In its field, Bethlehem Steel is second only to U. S. Steel. A "trade war" between these two is predicted, for U. S. Steel has apparently challenged a Bethlehem monopoly—the production of a broad-flange structural beam.
This is the Grey or Bethlehem beam, invented by Henry Grey (1849-1913). Weight for weight it is lighter and stronger than ordinary I-beams, and so is preferred by constructors, who gladly pay a bonus of $2 a ton to Bethlehem which has the patent and production rights. Incidentally they do not object when a Bethlehem salesman wants all their structural business.
U. S. Steel is now remodeling its Homestead plant to manufacture beams of this type. Anent this, Judge Gary said, in the Iron Trade Review: "We are building a mill which will be prepared to manufacture a wide flange beam." Bethlehem President Grace countered: "Bethlehem has an exclusive license under numerous patents which have several years to run, and which cover the process for rolling the so-called broad-flanged sections as a product." It may be that the Judge, always perspicacious, is looking far years ahead. Yet the ingredients of a fight already exist.
The differences between U. S. Steel and Bethlehem Steel lie deeper than ordinary competition. They are exemplified by the differing personalities of two men— Judge Elbert Henry Gary and Charles Michael Schwab. The Judge, for all his kindliness of heart, is ruled by his head; Mr. Schwab, for all his hard sense, is emotional. The clash of their natures showed itself at the very formation of the U. S. Steel Corp. in 1901. The late John Pierpont Morgan attracted Judge Gary, the legalist, to organize his iron and steel consolidation plans, and to give them grace. The late Andrew Carnegie was the biggest steel maker in the U. S., and Mr. Schwab was to all purposes Andrew Carnegie, being president of the Carnegie Steel Co. and Carnegie's prime partner. They could wreck the Morgan schemes. But they wanted to sell out—for nearly a half billion dollars. "Charlie" Schwab consummated that deal by persuading first Judge Gary, then Morgan. He became the first president of the U. S. Steel Corp.
Then began the Schwab-Gary tussle. The Judge wanted to operate the whole organization through an oligarchy, an executive committee. President Schwab wanted sole control. He objected to hearing an influential director ordering him to build a steel plant at Chicago, when he, the direct operator, needed a plant at Pittsburgh. The Judge was further irritated by President Schwab's behavior at Monte Carlo. Reports came that the very President of the U. S. Steel Corp., that "good" corporation, was reveling on the Riviera, that he was playing roulette, vingt-et-un, chemin-de-fer and baccarat for stakes of thousands of dollars. Mr. Schwab has never smoked. He has drunk sparingly. He has been a devoted husband. Yet he has always liked a pleasant game of cards. If he did gamble a bit at Monte Carlo, the stakes meant little to him and he had earned relaxation.