The Dawson news. (Dawson, Ga.) 1889-current, 1904-01-13

The United States Steel corporation
is thus discussed in The Worlds Work
for November:
The United States Steel corporation
was organized by men who were re-
garded as the strongest tinanclers ana
promoters in the world. 1t is the lar
gest industrial corporation ever organ
lied. Its products are the very basis
of commerce. Although their prices
have shown great fluctuations - Mr..
Carnegie has called the steel business
a pauper and millionaire industry -
they are the first necessity OF com
merce. 1t was possible, therefore, to
organize a great steel and iron business
not SO as to prevent, but surely SO as to
provide against, trade depressions, for
there is no business about which there
Is fuller knowledge.
And there were many facts about the
colossal steel corporation that were al
mirable and attractive. For one thing,
It began at once to publish much fuller
reports than most corporations have
published. 1t inspired unusual conf
dence from the beginning. This was
TO be, if there ever could be, great III
lustrial corporation which ShonId real
Nv take advantage of the economies OF
consolidation and be managed for the
benefit of the stockholders. The great
est financial organizer of our time, per-
haps of any time, was identified with 1t.
Its first president was man in the
full vigor of youth who had had re-
markabIe career in this business. The
great company was launched as no 9th
er ever was.
But it was the handiWork of the pro
moter after ALL as hundreds of other
great corporations are. The dominant
motive in its organization was not the
better manufacture of iron and steel
nor its cheaper manufacture nor the
better handling or marketing OF the
product nor the steadying of its price,
although all these motives played
part. No great Improvement has been
made in processes or in management
by the new corporation. But the dom
inant motive was to buy out Mr.. Car
negie. 1t was a personal motive rather
than what may be called a public mo-
tive. 1t was not the Improvement of
the industry nor primarily the protec-
ton of the owners of these great mills,
but promoters reasons.
In the organization of it definite,
conservative values were not set on
the property. On the contrary, 1t was
valued at it's earning capacity in pros
porous times-its maximum earning ca
pacity. Much more than half its CAPT
talized value was fictitious. The whole
amount of its common stock-SoOO,'
O00,0OO-was water 1t represented no
real, tangible value, but a calculated
value based on earnings at the very
maximum rate in prosperous times.
But the purchasers of this stock
were not plainly informed of this fact.
Every man had to dig this informa-
ton out for himself and calculate for
himself the chance of its permanent
or possible value. But the Inference
was, since honorable men were at the
head of the company, that there was a
reasonable expectation of continuous
dividends on the common stock.
1t soon came out that enormous
sums were required as fees for the I'M
derwriting syndicate. In other words,
the promoters took a heroic profit for
their risk and trouble. Promoters do
Il
bankers take heavy risks for nothing
truly, but from the beginning of the