《1855 American Tycoon》Chapter 60: The Future Alliance
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At the end of May 1858, Scrooge arrived in New York to take a ship to Europe to receive the honor of "Fellow of the Two Houses" from the British and the French. Before his departure, Rockefeller and Scrooge had a long conversation.
At that time, Rockefeller approached Scrooge and told him that he wanted Scrooge to give him a ride and let him take a share in Scrooge's new company.
"Scrooge, you're so secretive, I didn't know about it until after you made something so amazing that the whole world knew about it." Rockefeller shook his head, seeming to blame Scrooge for not being mean enough.
"A recent breakthrough ......," Scrooge seemed to explain.
"No need to explain, Scrooge." Rockefeller said, "I know the weight of this thing, if it were me, I would have kept it as secret as possible until it was oh so successful, even my father I would not have let him know. I know that even now, you must know that you can not monopolize this large market. The market is too big, I calculated that the European market alone, at least 30 million to 50 million pounds a year. In front of such a market, what bullshit laws are all crap. Such figures are enough for those Europeans to start a war over it. I'm sure you know this too. You will give up some, or even most of your interests to make a compromise with others. Because this is the general trend, you can not resist. In that case, can you let me have a share of this thing?"
"John, you make a lot of sense." Scrooge said, "Indeed, such a large market, I can not eat alone. The French and the British have signed an agreement to protect each other's patents, but if I insist on taking all the benefits alone, they will certainly let people produce these drugs illegally - well, it's very easy to analyze what it is once you get a sample. With the science level in England or France, it's not that difficult. Europe would be full of this illegally produced sulfa and the two governments would just look the other way and pretend not to see it. To avoid such a situation, I have to cede some of my interests to those who have enough influence in Europe. And they form a common body of interests so that I can get that money safely. I will soon accept the invitation of the Royal Academy of Sciences and the French Academy of Sciences in the name of these two countries to run to finalize these matters."
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Rockefeller listened and nodded slightly. This is indeed the Scrooge he was familiar with, even in the most triumphant time, but also sensible, sober. Always be aware of where the limits of your power are.
"John, as you said, since I can't eat this pie all by myself, it's not impossible to let you have a share of it. The reason is that now, although I do not have the power to eat the cake alone, how to share the cake to have a certain say. But, John, have you ever thought about why I am willing to let you have a share? The reason I want to give the pie to some of the English and French is that they have the power to keep my drugs in Europe and the ability to keep the illegal production of sulfa from taking over the whole of Europe. I will also give the Morgans a share of this business, again because their influence in the United States can help me. I agreed to let you have a share, of course, because we are friends, but there must be a reason based on interest."
Here, Scrooge paused and looked up at Rockefeller, who, he saw, was sitting calmly listening, seemingly not embarrassed or angry at Scrooge's "why should I let you have a share" question.
"The reason why I am willing to give you a little bit of the share I can get is that I think highly of your ability. Only in terms of the ability to run the business routine, you are much stronger than me. We were able to start with nothing and now have small savings, of course, and I always find the direction of wealth related, but your help is also essential. But John, now I have to ask you a key question, and that is, what are your plans for your future? What kind of a person do you want to be? If you just want to make a little money and live like a rich man, like those who came after Vanderbilt (Vanderbilt was the first billionaire super-rich man in American history, and his railroad empire was the first American monopoly. But within a few decades of Van Der Bilt's death, his children and grandchildren were rapidly losing the business in a life of paper and luxury, and 60 years after Van Der Bilt's death, none of his descendants were millionaires. (So the children and grandchildren of Van Der Bilt became synonymous with extravagance and failure. Well, with our friendship and your ability, it wouldn't be hard for you to follow me, even as a manager who helps me with my trading business. But, John, your talent is more than that, and I expect more than that from you." Scrooge said, quite sincerely.
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"And what do you expect of me?" Rockefeller asked.
"It starts with how I see the world in the future." Scrooge said, "The world of tomorrow is bound to be a world of big business. Only companies big enough to survive. Why do you say so? This is due to the characteristics of production in the industrial age. Take the MacDonald 1857 rifle for example, the larger the scale of production, then the lower the cost allocated to each gun. The larger the production, the lower the cost allocated to each gun. It is thought that buying raw materials on a large scale or whatever will bring about price concessions, and the more production, the lower the research and development costs allocated to each product. So if there are two enterprises producing this rifle, one of them is several times the size of the other enterprise, even if only using the most low-tech price war tactics, the former can easily defeat the latter. However, large enterprises will not lose profits, because once the competition with the small businesses is crushed, once the monopoly is achieved, the pricing power will be firmly in the hands of the larger enterprises, and at that time, the excess profits will roll over.
However, this is not the most ideal state, the most ideal state, several different, and interlinked aspects occupy an important position in the enterprise united, and allied. In this alliance, each company provides more good support to the other. For example, through cross-holding, we jointly control a number of the most important industries from pharmaceuticals, and arms, to transportation and finance, and then we form an alliance, and within the alliance, we offer each other lower prices than those offered to partners outside the alliance, so that anyone operating alone in a particular industry is not our opponent and will be We will be easily crushed. Moreover, this alliance will make any new adventurers trying to enter our business area have to face a high threshold to the clouds. In this way, who else can shake our hegemony? That's what I envision."
This grand design is clearly beyond Rockefeller's imagination. He thought for a moment and then said to Scrooge. "You mean you would prefer that I invest in other industries that are closely related to your industry? And then we could ally mutual ownership?"
"Yes," said Scrooge, "so that I will give you uncapped preferred shares of my business with dividends. When you provide raw materials or services to my business at below-market prices, it may seem like you're losing out, but since you get a cut in my business, it's just a matter of shifting your money from your left pocket to your right. And when I provide you with preferred shares, in exchange, you should also give me some of these preferred shares."
Preferred shares are shares that have priority over ordinary shares in the distribution of profits and surplus property. When a company goes bankrupt, the distribution of the company's remaining assets must be completed first for the preferred shares before the general shares can be distributed.
Of course, this "preference" comes at a price: these shares generally do not have the right to vote on the company's operating decisions. (They are not freely negotiable in the market (except in matters relating to their interests) and can only be redeemed by the company. Scrooge's intention in offering mutual preferred shares is also clear: He doesn't want the day to come when some of his partners will suddenly band together and kick him out of the company's decision-making ranks.
"I still have to think about it." Rockefeller said, "By the way, Scrooge, you have a good brain, can you help me think of what are the industries that are most closely linked to your medicine and chemistry, and also the easiest for us to achieve such an alliance?"
Scrooge thought for a moment and then replied, "One of the tightest ties with medicine and chemistry is raw materials, and the other is energy. These two are now concentrated in coal, but I think oil's future will be more promising. However, I do not think that now is the best time to enter this industry, now you have limited capital power in hand, and the relevant technology is not yet mature. You now pay more attention to the good. In addition, paying attention to military warfare is a special requirement for food, and food is also very promising. At least in the next few years, you can save up the capital base to enter the key areas."
"Thank you for your advice! Scrooge." Rockefeller stood up, "I'll give some serious thought to what you've said today."
"Then John, I'll be waiting for your good news." Scrooge also stood up to send off, "Let's unite and take the world firmly into our hands!"
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