New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-07-01
DETAILS OF REPORT
Steel Corporations Investments,
Profits and Position in Industry.

Washington June 3O-Part | of the re-
port on the steel industry made by Her.
bert Knox Smith. Commissioner Of Cor
porations, deals with the organization. in
vestments. profits and position in the in
ous,ry Of the United States Steel Corpora
zion. He sets forth the causes Of the for
nation Of the corporation. its actual in
vestment contrasted with its capitalization.
It's rate Of profits and its degree Of control
in the industry.
The corporation, the Commissioner saws.
was the elimination and the result of a
remarkable and even dramatic period in
tho steel industry. Until about 1895 the
bulk Of the business was distributed among
a very considerable number Of concerns
There was sharp competition. modified by
frequent pools and price agreements of
greater or less duration and effectiveness
In 1888 began an era Of great consolida-
lions, with capitaliZations ranging from
S51o00G0 TO $l00O00GO0 usually mergers of
many smaller companies. in most Of these
a. in the earlier price agreements, the
ruling motive was the removal of com
petition. They did not. however finally
eliminate competition. On the contrary, q
broad movement at once became apparent
which threatened competition on d larger
scale and probably more severe than any
IN steel history. This was the process
known as indignation.
Threatened Steel War.
Describing the situation in lS99-l9OO. he
says:
There were three -~eat communicable
Carnegie company, the Federal steel and
the National Stcel-dominating the produce
ton OF crude and semi-hnished steel This
may be called the primary group. Six
other large conceIns-the American Steel
and Wire. American Tin Plate American
steel Hoop, American Sheet Steel National
TUBE ana American Budge-severally con-
,uoIed these lighter finished products
these formed the secondary group
But. large as these concerns were. no one
OF them Was entirely self-suffiCient The
secondary group was dependent on the
primary for It's crude steel: the ''pri-
airy largely dependent on the secondary
for market Tor It's products Few were
completely migrated that is few car
ried through uudcT one control with the
accompanying advantages, the entire in
dustrlal process from tho ore to the finish
cd product. linking up ore and coal mines
transportation. blast furnaces. steel works
Immediately, however. came the next
step These great concerns almost stimuli
taneously began the final linking up of the
chain of production. once begun bv one
concern, others followed In Self-defence
The secondary companies began TO reach
back. acquiring ore reserves and crude
steel plants For example in 1900 the Steel
and Wire Company, whose supply of ma
terials mad previously been purchased
mainly from the Carnegie or he Federal
company. planned 10 make its own steel;
likewise the National Tube Company The
primary" concerns. finding these. their
chief customers turning into rivals, re-
taliated by reaching forward 10 the manu-
facture OF finished products.
Paramount I'm Importance was the ore
The recognition OF that importance came
strangely late. but. once recognized. il be-
came an axiom that no large concern could
stay i'm the business unless fortified by it's
own ore reserves. By 1900 the bulk of the
lake ores was in the hands Of less than
a dozen companies. with "A similar con
centration in coking coal.
Such efforts on The part OF these great
concerns, in striving each to 'integrate"
10 make itself wholly independent threat
ened 10 result in great and sudden in
crease and duplication Of the steel produc-
ing and finishing capacity Of the country
and to involve them also I'm an invasion OF
each others business.
Struggle OF the Giants.
Thus there was suddenly revealed - TIE
industry what the trade press al the time
called the impending struggle of the
giants" q contest between great concerns
which, under such circumstances. might be