Like Gary, Schwab was satisfied that the next step in steel making, one that must come sooner or later, was the integration of the different departments of steel making into one big, harmonious whole. How he assisted in making this possible we have already seen. In 1901, on the organization of the United States Steel Corporation, Schwab became its president, with a salary of $100,000 a year and about $15,000,000 of its stock.
After the Corporation had taken over Carnegie Steel, Morgan, the story goes, found a contract among its papers pledging Schwab a salary of $1,000,000 a year. He had not been aware of the existence of this contract and asked Schwab what could be arranged on the matter. Schwab replied: “Let me have that paper a second, Mr. Morgan,” and taking it from the banker, he tore it into small pieces and threw them into the wastebasket.
But Schwab did not long remain president of the great steel merger. Long accustomed to being “boss” he found the new conditions disagreeable. Bred in the old steel school he was out of sympathy with the policies of the Corporation as inaugurated by Gary. There was no open breach between them, but the situation was obviously galling to the younger man and so he resigned, his resignation probably being hastened by the fact that he had been for some time in poor health, a victim of neuritis.
It was in 1903 that Schwab severed his connection with the Steel Corporation and sailed for Europe intending, at the time, to give up business permanently. But this was not to be.
Although he returned from Europe in 1904 Schwab did not actively engage in business again until 1907. He was, in a sense, pitchforked back into the manufacturing arena by the failure of the United States Shipbuilding Co. a year or two before and its reorganization as the Bethlehem Steel Corporation. Schwab, who had been the principal bondholder of the shipbuilding company, became the controlling interest in the reorganization and eventually assumed personal charge of its activities to protect his own investment as well as that of others.
Once in harness again Schwab threw himself heart and soul into the steel battle. He found Bethlehem Steel in a rundown condition and for years he poured into it his personal fortune and all the money he could borrow. Although himself the largest stockholder he steadfastly refused to consider dividends until the company was firmly established financially and the result was that, before the European war broke out, Bethlehem was solidly on its feet and showing large earnings. These were enormously enhanced during the war years, when the stock sold as high as $700 a share. To-day Bethlehem is the second biggest steel company in the world, its plants having a capacity of 3,250,000 tons of steel annually.
Although for many years a competitor of the Corporation of which he was once president Schwab is still a firm believer in the future of United States Steel and the value of its securities. On one occasion he told the writer:
“It is a wonderful concern. There isn’t anything like it in the world, nor could its plants and organization be duplicated at any cost. The future will show how well, how securely, its foundations were laid.”
George W. Perkins
George Walbridge Perkins, chairman of the Finance Committee of the United States Steel Corporation from November, 1901, to February, 1907, and an active member of that committee and of the Corporation’s directorate till the day of his death, June 18, 1920, was an unusual figure in American business—a man who, working his way from the bottom of the ladder to an eminent position while still comparatively young, gave up active money making while still under fifty and devoted his life to the betterment of social conditions.