To make a ton of steel one and a half tons of iron stone has to be mined, transported by rail a hundred miles to the Lakes, carried by boat hundreds of miles, transferred to cars, transported by rail one hundred and fifty miles to Pittsburgh; one and a half tons of coal must be mined and manufactured into coke and carried fifty-odd miles by rail; and one ton of limestone mined and carried one hundred and fifty miles to Pittsburgh.  How then could steel be manufactured and sold without loss at three pounds for two cents?  This, I confess, seemed to me incredible, and little less than miraculous, but it was so.

America is soon to change from being the dearest steel manufacturing country to the cheapest.  Already the shipyards of Belfast are our customers.  This is but the beginning.  Under present conditions America can produce steel as cheaply as any other land, notwithstanding its higher-priced labor.  There is no labor so cheap as the dearest in the mechanical field, provided it is free, contented, zealous, and reaping reward as it renders service.  And here America leads.

One great advantage which America will have in competing in the markets of the world is that her manufacturers will have the best home market.  Upon this they can depend for a return upon capital, and the surplus product can be exported with advantage, even when the prices received for it do not more than cover actual cost, provided the exports be charged with their proportion of all expenses.  The nation that has the best home market, especially if products are standardized, as ours are, can soon outsell the foreign producer.  The phrase I used in Britain in this connection was:  “The Law of the Surplus.”  It afterward came into general use in commercial discussions.

CHAPTER XVII

THE HOMESTEAD STRIKE

While upon the subject of our manufacturing interests, I may record that on July 1, 1892, during my absence in the Highlands of Scotland, there occurred the one really serious quarrel with our workmen in our whole history.  For twenty-six years I had been actively in charge of the relations between ourselves and our men, and it was the pride of my life to think how delightfully satisfactory these had been and were.  I hope I fully deserved what my chief partner, Mr. Phipps, said in his letter to the “New York Herald,” January 30, 1904, in reply to one who had declared I had remained abroad during the Homestead strike, instead of flying back to support my partners.  It was to the effect that “I was always disposed to yield to the demands of the men, however unreasonable”; hence one or two of my partners did not wish me to return.[42] Taking no account of the reward that comes from feeling that you and your employees are friends and judging only from economical results, I believe that higher wages to men who respect their employers and are happy and contented are a good investment, yielding, indeed, big dividends.