Rubber Hero

"It has been ten years, almost, of good hard work by a hard-hit organization. It has been ten years, almost, of good hard work. It has taken ten years to do it."

Those ten hard years lay heavy in the thoughts of big, bashful Francis Breese Davis Jr. last week as he handed reporters a mimeographed announcement: for the first time since 1928 United States Rubber Co. has declared a dividend--4% on its 8% preferred. Since 1929, when Mr. Davis became chairman and president of U. S. Rubber, that overfed, unhealthy industrial giant had several times been within a banker's nod of extinction. Last week the giant was healthy again, its waistline of funded debt reduced from $130,000,000 to $46,000,000, its muscles bulging with the $5,000,000 it will earn this year.

Francis Davis was no rubber man when the Du Fonts put him in to run U. S. Rubber in January 1929. He had worked his way through Yale, become an engineer, built fabulous Hopewell, Va. for the Du Fonts in Wartime, and moved up to manage various Du Pont enterprises. He had a record as a trouble shooter and a trouble shooter was what U. S. Rubber needed in 1929. This biggest unit in the industry had been internally unsound when the Du Fonts bought into it in 1927 and 1928. Francis Davis, diagnosed its troubles as twofold: the general collapse of crude-rubber prices that began in 1925 and the individual collapse of U. S. Rubber, suffering from obesity.

Trouble-shooter Davis could do nothing to stop the sickening fall of rubber from its 1925 high of $1.25 a pound to 2 1/8-c- a pound in 1932, but he could do a little to lighten the effect of huge inventory losses on his company. He did it by slashing his inventory and accounts receivable (i. e., by selling part of his business) and the proceeds he applied to reducing the funded debt, thereby saving interest charges. While the deficit piled up and stockholders gave up, he wiped out $40,000,000 of that debt in three years. Meanwhile he did some inspired financial broken-field running to escape creditors, wangling short-term loans to meet long-term loans and shorter-term loans to meet those.

Less intricate to anybody but a bookkeeper was the thorough house-cleaning he gave the company. His first move was to let his employes ride with him in the elevator; his predecessor, Charles B. Seger, had risen to his office in solitary splendor. Mr. Davis told his men to work from nine to five, as he did. He toured the company's antiquated plants and gasped: "They're making tires like they made the pyramids!" He installed assembly line methods, introduced the "merry-go-round" (semicircular tire-building track), eliminated the "one man, one boot" system in his footwear divisions, modernized everything from boots to big belts. He also modernized the corporate structure, reducing U. S. Rubber's subsidiaries from 123 to 40.

Besides all this, Mr. Davis was running two huge rubber plantations in Sumatra and British Malaya (U. S. Rubber is the world's biggest producing company). Du Pont-trained in a healthy respect for new products, he pepped up the company's research department and pop out of the hat came Lastex, the yarn with the two-way stretch. Now he could put rubber on women's behinds as well as their feet. Lastex profits from girdles & gadgets led the way out of Depression. This year Mr. Davis has a brand-new product, called latex foam, which is exceedingly soft to sit on.

By last week U. S. Rubber's funded debt had been cut to $46,000,000--the last chunk of that obesity was sliced off in July--and Mr. Davis thought the stock-holders deserved the next break. Said he: "Our organization has been working for ten years in the hope of making the stock-holders happy." A smaller man might have felt self-satisfied.

Francis Davis is a large man, both physically and in his tastes. Born poor, he loves fine living. He has an apartment in Manhattan, a house at Fishers Island, N. Y. and a plantation on Brays Island in South Carolina. All three places are stocked with fine wines, fine foods, fine cigars, and Mr. Davis can sleep only on the finest bed springs. In South Carolina he raises diamondback terrapin for his own table in New York, and also supplies Voisin's and Jack & Charlie's. His annual dinner at the Sherry-Netherland is famed among high-placed visitors to the automobile show. He collects antiques, likes to browse in shops with his wife. He is an authority on birds and his collection of Audubon prints is one of the best in the land.

Gentle in manner, he has probably made U. S. Rubber a success chiefly through his power of conciliation, which kept the bankers off and maintained some peace in the cutthroat industry that he entered as an amateur. He was a conciliator even at Yale, where he made his tuition money by selling engineering instruments to fellow students. His last year the dean decided the college ought to sell its own supplies, but Francis Davis bargained a year's tuition for going out of business.

After making his announcement last week, Mr. Davis went home, bathed and dressed for the evening. At eight o'clock his officers and directors sat down in his Early American dining room to a dinner of diamondback terrapin and sherry, guinea hen and Rhine wine (Rudesheimer 1934), ice cream and Moet & Chandon 1928. After dinner they sat and talked about the triumph, but Mr. Davis said little. He felt no elation, only a quiet satisfaction. When the last guest had left at midnight, he went upstairs to sleep in a bed with the finest springs.

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