Chapter 291: Even if it's a pit, I have to jump
"By the way, Frank, what do you think is the biggest difference between the two parties?" Carnegie was in good spirits today and was always active. He didn't seem to be depressed at all because his industry would change hands.
"One is acquisition, the other is merger! As for financial resources, the Morgan Alliance should have a slight advantage. After all, there is nothing more profitable than running a bank." Frank was silent for a while and said, "Standard Oil and Union Company hope to acquire and take over most of the shares of the steel company, while the Morgan father and son want to acquire and establish an unprecedented steel alliance."
"Yes, that's their difference!" Carnegie smiled. In fact, the idea of the Steel Alliance was not uncommon for a long time. For a long period of his life, the biggest enemy of the Steel Alliance was none other than him, the steel tycoon.
This kind of alliance has another more well-known name, called cartel! One hundred years later, the most famous cartel in the world is OPEC. The cartel takes the expansion of overall interests as its main goal. In order to achieve this goal, a series of agreements will be signed within the cartel to determine the production and product prices of the entire cartel, specify the sales volume and sales area of each enterprise, etc. An organization composed of a series of independent enterprises producing similar products, producers acting collectively, with the purpose of raising the price of such products and controlling their production.
Carnegie's steel company, always the biggest enemy of the cartel, was actually part of the cartel in a broad sense, although it always had the highest profits in the industry. But it paid the smallest dividends and reinvested the rest of the profits in better factories, higher mechanization, and greater output. The decline in product prices was a good opportunity to expand market share - every time the market declined, Carnegie's company expanded its market share.
In most of these investments, Carnegie's company was in the forefront, setting a ceiling on the price of steel for its competitors - and because they reinvested most of their profits, others were forced to follow their lead and make similar investments.
It can be said that Carnegie Steel Company was using the name of a cartel but all it did was to undermine the cartel and kick out other competitors in the steel industry one by one.
Carnegie took advantage of the recession cycle to eliminate other cartel members one by one. This move is very similar to the Samsung Group in later generations. It took advantage of the economic depression to eliminate competitors. When the competitors were gone and the economic depression was over, the remaining market was all its own.
Because Carnegie always did this, he was very unhappy with Morgan's attempt to integrate the steel order and establish the U.S. Steel Corporation. However, if no other competitors emerged, Carnegie would not have resisted Morgan's pressure. After all, as an industrial entity, his steel company would be at a disadvantage against some bankers.
That's why Carnegie thought of the Rockefeller family of Standard Oil, because Standard Oil and Morgan were in a sense competitors. This has to start with the development of electricity, and Morgan was the main supporter of electricity.
Morgan wanted to bring electric lights to the entire country. He and Edison had workers dig pits and bury more than 100,000 feet of thick copper wire. This connected Edison's power stations to hundreds of homes and commercial buildings in New York, and Edison's grid became a model for power transmission in the United States.
Before long, Edison's power grid covered half of Manhattan, with electric lights on both sides of the street, and countless homes in New York were shining with electric lights at night. Morgan and Edison's actions had an impact on Rockefeller's kerosene business, because any household connected to Edison's power grid was a lost customer for Rockefeller.
Rockefeller, shocked, launched a public relations campaign against electricity, claiming that the new technology was dangerous and even deadly. Electricity, Rockefeller said, could cause mass electrocution and uncontrollable fires. He knew that as long as he could scare the public, kerosene could continue to dominate as a light source.
The reason why Standard Oil vigorously internationalized was that it was facing pressure from Morgan's development in the electrical field. It was buying time for Standard Oil while maintaining profits. Rockefeller and Morgan were far from having a relationship of keeping out of each other's way.
But all this was broken by a Southern giant. At the beginning, this large southern landowner also got involved in electrification, but then relying on the progress in the automobile field, his interests became more aligned with Standard Oil. Carnegie saw all this and was amazed in his heart. Just like Rockefeller grasped oil back then, this young man from the South grasped cars.
Carnegie was not stingy in expressing his admiration for Sheffield. This admiration was the basis for his real intention to withdraw. If his heart was still in his career, he would only be hostile to the new competitors, no matter what field they were in. Before withdrawing, he wanted to see a grand show, to see Morgan and Rockefeller, who had always been ahead of him, fighting each other to the point of bloodshed, and also to see if the king of the emerging industry in the South would have any outstanding performance.
"J. Morgan Jr. is here to raise the price. Just like I said just now, you and I are already enemies of the Morgans." Upon hearing the news that J. Morgan Jr. led a delegation to Pittsburgh, Sheffield concluded that this matter could no longer be fooled away, and kept complaining to Rockefeller Jr., "You are dragging my company onto your chariot."
"William, you don't think that a company that has developed to this point will not offend other companies, right? You might as well find a country without competitors, and have the final say in all industries." Rockefeller Jr. chuckled and put his hands in his pockets. "In fact, who would want to offend an opponent like Morgan? I don't want to either. Just like the impact of electrification on oil lamps, Standard Oil had to accept it. Will the development of electricity be affected by Standard Oil's business and stop developing it?"
Sheffield didn't say anything. He certainly knew that what Rockefeller Jr. said made sense, but he really wanted the Morgan father and son to make a mistake once and then let him go. He always felt that he did not have the strength to fight against the Morgan Alliance.
This extravagant hope was ruthlessly shattered by Rockefeller Jr., "For a company that was founded on the trade of human labor, the heirs can't be so naive, expecting the opponent to be crazy and expand their own industry? How did the United Company grow to such a large size?"
"I'm not naive, but who would be willing to spend more money for something that can be easily obtained!" Sheffield said coldly, "I don't have strong financing channels, and the United Banking Industry in Los Angeles is not strong. At least it can't be compared with Rockefeller, Morgan, or even Boston Bank and Carnegie's bank friends."
The shortcomings of the United Company are indeed short, but they are only slightly longer than those of the DuPont family, which is not involved in the financial industry at all. If you want the shortcomings to gradually become longer, doesn’t that take time?
"Then let's just drive up the price and then withdraw!" Rockefeller Jr. said when he saw Sheffield's lack of confidence, "Let's make it so that Morgan has to spend more money to succeed."
"No, we're already here! Who knows how many people are watching us!" Sheffield flatly refused. "If we pretend to resist and then leave, how will Standard Oil and Union still have any prestige if such a big scene gets out? If the federal court thinks that our merger is unreasonable, we can leave, because we lost to the federal government. But we're facing Morgan. If two big companies lose to a banker, Morgan will be overjoyed."
Just as the two were discussing the Morgan delegation, a noisy sound came into their ears from outside the hotel. They asked the bodyguard to go out and take a look. After a while, Jesla returned, seeming to be a little embarrassed and didn't know how to start.
Finally Sheffield had to ask, "What's going on? Was there a shooting?"
Sheffield thought there was a little bit of our great America with its own national conditions here, a shooting incident that we welcome.
"Boss, that's not the case!" Jesla finally put away the strange expression on his face and said slowly, "It was the people from Carnegie Steel Company. They welcomed the team led by Morgan Jr. and happened to choose our hotel as the one to arrange for them."
Rockefeller Jr. and Sheffield looked at each other, keeping their poker faces tight and silent for a long time. They almost spoke at the same time, "Intentional..."
"That's right!" Another sentence was blurted out at the same time. Rockefeller Jr. and Sheffield both had unfriendly expressions and even looked at each other, meaning why do you always imitate me in speaking!
Putting two rival teams together in a hotel, who would believe that it was not intentional? The two could almost imagine that the old man was laughing wildly in the office of Carnegie Steel's headquarters, waiting for the show to begin.
This situation reminded Sheffield of the Iran-Iraq War, when both the Iranian and Iraqi teams were arranged to stay in a hotel by the military factory.
But this is a trap, and the two cannot leave now. Even if Carnegie has a bad taste, he has a steel company valued at hundreds of millions and is just sitting there. What should they do!
"It seems that what you said about the conflict between the Rockefeller family and Carnegie has been resolved long ago is just your unilateral opinion. At least Carnegie doesn't seem to think so!" Sheffield could only try to make the best of a bad situation and tease the little Rockefeller who also had a sour face.
At this time, someone from Carnegie Steel knocked on the door gently. After getting approval, he walked in politely, nodded to the two of them, and then said, "Dear Mr. John, Mr. William, my boss invites you two to dinner."
"We are extremely honored!" The two of them forced out a smile that was uglier than crying. There was a big pit in front of them, and they had to jump in bravely.
(End of this chapter)
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