146 EDWARD SHERWOOD MEADE 



to the same policy. There were only two ways by which the 

 controlling interests of the steel trusts could avert the im- 

 pending calamity. One was to make an abject surrender to 

 the Carnegie company, thereby confessing their inferiority, 

 inflicting a severe blow upon their already doubtful credit, 

 giving up all the plans of industrial independence which had 

 been included in their schedules of advantages, and upon the 

 attainment of which their capitalization had been in part 

 based, and leaving the danger of competition still present 

 and no longer concealed; the other to adopt a plan which 

 should harmonize all the conflicting interests by uniting them 

 into one corporation, organized, like the Federal Steel com- 

 pany, to own a majority interest in the various steel com- 

 panies which it was necessary to control, and in this way to 

 remove the danger of competition. In a declining stock 

 market the second alternative could hardly have been chosen. 

 But, in the great bull movement which culminated in May of 

 1901, all things were possible. The United States Steel corpo- 

 ration was backed by the strongest financial houses in the 

 United States. It included the Carnegie company, the strong- 

 est steel company in the world; it completely realized the ideal 

 of independence, for which all the merging companies had been 

 striving; it exorcised the forbidding spectre of competition; 

 and it was offered to the public at a time when the speculative 

 mind was able to appreciate these advantages at something 

 more than their real value. Out of this favoring conjunction 

 of circumstances, was evolved a corporation with a capitaliza- 

 tion of $416,000,000 in excess of the combined capitals of the 

 merging companies, out of which has been taken a large 

 amount of ostensible profits in bonuses, premiums, and com- 

 missions. The details of the organization, the motives to 

 which the promoters appealed, and the financial prospects 

 of the new company are matters not for discussion here. The 

 outcome of the present investigation is that the primary ad- 

 vantages sought in the formation of the United States Steel 

 corporation were the avoidance of competition, and the guar- 

 antee of permanent stability and harmony in the steel trade 

 in the middle west. 



