Bonds to a total of $17,392,752.14 were redeemed and $6,945,237.50 issued making the outstanding bonded debt of the Corporation and its subsidiary companies on December 31, 1910, $597,136,659.08. Some $16,000,000 was expended in further work at Gary bringing the total outlay on the plant, city, and terminals there to $69,978,695.15, of which $60,203,189.22 was financed from the funds of the parent corporation and the balance by various subsidiary companies, including the Bridge and Wire companies, which began the construction of their new plants during the year.
Several important purchases of coal properties in the states of Illinois and Indiana were made in the years 1909–1910. These gave the Corporation 742 acres of land and 55,624 acres of coal rights. The most important new development recorded at this period, however, was the beginning of work on the construction of another steel plant and city near Duluth, Minn. The site for this plant had been purchased as early as 1907, but the events of the year and the dullness that followed made it seem wise to postpone the project. The more favorable conditions at the beginning of 1910 warranted its being proceeded with, and so the matter was put in hand, and at the end of the year $1,715,517.70 had been spent on the new plant.
In accordance with its policy of permitting its workers to share in the better earnings resulting from improved business conditions the Corporation, in 1910, announced another advance in wages, affecting the greater number of its employees who, throughout the year, averaged 218,435. The increase averaged something over 6 per cent.
Several factors operated adversely against the Corporation, from a financial standpoint, in 1911. The decline in business noted in the late months of the preceding year continued through and well into 1912, tonnage fell off and prices dropped with it. In May, 1911, the Republic Iron & Steel Co. precipitated matters by announcing a drastic reduction in the price of bars, the most important steel product, and this led to general price cutting, affecting every steel maker. It is worthy of note, however, that the conditions that now prevailed had nothing of panic in them. The business world seemed merely to be hesitating, to be timorous about making new ventures, to question the future. Perhaps the real reason was the world situation ripening for the Great War, for it is noticeable that, although conditions over the end of 1912 and into 1913 were good, this hesitancy was still in evidence, something ominous seemed to hang over the world of business and finance. It is likely that some of the leaders of finance foresaw, even though dimly and uncertainly, the trouble that was brewing.
Earnings of the Steel Corporation in 1911 were $104,305,465.87, the four quarters making a comparatively even showing. After the payment of dividends only $4,665,494.78 was left for surplus. Dividend requirements, however, were considerably larger than they had been in previous years. The rate of disbursement on the common issue had been increased to 4 per cent. in 1909, and to 5 per cent. in 1910, at which rate it continued until the latter part of 1914.
Production in 1911 fell off to 12,753,370 tons of ingots and 9,476,248 tons of finished steel products, and the gross volume of business declined to $615,148,839.79. The number of employees also grew less, the average number employed in the period being 196,888.
Another increase in the bonded debt was reported, new securities totalling $33,416,000 being issued, and $9,498,359.46 being redeemed. The bonded debt of the big company on December 31, 1911, stood at $621,054,299.62.
Capital expenditures reported for the year included $7,939,813.46 at Gary, bringing the total for this project to $78,258,508.61; $17,707,280.79 expended for the acquisition of new coal properties in the Connellsville region of Pennsylvania; $5,069,983.65 spent on the Tennessee properties, and $1,437,518 spent on the new Duluth plant.
The two most important events of the year were the decision of the directors of the Corporation to cancel the Hill Ore lease and the inception of the Federal suit for the dissolution of the big company under the Sherman Anti-Trust Law. Both of these events took place on the same day, October 26th. As the Hill lease has been discussed at length in a previous chapter, and the facts connected with the dissolution suit have already been told, they will not now be gone into.
Toward the close of the year just reviewed there was a gradual increase in the volume of steel buying. The railroads, which had been consuming very little of the metal—and the roads are the largest customers of the steel companies—began to buy in something like normal proportion and continued to do so until the spring of 1913. Other consumption also showed more activity, and under the impetus of this buying prices for steel products gradually advanced. The Corporation’s earnings, however, did not immediately reflect this betterment, the first quarter of 1912 showing net profits from operations of only $17,826,973.28, but a steady advance was recorded until $35,191,921.82 was reported for the last three months of the period.