United States Steel: A Corporation with a Soul

by Arundel Cotter

The Other Side—Coke Falling into Car

Two Views of Modern By-Product Oven

Far from instilling the spirit of fear into the men, it is noticeable that stockholding employees regard themselves, and rightly, as owners in the vast enterprise of which they are a part, that they feel a genuine interest in its welfare and work wholeheartedly to further its interests. They take a pride in the Corporation that is very real and apparent and it is not strange that this should be so. If the Corporation designs to make its workers subservient it is ipso facto defeating another great end it is unquestionably striving for—efficiency. Because self-respect and servility are implacable enemies and cannot exist together.

The offering of stock to employees on attractive terms is merely another efficiency measure. Each employee who is a part owner in the business works for more than his wage. “His heart is in his work and the heart giveth grace to every task.” Moreover, the plan encourages thrift, and every employer knows that a thrifty worker is more reliable than his spendthrift brother, less prone to the inefficiency induced by financial worries. Finally, the having of a stake in industry and through it, in the country’s prosperity, makes a man a better citizen and increases his independence and self-respect.

If the subject of self-respect appears to be harped on to some extent, it is because it is of paramount importance, its influence affecting not only the worker and his employer, but the whole community. If the writer were asked to sum up in a few words what the Steel Corporation has done for industry, these words would be: It has exerted an enormous influence in helping the worker, the common laborer, to become a self-respecting citizen.

The tangible gain to the Corporation has been enormous. The intangible gain, although it cannot be measured, has almost certainly been many times as great. The management of the big company realized that the workers’ rights to a decent life were fully as important as the rights of capital, and that more, both in mental satisfaction and in profit, was to be gained from a recognition of these rights than from their denial. Perhaps, too, it saw that sooner or later the day would dawn when the worker with his hands would demand fair treatment, and it had the foresight and the courage to hasten the dawn of that day.

In the matter of wages the Corporation’s course has been in entire harmony with its general policy toward the worker. Since its organization in 1901 it has many times, and always voluntarily, increased wage rates, and in doing so it has set a lead which other steel companies have found themselves forced to follow. Only once has it ever reduced wages and then but a small amount and only after the dividend on the common stock had been eliminated. The wages were soon restored and frequently thereafter advanced. Its principle has been that capital and labor both have important rights in the financial results of industry, but that labor is perhaps more directly concerned and should therefore be the last to suffer in times of stress.

Since 1901 the average wage rate of the steel worker has been increased approximately 237 per cent. and this increase has been due almost entirely to the Corporation’s stand on this question. Any one who doubts this has but to ask the competitors of the big company to be convinced. In 1911, when steel prices were at an unprofitable level and business was slack, the heads of more than one independent company expressed the opinion that a reduction in wages, what they called the liquidation of labor, was necessary, even imperative, but that they were restrained from attempting this liquidation while the Steel Corporation continued to pay its men the old rate. They said in effect: “The United States Steel Corporation boosted wages to the present high level. Let it take the lead in lowering them.” But the Corporation refused. Instead, with the first signs of an improvement in business, it gave wages another boost. Again in 1914, in the face of the worst period of depression in years, and with world industry demoralized as a result of the outbreak of the European war, and in spite of the fact that the Corporation had been compelled to forego the payment of the dividend on its junior stock and was not fully earning its preferred dividend, its management refused to let the worker suffer. So strong was the sentiment throughout the trade at this time in favor of the liquidation of labor that a wage cut was looked on as not only justified, but inevitable, and it is generally understood that even in the Corporation it was only the insistence of Judge Gary that prevented its occurrence.

At the present writing, world industry is going through a process of deflation from the high prices induced by the war. In some instances the effect is already visible on labor. Cotton mill workers in some parts of New England have themselves suggested a decrease in pay to keep the wheels of industry running. In the steel trade costs are admittedly high and wages constitute the chief factor in costs. But if one may conclude from Judge Gary’s public utterances in recent months the thought of reducing wages at present is far from the mind of the Corporation’s management. A liquidation of labor may occur later, but if it does, it is a reasonable assumption that, so far as the Steel Corporation is concerned, it will not take place until living costs have been at least sufficiently deflated to make the new real wage of the worker as distinct from his money wage, at least as high as it is to-day.