THE ROMANCE OF STEEL.

Press, Volume LXV, Issue 13545, 5 October 1909, Page 3

THE ROMANCE OF STEEL.

Br W. T. Stead (Editor of "The Review of "Reviews," etc.). In my previous chapter I briefly called attention to tho little known fact that Mr Carnegie made threefourths o? his colossal fortune in the last two years he was in business. The facte are so extraordinary, and so little appreciated, that I welcome an opportunity of calling attention to the stirring story of this great moneymaking achievement, which has been published by Mr H. N. Casson in "The Romance of Steel" (Grant Richards, 1908). Mr Carnegie's business career may be divided into three parts. The first was that in which he was making his way from the humble position of a telegraph boy to that of a successful man of business. This period began when he was a boy of thirteen, and closed when at the age of thirty he left railroading, and took to making iron and steel. The second covers a ■ period of the next thirty years, during which he was creating the Carnegie Company, which at the end of that time he was willing to sell, stock, lock, and barrel, for £31,000,000, or, to state it more exactly, for 157,950,000 dollars. This sum was to have been divided between Mr Carnegie and his partners. The bargain fell through owing to the failure of the purchaser to raise 60 million dollars in cash before the option expired. The third and final period only covers a couple of years, 1899 and 1900, but in that couple of years Mr Carnegie displayed such dashing generalship and such Napoleonic audacity, that in two years he more than doubled the fortune which had been built up in thirty years. It may be said that in the first period he made his way, in the second he made iron and steel, and in the third he made gold. * REFUSED OFFERS. In 1899 Mr Carnegie had retired from business. He still held the major interest in the Carnegie Comjpany, was kept punctually posted in what was done day by day, but he left the work to the workmen on the spot, and the efficient staff which he had trained to direct the business. In 1899 he had consented to sell the whole concern for 157 million dollars, • or £31,000,000. But when the holder of that option failed' to produce the stipulated onethird of the purchase money, Mr Carnegie exacted the forfeit and returned | to business with a vengeance. The temporary flutter on tho New York' Stock Exchange, which by mak ing money tight had rendered it impossible for this would-be purchaser to secure possession of the Carnegie Co., soon passed. Business was Looming. Mr Rockefeller, of the Standard Oil Co., ask«d Carnegie to nam* a price. Mr Carnegie, who a few months before had been willing to sell far £31.000,000, promptly replied that 'a. j would not part for less than £50,000,000, half in cash, and half ia ; five per cent- gold bonds. Tho prico was too stiff even for the oil king, and Mr Rockefeller refused to deal. Mr j Carnegie's next offer was made to his younger partners. This time the prico | "had gone up again. It was now GO millions sterling, half in gold bonds and half in stock. The offer was Jeclined. But Mr Carnegie knew the value of what he possessed, and he was j not afraid. It was probable that the most characteristic and the least understood part : of Mr Carnegie's career was that upon which he now entered. He saw -"-ho psychological moment, and worked his chance for all it was worth. Mr Casson says:— "Every day Mr Carnegie's vision of millions grew more radiant. His brain whirled with the details of a selling campaign, the like of which had nev«r been known before. In Wall stre.t language, he became a Carnegie Steel Company 'bull'—a furious, rampant, untaraeable 'bull.' Million was piled up million. The twenty-five millions f r which the company had been capitalised seven years before seemed to him now a mero handful of nickels. The more he* figured, the more he blended in the future with the present. Soon the three hundred millions became four hundred. 'I favour holding on for two or three years,' he wrote to his partners. 'There is no question but we can sell our property for four hundred million dollars.'" WAH TO REPEL INVADERS. But Mr Carnegie was not content with making a campaign on the Stock Exchange. He prepared to carry on the war by sea and land all round the earth. His watchword was, "Henceforth I will have only one profit from the ore to the finished product," Mid that profit was to be his. Mr Casson thus describes the measures which he took to carry the war into the enemy's camp:— 'To fight Rockefeller, he ordered seven eight-thousand-ton ore-carrying steamships. To fight the Pennsylvania

Railroad, he set a corps .of surveyors at work mapping out a railway from Pittsburg to the ocean. To fight 'he National Tube Company, he- announced that five thousand acres of land had been bought at Conneaut and that a© had -decide- to build a twelve-million dollar tube works. To fight the American Steel and Wire Company, a new rod mill was to be erected near Pittsburg. And to fight all other steel companies, ho proclaimed that ten mil ion dollars were to be spent at once in improvements which would put his beyond the reach of competition. It is probable, that Mr Carnegie would never have put up such a fight if he had not been seriously threatened by the competition of the Moore, Morgan, and Rockefeller combinations who were encroaching upon his territory, and threatening his business, becoming to his own view of tlie situation Mr Carnegie was merely fighting in selr-oe-fence. Although an opponent ot war, he always has approved of war to repel invaders. "While to other men he seemed tobe building up the most gigantic fortune of recent times, and doubling his wealth in a couple of years, Mr Carnegie regarded himself as merely conducting a series of operations which were of the nature described by the military strategist, as the defensiveoffensive. As often happens it was his opponents rather than his allies who helped him tc his phenomenal success. MR CARNEGIE'S FORCES. Mr Carnegie had very solid forces behind him with which to wage his defen-sive-offensive operations. "He had the men and the money and the mills. His personal profits in 1900 amounted to nearly 25,000,000 dollars. He was making one-quarter of all tho Bessemer steel in the United States. He was producing three million ( tons of pig iron a year. He was mining twenty-eight *per cent, of the ore in America, and producing half of the structural steel and armour-plate. His freight bill was ten millions—his payroll was fifteen. He was making openhearth steel for sixty per cent, less than his competitors, and rails for four, dollars a ton less than they cost in Chicago. He was selling his steel in England for ten shillings per ton less than English prices. No other plant in Europe or America was so well equipped or well managed as his." But with all his store of wealth and still more invaluable resources of genius, ; Mr Carnegie might have been, "best- | ed" if his tactics by 6heer bluff and audacity had not struck terror into the hearts of his adversaries. His bold attack upon the National Tube Company led other manufacturers to wonder what the great Vulcan of Pittsburg might do next. After tubes he might take to the manufacture of general hardware, and monopolise everything. Mr Carnegie, it need hardly be said, did nothing to alay the general alarm. "From every quarter," his adversaries "could hear the wild screeching of the bagpipes." From North and South, East and West came rumours of the alliances he was forming, of tlie new stroke he was meditating. He got on the nerves of his rivals. And the word went round that Mr Carnegie must be got rid of at any cost. "If we do not buy him out he will ruin both himself and all of us." So "all of us" argued with evtw-increasing strenuousness of conviction. HOW HE SOLD OUT. It was a great war of mighty magnates between one little hard-headed Scotchman who had nerves and o group" of millionaires who only had' nerves. And 1 against nerves nerve always will win. It won this time hands down. ' The war had not gone on many months before th© white flag was hoisted. Mr Schwab was sent.to Mr Carnegie on behalf of the 1 MorganGates combination, to ask the fateful question, "How muchP' Mr Carnegie was merciless in the hour of his triumph. The property which a couple of years before he had of_ered to sell for £31,000,000 he refused to part with under £89,000,000. Mr Casson says:— "The one towering fact which they kept before them was that; their company had cleared 1 forty millions during the last year. They were not selling so much steel, and brick, and machinery. They were selling a moneymaking mechanism, which had taken thirty-six years to construct. And so, in the letter which Schwab carried back to Morgan, were the following figures:— Dollars. 'Five per • cent, gold bonds .304,000,000 Preferred stock ... 98,277,120 Common stock, ... 90,279,040 "Taking the jpreferred stock at par, and' the common at fifty, this meant a cash price of 447,416,640d015. Add to, this the forty millions of profit for the year, and the total was 487,416,640 — nearly half a billion." Mr Carnegie had triumphed all along the line. And the secret of his triumph, apart from the phenomenal prosperity of that boom year, was that he knew and practised the arts which created the needed 1 atmosphere, and brought about the psychological moment when the enemy feels there is nothing for it but to capitulate "at any coat without even counting the cost."