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'As to the justice of the Company's demands' (writes Mr Bridge, p. 207), there is no question. The price of all the products of the Homestead mills had fallen, during the term of the last agreement, from 16 to 39 per cent., and billets had dropped from $27 a ton to $22. Under the old agreement, there was no decline in wages after billets had fallen below $25 a ton, no matter how low prices went; and the Steel Company not unreasonably claimed that, as they were willing to pay proportionate wages when prices rose, the men ought to accept reductions to a reasonable point when prices declined.'
As soon as the mills were closed, the strikers took the aggressive to prevent other men being brought in to fill their places. There was war, and all the accompaniments of war-barbed-wire defences, fighting at the works, fighting on the Monangahela river, and fighting in the streets-from July 1 to July 12. But the Company had strong support. Eight thousand troops-an troops-an entire division of the National Guard of the State of Pennsylvania-went to the aid of the sheriff of Alleghany county on July 12. This turned the scale. The open reign of terror at Homestead came to an end; and the Carnegie officials were put in possession of their property.
By this success the policy which Mr Carnegie had urged in his communication from New York-the nonunionising of the mills-was secured. By this success also, which, by the way, largely conduced to the defeat of the Republican party at the Congressional and Presidential elections in November 1892, the Carnegie Company, as it was constituted and managed in the months of April-June 1892, made its most outstanding contribution to the general economy of the iron and steel industry and to the industrial civilisation of the United States. In particular, the triumph of the Carnegie Company-the honours of which must be divided between Mr Frick, who stayed on the spot and was wounded, and Mr Carnegie, who issued his commands from various pleasant places in the British Isles-made it possible for the Steel Corporation to adopt that attitude towards all union labour which it has consistently maintained since 1901.
After the defeat of 1892, it is true, unionism lingered on in the sheet and tinplate mills, which are included in the secondary stage of the industry. But in June 1909,
when a contract between the Amalgamated Association and a subsidiary company of the United States Steel Corporation engaged in tinplate manufacture expired, the Steel Corporation refused to have any further dealings with the union.
'The men in the union' (writes Mr Fitch, op. cit. p. 135) ' promptly went out on strike, and succeeded in tying up a number of sheet and tinplate plants, though the larger number were operated with non-union men. The men held together remarkably well; but in August 1910, after nearly fourteen months, the strike was declared off by the Amalgamated Association. This action marked the absolute elimination of unionism from the mills of the United States Steel Corporation.'
The Corporation now employs a little over half of the men who are at work in the iron and steel industry in the United States. But it recognises no unions; and as, since 1901, it has with the aid of the tariff and of its cordial relations with British, German and Belgian iron and steel companies, determined for itself what shall be a reasonable profit on its undertakings, and has, for almost as long, persuaded the larger independent iron and steel companies to accept a similar view,* it holds tenaciously to the conviction that it can equally determine what is a reasonable wage and what are reasonable working conditions for its workpeople, without any intervention on the part of trade unions. This policy has succeeded. There are no unions at the works of the Steel Corporation; and attempts to organise them have been made impossible through a system of espionage.
'Unionism' (says Mr Fitch, pp. 17, 18) is not entirely dead in the mill towns; at least the spirit of it is to be found among the men, though the form is absent. Some of them expect to see again an organisation in the mills. Others have given up hope of gaining shorter hours or higher wages through collective bargaining, and are looking for government interference and a legal eight hours day. A good many men in the mills are Socialists at heart; and, though they still vote the Republican ticket, they would vote with the Socialists if that party were to manifest strength enough to give it a chance
* Cf. Stanley Committee, Bulletin No. III, 94, 95, and V, 264–6,
of carrying an election. A considerable number have gone the whole way and are active working Socialists.'
Mr Fitch, in examining the influence of this system at the Homestead mills, says further (ib. 214–17):
'I doubt whether you could find a more suspicious body of men than the employees of the United States Steel Corporation. They are suspicious of one another, of their neighbours, and of their friends. . . . The steel workers do not dare openly to express their convictions. They do not dare assemble and talk over affairs pertaining to their welfare as mill men. They feel that they are living always in the presence of a hostile critic. They are a generous, open-hearted set of men upon the whole. The skilled men are intelligent, and are able and glad to talk upon a variety of subjects. But let the conversation be shifted to the steel works, and they immediately become reticent. . . . Everywhere, even among the comparatively unintelligent, there is the same suspicion.'
II. Only one small group of figures is necessary to set forth the enormous growth of the iron and steel industry from 1890 to 1900. In 1890, as has already been stated, iron ore used in the American furnaces totalled 16,000,000 tons, from which there were produced some 9,000,000 tons of pig-iron, and, with the addition of scrap, a little over 4,250,000 tons of steel. In the year that preceded the organisation of the Steel Corporation 27,500,000 tons of ore were used, of which over 19,000,000 tons were drawn from the mines of the Lake Superior country. The production of pig-iron in 1900 was a little over 13,750,000 tons; and that of steel nearly 10,200,000 tons, or more than double the amount produced in the year 1890, in which the British Iron and Steel Institute made its first tour of the mines, furnaces and mills of the United States.
III. It was in 1897 that rails and billets were first exported oversea from the United States in amounts sufficiently large to attract notice. There were no rail mills in Canada until 1904, when a mill at Sydney, Cape Breton, and another at Sault Ste Marie, Ontario, began simultaneously, under the impetus of liberal bounties from the Dominion Government, to meet the larger part of the demand for steel rails in Canada. Before 1904 rails had been on the free list; and for many years all Canadian railways were
laid with rails from England and Scotland. After 1896, however, comparatively few of the rails imported into Canada came from British mills, for about this time orders from Canadian railway companies began to go to the United States; and the mills at Pittsburgh and Chicago had done a considerable business with Canada before large shipments of rails from American mills to England and British colonies other than the Dominion of Canada began, in 1897-8.
About this time there was trouble in the old Rail Association which distributed business among the different rail-making companies and kept up prices to the railway companies. 'Gentlemen's agreements' were temporarily out of fashion. Every rail-mill company was fighting for its own hand; and Bessemer rails, made at as low a cost as $12.50, were selling as low as $16 a ton.* In 1908 Mr Carnegie stated that he sold rails at this price about this time, and made a profit.† Under these circumstances it would not be safe to say that these oversea shipments of rails in 1897-8 were 'dumped.' It is a matter of fact, however, that most oversea shipments since 1901, when $28 became, as it is now, the fixed price for Bessemer rails, have been dumped, if dumping is to be understood to mean selling abroad at much lower prices than are charged to American buyers. That rails are thus dumped was admitted before the Ways and Means Committee of the House of Representatives at the revision of the tariff in the winter of 1908-9, and again by a representative of the Steel Corporation who was a witness before the Stanley Committee. Dumping was justified and defended on both these occasions. Ninety per cent. of the export business in iron and steel is done by the Steel Corporation; and, when Mr Elbert H. Gary, Chairman of the Finance Committee of the Corporation, was examined by the Stanley Committee, he frankly admitted that rails were sold at lower prices abroad than the prices charged in the United States.
'There is' (Mr Gary said) 'a practice all over the world of dumping (as it is called) surplus products. If we could sell our rails abroad at $26 a ton, or at about cost, all the time, so that we could keep our mills running full all the time, we
* Stanley Committee, Bulletin III, 98.
† Ib. VI, 340.
would accomplish several things. In the first place, we would reduce the average or general cost of production; in the second place, we would keep our organisations intact, our men in continuous employment; and in the third place, we would bring to this country from foreign countries large sums of money. Some years, and in fact many years, we do sell for export at prices somewhat less than the domestic prices. But the total result is that we can afford to sell for domestic consumption at a lower price. All countries do exactly the same thing. The net result is not prejudicial to the domestic purchaser, but is a benefit to him.' *
IV. There were two revisions of the United States tariff in the decade that preceded the organisation of the Steel Corporation. The first, in 1894, was made by the Democrats; the second, in 1897, was made by the friends of the tariff,' the Republicans. Partly owing to the Homestead strike (1892) and the general attention riveted upon Homestead all through that summer, and partly to resentment against the high duties of the McKinley tariff of 1890, the Republicans were defeated at the Presidential and Congressional elections in November 1892. The Democrats were elected on a platform of tariff for revenue only; and, as President Cleveland had long advocated this policy and was the most popularly trusted President since Lincoln, it was generally hoped that this policy would be embodied in the revision of 1894. But the 'Big Business Interests,' which have no politics but the politics of business, and to whom there is nothing on earth larger than a dollar-except it be ten dollars-have for nearly half a century subscribed to the campaign funds of both the Republican and the Democratic parties; † and, since about 1880, there have always been big business interests' Democrats, as well as big business interests' Republicans. In 1894 the big business interests' Democrats managed to get control of the Senate, with the result that Mr Cleveland and the Democratic majority in the House of Representatives failed to carry their tariff policy. Mr Cleveland was so annoyed
* Stanley Committee, Bulletin III, 93, 94. Mr. Stanley, chairman, having remarked that the price charged to Mexicans and Australians was $4 lower than the price charged in the U.S., Mr Gary made an evasive reply (ib. 100).
† Cf. Bridge, op. cit. p. 114.