Colt's Manufacturing Company

“ In 1905 the total value of the “factory” product was $25,975,651. The principal industries are the manufacture of small arms (by the Colt’s Patent Fire-Arms Manufacturing Co., makers of the Colt revolver and the Gatling gun) , typewriters (Royal and Underwood) , automobiles, bicycles, cyclometers, carriages and wagons, belting, cigars, harness, machinists’ tools and instruments of precision, coil-piping, church organs, horse-shoe nails, electric equipment, machine screws, drop forgings, hydrants and valves, and engines and boilers. ”

“ Then I tried the cheapest I could find, and the more ignorant a man was, the more brains he had for my purpose; and the result was this: I had men now in my employ that I started with at two shillings a day, and in one short year I can not spare them at eight shillings a day."* Colt's audacity, however, did not offend the members of the committee and they decided to visit his American factory at Hartford. ”

“ With its exports mounting up to the two-million-ton mark annually the Corporation had necessarily either to own or charter a large number of vessels. Ownership, of course, was better in the long run and it was, for a concern like U. S. Steel, with its big steel plants and experienced organization, cheaper to build than to buy the vessels.
The Steel Products Company’s need of a large number of vessels—before the war it owned nine and chartered constantly from thirty to forty—itself assures a steady demand, at least for a time. ”

“ All these are men of unusually high ability, nearly all of whom have worked their way to their present positions from the bottom of the ladder. They have for years devoted all their energies to building up, each in his own sphere, the business and resources of the big company and may justly and proudly claim the right to be reckoned with Gary, Morgan, and the others, as “Men who made United States Steel.” ”

“ If liberal charters were granted, one hundred successful establishments would spring into existence, where one, of feeble order, could be expected from individual effort.... About three-fourths of the manufacturing of the United States, is carried on by joint-stock companies: ... We shall certainly have to look to such companies to introduce the business with us...." He showed the perpetuity of the corporate form by instancing one South Carolina cotton factory operated by a joint stock company ”

“ They were, until recent years, content to leave the foreign markets to European exploitation and only to enter these markets when dull business at home forced them to seek new outlets for their product. In the earlier days of the industry American steel, at such periods, was thrown on foreign markets at prices often below cost of production, the loss being considered preferable to unemployment at home or the disruption of company organizations which a continuous decline in sales would have brought about. ”

“ In its final analysis, “The Spirit of the United States Steel Corporation” is efficiency, not applied merely to the mechanical processes of manufacturing, but to the human element behind these processes; the efficiency that abides in a healthy, well-housed, and contented workman. ”

“ She is the world’s steel city. And this is the story of some of the communities that owe their existence to the United States Steel Corporation, that have sprung up as a result of the extension of its manufacturing facilities, and in the building and management of which the forward-looking influence of the biggest of all businesses has been reflected. ”

“ All those who during the World War were in touch with what was being done by the Government to meet the enormous new manufacturing needs created by the war know that the Steel Corporation, in the great emergency, invariably put patriotism above profits and that its hearty coöperation helped materially in bringing about the desired end. ”

“ Greater earnings for the Corporation, larger profits for its stockholders, are represented by the extension of the manufacture of these by-products. But, beyond this, the cultivation of this part of the industry means an appreciable reduction in the cost of manufacturing steel, and consequently lower prices to the consumer and the possibility of higher wages to the worker, as well as the elimination of waste and the conservation of the natural resources of a continent. ”

“ Another factor of the highest importance in considering United States Steel stock as an investment is that of production costs. Here again the Corporation is in an enviable position. That its production costs are lower than those of most, probably all other manufacturers, is not challenged even by competitors themselves. It is indisputable. Presuming the possibility of a bitter trade war, the Corporation would unquestionably emerge the victor. But a trade war seems out of the question. The Corporation could not, for politic reasons, initiate it, and its competitors could not afford to. ”

“ Since the Corporation began its existence a number of new steel companies have sprung into being, grown and expanded, while the older so-called independents have greatly increased their output. Although the Corporation has added about 13,000,000 tons to its steel-making capacity its competitors38 have added a still larger amount with the result that the big company now controls less than half the steel production of the United States.B ”

“ How profitable is the manufacture of coke by-products is indicated by the fact that for years before the World War, and possibly even to-day, the patentees of one by-product process were usually willing to erect a plant in connection with a steel plant, at a cost of several millions, and to take their pay for it from the profits of the by-products alone, handing the plant over to the steel company at the end of a stated period. ”

“ After the failure of his first venture at Paterson, Colt had seen the advantage of interchangeable manufacture at the Whitney shop, and determined to carry it even further in his new plant. So thoroughly was this done that the methods crystallized there, and many of the tools installed have undergone little change to this day. Machine work almost wholly superseded hand work. Modern machines were developed, and interchangeability and standards of accuracy given an entirely new meaning. ”

“ The later years of his life were spent in Boston, and he often served as a patent expert in the courts, where his wide knowledge, hard common sense, incisive speech, and homely wit made him a welcome witness.
We now glance at another New England inventor, Samuel Colt, the man who carried Whitney's conceptions to transcendent heights, the most dashing and adventurous of all the pioneers of the machine shop in America. ”

“ It forced the planters into the production of their cotton at lower rates; and led the manufacturers to improve their machinery, and reduce the price of their fabrics [93] low enough to sweep away all household manufacturing, and secure to themselves the monopoly of clothing the civilized world. This was the object at which the British manufacturers had aimed, and in which they had been eminently successful. The growing manufactures of the United States, and of the Continent of Europe, had not yet sensibly affected their operations. ”

“ In that country, where manufacturing industry has so much energy of character in those carrying it on to back it up, and to secure a satisfactory result, it appears very strange that we should be able to beat them in the manufacture of their own produce.
But although many efforts have repeatedly been made by speculative and sanguine men to weave all the descriptions of cotton cloth made in Great Britain by the power-loom, they have never been able to do so in the United States. ”

“ But there are a number, backed by conservative and financially strong interests, that are in the business to stay, and practically every American steel manufacturer, either directly or through one of these agencies, to-day exports part of his product and expects to continue to do so. The steel trade at large now realizes, what the Corporation did from the beginning, that a permanent export business is of major importance in assuring stability in trade conditions. ”

“ George A. Fairfield, another Colt foreman, became superintendent of the Weed Sewing Machine factory and later president of the Hartford Machine Screw Company; another workman, A. F. Cushman, of the Cushman Chuck Company, for many years manufactured lathe chucks. In fact, there is hardly a shop in Hartford which dates from the seventies and eighties which does not trace back in some way to the Colt Armory. Its influence is by no means confined to Hartford, for such men as Bullard and Gleason carried its standards and methods to other cities. ”

“ He saw that, if his dreams were ever to be made realities, the Federal Steel Company must be enlarged and expanded, must provide itself with plants able to export steel in competition with Great Britain and Germany, the countries which ruled the international markets, and must so strongly entrench itself that it would not be too greatly affected by periods of stress. ”

“ The National Steel Co., another of the Reid-Moore concerns, was the maker of raw material for the other three members of the group. Its production was largely confined to semi-finished products and it had a capacity of about 1,700,000 tons of steel a year. It had some ore holdings in the Mesaba Range as well as a twenty-year contract for a one-sixth interest in the ore production of the Oliver Iron Mining Co. The company was chartered early in 1899 and in the first year of its existence earned approximately28 $8,750,000, or more than 32 per cent. on its preferred stock. ”

“ In 1918 the Steel Corporation’s sales grew to the largest volume on record, $1,288,029,255 or, including inter-company sales, $1,692,572,000.
During the war boom the rights of the worker had not been forgotten. Early in 1916, as soon as the improvement in industry became evident, a wage advance of 10 per cent. was put into effect. Since the beginning of the war, and up to the date of writing, wages of common labor have been advanced as follows ”

“ He began the manufacture of woollen cloth in 1815–1816 at Oxford, now Webster, Mass., where he had built cotton mills in 1812. In his later years he was interested in other textile mills and in iron foundries in Rhode Island. He died at Webster, Mass., on the 21st of April 1835. He has been called the “father of American manufactures” and it is no exaggeration to call him the founder of American cotton manufacturing. ”

“ The largest employer of labor in the world, by its adoption of such a policy, forced the recognition of this policy upon industry generally, and as a result of the safety campaign inaugurated by the Corporation in 1906, safety-first methods and appliances are generally employed in every steel mill in the United States to-day, and, in fact, by a vast number of plants devoted to other industries, and they have spread and are still spreading to other countries. ”

“ National Tube preferred stockholders29 exchanged their holdings at the rate of $100 for $125 of U. S. Steel preferred, while the junior stockholders received $8.80 in preferred and $125 in common stock of the corporation for each $100 they held.
The Federal Steel Co., second only in size and importance to the Carnegie Steel Co., was chartered late in 1898, as a merger of the Illinois Steel Co., Minnesota Iron Co., Minnesota Steamship Company, Mount Pleasant Coke Company, Lorain Steel Co., Elgin, Joliet & Eastern Railway Co., and the Johnson Co. of Pennsylvania. ”

“ Manufacturing Co., T. H. Symington Co., and many others must be a matter of deep satisfaction not only to their managements but to all who believe that American business men are not swayed solely by the desire to gather in dollars. And among those concerns whose managements asked themselves in regard to war activities not what profit there was in them but how best they could serve their country and help win270 the war, none was more ready and loyal than the United States Steel Corporation. ”

“ 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. ”

“ But in the case of United States Steel this usually unfavorable factor is really a tower of strength. It is, in fact, deliberate. It is part and parcel of the Corporation’s policy of giving the wage earner as large a share as possible in the proceeds of operations. And it has been possible to increase the worker’s share of gross sales in recent years without injustice to stockholders only because of the ploughing back of profits of previous years into new plants, increasing the investment, and enlarging capacity. ”

“ The fact that the Corporation has at times sold abroad cheaper than at home has been used as a weapon against it by its critics. Apart from the fact that its doing so afforded labor to many American workers and thus reduced unemployment, it seems plain that a seller must make his price to suit the market in which he is operating, that had such price concessions not been made the Steel Corporation’s export business would never have shown the remarkable growth it has. Europe would have undersold it in all markets. ”