Up to the end of 1906 the United States Steel Corporation had spent more than $200,000,000 in the acquisition of new properties, the construction of new plants and the extension of old. Its productive capacity had been increased enormously. Its plants were now in excellent shape, its organization in perfect working order. Prices were high and it had, at the close of the year, nearly 8,500,000 tons of business on its books. Its early difficulties were past and it seemed about to enter into the heyday of its prosperity. CHAPTER IV THE TENNESSEE PURCHASE On the events of the year 1907 the United States Steel Corporation must, to a certain extent, stand or fall at the bar of public judgment. This was the year of the panic and of the Tennessee Coal, Iron & Railroad purchase. The panic, enemies of the Corporation have asserted, was precipitated by the big “trust” by the immoral use of its immense financial resources to enable it to “gobble up” the properties of the Tennessee company, a competitor said to have been making big inroads into the business of the larger concern and which it had therefore become necessary either to destroy or absorb. The friends of the Corporation, on the other hand, are emphatic in asseverating that the competition offered by the Tennessee company was not such as to cause anxiety to the management of the Steel Corporation, that it was not a very valuable property, and that the Corporation purchased its stock only upon solicitation by the interests controlling the company and their assurance that a refusal to do so would result in the failure of an important security house, which would add greatly to the severity and danger of the panic. They claim further that the price paid was more than the actual value of the stock and that, far from using any advantage it may have had to squeeze the smaller concern, the “Steel Trust,” against the better judgment of its management and with the single purpose of alleviating the panic dangers, paid for the securities it took over something like 60 per cent. more than good business practice seemed to warrant. If the claims of the first are correct and the Corporation did use its power to force a competitor to the wall, regardless of the fact that in so doing it was bringing misery and calamity to the ninety millions of people of the United States, this act alone must be more than sufficient to convict it on a more serious charge than “monopoly in restraint of trade”--of high treason and betrayal of the trust which big business, willy nilly, undertakes. But if the Corporation, through its directors, put the national welfare before all other considerations this, conversely, should prejudice public opinion, properly informed, in its favor. And this is why the year was by far the most important epoch in the Corporation’s history and its events are worthy of careful consideration.