THE UNITED STATES STEEL CORPORATION 145 



The advantages of the Carnegie company did not stop 

 here. Their mechanical equipment was superior to that of 

 any other mills, and their business was the best managed of 

 any in the country. It is not meant by the first statement 

 to imply that the consolidations did not include individual 

 plants which were the equal of the Carnegie mills. The plant 

 of the Ohio Steel company at Youngstown, for example, was 

 not inferior to anything in Pittsburg. It is, however, true 

 that the average excellence of the Carnegie equipment was 

 far above the average of any of its rivals. 



The management of the Carnegie company represented 

 the acme of productive efficiency. Every officer had risen 

 from the ranks by sheer dint of compelling merit. Every 

 head of a department had an interest in the business apart 

 from his salary. Trade unionism had been banished from 

 the mills in 1892, and the workmen were spurred by high 

 wages and the promise of advancement. No visitor to the 

 Carnegie mills can fail to be impressed with the intensity of 

 the effort and the strained attention evident in every depart- 

 ment. The result of these advantages appeared in the revela- 

 tions of the Carnegie-Frick controversy, when the plaintiff 

 claimed that the total profits of the company for 1898-99 

 exceeded $70,000,000. Such was the company that threat- 

 ened the steel trusts with its competition. 



The results of this competition were clearly foreseen by 

 those in control of the consolidations. In view of the inade- 

 quacy of their surplus reserve, taken in connection with their 

 other disadvantages, a general decrease in profits would be 

 the signal for the passing of dividends, and a heavy fall in the 

 value of their stockholdings. Not only this, but industrial 

 warfare demands new appliances and large construction, 

 which could only be paid for by issuing bonds or adopting the 

 more dangerous course of mcreasing the floating debt. In 

 either event the decline in the value of stocks due to decreased 

 earnings would be fixed and confirmed for years by placing 

 fixed charges ahead of dividends. 



Not onl}^ were the leaders of the steel trusts under obli- 

 gations to their stockholders to prevent the threatened dis- 

 aster, but considerations of private advantage inclined them 



Vol. 6—10 



