United States Steel: A Corporation with a Soul. Arundel Cotter
for a most remarkable demonstration. For these staid, solid business men, on catching sight of Gary, broke into a spontaneous salvo of cheers which was enthusiastic and prolonged. It was a tribute to his generalship in the struggle then being waged, an unequivocal admission of his right to supreme command. In that storm of cheers were buried all doubts that may ever have been entertained.
It is impossible to write of the Steel Corporation without writing of its head. His influence on it is too direct, too personal, to be ignored. The Corporation, in a sense, is Gary. He has infused it with his spirit, a spirit which, it is to be hoped, will continue always to animate it.
CHAPTER I
THE WHY AND HOW OF THE BIG COMPANY
Mere size, to the majority of us, presents a certain fascination. Especially is this the case when it is the result of human endeavor. Hence, were the United States Steel Corporation nothing but the largest business aggregation in the world its immensity alone might justify placing upon record the facts connected with its formation and its subsequent history.
The Corporation’s vast capitalization, a billion and a half of dollars, its yearly turnover exceeding its capital, its payroll of 275,000 workers, or, with their families, enough to populate a large city, its productive capacity of more than 16,000,000 tons of finished steel annually—to say nothing of other products—the volume of freight carried in its fleet of ore boats, several times the tonnage passing through the Suez Canal, its foreign trade of two hundred million dollars—these alone might make the Corporation’s history worth the telling.
But size, properly considered, is of minor importance in itself. Its importance lies in the power it bestows to influence its surroundings. The greatest of all industrial enterprises could not fail to affect industrial history generally. And the management of the Corporation has recognized its responsibility in this regard and has endeavored to use its strength not selfishly but for the good of all concerned. It is not too much to say that the organization of the United States Steel Corporation marked the beginning of a new and a better era in industrial history.
That this assertion may be challenged goes without saying. But the facts will be permitted to speak for themselves.
The United States Steel Corporation was, in a modified sense, an experiment in popular ownership, the ownership of industry by the worker; it substituted for the ownership by a few men of a number of more or less important organizations one gigantic unit owned by a multitude. To-day the Corporation’s stockholders number around 160,000, and this figure includes only holders of record. Perhaps 75,000, possibly more, of its employees either own stock outright or are buying it on the instalment plan. Counting five to the family it is probable that close to 1,000,000 people are financially interested in the success or failure of the Corporation.
At the time of the big company’s birth corporate publicity was practically unknown. Important developments affecting the interests of security holders were announced, if announced at all, at the convenience of the so-called insiders. Curiosity into corporate affairs was discouraged. But the new business giant set the example of publicity by giving out at stated and frequent intervals detailed information regarding profits, business on hand, and other facts of interest to stockholders and the investing public. This example was later followed by other important steel companies and, with the passage of the years, the practice has become fairly general among large corporate enterprises. Thus the organization of the Steel Corporation may be said to mark the beginning of the era of corporate publicity.
But the most marked effect of the Corporation’s organization was probably that respecting competition. In the old days of the steel trade competition had been ruthless. The big steel merger, if the sworn statements of its competitors may be accepted, put an end to this and substituted an era, of competition still, but of competition clean and aboveboard, governed not solely by greed but by the spirit of fair play between manufacturer and manufacturer. It brought the dawn of the epoch of the square deal between industrial competitors.
In order to get a true perspective on the events immediately leading up to the formation of the United States Steel Corporation, it is necessary to review briefly the history of the steel industry in the United States during the latter half of the nineteenth century, and especially during its closing decade.
In a short half century steel making in America had grown from the age of swaddling clothes to full manhood, or rather gianthood. It stood supreme among industries. From being unimportant among the iron and steel producing nations, the United States, in a comparatively few years, had forged its way to the first place. Its steel mills turned out nearly half of the hard metal used by the world. Steel, from being an industry composed of a few scattered mills situated as nearly as possible to ore deposits with little regard to markets, had become one consisting of great corporate entities each made up of many plants, and these had in their service railroads and steamships plying to and from ore fields situated sometimes hundreds of miles from the plants, bringing to the mills such quantities of the raw metal as but a short time before had not been known to exist. It had bent to its use every modern invention, the newest discoveries of science. Fortunes had been spent, won, and lost in building up these great structures. It had at the same time been an industry subject to the most amazing fluctuations, periods of feast being followed closely by periods of famine.
This half century, or the last two decades of it, was, as has been suggested, a period of war to the hilt between manufacturer and manufacturer, war in which no quarter was asked or given. The history of the steel industry in America bristles thick with the names of millionaires who worked their way to fortune from the slag pile. And for every one of these there were many, whose names are forgotten, who sacrificed health, strength, and fortune in the mad fight for the wealth that poured in unstinted stream from the glowing furnaces of molten iron. The law of steel was essentially that of the survival of the fittest.
Perhaps there is no other great industry that has been so subject to fierce and unrestrained competition as steel making once was. To understand why this is so it is necessary to get an idea of the conditions influencing it. The discovery of the Bessemer process—about the middle of the nineteenth century—by which steel could be made cheap enough to permit of its general use found a world more than ready for it, and the demand for the metal grew by leaps and bounds. The Age of Steel did not dawn; like the tropic day, it broke with fierce glare. The sudden demand naturally opened up vistas of previously undreamed-of wealth for those who could supply it, and, in the desire to secure this wealth, production sprang forward so quickly as even to outstrip demand, strong and increasing as it was. Then ensued the inevitable battle for what business there was, a battle that lasted until consumption took another spurt, which, in turn, resulted in quickening output and a resumption of the battle.
At that time the country was just opening up. Railways were stretching their lines into the golden regions of the West; manufacturers of farm implements were calling for steel to be fashioned into tools to reap the rich crops of the wide prairie lands; inventors were each day evolving some new use for the metal. Was it any wonder then that steel became a world necessity and that the blast furnace became a philosopher’s stone that transmuted dull ore into precious gold? More and larger fortunes, it has been truly said, were made out of steel in the second half of last century than ever came out of the mines of the West or the diamond deposits of South Africa. And in the insane struggle for this so-freely-poured-out wealth men lost all sense of proportion.
It is inevitable that there should be a dark side to the picture. The boom times of the steel trade were succeeded with disheartening regularity by periods of dearth. One year steel manufacturers were building themselves palaces and purchasing steam yachts, the next they were mortgaging all they had to pay wages. One year the steel worker was a man favored above all others of his class, the next he was getting his meals on charity from the “soup houses.” To this day steel veterans speak of the dull times of the trade as “soup-house days.”
At these times competition, always fierce, became more ruthless than ever. The old adage regarding love and war was stretched to include the steel industry, and everything