Steel Combine Would Aid Peace

Chairman of U. S. Steel Corporation Says Public Opinion is Mistaken, Regarding World Understanding as a Menace.

JUDGE ELBERT H. GARY December 1 1924

Steel Combine Would Aid Peace

Chairman of U. S. Steel Corporation Says Public Opinion is Mistaken, Regarding World Understanding as a Menace.

JUDGE ELBERT H. GARY December 1 1924

Steel Combine Would Aid Peace

Chairman of U. S. Steel Corporation Says Public Opinion is Mistaken, Regarding World Understanding as a Menace.



HARMONY among the world’s greater steel manufacturers would do much toward establishing permanent peace among the nations, in the opinion of Judge Elbert H. Gary, chairman of the United States Steel Corporation, and president of the American Iron and Steel Institute. Indeed, he even intimates that had the steel manufacturers of the various countries got together and settled their differences, as it was proposed by some of their number in 1911, there might never have been a world war.

These statements are made in an interview given by Judge Gary to Rose C. Feld and printed in the Times (New York). The thing that prevented the steel industries from settling their differences at a world conference of their chiefs seems to have been mistaken public opinion, which in many countries looks upon such gatherings as an attempt at producing a great combine, and it is remnants of this prejudice that are still forestalling proposals for conferences that would bring about better relationships.

Judge Gary in the course of the interview gives an interesting sidelight on the failure of the proposed conference before the war, which is told by the Times representative as follows:

“Why were subsequent meetings never called?” the writer asked Judge Gary, “and how could the steel industry working in international harmony have assisted in bringing about universal peace?” “Subsequent meetings were not called for a very good reason,” he answered. “Following the Brussels meeting a bill was filed in the federal courts of the United States to dissolve the Steel Corporation in America. There was too much to do to answer that charge to think of any outside organization. We weren’t sure we’d be permitted to exist. What right had we, then, to try to weld foreign elements together when it was questioned whether we had any right to act as the head of a domestic corporation? No, you can’t construct outside of your province before you are certain that your own foundations are sound. It wasn’t until 1920 that the supreme court made a decision in our favor. In the meantime the great war had started, enmities were born and the time for calling such a meeting has not since been propitious.

“Now for your second question. You ask how the steel industrialists of the world, working harmoniously, might have assisted in bringing about universal peace? I’ll go further. I’ll say we might have prevented the world war. That’s a big statement. There is an erroneous conception in the minds of many men that capital fostered this war, battened on it. In answer to that let me say that the men gathered in the conference at Brussels were not inspired with thoughts of war. I believed then that war was a thing of the past, that I should never see another. I had no hesitancy in saying that. And I have no hesitancy in saying to-day that if the leaders of the steel industry had been permitted to come together year after year, had grown to know each other in friendly business relationship, they could have done much to bring men to reason. Munitions are made out of steel and they could have refused to manufacture them. It need never have come to that. They could have convinced the political leaders of the country that harmony could be maintained through friendly intercourse. Even in October, 1914, if the question had been left to the steel people, there would have been no further continuance of the war.

“Capital, in spite of another erroneous belief of the man on the street, is vastly more prosperous during times of peace than during times of war. There may be a vicious minority whose business is ephemeral; they indeed might thrive on war and war profits, but to those men whose interests are built on industry that is sound and constructive and lasting, war is a terrible calamity, from an industrial as well as a human point of

view. There is no better proof of this than the conditions prevailing in Europe after the coming of pèace and reaching into the present. It will take decades of effort to build up what a few years have destroyed. Continental steel men are no less aware of this than I. They know that in peace and harmony and cooperation there is strength. The international conference planted the seed that might have grown into this fruit, but unfortunate circumstances killed it. All this justifies the statement that the socalled combine reported in the newspapers to-day may possibly be the beginning of an effort to revive it, though I have no information whatever on the subject except what I have read in the newspapers.”

There was a pause in which Judge Gary’s mind seemed to be playing with memories. It gave the writer a chance to ask a question.

“If you believe in co-operation and harmony, why is it you refused to see Hugo Stinnes when he asked for an interview in Rome in 1923?”

“I never refused to see Hugo Stinnes. That is the truth. I saw Hugo Stinnes in Rome on March 25. We had an interesting talk. Although I do not wish to be quoted on what happened there, you can get the facts from an authoritative source.”

The source was found, and here are the facts as far as is known:

While Judge Gary was in Europe a cablegram came to his New York office, with words which ran something like this:

“Hugo Stinnes understands you are to be in Europe very soon. He would like to have an interview with you. Will you see him in Rome or London? If so, when?”

The message was forwarded to the Judge and his reply is stated to have been:

“Will see Herr Stinnes in Rome on March 25.”

On that day the meeting was held. Stinnes, remembering the great interest the Judge had shown in international industrial harmony, asked his help on a serious German industrial problem. France, he said, had taken the iron ore fields away from Germany. Germany had plenty of coal but had no ore with which to make steel. France on the other hand had all the ore but suffered from dearth of coal and therefore she could not make steel. It would be much to the benefit of both countries, he asserted, if an arrangement could be made whereby France could get the coal of which Germany had an abundance and Germany could get the ore of which France had a superfluity.

His belief was that Judge Gary could i help bring order out of this unhappy situation both by his personal influence as an industrial leader of a neutral interest and by once again calling a meeting of international steel men. This would entail injury to none and might accomplish the great task of peace at which others had failed.

Judge Gary frankly told Herr Stinnes that he wTas not unaware of the great influence for good the calling of such a conference v ould be, but felt that he v as po ■ erless to act until he could ascertain that all manufacturers of steel in all countries were " filing to overlook what had happened ia the past few years and were ready to com? together to work in harmony in the future. Several requests for the calling of such a conference had indeed b?en submitted to him, but they v ere not yet of su fident strength ' o warrant any mcvemen in that direction. Nevertheless he promised Herr Stinnes to see what could be done about his own individual problem. Proper inquiries were made and it ,ras unfortunately discovered that enmities were still too great for any constructive action. That, in brief, is the story of the Stinnes interview.

Judge Gary was asked whether since that time any effort had been made to interest him in once again calling an international meeting.

“Yes.” he answered. “Up to a recent

date I have been approached a number of times by various delegations who have asked me to take the initial step in bringing about an international gathering of steel men. I have had to refuse consistently. Unless all men come and all enmities are broken down there would be little purpose in such a conference. I should like to see an international group succeed in doing what our American Iron and Steel Institute is doing in the United States, breaking down all barriers of hate and creating a forum for open, friendly and scientific discussion. In no way would it or could it properly be an organization for the restraint of trade.”

Being ignorant on the subject of trade restraints, the writer asked the Judge how any international combine could possibly restrain the trade of American producers.

“We’ll take a hypothetical case,” he said. “During a certain period, let us say, the producing capacity of all steel makers might be double the demand. That would mean that we should have a surplus of production. In a fair and open market this would lead to close competition and, perhaps an unreasonable decrease of prices. A combine, how-

ever, organized to control the market, would see to it that there was no surplus and consequently no decrease in profits and prices. The representatives at such a conference would agree to divide the business of the world and charge prices that would compensate them for running at half capacity. In a word, they would double the price to the consumer in order to get the same profits which running at capacity would give them. Each member of the group would get a fair proportion of the entire business and would manufacture only the amount allotted to him. This is what is meant by restraint of trade, the fixing of prices, the division of territory. Such an organization we could never enter. You can see it would be unfair to purchasers. I cannot be too definite about that.

“I am reasonably certain, however, that this is not what is being contemplated. It may be that steel men on the other side have been getting together to sound opinions and attitudes before they suggest again the calling of a new conference, based on the international meeting of 1911 at Brussels. If it has gone further than that I have no knowledge or information concerning it.”