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Unformatted text preview: agnetism that began, a generation ago, to attract thousands of
small and sometimes inefﬁciently managed companies into large and competition-crushing combinations, had become operative in the steel world through the
devices of that jovial business pirate, John W. Gates. Gates already had formed
the American Steel and Wire Company out of a chain of small concerns, and together with Morgan had created the Federal Steel Company.
The National Tube and American Bridge companies were two more Morgan concerns, and the Moore Brothers had forsaken the match and cookie business to
form the `American’ group- Tin Plate, Steel Hoop, Sheet Steel-and the National
“But by the side of Andrew Carnegie’s gigantic vertical trust, a trust owned and
operated by ﬁfty-three partners, those other combinations were picayune. They
might combine to their heart’s content but the whole lot of them couldn’t make a
dent in the Carnegie organization, and Morgan knew it. 52 NAPOLEON HILL THINK AND GROW RICH “The eccentric old Scot knew it, too. From the magniﬁcent heights of Skibo Castle
he had viewed, ﬁrst with amusement and then with resentment, the attempts of
Morgan’s smaller companies to cut into his business. When the attempts became
too bold, Carnegie’s temper was translated into anger and retaliation. He decided
to duplicate every mill owned by his rivals. Hitherto, he hadn’t been interested in
wire, pipe, hoops, or sheet. Instead, he was content to sell such companies the raw
steel and let them work it into whatever shape they wanted. Now, with Schwab as
his chief and able lieutenant, he planned to drive his enemies to the wall.
“So it was that in the speech of Charles M. Schwab, Morgan saw the answer to his
problem of combination. A trust without Carnegie-giant of them all-would be no
trust at all, a plum pudding, as one writer said, without the plums.
“Schwab’s speech on the night of December 12, 1900, undoubtedly carried the inference, though not the pledge, that the vast Carnegie enterprise could be brought
under the Morgan tent.
He talked of the world future for steel, of reorganization for efﬁciency, of specialization, of the scrapping of unsuccessful mills and concentration of effort on the
ﬂourishing properties, of economies in the ore trafﬁc, of economies in overhead
and administrative departments, of capturing foreign markets.
“More than that, he told the buccaneers among them wherein lay the errors of
their customary piracy. Their purposes, he inferred, bad been to create monopolies, raise prices, and pay themselves fat dividends out of privilege. Schwab condemned the system in his heartiest manner. The shortsightedness of such a policy, he told his hearers, lay in the fact that it restricted the market in an era when
everything cried for expansion. By cheapening the cost of steel, he argued, an
ever-expanding market would be created; more uses for steel would be devised,
and a goodly portion of the world trade could be captured. Actually, though he did
not know it, Schwab was an apostle of modern mass production.
“So the dinner at th...
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This note was uploaded on 11/13/2012 for the course ACCOUNTING 225 taught by Professor Austin during the Spring '12 term at American.
- Spring '12