by a party
of speculative people into the Escanaba Iron Company. He was assured
that the concern was to be made a stock company, but before this was
done his colleagues had succeeded in creating an enormous amount of
liabilities--about seven hundred thousand dollars. There was nothing
but bankruptcy as a means of reinstating Mr. Kloman.

This gave us more of a shock than all that had preceded, because Mr.
Kloman, being a partner, had no right to invest in another iron
company, or in any other company involving personal debt, without
informing his partners. There is one imperative rule for men in
business--no secrets from partners. Disregard of this rule involved
not only Mr. Kloman himself, but our company, in peril, coming, as it
did, atop of the difficulties of my Texas Pacific friends with whom I
had been intimately associated. The question for a time was whether
there was anything really sound. Where could we find bedrock upon
which we could stand?

Had Mr. Kloman been a business man it would have been impossible ever
to allow him to be a partner with us again after this discovery. He
was not such, however, but the ablest of practical mechanics with some
business ability. Mr. Kloman's ambition had been to be in the office,
where he was worse than useless, rather than in the mill devising and
running new machinery, where he was without a peer. We had some
difficulty in placing him in his proper position and keeping him
there, which may have led him to seek an outlet elsewhere. He was
perhaps flattered by men who were well known in the community; and in
this case he was led by persons who knew how to reach him by extolling
his wonderful business abilities in addition to his mechanical
genius--abilities which his own partners, as already suggested, but
faintly recognized.

After Mr. Kloman had passed through the bankruptcy court and was again
free, we offered him a ten per cent interest in our business, charging
for it only the actual capital invested, with nothing whatever for
good-will. This we were to carry for him until the profits paid for
it. We were to charge interest only on the cost, and he was to assume
no responsibility. The offer was accompanied by the condition that he
should not enter into any other business or endorse for others, but
give his whole time and attention to the mechanical and not the
business management of the mills. Could he have been persuaded to
accept this, he would have been a multi