BUSINESS: The Ultimate Resource April 2006 Upgrade 43

MANAGEMENT GIANT
John Dennis Ryan

Timeline
1864 Born. 1881 Takes a job in his uncles general store. 1889 Moves to Denver. Becomes oil salesman. 1896 Marries Nettie Gardner. 1900 Anaconda owner Marcus Daly dies. 1904 Becomes manager of the Amalgamated Copper Company. 1906 Amalgamated buys competitors mining properties. 1910 Amalgamated merged into Anaconda Copper Mining Company. 1914 Amalgamated dissolved. 1923 Buys copper deposits in Chile from the Guggenheim family. 1928 Sells Montana Power for $85 million in stock. 1933 Dies.

Summary
John Dennis Ryans rise to fame is a fascinating one. Unlike many other entrepreneurs who have made a fortune in business, Ryan meandered through his early life with no real ambition to achieve anything special. He had no great desire to become a multimillionaire. He was content to ply his trade as an oil salesman, earning a reasonable but not startling salary. Ryans marriage appears to have galvanized him into action. So it is a credit to his brilliant business acumen that he achieved so much, starting so late. Through a formidable combination of clever negotiating and astute man-management, Ryan shoveled his way to the front of the copper mining industry. With astonishing rapidity he became the head of the largest copper mining company in the worldAnaconda Copperyet he appears to have lost interest in the copper industry as quickly as he became obsessed with it. Caught up in the whirlwind of Wall Street in the 1920s, away from the down-to-earth atmosphere of the Butte copper mine, Ryan forgot the virtues that made him a success, speculated on the stock market, and lost. The last of the copper kings died a poor man. Fittingly he was buried in a copper casket.

A & C Black Publishers Ltd 2006

BUSINESS: The Ultimate Resource April 2006 Upgrade 43

Background and Rise

John Dennis Ryan was born of mining stock. His father discovered extensive copper deposits in the Lake Superior region. Born in Hancock, Michigan in October 1864, Ryan was expected to follow his father into the mining business. But the young Ryan showed no interest in mining at all. Neither did he indulge his parents by attending college as they wished. At 17 he went to work for an uncle in one of the general stores in the Michigan copper mining district. For the following eight years Ryan weighed, measured, and wrapped parcels. Were it not for the fact that two of his siblings were forced to convalesce in Denver because of their poor health, Ryan might never become involved in the mining industry. But Ryan gave up the grocery store to seek his fortune in Denver where, after a bleak six-months of unemployment, he obtained a job as a traveling oil salesman. By the age of 30 Ryan had carved out a comfortable niche as a salesman. He was making somewhere between $100 and $150 a month. But it was a far cry from the achievements of some of the great entrepreneurs in business history, many of whom were millionaires by the age of 30. In the end it was marriage that started Ryan on the path to riches.

Defining Moments
At age 32, Ryan married Nettie Gardner. She had bigger plans for her husband than life as an itinerant oil salesman. A good customer of Ryans, Marcus Daly, the man behind the Anaconda copper mine at Butte, died. Ryan, urged on by his wife, became obsessed with purchasing an interest in one of Dalys businesses, the Daly Bank & Trust Company. Somehow, with bluff, bluster, a good deal of money borrowed from friends, and all of his savings, Ryan managed to buy out a number of minority shareholders and acquire a controlling interest. Ryan and his wife moved to Montana, where the head office of the Daly banking interests was located. Acquitting himself well, Ryan soon gained a reputation as someone people could trust, and built up a formidable network of connections. His reputation brought one of John D. Rockefellers partners knocking at his door with a request to take charge of the affairs of the Amalgamated Copper Company in Montana. Ryan accepted. If Ryan was unaware of the plight of the Amalgamated Copper Co. when he agreed to take up the challenge, he soon found out. The company was in litigation with Fritz Augustus Heinze one of the copper kings and owner of the Montana Ore Purchasing Company. It was also in conflict with the labor force. Ryan became managing director of Amalgamated in 1904. His first task was to negotiate with Heinze. Years spent eking out a living as an oil salesman had finely honed Ryans negotiating skills. In his preliminary discussions with Heinze, Ryan sensed an opportunity to buy out

A & C Black Publishers Ltd 2006

BUSINESS: The Ultimate Resource April 2006 Upgrade 43

all of Heinzes mining interests in Montana. The key to a successful deal, Ryan decided, was protecting Heinzes pride by dressing up the deal to suggest that a compromise was being reached rather than a sell-out. Ryans suspicions were confirmed when Heinze refused to meet in public, going out of his way to keep details of the negotiations from his mining workforce. As Ryan recalled, after six months negotiating we finally met one night, talked price from one oclock to three oclock in the morning and reached an agreement. In the agreement, sealed in 1906, Heinze signed over virtually all his mining interests in Montana. With Heinze out of the way Ryan concentrated on placating the workforce. A dispute between the Western Federation of Miners and the International Workers of the World threatened to run out of control. The miners Union Hall was blown up with dynamite, and the army had to be called in. Ryan calmly circumvented both unions by refusing to recognize either of them and declaring an open shop. His management skills proved equal to his talent for negotiating, and the amalgamated mines never lost a single day to labor problems. The mining industry was a rough, tough, often violent world, and Ryan did well to survive, let alone prosper. Just how dangerous the management of miners could be is well illustrated by events that took place at the 34th annual Butte Miners Union picnic, held at Gregson Hot Springs on Sunday, August 11, 1912. Fourteen thousand people attended, the majority miners. The main event of the day was the tug-of-war contest between miners from the St. Lawrence mine and those from the Buffalo mine. Ryan contributed to the prize money. What started as a tug-of-war, escalated into a brawl, which turned into a full-scale firefight. Two miners died from gunshot wounds. A three-day inquest failed to apportion blame. The tug-of-war contest was declared void by the Miners Union, and the $100 prize money returned to the union. These were the people Ryan had to manage. Ryan continued to consolidate other mines and smelting plants into the Amalgamated Copper Company. In 1910 the entire holdings of Amalgamated were merged into the Anaconda Copper Mining Company, and the Amalgamated was dissolved in 1914. The Anaconda Copper Mining Company, with Ryan at the helm, was the worlds largest copper company, a position secured by another of Ryans deals when he created the Montana Power Company to deliver cheap electricity to his mines. Ryan spent most of 1920s dealing with the power brokers on Wall Street, a world away from the dirt and grime of the copper mines. When Ryan acquired copper deposits in Chile for some $70 million, it was the largest cash transfer Wall Street had ever witnessed. Deal making to the last, Ryan sold Montana Power in 1928 for $85 million in stock. It was right at the top of the market, yet Ryan could have had little idea of the events to come the following year as he issued more shares in his company and used the cash to fund speculative investments. When the Wall Street Crash came in October 1929, Ryan went broke. His shares, worth $175 each at their height, were valued at paltry $4. He died, still broke, in 1933 and was buried in a copper coffin, the last of the copper kings.

A & C Black Publishers Ltd 2006

BUSINESS: The Ultimate Resource April 2006 Upgrade 43

Context and Conclusions

John Ryan showed that it is never too late to chase your dreams. Although mining was in his blood, Ryan only found himself in the industry in his thirties, and then only by chance. He soon discovered however that his natural talents were well suited to negotiating with unscrupulous competitors and obstructive unions, not to mention to controlling a motley crew of miners drawn from all parts and backgrounds. He used his talents to create the worlds biggest copper company, Anaconda. Ryan was also a lesson in the ephemeral nature of wealth and the corruption of power. Shrewd businessman though he was, he was unable to resist the lure of Wall Street at a time when rampant speculation was making the poor rich, and the rich richer. When the market crashed, so did Ryan, ending the dynasty of the copper kings.

Close But No Cigar

Marcus Daly
Born in Ireland in 1841, Daly emigrated to the United States and ended up in the California Gold and Silver mines. On a hunch he bought a silver mine in Butte, Montana. The silver was soon exhausted but the mine also contained plentiful reserves of copper. In an age where the increasing demand for electricity meant demand for copper wire, Daly had struck lucky. Daly created not one town but twoAnaconda and Hamilton and turned Butte into the copper capital of the world. He was the first of the copper kings.

For More Information

Book:
Marcosson, Isaac F. Anaconda. New York: Dodd, Mead & Co., 1957.

A & C Black Publishers Ltd 2006