Carnegie Challenges the World Summary and Analysis

The 1893 depression is caused by manufacturing overcapacity, particularly in the steel industry. Carnegie acquires two of the eight failing rail mills and follows an aggressive policy of price-cutting to anticipate its direction and expand sales. Carnegie pressures management and Frick resigns again, with his resignation accepted this time. Carnegie forces another fifteen partners out until only Schwab survives, while bringing in "young geniuses" who prove their merit on cost sheets. Schwab cuts $500,000 in costs at Homestead by cutting 15 percent from wages and replacing skilled labor with machines and unskilled workers. Schwab is made president in 1897 and contributes to modern facilities by quantifying the anticipated savings. As mills become more efficient, the need for raw material continues with deposits from Michigan, Wisconsin and Minnesota. John D. Rockefeller rescues Merritt's Mesabi Range from bankruptcy and Carnegie leases...