The first billion-dollar corporation in American history, United States Steel was organized by J.P. Morgan in 1901 through the merger of Andrew Carnegie`s steel operations with those of several other large steel concerns, particularly Elbert Gary`s Federal Steel Company and William Henry Moore`s National Steel Company. Although no longer in the top dozen worldwide, U.S. Steel was at one point the largest steelmaker and most valuable corporation in the world. Despite legislation against monopolies, the Supreme Court in 1911 ruled in a case involving Standard Oil that only unreasonable combinations in restraint of trade were illegal. Carrying forward the logic of this decision, the court again ruled that an enormous corporation, in this case U.S. Steel, was not necessarily in violation of any law. Justice McKenna, who delivered the opinion for the majority in United States v. United States Steel Corporation, wrote:
Indeed it is said in many ways and illustrated that "instead of relying upon its own power to fix and maintain prices, the corporation, at its very beginning sought and obtained the assistance of others." It combined its power with that of its competitors. It did not have power in and of itself, and the control it exerted was only in and by association with its competitors. Its offense, therefore, such as it was, was not different from theirs and was distinguished from theirs "only in the leadership it assumed in promulgating and perfecting the policy." Progressives were dismayed at this line of reasoning. Their position was expressed by Justice Day:The record seems to me to leave no fair room for a doubt that the defendants, the United States Steel Corporation and the several subsidiary corporations which make up that organization, were formed in violation of the Sherman Act. ... For many years, as the record discloses, this unlawful organization exerted its power to control and maintain prices by pools, associations, trade meetings, and as the result of discussion and agreements at the so-called Gary Dinners, where the assembled trade opponents secured cooperation and joint action through the machinery of special committees of competing concerns, and by prudent prevision took into account the possibility of defection, and the means of controlling and perpetuating that industrial harmony which arose from the control and maintenance of prices.While U.S. Steel tried to represent itself as a "corporation with a soul," author Kirby Page, writing in The Atlantic, gave a different picture:Let us analyze the wages paid by the Steel Corporation. Surely wages must be adequate if the average for all employees in 1920 was approximately $7 per day. There is no doubt that skilled labor is paid well in comparison with other industries. But how about unskilled labor? According to the Interchurch Report on the steel strike of 1919, the annual earnings of over 1/3 of all productive iron and steel workers were, and had been for years, below the level set by government experts as the minimum subsistence standard for families of five. ... That was the condition in 1919. What are the facts at the present time? Three successive wage cuts during 1921 reduced the wages of unskilled labor in the employ of the Steel Corporation slightly more than 40%, the rate now being 30 cents per with no extra pay for overtime.