ON OCTOBER 10, 1883, Mr. Bacon married Miss Martha Waldron Cowdin. She, like him, was of New England ancestry although she was then a resident of New York City, where he himself was soon to settle and to become a leading citizen. Her father, Elliot C. Cowdin, was born in Vermont in 1819. Mr. Cowdin's grandfather, Thomas Cowdin of Massachusetts, was a captain in the Army of the Revolution, and for many years thereafter a member of one branch or the other of the legislature of Massachusetts. Entering business in Boston, where he mastered the intricacies of silks and their manufacture, Mr. Elliot Cowdin established a firm of his own in New York with a branch in Paris, and lived alternately in one place or the other as circumstances dictated or suggested. In Paris he was the leading member of the American colony, and friend and confidant to a succession of American ministers, particularly to Elihu B. Washburne who said of him that he had never had "a more sincere, unselfish, and devoted friend, personal and political," and that as "friend and citizen, Mr. Cowdin was almost without a peer." Mr. Washburne, it will be recalled, was the only member of the diplomatic corps from any country who remained at his post during the siege of Paris and the still more trying days of the Commune. Mr. Washburne was living near the Bois de Boulogne where shells were falling thick and fast. When his house was bombarded he followed Mr. Cowdin's suggestion and moved to the latter's apartment. It, too, was shelled but without serious damage. At one time, after a brief absence, Mr. Cowdin and Mr. Washburne returned to find forty Prussian officers quartered in the apartment. Fortunately, they departed upon learning that it was temporarily the American Legation. At home he was a warm supporter of the Union , a prime mover in the formation of the Union Leagues, and vice-president of that of New York. His brother, Robert Cowdin, later a Brigadier-General of Volunteers, had led one of the first regiments to the defense of Washington, and the first regiment to volunteer "for three years or the war."(33) Of Elliot Cowdin's services to the cause, General Sherman said, "he was always kind to us who fought for our country in its day of peril . . . among all my acquaintances I can recall no more ardent, enthusiastic, and generous patriot than Mr. Cowdin, and I lament his death as a national loss. I hope his children will grow up to prolong his good name and fame."(34) Mr. William M. Evarts, at various times Attorney-General, Secretary of State, and Senator of the United States, declared Mr. Cowdin to be one of the few who seemed "both to understand and to perform public duty." Through a sense of duty he consented to serve a term in the New York legislature. Not the least tribute to Mr. Cowdin's work is, that the distinguished critic Edwin P. Whipple was his friend from boyhood and wrote an admirable memoir of him after his death in 1880.

On her mother's side, Mrs. Bacon was connected with revolutionary families of New Hampshire. The Cowdins as well as the Bacons had served the State.

In a little collection of maxims of conduct and religion entitled Some Fruits of Solitude, " the most devotional and charming" of William Penn's many writings, and Mr. Bacon's book of books, which he always carried with him, in civil life and on the Western Front, occurs this passage,

Never Marry but for Love; but see that thou lov'st what is lovely. . . .

In Marriage do thou be wise; prefer the Person before Money, Vertue before Beauty, the Mind before the Body: Then thou hast a Wife, a Friend, a Companion, a Second Self; one that bears an equal Share with thee in all thy Toyls and Troubles.(35)

MR. BACON settled down before he married, reversing the order of the process which he had himself recommended. He had worried during his trip round the world as to his future and immediately upon his return to Boston in the early summer of 1881, he took the first step, the one which counts, according to the proverb.

The son of a Harvard graduate, a Harvard man to the marrow of his bones, he would naturally desire to make what might be called a Harvard connection. Doubtless he had in mind a business career, and banking would make an appeal to the son of one who had represented the Barings, and who lived in an atmosphere of banks, banking, and finance. It was also natural that the thought of the father, if not of the son, should turn to Lee, Higginson & Company, bankers and brokers of Boston. The Lees and Higginsons who formed the firm were Harvard men, and a life-long friend of the Bacons was Major Henry Lee Higginson. In a letter to Mrs. Bacon, Major Higginson tells how it happened:

In the early seventies William Bacon lived in Hotel Hamilton here ---and we were on the top story---so I used to see the father and the beautiful son. Then he went to college and at his graduation they asked me to take him into our office---which I was glad to do. There he did excellent work and was valued highly---and in my stay abroad he left us to become a partner with Morse---and the rest you know....

I've quite forgotten to speak of his beautiful mother who held us ---boys then---fast.

Mr. Bacon's lines fell in pleasant places, and he might have passed his life with his friends, men like Colonel Henry Lee and Major Higginson, whom he admired and venerated.

In 1883, he accepted an offer, at the age of twenty-three, to become a member of the firm of E. Rollins Morse and Brother, of Boston, and remained there until Mr. John Pierpont Morgan persuaded him to quit Boston and settle in New York as a member of the firm of J. P. Morgan & Company. Mr. Morgan had known Mr. Bacon for years. He had followed his progress with interest; he had had the firm of which Mr. Bacon was a member handle business in Boston; Mr. Bacon had frequently been called to New York to discuss matters with the great man of Wall Street. There was therefore nothing unusual in Mr. Morgan's request to Mr. Bacon in the fall of 1894 to come to New York for a conference. He went, and he returned with an offer of partnership in Mr. Morgan's firm. The honour was indeed great; but Mr. Bacon was loath to accept, for it meant giving up Boston, within whose shadow the Bacons had grown up and prospered for two centuries and a half. It seemed to his friends little less than an act of betrayal, Major Higginson saying to him face to face that like Esau of old he was selling his birthright for a mess of pottage. It interfered with the plans of the family, for he and Mrs. Bacon had made arrangements to go with the children to France., in order that they might learn French, as she had done in her childhood, an acquisition to which Mr. and Mrs. Bacon attached the greatest importance.

As one of Mr. Morgan's partners has put it, Mr. Morgan had "fallen in love" with Mr. Bacon; he had found him sound and conservative; careful and industrious, with a charm of manner, tact, and a skill in negotiation which were irresistible. He insisted on having Mr. Bacon near him. Mr. Bacon came and brought a personality which had captivated Mr. Morgan, and qualities which, in Mr. Morgan's opinion, the firm needed. Mr. Morgan rejoiced in his presence, so much so that he never quite forgave him, long afterward, for resigning from the firm on account of ill health. Indeed, later., when Mr. Bacon resigned from the Ambassadorship of France to become a Fellow of Harvard University, Mr. Morgan, then withdrawing somewhat from business, insisted that Mr. Bacon should have an adjoining office, and actually forced him into compliance, although Mr. Bacon did not need such pretentious quarters for his private affairs.

Major Higginson forgave the young Esau and gave him his blessing in a letter of November 23, 1894

MY DEAR BOB,

Thank you for coming to say good-bye. I'd have gone to you, had I thought you were leaving so soon.

If Pierpont Morgan gets as much pleasure out of you and as many, pleasant words and looks as I have had, since we all lived in Hotel Hamilton (1870) he will be a lucky fellow. And why shouldn't he, for he deserves it, and is kind and pleasant to people---such is my experience with him.

Since first you and I met, you've always been very welcome to me and always will be---and we've had no bad "quarter of an hour," have we? I was very glad to have you come into the office, and very sorry indeed to see you go. It was one of the errors of my trip to Europe.

Of course you're right to go to N. Y.---At your age I'd gladly have gone---indeed have always wished to live there.

In that house you'll be most useful and comfortable---and the more that your partners are such pleasant men to deal with daily.

Don't overwork like Coster just because you can and like to do it. He is wonderful---and unwise---to do so.

Trade with me when you can. I'm always ready, and see me if you are in town.

Yours affectionately,

Best wishes always.

H. L. HIGGINSON.

Mr. Bacon's feelings may be imagined, but conjecture is unnecessary, as he stated them himself in a letter of December 26, 1894, to Mrs. Bacon, then in Tours, with "three dear little boys and one dear little girl," as Grandfather Bacon wrote in a letter of December of the very same year.

I shall go at once to Jam. [aica] Plain and I positively dread it. I feel a faint-hearted coward about it all now and cannot bear the idea of having really pulled up stakes for good but there are moments of weakness (although I am really glad that I do feel so), and when I once get to work, I shall not have much time for them.

In a hurried letter of March 26th, of the next year, he writes to Mrs. Bacon that he may not be able to bring her home from France, states the reasons why and recounts the one bit of pleasure which Mrs. Bacon would share, that he had had in the first anxious weeks with J. P. Morgan & Company:

I am terribly afraid I cannot come for you as I do not see how I can possibly take more than a few days' vacation. I am really working for perhaps the first time in my life. I almost feel as if I were just beginning to find a use for the poor substitute which I am pleased to call my brain. J. P. sails to-morrow in the Majestic and I assure you that I shudder a little to think of the responsibility which I feel. The past two months have been a wonderful epoch. The next two months will be more difficult in many ways. My life is simply engrossed in this mælstrom, and I have no moments for any other thoughts except thoughts of you . . . and your little brood working away in exile.

These months were indeed trying, as Mr. Bacon was associated with his great chief in saving the credit and good faith of the Government, and after Mr. Morgan's departure, in the midst of the undertaking he was left to handle the last phase alone.

But to the letter:

To-night I had the one engagement which I have made in advance all winter. I dined with Alice Murray, why I don't know except the invitation came more than three weeks ago and I hadn't the face to plead a previous engagement. It was a very small dinner---Eleanor Chapman was the only person I knew and I liked her because she talked of you and called you Martha . . . I am thankful of a little divertissement for my head fairly buzzes night and day with business and its worries. Like Louis XIII, I never sleep now---"je ne dors plus, Monsieur, je rêve quelquefois, voilà tout."

Mr. Bacon became a partner of J. P. Morgan & Company at the end of 1894, and remained in the firm until the last day of 1903. In the course of these years Mr. Bacon handled many important matters, but there was one head to the company. The firm was Mr. Morgan's; he had made it what it was, he directed its policy. His partners were "hand picked"; to use a common and expressive phrase. They were his juniors and, however able, they were lieutenants, not commanders. They were associated with Mr. Morgan in such matters as he chose to have them handle with him personally, or to carry out under his direction. Of the many "enterprises of great pith and moment" in which Mr. Bacon took part, either personally with Mr. Morgan or under his direction, three may be said to stand out in importance as well as interest. They are the relief of the Government of the United States in the panic of 1895; the formation of the United States Steel Corporation in 1901, and the negotiations which resulted in the Northern Securities Company of the same year.

On the morning of February 5, 1895, Mr. Morgan, Mr. Bacon, and Mr. Stetson entered the White House. Mr. John G. Carlisle, then Secretary of the Treasury, Richard Olney, then Attorney-General and soon to succeed the Secretary of State and to become one of the most distinguished holders of that office, were present. Secretary Carlisle explained to Mr. Cleveland the financial situation which had become desperate, especially in New York. The Conference had already lasted several hours, when Secretary Carlisle informed the President that according to a memorandum taken from a telephone message there were but nine million dollars gold left in the United States Sub-Treasury in New York City. During all this time, Messrs. Morgan, Bacon, and Stetson had taken no part in the proceedings, Mr. Morgan, as usual, silent and firm as a rock. His opinion had not been asked, but at this point he volunteered: "Mr. President, the Secretary of the Treasury knows of one check outstanding for twelve million dollars. If this is presented to-day, it is all over." Secretary Carlisle confirmed this statement. President Cleveland turned to Mr. Morgan and asked: "Have you anything to suggest?" Mr. Morgan made his suggestion. It was adopted.(37)

Some observations of a general character are advisable to understand how matters had come to this pass-why Messrs. Morgan, Bacon, and Stetson met with Mr. Cleveland, and what Mr. Morgan suggested.

The United States had hardly recovered from the panic of 1893, caused by over-production, over-promoting, over-speculation. There were in addition two sources of embarrassment.

Some three hundred and fifty millions of United States notes commonly called greenbacks were outstanding, which were payable upon presentation to the Treasury in coin, that is, either in gold or silver. Secretary Carlisle elected, with the approval of the President, to pay in gold.(38) The Treasury had collected and endeavoured to keep on hand a reserve of one hundred and fifty million dollars in gold, one half of which was found to be sufficient to meet all demands. It might have continued to do so but for a provision of the law of 1878 requiring the Secretary of the Treasury to receive, pay, and reissue the notes. The same notes could thus be used time and again, to drain the Treasury of its gold.

Of the withdrawals from the Treasury during the year, more than $172,000,000 in gold was for "shipment abroad or hoarding at home"; and of this huge sum, as we might call it if the World War had not taught us to think in billions, more than two thirds, in round numbers $69,000,000, in gold was withdrawn in the two months preceding this meeting.

The situation was further complicated by the fact that silver had fallen steadily since 1878. Silver "depreciated," gold "appreciated." The friends of silver called upon Congress to restrain by statute the inexorable law of supply and, demand. By the Sherman "law" the Secretary of the Treasury was directed to buy four million five hundred thousand ounces of silver a month and to issue Treasury notes redeemable in gold or silver at his discretion. Debased coin has in the past always driven out good coin. That this did not happen in the present case was "wholly due to maintenance of gold payments against the Treasury notes, with a steadily dwindling gold reserve."(39) The Sherman law was repealed within three years of its passage. But it had accelerated the process of depleting the Treasury.

In this state of affairs the administration decided, upon the advice of Mr. August Belmont, to consult Mr. Morgan, who was of the opinion that the Government could get gold only from the sale of bonds abroad, and "that it was very doubtful whether the gold could be secured in Europe, but that an attempted negotiation was essential."(40)

Mr. Morgan's account of the beginning of the negotiations is thus stated in his testimony before the Sub-Committee of the Senate:

Mr. Curtis [Assistant Secretary of the Treasury, who had gone to New York to confer with Mr. Belmont] asked me if we would be prepared to undertake it, provided the President and the Secretary of the Treasury requested it. I told him that I felt bound to do so and that I was prepared to proceed upon a basis which I would prepare during the day and which he would take to Washington, and that from there he could let me know whether it was agreeable to the President and the Secretary of the Treasury.

That memorandum provided for a private contract as essential, and it would be understood before we began that if we were successful such a contract would be made. Mr. Curtis went to Washington . . .

Mr. Curtis returned from Washington the following morning [February 2nd], and we were given to understand that the basis proposed by me had been agreeable to the Treasury and that we were to proceed with the negotiation. . . .

Neither Mr. Belmont nor myself doubted for a moment that the terms would be satisfactory and that the business was practically settled, when on Monday morning [February 4th] we received a letter from the Secretary stating that they had decided to abandon the private negotiation.

Knowing, as I did know, the inevitable result of a public announcement of the abandonment of the negotiation, I urged Mr. Belmont to leave at once for Washington, and stated that I would communicate with the Department by telephone or telegraph as soon as possible after reaching the office.(41)

Mr. Morgan did so and learned that the Department intended "to issue a public advertisement that afternoon." Mr. Morgan advised strongly against this course, and asked that action be postponed until Mr. Belmont and he could see the President and the Secretary. The delay was granted.

On Monday morning, February 4th, Mr. Belmont left New York for Washington; Mr. Morgan and Mr. Bacon left in the afternoon, accompanied by Mr. Stetson, Mr. Morgan's counsel. Of course, this news was telegraphed to Washington. Just what Mr. Morgan's plan or purpose was, nobody knew, but, as he has since expressed it, he felt that it was his duty to go down and see the President once more, although he had not been bidden to do so.

When he go got off the train in Washington, to his surprise he was met by Daniel Lamont, the Secretary of War, who informed him that his coming to Washington had been reported and that whatever his errand was it was only fair for him to know that the President had not changed his attitude about the responsibility of Congress for the situation; he would not consider a private bond sale and he would not see Mr. Morgan. After Mr. Lamont ceased speaking, Mr. Morgan told him that he had come to Washington to see the President, that he was going to the Arlington Hotel and would stay there until he saw him. Hailing a cab, he jumped into it and drove to the hotel with Bacon.

The news of his arrival was quickly noised around and immediately the Treasury officials, leaders in Congress and others familiar with the situation, came to see him. . . .

ELIHU ROOT, SECRETARY OF STATE

IN THE COURTYARD OF THE PALACE AT HAVANA, CUBA Mr. Bacon, General Bell, Mrs. Taft, Secretary Taft, Governor Magoon

All the evening this sort of reception went on. Mr. Morgan sat and listened and smoked and said nothing. It was after midnight when the last of the callers left, and finally Bacon went to bed, leaving Mr. Morgan still working out a game of solitaire. The people in the hotel said later that his light was not extinguished until after four o'clock. It was not only a problem involving clubs, spades, and diamonds, that he was engaged in. There was only one day's supply of gold left in the United States Treasury and a plan had to be worked out to save the Nation's credit. . . . While Mr. Morgan and Mr. Bacon were breakfasting together, about half-past nine o'clock, the financier told his junior partner of the plan that he had evolved the night before over his game of solitaire. . . .

Before they had finished their meal, they began to receive reports of the opening of business in New York and learned that the run on the Treasury continued. . . . The telephone rang and Mr. Bacon received a message to the effect that the President would see Mr. Morgan. Not even stopping to light his customary after breakfast cigar, the financier started with Bacon across Lafayette Square, for the White House(42).

In reply to President Cleveland's question, "Have you any. thing to suggest ?" Mr. Morgan told him what he had explained to Mr. Bacon at greater length some hours earlier at the breakfast table, that in 1862 President Lincoln was faced with an empty treasury; that he sent the then Secretary of the Treasury, Salmon P. Chase, to New York to confer with bankers in New York to hit upon a plan to get gold in the Treasury, that the bankers suggested an act of Congress, which Congress passed on March 17, 1862; that under this act gold had been sold to the Government by the house with which Mr. Morgan, then a young man, was connected; that the act, if unrepealed or unmodified by subsequent legislation, would give Secretary Carlisle the same power which it had given Secretary Chase, and that it would prove of equal benefit.(43) Therefore Congress had already acted; the authorization was at hand; there was no longer a pretext for delay, and delay itself was now the greatest danger confronting the Government.

President Cleveland therefore took up with Mr. Morgan the terms upon which he, as representative of a syndicate, should procure from abroad and furnish to the Government the necessary amount of gold. Eventually the amount of three million five hundred thousand ounces was agreed upon. The price was fixed at $17.80 per ounce, which would supply the Treasury with about sixty-five millions, which Secretary Carlisle felt to be sufficient.

Two days later, on the afternoon of Thursday, February 7th, the House of Representatives rejected the so-called Springer Bill, which would have given the President the authority he desired, and would have had the advantage of saddling Congress with the responsibility. Until Congress had acted one way or the other, Mr. Cleveland refused finally to commit himself. But on the rejection of the bill, he had to act on his own responsibility. Therefore, on the next day, February 8th, the details of the arrangement were concluded and the President so informed Congress in a message of the same date.

The United States did not suspend payment then or since.

President Cleveland and Secretary Carlisle were bitterly attacked because, in the opinion of some of their critics, they should have made better terms for the Government, and in the opinion of others, they should not have made a. private loan under any circumstances; Messrs. Belmont and Morgan were attacked because they had driven a hard bargain and had made money out of the necessities of the Government. Actually, all parties to the transaction had reason to be satisfied. The President and the Secretary of the Treasury, who had saved the good faith of the United States; Messrs. Belmont and Morgan that they had rendered a patriotic service.(44)

It was a mark of confidence for Mr. Morgan to pick out Mr. Bacon as his lieutenant. From the beginning of this delicate, difficult, and vastly important transaction he handled its details in association with M. Morgan; in the later stages, Mr. Morgan was in Europe, and his junior partner was in charge. Mr. Bacon rightly regarded it as a great honour, for in serving his chief, he was serving the country, and service to the United States was a passion with Mr. Bacon.

As LORD ERSKINE was passing through a quarter of London which had seen better days, his attention was attracted to a stately house, once the residence of a fellow lawyer, but which was now doing duty as a blacksmith's shop. He mused for a moment, scratched these lines, and passed on:

The house a lawyer once enjoy'd,
Now to a smith doth pass;
How naturally the iron age
Succeeds the age of brass!

Naturally, indeed, but neither so naturally nor so rapidly as the age of steel has succeeded that of iron, due to the Bessemer process, which ushered in for the steel magnate the age of gold.

The Iron Master, or the Steel King, as Andrew Carnegie has been called (he might perhaps with equal propriety be termed the little Alchemist)(45) had, as early as 1868, planned to retire from business, to devote himself to practical philanthropy.(46) The unsettled condition of affairs at the end of the Civil War, the financial panic of 1873, involving the failure of Jay Cooke and Company and a multitude of other bankers, brokers, and business men caused him to postpone his retirement. Finally, however, matters came to a crisis with the end of the century, when he found himself confronted with the alternative of losing his supremacy in the world of business, or of enlarging his already enormous business so as to make himself independent of his competitors. He preferred to dispose of his interests to them. He sold out, and the United States Steel Corporation came into being.

Consolidation was the watchword of the last quarter of the century. Big business was replacing little business; smaller holdings were merging into larger, and groups, whether competing or not, were consolidated. But two years before the end of the century the Federal Steel Company, with a capital of one hundred million dollars, was formed of various companies, "in order to create a company," as Mr. Bacon put it in testimony which he gave in a suit brought by the Government against the Steel Corporation, "which for the first time owed its raw material, iron ore, and transportation facilities to manufacturing plants." But this great company was incomplete. It lacked, again to quote Mr. Bacon, "a great many finishing mills and distributing plants."(47) It therefore became the policy of the company to "acquire or build further finishing plants, to make it more complete."

In the creation of the Federal Steel Corporation, Elbert H. Gary, who became its president, and Robert Bacon, did most of the work(48) From his position as well as from his belief in the possibilities of steel, Mr. Gary became the leading advocate for the formation of a still larger corporation, which should include Mr. Carnegie's holdings, for without them the competition would be great, and might become too great. Mr. Gary felt that only the firm of J. P. Morgan & Company could finance such an undertaking. Mr. Carnegie was of the same opinion. Mr. Bacon was the member of the firm responsible for the Federal Steel Corporation and anxious to see it increase in power and usefulness. He was by this time not only Mr. Morgan's experienced and trusted lieutenant; he had become his associate and representative in the larger affairs of finance. But Mr. Bacon could only act if the head of the firm consented, and Mr. Morgan would only act when he was convinced.

From the creation of the Federal Steel Corporation in 1898, the possibility of the purchase of Mr. Carnegie's holdings was in the air. The Carnegie interests knew this, and they looked upon Mr. Morgan as the prospective purchaser. Until the last month of 1900, no outward progress had been made. In that month, to be specific, on December 12th, a dinner was given, in the city of New York, by two representatives of Mr. Carnegie's interests. Mr. Morgan's presence was greatly desired by the promoters of this social occasion; not less desirable was the presence of Mr. Charles Schwab, then president of the Carnegie Steel Company. Nothing was more natural than that Mr. Schwab, should, when the coffee was served, make some observations on steel and its possibilities; nothing was more natural than that Mr. Morgan should listen to the speaker of the occasion. Nothing was more fortunate for all concerned than Mr. Morgan's conversion, for he left the dinner a professed believer in steel and the possibilities of steel as set forth in glowing terms by Mr. Schwab.

As Mr. Bacon puts it in his testimony, "Mr. Morgan told me of the conversation he had had with Mr. Schwab at that dinner, and it was evident that he had been very much impressed by the new light that had been thrown upon the whole steel situation, its growth and possibilities, and for the first time he indicated to me that it seemed a possible thing to undertake the purchase of the Carnegie Company." In another portion of his testimony Mr. Bacon stated that Mr. Schwab impressed Mr. Morgan "with the fact that the iron and steel business was just bursting into a new and tremendous field of importance and activity and consumption, and that that justified the possibilities, and under those conditions justified the purchase of the Carnegie Company and of others to meet the new conditions." The fact, therefore, is that Mr. Morgan was converted by Mr. Schwab.(49)

Whatever the reasons may have been, negotiations began after the dinner, and they were completed before the effects of the dinner had subsided. As is to be expected, Mr. Carnegie has something to say of the transaction in his Autobiography, and, properly enough, in the opening lines of the chapter on the "Gospel of Wealth,"(50) for the sale of his interests enable him to "live up to its teachings by ceasing to struggle for more wealth.", This is his account:

At this juncture---that is March, 1901---Mr. Schwab told me Mr. Morgan had said to him he should really like to know if I wished to retire from business; if so he thought he could arrange it. He also said he had consulted our partners and that they were disposed to sell, being attracted by the terms Mr. Morgan had offered. I told Mr. Schwab that if my partners were desirous to sell I would concur, and we finally sold.

We have Mr. Carnegie's word for it, that he "declined to take anything for the common stock," which, had he done so, would have given him "about one hundred millions more of 5 per cent. bonds, which Mr. Morgan said afterward I could have obtained."

In an investigation before a Committee of the House of Representatives, in January, 1912, Mr. Carnegie gave a detail or two lacking in his Autobiography:

I considered what was fair and that is the option Morgan got. Schwab went down and arranged it . . . I have been told many times since by insiders that I should have asked $100,000,000 more and could have got it easily.

The language of "insiders" is to the same effect, but it is more outspoken. According to them Mr. Carnegie is reported to have said one day to Mr. Morgan, when the principals in the duel met, rumour has it, on a steamer, " Pierpont, I am told that I could have got a hundred million dollars more for my holdings," to which the imperturbable financier and man of few words replied, "Very likely, Andrew."

If the preferred stock be taken at par, and the common stock at fifty, the price for Mr. Carnegie's personal holdings amounted in all to $447,416,640; if to this forty millions of profit for the year be added , the total was nearly half a billion.

In these post bellum days a billion is a familiar unit; but before the war the imagination was excited by half a billion. "It was," to quote an authority on steel, "almost a two-hundredth part of the national wealth. It was the value of all the wheat, barley, and cheese produced in the United States in 1900, more than the combined dividends of all American railroads for the previous four years. It would pay the President's salary for nine thousand years. It was more than a year's product of gold, silver, and coal. In Germany it would build ten enormous steel plants like Krupp's---the pride of Europe. And for this huge sum Carnegie offered, not an empire, not a State, but a single corporation with forty-five thousand employees."(51)

Mr. Bacon, however, was of the opinion that this was the fair value under the circumstances. If the purchase is to be looked upon as a game, it was assuredly a game well played. Mr. Carnegie got a purchaser, and Mr. Morgan what he wanted at one hundred million dollars less than he was willing to pay. The stakes were great because the hazards were great.

But it was not a five hundred million dollar corporation. Altogether it totalled $1,384,681,297. "Consequently," to quote again the authority from which the above passage is taken, "when Morgan coolly announced that his new company would pay interest or dividends upon nearly fourteen hundred millions, the whole international world of finance was speechless with surprise."(52)

Events have more than justified the purchase and the creation of the mammoth corporation, both by profits which have flowed like golden streams into the pockets of the fortunate holders of stock, and to the public at large, which has benefited in greater degree although not in such a tangible manner. The corporation has not throttled competition; it has not driven out competitors. When it was organized, it controlled, it was said, two thirds of the steel industry of the country. Some twenty years after its organization it controls approximately one third.

The Steel Corporation has been the subject of favourable and unfavourable reports which have been made from time to time by various departments of the Government. In 1911 the Government filed its bill under the provisions of the AntiTrust Act to have it enjoined and dissolved as an illegal corporation. The case was heard before the four Circuit Judges for the District of New Jersey, who unanimously decreed in favour of the corporation.(53) In 1915, five years later, the Supreme Court of the United States affirmed the decree of the lower court on appeal.(54) The United States Steel Corporation is therefore a going concern; a monument to the foresight of those who proposed its creation, to the ingenuity of those who incorporated it, and to the wisdom and moderation of those who have administered its vast and increasing interests.

From a Minute submitted by Mr. Gary, chairman of the Board of Directors of the United States Steel Corporation and adopted by that body, it appears that:

Hon. Robert Bacon was a member of the Board of Directors of this Corporation, with some short interruptions, from the time of its organization to the time of his death. He was Chairman of the Finance Committee from April 9, 1901, until November 12th of the same year, when he resigned.

The Minute, approved by members connected with the Corporation from its inception and in a position to know, thus states the part taken by Mr. Bacon in the organization of this billion-dollar corporation:

During the negotiations relating to the acquisition of properties and the development of plans for the organization and management of the United States Steel Corporation, from the time the subject was first suggested until shortly before purchases were completed and plans finally consummated, Mr. Bacon assumed the leading part for J. P. Morgan & Company in their connection with the matter.

Chapter Seven

Table of Contents