68 WILLIAM FRANKLIN WILLOUGHBY 



formation of the United States Steel corporation, with its 

 billion, one hundred million, dollar capitalization. 



With the formation of this corporation the evolution in 

 the organization of the iron and steel industry entered upon its 

 third, and as yet final, phase. It constitutes, if the expression 

 may be permitted, combination carried to its second power, 

 being, as it were, a combination of combinations. That in 

 character it is essentially different from previous combina- 

 tions, which had in view merely the concentration of indus- 

 tries for the purpose of controlling production and prices, is 

 manifest in the view of the conditions leading to its founda- 

 tion. The motives that were at work were purely those for 

 bringing about an integration of related interests. It must be 

 remembered that the companies which were united were not 

 essentially competing concerns, as regards the disposition of 

 their products. Had the motive been primarily one to lessen 

 competition, the union would have taken place along different 

 lines. The insistence that Mr. Schwab lays upon this point, 

 in his testimony before the industrial commission, must be 

 taken as a sincere expression of opinion, and not one dictated 

 by business policy. 



Mr. Schwab, moreover, has brought out this point with 

 great clearness. "The iron industry," he says, "was kept 

 back in this country for many years, because there was no 

 connection between the various industries on which it de- 

 pended. The ore deposits were owned by one set of men. 

 The coal deposits were owned by another set. The coke was 

 made in a hundred different places, scattered throughout 

 several states, under different management. The mills and 

 furnaces, in turn, were owned separately; and, when these 

 mills and furnaces, having bought their iron here and their 

 coke there and their other products elsewhere, finally produced 

 their iron and steel, there were still other processes that the 

 product had to go through before it could be finally landed in 

 the market. Everything was disconnected and disjointed. 

 It was not until the whole process was welded into a continu- 

 ous chain under one management that the American iron 

 industry began to make its giant strides which have now car- 

 ried it into a position where it dominates the whole world." 



