The steel industry was a giant without lineage, parentage or category.
Nobody knew how big it should be nor could tell by looking at it
what stage it was in. Not until afterward. It was measurable only by
contrast with itself. It was supposed to be already grown up when John
brought the American Steel Company back from Wall Street. But it was
still in the gristle. Bone and sinew had yet to be acquired.
“What, my God! if we had sold out then,” Slaymaker would say again and
again, with the aghast and devout air of a man whose faith in the deity
dates from some miraculous escape. “We should probably never have got
in again,” he would add.
If they had got out then they would have been able to count their
wealth in millions. But they had to go on. And when at last they did
get out in the golden harvest time years later they counted it in
scores and hundreds of millions.
Thane’s new method, which proved itself in practice, gave the American
Steel Company a whip hand in steel rails. It could make them at a lower
cost than anyone else in the world, owing to the saving in fuel. Nobody
ever knew what that cost was. No matter at what price the Carmichael
people sold rails John could sell them a little lower if he needed the
business, and he became for that reason a burning thorn in the flesh
of Bullguard, who had capitalized the Carmichael properties and brought
the shares out in Wall Street. They had a wretched career. Everyone
who touched them lost money. This was not only because of the American
Steel Company’s competition; the steel industry as a whole was running
wild. There was no controlling it. For a year or two the demand for
steel would exceed the utmost supply at prices which made a steel
mill more profitable than a gold pocket. Then new mills would appear
everywhere at once and presently, although there never could be enough
steel really, the bowl would slop over from sheer awkwardness.
There were still the three great groups,--the Western group, the
Carmichael group and John’s--all growing very fast. Minor groups were
continually springing up at precisely the wrong time. They generally
smashed up or had to be bought out by the others to save themselves
from ruinous competition. The steel age cared nothing about profits.
All it wanted was steel--more and more and more.
Next was the phase of specialization. One mill made rails exclusively,
another merchant steel, another structural shapes for bridges and
skyscrapers, another sheet steel, another steel pipe, and so on. That
only intensified the competition.
Then trusts began to be formed, precisely as John had formed the nail
trust years before, and for the same purpose, which was to regulate the
output and keep prices at a profitable level. Somebody would go around
and get options on nearly all the mills of this kind, of that kind and
then get bankers to make them into a trust with shares to be listed on
the Stock Exchange and sold to the public. So there came to be a steel
pipe trust, a sheet steel trust, a bridge and structural steel trust,
a tin plate trust, a trust for everything; and matters became a great
deal worse because some of the biggest mills, such as John’s, were
never in a trust and if the pipe trust or the structural steel trust
got prices too high the independent mills would begin to make pipe or
structural steel. Besides, each trust was a law unto itself and the
steel industry was still anarchic.
Now finance began to be worried. The shares of these trusts having
been floated in Wall Street and the public at last having begun to
buy them, an outbreak of disastrous competition among the trusts, or
between the trusts and the independents, or an overrunning of the steel
spool, caused a panic on the Stock Exchange. Enormous sums of capital
had become involved. Every such panic caused a general commotion, like
a small earthquake. Something would have to be done to stabilize the
steel industry. That was the word; everybody began to say, _Stabilize
it_! Gradually there crystallized the thought of a great trust of
trusts to embrace everything. Not otherwise could the steel industry
be stabilized. Any such colossal scheme as that would have to consider
first of all the three dominant groups. But when overtures were made
to John directly or through his partners, he repulsed them. To Wall
Street’s emissaries he would say flatly, “No.” To his partners he
would say, “Not yet.”
His word was final. Having retrieved his fortune in the first year
after his inglorious shipwreck, by the most daring and brilliant
selling campaign the steel industry had ever seen,--a campaign
that put American rails over European rails in all the markets of
the world,--his authority not only was restored: it was increased.
Then, having paid off his notes with Slaymaker and Pick, he had got
possession of Creed’s shares. That made his interest in the American
Steel Company greater than that of any three others. There was still
the North American Manufacturing Company, in which he was the largest
stockholder; it controlled the manufacture of steel wire and nails, and
had never ceased to pay dividends.
He enforced one policy of business. That was to make steel continuously
under all conditions and never to close a plant except for repairs.
Back of him was Thane steadily reducing the costs of manufacture.
Sometimes they sold steel at a loss. In the long run, however, this
policy paid so handsomely that they were presently able to find
in their own profits the capital they needed for expansion. On an
ever-increasing scale they devoted profits to the construction and
purchase of new properties,--more mines, more ships, more mills. When
his partners complained, saying it was time to take something out
instead of putting all their gains back again, John offered to buy them
out.
So he grew wise and tyrannical and a little grey at the temples. His
voice became husky. He lived hard, worked hard, walked steadily on the
edge of the precipice, with nothing he cared for in view. On his watch
chain he carried the key to Thane’s house. Twice he got as far as the
gate and turned back.