STEEL TRUST HEAD.

Taranaki Daily News, 13 December 1919, Page 10

STEEL TRUST HEAD.

STORY OF JUDGE GARY. MAN WHO NAMED HIS PRICE. | FROM LAW TO INDUSTRY. Elbert Henry Gary, the-man whom the labor unions hold responsible for the great steel strike in the United States, is the chairman of the board of directors of the United States Steel Corporation, and by virtue of his office controls the economic destiny of nearly 300,000 persons, the employees of the concern, says the Springfield Republican. In otiier words, he is the commanding general of the largest industrial army not only in America but in the world. He is one of the men whom our magazine writers a couple of decades ago called in naive admiration "captains of industry," or "Napoleons of finance"—the same men who later were termed by these same writers, this time with an excess of muckraking zeal, "representatives of predatory wealth.'' This change in the status of our leaders of big business was one of the first indications of the nation's sensing the coming struggle between capital and labor, and of its condemnation of some of the methods of these loaders. FIRST MAN TO RECEIVE 100,000 DOLLARS SALARY.

Elbert Henry Gary has many claims to fame. He was the first man to receive what was then considered the fabulous salary of 100,000 dollars ( £20,0001 a year. What a really trivial sum this is, of course, is apparent to nearly every one nowadays, when no self-re-specting would think of signing a contract for an annual stipend of anything less than three or four times this amount. At the time the 100,000 dollars was written opposite Gary's name on the pay-roll, he was a corporation lawyer in Chicago with fees amounting to 75,000 dollars annually. The Federal Steel Company was without a head, and J. P. Morgan, the financial backer of the company, was scouting around to fill the want. He offered the position to Gary, but Gary demurred. He thought that he was making more money as a lawyer than he could get as president of the steel company. But Morgan, keen man of business that he was, refused to accept the negative answer, and told the Chicago attorney to name his own price. The attorney did. FATHER OF LARGE SCALE PRODUCTION. j But Gary's greatest claim to fame is , based upon the fact that he is the father l of large scale production. Now, the idea that to produce things in large quantities, provided that you can encompass the means, is a cheaper and more economical process than to produce them in small quantities was an idea so old that it had taken on the character of simplicity. Gary by no means invented the idea, for it had been floating around in the theoretical world of economics for a lonjr time. AYhat he did was, probably, vastly more important. He lifted the idea, put it into practice, and proved to the world that it would work successfully.

Gary got his opportunity this wav: A steel manufacturer found himself in financial straits. He felt there was nothing to do but close the business. As things stood he saw that he would be penniless when his mill stopped operating. H e wanted to save something from the wreckage in order to safeguard his family against starvation. He took his problem to Gary. Lawyers, as a rule, find bankruptcy proceedings sweet pickings, but Gary was not a lawyer by rule.

Ho took the problem and studied it. He found that the manufacturer had liabilities amounting to about 100,000 dollars which must be met at once, and there was no monev forthcoming to meet them. To offset this there were assets totalling about 200,000 dollars. Gary further found that in the district iii which the steel man's plant was located there were two other mills making practically the same kind of product. These three concerns had been encaged in. ruinous competition, each trying to undersell the other, each maintaining a force of salesmen, each, spending laTge amounts annually for advertising purposes. So keen had become the business strife, that the members of the three firms were scarcely on speaking terms. MAGIC WAND OP COMBINATION. And now for a touch of the magic wand—which was Gary's. He saw—and to us to-day, it seems as if it took no great acumen to do so—that if the three competitors could be united the result would mean far greater profits for every one concerned. He patched up the differences between them, and brought about the union. This patch-ing-up work was the first of many simi--1-r jobs which he has since performed, thus winning the name of the great pacificator. A corporation was formed, each of the three original companies receiving stock therein in proportion .to the value of its property. Bonds were issued in the name of the new corporation, and with some of'tliese the amount seemed uncertain, the promoter, Mr. Gary, paid himself for his trouble. Under the new plan one of the mills made only steel ingots, the second rolled the ingots into sheets, and the third manufactured wire. A truly great saving was brought about. Advertising and selling expenses wore cut at least two-thirds, and there were many other economies in the process of manufacture.

Given the premises furnished concretely by the success of Gary's experiment with the steel mills, it 'did not require an industrial genius to hop to the next stone in the crossing of the business rapids. Ho saw that if a steel company could own the iron mines, own the railways carrying the ore to the mills, own the mills, and own the railways carrying the produce to market, that an immensely greater saving would be effected. Doubtless the thought must have occurred to him that if the company could also own the employees, ah! how simple would life be—for the' company. GARY'S CAREER.

Elbert rtenry Gary was born on his' father's farm, near Wheaton, 111 on Bth October, 1840. As a bov he did the countless chores that fell to;the lot of {he farmer's boys in the Illinois of that day, but little removed as it was from the frontier. His mother was a woman above the ordinary in intelligence and education, and 'through -Her influence the boy headed himself toward an education. When the. work of the farm was over he turned to his books, and when he reached the proper age entered Wheaton College, then a normal school. Upon graduating he took up the study of law, first in a lawyer's office in his home town. and later at

the University of Chicago, from which institution he received the degree of Bachelor of Laws. He wag admitted to the Illinois Bar in 1867, and to the Bar of the United States Supreme Court in 1882. He was President of the town of Wheaton for three terms, and later Mayor for two, being the first man to serve in that office. In 188-2 he was elected Judge of Du Page County and was re-elected in 1880. As a Judge he earned for himself a reputation for dignity and courtesy. At the conclusion of his second term on the Bench he repaired to Chicago and resumed the private practice of law. In Chicago he soon became known as the best Corporation lawyer in the city, and his opinions were sought by many business concerns- He took a leading part in the organisation of the Consolidated Steel and Wire Company in 1890. This concern included the manufacture of 75 per cent, of all the steel rod and . wire products of the United States. By tins time he had acquired for himself such a name as an organiser, that when J. P. Morgan was forming the Federal Steel Company with a capital stock of 200,000,000 dollars he called on Gary to take a prominent part. , When" the formation of the company was complete, Gary, as has been mentioned before, bei came president, removing to Ktw fork, where the headquarters of the company were located. When the United States Steel Corporation was organised in 1901 with the Federal Steel Company aa one of its subsidiaries, Gary was advanced to his present post. The City of Gary, in iake County, Illinois, is named after him. The eity was built by the Steel Corporation, and in it is located one of the largest steel manufactories in the world. The Corporation has striven to make the city a model of its kind. ORIGIN OF THi: GREAT STRIKE. The great steel strike at present in ; progress had its inception in Chairman Gary's refusal to treat with representa- : tives of the steel workers' unions. That refusal Samuel Gompera, president of i the American Federation of Labor, has characterised as "flippant and autocra- ■ tic." Said Mr. Gompers in testifying at the hearing on the Cummins Railroad Bill before the Senate Interstate Com- : merce Committee:—

"When employers say 'there is nothing to talk over, when they refuse to meet representatives of Labor, when they say those representatives represent nobody, how else is there to convince them but by strike? Look at the steel strike now. That was the uosition Mr. Gary took. A letter to him from me last July is still unanswered. A committee to see him was greeted with the word that he had nothing to discuss with them. He treated us in a flippant and autocratic fashion. The strike is now on much to my regret, because I wanted to see it delayed until after <the President's Industrial Conference. But if you knew conditions in districts the United States Steel Corporation controls you would understand. Murder, assault, arrm of men, prohibition of meetings on rented grounds, workers dispersed by thugs, gangsters, and detective crooks employed by the companies. GARY'S STAND OUTLINED.

Mr. Gary makes clear the position of the United States Steel Corporation in the matter in ,a letter sent to the president of the subsidiary companies. He bases his stand on the refusal of the corporation to recognise the principles of the "closed shop." He writes: — long since I respectfully declined to meet for the purpose of discussing matters pertaining to labor at our various plants a number of gentlemen representing certain labor unions. They claim this furnishes cause for complaint, and have stated that they intend, if possible, to prevent a continuance of operations at our mills and factories. The declination was made for two reasons; First, because I did not believe the gentlemen were authorised to speak for large numbers of our employees, whose interests and wishes are of prime importance. Secondly, because a conference with these'men would have been treated by them as a recognition of the closed shop method of employment. Wp do not combat labor unions as such We do not negotiate with labor unions, because it would indicate the closing of our shops against non-union lasior; aim large numbers of our workmen are not members of unions:, and do not care to be. "The principle of open shop is vital to the greatest industrial proOTess and prosperity. It is of equal benefit to employer and employee. It means that every man may engage in any line of employment that he selects, and under such terms as he and the employer may agree upon; that lie may arrange for tlie kind and character of work which ho believes will bring him the largest compensation and the most satisfactory conditions depending unon his own merit and disposition. The 'closed shdp' means that no man can obtain employment in that shop except through and on the terms and conditions imposed by the labor unions. He is compelled to join the union and to submit to the dictation of its leader before he can enter the place of business.