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A NERVE CENTRE OF VAST INDUSTRY

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THE UTILIZATION OF THE WHOLE WATER-POWER OF LAKE
SUPERIOR FOR A MULTITUDE OF ALLIED INDUSTRIES — A
RAILROAD TO HUDSON'S BAY-THE ENERGY OF THE MAN
WHO IS DEVELOPING A REGION OF IMPERIAL EXTENT

BY

DWIGHT E. WOODBRIDGE

NE of the greatest industrial movements of the time is the rediscovery of water-power, and the new era in its use since the long-distance transmission of power has been made practicable. Mr. Francis H. Clergue, a young lawyer of Bangor, Maine, was among the first to realize the enormous possibilities of the new waterpower. Seven years ago, having secured financial backing, he began a search for a location fitted for his purpose. He traveled westward, examining numerous falls and rapids, but found nothing satisfactory until he reached the Sault Sainte Marie.

Its pos

sibilities were apparent at a glance, he demonstrated the value of the property to his backers, the utilization of the power of Lake Superior was at once decided upon, and a company was organized.

The first canal, completed several years ago, is upon the Canadian side of the rapids, and is cut about half a mile through the sandstone rim of Lake Superior. It furnishes 20,000 horse-power, but when it was first offered for sale no one wanted it. The demand for cheap energy had not reached the shores of the western lakes, and manufacturers were unwilling to move their plants to such a remote point. The builders of the canal saw that, if they were to escape failure they must make use of the power themselves. Mr. Clergue was equal to the emergency. He had often been in the paper mills about his home in Maine; he was familiar with the manufacture of pulp; and, since an abundant supply of raw material was at hand in the forests of spruce which stretch northward from the Sault, he determined to build a mill. This mill is now annually making $800,000 worth of pulp at a handsome profit.

The building of this mill was the first step in a great industrial scheme. Other indus

tries that have been developed are the mining of iron ore, sulphur, nickel and copper; the manufacture of iron, steel, and a dozen other such products; lumbering; the construction and operation of railway and steamship lines on the lakes and to European ports, and colonization on a large scale. Everyone of these has grown more or less naturally out of its predecessor. For instance, spruce lumber is worth from $8 to $10 a cord at the paper mills. Before Mr. Clergue began to build a pulp mill, he bought spruce stumpage from the Canadian government at ten cents a cord. Thus he produced pulp more cheaply than any of his competitors. Sulphite pulp is worth nearly twice as much as paper pulp, and he determined to undertake its manufacture. The first necessity was a supply of sulphur. That from Sicily, used in the paper mills of the United States, cost much for freight alone. But a hundred miles to the eastward of the Sault, and easily accessible, were mineral deposits whose ore was a combination of sulphur, nickel, copper and iron. Could not the sulphur in this ore be utilized? A laboratory was built, and the problem was soon solved. Then a mine in the Sudbury country was bought and furnaces for roasting the ore and a mill for making the pulp were put up. After roasting the ore there remained a by

product rich in nickel. product rich in nickel. The chemists were called upon to devise an electrical method for separating and reducing it. After much experiment they succeeded, and long contracts were made with the greatest of German steel makers, for the purchase of an electrically smelted, nickel-steel product to the amount of 250 tons a day.

Mr. Clergue's chemists, moreover, in the course of their ferro-nickel experiments, found the ore from the Sudbury mine too rich in nickel to make a hard steel without the addition of

a non-nickeliferous pig iron. Here opened another instructive chapter. A short time before there had been a "rush" of gold hunters to the Michipicoten river, 125 miles north of the Sault, on the shores of Lake Superior. One of the prospectors found, not gold, but an outcrop of hematite iron which he offered for $500, and Mr. Clergue bought the claim. The engineers whom he despatched to examine and report upon his purchase found a vast deposit of ore, covered only by rotting leaves and mold.

In the summer of 1899, a supply of iron was needed for the manufacture of nickelsteel. One day in August, a scow, carrying civil engineers, navvies, horses and tools, was towed out of the Sault harbor bound for the Indian mission of Michipicoten. Arriving there the men went ashore, and cleared a corner in the edge of the forest. Tree-clad mountains rose on all sides, and there seemed no possible route for the railroad that they had been ordered to build. Twelve miles away lay the ore, and it was their task to reach it immediately by the easiest route. That was the order, and the only one, from their chief.

Before cold weather set in, the line crossing ravines and mountain walls of rock was surveyed, steam shovels were brought from the Sault, saw-mills were started, buildings were erected, and supplies for the long winter were landed at a dock so new that it still gave forth the fragrance of the forest. The first arrivals in the spring found the road graded and ready for the track layers; and, before the end of July, 1900, one could ride from the mine over a track laid with 80-pound steel rails, in cars of fifty tons capacity, pulled by 100-ton locomotives. Since then vast quantities of ore have been shipped to Canada and the United States, and now blast furnaces for making pig-iron, open hearth furnaces for reducing it to steel, electric furnaces for the ferro-nickel, and rolling mills for the manufacture of rails are being built at the Sault.

To ship ore from the Michipicoten mine. ships were lacking, and the rates then charged on the lakes being too high, four ships were bought in England. These ships were the first to pass into the lake through the deep channel lately completed by the Canadian government; and this channel was also first used by them to carry cargoes from the great lakes to the Old World, all of them having

been loaded on Lake Erie with steel for England last November. When they return, four other ships of equal or greater capacity, will be practically completed in the Clyde yards. By that time, too, a line of three passenger ships between the Sault and Clergue's new Manitoulin railway to the East, and Michipicoten to the Northeast will be in operation.

This brings us to the railway projects of this exceptional man of forty-two, which are intended to make the Sault the entrepôt of a populous agricultural and industrial region. The Manitoulin and Northshore railway willopen up the mineral riches of Sudbury and Manitoulin. Greater things, however, are expected from the Algoma Central, which runs northward from the Sault, and will soon touch the main line of the Canadian Pacific. Beyond that it will run through the primeval wilderness. Two hundred miles further and it will tap Hudson Bay, that great arm of the Atlantic which Canadian statesmen have for a generation dreamed of reaching with a railway. "In five years," says Mr. Clergue, "we shall be carrying salt-water fish from Hudson Bay to the interior of the states."

It is proposed during the next five years to settle 50,000 Englishmen and other desirable Europeans on the land along the line. Many are already on the ground, and some thousands are booked to arrive during the summer. Mr. Clergue's ideas on colonization are characteristic: every effort will be made by his railroad and the parent company at the Sault to transform these immigrants into a self-supporting and contented population. The Algoma Central will be a colonization line of railroad. Thousands of forty-acre farms will be laid out, each with the same railway frontage. The settler, in addition to forty acres, will be given more land in the rear of his first holding. His railroad frontage will not be increased, nor will he be permitted to monopolize the desirable locations.

The Algoma Central will give every farmer access to a side track within a mile of his farm. It will also act as a market for his surplus. Mr. Clergue has planned, for instance, that if more wheat is raised along the road than can be profitably sold, his power company will erect a plant at the Sault for milling it, giving a steady market free from costly transportation charges; if there are more potatoes than will bring a fair price, the

company will make starch, for which there is always a demand; and, if there are too many cattle, or if for any reason the terminal market is unfavorably affected, it will erect abbatoirs and coldstorage warehouses. The settler in marketing his crops will, in short, have the assistance of the Consolidated Company, which, with its twenty millions of capital, now binds together the dozen or fifteen enterprises that Mr. Clergue has developed. The company's interests are so vast, and its millions of acres are of so little value without the success of the settler, that its own future and his are substantially one.

Meantime, Mr. Clergue is mindful of the quest that first led him to the Sault, and he proposes to utilize every drop of water running from Lake Superior except what is needed for the canals and locks of the American and Canadian governments.

On the Michigan side a second canal, which will have 50,000 horse-power is being cut, the largest canal ever cut for the utilization of power. It will run two and a half miles, half of its length, through walls of sandstone, and then through heavy clay 200 feet wide and thirty deep at the upper end, and it will broaden at the lower end into a stream nearly fourteen hundred feet in width. It will turn eighty great turbines. Part of the power thus generated will be used by the company for manufacturing calcic carbide and alkali, for refining metals, and for other purposes, but most of it has already been leased for long terms to outside corporations at profitable prices.

These two canals will not consume all the flow from Lake Superior not needed for navigation purposes, and so a third power canal has been started. This will be on the Canadian side, some distance from the river, and is to be almost as large as the Michigan one. That the diversion of such a tremendous quantity of water may not permanently lower the level of Lake Superior, remedial works are now being built at the head of the rapids of Sault Marie. It is planned that as the flow through the power canals increases, the dams of the remedial works shall be similarly increased, so that the increasing flow through the canals shall be offset by a retarded flow through the rapids. Thus, a few years hence, when all the available water shall pass through the canals, there will be no rapids; and the

traveler up the lakes, instead of halting to watch the white water rush down jagged rocks, will see only the dry bed of a vanished river where the rapids were, and he will hear the roar only of the water through the canals, the whirr of wheels and the whiz of saws.

The most noteworthy traits of the man who has planned and is directing these enterprises are his masterly grasp of large undertakings, and his power to inspire others with confidence, and to shape them to his way of thinking. All who follow his lead swear by

him, and the day's work with them ends only when the task is accomplished. Results are what he seeks, and those who help him to win them are sure of prompt and generous reward. Few corporations pension men for life who sell for a song what afterwards proves to be worth millions, but the name of the discoverer of the Michipicoten mines is on the pay-roll of the Clergue company and will remain there until death erases it.

Nor is Mr. Clergue too busy for sentiment. When he began clearing the débris that had accumulated above the mines of Hudson Bay Company occupation, near the sleepy village of Sainte Marie, he came upon the lock built by the fur traders two centuries ago to get their boats around the rapids. The very fact of the existence of this lock had been forgotten. He carefully rebuilt it, encircled it with a bit of greensward, and is now completing a large office building overlooking it. Near the old lock he found the rotted remains of a stockade surrounding a tumble-down fort. A parapeted stone wall now replaces the stockade, and the fort, repaired and made habitable, is Mr. Clergue's artistic home.

He has chosen a historic spot as the centre of his labors; for it was on the site of Sainte Marie that in 1670 the Intendant of France, with all the regalia of royalty, received the submission of the tribes of the far northwest, even to the China seas. Here St. Lussan and his comrades took possession for the Grand Monarch of a region whose limits they could not guess; here for decades came the coureur de bois and the fur trader; and here in later years has passed the most splendid procession of commerce the world has seen. The new industrial empire which the Bangor lawyer and his associates are building could scarcely have a more romantic birthplace.

I

SHARING PROSPERITY

SOME EXPERIMENTS WHICH SHOW WHY ONE PLAN FAILS AND ANOTHER SUCCEEDS CLOSER COOPERATION OF EMPLOYEE WITH EMPLOYER AND ATTENTION TO DETAILS THE RESULT - REWARD FOR MERIT IS THE IDEA, NEVER FOR CHARITY BY

R. E. PHILLIPS

N 1886 a large commercial house in New York had an exceptionally prosperous year. Believing that success was due partly to the intelligent co-operation of their employees, the manager decided to give them a share in the profits, and for three years a cash bonus of three per cent. on wages was paid. But the plan failed. For the first year, indeed, the employees worked with greater interest, but by the second year they had taken the additional money as a matter of course. In 1889 a question came up over putting eight layers of goods under the cutting machine for a certain pattern instead of four. It meant doubling the output with practically no extra work. Yet because the company insisted there was a strike. The share in the yearly profits had not brought closer co-operation-and chiefly because the company gave away money instead of paying it for service. And the scheme was abandoned.

But with the beginning of the present year the company decided to try an experiment along somewhat different lines. Profits now are distributed only if the various salesmen earn their share, though the bonus to be divided is calculated on the volume of business done in all departments and not in separate departments. The man at the necktie counter, if he sells more ties in a month than were sold at that counter during the same month a year ago, received a share just as the man does in the clothing department, where the actual profits to the concern are much larger. A complete record of what each man sells is kept, and this determines his salary. If by large sales he lowers the percentage allowed for marketing the goods his salary is increased. If the sales drop off and the percentage is increased, the salary is reduced. The man receives in money, in as far as it is possible to judge, exactly what he is worth.

The plan is even wider in its detail. If a salesman in one department refers a customer to another, he is given half credit for any sales resulting, or if he is busy and is asked. for by the customer he again gets half credit. All this has brought results: the worker has a definite end to work for. One of the salesmen said frankly that the entire force was working harder. Another told of a number of his associates who had considerably bettered their condition under the new arrangement. Still another figured that in January he made an extra profit of a dollar a week. What may eventually result remains to be proved. But the plan will probably succeed, for the underlying idea is right.

men give something for something. There is no charity in it.

Similar in principle is an experiment which has been carried on for a much longer time at the Bourne Cotton Mills at Fall River. Twenty-three semi-annual dividends averaging three and a half per cent. on wages have already been paid. The plan originated in a curious way. Jonathan Bourne, the first president of the company, was originally a merchant in the whaling trade. It was the custom to offer a share of the catch to the men. Mr. Bourne thought this idea should apply to a cotton mill as well as to a whaling vessel. He proposed it to the company's directors in 1888, and it was accepted. In the following May the treasurer of the company outlined the proposed plan to the employees. On July 1st, 1889, it was put into operation, and six months later the first cash dividend was paid.

In return for added interest in the success of the Bourne Mills, all employees share-in proportion to wages earned-in the concern's profits. Faithful and continuous service was the only condition. This was the whole plan

in a nutshell. The amount of the dividend to be divided was settled upon as not less than six, and not more than ten, per cent. of the semi-annual dividend paid to the stockholders. By this arrangement the company did not divulge its private business or its total profits. During the first eight years the directors considered and passed upon the plan twelve times. They tried to get at the feeling of the employees, and watched carefully for specific results. In 1895 a circular was sent to each workman, enclosing a blank ballot, with the request that he return it with an estimate of the advantages of their profit-sharing. All ballots were sealed. There was some curious

answers.

One man said that the plan was unfair to the stockholders.

Six in all voted "no" to its continuance. The others were all in its favor.

One said, "It shows respect from the master. I have received over one hundred and twenty dollars in dividends. Thanks."

Another, who had been a little over four years in the company's employ, said: "It raises the laborer above the mere wage-earner, and I believe the principle right and a benefit to me."

One of the women employees wrote: "I think it is a benefit, because there is not so much changing of help, and they become more interested in their work. It is our duty to do our work, but it is encouraging to feel that we are rewarded for it."

Many of them emphasized the fact that the plan "showed respect from the master," and so encouraged them to do better work.

But results in the development of business had more weight than this expression of opinion. Good wages are of the very first importance. No plan of betterment is possible without what the workers call "honest " pay. The average wage paid now by the Bourne Mills is $7.50 a week. Formerly it was $6; and this was the average in the other cotton mills nearby. It cost one of the mills in the neighborhood of $300,000 to come to the standard set by the Bourne Company. The average pay under the profit-sharing has increased ten per cent., and this notwithstanding that the general standard price of wages was higher formerly than now, and that the working hours have been reduced from sixty to fifty-eight hours a week. The fair rate of wages, good management, and

the fact that the pay has always been largely based upon piece-work, have been taken into consideration by the company in determining results. But, as the treasurer of the company recently said, good management is largely the result of an effective working force.

From the beginning the company has tried to enforce upon the employees how clearly the dividend paying must depend upon them, particularly during the years when business is dull and competition close. By making examples of carelessness attention to details has been gained. If the belts in a cotton factory are allowed to run three minutes an hour on loose pulleys it means a loss of five per cent. in the production. But that has all become real to the employees, because they see that carelessness reduces profit-their's as well as the stockholders'. In the making of "seconds," too, there has been a successful change.

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The employees call their profit-sharing a "divvy," and regard it much as a stockholder regards his dividend on stock. But they have come to rely in large measure upon the generosity of the company to keep it going. One day, a few years ago, 110 of the male employees left work without permission, to attend a field-day celebration in Fall River. It was a breach of discipline. Nothing was done about it until the day came for paying the semi-annual dividend. On that day each of these men received an envelope marked gratuity," with a note inside to the effect that although they had forfeited their dividend, a sum not as large as they would have received, but larger, as a matter of fact, than any previous dividend, was restored to them as "gratuity." This good action broke the back of the coöperative idea. In showing good will by a gift, compensation for service was at once lost sight of. It was a return to the old method. It involved the principle of the whole plan. The treasurer of the company has often said in the presence of the men that it was a pleasure to pay them their "divvies ;" and the first pamphlet issued mentioned the company's generosity in proposing it. This seems the one weak point in the system. For, in its development, it stands for charity.

By way of contrast, the Proctor & Gamble Company may be mentioned. The company's factory is just out of Cincinnati in the little town of Ivorydale. Here there are about

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