Britannica Money (2024)

United States Steel Corporation, leading U.S. producer of steel and related products, founded in 1901.

At the beginning of the 20th century, a number of businessmen were involved in the formation of United States Steel Corporation, including Andrew Carnegie, Elbert H. Gary, Charles M. Schwab, and J.P. Morgan. Carnegie had founded Carnegie Steel Company, centred in Pittsburgh, Pennsylvania, and Gary had founded Federal Steel Company, centred in Chicago. In 1900 Schwab became president of the Carnegie company, and he eventually approached Gary with the idea of a giant consolidation. With the aid of J.P. Morgan, they bought Carnegie’s interests for more than $492 million and put together U.S. Steel, adding National Steel, National Tube, American Steel and Wire, American Steel Hoop, American Sheet Steel, and American Tinplate to the nucleus of the Carnegie and Federal Companies. U.S. Steel was capitalized at $1.4 billion and became the first billion-dollar corporation in American history. Schwab was named president (but resigned in 1903 to join Bethlehem Steel), and Gary was made chairman of the board (a post that he held until his death in 1927).

Very soon after, in 1901, two other companies, American Bridge and Lake Superior Consolidated Iron Mines, were brought in, and more companies were absorbed in the years following. The example of U.S. Steel prompted mergers elsewhere in the metals industry.

During its formative period the company was dominated by Gary, who exercised influence throughout the American steel industry through his famous “Gary dinners,” attended by the heads of major steel producers; out of the meetings came agreements on cooperative pricing and marketing that stabilized a once wildly fluctuating market. Gary opposed “unreasonable” competitive practices as well as labour organizers. A general steel strike in 1919 was answered by his refusal to negotiate and his use of strikebreaking tactics. In 1920 the U.S. Supreme Court held that U.S. Steel was not a monopoly in restraint of trade under the U.S. antitrust laws. A successor to Gary, Myron C. Taylor (1874–1959), board chairman from 1932 to 1938, took a different view of unions and recognized the United Steelworkers of America in 1937.

Although U.S. Steel remained the largest steel producer in the United States, by the late 20th century only about one-third of its business remained in steel. The acquisitions of Marathon Oil Company in 1982 and Texas Oil & Gas Corp. in 1986 had given U.S. Steel major interests in the oil and gas industry. The company had also expanded into such industries as mining, chemicals, construction, real estate, and transportation (including railroads, shipping, and shipbuilding). In 1986 the holding company USX Corporation was established to oversee the diversified interests, which were divided among four operating units: USS (for steel), Marathon Oil, Texas Oil & Gas, and U.S. Diversified Group (covering the chemical, engineering, and real-estate businesses, among others). U.S. Steel Group was spun off from USX in 2002 and again became an independent, publicly traded corporation under its original name, United States Steel Corporation. It acquired the steel-related businesses of National Steel Corporation in 2003.