Arizona republican., 1902-01-31
A BILLION DOLLAR AGE.


with large capital was the distin-
gushing feature OF the years 1898 and
| 1899. There had been previous to that
time some industrial companies with
considerable capital, as, for example.
the American Sugar company, the
lea Their company and others. In 1898,
however. there was flood of corpora
tions of all kinds and sizes; and as
time went on the magnitude of the va
rious promotions tended to increase.
By 1899 there had been brought into
existence a great many companies with
capital of from $50. 200 900 to 800 ,O0e. =
900.
Early in 1899 these forces of promo
ton received somewhat of a check ow
ing to commitments of underwriting
syndicates being too heavy to permit
of their being released by sales of Sc
curities to the public. For some
months there was a lull in the forrna
ton of Industrial companies, and to-
ward the end of 1899 there was a sharp
liquidation which had the effect o.
moresor less clearing up the situation.
For a year thereafter there were rela-
lively few instances OF large promo
tions. and more attention was given to
the development of the community of
Out of the industrial promotions o.
1s9S-99, however. grew the first great
billion dollar" trust or corporation al
most before the people realized that ii
was coming. One of the companies
formed in the first great trust" boom
was the National Tube company.
This company made large profits. but
in striving to make itself independent
of Mr.. Carnegie it incurred the active
opposition of that gentleman. and the
Carnegie Steel company threatened a
new tube-making plant unless the Ma
tional Tube company agreed to COM
bine to buy steel from the Carnegie
company. This opened the eyes of the
allied ompanies-Federal Steel, Ma
tional Tube. and so onto the danger
in a situation where an active. self
contained, moderately capitalized COM
petitor could practically ruin compa-
MES capitalized with a good deal of
water and not entirely self-conta tanned.
After some weeks OF negotiating. the
interest controlling the newly-formed
companies We're compelled to buy not
only Mr.. Carnegie's concern. but the
Moore Eros companies in order to pro-
tect themselves. and the result was the
great billion dollar steel company.
This corporation was the outgrowth.
not. as in the case OF its constituents
of the efforts of promoters to supply a
public demand with securities. but OF
the necessity for protecting these very
creations.
The United States Steel corporation
was probably the merest embryonic
conception in January of this year. but
by June 30 more than eleven hundred
million of stocks had been issued and
distributed TO the public. So gigantic
and rapid a piece of promotion has
never before been Witnessed in the
worlds history. Thus, what in 1899.
a mere rumor. startled and indeed
scared the financial community. in 1901.
as accomplished fact. was taken
very much matter of course. and.
in fact. as a good thing. SO far can
be seen the United States Steel stocks
are very widely distributed among the
public-a good deal more widely in
than even the stocks of the
constituent companies.
The first billion dollar" railroad,
viz. the Northern Securities company.
may perhaps be regarded in a light
somewhat similar to that in which the
steel company is viewed. II is I'M
questionably the outgrowth of the
general process of concentration of
ownership and interest to which the
name of community OF interests has
been given. Unlike the steel company.
however. IL had been long under con-
in one form or another. and.
while its birth followed the announce
ment of settlement of the great North
ern Pacific fight. it was not the prod |
uct or result of that fight.
Failing some early development in |
the direction of national ownership of |
it is probable that it will not |
long remain the only billion dollar"
railroad corporation. AS in the case |
of the companies in the steel trade. one |
larger ones as time goes on.
Concentration of capital on this pre- |
viously unheard-of scale brings new |
set of problems to be faced. COMPETE !
ton of independents on more vigorous |
lines will naturally be stimulated by |
large apitalizations-if dividends are |
paid thereon. Ability of management |
will become a more vital factor than |
ever in determining success or failure. |
as the tasks of managers grow in i'm
portance. Tariff changes in the case
Of industrials, and more Legislation in
the direction of railroad control, are |
more likely by concentrated /
ownership OF industrial and railroad |
How these problems will
be solved remains to be seen. If, as
many believe. we are shortly to wit
~ ~ ~ The 7 oroect