70 WILLIAM FRANKLIN WILLOUGHBY 



tions it made 50 per cent, in rails 30 per cent, and in armor 

 50 per cent of the production of the country. 



It was in the theory or principle of its organization, how- 

 ever, that the Carnegie company was unique. With an in- 

 sight into the requirements of a scientific organization of the 

 iron and steel industry that amounted to genius, Mr. Carnegie 

 had twenty-five years before his competitors begun the organ- 

 ization of his undertaking upon the principle of the accurate 

 integration of all the branches of the industry under a unified 

 control. He was thus working out in theory and practice a 

 plan of organization which the great steel corporation was to 

 adopt in toto. Mr. Schwab, the president of the company, 

 gave an exceedingly interesting account, in his testimony 

 before the industrial commission, of the development of the 

 Carnegie company and its policy. He said in part : 



"The original Carnegie Steel company was a partnership. 

 When it went into the mining of ores, it formed a separate 

 organization for that purpose, and so with almost every other 

 branch of its business. Its shipping industry on the lakes 

 (the Bessemer Steamship company) was a separate organiza- 

 tion ; the railroad (the Bessemer & Lake Erie railroad, running 

 from Conneaut harbor to the works in Pittsburg, about one 

 hundred and fifty six miles) was a separate organization; its 

 coke interest, limestone interest, all those various companies 

 numbering some twenty six or twenty seven, were all separate 

 organizations. But the controlling interest of each was held 

 by the Carnegie people. In fact, Mr. Carnegie himself retained 

 a controlling interest in all, owning something over 50 per cent 

 in each of the companies. 



It was then found that this partnership had grown so 

 large and the business was of such a varied character, there 

 were so many companies to control and so many partnerships 

 holding varied interests, that for the sake of harmony among 

 our partners it was decided to put all in the control of one 

 corporation, to be known as the Carnegie company. One of 

 the chief reasons for that was Mr. Carnegie's idea that a partner 

 in the coke interest, for example, should not have a greater 

 interest in coke than he had in steel, as it might affect the 

 contracts between the two companies ; or that a partner should 



