The times., 1901-05-12
SCHWAB TALKS OF STEEL
The Magnnte Before the Industrial
Commissions

StittS dDSbfBe0 tNe carnegie, tS0eral,
National, and other steel companies. tes-
tilted before the Industrial Commission
yesterday on the subject of the steel In
dustry. The interest in Mr.. Schwab s
testimony was shown by the attendance
of nearly all the members of the Com
mission and by an audience numbering
more than 100 who listened with close at
tention to the proceedings.
Mr.. Schwab first spoke of the Carnegie
Company, of which Mr. Schwab said he
had been President for the five years pre-
ceding the formation of the United States
Steel Corporation. The Carnegie Com
pany mined all it's own ore-about 6. 900, ,O0O
tons year-carried a large portion of
this tonnage on it's own boats on the
lakes, and transported practically all of
the ore used in its manufactures over its
own railroad-ths Pittsburg, Bessemer
and Lake Erie-to the works at Pitts
burg.
He said it had not been the practice of
the Carnegie Company to sell it's ore to
other companies, but to manufacture the
different grades into a great variety of
products. That company alone then con-
trolled % per cent of the ore of the coun-
try, and accounted for a like percentage
of the finished product. On some specific
manufactures of steel the portion of the
output controlled by the Carnegie Com
pany was greater-in structural work
about 30 per cent steel rails 30 per cent
and armor plate more than 50 per cent
There had originally been twenty-seven
companies in the Carnegie interests. a
majority of the stock in each company
being owned by the Carnegie Company
proper. 1t was found, however, that even
with a controlling interest of the stock
these numerous companies were hard to
control and to keep together along one
general line of policy. They were, there
fore. merged under a centralized man
agement. The resulting concern was
more like partnership affair than a
stock company. The stock, he said. was
si'ooo share, and was never listed. which
practically prevented trading in it.
Inc success of this consolidation was
so marked. said Mr.. Schwab. that it was
reailzed that many advantages would ac-
crue from the consolidation with the 9TH
er great steel companies. and the United
states Steel Company was formed. While
the latter company was still in process of
organization the advantages and savings
which were expected to be realized were
many. Where the individual companies
heretofore had been manufacturing a va
riety of products they would now special
lze. That is to say, one plant would make
steel rails, another structural work, and
yet another armor plate. and as certain
grades of ores were better adapted to GER
tain manufactures the interchange of ores
among the individual concerns would tend
to the betterment of the quality of the
output from all.
There was a great saving also in the
transportation of ores. the corporation
owning lis boats on the lakes, which un-
der the present system could operate con-
tinuously, and not wait. as they were for
merly obliged to do for the product of
certain mine to be carried to a certain
distribute over the docks and thence over
the railroads to the various works more
economically.
There was now also a saving in the sal
airy OF extra superintendents and the
skilled and salaried help to be considered.
Where there was formerly a chemist con-
nected with each concern, each of whom
might have a different process of manu-
facture. there was now one chief chemist
for the entire company. This has resulted
in greater uniformity of process and
betterment of quality. Mr..
estimated that the United States
Steel Company now owned 70 or 80 per
cent of the ores of the United States and
a like percentage of the fin
ished product.
Mr. Schwab explained in response to
enquiries that the United States Steel
Corporation simply owned the capital
stock of the other companies and was
well defined as "a clearing house Of in
The individual companies
continued to purchase their own supplies
and to make their own sales except in
cases of two trust concerns selling the
same class of product in the same terri
tory, in which case one representative
acted for both As since the organiza-
ton of the Federal. National and Car
negie companies the tendency had been
to keep prices down, Mr.. Schwab thought
the further economies that could be eff
Tected under the Capitalization would tend
10 reduce prices still further. High prices,
ne thought, reduced consumption.
1t was true that prices obtained abroad
were lower than those obtained in the
United States. The explanation for this,
Mr.. Schwab said, was very simple. 1t
was the idea of the operators to run the
works always full and steadily, and when
times were dull. in order to attain this
end. it was necessary to seek foreign
market at reduced prices. In any case
t was necessary to reduce prices 10 OBJ
-ain a foreign market, and when the mar
<et was attained, which was generally the
work of years. ii was sometimes neceS-
5aTy to keep prices down in order to re-
ain it; the laboring classes in any event
were directly benefited. The rule worked
both ways, foreign manufacturers sell
ng their goods i'll the United States
cheaper that at home.
Mr. SChWab thought a protective tariff
IN some classes of manufactures of steel
vas desirable. In industries in which la
Dor formed the largest part of the cost
It was Indispensable. on pig iron and
steel rails the tariff was not necessary,
abOr forming small portion OF their
cost If the tariff were taken off finished
however, such as tin plate and
structural work, a reduction in wages
would inevitably follow.
The average wage paid by the Carnegie
Company has been greater in every year
since 1892 than in any year preceding that
period. Mr.. Schwab considered it signif-
,ant that up to the year 1892 labor or
had existed among the COM
Jany's employees Since that year there
lad been no organized labor. AS Mr..
5chwab expressed it, no ''aristocracy of
abor' existed as 1t had prior TO 1892.
rhen the unions dictated the wages of
Oremen and certain classes of employees,
md the company considered the figures
iXed by them as unjust. Now the lower
priced men We're paid more and the high
)riccd men less, the general average
)eing greater.
No business gould prosper, Mr.. Schwab
hought, subject TO the dictation of a Ia
lOr orga station A man was handicapped
~ membership in a labor organization.
lie said He submerged his personality and
old mis- individuality for doubtful con
iderdton. Mr.. SchWab stated that the
minimum wage paid in the non-uniOn
nils at Carnegie IN one year, includ-
ng absences for various causes, was 81
day When asked by Commissioner
-ichtmann as to the maximum wage paid
" the company, Mr.. Schwab said that he
would have to reply as did the man in
Weber a. Fields company when asked
vhat he vouId dn for x1D oDn no s.,-o g