United States Steel: A Corporation with a Soul. Arundel Cotter
than the erection of a tube mill. But again Morgan paid no attention. It is extremely doubtful if Carnegie, powerful as he was, could have seriously intended to attempt such an undertaking, and therein may have lain the reason for the banker’s seeming indifference. On the other hand, those who knew Carnegie declared that he would have found means to build the suggested road, even as he had in the past done other things deemed to have been impossible.
That Carnegie had no desire to enter into a pitched battle with the powerful Morgan interests seems to be fairly well established by his next act. Coercion having failed, he again resorted to peaceful tactics and fired what, possibly, was his last shot. And here it might be interjected that, while the event that directly led up to the formation of the Steel Corporation has been narrated scores, probably hundreds of times, the part that Carnegie played therein has usually been overlooked.
Among the Carnegie partners was a young man, Charles M. Schwab, president of the Carnegie Steel Company. Schwab not only represented the top notch of efficiency as a steel maker, a salesman, and an executive, but he had a veritable tongue of gold. To listen to him was to be converted to his views; he could talk the legs off the proverbial brass pot. And Carnegie saw that if the man lived who could convince Morgan to finance a purchase of the Carnegie Steel Company that man was “Charlie” Schwab. Carnegie therefore decided to bring together the financier and the president of the Carnegie Steel Company and to let loose on Morgan the flood of Schwab’s eloquence.
On the night of December 12, 1900, Edward Simmons and Charles Stuart Smith, both close friends of Carnegie, gave a dinner to which Morgan was invited. And to Schwab was assigned the duty of making the speech of the evening. Ostensibly the dinner was merely a social affair with no ulterior motive, but in the light of subsequent events it may be considered certain that it was arranged at the suggestion of Carnegie, and that its purpose was the sale of his properties to Morgan.
Everything went off as planned. Schwab chose for his subject the steel company of the future. He played upon this theme as upon a harp to an attentive audience, not the least attentive of whom was the banker, and, while he never referred directly to the Carnegie company, he made it very clear that the concern which he described in glowing terms would of necessity own and control the Carnegie plants.
Schwab foretold a future of wonderful brilliance for the steel industry. He drew a word picture of a company big enough to insure the greatest economies in the securing and distribution of its raw material, but highly specialized by departments, each and every plant confining its attention to one particular product so as to secure the highest degree of efficiency. He described such an organization as able to dominate the markets of the world and to set a pace that neither England nor Germany could follow. The ideal structure he painted was such an one as was well worthy the attention of the greatest of bankers, an industrial enterprise for which even the great Morgan might well be proud to stand sponsor.
And the youthful Carnegie president swept the financier off his feet and along with him in the flood of his oratory. The United States Steel Corporation was not actually incorporated for some months, as an undertaking so immense naturally took a great deal of time to put through, but it was by that speech that the idea of a vast steel merger, sown in Morgan’s mind by Gary, was quickened into life. In that half hour the United States Steel Corporation, to all intents and purposes, became an actual fact.
CHAPTER II
THE BIRTH OF THE BIG COMPANY
A billion dollars!
During the past seven years the world has grown accustomed to big figures. The enormous expenditures caused by the war and the growth of the national debts of most countries, attributable to the same cause, have made the mention of a sum expressed in ten or more figures rather commonplace. But back in 1901 a billion dollars was an almost unthinkable sum and it was hardly any wonder that the financial world gasped when the plans for the new corporation, with an authorized capitalization of $1,100,000,000 in stock and $304,000,000 in bonds, were announced.
Wall Street had long been accustomed to treat millions with the dollar sign before them as mere trifles and even tens of millions were more or less commonplace. Hundreds of millions commanded respect. But a billion, a thousand million—that seemed merely a row of figures, something that could hardly be computed.
And, indeed, the mind cannot readily comprehend what a billion means. Some concrete comparison is needed to give a faint idea of the immensity of the capital of the “Steel Trust.” A king’s ransom? It would have ransomed a hundred kings! The fabled wealth of Ormus and of Ind, of Croesus, of Montezuma, all these fade into insignificance when compared with this gigantic aggregate of money.
If the authorized capital of the United States Steel Corporation could be turned into solid gold it would weigh 2,330 tons, or more than 5,200,000 pounds!
This gold would have a cubic content of 3,880 feet!
With it you could build a pillar six feet square and towering 108 feet in the air; or a Cleopatra’s needle of virgin gold six feet square at its base and tapering to a point at a height of more than 430 feet.
A train of fifty-eight railroad cars would be required for transporting the precious metal, with two big engines, one at either end, to move the train!
For storage room the gold would require a vault 8 feet high, 20 feet wide, and 24½ feet long, and there wouldn’t be an inch of spare room!
Placed at one end of a scale the gold would need 34,666 men of average weight to balance it!
If the Corporation’s capital were coined into five-dollar gold pieces they would pave a road twenty-five feet wide for more than ten miles!
Stacked one on the other these coins would reach a height of more than twenty miles!
If this huge sum were converted into pure silver it would weigh 87,500 tons, with a cubic content of 268,000 feet!
This silver would form a needle six feet square at the base and piercing the skies to a height of 29,776 feet, or above the highest crest of the Himalayas!
It would take 2,200 freight cars to load it, and about fifty-five powerful locomotives to pull these cars!
This $1,404,000,000, changed into dollar bills, would measure 166,200 miles, forming a ribbon that would girdle the earth six times and leave two streamers each 8,000 miles long floating behind! A ribbon that would reach more than two thirds the distance to the moon!
These bills would cover an area of 228,317,433 square feet!
An expert bank teller working eight hours a day, Sundays and holidays included, and counting one bill a second without rest, would take more than 133 years to count them all. If he started to count on January 1, 1921, one of his descendants might count the last bill in the pile about the end of June, 2054!
If the Corporation’s capital were divided evenly it would give every man, woman, and child in the United States about $14!
The interest on this sum at 6 per cent. would keep some 35,000 American families in comparative comfort without touching the capital!
From the date of the Simmons dinner to that on which the plans for the new corporation were announced was a very short period. The birth of the Corporation did not take long. Once convinced that a merger of a number of large companies making various steel products was practicable and desirable for the good of the industry and of the country—as well as for the pockets of the consolidators—Morgan and his associates lost no time in bringing it about. The dinner took place on December 12, 1900; United States Steel was formally chartered on February 25th of the year following and began business as a corporate entity on April 1, 1901.
It is likely that Schwab himself did not foresee how far reaching would be the effects of his speech. Morgan did not do things by halves. When the young steel maker caught his attention and drew a picture of a company big enough to manufacture all lines of steel and to specialize on each one, powerful enough to enter and occupy