Karl Schmidt did not have a plan. He had two plans, and hadn"t decided which of them to implement. The first plan, to copy the tools and machines of the Higgins Sewing Machine Corporation and start making his own, had several drawbacks. While Karl had more and better connections outside the Ring of Fire, and in a sense more money, the kids had better connections inside the Ring of Fire, and a head start. They also had, in a sense, Ramona.
Karl really liked Ramona Higgins. Maybe he even loved her. He was no Romeo and he wasn"t fourteen so there was no question of abandoning his name and house, but if he could avoid it he would prefer not to hurt her. He would also prefer not to get in a fight with David, not with Johan and his shotgun in the background, although Karl was fairly confident that guns would not come into play over this. If it had been his only option he would have done it. He had even been preparing the ground to do so until a fairly short while ago.
Granted all his preparation so far had been dual use. Not all the machines and tools useful in making the parts of a sewing machine required up-time equipment to make. Forms and tools could be made that in turn could make the production of parts easier and cheaper. Karl Schmidt was quite familiar with tricks of his trade as practiced by the craftsmen of his time, and for the last two months he had been picking up what he could of up-time notions. The combination was useful. By now he was producing most of the parts he sold to the Higgins Sewing Machine Corporation at a good profit.
The second plan had been little more than a wish. He wished that he could get into the sewing machine business without upsetting Ramona. He even wished he could do it without going into compet.i.tion with a bunch of kids. Kids that he had come to like. Until recently there had seemed no way to do it, but maybe now there was. Ramona didn"t know that much about stock corporations, and neither did Karl, but Uriel Abrabanel did. Karl had learned enough to understand two things. You voted your stock by how much you had, and you did not actually have to own more than half the stock to gain control. You just needed to get a majority to support you.
The incorporation had done something else. It had decreased the chances of competing with them. As they sold stock, they would gain money. Which would eliminate one of his advantages.
November 8, 1631: Higgins House
The stock had sold fairly well. So far they had sold a bit over seventeen thousand shares. Enough for them to rent a wagon shed out on Flat Run Road, and move all the production machines into it. They had gotten their production back up to two days per machine.
One thing David found interesting and a little frightening was Sarah"s little sister Judy. She had bought over eight thousand shares, for herself and some of her school friends. He had been peripherally involved because Johan had been asked to find a merchant and help with the negotiating. Johan had asked David who had in turn checked with the Wendells. Only to learn that Judy did indeed have her parents" permission to sell dolls and buy stock. They had even suggested that she ask for Johan"s help. He had also learned that Judy had five dolls that she was willing to sell. He had pa.s.sed on the permission but not the number to Johan.
When he got the report on the deal from Johan he realized that he probably should have pa.s.sed on the number of dolls. Judy and her friends had had twenty seven dolls, a Barbie hairstyling head and a few other toys. Johan was impressed with the girls. Aside from translating, they hadn"t needed any help. Sad little eyes, crying not quite crocodile tears over having to give up their dolls. Johan"s biggest trouble had been keeping a straight face. The merchant hadn"t had a chance. The "Barbie Consortium," as they called themselves, had gotten an even better price than Delia had. They had then turned around and spent most of the money on stock in Higgins Sewing Machine Corporation.
Since this was precisely what Johan had been told they had permission to do, he hadn"t even thought about it. Acting as an officer of the company he had just taken their money and issued the stock. Besides, they all had parental consent forms signed by their parents. True the parental consent forms didn"t specify the number of shares, but then none of the parental consent forms did. It was a detail Sarah, the boys, and her parents had just failed to think would ever be significant. None of the other minors buying shares had ever bought more than a handful.
The rest of the sales to minors had totaled only a couple of thousand shares. They had done better with their down-time suppliers who had bought most of the rest. Only a few shares had been bought by up-time adults.
They needed money from the sale of stock because they weren"t selling their sewing machines for cash on the barrel head. Nearly every machine they sold was effectively a loan they made to the buyer. They would get their money back plus some, but not anytime soon. The problem was the bank. Sarah had planed on selling the loans to the bank at a discount, using the contract as collateral for a loan. It was a fairly standard practice up-time, but the bank of Grantville wanted a bigger cut than Sarah wanted to give. So until they worked it out, they weren"t receiving nearly as much per machine up front as it cost to make it.
November 13, 1631: Higgins house
"The bank caved; well, mostly anyway." Sarah went on to explain the deal she had reached with the bank, which bored Brent almost to tears. The important point was that they would get paid for the sewing machines when they sold them. That meant they could hire people to do the a.s.sembly and make and finish the parts so he and Trent wouldn"t have to do it anymore. Figuring out how to make a sewing machine was great fun, even making the first one was fun, but by the time you have made several it"s just plain work and boring work at that.
November 23, 1631: Higgins" Sewing Machine Factory
"Look, Sir," said Brent excitedly to Samuel Abrabanel, "the neat thing about a sewing machine, well, one of the neat things, is that it"s all structured around a two st.i.tch cycle. One complete rotation of the power wheel is two st.i.tches. At any point around in the spin of the power wheel the other parts are all in the same place they would be at the same point in the next rotation. Pretty much all that"s in there are cams, levers and a few gears. Then a set of parts that actually do the sewing based on the position of the levers.
"The parts we make ourselves are the parts that would be really hard to make with standard seventeenth-century tools. The other parts we contract out to people like that guy Johan got in the fight with the other day."
"It wasn"t a fight, Master Brent," Johan said severely. "It was bargaining." Looking at Samuel Abrabanel: "Begging your pardon, sir, these up-timers have no notion of bargaining. If they weren"t so rich they"d all be penniless by now."
Johan shook his head. "It isn"t just the kids. All the up-timers are like children in a way."
"Trent and I," said Sarah, with a look at Johan, "have worked it out as well as we could. We figure that making a sewing machine with seventeenth-century techniques could probably be done, but it"s just barely within the techniques the very best of your craftsmen have. It would take, we guess, something over five thousand man hours."
"I know that"s a lot," Trent interrupted, "but imagine just two parts, each part has dozens of places where they have to fit with the other in exactly the right way. Now add another part and another and they all have to fit together. It"s a lot of delicate filing and shaping, and you can"t separate the work having one master make one part and another make another. No matter how good they are the parts won"t fit.
"With our machines doing the tricky time-consuming parts, we have that down to, we think, around two hundred man hours. The reason it"s "we think" and not "we know," is because we really don"t know for sure how long it takes the contractors to make the parts we farm out. All we know for sure is how much we are being charged, and we"re guessing the hours from that. When you figure labor at eight dollars an hour and add in the cost of materials, it costs us about four thousand dollars to make a sewing machine. Three thousand of that is contracted parts and blanks, another two hundred or so is putting all pieces together and testing the machine. The rest, the key to producing them at something approaching an affordable price, is the machines you see around you."
"It"s very interesting," said Samuel Abrabanel "but why did you ask me to come here? Are you looking for a loan or an investor?"
"No, Sir, not really," said Sarah. "We do sell stock and if you would like to buy some we"ll be happy to sell you some, but that"s not why we wanted to show you this. What we are really looking for is a distributor. We can sell a few hundred sewing machines locally. To people that come here to buy them, but as production increases we will need to establish markets in other places. To do that we need stores where people can see our sewing machines and try them out before they buy one. We"re not quite ready to do that yet but we wanted to offer you the option while you were in town."
Samuel Abrabanel, as was his habit, made no commitments then. But Sarah wasn"t expecting any.
December 12, 1631: Higgins House
Karl Schmidt had come to dinner again. This time, he had brought his whole family. He was probably going to formally ask for Mom"s hand in marriage. David didn"t really mind. He had been getting along with Karl better the last few months, and Mom seemed happier than she had been in years. From the look on his face Adolph was probably expecting it too.
Officially they were celebrating the sale of the fiftieth sewing machine, which had happened the previous week. They were making a profit on the sewing machines now, but not enough of one. It would take them years at this rate just for the investments Delia and others had made to be paid back.
Karl said, "I would like to talk to you all about a proposal I have. I have already spoken of it to Ramona and Madam Higgins, but without your agreement they will not agree."
Karl hesitated; then: "I wish to take over the Higgins Sewing Machine Corporation. I will put in my foundry to pay for fifty thousand shares of stock. I wish to wed Ramona, and with the wedding, I will control her stock. Together with Mrs. Higgins, I would control over fifty percent of the outstanding stock. If you all agree, she has agreed to give me her support."
"Hear me out," Karl demanded, apparently unaware that no one was in any hurry to interrupt. "You four have done a tremendous thing. Four children have started a company that may someday be worth more than some kingdoms. You have brought wealth into the world, but starting a company is not the same thing as running it. Already there are others interested in producing sewing machines. So there will be compet.i.tion and alternatives.
"Even if you do everything right, you will be at a disadvantage because people will not want to deal with children if they can deal with an adult. Others will find it easier to buy iron and other materials. People will say "do you want to trust a sewing machine that was made by children having a lark? Or would you rather have one made by "mature men of consequence." Besides, you have schooling yet to complete, so you will not be able to pay the company the attention it needs."
Karl talked on. He talked about potential problems, he talked about what he would like to do, how he wanted to make the company grow. David looked at his mother to find her looking at him. Her eyes begged him not to kill this. She was almost in tears, afraid of what he would do. He looked at Grandma as she caught his eye, looked at Ramona, then at Karl, and nodded. He looked to Sarah, she saw him looking at her and gave a slight shrug.
Brent and Trent were looking rebellious and betrayed. David caught their eyes and mouthed the word "wait." David turned his attention back to Karl, and the business part of the proposal. It was fair. The foundry was worth more than twenty five percent of the company when you included Karl"s connections with suppliers and customers, and both would increase in worth with the merger. He looked at Adolph who looked like he had bitten a lemon. Apparently he did not approve.
Karl was running down now. Not quite sure how to finish. Wanting to come up with something to convince the kids. David looked back at Grandma. Karl would take being interrupted by her better.
Delia picked up the signal. "Perhaps we should give the kids a chance to talk it over?" she suggested. "Why don"t you four go out in the garden and talk it out."
The kids headed for the garden.
They talked it out. Brent and Trent wanted to say no at first. It wasn"t that they found the prospect of running a sewing machine company all that exciting. It wasn"t.
"Oh, I don"t know," said Trent, "I just hate the idea of losing."
"What makes you think you"re losing?" David asked. "You"re gonna be rich, and Karl"s gonna do most of the work to make you that way. You never wanted to be the CEO anyway."
"What about you?" Brent asked "You did want to be the CEO. Don"t try to deny it. We were gonna be the chief engineers, Sarah was the chief financial officer and you were gonna be the CEO. The wheeler-dealer. So how come?"
David looked at the ground. He moved a rock with his toe. Then he said quietly: "Mom. She loves the guy and I think he loves her in his way. He"ll treat her right."
Then, because mush is not an appropriate emotional state for a fifteen year old boy or a captain of industry: "Besides, it"s a good deal. The foundry will really increase production once it"s upgraded a bit."
Sarah didn"t buy the last part for a moment. Oh it was true enough, but it wasn"t what had decided David, and she knew it. David was doing it for his mother. She wouldn"t have fought it after that, even if she had cared, but the truth was she didn"t much care. She was more concerned now with other things.
Afterword, some time later: Grantville High School
Brent and Trent were arguing as usual when David and Sarah arrived. "I tell you we don"t need electricity to make it work," said Brent.