United States Steel Corporation

“ The desire for justice, for fair and full recognition of fair and full service, is deep grounded in every man, and the management of United States Steel, by giving each worker the assurance that he will get just what is his due, has secured for itself the entire coöperation of most of its employees and has, as a result, an organization that probably could not be equalled elsewhere in the industrial world.
The Steel Corporation is a true democracy. No position in it, however high or responsible, is beyond the reach of any employee who proves his ability to handle the job. ”

“ 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. ”

“ 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. ”

“ 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 was considered fair that might help to keep the mills running full. Prices were cut—and wages with them; steel was “dumped” on foreign markets at less than manufacturing cost, and steel makers resorted to every means that offered to divert orders from competitors to themselves. It was case of dog eat dog, and failures, with their unavoidable accompaniment of unemployed labor, were all too frequent. ”

“ So great an operation cannot be considered merely as a matter of finance. The biggest of trusts must of necessity contain enormous potentialities affecting the general welfare of industry and of the State. Its organizers and managers, in consequence, cannot resent fair-minded investigation into the use it makes of its powers. Has the Steel Corporation’s existence been prejudicial to the interests of its competitors, its customers, its employees, or the general public? ”

“ 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. ”

“ In the fierce and bitter struggle that was the steel trade only the most daring or the most unscrupulous manufacturer could survive, and under the strain for production that it necessitated only the strongest workers could live. No one, unless he has been through a steel plant, can imagine the conditions under which the steel maker works. ”

“ 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. ”

“ Conditions in the steel trade are not encouraging for the immediate future. The industry is apparently going through the period of deflation from a war to a peace basis just as are other industries all over the world, but while the immediate future is somewhat cloudy, the outlook for steel, if one looks ahead several years, is unquestionably bright. ”

“ 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. ”

“ 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 ”

“ Its glare lights up the countryside for miles around, and the hissing and roaring of the molten iron, or rather of the steel groaning in its birth throes, forms a fitting accompaniment. It is a sight that once seen will never be forgotten. ”

“ 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.” ”

“ 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. ”

“ 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. ”

“ How important to the labor unions was the hope for organization of the Steel Corporation is obvious. Between 500,000 and 600,000 workers are engaged in the industry, the Corporation alone employing about 275,000. Possibly another half million are employed in closely allied industries.249 And the steel trade, as well as these allied industries, has for years looked to the Corporation for guidance on important questions of public polity. Hence, United States Steel’s adherence to the open-shop principle was a deep and rankling wound in the side of the labor unions. ”

“ There is every reason to believe that the world still needs steel in immense quantities for the myriad uses in which the metal is employed, not only for future expansion but for replacement which should have occurred during the war years. ”

“ 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. ”

“ 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. ”

“ Has the public, which always pays the bill in the long run and whose interest is paramount, been injured? In the thirteen years from the Corporation’s organization to the beginning of the European war the tendency of steel prices has been downward, not only as compared with those of other commodities, which ascended, but on a dollar-and-cents basis. ”

“ When the idea of a big steel combine was first conceived by Judge Gary, one of the chief considerations in his mind was that such a vast organization, and such an organization alone, would be able to offer battle to the manufacturers of the other great steel-producing nations—Great Britain, Germany, and Belgium—which were then practically without let or hindrance, dividing between them the markets of the world. ”

“ No other metal plays such an all-important part in modern warfare as does steel. Warships, transports, big and field guns, small arms, shells, gun mounts, and other munitions are made entirely or almost entirely of the metal. And when Germany first threw down her gauntlet to the civilized world the Allies found it necessary to depend to a great extent on American mills for a supply of this vital war metal. And the manufacturers of the United States responded, among them the Steel Corporation. ”

“ He had become, and still is, a walking encyclopedia on all matters relating to the exportation of steel, carrying in his head details of freight rates, steamship facilities, duties, and so on, at and between all important and many unimportant points. His facility in reeling off from memory these facts and figures, as displayed when he was called as a witness for the defence in the Federal suit since dismissed by the Supreme Court for the dissolution of the Steel Corporation, earned him the soubriquet of “the man with a head full of figures,” a not inept title. ”

“ 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. ”

“ Gary is growing rapidly. Two Corporation subsidiaries, besides the Indiana Steel Co., already have plants there. These are the American Sheet & Tin Plate Co. and the American Bridge Co. The American Locomotive and American Car & Foundry companies both big railway equipment manufacturers, not connected with the Steel Corporation, are said to be planning the erection of plants in that vicinity. The Gary Screw & Bolt Co., one of several local enterprises, has a plant for making bolts, nuts, and screws, and employs 800 men. ”

“ Last of the Reid-Moore companies to be organized was the American Sheet Steel Co., chartered in February, 1900. This company acquired 164 sheet mills, nineteen puddling furnaces, and a number of open-hearth furnaces and bar mills. It had a capacity of about half a million tons. Its earnings, from the time it began business to April 1, 1901, amounted to $1,676,480 and its surplus on the latter date was $705,757. Its stock was exchanged for Steel Corporation securities on the same basis as those of the Steel Hoop Company. ”

“ The frequent and prolonged periods of depression had forced upon steel makers the conviction that some way of combining to prevent their recurrence was desirable, even necessary, if the United States was to keep and increase its lead in the manufacture of the metal most needed by the age. ”

“ Between the conflicting claims from all sides it is impossible to say just how many men went out in the steel mills, voluntarily or through intimidation, but it is certain that at many centres, such as Youngstown, where the Corporation and some of the larger independents—Republic Iron & Steel, Youngstown Sheet & Tube and Brier Hill Steel—have big plants, operations were practically suspended in toto. ”

“ Its resources, strength and comprehensive ownership of the means of production enable it to adopt measures to do again as it has done in the past, that is, to effectually dominate and control the steel business of the country. ”

“ Followed a period of general business uncertainty, a let-up in buying activities felt keenly by the steel mills. The responsibility for this situation must be placed largely at the door of the Railroad Administration. The roads, with the possible exception of the farmers, are the largest consumers of steel and of many other products in the country. Prosperity was hardly possible in steel trade without railroad buying, that is, under normal conditions. ”

“ While United States Steel, its actions and its policies, have earned the commendation of thoughtful students—perhaps even the majority of the public, and many public198 speakers and writers have expressed this, probably no other organization has enjoyed or been subjected to so much—and generally such unconsidered—criticism as has the Steel Corporation. ”

“ The Allies, calling more and yet more on their man power to fill up the gaps in the fighting line, found it increasingly difficult to meet the ever-growing need for war materials and leaned more and more heavily on our manufacturers. The price of steel, under the enormous buying power from abroad and the increased demand at home, advanced rapidly, nor did this advance let up until the latter part of 1917, when, the United States having at length united her fortunes with England, France, and the other countries defending civilization, prices were fixed by agreement with the Government. ”