- Historic Sites
When The Headlines Said: Charlie Schwab Breaks The Bank
The Monte Carlo capers of U. S. Steel’s new president outraged Andy Carnegie but never ruffled J. P. Morgan
April 1957 | Volume 8, Issue 3
EVERYTHING ALL RIGHT. ANDREW CARNEGIE AND SEVERAL OTHERS WERE VERY MUCH EXCITED BUT THEY DID NOT MAKE THE SLIGHTEST IMPRESSION ON MR MORGAN. DO NOT GIVE THE MATTER ANY FURTHER THOUGHT OR CONSIDERATION. GO AHEAD AND HAVE BULLY GOOD TIME.
The worst of Mr. Schwab’s ordeal was over. “Many thanks,” he cabled Perkins. “Appreciate Mr Morgan’s attitude more than possible to express. Am his to command always.”
For the remaining three weeks of his tour the president ol the United States Steel Corporation attended strictly to business. “If I have injured our great company in America,” he wrote from Berlin on January 26, “I have done it very much good in Europe.” In Vienna he was received by Emperor Francis Joseph: in Berlin he made a speech on the expansion of American trade. But he was still worried about his adventures at Monte Carlo, and inquisitive reporters plagued him continually for further statements about his future in the great trust. Finally he wrote Perkins again for reassurance, and he asked how he should handle the American reporters when he arrived in New York. “Steel Co. first—me second,” he said. “Do what you think best…. I’ll do anything Mr. Morgan wants. He’s my idea of a great man. Carnegie has condemned me without a hearing. Mr. Morgan, a new friend, is broader gauged by far. I’m his to command.”
But Schwab had no reason to fear for his job. By the last week of January his letter explaining the affair had reached Perkins, and Perkins, of course, had read it to Morgan. “That’s a good letter,” Morgan had commented. “He’s all right.” Since J. Pierpont Morgan did not make such statements lightly, the incident could be considered closed.
The only remaining problem was the reporters. Schwab’s arrival would have been newsworthy in any case, for the corporation’s first annual report had just been published, and a stockholders’ meeting was scheduled for the day after his ship docked. Because of the Monte Carlo incident, it was sure to be a major event. Perkins, however, went to the editors of the “decent” papers (“it is impossible,” he said, “to do anything with the World or the Journal in such matters”), and “arranged” for them to avoid the subject of gambling. Then he wrote a final letter of instruction which was delivered to Schwab by special messenger just before he came ashore. If Monte Carlo was mentioned, Schwab should treat the affair as “one of those wild rumors.” Then he should “shoot right off into what really took you to Europe”—the study of commercial conditions. He should stress the great interest of European businessmen in the United States Steel Corporation, and his own deepened sense of responsibility as the head of that great exemplar of America’s methods and aims. “This will have the effect of reassuring the weak brethren over here who thought you had ceased to be a serious-minded business man and had turned into a gay butterfly,” Perkins told him. And he added: “I want to see you as soon as you arrive.”
On February 16 Schwab reached New York on the St. Paul. A terrible blizzard was raging, but he talked at length with the reporters. Naturally, they tried to get him to discuss his visit to Monaco, but he would not do so. A World reporter overheard Dr. Goulding whisper to him as the reporters approached: “Don’t say a word; not a word.” The best the man from the World could obtain was a statement by Charles T. Schoen, who said that Schwab was “an all-round good fellow and a dead game sport every time.” (In Vienna he had lent Schoen 600 kronen and when Schoen had tried to pay him back he had pulled out a coin, asked him to call it, and, when Schoen had done so correctly, refused to accept the money.)
“Mr. Schwab declined to discuss the personal details of his trip,” the Times man reported respectfully. “He said he preferred to speak as the President of the United States Steel Corporation.”
“While I had a delightful trip,” Schwab told the newsmen, “I also did a great deal of work. I found a feeling of the utmost friendship for our country existing everywhere in Europe. I found also intense interest in the question of industrial combinations…. I come back with my ideas broadened and my enthusiasm unbounded.” The European political situation seemed calm, and the future of American trade limitless, he added. And he left the reporters with this thought: “My visit abroad this year was notable in the change I found when I, who had been there so often before as an individual, presented myself as the President of the United States Steel Corporation.” This “greatest of American consolidations,” Schwab said, “was the centre of curiosity among enquiring men of all nations.”
That evening, according to the Times, Mr. Schwab was the guest of George W. Perkins for dinner at Sherry’s.