United States Steel: A Corporation with a Soul

by Arundel Cotter

For many years, ever since the period of consolidation in manufacturing and other industries began, big business had been viewed with suspicion and something of hatred by the mass of the people—and by no means without cause, in many instances. There was no question that the powers that controlled more than one great industry used their resources to crush competition and, too often, their money and influence for political ends. No argument is necessary to convince the unprejudiced mind that such acts were inimical to the good of the nation. It was perhaps natural that the stigma that attached to some as a result of this was used by demagogues and others, often sincerely enough, against big business in general as an aid to themselves politically. In short, “Smash the trusts” was for years the great vote-getting slogan, and unfortunately, is so still to some extent.

Small wonder then that the Steel Corporation, the largest and most powerful of all the so-called “trusts,” was a shining mark for these attacks. Small wonder that the man in the street, looking to his leaders for guidance in such matters, was easily persuaded that the giant company was necessarily a menace to the body politic.

Apparently this it was that Judge Gary foresaw when he insisted that the organization at whose helm he stood must so conduct itself in all its dealings with competitors and the public that it could at any time show clean hands; could prove that its power had been used not destructively but constructively for the good of all affected by its actions—and this means the entire population of the United States. He has said publicly either in a public address or when testifying that these policies were justified on two grounds either of which is sufficient, namely: first, because they are right, and secondly, because they will pay in the end.

He evidently saw that the very life of the Corporation depended upon this; and time has proved the accuracy of his judgment. It is safe to say that had the Corporation misused its power it would have been picked out many years before it was for legal attack, and the attack would have been successful. The Corporation would not have been in existence to-day.

To the lay mind, it is passing strange that the so-called “Gary dinners,” which provided the principal example of the Corporation’s attitude toward its competitors and the public, should have been made the subject for special attack by the Stanley Committee and the Government’s attorneys, and should have been criticized by the Lower Court. However, the Court’s criticism appears to have been based largely upon a technicality, as the judges in their opinion practically admitted that there was no intent shown on the part of Judge Gary or his associates to restrain trade by these functions. In fact, the criticism seems rather to have been based on certain meetings held in Pittsburgh as a result of these dinners, but at which meetings the head of the Corporation was not present.

Judge Woolley, who rendered a separate opinion, said of these dinners:

The first Gary dinner was given on November 20, 1907, to meet an unquestioned exigency arising out of the panic then existing.... The dinner was given in order to devise ways and means to prevent calamity to the [steel] industry. Ways and means were found which, no doubt, contributed greatly in preventing disaster not alone for the producers of steel but also to those intermediate consumers who were carrying large and costly supplies. The ways and means consisted then of nothing more than the urgent request of a strong man that in the stress of panic all should keep their heads, and avoid the consequence of reckless cutting of prices. In this the others acquiesced, and in the light of the emergency then existing and of the disaster averted, I am of opinion that the purpose and conduct of those who participated in the first Gary dinner were not unlawful, improper, or questionable.

In view of the notoriety that these functions had received and of the use that had been made of them against the Corporation, it may be worth while to devote a little time to them here.

The Gary dinners! Feasts that will rank in the business history of the United States as did the feasts of Lucullus in epicureanism or Cleopatra’s dinners to Antony in romance. Occasions where the heads of the steel companies of the United States gathered at the festive board with amity and good will, to consider and discuss a situation that threatened not themselves alone, but the country at large; where these Titans of industry, only a few years before mortal enemies, met as friends and openly and without fear discussed with one another the intimate details of their businesses.

It was right after the first great shock of the panic of 1907. The country was still trembling from the effects of the great financial disaster, and no man knew surely whether the worst had been passed, whether financial and industrial chaos had been staved off, or not. The storm clouds had not passed away, and the men engaged in the steel and iron business, truly called the barometer of trade, having on more than one previous occasion—many of them, at least—seen a similar situation lead to years of distress and of prolonged industrial depression and unemployment, in a word to what the trade knew as soup-house days, had especial reason to be fearful of what the immediate future held for them and the concerns with which they were associated.