The Birmingham age-herald., 1913-05-27

justice is. through these hearings. to OBJ
tain evidence which will justify the
complaint upon which the government
Is now proceeding against the corpora
ton as violator of the Sherman law
will be disclosed when the hearings are
ended and the supreme court at WASH
ington has given judgment. But at
present. and for the public at large.
these hearings come at an opportune
time. So much has been said about ef-
ieiency and especially efficiency as a
qualification which will surely negative
any unfayorable business tendencies
consequent upon the enforcement of the
new tariff law, that 1t is regarded as
fortunate that the country is now hav-
Ing competent testimony which shows
what efficiency in the best practical APP
plication of the quality really means
The corporation may, by order of the
court, be dissolved. There may In the
future be no United States Steel cor
poration as we now know 1t. But the
record made up of testimony given un-
der oath will reveal to the American
people what high-grade efficiency real
ly is.
Mr.. Schwab's own testimony, which
has supplemented that of President Far
rell of the corporation, demonstrates
that efficiency consisted of the union
of several factors, some of which have
never been recognized by the many
leaders of American industry Thirteen
years ago, by chance-like inspiration
which was Immediately voiced at the
time of a dinner In New York one of
the guests being the late J. p. Morgan.
Mr.. Schwab asserted that conditions
were favorable for developing very
high order of efficiency which would re-
suit in greatly increasing the iron and
steel industry of the United States The
quick ears of Mr.. Morgan and his in
tuftive grasp especially of the great op-
portunities led him to ask Mr.. Schwab
Immediately TO go over the proposition
somewhat in detail. What did Mr.
Schwab mean by efficiency? What did
he mean by possibilities?
The first requisite of very high grade
enic1ency, Mr.. Schwab said, was the
creation of a company upon a capital
ization basis probably greater than had
ever been made, either in this country
or In Europe. Very great capital was
needed If very great efficiency was to
be secured. For there would be needed
vast amounts of raw material, many
manufacturing plants and unusual IA
cilities for producing, including trans
portation. For since the highest econ
omies and the best results were to be
sought, it was essential to carry on
the business from the mining of the ore
and coal right through to the manu-
facture and sale of every class of fin
lshed product. An ore mine or a rail-
road in this way would not be run
simply to make the most money pos
sible as mine or railroad. but chiefly
with the view of serving the mills to
the best advantage.
Great capital was necessary If great
ore mines were to be secured. But such
ownership would make 1t possible so
to mix the ores as to produce qualities
needed for the operation of different
Kinds of furnaces Again, great effi-
ciency which would follow the possess
sion of great capital and resources
would make possible the ownership of
a complete line of finishing mills That
would enable the proposed organization
to relieve itself of an uneconomic meth
cd which the steel and iron mills of
that time We're obliged to adopt-name-
ly, the selling of their products in semi
finished state
Another factor in the high grade ef-
ficiency made possible by the possess
sion of great capital would be mill
ownership representing all kinds of
productions and in many sections of
the country. The Federal Steel company
for instance, could not advantageously
do business in the east or across the
seas nor could the Carnegie company
command profitable business in the
west
Another factor for high efficiency and
great economies which needed no de-
tailed explanation for Mr.. Morgan TO
understand was the reduction of vari-
Gus expenses which a concentrated or
gantzatfon could make possible, such as
selling expenses. the saving of freight
and there could be gfeat saving in ad-
ministrative expenses.
ta1t tot t;1,a
could be carried to a very high degree
of efficiency. Instead of having only
one or at the most two. There could
be comparison of efficiency in many
different mills and this would entail
a system of accurate records for the
result obtained for each mill Thereby
the standards of the whole organization
could be raised. This point appealed es-
pecially to Mr.. Morgan, for he was con-
fident that in this way could a splendid
esprit de corps be established and in
all his active life Mr. Morgan was con-
vinced that one of the chief factors in
the success of any business undertake
ing was the establishment and main
tenance of esprit de corps.
In this way almost informally dis
cussed over coffee and cigars at dinner
and then by formal conferences, the
first conception of what has become the
United States Steel corporation ma
terialized into a fact, Mr.. Morgan un-
derstanding that for a plan as COM
prenhensive as this distinctively mark
ing the opening of new industrial
era enormous capital was absolutely
necessary. This he agreed to secure,
and did.
1t was a wonderful story, brought out
by the lawyers questions, which Mr.
Schwab told For the first time there
seemed to be good understanding, at
least on the part of those who have at
tended these hearings, OF what eff
cheney in the beginning really meant
to the organizers Of the corporation.
There still remains to tell the manner
In which efficiency was worked out
what the results of 1t were. And this
history, whether the United States
Steel corporation he found to exist
in violation OF the Sherman law or not
will of itself be most valuable les
son to American industry hereafter and
will Sprva preatlv fo incrQasa its