After a few years, fate intervened again
In 1888, Sampson Fox of the Leeds Forge Company of England tried, and failed, to sell American railroad companies his all-steel Fox Undertruck. This was a lightweight undercarriage made of pressed steel from a formula his company developed and was in use in Britain. At the time, American railroad undercarriages were made of wood and the railroad magnates saw no reason to change. Fox’s last stop was to Charles Moore who declined the offer to become the company’s U.S. representative. However, Moore told Fox that he had a top salesman on his payroll and that if he wanted to sell his undertruck as a sideline, that was all right with him. Over dinner that night, Fox made his offer: If Jim would represent Fox in the U.S., they would provide him with the technical expertise to produce the undertruck and pay him a 33 1/2 percent commission on every one he sold. With an incentive like that, Jim decided to convert every undercarriage used in America over to the Fox Undertruck.
Jim found a blacksmith shop in Joliet, Illinois and immediately had them fabricate ten undercarriages for the newly formed Fox Pressed Steel company. He knew from experience that American railroad men were the most conservative, if not the most hardheaded, of businessmen. Talking about your product meant nothing to them. They had to see for themselves in order to be convinced.
Brady began his campaign at the offices of the New York Central, then the leading railroad in the country. He made an appointment with the motive-power superintendent and boldly declared that if they didn’t at least give him the opportunity of a demonstration he would give the Pennsylvania Railroad, New York Central’s chief rival, the chance to be first on the list for a product that would provide an edge on shipping costs. This was because the all-steel undercarriage was stronger than the wooden version – and thus could carry more, lasted longer, and required less “off line” time for maintenance and repair. If anyone else made this statement they most likely would have been thrown out the door, but “Diamond Jim” wasn’t just anyone. His reputation as America’s top salesman preceded him and he was granted his test run, providing he supplied twenty railcars. It meant working overtime to produce the extra ten undercarriages, but they were delivered on time.
For the test itself, the cars were filled halfway with scrap metal and rock. Jim, on seeing this, ordered the cars to be filled to the top, “to make it a real test.” The run was from Albany to New York City and back, a route full of turns and twists. The test was a success, making the trip in good time. The New York Central placed an order for one hundred steel undercarriages.
Jim then went to the Pennsylvania Railroad and quickly sold them the next lot. Not to be outdone by their main rival, they ordered two hundred and fifty undercarriages. Within a few months both railroads announced that they were going to convert all of their rolling stock to the Fox Undercarriage. With that sort of endorsement, every railroad in the country sent in orders. By early 1889, Jim was selling hundreds of undercarriages a week at his now greatly expanded facility. He also included in his shops the manufacture of hydraulic brakes, fireboxes, and an assortment of other railroad equipment.
Jim was now living the good life. His home was a large mansion on Eighty-Sixth Street, he enjoyed dining and entertaining on a baronial scale at New York’s finest restaurants; wore diamonds on his buttons, watch, belt buckle, scarf pin, eyeglass case, rings, tie pins, walking cane and cuff links; and was the constant companion of Lillian Russell, the voluptuous leading star of the American stage (and who preferred his company over that of J. P. Morgan). Jim also became the owner in a racing stable and even bought a farm in New Jersey, the bounty of which often ended up in gift baskets to his numerous friends in the railroad industry and in the theater.
Then disaster struck
Pittsburgh empire builder Andrew Carnegie noticed the tremendous profits the Brady operation was generating and began to raise prices on the steel they were buying from him. His plan was to either force Brady to sell out to him, or force him into bankruptcy and then pick up the pieces of his operation at bargain prices. Brady chose neither option. He would fight.
The key to winning was to find another dependable source of steel. Not an easy task with Carnegie’s tentacles reaching into every steel mill in the country.
Brady had discovered that the Carbon Steel Company of Pittsburgh was being pushed into bankruptcy by Carnegie. He had to act fast. Time did not allow for him to trawl Wall Street in search of venture capitalists, but recalling his days at his father’s bar, he began to make the rounds at the better watering holes around Manhattan until he found a couple of Wall Street investors who were tempted by the idea of becoming men of steel. Brady made them the following proposition: if they would purchase Carbon Steel and make Brady a partner in the new firm, he would provide them with the process for creating high tensile steel and Fox Pressed Steel would buy all the steel they could produce.