CHAPTER XI
INVESTIGATIONS AND DISSOLUTION SUIT
On March 1, 1920, the Supreme Court of the United States handed down a decision acquitting the United States Steel Corporation from the charge of the Government that it was a combination in restraint of trade, bringing to an end litigation that had cost both the Corporation and the Government many millions in cash and had for nearly nine years thrown a threatening shadow on the steel industry and on American business as a whole.
The decision, moreover, wrote the final chapter to a record of investigations of and political attacks against the Corporation that had lasted almost since its organization.
An immensity from its conception, an undertaking so vast that its actions and policies, good or ill, reflected their results for the industrial weal or woe, not of a single community but of the whole American people; conceived and born, further, at a period when the thoughts of the nation were directed toward the menace that was believed to exist in trusts against the body politic and when politicians and economists were bending their energies toward a study of the question of big business, it was but natural that investigations of one kind or another, but all directed toward the one end of finding out whether the big company’s existence was a danger to the country or not, should have played an important part in the history of the United States Steel Corporation.
While United States Steel, its actions and its policies, have earned the commendation of thoughtful students—perhaps even the majority of the public, and many public speakers and writers have expressed this, probably no other organization has enjoyed or been subjected to so much—and generally such unconsidered—criticism as has the Steel Corporation. Even the Standard Oil and the American Tobacco companies, big and prominent as they were and as much as they have been attacked for their methods of eliminating competition, have failed to strike the public imagination as forcibly as the so-called Steel Trust. There were two main reasons for this. To the mind of the student of economics the activities of the Steel Corporation bore more importance to the public welfare because of the part that steel plays in making or unmaking the prosperity of the country, the importance of iron as one of the resources of the nation. The steel trade is the industrial barometer of the country and this is because steel enters into almost every line of activity. So far as the public was concerned the very size of the Corporation constituted its weakness. Its billion-dollar capitalization captivated the imagination, compelled attention. What men do not understand they are apt to fear, and how many can understand the import of such a vast sum? As the majority opinion of the U. S. Supreme Court says:—“The Corporation undoubtedly is of impressive size and it takes an effort of resolution not to be affected by it or to exaggerate its influence.”
And because it was so easy to inflame the public imagination with the very mention of the “Steel Trust,” the Corporation became a shining mark for the attacks of demagogues who recognized in it an excellent net for snaring votes.
This does not mean that all the attacks on the big Corporation have been the work of demagogues. Some have been originated by men entirely sincere in their conviction that so great an enterprise was inherently dangerous to the well being of the country at large. But it was generally overlooked that the power to do harm implies an equal power to work good, and the question resolves itself in the final analysis to an individual one. What were the powers of the Steel Corporation and how were they used? The investigations, ending in the suit for the dissolution of the “Steel Trust” and its absolution by the Supreme Court, have brought to the light of day all the actions of the big company, have submitted them to the glare of pitiless publicity, and the vast industry has been judged not alone in the courts but at the bar of public opinion. What have been these investigations, why were they instituted and in what have they resulted?
On June 18, 1898, an investigation into the question of trusts and their relation to labor and, in fact, their effect on the country generally, was decided on by resolution of Congress. A committee, known as the Industrial Commission, was appointed to make the investigation. This commission was composed of five members of the Senate, five members of the House of Representatives, and nine others, assisted by a large corps of experts in economics. The committee did not finish its work until the later part of 1901, its report being presented on December 5th of that year. So that the Corporation began its existence during the life of the commission and came in for a certain amount of study on its part. As the report, generally speaking, was an academic one and as it dealt very little with the Corporation, it may be passed over here.
The first investigation bearing directly upon the methods or practices of the Steel Corporation was begun during the administration of President Roosevelt. James R. Garfield, appointed Commissioner of Corporations in the Department of Commerce and Labor when the department was instituted early in 1903, was instructed by the President to investigate various large corporations and in the course of this work he directed his attention to the steel trade. About 1905 Mr. Garfield began an investigation of the Corporation and the work was carried on until some years after he had resigned his post and become a member of the Roosevelt cabinet.
The report of the Commissioner of Corporations on the steel industry was made by Herbert Knox Smith, who held the post under President Taft.