An African Adventure Part 17

Clearly to understand the scope and purpose of the Forminiere you must know that it is one of the three companies that have helped to shape the destiny of the Congo. I encountered the first--the Union Miniere--the moment I entered the Katanga. The second is the Huileries du Congo Belge, the palm-oil producers whose bailiwick abuts upon the Congo and Kwilu Rivers. Now we come to the third and the most important agency, so far as American interest is affected, in the Forminiere, whose empire is the immense section watered by the Kasai River and which extends across the border into Angola. In the Union Miniere you got the initial hint of America's part in the development of the Congo. That part, however, was entirely technical. With the Forminiere you have the combination of American capital and American engineering in an achievement that is, to say the least, unusual.

The moment I dipped into Congo business history I touched the Forminiere for the reason that it was the pet project of King Leopold, and the last and favorite corporate child of his economic statesmanship. Moreover, among the leading Belgian capitalists interested were men who had been Stanley's comrades and who had helped to blaze the path of civilization through the wilds. King Albert spoke of it to me in terms of appreciation and more especially of the American end. I felt a sense of pride in the financial courage and physical hardihood of my countrymen who had gone so far afield. I determined to see the undertaking at first hand.

My experience with it proved to be the most exciting of my whole African adventure. All that I had hitherto undergone was like a springtime frolic compared to the journey up the Kasai and through the jungle that lurks beyond. I saw the war-like savage on his native heath; I travelled with my own caravan through the forest primeval; I employed every conceivable kind of transport from the hammock swung on a pole and carried on the shoulders of husky natives, to the automobile. The primitive and modern met at almost every stage of the trip which proved to be first cousin to a thriller from beginning to end. Heretofore I had been under the spell of the Congo River. Now I was to catch the magic of its largest tributary, the Kasai.

Long before the Forminiere broke out its banner, America had been a.s.sociated with the Congo. It is not generally known that Henry M.

Stanley, who was born John Rowlands, achieved all the feats which made him an international figure under the name of his American benefactor who adopted him in New Orleans after he had run away to sea from a Welsh workhouse. He was for years to all intents and purposes an American, and carried the American flag on two of his famous expeditions.

President Cleveland was the first chief dignitary of a nation to recognize the Congo Free State in the eighties, and his name is perpetuated in Mount Cleveland, near the headwaters of the Congo River.

An American Minister to Belgium, General H. S. Sanford, had a conspicuous part in all the first International African a.s.sociations formed by King Leopold to study the Congo situation. This contact, however, save Stanley's share, was diplomatic and a pa.s.sing phase. It was the prelude to the constructive and permanent part played by the American capitalists in the Forminiere, chief of whom is Thomas F. Ryan.

The reading world a.s.sociates Ryan with the whirlpool of Big Finance. He ruled New York traction and he recast the tobacco world. Yet nothing appealed to his imagination and enthusiasm like the Congo. He saw it in very much the same way that Rhodes viewed Rhodesia. Every great American master of capital has had his particular pet. There is always some darling of the financial G.o.ds. The late J. P. Morgan, for example, regarded the United States Steel Corporation as his prize performance and talked about it just like a doting father speaks of a successful son. The Union Pacific System was the apple of E. H. Harriman's eye, and the New York Central was a Vanderbilt fetish for decades. So with Ryan and the Congo. Other powerful Americans have become a.s.sociated with him, as you will see later on, but it was the tall, alert, clear-eyed Virginian, who rose from penniless clerk to be a Wall Street king, who first had the vision on this side of the Atlantic, and backed it with his millions. I am certain that if Ryan had gone into the Congo earlier and had not been engrossed in his American interests, he would probably have done for the whole of Central Africa what Rhodes did for South Africa.

We can now get at the beginnings of the Forminiere. Most large corporations radiate from a lawyer's office. With the Forminiere it was otherwise. The center of inspiration was the stone palace at Brussels where King Leopold II, King of the Belgians, held forth. The year 1906 was not a particularly happy one for him. The atrocity campaign was at its height abroad and the Socialists were pounding him at home.

Despite the storm of controversy that raged about him one clear idea shone amid the encircling gloom. That idea was to bulwark the Congo Free State, of which he was also sovereign, before it was ceded to Belgium.

[Ill.u.s.tration: THOMAS F. RYAN]

Between 1879 and 1890 Leopold personally supported the cost of creating and maintaining the Free State. It represented an outlay of more than $2,500,000. Afterwards he had adequate return in the revenues from rubber and ivory. But Leopold was a royal spender in the fullest sense.

He had a variety of fads that ranged from youthful and beguiling femininity to the building of palaces and the beautifying of his own country. He lavished millions on making Brussels a sumptuous capital and Ostend an elaborate seaside resort. With his private life we are not concerned. Leopold the pleasure-seeker was one person; Leopold the business man was another, and as such he was unique among the rulers of Europe.

Leopold contradicted every known tradition of royalty. The king business is usually the business of spending unearned money. Your royal spendthrift is a much more familiar figure than the royal miser.

Moreover, n.o.body ever a.s.sociates productive power with a king save in the big family line. His task is inherited and with it a bank account sufficient to meet all needs. This immunity from economic necessity is a large price to pay for lack of liberty in speech and action. The princ.i.p.al job of most kings, as we all know, is to be a n.o.ble and acquiescent figure-head, to pin decorations on worthy persons, and to open public exhibitions.

Leopold did all of these things but they were incidental to his larger task. He was an insurgent from childhood. He violated all the rules of the royal game not only by having a vision and a mind all his own but in possessing a keen commercial instinct. Geography was his hobby at school. Like Rhodes, he was forever looking at maps. When he became king he saw that the hope of Belgium economically lay in colonization. In 1860 he made a journey to the Far East, whence he returned deeply impressed with trade opportunities in China. Afterwards he was the prime mover in the construction of the Pekin-Hankow Railway. I do not think most persons know that Leopold at one time tried to establish a Belgian colony in Ethiopia. Another act in his life that has escaped the casual biographer was his effort to purchase the Philippines from Spain. Now you can see why he seized upon the Congo as a colonizing possibility the moment he read Henry M. Stanley's first article about it in the London Telegraph.

There was a vital reason why Belgium should have a big and prosperous colony. Her extraordinary internal development demanded an outlet abroad. The doughty little country so aptly called "The c.o.c.kpit of Europe," and which bore the brunt of the first German advance in the Great War, is the most densely populated in the world. It has two hundred and forty-seven inhabitants for each square kilometer. England only counts one hundred and forty-six, Germany one hundred and twenty-five, France seventy-two, and the United States thirteen. The Belgians had to have economic elbow room and Leopold was determined that they should have it.

His creation of the Congo Free State was just one evidence of his shrewdness and diplomacy. Half a dozen of the great powers had their eye on this untouched garden spot in Central Africa and would have risked millions of dollars and thousands of men to grab it. Leopold, through a series of International a.s.sociations, engineered the famous Berlin Congress of 1884 and with Bismarck's help put the Free State on the map, with himself as steward. It was only a year ago in Germany that a former high-placed German statesman admitted to me that one of the few fundamental mistakes that the Iron Chancellor ever made was to permit Leopold to s.n.a.t.c.h the Congo from under the very eyes and hands of Germany. I quote this episode to show that when it came to business Leopold made every king in Europe look like an office boy. Even so masterful a manipulator of men as Cecil Rhodes failed with him. Rhodes sought his aid in his trans-African telegraph scheme but Leopold was too shrewd for him. After his first audience with the Belgian king Rhodes said to Robert Williams, "I thought I was clever but I was no match for him."

The only other modern king interested in business was the former Kaiser, Mr. Wilhelm Hohenzollern. Although he has no business sense in the way that Leopold had it, he always had a keen appreciation of big business as an imperial prop. Like Leopold, he had a congested country and realized that permanent expansion lay in colonization. The commercial magnates of Germany used him for their own ends but their teamwork advanced the whole empire. Wilhelm was a silent partner in the potash, shipping, and electric-machinery trusts. He earned whatever he received because he was in every sense an exalted press-agent,--a sort of glorified publicity promoter. His strong point was to go about proclaiming the merits of German wares and he always made it a point to scatter samples. On a visit to Italy he left behind a considerable quant.i.ty of soap. There was a great rush to get these royal left-overs.

Two weeks later a small army of German soap salesmen descended upon the country selling this identical product.

Whatever may be said of Leopold, one thing is certain. He was not small.

Wilhelm used the brains of other men; Leopold employed his own, and every capitalist who went up against him paid tribute to this a.s.set.

We can now go back to 1906, the year that was to mark the advent of America into the Congo. Leopold knew that the days of the Congo as a Free State were numbered. His personally-conducted stewardship of the Colony was being a.s.sailed by the Socialists on one hand and the atrocity proclaimers on the other. Leopold was undoubtedly sincere in his desire to economically safeguard the African possession before it pa.s.sed out of his control. In any event, during the summer of that year he sent a message to Ryan asking him to confer with him at Brussels. The summons came out of a clear sky and at first the American financier paid no attention to it. He was then on a holiday in Switzerland. When a second invitation came from the king, he accepted, and in September there began a series of meetings between the two men which resulted in the organization of the Forminiere and with it the dawn of a real international epoch in American enterprise.

In the light of our immense riches the timidity of American capital in actual constructive enterprise overseas is astonishing. Scrutinize the world business map and you see how shy it has been. We own rubber plantations in Sumatra, copper mines in Chile, gold interests in Ecuador, and have dabbled in Russian and Siberian mining. These undertakings are slight, however, compared with the scope of the world field and our own wealth. Mexico, where we have extensive smelting, oil, rubber, mining and agricultural investments, is so close at hand that it scarcely seems like a foreign country. Strangely enough our capital there has suffered more than in any other part of the globe. The spectacle of American pioneering in the Congo therefore takes on a peculiar significance.

There are two reasons why our capital has not wandered far afield. One is that we have a great country with enormous resources and consequently almost unlimited opportunities for the employment of cash at home. The other lies in the fact that American capital abroad is not afforded the same protection granted the money of other countries. Take British capital. It is probably the most courageous of all. The sun never sets on it. England is a small country and her money, to spread its wings, must go elsewhere. Moreover, Britain zealously safeguards her Nationals and their investments, and we, I regret to say, have not always done likewise. The moment an Englishman or the English flag is insulted a warship speeds to the spot and John Bull wants to know the reason why.

Why did Leopold seek American capital and why did he pick out Thomas F.

Ryan? There are several motives and I will deal with them in order. In the first place American capital is about the only non-political money in the world. The English pound, for example, always flies the Union Jack and is a highly sensitive commodity. When England puts money into an enterprise she immediately makes the Foreign Office an accessory.

German overseas enterprise is even more meddlesome. It has always been the first aid to poisonous and pernicious penetration. Even French capital is flavoured with imperialism despite the fact that it is the product of a democracy. Our dollars are not hitched to the star of empire. We have no dreams of world conquest. It is the safest politically to deal with, and Leopold recognized this fact.

In the second place he did not want anything to interfere with his Congo rubber industry. Now we get to the real reason, perhaps, why he sent for Ryan. In conjunction with the late Senator Nelson W. Aldrich, Ryan had developed the rubber industry in Mexico, by extracting rubber from the guayele shrub which grows wild in the desert. Leopold knew this--he had a way of finding out about things--and he sought to kill two birds with one stone. He wanted this Mexican process and at the same time he needed capital for the Congo. In any event, Ryan went to see him and the Forminiere was born.

There is no need of rehearsing here the concrete details of this enterprise. All we want are the essential facts. Leopold realized that the Forminiere was the last business venture of his life and he projected it on a truly kingly scale. It was the final chance for huge grants and the result was that the Forminiere received the mining and mineral rights to more than 7,000,000 acres, and other concessions for agriculture aggregating 2,500,000 acres in addition.

The original capital was only 3,000,000 francs but this has been increased from time to time until it is now more than 10,000,000 francs.

The striking feature of the organization was the provision inserted by Leopold that made Belgium a partner. One-half of the shares were a.s.signed to the Crown. The other half was divided into two parts. One of these parts was subscribed by the King and the Societe Generale of Belgium, and the other was taken in its entirety by Ryan. Subsequently Ryan took in as a.s.sociates Daniel Guggenheim, Senator Aldrich, Harry Payne Whitney and John Hays Hammond. When Leopold died his share went to his heirs. Upon the death of Aldrich his interest was acquired by Ryan, who is the princ.i.p.al American owner. No shares have ever been sold and none will be. The original trust certificate issued to Ryan and Guggenheim remains intact. The company therefore remains a close corporation in every respect and as such is unique among kindred enterprises.

II

At this point the question naturally arises--what is the Societe Generale? To ask it in Belgium would be on a par with inquiring the name of the king. Its bank notes are in circulation everywhere and it is known to the humblest peasant.

The Societe Generale was organized in 1822 and is therefore one of the oldest, if not the oldest, joint stock bank of the Continent. The general plan of the famous Deutsche Bank of Berlin, which planted the German commercial flag everywhere, and which provided a large part of the bone and sinew of the Teutonic world-wide exploitation campaign, was based upon it. With finance as with merchandising, the German is a prize imitator.

The Societe Generale, however, is much more than a bank. It is the dynamo that drives Belgian enterprise throughout the globe. We in America pride ourselves on the fact that huge combinations of capital geared up to industry are a specialty entirely our own. We are much mistaken. Little Belgium has in the Societe an agency for development unique among financial inst.i.tutions. Its imposing marble palace on the Rue Royale is the nerve center of a corporate life that has no geographical lines. With a capital of 62,000,000 francs it has piled up reserves of more than 400,000,000 francs. In addition to branches called "filial banks" throughout Belgium, it also controls the powerful "Banque pour l'Etranger," which is established in London, Paris, New York, Cairo, and the Far East.

One distinctive feature of the Societe Generale is its close alliance with the Government. It is a sort of semi-official National Treasury and performs for Belgium many of the functions that the Bank of England transacts for the United Kingdom. But it has infinitely more vigour and push than the Old Lady of Threadneedle Street in London. Its leading officials are required to appear on all imposing public occasions such as coronations and the opening of Parliament. The Belgian Government applies to the Societe Generale whenever any national financial enterprise is to be inaugurated and counts upon it to take the initial steps. Thus it became the backbone of Leopold's ramified projects and it was natural that he should invoke its a.s.sistance in the organization of the Forminiere.

[Ill.u.s.tration: JEAN JADOT]

Long before the Forminiere came into being, the Societe Generale was the chief financial factor in the Congo. With the exception of the Huileries du Congo Belge, which is British, it either dominates or has large holdings in every one of the sixteen major corporations doing business in the Colony and whose combined total capitalization is more than 200,000,000 francs. This means that it controls railways and river transport, and the cotton, gold, rubber, ivory and diamond output.

The custodians of this far-flung financial power are the money kings of Belgium. Chief among them is Jean Jadot, Governor of the Societe Generale--the inst.i.tution still designates its head by this ancient t.i.tle--and President of the Forminiere. In him and his colleagues you find those elements of self-made success so dear to the heart of the human interest historian. It would be difficult to find anywhere a more picturesque group of men than those who, through their a.s.sociation with King Leopold and the Societe, have developed the Congo and so many other enterprises.

Jadot occupies today the same position in Belgium that the late J. P.

Morgan held in his prime in America. He is the foremost capitalist.

Across the broad, flat-topped desk of his office in that marble palace in the Rue Royale the tides of Belgian finance ebb and flow. Just as Morgan's name made an underwriting in New York so does Jadot's put the stamp of authority on it in Brussels. Morgan inherited a great name and a fortune. Jadot made his name and his millions.

When you a.n.a.lyze the lives of American multi-millionaires you find a curious repet.i.tion of history. Men like John D. Rockefeller, Henry H.

Rogers, Thomas F. Ryan, and Russell Sage began as grocery clerks in small towns. Something in the atmosphere created by spice and sugar must have developed the money-making germ. With the plutocrats of Belgium it was different. Practically all of them, and especially those who ruled the financial inst.i.tutions, began as explorers or engineers. This shows the intimate connection that exists between Belgium and her overseas interests.

Jadot is a good ill.u.s.tration. At twenty he graduated as engineer from Louvain University. At thirty-five he had directed the construction of the tramways of Cairo and of the Lower Egyptian Railways. He was now caught up in Leopold's great dream of Belgian expansion. The moment that the king obtained the concession for constructing the 1,200 mile railway from Pekin to Hankow he sent Jadot to China to take charge. Within eight years he completed this task in the face of almost insuperable difficulties, including a Boxer uprising, which cost the lives of some of his colleagues and tested his every resource.

In 1905 he entered the Societe Generale. At once he became fired with Leopold's enthusiasm for the Congo and the necessity for making it an outlet for Belgium. Jadot was instrumental in organizing the Union Miniere and was also the compelling force behind the building of the Katanga Railway. In 1912 he became Vice Governor of the Societe and the following year a.s.sumed the Governorship. In addition to being President of the Forminiere he is also head of the Union Miniere and of the new railroad which is to connect the Katanga with the Lower Congo.

When you meet Jadot you are face to face with a human organization tingling with nervous vitality. He reminds me more of E. H. Harriman than of any other American empire builder that I have met, and like Harriman he seems to be incessantly bound up to the telephone. He is keen, quick, and forceful and talks as rapidly as he thinks. Almost slight of body, he at first gives the impression of being a student for his eyes are deep and thoughtful. There is nothing meditative in his manner, however, for he is a live wire in the fullest American sense.

Every time I talked with him I went away with a new wonder at his stock of world information. Men of the Jadot type never climb to the heights they attain without a reason. In his case it is first and foremost an accurate knowledge of every undertaking. He never goes into a project without first knowing all about it--a helpful rule, by the way, that the average person may well observe in the employment of his money.

If Jadot is a live wire, then his confrere, Emile Francqui, is a whole battery. Here you touch the most romantic and many-sided career in all Belgian financial history. It reads like a melodrama and is packed with action and adventure. I could almost write a book about any one of its many stirring phases.

At fourteen Francqui was a penniless orphan. He worked his way through a regimental school and at twenty was commissioned a sub-lieutenant. It was 1885 and the Congo Free State had just been launched. Having studied engineering he was sent out at once to Boma to join the Topographic Brigade. During this first stay in the Congo he was in charge of a boat-load of workmen engaged in wharf construction. The captain of a British gunboat hailed him and demanded that he stop. Francqui replied,

"If you try to stop me I will lash my boat to yours and destroy it with dynamite." He had no further trouble.

After three years service in the Congo he returned to Brussels and became the military instructor of Prince Albert, now King of the Belgians. The African fever was in his veins. He heard that a mission was about to depart for Zanzibar and East Africa. A knowledge of English was a necessary part of the equipment of the chief officer. Francqui wanted this job but he did not know a syllable of English. He went to a friend and confided his ambition.

"Are you willing to take a chance with one word?" asked his colleague.

"I am," answered the young officer.

He thereupon acquired the word "yes," his friend's injunction being, "If you say 'yes' to every question you can probably carry it off."

Francqui thereupon went to the Foreign Office and was immediately asked in English: