Ziskind.com > Writing > His Story: Morris L. Ziskind > Chapter Six - How I Got Rich

His Story: Morris L. Ziskind

Chapter Six - How I Got Rich

My greatest financial success involved the hog cholera serum that I used in my large animal practice. Whether the cost of serum went up or down I still needed and used it. I was a major customer and knew the market trends. I did not have to ask anybody?s advice. I knew when the cost of pigs rose, the cost of serum rose as well. At that time the variance in cost of serum was from sixty cents to one dollar sixty per cc. I was buying 4 million cc. a year, primarily from Pittman Moore, paying full price. I didn't realize that I was the largest serum customer in the East and therefore a very desirable customer until another company sent a salesman to try to get me to try their serum.

"Try our serum, I can give you a deal," the salesman said.

"What kind of deal? After all, the prices of serum are fixed by state law."

"How big a discount do you get from Pittman Moore?" asked the salesman. "I will give you a discount of 10% for a volume purchase;" a lot of money at the volume I was buying.

The next time the Pittman Moore salesman came in I told him about his competitor's offer. At first he discounted it and said that was against the law. Then he began to haggle with me and I knew I was on the right track. So I cut him off. I was their largest hog cholera serum customer and I threatened to stop buying from them.

The vice president of Pittman Moore called me, and then the president of Pittman Moore. I had never spoken to anyone in the organization other than salesmen. Now the top brass were talking directly to me. I was angry that all this time I had been dealing with them they had given me no attention. Now that I had threatened to stop buying they were courting me. To appease me they offered to return half of the commissions from my purchases that month. That was about $5000. Rebecca and I couldn't believe it! For over two years I had been buying large quantities of serum without the volume discount. They gave me credit for "breakage" to make up for the discount they had not given me. Of course there had been no breakage. It was like found money for me, money I never expected to have.

I then began investigating the "government controls" on the sale of serum. They turned out to be controls the manufacturers had devised. The serum was all manufactured according to government requirements. I realized that I was an important customer and began playing one company against the others. There were about ten companies that made hog serum. It seemed that all the salesmen knew who the large customers of serum were so at night after my office hours the waiting room would be filled with salesmen waiting to see me. One time the salesman turned out to be the vice president of the company Ashe Lockheart. Another time I was taken out to dinner by a company representative.

After I told one salesman that I was being given a 10% discount, I asked for 20%. I got it! There must have been a large profit built into their price structure. It was done under the table. Neither the company nor I wanted it known. They could brag that they had my business.

I ran an advertisement in one of the veterinary journals to find another volume buyer. The veterinarian who was the second largest user of serum answered my ad. I never met the fellow, who was located somewhere in the Midwest, as we negotiated over the phone. I was buying three million cc. of hog cholera serum a year at that point. He was using two million cc. The Serum Control Act allowed an extra ten percent off when you bought five million cc. The Serum Control Act had been written after an outbreak of hog cholera when there had not been enough serum available to treat the disease. The serum was under the jurisdiction of the Department of Agriculture and the law required manufacturers keep a reserve supply of serum.

Apparently no other veterinarians had tried what was referred to as advanced buying. At first the companies resisted. I had a lawyer, David Pollock, research the law for me. My partner and I sent the drug companies a letter that we would sue if they did not honor our legal right to order volume discounts. Together, by combining our separate orders, we legally qualified for the extra discount. Our volume order established an account. The serum companies held the serum, as part of their mandated reserve supply, until one of us needed it. We prepaid the entire amount and would have them deliver two, three, five thousand cc. lots when we needed it. I bought a large refrigerator to hold the serum that I used. Each order of five million cc. would last us about a half a year.

My partner apparently sold some of the serum to other veterinarians but I used all mine. I would get phone calls from veterinarians who thought I was selling serum. I was not a dealer; I was a user of the serum. In fact, even with this volume order I still would run short.

We were required to pay for the serum in ten days. I made a loan from the bank to cover the cost. I also borrowed money from my father-in-law. One of the times we did this I saved fourteen thousand dollars. When the price of serum went up the drug company was obligated to deliver the serum at the lower price we had pre paid. Later we found another company would give us a 15% discount. Serum companies, some from out west that I had not heard of, contacted us to try to work out a deal for our business. We combined our orders for over a year and my partner and I made a lot of money.

Another aspect of the serum business that was a major success for me was assisting the companies in their purchase of pigs. Serum was made from the blood of pigs so the companies needed access to live pigs. Since I was the primary swine veterinarian in the area I was the logical contact. I would arrange to provide the drug company with the blood that they would use to make the serum. I became the middleman. Sometimes I owned the pigs outright, other times I arranged for pigs to be available for bleeding. I arranged with various pig farmers to house the pigs I owned on their farms. After they were bled the pigs were perfectly fine and were sold for slaughter. Sometimes the animals were slaughtered and blood was collected simultaneously.

The drug companies had laboratory facilities in North Bergen where they collected the blood. The immunized pigs that I owned were immune to the mixed infections in our geographical area. Therefore the serum made from the blood of my pigs had particular value in our area. I was involved in the manufacture and sale of this serum. Serum provided immunity against the diseases prevalent in the part of the country where it had been produced. My serum was produced locally and had particular use and value in the east. Pigs treated with my serum were surviving while pigs treated with serum produced elsewhere were dieing. I had no problem selling my locally produced serum; the problem was producing enough. I would get calls from the mid west from a farmer who wanted to buy my pigs that had been immunized and were healthy. I would get calls from local farmers who had pigs to sell that I had immunized and therefore were valuable to me. I was a specialist in the field and was constantly filling orders and making deals. And at night I still had my small animal practice. I was young and I was busy!

Among others that I worked with was Harry Himsel who owned the North Bergen Stock Farm. He was a big client of mine. It was an ideal arrangement because I had a place to house my pigs and feed them. If I anticipated that the price of pork was going to rise I would hold the pigs a week or two until the price was right to sell.

One of the pharmaceutical companies, Lederle, produced a film about a certain product they were producing. They shot some scenes for the movie on Harry Himsel's farm. Harry called me and told me to come down and get in the picture. I was photographed using Lederle's products. I was too naïve to even ask to get paid. When they showed the film at some veterinary meetings I was thrilled to see myself in the picture.

A totally different deal in which I was involved grew out of my childhood experience. A group of men, who met in my father's shop, pooled their resources and created a loan society. They made loans to their friends and were repaid with interest. As an adult I was not always satisfied with the service I was getting at the local bank. The bank's formalities in making a loan would take too long when you needed a short-term loan. Like my father, I gathered a few like-minded friends including local merchants to form a loan society, or corporation. It was almost a lark when we got started, like a social club. We met at member's houses. At first there were just two or three of us. We paid dues that entitled us to a certain number of shares. Members could make a small loan, especially when you needed it in a hurry, based on the number of shares you had. If someone had trouble paying off the loan we would extend the loan period or individually help him out. We knew everybody involved and knew that everybody would pay off his debt. All the loans were to people we knew in Secaucus. They came to us because they wanted a loan fast. We never lost any money. Over time our profit accumulated, our membership grew, and our capitalization grew. We offered ourselves a return of 2% or 3% greater than what could be made elsewhere. We kept any profit in the corporation and over the years we grew. Eventually we got big enough that we decided we needed to formalize the operation so we could meet all the legal requirements. Our lending society got a banking permit and became the National Bank of Secaucus. We hired a banker to run the operation. I was the first president of the National Bank of Secaucus. I did some of the appraisals. I had no formal training, just my business experience.

The first banker we hired did a good job. His successor turned out to be a crook. Eventually we were able to get the money he stole back, but it was a struggle. And until we did, we did not have any money to make loans.

Eventually a larger bank bought out our bank. Each time we were absorbed we made a profit and were able to make larger loans because we were part of an organization with larger resources. When we finally sold our interest each of the original investors got eight times his original investment.

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