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United States Steel Corpora Tion

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UNITED STATES STEEL CORPORA TION, The. An industrial organization formed in 1901 by the amalgamation of the Carnegie Steel Company, the Federal Steel Company, the National Tube Company, the American Steel and Wire Company, the National Steel Com pany, the American Tin Plate Company, the American Sheet Steel Company, the American Steel Hoop Company, the Lake Superior Con solidated Iron Mines and the American Bridge Company. These 10 merged companies had an aggregate capital of $867,550,394, of which $459, 936,694 was common stock, $247,613,700 pre ferred, and $160,000,000 bonds. Elbert H. Gary, president of the Federal Company, Andrew Car negie, owner of the Carnegie Company, Charles M. Schwab, a Carnegie official, and J. P. Mor gan, banker, were the principal figures in ef fecting the consolidation. In the new company a capital of $500,000,000 each in common and preferred stocks was authorized, together with $304,000,000 in bonds, making a total of $1,304 000,000. The syndicate which financed the transaction, headed by the Morgan interests, ad vanced $25,000,000 in cash as working capital. In less than a year from its foundation the stockholders of the old companies had ex changed their holdings for stock of the new corporation.

The steel-producing equipment controlled by this gigantic corporation comprised 149 steel works of various kinds, having an annual ca pacity of 9,400,000 tons of crude and about 7,700,000 tons of finished steel; 78 blast fur naces with a pig-iron capacity of 7,400,000 tons; over 50,000 acres of coking coal lands; over 1,000 miles of railroad; a fleet of 112 vessels engaged in traffic on the Great Lakes, and areas of ore-bearing property, docks, natural gas and limestone properties, etc. The men who guided the destinies of the new company were J. P.

Morgan, John D. Rockefeller, Elbert H. Gary, H. H. Rogers, Charles M. Schwab, Robert Bacon, Edmund C. Converse, Francis H. Pea body, Percival Roberts, Jr., Charles Steele, William H. Moore, Norman B. Ream, P. A. B. Widener, James H. Reed, Henry C. Frick, Wil liam Edenborn, Marshal Field, Daniel G. Reid, John D. Jr., Albert Clifford, Cle ment A. Griscom, William E. Dodge, Nathaniel Thayer and Abram S. Hewitt. Charles M. Schwab was chosen president of the corpora tion and Elbert H. Gary became chairman of the executive committee. Charles M. Schwab resigned the presidency in 1903 and was suc ceeded by William Ellis Corey. In 1910 the latter was succeeded by James A. Farrell.

In the 20 years since its foundation the United States Steel Corporation has expended over $500,000,000 out of its earnings for the building of new plants and the extension of old ones. Its plants now have a capacity of 20,000,000 tons of steel ingots and all the pig iron it needs.

It was soon realized that a concern con trolling two-thirds of the nation's total possible output must contain enormous potentialities af fecting the general welfare of industry and of the country, of its competitors, customers, em ployees, or through these, the general public.

Generally speaking the corporation's selling methods have not been unfair to its competitors and the consumer has fared equally well at its hands. In its treatment of its employees, it is only fair to note that it has spent great sums of money in sanitation and other methods of so cial betterment. It has opened a way for its employees to become stockholders. On the other hand it has encouraged workers of alien birth, unfamiliar with American customs and ideals, with the object of being unhampered by trades unionism, from which it was supposed the alien worker might be held aloof. During the war years 1914-18, however, these °safe alien workers became imbued with ultra-radical ideas and the great strike of the autumn of 1919 was the result.

In the first nine months of its opera tions the United States Steel Corporation reported net profits of $84,779,298, of which $61,420,304 was distributed to stock holders at the rate of 7 per cent on pre ferred and 4 per cent on the prior issue. In 1902 the net profits were $133,308,764, full divi dends were paid and the company showed a surplus balance of $34,253,657. In 1903 began the general industrial depression which lasted well into 1904. In 1905-06 the city of Gary, Ind., was founded by the corporation which erected there a plant of the most modern standard. The corporation's net profits in 1906 amounted to $156,624,273. The year 1907 is one of the most important in the history of the Steel Corpora tion. During the industrial panic of that year the corporation secured control of the Tennes see Coal and Iron Company, its strongest com petitor in the South. The corporation soon found itself in the toils of the law, the govern ment having instituted proceedings for its dis solution as a monopoly in restraint of trade. The taking of testimony was not finished until the spring of 1914 and on 3 June 1915 the United States District Court of Appeals handed down a decision that the corporation was not a monopoly in restraint of trade. De pression in the industrial field caused the cor poration to pass dividends in the last quarter of 1913 and again in 1914. Not until March 1915 were operations again under way to 60 per cent of capacity. As the war in Europe devel oped the business of supplying steel for the materiel of war grew apace. By 30 June 1915 one-third of the corporaticn's output was being exported to England, France and Russia. After the entry of the United States into the war the domestic demand increased far beyond the ca pacity of the country's steel mills, and under war stress, expansion on an enormous scale en sued.

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