were not at that time united under one management as at present.

From what has been said it is apparent that the leading characteristic of the iron and steel industry during the early and middle nineties was its competitive character. It is true that agreements were quite common; indeed, there was hardly any branch of the iron and steel industry that was free from them. Yet the pools generally maintained but a precarious existence, and this was especially true of the less formal "gentlemen's agreements."

In the latter part of the nineties, however, the situation underwent a marked change. In 1898 the combination movement struck the iron and steel industry, and by 1900 a large number of combinations had been formed. Some idea as to the extent of this movement is given by the following table, which shows the leading iron and steel combinations created during 1898 to 1900, with their authorized capitalization.1 LEADING COMBINATIONS IN THE IRON AND STEEL INDUSTRY, 1898-1900 A. Combinations later united in the United States Steel Corporation Name and year of organization

Capitalization

1

Total.

54,000,000

345,081,813

15,000,000

$1,053,419,648

Report of the Commissioner of Corporations, part I, pp. 80-81.

2 This company was merged in 1899 into the American Steel and Wire Co. of New Jersey.

B. Combinations not subsequently united in the United States Steel

In addition to these combinations there were a number of others in the machinery trade or similar branches of the industry. Among them were the American Bicycle Company, capitalized at $30,000,000; the International Steam Pump Company ($27,500,000); the United Shoe Machinery Company ($25,000,000); the Otis Elevator Company ($11,000,000); and the American Radiator Company ($10,000,000).

The first table shows the companies which subsequently united to form the United States Steel Corporation. A brief description of these companies will facilitate an understanding of the subsequent course of events.

Carnegie Company of New Jersey. The leading concern in the iron and steel industry, without a doubt, was the Carnegie Company of New Jersey. This company was organized in March, 1900, being simply a reorganization of the Carnegie interests and of the H. C. Frick Coke Company (owning extensive coking coal properties in the Connellsville district of Pennsylvania). It had an authorized capitalization of $320,000,000, half stock and half bonds. All of its manufacturing properties

1 Not counting $25,081,813 of underlying indebtedness represented by bonds.

were concentrated in the vicinity of Pittsburg, thus giving compactness to its organization. The Carnegie Company also derived strength from the fact that its size had been attained largely through internal expansion, rather than through the acquisition of competitors, the purchase of the Duquesne works (1890) being the most important exception. The company was noted for its efficiency, its financial power, and its conservative management. It had built up its property chiefly out of earnings; its securities were not on the stock market; and its owners were actively engaged in the business. Among its more important subsidiary and allied concerns were the Oliver Iron Mining Company, the ore deposits of which, together with those secured by the lease of the properties of the Lake Superior Consolidated Iron Mines, assured the Carnegie Company an ample supply of good ore for a long time; the Pittsburg, Bessemer and Lake Erie Railroad, running from the Great Lakes to Pittsburg, and used mainly for the transportation of iron ore; the Union Railroad Company, operating an important belt line in the Pittsburg district; and various gas, water, and dock companies.,

The chief business of the Carnegie Company was the manufacture of semi-finished steel for the trade, and of heavy steel products, such as rails, plates, structural steel, bars, skelp, and bridge material. Its leading position is indicated in the fact that in 1900 it produced some 18 per cent of all the ingots produced in the country, its nearest competitor producing only about 15 per cent.1 The Carnegie Company did not make such finished products as wire, nails, tubes, tin plate, and sheet steel; it merely supplied the manufacturers of these finished products with the necessary crude steel. But it was, nevertheless, in a position to turn out these finished products itself on comparatively short notice, should its customers decide to produce their own crude steel, a circumstance that later proved to be one of the unsettling factors leading to the formation of the United States Steel Corporation.

The Federal Steel Company. The largest competitor of

1 1 Report of the Commissioner of Corporations, part I, p. 87.

the Carnegie Company was the Federal Steel Company, organized in September, 1898. The Federal Steel Company was a consolidation of the Illinois Steel Company, with several steel plants in or near Chicago, and one at Milwaukee; the Lorain Steel Company, with a plant at Lorain, Ohio; the Johnson Company, with a plant at Johnstown, Pennsylvania; and the Minnesota Iron Company, which not only owned large iron ore deposits, but also an iron ore railroad from the mines to the Lakes (the Duluth and Iron Range Railroad), and a fleet of lake vessels by which the ore was carried from the railroad terminus to the lower lake ports. The Illinois Steel Company controlled the Chicago, Lake Shore and Eastern Railway, connecting its various plants in the vicinity of Chicago; and the Federal Steel Company itself acquired the stock of the Elgin, Joliet and Eastern Railway, a line connecting with nearly every railroad entering Chicago. The Federal Steel Company was thus well integrated; in fact, the chief purpose in its formation seems to have been not so much the suppression of competition as the creation of an organization that would be independently situated, not only with respect to its manufacturing plants, but also with respect to its ore, fuel, and means of transportation. The Federal Steel Company, like the Carnegie Company, produced chiefly billets, steel rails, plates, structural shapes, wire rods, and semi-finished steel for the trade, many of its largest customers being themselves steel manufacturers. At the time of its organization in 1898 it produced about 15 per cent of the country's output of ingots, somewhat less therefore than the output of the Carnegie Company. The Federal Steel Company was generally rated as a Morgan property.

The National Steel Company. Next in importance after the Carnegie Company and the Federal Steel Company was the National Steel Company, organized in February, 1899. The National Steel Company was a consolidation of a number of steel concerns, located mainly in Ohio, and producing in 1899 about 12 per cent of the total output of steel ingots." It pro1 Report of the Commissioner of Corporations, part I, p. 88. 2 Ibid., p. 89.

duced chiefly semi-finished steel, i. e., billets, sheet bars, and tin plate bars, rather than the finished products. It had an excellent market for its crude steel through its close affiliation with the American Tin Plate Company, the American Steel Hoop Company, and the American Sheet Steel Company, all promoted by Judge W. H. Moore (the organizer of the National Steel Company), and all obtaining their raw material largely from it. The National Steel Company carried integration almost as far as the Carnegie Company and the Federal Steel Company, but differed from them in being also a combination of formerly competitive concerns.

The American Tin Plate Company-the tin plate trust. This company, organized in December, 1898, illustrates a group of combinations formed, not to integrate more fully the business of production (and thus to achieve a more strategic position), but to restrain or exclude competition. It brought together 39 plants, controlling 279 mills, which represented nearly every concern in the country making tin plate.1 It effected, therefore, a tin plate trust. Having done so, it attempted to strengthen its position by entering into exclusive contracts with the principal manufacturers of rolls and machinery used in the manufacture of tin plate, and thus to oppose an effective obstacle to the construction of competing mills. While this scheme was not altogether successful (the contracts were cancelled in 1902 at the insistence of the Steel Corporation), the company did succeed in maintaining for several years a monopolistic position in its branch of the steel industry.

The American Steel and Wire Company of New Jersey-the wire trust. This company represented another attempt to restrain competition and to make large promoters' profits. The dissolution of the wire nail pool toward the close of 1896 had been followed by marked reductions in prices, and this led to the

1 Brief for the United States (no. 481), vol. II, p. 170. The United States Steel Corporation admitted that the American Tin Plate Company acquired control of concerns producing 90 per cent of the country's output of tin plate. Brief for the Steel Corporation (no. 481), p. 77.

2 Brief for the United States (no. 481), vol. II, p. 192.