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he once suggested for his epitaph, "Here lies the man who knew how to get around him men who were cleverer than himself." He said, "The nation that makes the cheapest steel has the other nations at its feet." Hendrick also affirmed that Carnegie did not like "this Wall Street coterie." What a pity that, with his desire to get out of business, such inducements were offered that he must perforce go in with them! For the United States Steel Corporation has never been the asset for the country that the Carnegie Steel Company was or might have been. Carnegie in the United States was greater than Krupp in Germany. The one made the implements of peace; the other was skilful in the production of necessaries of war. Carnegie had a fit successor in Henry Clay Frick to carry on his work while he might have devoted himself to his noble benefactions. Unfortunately however, the two had quarrelled.

While the Carnegie foibles are apparent, he was ahead of his age in his devotion to "gentle Peace." How much he thought of it, why the world ought to have it, why

He

a-day mechanic from the neighboring works at Johnstown. . . had volunteered as a private during The Civil War and carried himself so finely that he became captain of a company which was never known to flinch. Much of the success of the Edgar Thomson Works belongs to this man." In later years, Carnegie offered him an interest which would have made him a millionaire without entailing any financial responsibility. This Jones declined saying, "No, I don't want to have my thoughts running on business. I have enough trouble looking after these works. Just give me a big salary if you think I am worth it." "All right, Captain, the salary of the President of the United States is yours." "That's the talk," rejoined Jones. P. 203.

66

'Captain Jones described me as having been born with two rows of teeth and holes punched for more, so insatiable was my appetite for new works and increased production." — Ibid., 112.

1 The Age of Big Business, B. J. Hendrick, 68.

2 The Age of Big Business, Hendrick, 60.

P. 81.

war was the worst of evils, are amply testified to in his writings, private letters, expressed desires and by his benefactions. No wonder then that the great war of 1914 broke his heart.1

Different from Carnegie, J. P. Morgan had inherited wealth and a good education; he possessed the confidence of the investing public. It was thought in 1901 and 1902 that he could accomplish anything. Ex-Mayor Grace's experience was that of many. One morning he received a brief letter by post saying that he had been awarded a hundred thousand dollar share in the Underwriting syndicate of the United States Steel Corporation. Having had no conversation with Morgan on the subject, knowing only by hearsay of the organization of the "billion dollar" trust, he sent his cheque for what was asked for, being $8000, from his entire confidence in the banker. Although liable up to the amount of $100,000 he never got a further call for more but in due time received back the money he had sent and his share of the enormous profits of the Underwriting. "I never made money as

easy as that," he said."

The organization of the "billion dollar steel trust," as the Steel Corporation was called, the impetus of McKinley's second election, the rebound from the panic of 1893, the war of 1898 and the stock depression of 1899 turned men's heads in 1901. Stocks went up, money was easily made, thoughts ran in hundred millions, men and women were extravagant, champagne corks popped, the assertion was made that the day of panics had passed

1 Preface to Carnegie's Autobiography by Mrs. Carnegie, v.
'Life of Morgan, Hovey, 216.

and all went as merry as a marriage bell. "The outburst of speculation during April 1901," wrote Noyes, "was something rarely paralleled in the history of speculative manias." Men who were made millionaires by their sales of United States Steel Corporation shares became speculators in Wall Street. "The 'outside public' meantime seemed to lose all restraint. A stream of excited customers of every description brought their money to New York and spent their days in offices near the Stock Exchange. . . . The newspapers were full of stories of hotel waiters, clerks in business offices, even doorkeepers and dressmakers, who had won considerable fortunes in their speculations." Happily this booming condition was for a time brought to an end by a quarrel between Edward H. Harriman on one side and Morgan and James J. Hill on the other. Both parties desired control of the Northern Pacific Railroad and began bidding against one another for its possession. The stock ran up from 160 to 1000 but "all other stocks broke violently" and a good part of Wall Street was for two hours on that day of May 9, 1901, "technically insolvent."2 Those who term this a real panic and are fond of historical parallels may refer to 1881 and point to the facts that the Indian corn crop in 1901 was with two exceptions the smallest in twenty years and that a President was also assassinated. The strife for the Northern Pacific was a battle of financial giants but all this turmoil would have been avoided had they composed their differences before instead of after this Wall Street shock.

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1900 the crop was 2,105,000,000 In 1901 the crop was 1,522,000,000 1902 the crop was 2,523,000,000

Elated with his success in the Steel combination Morgan attempted a similar enterprise in connection with transport across the Atlantic Ocean. He got hold of the Dominion Line, the American and Red Star, the Atlantic Transport Company, the White Star Line and the Leyland, paying for the ships more than they were worth. The chairman of the Leyland Company told the shareholders that Morgan's offer was so high "that no management had a right to refuse it." Morgan attempted to get hold of the German lines and the Cunard Company but these for similar reasons would not sell their ships.

As I have previously written, the whole amount of cash in the flotation of the United States Steel Corporation was twenty-five millions; the rest was faith in Morgan. It may be readily conceded that he alone in the country could effect such an organization but, was it worth while to abuse that faith and put upon the market at a supposedly valuable price more than 550 millions of "water"? True, Morgan's friends argued that the capitalization was based upon earnings and not upon the value of the property; but what consolation was that to "widows and orphans" who had invested in Steel Common at from 38 to 55 because it paid four per cent, when the Corporation suspended dividends on the Common and the stock went below 10 as it did in 1903? The decline in the market was from 101 for the Preferred down to 49, and from 55 for the Common to 10. No wonder that Morgan was depressed coming as it did with the utter failure of his ship combine. Morgan has "fallen down" in his steamship combination, was a usual remark. This depression in 1903 was called "the rich men's

1 Noyes, 303.

panic." After what is known as the Northern Pacific Railroad corner, speculation again grew rampant as the "bumper wheat crop" in 1901 made up for the shortage of corn, but early in 1903 it became apparent that the old rules of business and finance remained in force and the "little panic" between two economic crises occurred. As Morgan said in a newspaper interview it was a case of "undigested securities." 1

The Boston Herald of January 10, 1920, commented on "The Greatest Epic in the History of Big Business" by which it meant the Standard Oil Company, that is typified by John D. Rockefeller. In the constituent companies which made up the United States Steel Corporation one finds the "Lake Superior Consolidated Iron Mines," which is put down as the "Rockefeller interests" and which was necessary to the Corporation as owning a large quantity of Lake Superior iron ore. Lake Superior ore had become the basis of the steel industry from its quantity and, while the Bessemer process ruled, from so much of it being low in phosphorus. Ores high in phosphorus were inadmissible as that element was at enmity with steel. The "Rockefeller interests" were not absorbed until after the Carnegie Steel Company. The transaction is simply related by Rockefeller. "After some negotiation," he wrote, "Morgan made an offer which we accepted whereby the whole plant - mines, ships, railways, etc. should become a part of the United

1 Noyes, 308. Besides works already referred to, I have used in this account, Trusts of To-Day, G. H. Montague; Commercial and Financial Chronicle, 1900, 1901; The Nation, 1900, 1901; Articles of Gleed, Macchen, Ely, Cosmopolitan Mag., 1901; article of R. S. Baker, McClure's Mag., Nov. 1901; Peck; Life of Hill, Pyle, ü.

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