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. [Footnote 42: The full statement of Mr. Phipps is as follows: _Question:_ "It was stated that Mr. Carnegie acted in a cowardly manner in not returning to America from Scotland and being present when the strike was in progress at Homestead." _Answer:_ "When Mr. Carnegie heard of the trouble at Homestead he immediately wired that he would take the first ship for America, but his partners begged him not to appear, as they were of the opinion that the welfare of the Company required that he should not be in this country at the time. They knew of his extreme disposition to always grant the demands of labor, however unreasonable.