O N A WINTRY EVENING IN DECEMBER, 1900, GENTLEMEN in the warm, plush confines of the University Club pushed back their plates, lit cigars, and prepared themselves for the speech by their guest of honor, the young, likable, and highly competent president of the Carnegie Steel Company, Charles M. Schwab. No one in that distinguished audience, however, would pay closer attention to Schwab's remarks than the man sitting immediately at his right, the great Wall Street financier, J. Pierpont Morgan. The banker had been instrumental in creating several of the large consolidated iron and steel companies in the previous three years, including Federal Steel and American Wire, and his reactions to the speech would be as interesting to the assembled guests as the talk itself. Schwab, they believed, spoke for Andrew Carnegie, and recent relations between the Morgan and Carnegie interests resembled nothing less than two mighty armies preparing for mortal combat.
Carnegie Steel, through technical innovations, integrated production, and aggressive competition had dominated the steel industry in the last three decades of the nineteenth century. Carnegie had been among the first to adopt the Bessemer and openhearth processes, and his firm had sought continuously to improve the quality of its product and the efficiency of its works. The combined efforts of Alexander L. Holley, who contributed several important refinements to the Bessemer techniques, and of Captain William "Billy" Jones, whose hard-nosed practical