist we had to work as a team, and we got along and got over more territory that way than if each one of us felt we had a department in charge. An Important Trip. I remember on one trip that Scotty and I took about the fall of 1906 we examined eleven properties, made complete written reports in to New York and were back here in New York to discuss the reports in thirty-three days. You can imagine we did not have much time to sleep on the trip. But it was not that each one of us was acting as an individual, that made those things possible. It was the team work, the true family spirit, and it was from that teamwork and from that true family spirit which Mr. Doherty had instilled in us all that the Doherty Organ- ization has become what it is today. The Days of 1907. I can remember very well in those dark days of 1917 things looked pretty shaky. We were a new Organization just getting our start here. We were not known here, the banks never heard of us, and as the elevator starter said to the office boys we had then, in reference to the uniforms, that the "H. L. D." on the collars THE DOHERTY SPIRIT stood for "Henry Lacks Dough." And we had then very different conditions to meet than we have today. Expansion. But some of us were dreaming even in those days as Mr. Doherty was dreaming, and when we talked about expanding to take a whole floor we thought we had reached almost the heavens. I remember when the expansion took place and we took on the whole fourteenth floor we thought we certainly had grown big or about as big as we were going to grow. Then we added other space, as you know, day after day, until today we could occupy the whole building if we could get it. This is the fulfilment not of a corporation but of a family spirit that means to keep on growing. Perpetual Growth. One of the earliest remarks that Mr. Doherty made to me, and one which I will never forget, is this that when any company or any concern becomes satisfied with its size and with its present condition slow death is beginning in that company, and within the course of a few years it will have passed away. And whatever I may do, he said, I want to see up to my last day the corporation or the company with which I am connected dissatisfied with its present size and still wanting to grow, still wanting to be bigger, and stronger. Delegation of Responsibility. When we came down through to 1910 and 1911 and survived the 1907 conditions and began to see the bigger possibilities, even then few of us could dream of how big and how strong this Organization could become. But there was a new problem introduced. Up to that time a comparatively few individuals could carry the responsibilities of the Organization ; perhaps a dozen men could look after all of the important routine of the New York Office, could see that everything was done and everything taken care of. Then came the problem of growth : How were we going to grow ? What were we going to do to continue to grow larger? There was only one answer — there must be more men, there must be more THE DOHERTY SPIRIT men able to carry the load, they must be more ready to develop to the size of existing responsibilities, so that the leaders could go on to other things. And almost at once the problem seemed to solve itself. There was only one way to grow in the minds' of the Doherty Organization, and that was to grow from within. We could go outside and hire men ; we could go outside and hire men who perhaps knew the work better than the ones in the Organization. Promotion of Employes. But that was not the spirit of the Doherty Organization ; the spirit of the Doherty Organization was to take the fellow that was within the Organization and boost him and make him make good in the new responsibility. And as we went along we found it was an absolutely self-exciting process, going along from day to day and month to month. There is never a time when we cannot look back and say "Yes, we have a man for you, we have a man to fill the job you name, we have a man to assume the respons- ibilities and take care of them." That is the true spirit and the meaning of the spirit of the Doherty Organization. As to the relations between the individuals in the Organization, some have said that this growing as a family, this growing with the Organization constantly in mind, means a loss of individual initiative; it means that a man buries his own ambitions in the ambitions of the Organization. Personal vs. Organization Ambition. I hold that it is just the opposite. I hold that that is absolutely untrue. The man who forgets his personal ambition in the ambitions of the Organization achieves more each and every year that he lives than the man who starts out with a personal object in view and is satisfied when he gets that one little object, and then finds that he is through progressing and that life holds nothing more for him. Boosting. The man who wants to succeed at the expense of others has no place in this Organization; there is not any room for him at THE DOHERTY SPIRIT all. We have no place for the man who will either hide a truth or tell an untruth about another man for the sake of his personal advance- ment, at the expense of the other man. It is true that we very very seldom have such cases, but I just want to say a word to the younger people in the Organization along that line, and that is this — that you never gain in the world by trying to hide facts or distort facts. The big gain comes from telling the truth, from giving the other fellow a boost. If you know another fellow that is worth while, if you know he can handle a position that is open, the thing for you to do is to come to the front, and say so — tell just what you think, tell it honestly, tell it fearlessly. It will not hurt you, it cannot hurt you, it will make you a bigger man in the eyes of those who ask you than to do any other thing. They may be all the while testing you for some other purpose that you do not know about, and if they find you have deliberately misled them, your chance for a future is huit and your future is simply blank. Unselfishness. We have come along now. This is my fifteenth year with the Organization, and I wish I had time to look around this room and cite to the younger people here particularly the examples of the ones in the Organization who have imbibed this Doherty Spirit. Unselfishness has done it. You have come to the front and made good through making good for the Organization. Men Who Have Succeeded. I wish I could tell you about the boys who were meter readers and nothing more when I first went to Denver; yes, of the boy who wagi an office boy in Denver — I see him in this room — who is a responsible head of a department, and yet he is hardly past thirty-one. I wish I could tell you of the various ones who have absolutely made good through forgetting themselves, not through boosting themselves. The Organization is filled with them. I could go out into the properties and show you men who are general managers of the properties today who came to us as green cadet engineers or firemen or were in very menial positions just a few years back — all within the history of this Organization. THE DOHERTY SPIRIT One, for instance, was a street car conductor ten years ago and he is a manager today. The Organization is full, of those cases, and it simply means this, — as long as we grow, as long as we are able to find men to fill the responsible positions, there is going to be an opportunity ahead for every man and every individual in the Organization. Opportunities for Women. When I say "man" I do not mean to slight the women; I am simply talking from the impersonal stand- point. I think there is a great future for the women in our Organization, and I think it is growing bigger every day and every minute, and I think you are just now beginning to have that fact recognized by the Organization. The Future. As we go along to the problems of tomorrow — why, we are poor dreamers, all of us, I think. What we are today and what we have created up to today represents you might say the first spurt, the first sprint in the race. What are we going to be in another fifteen years from now ? We have had fifteen years of organization history. Now, based on this fifteen behind us, what will the next fifteen be? I can tell you. It will be just as much bigger than today as that of today is bigger than the beginning— if the members of this Organ- ization will continue the true Doherty Spirit, will continue the true Doherty feeling of building in from behind, of supporting the ones up front and of seeing that there is never a position open but what there is a man capable of filling the position and assuming the responsibility. Opportunities for Advancement. I know some of you in the office departments have been a long ways removed, a long ways detached from the executive side of a real glimpse of the Organization as a whole. You feel that your work today is not of much importance, that you could drop out and perhaps would not be missed, and that THE DOHERTY SPIRIT sort of thing. Now, that is not true. If you have a real sincere desire to succeed you have a bigger chance ahead of you today than the man who entered this Organization fifteen years ago had. You have a bigger opportunity, because the big grade in the history of this Organization" has been ascended and we are at a point now where we feel that within the Organization itself we have the power to make the Organization grow. And we want you — we want every man and every woman who has an ambition to succeed, to grow bigger, to do something really worth while for the sake of doing something worth while, not mere personal aggrandizement; we want you to come in, come along with us, and feel that you are part of this one big family. It is going to be a big family ; it is already a good big one — seventeen or eighteen thousand of us all told. But that is small to what we can be ; that is only a starter. If we will do the best we know how today and tomorrow and every day, why the eighteen thousand in another fifteen years can just as easily be one hundred and eighty thousand. It does not seem nearly as impossible as it did fifteen years ago that we would have eighteen thousand today. You can see what that means in the way of opportunities for every- one of you, and I want you to get that one message if I am not able to convey any other to you today, and that is that there is room at the top. There is constantly more room at the top, and as^ long as the company does not feel that it is being left behind through failure of its members to develop, this Organization will continue to grow, it will continue to be bigger, brighter, stronger. It will be a happier organization for everyone connected with it. It will be a more successful organization in the success and happiness of its members. Courage. This Organization, I am sure you will realize, does not aim to have mere financial success. It does not aim to have its success measured only in dollars. There is a great deal of satisfaction that a lot of our boys are getting who are out on the firing line, fighting THE DOHERTY SPIRIT what has, been a losing game in the last three or four years. As a great many of you know, the public utility properties have been up against very, very hard conditions. They have seen their earnings slip back month after month, almost for years it seems. And yet they have not lost their courage; they have enjoyed fighting the game because they had the realization in their hearts that they were doing their very best as stewards to discharge their stewardship capably and to make their property do the very best it was humanly possible to do. Improvement. Now, there is one old maxim of Mr. Doherty that I think we can all copy into our own lives. He has always said "There is no idea, there is no standard, there is no method, no theory, that can be called the best theory as long as a possibility exists of a better one. We may have certain ideas today, certain ideals. We may think that certain things are absolutely the things to do. The Organization has them today; we all tie to them. But^ let us keep our minds open for the better things, and then let us be willing to recognize them. Let us never be in the position of saying "Oh, well, we are the best there is and what's the use of trying?" That is a sure sign of slow death and a sign we have reached a point that is dangerous. I say that there is no method, no policy, no plan, that is in effect today in this Organization that Mr. Doherty is not absolutely ready to change as soon as any member of the Organization can show him a way to change it that will improve it. Now, that means a great deal. It does not mean that this Organiza- tion is run with a military commandership at the top ; that the people in it have nothing to do but carry out orders. It means that Mr. Doherty is passing out to the Organization just as much as he possibly can the responsibility for the Organization, and if you can help him, if any one of you can bring forth a new idea, that will be a help to the Organization, that is the thing to do. Because it means that the Organization grows and with its growth every one of us is bound to succeed more than we have in the past. THE DOHERTY SPIRIT The Story of the Big MoguL I used to tell a story several years ago to some of our men and perhaps some of you have not heard it. It is about the problem of the man who was discouraged. He thought he had reached a point in life where he just could not go any further. He thought he had reached the limit of his capabilities, and he would just have to stop growing and be contended with his lot in life right where he was. But one day he met a cheerful man and this cheerful man said, "Now, look here Bill, you don't understand this problem at all, you have not seen it right." He said, "You remind me of the problem a freight crew out on the mountain had one time, the problem of getting a big freight train up over the mountain. They went out to find an engine ; there was no engine to draw it. They started down through the yard looking for the engine, and they came up to a great Big Mogul, and they said to the Mogul, speaking to it, "Mogul, do you think you can drag' that thing over the hill?" There was a great shower of sparks and steam and the Mogul said, "I don't think — I can, I don't think — I can." So; they went down the yard hunting for another one and came to a big Atlantic engine, and they asked him the same question and got the same answer. The Story Of Freshy. Finally they got down to the end of the yard and there was nothing left but a little snub-nozed yard engine, and they addressed him : "Freshy, do you think you can pull that thing over the hill?" Freshy replied: "I guess — I'll try, I guess — I'll try." So Freshy got out on the main line and was coupled to the freight train. She started off with all the steam that she had — "I — think — I — can, I — think — I — can, I — think — I — can, I think I can, I thought I could, I thought I could, I thought I could, I thought I could" and over the hill they went. Personal Troubles. Now, it is that spirit that we want you all to put into your every-day lives. I know just as much as you do of the many little personal troubles we have, and I have a little tendency to be blue at times. I know everybody else here is human; we all THE DOHERTY SPIRIT have those tendencies. But let us keep the big game ahead of us ; let us keep the big thought ahead of us that we have not reached the top of the hill. But we can, and as long as we keep that thought ahead of us today's troubles are really small. The Spirit of Unrest. Looking over the country today I suppose there is a bigger spirit of unrest than we have ever known in our history. But try to analyze that spirit of unrest, try to find out what is really behind it. Simply the lack of a goal. You ask the laboring man today and he will admit if you get right down and talk to him that he never was so well off in his life. You ask, the manufacturer, you ask the banker and you ask the farmer and practically all of them will say "Yes, that is true, but we are not getting our shares." Selfishness. Now, what is that "getting our share?" It means a spirit of selfishness that is in the nation, a spirit of "I want to get better than you do." And it is that spirit fundamentally that we have got to work on. It is because of that spirit that the radicals and I. W. W.'s are springing up today. They want it all. They want to start by tearing down everything. Why? Not because they want it torn down ; because they think they can get more of it than the other people in the scramble that would follow. It is the spirit of selfishness that is behind it all, that is causing our trouble and we have' got to get out and combat that spirit. And I ^ay the only true way to combat the spirit is through a spirit of cheerfulness, through spread- ing broadcast a spirit of cheerful service, being willing to put forth the same conscientious endeavors we ever did, and to get the rest of the country to do the same thing. Love of Service. It would be almost impossible to measure the value of such a propaganda spread broadcast across this country today — a doctrine of cheerfulness, a doctrine of love of service. That is what the new Doherty Organization Fraternity stands for and the Doherty spirit is fraternity. THE DOHERTY SPIRIT I want to get that thought in your minds. I see a good many from the properties here today. I want that message carried out to the properties' if I can get it there, and I think it would be a good thing for every one of you to carry it to your homes and carry it to your friends. Let us stop to smile. The world is still going on. Why think that it has all stopped? You go along today and see a lot of sad faced people and you would think the world was coming to an end the day after tomorrow and that they had not found a place to be buried in. Now, you get right down to it and analyze almost any one of those persons and they cannot tell you anything wrong, except there is a spirit of unrest in the air. I think we have got less of that in this Organization — and I am thankful for it — than in almost any other organization in the country, and I think the secret of it lies in the Doherty Spirit, the spirit of cheerful service. I think if you will analyze it you will see that this factor has been the great think in holding us together no matter what the future conditions may be. Now, as I said, I did not have any set speech prepared today because I did not have time, and usually when I try to prepare a speech it is not any good anyway I generally end by throwing it away and starting over. But I just want to carry these few words to you, or this little message to you, in my humlble way, and see if I can in some measure instil into you that old family spirit that some of us who were in the Organization in the early days, were fed upon and have grown up since. I want to tell you there is not one from the lowest office boy in this Organization that has not a great future if he will deliver the goods, if he will do unselfishly and ungrudgingly what should be done. I can say to you we will be just as much bigger tomorrow than we are today as we are bigger today than yesterday; and that there will be an inevitable opportunity. But we cannot do that unless you all come along and get in with us, unless you all push, unless you all show the spirit of boosting unselfishly the organization all the time. THE DOHERTY SPIRIT A Slogan. Mr. Doherty as the head of the Society of Electrical Development adopted a slogan some time ago: "All together, all the time, for everything electrical." That was simply transferring the essence of the Doherty Spirit. As I see it, it means simply this : "All together, all the time, for the Doherty Organization." CHAPTEPv SEVEN FUNDAMENTALS OF ELECTRICITY By T. COMMERFORD MARTIN Advisory Secretary, National Electric Light Association Introduction. It is very gratifying indeed to listen to such an obitu- ary notice, but I must disclaim any desire this evening of appearing before you or posing before you in the light of the only man who knows what electricity is — ^because I don't. And I think you will know less about it when I get through than you do now. The Fundamentals. I understand my subject is "The Fundamentals of Electricity". I am going to give you a little list, though it may not be according to the canons or exactly correct. This is the list of fund- amentals of electricity that I have made up, — water, fuel, copper, iron, steel, wood, land, capital, labor, enterprise, and that which I have before me so manifestly at the moment — brains. In mtroducing the lecturer Dr. Fuld said: When elecricity was first introduced as a commercial commodity a man was indicted in the State of Massachusetts for the larceny of electricity, for making an unauthorized connection to a transmission line and taking current without paying fdr it. The court promptly quashed the indictment on the ground thatl electricity was not property susceptible of larceny. Electricity, the court held, is intangible. It is invisible. It cannot even be smelled as gas is detected by the sense of smell. It is not subject to measurement by the ordinary standards of measurement. It has neither length, breadth nor thickness. It was found necessary to amend the statute in order to protect electricity from theft. If the courts have experienced this difficulty in getting a proper concept of electricity, our own lack of knowledge of this subject is eateily expla-ined though it cannot be excused. We use electricity to such a large extent in business and in our homes every day that we all ought to know more about it than we do. To furnish us • this information Mr. Martin, than whom there is nobody in this country, if indeed in the world, better qualified to talk on the subject, will tell us something about the fundamentals of electricity thi» evening. Ladies and gentlemen: Mr. T. Commerford Martin. FUNDAMENTALS OF ELECTRICITY Static And Djmamic. Electricity, as you know — it would be pre- sumption on my part to think that this is the first time you have heard the statement — is both static and dynamic. There really is no underlying difference. At the present moment you are static; when I get through, as speedily as possible, and you get up and walk out — you will be dynamic. The same person, same thing absolutely. That is one of the underlying fundamental mysteries about electric- ity, which is presumably beyond description, and so regarded, answer- ing that long category of adjectives which my friend Doctor Fuld used so eloquently. But still it is within our comprehension as much as any phenomenon with which we are acquainted in this little world and in this brief life of ours. Motion. Both static and dynamic electricity are produced by motion, and in order to get any electrical efifect, manifestation or phenomenon of any kind we must have motion. Electricity can be produced in various ways. Only yesterday, or last night, I read the statement that Benjamin Franklin was distinguished because he made the discov- ery of electricity by rubbing a cat's fur backwards. I think his discov- ery probably would have been just as fertile and fruitful if he had rub- bed the cat forward. My friend Mr. Edison once tried to charge a telegraph line by using a cat as a battery, but the cat objected in the middle of the experiment and Mr. Edison has made no later report on the subject. - We can get frictional electricity of the same kind by rubbing various materials together, notably glass plates, the large plates which you see in the doctor's office if he makes a particular use of electricity in his work. Frictional electricity is also seen in the lightning from the clouds, which is a beautiful phenomenon, but so far as electrical development and utilization is concerned is today vastly more of a FUNDAMENTALS OF ELECTRICITY nuisance than the great Creator intended it to be when he first put it in the skies. We really have nothing very new in electricity today in relation to motive power or light, or its application to medicine or chemistry, but the trouble was that all the earlier discoveries in the utilization of electricity were based upon getting current from batteries. When I tell you that an ordinary assumption or estimation is that it costs twice as much, ten, twenty and possibly thirty times as much to get electric- ity from a battery in which zinc is consumed as from a waterpower plant or a dynamo plant run by a steam, gas or oil engine, you will realize that electrical development, science, progress and utilization could make no very great headway until we got away from the regime of the battery. It is true that batteries are still used for push-buttons, in teaching the young how to shoot, in raising up electricians for the future, and are also used somewhat in telephone work. But the bat- tery has fallen very much to the rear as a means of furnishing current for electrical development and utilization. We have the same phenomena, however, that we have in connection with electricity, which is derived from electro-dynamic sources, as we have with the battery. The main thing is to secure your current and, as I have said, there can be no electricity unless there is motion, which is equally true in the battery as well as in the dynamo and in the motor, the battery being regarded simply as a mechanism or machine for pumping electricity out of the battery and onto the line for useful work. Djmamo. Our whole modern use of electricity is dependent upon the electrical energy or current which we derive from dynamo electric machinery. You have before you for a moment, we will say, a human dynamo. The phenomena are so simple and so readily understood. FUNDAMENTALS OF ELECTRICITY I think, that you will follow me when I show you that I have in my left hand here an ordinary plain permanent horseshoe magnet and I have in my right hand a coil of wire. If I move that coil of wire up and down in front of that magnet or better, if I revolve it, or if I move the magnet in relation to the wire, even as I am doing that — and if I had the instruments I could show you — I am getting up a current of electricity in that coil, and that is all it amounts to, even when we set Niagara to work. We can convert that permanent magnet as we call it, into an electro- magnet by winding a little wire around it and using soft iron instead of hard steel ; we can multiply the number of coils ; we can put the coils within the field of the magnet and revolve them, or we can revolve the magnets around the coil of wire, or we can set both in motion. As, long as we change the relative positions, arid as long as the wires are cutting the lines of force which are emanating from the poles of those magnets, we are getting an electric current, and all we have to do is to conduct it away from that bunch of wire or the bunches of wire, put it on the circuit, and there utilize it. That is all there is to it. I do not think that is such a wonderful thing to understand. Just to illustrate, here, for example, is a model of a little Edison dynamo. Thus you have your electro-magnet and here you have your coil of wire and all you have to do is to hitch an engine, a steam engine or other engine, to this by means of a belt and set that coil in motion and in accordance with the speed at which you run it, the amount of wire there is and the size of the machine, you get your quantity, qual- ity and potential of electrical current. By means of a model bipolar, direct current, Edison dynamo, these principles can be easily illustrated. In all such machines the object is FUNDAMENTALS OF ELECTRICITY simply to spin the coils of wire constituting the armature in front of the field magnets, or vice versa, and this is done very easily by connecting the dynamo , often by means of a leather belt, to a driving steam engine or water wheel, so as to use the energy of expanding steam or the energy developed by falling water. In proportion to the amount of prime energy used, the size of the dynamo, the number of magnets in the field, the amount of wire in the windings of the arma- ture, the speed of revolution, would be the quantity and quality of the current obtained — its voltage and amperage.* Motive Power. Developing these few fundamental ideas, let us pass briefly over the ineffective method of producing electricity by friction and the expensive method of developing it by chemical action in pri- mary batteries, to treat of the generation of current by modern methods, starting with the fields of force around magnets, and around wires through which current is flowing. The familiar analogies as to the flow of water in a pipe may be used to emphasize these prin- ciples. So long as you have the motive power to spin the electro-magnets and coils of wire in front of each other, and to convert by such motion the energy into current — the nature of the prime mover matters little and is subject to almost infinite variation. In the Far East even man power has been used. The lecturer had seen many plants driven by wind power, efforts have been made to utilize the wave motion of the ocean, and when all the coal is gone, great possibilities might be found in the tides. Water Power. Meantime great and growing use is made of water power, by means of two main types of hydraulic machinery — water turbines and bucket water wheels — the former being employed usu- ally for large dynamos — the latter for small units. The difference is broadly that in turbines the shaft to the revolving field or armature •The lecturer began at this point the presentation of about thirty slides accompanied by a concurrent discussion. FUNDAMENTALS OF ELECTRICITY is connected vertically and in the wheels it is connected horizontally. But the result is the same in getting as much as possible of the energy out of the falling and gyrating water into electrical current. Some of the slides showed one of the great power houses at Niagara* — the long shafts connecting the turbines at the bottom, 150 feet below, with the dynamos at the top, being compared two spools at the opposite ends of a lead pencil. Today they are generating over half a million hydro-electric horse power at the Falls and some people com- plain of their "desecration". "I think it is the best thing that ever happened. They are just as beautiful as ever. You look at a beautiful woman and she is beautiful just to look at. But you thank God when she is married, and is then more beautiful and useful than ever. Now Niagara is just married ." , At Niagara the dynamo generators shown were of the alternating current, two phase type, and dynamos may also be three phase, single phase or multiphase, or may be of the direct current type — there being as many varieties and types as there are of gasoline cars. The differences lie in the arrangement of the magnetic poles, the coils of wire, and the manner in which the current is "piped away" from the machines to the circuits of transmission and distribution. Engines. Passing on to steam engines, these are of numerous types, like the boilers feeding them with steam ; and the furnaces under the boilers instead of using coal can be stoked with almost anything burn- able from sawdust and sugarcane trash to finely sprayed oil or natural gas. A number of slides were exhibited of types of engines of the recipro- cating type and in contrast with these steam machines of the recipro- cating type, were shown steam turbines which are now the prevailing practice in the largest generating units up to say 50,000 H. R. Ref- erence was also made to gas and oil engines for driving dynamos — the function and the result being ever the same, through the cycles FUNDAMENTALS OF ELECTRICITY of converting heat and energy into motion and that motion resulting in the spinning of coils of wire in front of magnets. Switchboards. There are various types of switchboards to receive the current thus generated, and of the transformers to which such current, if alternating, is also often delivered to raise or lower its volt- age, particularly in the case of long distance transmision at high pressure, say 150 miles or 150,000 volts, or to take ordinary alternating current of say 22,000 orll,000 volts and bring it down to 220 orll5 volts for use in the home. The electric transformer is a machine that leads a double life, and to explain its construction let us examine this little model of the first one ever put into practical use in America. If you want to store electricity as gas is stored in a reservoir, this can be and is largely done by means of the chemical reaction effect in a storage battery. Uses. The next fundamental condition of electrical supply after the generation and distribution of the current is dependent on what you want to do with it, and this leads into ramifications affecting every department of social life and of industry. Electricity is a protean agent with infinite transformations and reversions, so that in an extreme case coal could be burned at the remote mine to generate the current electrically, said transmitted current being used to burn up garbage which could in turn generate current for running or lighting or heating a trolley car. Some of the leading uses of electricity are the following : — 1. Electrical heating processes as well as various heating and cooking devices of a domestic or industrial nature. 2. Electric lighting as in the arc lamp consuming usually small carbon sticks; the incandescent filament lamp; the vapor lamp in which a gaseous content becomes luminous. FUNDAMENTALS OF ELECTRICITY 3. Electro-chemical processes for extracting metals or for plating. 4. Electric power by the application of the electric motor to driving machinery of all kinds. 5. Electric traction by which motors propel trolley cars, electric locomotives, mine trains, electric vehicles, escalators, and moving side walks or continuous platforms ; traveling cranes, endless belts and package conveyors and telpherage systems; the hauling of towboats on canals ; electric launches, and traveling dredges for working refuse ore dumps, etc. 6. All kinds of telegraphy and telephony depend upon electric current and there are electrical arts of healing as well as the devilish arts exemplified in the recent Great War of destroying men and the materials of warfare. CHAPTER EIGHT CITIES SERVICE FINANCE By JOHN MILTON McMILLIN Assistant Manager, Bond Dept. Henry L. Doherty &• Co. Where Does the Money Go? The purpose of our meeting today is to see if we can get a more practical idea of Cities Service Company. To some of our people the various official statements in regard to the Company seem complicated. We want to see if we can translate these things into plain, simple terms, so that we can understand them ourselves and so that we can explain them to others. We shall also discuss the question of why a prosperous company like Cities Service Company continues increasing its capitalization and raising further amounts of money from, time to time. Some would say the earnings are so tremendous that this would not appear to be necessary. All of our people ought to understand these things. In intrcKluciiig the lecturer, Dr. Fuld said: When we tell our friends that we are working in Wall Street, they envy us because Wall Street is the land of promise), the land where fortunes are made. And when we tell them that we are connected with the House of Doherty, they envy us some more because there is no security on the Street which has a brighter future than Cities Service, and no house that can do more for its employees than the House of Doherty. But are we able to take advantage of the opportunities before us? Do we understand enough about the securities of our House? Only two days ago, I received a petition"' from the women employees of the House, asking permission to give up a portion of their Saturday afternoon each week to learn more about our securities. The'y did not wish to become bond salesmen, but merely to learn more about Cities Service in order that they might take advantage of their opportunities. With their usual astute- netas, these women had accurately sensed a need which all of^ us havei felt indefinitely, and they were willing to give up a portion of their hard-earned leisure each week to learn. With a view to giving all of us some of this information which we all need, Mr. J. M. McMillin, Assistant Manager of the Bond Department will talk to us today on "Cities Service Finance." Ladies and Gentlemen, Mr. McMillin. CITIES SERVICE FINANCE The simplest way for us to get some light on these matters is by the study of ,what conditions and problems we should have to deal with if we were trying to build up a business of our own. We Will Start a Business of Our, Own. Let us suppose that we who are here in this room hit upon the idea of going into the business of manufacturing and selling some article or other — furniture, for instance. To embark upon this undertaking, we should have to have among us, of course, some men who knew all about, the business in a general way, some who were experts in buying the raw materials and making |the finished products, others who understood where and how to sell the output, some who could run the office and keep the accounts, and, of course, among us all we should have to have the necessary money to inaugurate the business. We Raise the Money. After preparing our, estimates, we find that $100,000.00 in cash is the amount needed with which to begin the business and operate it for the first year., We organize a corporation as the most satisfactory way that we can all go into partnership together. Our company will have but, one kind of stock, for we are all taking the same risk and each of us will get an amount of stock proportionate to the amount of money furnished for the enterprise. We start out with all of us as Common stockholders. We Take Common Stock and Some Risk. Now understand that we have gone into a speculation. We have no positive assurance of even a moderate income from this stock. True, we have made very careful estimates and the indications are that our money will earn 25%. But we have not yet demonstrated that this is a fact. We have put our money into this enterprise for the deliberate purpose of making a CITIES SERVICE FINANCE profit out of it. We shall not let ourselves be concerned for a year, or possibly longer, with regard to the question of whether or not our stock can be sold on the market any day that we please at the price we are now paying for it. We are concerned with the future only. We think we can build up a profitable business and we take a certain amount of risk to achieve that end. It may be that we shall lose our money. Very often that happens in cases like this. But we will assume that in our judgment the risk is only a moderate one and is very much outweighed by the possibilities of profit. Business is Good. So we start. We build our factory, put in our machines, stock up with some lumber and other materials, and begin turning out the product. Meanwhile we send our salesmen out on the road to make contracts for the sale of our goods. Our plans having been well laid, we find we can make a good product and that there is a splendid field for its sale, so that success rewards our efforts. Indeed, we are able to sell everything we can make and more too. The Business Gets Ahead of Us. Under these conditions, where would we find ourselves at the end of the year? We would figure out that considering the manufacturing cost of the goods we sold, plus the cost of administration and commissions to salesmen, altogether left us still a substantial margin in comparison with the price received for our output. After thus calculating our earnings, we are pleased to find our original estimates confirmed by the fact that we have earned $25,000, which is in fact the 25% which we expected to make on our original investment. But on examining our bank accounts, we do not discover this $25,000 to be there. Something else has happened in our business. CITIES SERVICE FINANCE Where has this money gone ? Splendid Profits But Little Cash. The explanation is simple. Our business has grown. During the year we had to make a certain extension to the building or put in a few more machines. Some of this cash went for that purpose. Of course, this is not operating expense, for we still have an asset to represent the money which went into this extension. But it did take cash to do this just the same. At the same time we find that with our growing business we have to keep on hand a larger amount of stores and supplies than we use to. More lumber, more leather, more nails, etc., keep more cash tied up than was necessary at the start. Plant Extensions Run Us Into Debt. Thus we have gone into a successful business, earned 25% on our money, and we have every reason to congratulate ourselves. But all of our earnings have had to be invested in the extension and growth of our business. It may even happen that we have ended the year in debt to the banks. Perhaps we had to borrow some more money in addition to our $25,000 of earnings, in order to keep pace with the demands of our business. Still We Need More Money* Now, what are we going to do? We have made a success and yet we need some more money, for we must pay the banks and, besides that, we can see it would be a good plan to increase our plant still more in order to take advantage of the sales opportunities which are open to us. So Much Business We Don't Know What To Do. Of course, we could have another meeting and all of us might agree to buy some more of the common stock just as we did in the beginning, but we would immediately have a number of riddles to solve if we went about it in that way. There would be some of us perhaps who did not have any money available just now and they would object to the sale of some more stock to other people at anything like its original price. They would protest that the risk of the original subscriber CITIES SERVICE FINANCE has been eliminated by the demonstration of the year's operations. They perhaps would demand that the new stock be sold at $150 per share instead of $100 per share, which was the original price. It might be that those of us who did have some money would object to paying any such price. So we would find it hard to agree. You can see that unless we were all prepared to buy the same amount we did in the first place, it would naturally follow that everyone's percentage of interest in the business would change. We Want to Rent Some Money. The most obvious way to solve our problems is to sell some Preferred stock. We know that there are plenty of people who are satisfied with six, seven or eight per cent, investments, provided they can be sure that there is a reasonable assurance against loss. These people are not particularly anxious to go into partnership with us in our business of making this furniture, but they will let us have some of their cash if we| pay a satisfactory rate for it, at the same time making reasonably certain of its safety. We Sell Some Preferred Stock. Therefore, we put out say $50,000 of 6% Preferred stock. The agreements we make in respect to this issue are, first, that we will pay the dividend upon it regardless of whether or not there may be any earnings left for us to distribute among ourselves, and second, we agree that in the event of liquida- ,tion of the business we will pay the Preferred stockholders in full whether or not there should be left anything for us. We seek out people who like this form of investment. We explain to them that we have demonstrated the success of the business, that we have a great deal of property now and that our earnings are running at a rate many times the amount necessary to pay dividends on the new Preferred stock, and we recommend this issue as a conservative investment. We frankly say to these people that their dividends will CITIES SERVICE FINANCE never exceed $6 per share each year, but we do assure them that $6 may be counted upon. Of course we shall have to canvas for people who buy such invest- mients, but we know they exist and we finally succeed in selling the stock. This furnishes the capital we need for our growth. The New Capital Cost Us 8%. It may be that we had to sell this new stock at 75. If so, then we have to pay $6 a year in dividends for each $75 of cash we receive . In that event, this new money will be costing us 8%. But we can easily afford to do this, for we know that the $75 will earn 25% when invested in the business. Why should we not ? The difference between the earnings on this new money and the cost we have to pay to get it, will all be profit to us. At the end of the next year we may again find that our business has outgrown the financial plans we made for it, and so we sell some more Preferred stock. Of course we would do that very thing. Recognizing our opportunity to build up a great business, we would certainly make the most of it. We Sell Some Bonds. After a few years we find that we have a very large and exceedingly prosperous company. We have established our credit and our good name and again we find that we can use some new capital. But perhaps at that time it might be that the average investor has become more interested in bonds than in Preferred stocks. There are times when it is easier to sell one than the other. We should find that we had plenty of property at that time to furnish adequate security for a bond issue. We should have no fear of mortgaging the plant because now we are so fully in command of CITIES SERVICE FINANCE our business we know very well that we can meet the debt when it becomes due. Furthermore, we find that by selling bonds we do not have to pay quite so much for the money as we had to pay when we raised our new capital with Preferred stock. At that time we sold 6% stock at $75 per share. Now perhaps we shall sell a 5% bond at a net cost for the money of 6%. So we go ahead. We who are so prosperous issue some more securities. We sell some bonds and increase the plant again. We Keep Going Ahead. Meanwhile we have made a lot of money. The original speculative investment we made, has grown to be worth four or five times its original cost besides which we have been receiving very large dividends. There are other people who own Preferred stock in our business who actually have a claim ahead of us on the earnings and the assets of the business, but we are well satisfied with the arrangement. There are other people too who own bonds on our plant. These other people took far less risk than we did. Indeed, the bondholders took no risk at all. Accordingly, their share in the earnings of the business is very much less than ours. Now you have seen why a prosperous, growing business keeps on raising money. This is exactly the explanation as to why Cities Service Company brings out new issues from time to time to raise additional capital, even though its earnings are enormous. We Make It a National Enterprise. Let us go on with this furniture business. Why should we stop with this first plant? We have built up a dependable organization. We understand better than ever where and how to buy our raw mterials. We have developed a strong demand for our products. We can see how to do a much greater amount of business. Quite naturally, therefore, we build another CITIES SERVICE FINANCE plant, at Grand Rapids perhaps, and others in various parts of the country, until finally we have, let us say, half a dozen. This enlarges the business not only, but also our problems of financing the growth of all these plants. We have to sell a Preferred stock issue or a bond issue on first one and then another, each time we have about a $50,000 problem, or it may be a $100,000 problem, to handle. We Need To Finance at Wholesale. Right here it should be stated that it is much easier to finance on a large scale than on a small scale. You cannot very well go to an investment dealer with a $50,000 issue and expect him to incur the expense of an examination by engineers, accountants and lawyers, to determine whether he wishes to retail the secruities to his customers or not. His costs of this kind very likely would exceed the, profit he could hope to make out of so small an amount of business. All of our plants together, need, let us say, $500,000 this year. If we could put that problem into one deal we could easily find an investment dealer who would be glad to look into the matter. We Form a Holding 0>mpany. Therefore, we form a holding company. We get up a new corporation, which, we call the General Furniture Company, for instance. We give up all the Common stocks which we originally held on the half dozen different plants to this new Company, and we take back Common stock of the holding company in place of it. So far the result to us is very much the same. We still own exactly what we owned before. But we have designed a much more convenient instrument for financing the growth of our various properties. CITIES SERVICE FINANCE We Sell Preferred Stock of the Holding Company. Perhaps the first thing we would do would be to sell some Preferred stock of our hold- ing company. It will ,be salable for the same reasons that made it possible for us to sell our underlying Preferred stocks. Of course, this Preferred stock of our holding company will not be the direct issue of an operating company actually engaged in the manufacture of furniture. In that respect.it will be a little less attractive to some people than the kinds of Preferred stock we sold in the first place. But this new one will have an offsetting advantage, however, by virtue of the fact that its dividend will be assured from half a dozen dififerent sources. This will, make the new issue very much more attractive to a very much larger number of people. Now you have the comparison with Cities Service Company prac- tically complete. Cities Service Company is not in the furniture business, of course. Its properties consist of public utility companies and petroleum companies. But the similarity is much the same in the manner of its prosperity, its growth, and its problems of finance. Do not allow yourselves to be disturbed when some critic says to you that Cities Service Company has too many securities outstanding ahead of it which were issued by the subsidiary companies. You saw how this worked out in our furniture business. The all-important question is what total amount of securities are there outstanding to what grand total earnings. Cities Service Company. If you care to look at the last annual report of Cities Service Company, you will find that the combined subsidiaries had a business of about $90,000,000 gross a year, out of which they had left in net earnings about $30,000,000 a year. CITIES SERVICE FINANCE Cities Service G>inpany Goes On Too. Now let us compare the securities outstanding. You will find about $100,000,000 of bonds of the subsidiaries outstanding in the hands of the public and about $10,000,000 of subsidiary stocks also owned by the public. Add to these the various issues of Cities Service Company, being the Debentures, the Preferred stock and the Common stock, amounting, altogether to about $125,000,000, and you have a grand total of all securities of approximately $235,000,000. This is a good deal when expressed in dollars, of course, but when you consider the proportions you will note that the situation is remarkably strong. The combined net earnings are equivalent to about 13% on this whole capitalization. Obviously Cities Service Company can with profit continue to issue new securities so long as the new capital can be obtained at anything around six or eight per cent. While I have no thought of trying to sell you any stock of Cities Service Company today, it is worth one more moment to point out to you a few facts in regard to its securities. Cities Service Common Stock. Those of us who are confident of the future, make our investment in the Common stock of Cities Service Company, or the Bankers Shares, which are much the same thing. You must remember, of course, if you buy the Common stock you may not be able to sell it tomorrow or next month at the same price you paid for it. It may be higher or it may be lower. But if you can afford to wait, just as you did when you went into the furniture business, you will certainly make some money out of it in our judgment. Cities Service Preferred Stock. Your own investment problems cannot very well be solved for you by other people. It may be that for your own purpose it is better to keep your money invested in CITIES SERVICE FINANCE such a way that you can reasonably expect to sell out if you have to, in order to raise cash for some emergency. Under such conditions, of course, you will have to make more conservative investment and expect a more moderate return on your money. Cities Service Com- pany Preferred stock is the more appropriate security for such con- ditions. Its price does not fluctuate very widely. The Preferred stock has ranged between a high price of 93 and low price of 67 during the time that the Common stock has ranged between a high price of 485 and a low price of 185. This range of quotations covers a very wide fluctuation in financial conditions. Cities Service Preference "B" Stock. Right here let me say that this new issue of Preference B stock of Cities Service Company should be a great boon to many people. There are great numbers who can save for investment $7.50 a week or month, and they will do very well to employ these savings in the purchase of the new Preference B stock of $10 par value per share, and which at present may be had at a price of $7.50 each. The dividend rate being 6% on the par value, the investment return on the purchase of that stock is, of course, 8%. One is very lucky to be able to invest small sums at such an advantageous rate of return. The Rental Value of Capital Changes* One final word respecting changing quotations. Sometimes we are scolded because a man has bought Cities Service Preferred at 92 and now it is 76, for instance. He thinks this is our fault. Perhaps he protests that it is due to our having issued so many securities, forgetting for the moment how much better his Preferred stock now is intrinsically than it was when he bought it. The true explanation is that when he paid $92 for an income of $6 per year about three years ago, he could buy a pair of shoes with that same income. Now, with that income, he can just CAT IKS SERVICE FINANCE buy DHL' shoe. As a natural result no new investor wants to pay quite so much to purchase a $6 per year income, as he was willing to pay three years ago, for the simple reason that the income is not so useful as it used to be. In other words, the rental value of capital, like everything else, has been influenced by the rapid-fire changes of the last few years. CHAPTEP. NINE THE TOLEDO TRACTION SITUATION By FRANK R. COAXES President of Toledo Railways and Light Co. Introduction. I am just briefly going to give you some words on the Toledo situation, including the electric and gas as well as the traction business of .that city. Now, I appreciate very much the opportunity of being allowed to talk to this august body and, further, I am glad that Doctor Fuld gave me a subject; for if he had not I would have been somewhat in the position of the preacher who was called upon suddenly to deliver a funeral sermon, and in his haste he forgot to ascertain the sex of the corpse. He realized this about the middle of the sermon and leaning over he whispered to the chief mourner, "Brother or sister?" The chief mourner looked up and said, "No, cousin," Now, you people sitting down here sometimes envy the one who has to do the talking; but I want to tell you that the talker feels about like an Irish friend of mine who was being ridden out of town on a rail, and he remarked that if it wasn't for the honor of it he'd a great deal rather walk. In Introducjns the Lecturer Dr. Fuld said: We residents of New York are inclined to charge our acute traction situation to our present city administration. Tliat the causes underlying this situation extend over a wider territory, how- ever, than New York is evidenced by the fact that other cities, notably Toledo, have been struggling with the same problem. Toledo has handled this situation in a unique manner. It was handled by Henry L. Doherty, through his lieutenant in the field, Frank R. Coates, President of the Toledo Railways and Light Company. It was handled in such a manner that it caused the world to sit up and take notice, and many a person has said prayerfully, "Would that we had a Henry L. Doherty to handle the New York traction situation." Ladies and gentlemen, Frank R. Coates is here from Toledo to-day to tell us something about the Toledo situation. Frank R. Coates. THE TOLEDO TRACTION SITUATION I am going to take the liberty this afternoon — as Doctor Fuld has impressed it upon me so strongly and also Mr. Bump ,and Mr. Scott and others, that I shall be through prior to five-fifteen— of reading to you the notes that I have made. You know, when you start to talk on this Toledo situation, a person is liable to talk from now until midnight and then not get the whole story out. And for that reason, and again so that I will not miss any of the salient points, I am going to take the liberty of reading the majority of it to you. You know, sometimes people get forgetful when they have not their notes. That brings to my mind another occurrence of an English clergyman. You know over there they do not do things quite as rapidly as we do them here. Take for instance getting mar- ried. In this country, you go to the minister and he says, "John " this is not referring to John Mc Millin now' — he says, "John, you take Mary? Yep. Mary you take John?" Yep. Go on home, five dollars, please." Now, you know, over in England it is a little diffierent. I remem- ber a rector one time who was new in the ministry, and he had his first wedding to perform. He thought he had that ceremony memorized perfectly. He went to the church and as he saw the bridal party approaching the ceremony began to drift away from him, and finally when the bride and grodtai and the rest of the party got up to the chancel every confounded thing of that service had left his mind and he thought a minute for some appropriate verse of Scrip- ture, and ALL he could think of was, "Oh, Father, forgive them, they know not what they do." City of Toledo. Toledo has received a great deal of advertising, some favorable, some otherwise. I do not want you people to picture Toledo as a town of turmoil, a city of the older western type that you read about in history. We are just like any other American city or town. We have our churches, schools, libraries, art galleries, business section, industrial section, and no saloons. Toledo was the first metropolitan city over the top in the Third THE TOLEDO TRACTION SITUATION Fourth and Fifth Liberty Loan campaigns. Toledo has a popula- tion of 244,000 people and has in the neighborhood of six hundred industries. We are the third largest railroad center in the United States. There are ten separate and distinct interurban lines running into our town and twenty-one distinct divisions of steam railroads. We have a navigable dock frontage of twenty-five miles. On our city building is the largest three overlay electric sign in the world, and our own office building, as we understand, is the largest building with electric outlining. Both of these were con- ceived by Mr. George Williams of this organization. We are nationally known for a nu'mber of our activities. Take for instance, the Overland. At present they employ sixteen thou- sand persons, and turn out over eight hundred machines per day. As soon as the transportation of steel and other raw materials is improved, they will turn out one thousand cars per day. At the present time they are the largest individual users of electric current supplied by a central station, the largest users of central station power in the world, using to-day twenty thousand horsepower. Toledo is the largest clover seed market in the world. Also we are within one hundred miles of._ the center of population of the United States. It is the home of many nationally advertised articles such as Willys-Overland automobiles. Champion spark plugs, Libby Plate Glass, Milburn Electric Cars, Creolite Floors, American Can Company cans, National Supply Company products, Toledo Scale Company scales, Milburn wagons, DeVilbiss atomizers and paint sprayers, Owens bottle machines, American Bridge Works products, Gendron bicycles and wheel chairs, Haughton elevators, Woolson Spice Company products, McNaull tires, and Hull umbrellas. These are a few of the activities of Toledo. Newsboys Association. I do not want to pass this general descrip- tion of what we have there without calling attention to the fact that Toledo, was the originator of the Newsboys Association move- ment. That is a great work. We have at present a building that THE TOLEDO TRACTION SITUATION houses for their amusement and instruction two thousand newsboys. This was built and is maintained by a number of the generous citi- zens. On a Sunday it is well worth a visit to this institution to see fifteen hundred or two thousand of these boys being entertained by the different organizations of the city. These entertainments consist of talks and vaudeville entertainment. I recall one Sunday not long ago — well, I say not long ago; this was several years ago — I was sitting there, and one of our old trustees was in a very dignified way explaining how any of these boys could become president of the United States. Well, most of them knew it was bunk, for the simple reason that most of them were foreigners. The little fellows were pretty attentive, but after he had talked on this subject of being president for a number of minutes and they thought he was about through and going to sit down, he went down into his papers and pulled out a sheaf of foolscap said, "Now my young gentlemen, I would like to begin my talk of the day to you." That was more than two little kids down in front could stand, and they looked up and saw back in the wings a fellow we knew as "Gunck," and one of them cried out, "Hey, Gunck, give the big guy the hook." And that is the way they would receive anyone who did not suit them. Now, "Gunck" was known to these newsboys by that familiar title. He was John Gunckel, the founder of this organization. He would be known to you or myself as Mr. John Gunckel, or Com- modore Gunckel; and I tell you he did a wonderful work, and when he died — I can see that sight yet — fifteen hundred news- boys following his body to the grave through a heavy rain four miles to the cemetery, each boy with a stone in his hand; and when the services were over each little fellow deposited the stone at the head of Gunck's grave. That was erected into a monument twelve feet high, and that was the newsboy's monument to the founder of their association. Toledo Railways and Light Company. The Toledo Railways and Light Company is divided into six major departments: there are the electric, gas, street railway, auditing, new business and heating THE TOLEDO TRACTION SITUATION departments. We were very fortunate in the last year to have all these housed in one office building. That building is six stories in height, and, without going into too much detail, I would say that in the basement we have a sub-station for downtown distribution of electricity. There are also our employment office, and storeroom for the new business department located here. On the first floor we have the finest show-room we think there is in this country for new business display. In addition there are also the cashiers' cages, In- formation Department, rest room for women, lamp counter, etc. The second floor is entirely devoted to the Auditing Department; the third is the executive floor; the fourth the Railway Depart- ment; the fifth the Electric Department, and the sixth to a joint section meeting room, ticket counting, new business department meeting room, and a large auditorium where various meetings are held, an auditorium possibly a little larger than the size of the one we are in today. Electric Department. I would just in a few words like to tell you what has been done in the Electric Department. Reviewing the history of the Light and Power Department of our company since the Henry L. Doherty Company took it over in 1913 discloses some startling facts in the way of improvements necessary to meet the demands of the city, whose natural growth is way above the average American cities. The barometer which indicates this growth is shown best by the increased number of customers. In 1913 there were 13,180 meters. The December, 1919, record shows a gain of nearly two hundred per cent, in actual figures approximately 38,800 meters representing a capacity or connected load of nearly 100,000 Kilowatts, as compared with 36,000 kilowatts in' 1913. The reason I go back to 1913 is because it was the year that Henry L. Doherty took hold. This may be better understood by comparing ,the output in kilowatt hours for 1913, which was 82,500,000, and for 1919 174,800,000, or a gain of 111 per cent. This is productive of a gross revenue in 1919 of $3,230,949, as com- pared to the gross revenue in 1913 of $1,184,461, or an increase of $2,046,488, or 172 per cent. THE TOLEDO TRACTION SITUATION We have increased our conduit system in the past seven years nearly 100, per cent, v(rhich now has 1,500,000 feet. This was made necessary partially by reason of our big demands for power on the outskirts of the city, which necessitated the installation of approxi- mately thirty miles of 25,000 volt cable, the first of which was install- ed in 1914 by reason of the demand of 1200 kilowatts at the Overland plant, and showed signs of rapidly increasing to a point beyond the capacity of any aerial lines that could be built within the city limits. This one factory has increased its demand from 1200 kilo- watts in 1913 to 16,000 kilowatts, and before the year is out may reach 18,000 or 20,000 kilowatts. This system also serves to operate more economically our De- troit Avenue station, which is operated as a heating plant in the winter and shut down in the summer, caring for its load through this cable system. A word might be said as to the personnel for caring for this system. There were some 200 employes in 1913, where the pay roll now for the electric department is represented by 474 em- ployees. This is necessary by reason of operating the system more efficiently, both in operation methods, of designing construc- tion, caring for the records and statistics which have proven them- selves valuable in every way. The Standard Oil Company, is building a plant claimed to be the largest in the world, in which, it has been said, it will centralize its oil refining business, and it will at least be the headquarters of the Stand- ard Oil Company in Ohio. No opportunity is given for expansion in Cleveland and with the resources available here they have given Toledo this attractive industry. There is estimated an increase in gross electric revenue, that will appear on our books one year from today of nearly one million dollars, of which, one-third is actually signed up as new industries that will come on our system within nine months. Gas Department. Now a few words about the Gas Department. At the time the Doherty interests took over the Rail-Light, the THE TOLEDO TRACTION SITUATION sales were running about 14,000,0(X) cubic feet per month, 10,000,000 cubic feet domestic and 4,000,000 cubic feet industrial.. On account of the natural gas competition, we devoted our time to the indust- rial end and we were, able to increase the industrial sales to 13,560,000 cubic feet for the month of December, 1913. During the year 1914 we sold 267,000,000 cubic feet, giving us a gross of $184,567. We continued our eiiforts on industrial sales during the years 1915 and 1916, and were able to increase our gross for the year up to $252,000. The latter part of 1916 the coke oven gas from the Toledo Furnace Company became available, and a concentrated effort was made to interest the large industries in gas to replace oil. Through the untiring efforts of Mr. Loebell and his industrial heating engineers we were able in the latter part of 1917 to connect up a large part of the Overland and the new plant of the Mather Springs Company. During the early part of, 1918 the old plant of the Mather, together with a part of the Libbey Glass Company and practically all of the heating operations of the National Supply, Doehler Die Casting Company and Bock Bearing Company were taken on, with the result that during 1919 our sales increased to 1,882,000,000 cubic feet and a gross of $704,297. Please note the increase in five years, from a gross of. $184,567 in 1914 to $704,297 in 1919. It might also be interesting to know that the results obtained in 1919 were under adverse conditions, owing to the strike at the Overland and Bock Bearing plants. At the present time we are up to the output of the Furnace Com- pany and are, not taking on any more large industrial customers. I might add here that experiments are being made that will rev- olutionize the manufacture of gas in Toledo at this time. Monday, February 16th, our output was 9,843,000 cubic feet which is the largest 24-hour send-out in the history of t!he company. About two-thirds of this amount went out between 6 a. m. and 6 p. m., and it, was necessary to make 445,000 cubic feet of water gas in our own plant, in order to keep the holder out of the pit. Now, I know some of you ladies may not be interested in that, THE TOLEDO TRACTION SITUATION but Mr. Weber asked me if I would not put in something about the gas at Toledo. He is very proud of it. Railway Department. In the Railway Department we have 120 single track miles. Since 1913 we have replaced single track on various lines by double track to the extent of six miles, and we have done considerable rehabilitation work in the same time. The city has just completed a valuation of the street railway property and it indicates that same is in 85 per cent efiScient con- dition. In 1913 we had 230 cars, today we have 325; but about 40 of these have been discarded within the past few years, most of which are single truck cars that have outlived their usefulness. In 1913 we purchased 30 pay-enter cars and in 1916 we added GC cars of the front entrance center exit type, as well as rebuilding 10 single truck cars in our own shops into large double truck cars. We have been gradually installing the pay-enter system, and today nearly all of our cars are not only pay-enter operated, but are also equipped with fare boxes. And I want to give you a tip that the conductors can beat them also. In 1913 we carried 48,000,000 paid passengers; in 1917 we reached our peak of 57,000,000, which dropped to 52,000,000 in 1919. In 1913 we carried ,13,000,000 transfer pasengers, in 1917 17,000,000, and 12,000,000 in 1919. In 1914 we carried 45,000,000 paid passengers, and at the same time carried about 10,000,000 passengers free of charge due to the three-cent fare controversy. Our revenue has steadily increased frdm $1,900,000 in 1913 until in 1919 our gross earnings in the Railway Department amounted to $3,000,000. Early History. On June 29th, 1901, the Toledo Railways and Light Company was incorporated. In July, 1911, the Council of the City of Toledo adopted an ordinance to charge $250 a day rental of lines where franchises had expired unless three cent fares were given. THE TOLEDO TRACTION SITUATION On January 4th, 1912, holders of mortgage bonds brought suit in the United States Court for , receivership. This was brought about by the City's insistence on a straight three-cent fare for the entire day. The lines had been charging three-cent fares in workingmen's hours, one each in the morning and evening. Upon the City 'agreeing with the bondholders' representatives to extend the workingmen's hours in the morning and evening so that three-cent fares could be used from 5:30 to 7:30 in the morning and from 4:30 to 6:30 in the evening, a compromise was made and the receivership not pushed. Purchase By Doherty. Now we get down to the facts with which I think a number of the gentlemen here are more or less familiar. It brings us to April 1913 when Henry L. Doherty & Company came into possession of the property and inherited a political fight of a dozen years' standing, during which time nearly all of the mayors had come into office on a platform of three-cent fares during the entire twenty-four hours of the day. The taking possession of the property was about as strenuous as the majority of the activities that we have had since that day. The stockholders were holding out against the proposition offered by Henry L. Doherty and Company. Mr. F. W. Frueauff came to Toledo to adjust matters. He attended a directors' meeting with me and when the meeting was over I was minus a position. And they did it very smoothly. I found out that that kind of a thing is not so painful to take, after all, if you have Mr. Frueauff along with you. Mr. Frueauff in a very masterful manner endeavored to show the directors the mistake they were making in not turning over the property and living up to the agreements that had been previously made. When we left the meeting Mr. Frueauff in his cool, deHberate way, said, "I will have to get busy and get the property." Thirteen days after we were thrown out we took possession with the aid of the Court. I won't make any mention of that. Mr. Bump and some of the others may feel homesick to think of the gang of associates they took along with them to take possession of the property. They THE TOLEDO TRACTION SITUATION were the roughest roughnecks we ever saw in Toledo. Fare Controversy. In December of 1913, City Solicitor Schreiber introduced a three-cent fare ordinance that was to become effective March 27th, 1914, when all franchises of the street railway company would have expired. This legislation passed without any notice to the Company or without it being heard. On the evening of March 26th, 1914, the radical element of the City held a meeting in Memorial Hall for the purposes of agitation against the Company. Mr. Doherty attended this meeting; he was a stranger in Toledo at that time and sat in the rear of the hall. At an opportune moment he arose, addressed the Chairman, stated that his name was Henry L. Doherty and that he would like to be heard. There were cries of "No, No," and the Chairman refused to recognize his request. The next evening he hired the same hall and on the short notice that was given filled same, was given re- spectful attention by his hearers and made a great impression upon all. Free Rides. At midnight of March 26th the new order of things was to become effective. No one knew of the stand we would take. Mr. Doherty had instructed the President of the Company to issue sealed orders to all conductors, inspectors, superintendents and Manager of Railways, to be opened at midnight of March 26th. When they were read the conductors were informed that they were to insist in a polite manner on the regular fare being paid, which was five cents cash fare, six tickets for a quiarter, three cent fare during two hours in the morning and two hours in the evening and that if any positively refused to pay the regular schedule of fares and presented three cents, they were to be carried free. This condition of. affairs extended from March 27th, 1914, until September 15th, 1914, during which time only about twenty per cent of the riding public took advantage of the opportunity to get trans- portation free. Some people even went so far in order to have three cents in their possession as to have them pasted upon a card, and pulled their card out and showed it to the conductors; others wore THE TOLEDO TRACTION SITUATION them outside on their coats. Oh, there are all kinds of crooks up there. Publicity Campaign. At this time Mr. Doherty inaugurated his celebrated publicity campaign. This was probably the most unique in the history of advertising. He took entire pages every day and under the heading of "So the People May Know" discussed the problems with the people. He used the language of the streets, so that the people could understand. He invited criticisms and every one which came in to him and every one sent to a newspaper he reprinted in his page, and answered it. His talk on "Why I am on Wall Street" and the ones on "Municipal Ownership" are classics. The talks were reprinted in a large volume and the entire edition of 2,000 has been exhausted and fourteen of the leading educational institutions of the country wrote for copies to use as text-books in their classes on advertising. So effective were the talks that although the city told everyone they could ride free on our cars, and even guaranteed police protection to anyone who proffered only three cents, nearly eighty per cent of the riders voluntarily paid the fare we asked, that of five cents. Mr. Doherty's talks, however, were so frank and fair that they carried the great bulk of the public with them. On February 4th, 1914, the Council refused to consider the question of a new franchise patterned after the Taylor plan of Cleveland, or to give any consideration towards a valuation of our property being made. On March 19th, 1914, the Council refused Mr. Doherty's request to extend the Schreiber Ordinance until a valuation could be made. Federal Injunction Proceedings. On March 26th the Company asked for an injunction in the United States Court against the operation of the Schreiber Ordinance, and the Court held that the Company could charge an adequate fare. On August 4th, 1914, an election was held, inaugurated by labor THE TOLEDO TRACTION SITUATION unions, which showed a majority of 1100 in favor of municipal ownership. On August 12th, 1914, Judge KilHts entered a permanent injunction against the three cent fare ordinance. On November 2nd, 1915, the Dotson Ordinance was defeated at the polls by a majority of 6,000. This ordinance had been prepared very carefully by a council committee headed by Councilman Dotson and Mr. Doherty after conferences lasting for a number of months. Then Mayor Milroy appointed a commission which worked with Mr. Doherty for a number of months on the community traction plan. This commission made its report to Mayor Schreiber when he took office, but nothing further has been done with it. Labor Troubles. In March, 1916, the street car men were organ- ized. At this time we had a thirteen day strike during which not a wheel turned, and it was the beginning of what is known as the peaceful strikes of street railway men. Every car was put into the barn and not moved until after the strike was settled. Not a pane of glass was broken and not a person injured during these days when Toledo walked or rode in vehicles of all kinds and descriptions. In April of 1917 there was another increase in wages, as per con- tract agreement made in April,1916, and this 1916 contract covered a period of three years and they were given raises each year. At this time no increase in fare was made, the workingmen's fares having been abolished at the time of the April 1916 settlement. In May, 1918, the Court gave the men another increase in wages, due to the high cost of living at that time, and| raised the fares to five-cent cash fare with a one-cent charge for transfer. In July, 1918, Mayor Schreiber asked for an injunction against the one-cent charge for transfer. This was refused by the Court. The contract with the unions having expired April 1st, 1919, and the company not being able to agree with the union representatives THE TOLEDO TRACTION SITUATION on their demands, the entire question was referred to the War Labor Board. It might be added here that this case was one of the very last heard before the War Labor Board was dissolved. Due to the war conditions the wages were increased materially, and it was necessary for the Company to increase its rate of fare to six cents cash fare with a two-cent transfer charge, in order to meet its obligations. This went into effect June 25th, 1919. Ouster Proceedings. Mayor Schreiber immediately introduced an Ordinance in the Council to throw the Company ofif the street. This was passed by the Council and was to become efifective July 31st, 1919. On July 30th of the past year the citizens filed a referendum petition against the ouster, which carried it to a vote of the people on November 4th. On Election Day out of thirty-five thousand votes cast for and against the ouster, the same carried by an 800 majority. According to our legal authorities, the Company had no rights on the streets immediately upon the closing of the polls at election time ; but the vote on this question was not known until the afternoon of November 8th. As soon as it was officially given out, Mr. Doherty, who was in Toledo upon that day, gave instruct- ions to take all of the rolling stock from the city into the State of Michigan. The Company has two interurban lines running into Michigan, one of them is the Toledo, Ottawa Beach and Northern Railway, and the other is the Toledo and Western Railroad. It was upon these roads that we placed everything that had wheels under it and was the property of The Toledo Railways and Light Company and could be moved. The movement of cars started about seven o'clock Saturday night, November 8th, and by 1.30 Sunday morning November 9th, every piece of our rolling stock with the exception of twenty crippled cars which could not be operated were safely resting upon side tracks in the state of Michigan. On November 10th, 1919, the Council voted not to repeal the ouster ordinance. On November 11th Mr. Doherty returned to Toledo, having been THE TOLEDO TRACTION SITUATION called to Kansas City on November 8th, and actively took hold of the situation. He was besieged by different interests to bring the cars back, but to all such appeals he stated that in his judgment no permanent settlement of the traction situation could ever be made with the cars in the city. He repeatedly stood firm not to return the cars until the entire question was definitely and permanently settled. Return of the Cars. The city, while it had ordered the cars off the streets, seemed very much hurt that the Company had obeyed a legal order, and city officials appealed to the Federal Court Judge who, on November 20th, ordered both the City and the Company into his court. Conference after conference followed, and on Dec- ember 1st Judge KilHts decided that the City must act to give the Company authority to bring the cars back. On December 2nd the Council amended the ouster ordinance to postpone its operation for ninety days. After further argument Judge Killits issued an order for us to immediately return the cars and operate them. At the same time he appointed a commission of seven business men to assist the City in preparing a cost of service franchise, and another commission of seven men to prepare a muni- cipal ownership franchise. This order was issued at six o'clock in the evening of December 4th. At 12.30 on the afternoon of December 5th the cars started to return to the City. Federal Judge Killits was fhe motorman on the first car. Service at Cost Plan. Previous to this time, practically since last Spring, the Company represented by Mr. Doherty and Mr. Bailey had been in one session after another with the Mayor and the Director of Law of the City in the preparation of a service-at-cost plan. It was presumed that the foundation which had been laid by these conferences, which was a service-at-cost plan nearly per- fected, would be taken up by the commission appointed by the Judge and rapidly whipped into permanent form. The service-at-cost commission had its first meeting on Dec- ember 6th, and ever since that time has been working on the plan. THE TOLEDO TRACTION SITUATION Same has been changed so as not' to be recognized as being any relative of the Taylor Grant of Cleveland, which originally had been used as the pattern. If it is a relation at all, it surely is not by blood but by marriage. This plan within the past couple of weeks has been completed and handed to Mr. Doherty for his consideration. Last fall Mr. Doherty agreed to loan the City $25,000 to defray the expenses of a valuation. This now has been completed, but not agreed upon between the City and the Company. The municipal ownership commission found a number of legal obstacles, and through the Legislature and courts they endeavored to have these ironed out. Up to this time, however, they have noth- ing definite to present. The Future. We are all of us most sanguine of success in Toledo. We are not easily discouraged because we have absorbed the optim- ism and enthusiasm of the Doherty Organization. We have endeav- ored to apply its principles in Toledo. We know they will work and we know they will ultimately win, because they are fundament- ally right. We have been greatly handicapped in having the troubles and tribulations of the old company thrust upon us, but we have in the past successfully ironed these out by convincing the people that we were a partner in every success the City makes, and without a thriving public utility company it cannot hope for a continued success. We are convinced that if given the opportunity of putting into effect all the Doherty service ideas, we will build up in Toledo a public utility company that our Organization not only may well be proud of, but the City as well. Conclusion. In some of the dark hours of the past we have never lost heart nor our temper. We are enthused by the spirit put into the fight by Henry L. Doherty, who is never known to quit when he knows he is right, and whose unfailing fountain of good nature has THE TOLEDO TRACTION SITUATION kept us all buoyed up with a spirit that enabled us to keep plugging away every day. Better than all this is to do as Mr. Doherty is always doing,^ "Keep smiling." Just remember the word "smiles" is the longest in our dictionary. Yes, I know there are only six letters in it, but there is a mile between the first and last letters. It's a great help, this smile tonic. It will bridge you over many a difficulty, and "The Pride of Workmanship" and "The Price of Service" coupled with a radiant countenance, makes a combination that will win every place where the Doherty emblem is established. CHAPTEPv TEN THE NATURAL GAS INDUSTRY By HOLTON H. SCOTT General Manager of Operations, Henry L. Doherty &• Co. Introduction. In beginning I desire to state that I do not pose as a natural gas expert. It was my good privilege early in 1912 to come in contact with the various people who were at the head of our natural gas properties and to have visited all of our natural gas holdings during the year 1913. One of the most interesting times I have ever experienced was a two months' visit in Oklahoma and Kansas in the Summ'er of 1913, the larger part of which time was spent in what are now the great natural gas and oil fields in that District. The members of the party on various trips were Messrs. McDowell, Diescher, Straight, Carpenter, and yours truly. If I were to attempt to tell you only a portion of the discussions and predictions made at that time, it would sound like a story from the Arabian Nights. Since 1913 I have made many trips over the properties in that territory — so well named. Empire, and each time I have been even more impressed by the In introducing: the lecturer Dr. Fuld said: Almost daily in our work we find reference made of natural gas. What is natural gas? Is there any natural gas in New York City? How does it differ from the gas we use? Is it more economical? Is it more efficient? Has it any unpleasant odor? These and dozens of other questions regarding natuipoirtunities in the Field. One of the things this should bring to the minds of the younger employees particularly — and I think no doubt it does — is this : That if there are 400 here and 18,000 outside of this office, that if we are all part of one Organization, there must be lots of chances for the young fellow in New York, the youngster here, starting as the office boy perhaps, when he reaches a certain point there must be chances for him to go out into the properties, go out on the firing line and gain his practical experience, in the world in that way. And I want to tell you that there are all kinds of such chances, the whole Organization is full ofj them ; and what we want to do is to stimulate that feeling here in this office among the younger members of the Organization. One of our best sign experts in Toledo today, one of our best illumination experts, is a boy who was answering calls here in 1908 and 1909. Another one of the boys, who was a young clerk, is one of the responsible cashiers in Bartlesville, and so on. The ones that have seen their call, have been ambitious to get out there and out to the firing line, are making good; and I don't believe you could get them back in here, in any possible way, unless it was through some executive promotion. After they got there on the firing line, they liked it. ADVANCEMENT IN THE ORGANIZATION Promotion Policy. Now, our Organization is, we think, distinct from most organizations . in one primary respect, and that is this : That we always try to build from within the Organization. If we buy a new property, it is not our thought to go outside and hire a man to run it. It is not our thought to go and get a new staff to put on that property. Our first thought is, "Whom have we in our present properties that deserves the promotion and deserves the chance to go on to that property?" Build from within. And all the way along you will find that rule is adhered to, that we never do go outside, unless it is absolutely necessary, and we hope, we want to be in the position where we never will have to go outside to get any man for a responsible or executive position. Love of Work. How, as to whether we can make good that motto, and whether we can stick to that plan or not, depends as much upon the people in this room as upon anyone else. It depends upon how you grow and how you develop and how you come along, as to whether we can keep it growing from within. We don't know how fast we are going to continue to grow or how far. We do know that there is infinite growth ahead of us, that what we are today, while it may look large to some, is small in comparison to what we can be and what we will be if we hit the ball and go at the game right. For, after all, this work is all a game, it is all a play. The man who doesn't love his work and doesn't get play and enjoyment out of it, simply is going to make himself sooner or later, either in his present job or in some other job, a drone; he is not going to get far. If your work is work to you and you don't see beyond that work and see the pleasure in work and the pleasure in service, look out; you are in danger of standing in your present station for a long, long time. Advancement of Henry L. Doherty. Now, advancement in the Or- ganization might be cited in a great many notable cases. I haven't the time to go over them and I doubt the propriety of calling all of the different cases that I mention by name; but let me just cite a ADVANCEMENT IN THE ORGANIZATION few, plain, blunt conditions to you, to show you that your chance, everyone of you, is just as big and just as good as that of any man who has ever been in the Organization. Where was the gold spoon that gave Mr. Doherty his start when he left school, between eleven and twelve years of age, and went to work as an office boy? Who gave him his chance? Where was his financial backing? Where was the man to give him opportunities ? He didn't have them ; he had to go out and create them for himself. Everything he got came through his own initiative and his own perseverance, on his own will, to do. Mr. Frueauif, the same way, from a boy on a lamp window in the Denver office, a position of no more importance than that of any office boy in this office, up to his present position. Who helped him? He helped himself from within, just as Mr. Doherty did and just as it lies within the power of everyone of you to do. Other Examples. Now, I could go on and cite example after ex- ample. Perhaps just two or three will serve to show you what I mean. One of the active heads of our oil division today, a man who carries as big an executive load perhaps as any man in that division, was a working miner in the fields in Montana years ago. What took him out of that miner's outlook and that miner's sur<- roundings and put him where he is today? Surely, it was no out- side pull; surely it was no outside help. It came from the initiative and the will that was within him. And you all have that will, you all have that initiative, if you will use it. It is a question of put- ting it to work. I know another man who is also one of the head executives of our oil division today, down at Bartlesville, who was a bookkeeper in a little branch gas office in a small Missouri town less than twelve years ago. What took him out of that little office in a little out of the way town up to his position. It was perseverance and the will to do. I know another man right here in the office, that you all know, one of our responsible department heads. I know him very, very well, and remember when he wore a uniform and answered calls in our office in Denver. Now, we didn't make a start' for him, we ADVANCEMENT IN THE ORGANIZATION didn't create it for him. It was simply that he had the will to come ahead. He had the perseverance. Everything that was as- signed to him to do he did so well that it was noteworthy. His work was so well done that it seemed as if he was never busy, simply because he had the right spirit. We have any number of examples right here in the office that are similar to that. Perhaps some of you could go through the list of the department heads with me and pick out the posi- tions that they started in here, right here in our office, as steno- graphers and clerks of various kinds, and where they are today. Now, they didn't get their positions today by any pull, they didn't get them because they were related to anybody or had wealth of their own, or that sort of thing. Not one of them got it that way. They rose to their positions because they delivered the goods and because they had the will to succeed. Future Growth. Now, if in 1906 our Organization consisted of, you might say, three executives and about ten that you would class today as assistant executives, and if in 1920 it has grown to what really amounts to 300 executives and perhaps 1500 assistant executives, what can it be in 1930 or 1940, if we grow from within as we should? If we all forget our own selfish little view points and bury ourselves in the task of putting this Organization ahead, how many executives, how many promising executives can we have in another ten years? Five times as many as today? If we have a hundred times as many today as we had fourteen years ago certainly five times as many ten years from today does not look like a big task, does it, if we simply hew to the Hne? That would mean 1500 executives and it would mean 5,000 responsible assis- tant executive positions in our Organization. Now, we can do that, and if we do, it means that there is a chance for every man and woman in this room to land in one of those positions. Now, this is not fairy talk at all. I am not holding up ideals to you that I don't believe in, because I am only telling you what I have seen. I was cadet engineer number one here in this ADVANCEMENT IN THE ORGANIZATION New York office, and am tracing it from that day to this. I came in here under just about the same conditions that most of the cadets come in, that are coming today, and I have been right with the game and followed it through ; and I am simply telling you that from what I have seen up to today, and with the faith that I have acquired up to today, that we have only begun, if we fight our battles as we should. Stewardship. Now, in doing this work for the Organization some- times we are apt to forget that it is all a very important big game that we are playing in this respect, that we are stewards, for those who put their money in our Organization, and if we are to continue to get the money we must merit that stewardship, we must always conduct ourselves and conduct our operations in such a way as to gain the confidence of the investing public and the investing world. And that means that each one of us, in our contact with the outside world, should begin early to reflect something of what we really think the Doherty Organization stands for, we should begin to instill among our friends and associates our feelings towards this Organiza- tion, get their interests, get them to think as we think. If we will all keep that in mind and do it, it is remarkable the field that we can open for the increased sale of securities, the increase of public con- fidence, and remarkable the number of new people we can draw in with us that we will all be glad to welcome and all be glad to see come along with us. Suggestions Welcome. There is one other fundamental difference between our Organization and most big organizations, if you can call our Organization big today. I don't think it is nearly as big as it will be, in any sense of the word. That condition is this : In most organizations, methods are more or less considered bible, the past methods, the past precepts, and all that sort of thing are things which no employee should tamper with. They must accept the rules as they find them, they must simply abide blindly by what you might call military guidance from executives of their organization. But our Organization is different. While we have rules and we think we have the best rules in the world, we are always willing to look for new rules, we are willing to change the ones we have, we are ADVANCEMENT IN THE ORGANIZATION always willing to accept any suggestions or any idea that will give us a better set of rules or a better method of operation or a better chance as an organization to be efficient and to be what we should be. Biuilders vs. Carpenters. It means this, that a man who really thinks, has .a chance. If he is a drone he had better belong to some other organization where they don't encourage thinking. In our Organization we want) people who think, we Want people who want to think ; and I am sure that there never will come a time when we will not encourage in every possible way original thought on the part of every employee in the Organization. We want thinkers, not simply automatons; we want doers, not machines. We want men and women who have the love of the game and the inspiration to be somebody and to be something, and to see the Organization that they are connected with amount to something on account of real pride in it. We want to see such people come along with us and develop, and we want to make always the way as easy as pos- sible for them to show their development. We need builders, not carpenters. By that I mean builders who can plan as they go, people to whom you can give a specific problem and not have to go and show them exactly how to do it, as you would show a carpenter how, to cut his timber in order to gesti the pitch right on his roof. We want people who can plan their work and follow it up as they go. Personal DiflFerences. Now, in a big organization such as ours, there comes a time when personal differences creep in, and I suppose we are all, more or less, subject to them; and yet it is only because the two people who have a personal difference have for- gotten the one big thing when they have that difference. If they are both honest and if they are both sincere, there can't be any personal difference that will last any great length of time, because if they are honest and if they are sincere they must realize, each one realize of the other, that the other is doing the best that he can for what he conceives to be the good of the Organization; and if ADVANCEMENT IN THE ORGANIZATION both* meet on that ground their personal difference disappears merely in a discussion of what is the best for the good of the Organization. Now, that sounds perhaps a bit altruistic, as if I were trying to preach to you that we all must avoid trouble, regardless of its cause. That isn't it at all, but we all should stick to the main game and keep the main thought in mind, that as the Organization grows we have a chance to grow, and that if we are all sincere in wanting to grow ourselves we must want to see the Organization grow in order to give us that chance. If anyone stands in the way — find out whether he is sincere or not, find out what the cause is, analyze it down; but keep in mind that it is not you and it is not the other fellow in a personal difference that is getting hurt, as a rule, half as much as it is the Organization that suffers every time two people fight. Every time a personal difference creeps in there is a loss of efficiency on the part of two employees from whom the Organization has the right to expect all of their honest effort and all of their time. Time lost in personal differences is really time stolen from the Organization, if you will get right down and analyze it to its ultimate real meaning. Winning the Game. I want to warn all of you, particularly the younger employees, to keep that in mind, keep in mind the fact, just as you would in school or college, the way you would support your football team — ^the big thing is to win the game. Keep that big thought in your mind, that our big game is to keep this Organ- ization going, to keep it growing, to keep it ever expanding and ever growing bigger because our success is bound to come if we help it to grow bigger. Doherty Spirit. Now, of necessity I have had to mention a number of the things that I mentioned the last time I talked, because the subjects were so close together. Advancement in the Doherty Organization means Doherty Spirit, as a matter of fact it is the best of Doherty Spirit. It meians a fair chance for every man, a fair chance for his white ally, for every person in the Organization ; and the greatest, I am sure the most sincere desire on the part of ADVANCEMENT IN THE ORGANIZATION every executive in the Organization is to see that chance granted without favor to everyone who enters it. Now, let us look ahead just a little bit. Suppose five years from now we are twice as big an Organization right here in New York as we are here today; and there is no reason in the world why we should not be that and more. Can't you all see chances where you could better yourself? Don't you all see where in five years you might be in much better positions than you are today Don't you all see that there is an opening? Now, we have more than doubled in the last two years, and it is a certainty that we are going to more than double in the next five years or in the next three years. Keep that thought in mmd. Let us get down to this point where, as nearly as possible, we will all forget the outside world in the sense of the present day turmoil and strife and trouble, and consideration of whether the messages were passed properly or diplomatically or not, and not let them worry us. But let us try to get ourselves back to the one funda- mental place that our big game and our big chance lies in centering our thoughts and our energy and our time right here on this game that we are playing. I will tell you that if you will all do that you will find there is more fun in this game than in any game you ever tried to play. It will beat your football games, it will beat your baseball games, basketball or anything else, if you will tackle it with that supreme spirit, if you will tackle it with the will to go in and win. You do not have to knock down a lot of old precedents, you don't have to wait for a lot of sons of directors and other incumbrances that many of the older corporations have thrust upon them to get out of your way, in this Organization. We are a young Organization, we haven't, thank God, a lot of that old precedent to bear down upon and get away from. We are free, we are young, and we have a lot of good, honest, red blooded people in the Organization that I know have the Organization at heart, and I know that all they want is to see that the whole Organization keeps that same spirit as they do, — the spirit of sticking together, the old college ADVANCEMENT IN THE ORGANIZATION spirit that puts the ball over the line. Unconscious Advancement And so I say to you that advancement as advancement in the Organization is not a conscious matter, it is not a matter simply of a physical change here and there. The more you advance the less conscious you are of it, the less you realize that you are advancing, because the more engrossed you become with the game, the bigger your view point of the game becomes and the more you see in it and the more chance for further advancement. Every advancement leads a man to a point where he can see two or more ahead of him. And I say to you that the chances that the men at the top of this Organization see are so big that it is almost impossible to measure them. And they are your chances, they are not going outside to look for others, if you will come along and take those chances. They are not going to go outside and hunt around for someone to come in there, if you will do the work and keep on growing and keep up to their vision as they try to make this Organization grow. Ambition. Now, advancement must be from the heart if it is going to last, it must be from a real ambition. You must have that personal desire to succeed and to win. It is all well and good, as you go through life, to have a good time and have lots of fun and all that. We encourage it, we like it; but at the same time don't get the idea that the good time is the big thing in life, don't get the idea that you are simply working for enough money to have a good time on, because that won't lead you very far. You prob- ably will stay just about in your present station if that is your idea of life. I don't want to moralize or preach a sermon on subjects of that kind, but I do want you to get this one thing, which really means the essence of the whole subject,— that advancement in this Organization means the absorbing of the spirit to do, and that is the Doherty Spirit, the spirit of pushing the ball ahead always. And if you will all do that, if you will all come along, I think ADVANCEMENT IN THE ORGANIZATION I am safe in saying that your chiefs will see to it that you wiU never reach the end of the field, because the field will be ever expanding and ever bigger, so that you can go on to any extent, to any heights that you may wish, and still find yourselves within the Organization, as we hope you always will.