Evening Republican, Volume 19, Number 52, Rensselaer, Jasper County, 3 March 1915 — BUSINESS PLOT THAT COLLAPSEO [ARTICLE+ILLUSTRATION]

BUSINESS PLOT THAT COLLAPSEO

How Henry’s Scheme to Grab the Darbey Company Was Frustrated. WAS REVEALED BY ACCIDENT Dishonest Agent of the Trust Was Exposed and Compelled to Take Some of His Own Medicine. By RICHARD SPILLANE. (Copyright, McClure Newepaper Syndicate.) Mr. Darbey considered the Darbey Manufacturing company bls own. although he owned only one-third of the >IOO,OOO stock. He had started the concern, carried It along some troublesome years, put up the buildings in which Its product was made and personally engaged every man employed by the company. He was hard-working and rather obstinate. He made knives, forks, spoon's, etc. Flat ware is the trade term for such stuff, as distinguished from hollow ware, the name applied to metal pitchers, urns, cups, etc. Some years the company paid dividends. Some years It did not. When the trust was formed Mr. Darbey had a chance to be taken in, but, despite the advice of some of his stockholders, he declined. The tertns offered by the trust were not attractive. In addition, he preferred to be Independent. He objected to trusts. Mr. Darbey looked after the manufacturing end and the selling end. He tried to look After everything. Some men are that way. Business was none too good for him. after the trust got well under way. He felt its competition keenly. He had trouble occasionally in meeting, his pay roll. Frequently he had to ask the Indulgence of the banks. The more he went to his bankers, the more they shook their heads and advised him to reduce the cost of production or economize so that he would not have to borrow. When Mr. Darbey went out on a selling trip he usually visited New York. One of the men at the Hardware club was Peter Henry. They discussed the condition of the trade, had luncheon together and occasionally visited a show. They were quite congenial. Every time Darbey came to New York Henry suggested that Darbey make him selling agent for the manufacturing company. Wanted to Be Selling Agent “You ought to give all your time and attention to the manufacturing end,” he would say. “You are a good salesman, but you ought to stay at your factory. I can do better for you at the selling end than you can do for yourself.” • Darbey would smile, but would not answer. .This went on for several seasons, Henry all the time becoming more and more pressing in his suggestion abput the selling agency. Darbey had a suspicion that Henry had a connection with the trust, but was not quite sure. Henry never would admit It One spring when Darbey started on his usual selling trip he and Henry met as was customary. Darbey was rather downcast. His banks had warned him they would not carry him much longer unless conditions Improved. Conditions were not Improving and there were no signs that they would. Darbey spoke without reserve and explained the whple situation to Henry. That gentleman said little until Darbey finished. Then he spoke plainly.

"You cannot go on this way, Darbey,” he said. “You will have to do as I have told you many times. You must devote your attention to the manufacturing end. You will have to make me the New York selling agent. I will take over all your product and market it That will Relieve you in money matters. "I will make prompt payments and, if necessary, make such advances as you require. The way you are going there is nothing but disaster to result. It is all very well for you to think you can run this concern in the old way, but you cannot. You will have to conform to modern methods. You personally cannot both manufacture and 5e11.,. You are a'U right for manufacturing, but you are not all right for selling. Now we had better talk over the arrangements for marketing your stuff through me.” Henry Had Bought Control. Darbey didn’t like the tone of Henry’s speech and said so. "You are talking as if you were string orders instead of advice/’ he said. ” Henry smiled enigmatically. “I am giving orders,* he said. “I have a right to.” " "What!” exclaimed Darbey. "That is what I said,’* was Henry’s rejoinder. "I have bought control of your company. I have been picking up the stock for some time. I got it cheap. You-are working for me now and I want this business conducted according to my ideas.” Darbey gasped. Henry continued: "I mean to conduct this business on business lines, not as a one-man concern. Youcan look after the shop up. in Connecticut. I will look after things down here. You will be rehered of all anxiety. I am going to charge 20 per cent for selling. How does that strike your "It is outrageous,” said Darbey. “It

: V W'> Is a shame. You have taken advantage of me, undermined me, takon my business away from me. Twenty per cent is little short of—” “That is enough,” said Henry. "It was all very well for you to do as you pleased so long as you were in control, but I’m the boss now. You either do as I say or I’ll take over not only the selling end, but the manufacturing.” Darbey went back to Connecticut a much depressed man. He was bitter and hard against Henry. But he saw no way out of his difficulty. He settled down to his factory work. He plodded along tdn or twelve hours a day and tried to conform himself to the new conditions. When he needed money he advised Henry. That gentleman made advances. Occasionally Henry paid a visit to she plant and looked things over. He tried to be kindly and gracious, but Darbey was not to be deceived. He knew Henry was not satisfied and he also knew the business was not improving. After a year or so Henry did not respond to money calls so promptly as before. When he did send money a complaining letter accompanied the check. The cost of production was too high, he insisted. Darbey must cut down expenses. Henry could not meet competition. Darbey got rid of a man here and there, saved every penny he could for the company and watched every Item of expenditure closely. He reported all these things to Henry and at the same time pointed out that the heaviest load that the company had to bear was that frightful 20 per cent selling cost that Henry exacted. Henry’s replies on this score were sharp. He made it plain to Mr. Darbey that if Mr. Darbey would attend to the manufacturing end he would have plenty to do. It was not for Darbey to criticize. His Scheme Discovered.

One day a most unusual thing happened. A silverware dealer in a neighboring town called Darbey up on the phone. He wanted a gross of a certain class of goods, and In describing the articles he mentioned the price per dozen, $5.75. That particular class of goods did not sell at that

price, but much below, and Darbey thought the dealer had made a mistake. The dealer said he had not; that was the price he had been paying. Darbey told him that all the product of the factory was handled through Mr. Henry in New York and he would wire him to forward the goods at once, but meanwhile he, Darbey, would like to see the dealer and he would go to the dealer's town that afternoon to have a personal conversation with him. The dealer said he would be glad to see him. Darbey made the visit. He had a confidential chat with the dealer and the dealer showed to him the bills he had from Henry. The goods were sold to the dealers lor 15.75. The return made by Henry to the Darbey Manufacturing company was $3 a dozen. Darbey got all those bills from the dealer and took them home with him. A little later he met one of the former salesmen of Mr. Henry. The salesman was none too well disposed toward Henry. When Darbey, in the course of discussion about business, remarked that things were going none too well, the salesman blurted out the statement that they couldn’t go well; that Henry was selling the Darbey product only to such dealers as would pay prices much above those of the trust, and that Henry was really an agent forthetrust and handling a lot of the trust’s goods. Before those two men parted, Darbey got a lot of details of the prices at which that man acting for Henry had sold the Darbey products. The man gave names, dates and figures. Darbey made a memorandum of each and every item.

Darbey Had Whip Hand. Thereafter, when Mr. Henry, as usual, complained about the factory costs and insisted upon further and further economies. Darbey very bluntly declared he could not make the stuff any cheaper. He had cut things down to the bone. He told Mr. Henry he thought his criticisms were unwarranted. The real economies ought to be Introduced in the selling end. This brought some sharp retorts from the New York office, and sharper ones from the Connecticut end. Mr. Henry lost all patience with the manufacturer and summoned him to New York. Mr. Darbey refused to make the trip. He was too busy in the factory, he said. If Mr. Henry wanted to see him he could go to Connecticut Mr. Henry did so promptly. He was

wrathy when he entered Mr. Darbey’s office. ' “Mr. Darbey,” he said, "I do not like the tone of your letters to me and I do not like the way you have oeen handling my business. You never have seemed to recognize the fact that you have been dislodged from the control of this company. I thought you were a good manufacturer. I think so still, but I consider that your efficiency is impaired by reason of the feeling you have toward me. Now this thing has to end. I have come up here to make 'a proposition to you. This company cannot succeed under present conditions. If you want to sell your stock and get out, I will buy your shares. I will pay you ten cents on the dollar. If you want to remain here as my employee, as a sort of supervisor, I will give you twentyfive dollars a week. What about It?” Mr. Darbey hesitated for nearly half a minute, then he asked: “Is that the best you will do?” “Yes,” said Henry. “Ten cents on the dollar Is very little for shares of this company that I have been bound up In so long,” remarked Darbey. “Well, do you accept, or do you not?” Henry demanded. "I do not accept,” said Darbey. “Then,” said Mr. Henry, “although I am reluctant to do so, I will have to dispense with your services and put one of my own men in here, a man who will do what I want.”

“No,” said Darbey, “you •Won’t put a man in here. I won’t sell my shares and I won’t get out” “You won’t!” exclaimed Henry. "No,” said Darbey. Turning the Tables.

Then a hard look came Into Darbey’s face. “Look here, Mr. Henry,” he said, "the time has come for me to talk very plainly to you. You are a thief.” Henry started to jump up, but Darbey, who was a powerful man, pushed him back in his chair. “Don’t get excited,” he said. “I am ready to prove everything I say. You are a thief. You have robbed the Darbey Manufacturing company from the

day you became the selling agent I have the evidence. I have been collecting it for nearly a year. I have all the reports that you made to this office and I have many of the bills that you rendered to customers. There is a wide difference between the amounts you reported and the moneys you obtained. You were not satisfied with your 20 per cent, outrageous as it was, but you have swindled this company out of many thousands of dollars'and have 'done it coldly, calmly and methodically for the purpose of bringing this company into a position where you could get the remaining stock at your own price and then, I suppose, sell the concern to the trust at a figure that would give a handsome profit to you. Maybe you have been acting for the trust all through this. I dfin’t know.” Then he told of the Incident of that dealer who telephoned the order to the factory instead of to the selling agent—-the order for the 15.75 goods. Next he told of what he had learned from salesmen of the Henry concern. "I placed all this evidence in the hands of one of my young friends, a lawyer named Davis,” lie said. "He tells me I can put you behind the bars if I am so disposed. The fact that yon own a majority of the stock of this company does not warrant you In robbing the company of its funds. My friend Davis has Interested some persons in this affair and between us we have made up our minds that we are going to take over the control of the Darbey Manufacturing company. Mr. Davis is in the outer room. He has all the bills, all of your statements, all the evidence. He also is ready to swear out a warrant for your arrest. I do not want to go so far unless it is necessary. I want to be very fair and decent with you. I want to make a proposition. I win buy the stock that yon hold in the Darbey Manufacturing company at 10 cents on the dollar. Do you accept, or shall I call in Mr. Davis?" The Darbey Manufacturing concern Is doing business today. It is not a hundred-thousand-dollar corporation any longer. Its capitalisation is $250,000. Mr. Henry is not among the stockholders. Mr. Darbey looks after both the manufacturing and the selling end. He visits New York two or three times -a year. At the Hardware club he sometimes sees Mr. Hen ry. but Mr. Henry has business elsewhere as soon as he catches sight at Mr. Darbey of Cunnsriiiwt.

“You Are a Thief.”