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Kings and Princes of
Steel
The
stalemate was resolved by the agreement to unite in 1866 and vest the rights
to all patents in a single entity, a joint stock company of New York called
the “Pneumatic Steel Association”. Winslow, Griswold & Company received 70%
of the profits for their essential rights to the Bessemer steel-making
process in America, whereas the shareholders of the Kelly Pneumatic Process
Company received 30%. John F. Winslow, John A. Griswold and Daniel J.
Morrell became trustees, Zoheth Durfee, general agent and Alexander Holley,
consulting engineer. Iron makers who desired to produce Bessemer steel in
America were requested to join the association and pay royalties on the
basis of their output .
In
1877 the U.S. steel producers used their association to create a pool of
interest, instituted as the Bessemer Steel Company or Association, to
restrain access to the use of Bessemer patents and act as a pool to allocate
steel rail orders among its members. In these times, such pools (or cartels)
were organized in almost all American industries and in most cases
eventually led to a trust (like Standard Oil) or a corporation (like
American Tobacco and eventually also U.S.Steel). In 1890, the Bessemer Steel
Association was reorganized into the Steel Patents Company, whose influence
gradually waned with the expiration of the basic patents and the
consolidation of the US steel industry .
The
name one remembers most in relation to the development of the US steel
industry is “Carnegie”, because Carnegie Steel emerged as the most efficient
and most profitable American steel producer and consequently Andrew Carnegie
turned his stake in it into one of the world’s largest fortunes. His
subsequent second career of a philanthropist, during which he almost
completely gave away that huge fortune, did much to further amplify the fame
of his name. But Carnegie was neither a pioneer steel producer, his first
successful venture in steel was actually only the twelfth company in the USA
to apply the Bessemer process, nor was he ever a master of this craft. He
was a shrewd and sometimes ruthless investor with a knack for salesmanship
and the talent to manage or even manipulate people .
The Trusts
> Steel Kings :
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