Charles Schwab was able to recognize opportunity, and to understand it in ways that other men could not; and so, when he proposed his plan he proposed it thoroughly, with a strong plan for success that attracted wealth and power to him.
“Schwab’s speech on the night of December 12, 1900, undoubtedly carried the inference, though not the pledge, that the vast Carnegie enterprise could be brought under the Morgan tent. He talked of the world future for steel, of reorganization for efficiency, of specialization, of the scrapping of unsuccessful mills and concentration of effort on the flourishing properties, of economies in the ore traffic, of economies in overhead and administrative departments, of capturing foreign markets.
The Error Of Past Ways
“More than that, he told the buccaneers among them wherein lay the errors of their customary piracy. Their purposes, he inferred, had been to create monopolies, raise prices, and pay themselves fat dividends out of privilege. Schwab condemned the system in his heartiest manner. The shortsightedness of such a policy, he told his hearers, lay in the fact that it restricted the market in an era when everything cried for expansion. By cheapening the cost of steel, he argued, an ever-expanding market would be created; more uses for steel would be devised, and a goodly portion of the world trade could be captured. Actually, though he did not know it, Schwab was an apostle of modern mass production.
“So the dinner at the University Club came to an end. Morgan went home, to think about Schwab’s rosy predictions. Schwab went back to Pittsburgh to run the steel business for ‘Wee Andra Carnegie,’ while Gary and the rest went back to their stock tickers, to fiddle around in anticipation of the next move.
The Right Focus
Schwab’s plan was brilliant because it went beyond the obvious and focused in on the real opportunity that had eluded all those before. He had a realistic plan for building wealth throughout the steel industry that focused on the wider world, and not narrowly on his own deep pockets. Interestingly enough, the one easily fed the other, proving that the path to wealth is not a tunnel, but a wider road that encompasses the travel of others.
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