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After the death of his father in 1890, Morgan took control of J. S. Morgan & Co. (which was renamed Morgan, Grenfell & Company in 1910). Morgan began talks with Charles M. Schwab, president of Carnegie Co., and businessman Andrew Carnegie in 1900. The goal was to buy out Carnegie's steel business and merge it with several other steel, coal, mining and shipping firms to create the United States Steel Corporation. In 1901 U.S. Steel was the first billion-dollar company in the world, having an authorized capitalization of $1.4 billion, which was much larger than any other industrial firm and comparable in size to the largest railroads.

U.S. Steel aimed to achieve greater economies of scale, reduce transportation and resource costs, expand product lines, and improve distribution.[9] It was also planned to allow the United States to compete globally with the United Kingdom and Germany. Schwab and others claimed that U.S. Steel's size would allow the company to be more aggressive and effective in pursuing distant international markets ("globalization").[9] U.S. Steel was regarded as a monopoly by critics, as the business was attempting to dominate not only steel but also the construction of bridges, ships, railroad cars and rails, wire, nails, and a host of other products. With U.S. Steel, Morgan had captured two-thirds of the steel market, and Schwab was confident that the company would soon hold a 75 percent market share.[9] However, after 1901 the business' market share dropped. Schwab resigned from U.S. Steel in 1903 to form Bethlehem Steel, which became the second largest U.S. steel producer.

Labor policy was a contentious issue. U.S. Steel was non-union and experienced steel producers, led by Schwab, wanted to keep it that way with the use of aggressive tactics to identify and root out pro-union "troublemakers." The lawyers and bankers who had organized the merger—notably Morgan and CEO Elbert Gary—were more concerned with long-range profits, stability,...