19th-century American steel producer in Illinois and Wisconsin
The Illinois Steel Company was an American steel producer with five plants in Illinois and Wisconsin. Founded through a consolidation in 1889, Illinois Steel grew to become the largest steel producer in the United States. In 1898, several other steel and transportation companies were merged into it to form the Federal Steel Company, itself merged into U.S. Steel in 1901.
The success of Illinois Steel did not go unchecked. The Carnegie Steel Company had a more efficient operation in Pittsburgh, Pennsylvania and sought to force Illinois Steel into receivership. Carnegie sold steel near Chicago at only eighteen cents a ton, forcing Illinois Steel to sell their products below production cost. The ploy worked and by 1896, Illinois Steel had drawn papers to place the company into receivership. Before these papers could be filed, however, Illinois Steel decided to focus on expanding their market to the west of Chicago, where Carnegie lacked sufficient supply lines. This strategy proved successful.[3]
In 1898, the Illinois Steel Company acquired the Minnesota Iron Company, Lorain Steel Company of Ohio, the Johnson Company of Pennsylvania, and the Elgin, Joliet & Eastern Railway, forming the Federal Steel Company. Upon completion of the merge, general counsel Elbert Henry Gary became president of the company.
In February 1901, Gary worked with J. P. Morgan to have him acquire Carnegie Steel. Days after the acquisition was approved, Gary announced his intent to merge Federal Steel into Carnegie to form what would be known as U.S. Steel. The new company began operations on April 1, 1901.[2]