U.S. Steel Is Established

February 25, 1901:

J. P. Morgan incorporates the United States Steel Corporation. J. P. Morgan and the attorney Elbert H. Gary founded U.S. Steel in 1901 (incorporated on February 25) by combining Andrew Carnegie's Carnegie Steel Company with Gary's Federal Steel Company and William Henry "Judge" Moore's National Steel Company for $492 million. It was capitalized at $1.4 billion, making it the world's first billion-dollar corporation.  At one time, U.S. Steel was the largest steel producer and largest corporation in the world. In 1907 it bought its largest competitor Tennessee Coal, Iron and Railroad Company which was headquartered in Birmingham, Alabama. This led to Tennessee Coal's being replaced in the Dow Jones Industrial Average by the General Electric Company. The federal government attempted to use federal antitrust laws to break up U.S. Steel in 1911, but that effort ultimately failed. Time and competitors have, however, accomplished nearly the same thing. In its first full year of operation, U.S. Steel made 67 percent of all the steel produced in the United States. It now produces less than 10 percent.
The Corporation, as it was known on Wall Street, always distinguished itself to investors by virtue of its size, rather than for its efficiency or creativeness during its heyday. In 1901, it controlled two-thirds of steel production.  Because of heavy debts taken on at the company's formation — Carnegie insisted on being paid in gold bonds for his stake — and fears of antitrust litigation, U.S. Steel moved cautiously. Competitors often innovated faster, especially Bethlehem Steel, run by U.S. Steel's former first president, Charles M. Schwab. U.S. Steel's share of the expanding market slipped to 50 percent by 1911.

Steelmark logo, originated by U.S. Steel and used by AISI to promote the steel industry.