United States Steel: A Corporation with a Soul

by Arundel Cotter

The world does not know how to judge Perkins. There are many who believed that his withdrawal from active business and his self-submergence in social work was a cloak, and this belief was undoubtedly strengthened by the fact that Perkins, in appearance, was a typical, cold-blooded financier. His was neither the look nor the manner of an idealist, a reformer. But the record of his life from 1911, when he resigned from a partnership in the great House of Morgan, is ample answer to all doubts of his sincerity. Perkins’ friends and admirers can point with confidence to this record in the impartial court of history.

Perkins was born at Chicago in January, 1862. He began his business career in the humblest capacity, that of office boy, in the branch of the New York Life Insurance Co. in his home town. Later he became bookkeeper, then solicitor, manager of agencies and, still later, vice-president. Finally, when only thirty-eight, he was elected chairman of the Finance Committee of the company.

Perkins was one of the first exponents of corporate publicity. He saw its virtues when publicity to most corporation men was anathema. When vice-president of New York Life he urged that the best way to earn the confidence of the public was to give it your own, and he prevailed upon the trustees of the New York Life to publish annually a full list of the securities in which the policyholders’ money was invested. This innovation was heralded with a storm of ridicule by the managements of competing concerns. But so powerful a means of getting new business did these security lists prove, so great was the increase of insurance written by the agents armed with them, that other insurance companies were soon forced to follow, and the practice became general in the insurance world.

Perkins’ next step was to extend the business of his company to European fields previously closed to all American insurance concerns, which, in fact, were not permitted to operate in many European countries because of the unenviable reputation they bore. Perkins was determined that New York Life should lift these legislative handicaps and do business anywhere and everywhere it wanted to and so he made one trip after the other to Europe, each time extending his company’s field of operations. What he said in effect to the various European governments was: “The New York Life is ready to meet any reasonable demand for the safeguarding of the interests of its policyholders,” and he backed up his assertion. The result was not only to give the company a bigger field abroad but to strengthen the arguments of its agents at home.

This achievement and the fact that he was instrumental in bringing to America the first Russian loan ever placed here, brought Perkins to the notice of New York financiers. Early in 1901 he called on the elder Morgan seeking a subscription to the Palisades Park project, one of Perkins’ pet hobbies until the day of his death and a project that has enabled thousands of poor children from the New York slums to get a chance for fresh air and outdoor enjoyment. Morgan, on his second meeting with the insurance man, pointed in his usual abrupt manner to a desk near his own:

“How would you like to occupy that?” he asked.

At first Perkins refused, but later accepted, and he became a partner in Morgan’s in 1901, continuing with the great banking house until 1911.

Soon after the Steel Corporation was organized Perkins was elected a member of the Board of Directors, and later, on the resignation of Robert Bacon, became chairman of the Finance Committee. His experience with the New York Life had peculiarly fitted him for the position he now held, for Perkins was first and last an organizer—a worker with men, not with money. Although a member of the largest private banking house of the country he was not a banker. “In the ten years I was with Morgan’s I never went behind the counter or examined into the bookkeeping end of the business,” he declared; “my job was to assist in the physical organization of the great industrial combines which Mr. Morgan was then engaged in financing.”

Like Gary, head of the Steel Corporation, Perkins looked rather to the ultimate results of an action or a policy than to its immediate effects. Like Gary, moreover, he was a believer in corporation publicity and in the square deal to the worker, so it was natural that he should have favored these ideas in the Corporation. Perkins at the beginning, it is true, did not fully endorse all Gary’s policies but he early became an ardent supporter of them, and his assistance in the turbulent early years was a great help to the Judge in his efforts to have his policies endorsed by the Corporation’s board.

Perkins was particularly identified with the Corporation’s bond conversion plan, explained in an earlier chapter. It was largely his idea. When the subject of raising more working capital came up after the organization of the big company it was he who suggested the scheme by which the cost of securing the new capital needed would be paid back in a few years by savings in interest charges, one which would also eventually reduce the Corporation’s fixed charges materially. He believed that the Corporation should build for the future and that it was a matter of small moment if the immediate cost of a course of action was high if the ultimate results were toward economy. And when the plan was opposed in the courts by some of the stockholders it was an affidavit presented by Perkins that did more than anything else to induce a favorable decision and to make it possible to proceed with the conversion.