United States Steel: a Corporation With a Soul

Appendix 308

LIST OF ILLUSTRATIONS

Elbert H. Gary Frontispiece

“The story of United States Steel is the tale of how Gary made his dreams come true.”

FACING PAGE Andrew Carnegie 40

J. Pierpont Morgan 41

Down in a Coal Mine 56

Open Pit Mining--Canisteo Mine 57

Mine Stables 72

Modern Coal Mining by Machinery 73

Bee-hive Coke Ovens 88

Mouth of Coal Mine--Coke Ovens in Background 89

James A. Farrell 120

Transporting 222 Tons of Bridge Material in China 121

“Drawing” Bee-hive Coke Ovens 136

Two Views of Modern By-Product Oven 137

The Original Jones Mixer 152

A Bessemer Blow 153

Interior of Gary School 168

Ore Cars at Proctor Yards 184

General View of Duluth Ore Docks 185

Ore Boat and Train 200

Ore Boats at Duluth Docks 201

A Trainload of Ingots in Molds 216

Ingot on Way to Rolling Mill 217

Rails on Cooling Bed 232

Pouring Ingots 233

Part of the Duquesne Works--Detail of Unloading Ore-- a Hulett Machine 248

Making Wire Rods--Old Method 249

Coils of Red Hot Wire 264

Annealing Wire 265

Drawing Fine Wire 280

Making Wire Fencing 281

Making a Steel Tube 296

Steel Transportation by Man Power in China 297

UNITED STATES STEEL

A Corporation With a Soul

UNITED STATES STEEL

PROLOGUE

THE MAN AT THE HELM

Every business enterprise, however great, reflects in its dealings with its competitors, customers, employees, and the public generally, the individuality of some one man. Curious as it may seem at first glance, this personal touch, far from being lost, is particularly evident in the greatest of all business enterprises, the United States Steel Corporation.

Many men, including some of the ablest financiers the country has produced, have assisted in a measure in making the Corporation what it is to-day. Morgan, Frick, Perkins, all these and others, have helped with their counsel in bringing the Corporation to the pre-eminent place it holds in the industrial world. But one man has stood out among all these--Elbert H. Gary, its chairman and chief executive officer.

Throughout its ramifications the Steel Corporation is everywhere a reflection of Gary’s spirit. His influence, from the time of its incorporation nearly twenty years ago, has shaped its policies and, almost from the beginning, has dominated its counsels. For what the Corporation is, whether good or bad, Gary must accept full responsibility.

Judge Gary himself would probably object to the use of the word “dominated.” He would doubtless prefer “guided”, for his dominance has never been autocratic. But his colleagues, except perhaps in the earlier days, have confidently accepted his opinion on all matters pertaining to the Corporation’s welfare. And the events of the last few years have proven that they were right in so doing.

Not the Corporation alone but the entire steel trade, the most important manufacturing industry in America, has benefited from Gary’s wisdom. As the chief executive officer of the leading interest in the industry his competitors have always looked to him for leadership in periods of stress. And whenever occasion arose, as in the dark days of the panic of 1907, he proved his right to lead.

There have been times when this leadership was in question if not doubt. One such occasion was as recently as 1919 when the great steel strike threatened.

Gary’s attitude toward labor was well known. He believed in “leaning over backward” in the matter of giving justice to the worker. And when union organizers and radical agitators attempted to force the closed shop on the industry many of his competitors feared that he would yield to the demands of the labor organizers.

But Gary had never flinched from responsibility, however great. Here was a question of principle involved, concerning not the rights of the employer alone but those of the very large number of unorganized workers. Although pressure was brought to bear upon him from high quarters to compromise and avoid a strike, and later to settle it once begun, the head of the Corporation unswervingly stood his ground and led the steel trade to a signal victory. He proved to those who doubted him that, though he might usually adopt the attitude of “suaviter in modo” he knew how to assume that of “fortiter in re” when occasion warranted.

On October 24, 1919, the annual meeting of the American Iron and Steel Institute was held in New York City, at the Hotel Commodore. Some sixteen hundred of its members, including the majority of the leading figures in the steel trade, attended. The steel strike had been going on for some weeks and the steel men were gathered to hear what Gary had to say.

The entrance of the Judge into this gathering was the signal 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

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.

Continue reading United States Steel: a Corporation With a Soul free in the Wunder reader →