[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.

“I have never known of any one interested in the business to make any complaint about Mr. Carnegie’s absence at that time, but all the partners rejoiced that they were permitted to manage the affair in their own way.” (Henry Phipps in the New York Herald, January 30, 1904.)]

The manufacture of steel was revolutionized by the Bessemer open-hearth and basic inventions.  The machinery hitherto employed had become obsolete, and our firm, recognizing this, spent several millions at Homestead reconstructing and enlarging the works.  The new machinery made about sixty per cent more steel than the old.  Two hundred and eighteen tonnage men (that is, men who were paid by the ton of steel produced) were working under a three years’ contract, part of the last year being with the new machinery.  Thus their earnings had increased almost sixty per cent before the end of the contract.

The firm offered to divide this sixty per cent with them in the new scale to be made thereafter.  That is to say, the earnings of the men would have been thirty per cent greater than under the old scale and the other thirty per cent would have gone to the firm to recompense it for its outlay.  The work of the men would not have been much harder than it had been hitherto, as the improved machinery did the work.  This was not only fair and liberal, it was generous, and under ordinary circumstances would have been accepted by the men with thanks.  But the firm was then engaged in making armor for the United States Government, which we had declined twice to manufacture and which was urgently needed.  It had also the contract to furnish material for the Chicago Exhibition.  Some of the leaders of the men, knowing these conditions, insisted upon demanding the whole sixty per cent, thinking the firm would be compelled to give it.  The firm could not agree, nor should it have agreed to such an attempt as this to take it by the throat and say, “Stand and deliver.”  It very rightly declined.  Had I been at home nothing would have induced me to yield to this unfair attempt to extort.