Americus times-recorder. [volume] (Americus, Ga.) 1891-current, 1911-08-18
HOW BARBED WIRE PUT WEALTH
INTO JOHN w. GATES'S POCKET
lPhiladelnhia RecordD

philadelphia Record)
Nine years ago John w. Gates told
the story of his career to a newspa-
per man. 1t comes the nearest of any
thing we have seen to a description
of how a man becomes a million
aire.
Gates went to work as a travelling
salesman for Isaac L. Blwood, one Of
big iron men of Illinois. Il erected
the first corral in the state of Tey-
as" he said, hiring men to help me
put it up TO show the rangers what
use could be made of barbed wire.
had not travelled very long btA)re I
came to the conclusion that there Was
more money in the manufacture Of
barbed wire than there was in selling
it at a salary of 500 a MONTH" He
and friend, on an investment Of
5000, started with three barbed wire
machines.
The profits were big, and he and mis-
partner and six others started an
other factory on a capital OF $4,000
each, $4,000 in ALL 1--WE declared
dividends of about 80 per cent per
week." said Gates. q would taryel
and sell the wire, come back, invoice
it, bill it, paint it, mark it and collect
the money. Our profits for the first
year were $150,000." AS he was do
ing most of the work and getting
only one-eighth of the profits Gates
bought out his six new partners,
keeping the original one. In 1888
he and this partner incorporated the
Southern Wire Company with a cap
ital stock of $4,000, of which Gates
had As per cent. profits for the
next year were $18S,000."
Three years later his mill burned.
The next morning he effected a con-
solidation with competitor. Il
pointed out the profits to be made"
he said, land within fifteen minutes
we had reached an agreement" The
new mil was built near the one with
which he had consC lidated, In 1884
he and his associates erected the
Braddock Mill, near Pittsburg. He
went to Europe to buy steel billets,
and had trouble in getting bankers
credit, but j. p. Morgan gave them
all they wanted. Gates purchases
sent steel up. He said that he sold
10000 tons of the steel to the Car
negie Company without touching II,
simply delivering the shipping docu-
ments to them, and thereby made
100000 net profit Profits in 1884
were small, but in 1887 we increas-
ed the capital stock of the Braddock
Wire Company from its original
amount of 100000 to 100000, and
paid a cash dividend of $4,000, max
ing a 500 per cent dividend as the re-
suit of work during 1884, 1885, 1886,
1887, or an average dividend for the
four years of 125 per cent annually"
AS this easy money was made I'M
der the benign influence of the tariff,
Gates had to go into politics. He
said:
My entrance into politics at that
time was owing to the fact that some
of the democratic members of Con-
Eress had violated their agreement
with ME and voted for the Mills bill
We elected five republican mem
bers of congress in Missouri three Of
whom We're from St. Louis. This
gave us a republican congress by a
majority of two or three votes"
AS there was constant litigation ne
tween Gates and the Washburn x
Moen Company and Elwood, Gates or
ganized a company to hold all the
barbed wire patents; the other two
concerns sold their patents to it, so
that We had practically an absolute
monopoly on wire fencing and wire
! fencing machinery. This com
pany operated until the expiration OF
the patents, and for many months
paid dividends of 100 per cent pei
month It's capital was 100000" He
bought a wire company, giving unse-
cured notes for one and two years
and paid off all the notes within a
year.
In 1888 he bought the Iowa Barbed
Wire Company, of Allentown, Pa,
capital 100000 bonded debt $150,000.
1T had a floating Indebtedness If
$7OO,O 600, and was, of course, absolute
| ly bankrupt. But we did not know i
Confronted with that enormous
floating debt, we put it all into the
shape of notes. Twelve months lat
er they We're all paid Off" Then he
merged his five wire companies into
the Consolidated Steel and Wire Com.
In, ~