The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-10-27


production OF wrought pipe and tubes in
the United states. purchased a very large
! part Of its crude steel.
MOVEMENT TOWARD CONSOLIDATION.
The American Sheet Steel Company, the
American Tin Plate Company and the
American Steel Hoop Company were only
partially protected as to obtaining their
raw material through a common control
! lhere was general movement upon the
part OF these concerns to control their
raw material and all stages OF the manu-
facture Of their products.
For example. the American Steel and
wire Company. whose constituent concerns
! had largely patronized the Federal steel
Company and the Carnegie Company.
planned In 1900 to make it's own iron and
steel The National Tube Company, q
large customer OF the Carnegie Company,
proposed to erect additional blast furnaces
and steel works. The American Tin Plate
Company. the American Sheet Steel Com
! pany and the American Hoop Company,
then large customers OF the Carnegie Com
pany. and other makers Of steel werc
rapidly making themselves independent
through the increase OF tho crude steel
.capacity of the National Steel Company,
I
ertes and fleet OF lake ore vessels.
CARNEGIE A DISTURBING COMPETITION.
Thus competition, under old methods
OF doing business having been restricted
and In some products almost entirely de-
stroyed. threatened to make a new way
and reestablish itself In a vigorous fight
| The leaders to the steel industry feared
the breaking down Of the restraints upon
| trade and the overthrow OF the partial
or complete monopolies which they had
I established. The Carnegie Company and
the Federal Steel Company saw the danger
! OF their former customers becoming their
rivals. Both Of these companies took step
! looking to the manufissure OF finished
products, such as structural material tubes
| and universal plates.
About the close of the year 1900 the Car
, negie interests announced that they would
erect an immense tube plant at Conneaut
on Lake Erie. period Of greater com
petition had already been foreshadowed
This announcement brought affairs to
a crisis. A battle of the giants" was dis
cussed in the daily papers and in the trade
journals.
HE HAD TO BE BOUGHT oCr OR COMPETED
WITH
II each OF these actual and prospec tive
competitors had worked out it's own destiny
obstruct ted by combinations or agreements
entered into FOR the purpose OF restrain
ing competition and trade and commerce
among the States. and between the States
and foreign countries, new plants would
have been established. and such trade and
commerce would have developed under
different conditions. and free from re-
straints which. a. will be shown. were i'm
! posed with the purpose and effect of unduly
va IN n nd
monopolllins N part such trade and COM
merCs.
An opportunity was offered. through
further consolidation and restriction OF
trade and commerce. for enormous profits.
as a reward for erectng the combination
ana a result OF the fotation OF inflated
stocks. on account OF its announced pur-
pose. which contributed largely toward
preciritating the crisis and also on account
OF its great strength. II was manifest that in
order 10 form an effective combination 1t
was necessary to control the Carnegie COM
PAM. considering the magnitude of the
entire undertaking II was carried to d CON
clu>ion win unprecedented ssiftnes-.
BIRTH OF THE UNIrED STATES srEEL
WITHIN tour months from the announce.
inent by the Carnegie Company of its pur-
pose 10 extend lie activities into new fields.
a new corpora ION was created for the pur-
and eliminating the existing competition
between sald companies.
After the incorporation OF the United
States Steel Corporation on April |. 1901
the petition says IL acquired practically
all Of the capital stock Of twenty other
large corporations, all of which are
named as defendants These corporations
had 4 capitalization of 81. .+O2 ,Si6. .sl1. The
Sts"i Corporation was formed with an
auth orized capital of 81 .oO0 600, 900. divided
equally between common and preferred
stock. ] he connection Of the individual
dat-n"ants with the formation and
operation Of the trust is set forth in the
bili as follows:
INDIvtDrA,s CONCERNED SPECIFIED.
81. p Morgan, aside from the prominent
part taken by him as a member Of the
firm oi j. y. Morgan 4 Co., who werc
syndicate managers in charge Of tho
organization of the compay was a
director in the Federal Steal Company.
He became n momber Of the first board Of
directors Of thu corporation.
Charles Steele. who was n member of
the firm of }. =. Morgan + Co. and acted
in the negotia tions for the consolidation,
was "A director in the American Bridge
Company and the 'atiunai Tube Company
and became a member of the first board
Of directors H Of the bs.ip corporation.
firm Of J, p, Morgan 4 Co, after the
negotiations for the first combinato
began. He became active in bringing
about subsequent combinations herein
mentioned. lie became a member Of the
board Of directors Of the corporation In
1901
"E II. Gary was active in bringing
about tho combination. At the time Of
the merger he was president. director and
n member OF the executive committee
Of the Federal Steel Company He be-
came member of the first board Of direc-
tors Of the corporation. chairman Of the
executive committee and a member of
the finance committee and has been the
leading person in controlling its affairs
throughout i'S existence
Charles VI Schwab was active in the
negotiations leading up TO the formation
OF the corporation, and was president and
director of the Carnegie company when
absorbed and became the first president.
and became a member of III. first hoard OF
directors Of the corporation.
CARNEGIE AS WICKED AS ANY
Andrew Carnegie was in control OF the
Carnegie Company Of New Jersey, was
fully advised as to the formation of the
corporation and its character and com-
binnd in the plan for tn" purpose and TO
the extent of transferring To it the control
of IN" Carnegie Company of New Jersey
Henry c, Frick was prominent in the
Carnegie company was active in the effort
10 sell the Carnegie properties and merge
them in the CORPORATION and became n