The times. [volume] (Washington [D.C.]) 1897-1901, 1901-05-12
SCHWAB TALKS OF STEEL.
The Magnnte Before the Industrial
CommisSfon

| Nttionai, ana other steel companies, tes-
tilted before the Industrial Commission
yesterday on the subject of the steel iu-
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 its own ore-about s.ooO. 900
| 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-the Pittsburg, Bessemer
| and Lake Erfe-to the works at Pitts
| burg.
He said 1t had not been the practice of
the Carnegie Company to sell it's ore to
other companies, but to manufacture the
| diHerent grades into a great variety of
products. That company alone then con-
| troiled u per cent of the ore of the coun-
try, and accounted for 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 % per cent, steel rais 80 per cent
and armor plate more than 50 per cent.
There had originally been twenty-seven
companies in the Carnegie interests.
majority of the stock In each company
being owned by the Carnegie Company
proper. 1t was found, however. that even
with 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
S',"p snare, and was never listed, which
practically prevented trading In it.
Inc success of this consolidation was
SO marked. said Mr.. Schwab. that It was
reahzed 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-
ize 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 a
certain mine to be carried to a certain
company. 1t was now also possible to
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 superintendent and the
skilled and salaried help to be considered.
Where there was formerly chemist con-
nected with each concern, each of whom
might have different process of manu-
facture, there was now one chief chemist
for the entire company. This has resulted
in a greater uniformity of process and
consequent betterment of quality. Mr..
Schwab estimated that the United States
Steel Company now owned 70 or 50 per
cent of the ores of the United States and
controlled 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 IA clearing house of in
formation" 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
fected under the Capitalization would tend
to reduce prices still further. High prices,
he 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, 1t was necessary to seek a foreign |
market at reduced prices. In any case |
it was necessary to reduce prices to OBJ |
|
ket was attained, which was generally the
work of years. it was sometimes neces- |
Sary to keep prices down in order to re- |
tain 1t; the laboring classes in any event |
were directly benefited. The rule worked
both ways, foreign manufacturers sell
ing their goods i'll the United States |
cheaper that at home.
Mr.. Schwab thought a protective tariff |
on some classes of manufactures of steel |
was desirable. In industries in which la |
Dor formed the largest part of the cost |
1t was Indispensable. on pig iron and |
steel rails the tariff was not necessary |
labor forming a small portion of their |
cost. If the tariff were taken off finished |
products, 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 1t signifi- |
cant that up to the year 1892 labor or
had existed among the COM |
panys employees. Since that year there
had been no organized labor. AS Mr. |
Schwab expressed it, no "aristocracy of |
labor existed as ii had prior to 1892
Then the unions dictated the wages of |
toremen and certain classes of employees
and the company considered the figures
liked by them as unjust Now the lower
priced men were paid more and the high |
priced men less. the general average
being greater.
No business could prosper, Mr. Schwab
thought. subject to the dictation of a la
Dor orga STATION. A man was handicapped |
by membership in a labor organization.
he said. He submerged his personality and
sold his individuality for a doubtful con- |
siderdtion. Mr.. Schwab stated that the
minimum wage paid in the non-union
mills at Carnegie In one year, includ-
ing absences for various causes was 81
4 day. When asked by Commissioner
.tchtmann as to the maximum wage paid |
~ the company, Mr. Schwab said that he
you'd have to reply as did the man in
tfa1u HfaI.1