The big players already were seeing the promise and success of affiliations, and so they all could see just how promising Schwab’s plan was. But there was an elemental piece to the puzzle that needed to be secured.
“The financial magnetism that began, a generation ago, to attract thousands of small and sometimes inefficiently managed companies into large and competition-crushing combinations, had become operative in the steel world through the devices of that jovial business pirate, John W. Gates. Gates already had formed the American Steel and Wire Company out of a chain of small concerns, and together with Morgan had created the Federal Steel Company. The National Tube and American Bridge companies were two more Morgan concerns, and the Moore Brothers had forsaken the match and cookie business to form the ‘American’ group— Tin Plate, Steel Hoop, Sheet Steel—and the National Steel Company.
“But by the side of Andrew Carnegie’s gigantic vertical trust, a trust owned and operated by fifty-three partners, those other combinations were picayune. They might combine to their heart’s content but the whole lot of them couldn’t make a dent in the Carnegie organization, and Morgan knew it.
It’s All In What You Know
“The eccentric old Scot knew it, too. From the magnificent heights of Skibo Castle he had viewed, first with amusement and then with resentment, the attempts of Morgan’s smaller companies to cut into his business. When the attempts became too bold, Carnegie’s temper was translated into anger and retaliation. He decided to duplicate every mill owned by his rivals. Hitherto, he hadn’t been interested in wire, pipe, hoops, or sheet. Instead, he was content to sell such companies the raw steel and let them work it into whatever shape they wanted. Now, with Schwab as his chief and able lieutenant, he planned to drive his enemies to the wall.
“So it was that in the speech of Charles M. Schwab, Morgan saw the answer to his problem of combination. A trust without Carnegie-giant of them all—would be no trust at all, a plum pudding, as one writer said, without the plums.
Understanding The Elements
Charles Schwab understood the opportunity in a way that the others had failed to see up until this point. That is not so unlike those who fail to see the opportunity that the right wealth creation mindset holds. Think of yourself as a Schwab—as one who understands the essentials of the opportunity, and then act, just as Schwab did—taking steps, making actions, and making your dream a reality!
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