But incredible as it may have seemed to those accustomed to the vagaries of high finance as it was often practised in 1901, the promoters of the United States Steel Corporation did not regard it as a mere venture in financial legerdemain. They had the greatest faith in it as a straightforward business enterprise. They believed in its future. Judge Gary, who took an active part in the organization, has always insisted that it would be successful and the enterprise justified. And the reader of the history of the big company must judge for himself whether it has justified its organization, not only from an economic, but more particularly from a sociological standpoint. Morgan, it has been said, considered the financing of the Steel Corporation the crowning achievement of his career. Was he mistaken? Or did he, in making possible this giant Corporation, erect himself a monument more lasting than brass? It has been admitted that a large part of the Steel Corporation’s original capital was water. Just how much will never be decided. Herbert Knox Smith, Commissioner of Corporations under President Roosevelt, estimated that substantially half of the Corporation’s total issue of securities was not based on any tangible property assets. Other critics have gone further, while some have placed the amount of over-capitalization at a lower figure. Mr. Smith’s figures, so far as they go, are probably approximately correct, except that they made little or no allowance for the enormous value of the Corporation’s ore holdings. But does the cost of tangible assets indicate actual value? Does the cost of erecting a factory or a business indicate the value of that business? Manhattan Island was originally purchased for twenty-four dollars. A business that is losing money is seldom worth the investment put into it, and conversely a money-making concern must be valued on its earning power. Many of the companies merged into the United States Steel Corporation were immensely profitable, and even though they themselves may have been over-capitalized, their value to the new corporation and to their stockholders was greater than their capitalization. The actual plant cost of the Carnegie Steel Co., to take one instance, had been placed at about $75,000,000. That is, these plants in 1901 could have been duplicated for that sum. But the organizers of the Steel Corporation bought not only the Carnegie plants; they purchased an organization that was at the same time the most efficient steel-making and steel-selling machine in the world, an organization that the best-qualified witnesses have declared was worth anything from $250,000,000 up. An organization, moreover, that had earned $40,000,000 in a single year. And what was true in the case of the Carnegie company was, in part at least, applicable to most of the other concerns which went to make the United States Steel Corporation.