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MARCH 15M12
The Commoner.
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patch to the New York World: The
United States Steel corporation is a
gigantic monopoly in restraint of
trade, making fabulous profits and
false reports of thoso profits, and
two of its leading officials under
stated the magnitude of its control
of the industry to President- Roose
velt in 1907, according to the re
port of Farquhar J. Macrae, an ex
pert accountant, made public recent
ly by the Stanley committee, which
has been investigating the trust.
J. P. Morgan & Co. made a cash
profit of $69,300,000 out of the or
ganizing of the trust, $02,500,000
for promotion and $6,800,000 com
mission for a bond conversion
scheme.
The corporation earned $4,339,
140, or 100 per cent in eight years
through its subsidiary, the Union
Supply company, which sells goods to
employes, is the conclusion Oi an ex
hibit. Elbert II. Gary, chairman of
the board of the corporation, testified
last summer:
"Where the Steel corporation has
stores, and we have not very many,
we made it certain that the goods
were sold to the men at prices less
than they could purchase the same
things elsewhere."
The trust refused to produce its
books and the minutes of its meet
ings before the house committee but
offered to let an expert go over them.
"The .Gary dinner arrangement,"
says the report, "whereat the so
called independents are influenced
to reduce their production conform
ably to their estimate of the reduc
tion in the demand existing, and to
maintain prices, is objectionablo as
far as it operates to exclude free com
petition. The arrangement is de
signed and Intended to operate, and
has operated admittedly, as to stand
ard steel rails, although it is claimed
that the so-called independent par
ticipants can cut prices without fear
of penalty, except the dishonor of
declaring in favor of a named price
and then selling at some other price."
Stress is laid in the financial sec
tion of the report on the demonstra
tion by figures that the corporation
restrains competition by making the
greater portion of its profits in raw
materials and in plants producing
semi-finished materials, while the
finished product plants make very
low profits. This operates to keep
the price of raw materials, ore, coke
and pig iron on a high plane, to the
advantage of the corporation and
disadvantage of the independent.
"During the nine years from Jan.
1, 1902, to Dec. 31, 1910," the re
port Bays, "the productions of the
corporation In rolled and other
finished, steel amounted to 79,267,
368 tons, and the adjusted net earn
ings for the same period amounted
to $1,029,685,389 or an equivalent
of approximately $13 per ton. In
order that an idea may be had of
the net earnings in dollars per ton
of the several operating groups of
the corporation,. I have calculated
these figures and find the approxi
mate not earnings of $13 per ton of
finished product to have been earned
as follows:
"By manufacturing companies
$8.01 per ton. By coal and coke
companies $0.70 per ton. By iron
mining companies $2.12 per ton. By
transportation $1.81 per ton. By
miscellaneous companies $0.36 per
ton. Total $13.00."
In accounting for the discrepancy
between the earnings claimed by the
corporation, $980,000,311, and his
estimate of $1,109,146,093, Mr. Mac
rae restored to net earnings what had
been eliminated by tho corporation
In its accounting.
Aa showing the result of -the policy
Secrets of the Steel Trust
Following is a Washington dis- j of the corporation to make tho bulk
oi its proms in tho raw and semi
finished material, Mr. Macrae sub
mitted a condensed statement of the
dividends paid by the subsidiary com
panies to the Steel corporation and
the interest paid by the Carnegie
company on its collateral trust
bonds, from April 1, 1901, to April
1, 1910, showing a total of $753,-124,386.53.
"The income from the Carnegie
company in dividends and bond in
terest amounted to $305,239,537.49
or about 40 njr cent of the total.
The American Bridge company paid
the holding company dividends on
its preferred stock during this period
to the amount of $19,715,577.50, or
2 6-10 per cent of the total."
The table of dividends for the
nine-year period follows:
The Carnegie Co. . .$227,280,000.00
Federal Steel Co.,
common 114,816,182.00
Federal Steel Co.,
preferred 31,157,128.50
National Tube Co.,
common 29,783,905.50
National Tube Co.,
preferred 27,299,737.50
American SteeJ &
' Wire Co. of N. J.
common 51,110,460.25
American Steel &
Wire Co. of N. J.
preferred 27,299,158.25
National Steel Co.,
common
National Steel Co.,
preferred
American Tin Plate
Co., common ....
American Tin Plate
Co., preferred . . .
American Sheet Steel
Co., common ....
American Sheet Steel
Co., preferred . . .
American Sheet &
Tin Plate Co., pre
ferred 25,540,833.00
American Sheet &
Tin Plate Co.,
common 12,00.4;804.00
American Steel Hoop
Co., common 1,330.000.00
American Steel Hoop
Co., preferred . . . 2,041.497.51
Amrican Bridge Co.,
preferred 19,715,577.50
Oliver Iron Mining
Co 2,400,000.00
Lake Superior Cons.
Iron Min. Co 66,689.969.03
Shelby Steel Tube
Co., preferred . . . 2,224,995.00
Pittsburg Steamship
Co 243,870.00
Clairton Steel Co... 4,235,000.00
Mtfft
13
6,400,000.00
3,779,153.00
7,419,690.00
3,634,372.00
3,184,948.00
5,573,568.00
property of the Bethlehem, Cambria,
Colorado, Lackawanna, Pennsylva
nia and Tennessee companies added
to the capital stock of Jones &
Laughlin (because statement of
property is not available) amounted
to $365,768,889, theoo companies be
ing tho only important concorns in
the steel business in tho United
States outside of the United States
Steel corporation. This amount
added to that of tho United States
Steel corporation equals a grand
total of $1,811,606,339, of which tho
property account of the United
States Steel corporation amounts to
$1,445,837,450, or about 80 per
cent."
The report concludes:
"Competition between previously
cbmpoting concerns was terminated
by the concentration of the control
of upward of 180 corporations into
one security holding company known
as the United States Steel corpora
tion. "The corporation is merely a hold
ing company, engaging in no business
except tho control through stock
ownership of the subsidiary com
panies. "There were acquired a large num
ber of major concerns' at much in
flated valuations, succeeding several
increases in the capitalization of pre
ceding incorporations, due in some
cases to the greater combination
value or merger of the consolidation,
in which, of course, the units com
bined were restrained of any com
petitive activity. Specific instances
are given under this head relating to
three processes of combination as
follows:
"The original combination of
major concorns to eliminate all pos
sibility of competition.
"Other acquisitions in related lines
of business for which no explanation
has been offered and none appears
except the visible consequence, the
tho
removal of such concerns from
independent field.
"Tho acquirement of a largo num
ber of plants which never woro
operated and so mo of them, dis
mantled, being removed from tho
competitive field."
"Tho great possibilities for com
petition possessed by tho Tennessee
company" are given by Mr. Macrao
as his Judgment of why It was
acquired. The interlocking of direc
tors of the steel corporation and tho
purchase of stocks and bonds of other
companies and various outsido trans
actions of enqrmoiis size, the report
discusses at length in support of tho
claim of power of tho corporation In
restraining competition.
Tho control of ore by the Stool
corporation, 76 per cent of competi
tive ore In Minnesota, 500,000,000
tons In tho south, "In all 2,500,000
tons out of 4,462,940,000 tons of
commercially available ore In tho
United States Is an ownership and
a control which must intorforo with
competition."
A BLUNDIOIUCIt
"What you need, madam, Is oxy
gon. Como every afternoon for your
inhalations. They will cost you $4
each."
"I. know that other doctor didn't
understand my case," declared the
fashionable patient. "He told me all
T needed was plain fresh air."
Washington Herald.
NECESSITIES
Smith "I didn't know you owned
a motor-car; why these auto
goggles?"
Smyth "My wife has hatpins."
Puck.
ABSENT-MINDED
"I want a dog-collar, please."
"Yes'm. What size shirt does ho
wear?" Life.
$675,164,849.04
Interest pn the Car
negie Co. col.
trust bonds . 77,959,537.49
$753,124,386.53
"Percentages of the business done
by the United States Steel corpora
tion," the report says, "are deceiving
and misleading unless segregated
with reference to particular products.
For example, Mr. Roosevelt refers
to an estimate that the United States
Steel corporation did not have above
60 per cent 'of steel properties' or
steel holdings,' and when he was
asked If Gary and Frlck (at the time
of the purchase of the Tennessee
Coal and Iron company) said any
thing about the ore properties that
they were buying at that time he
answered 'They did not go Into de
tails at all, and he also stated that
ho understood they were going to
buy the Tennessee' company s
P "If" this estimate of 60 per cent
refers to property and investment in
tho steel business it may be noted In
Sat year (1907) that the total
Ropp's New Calculator and
Short-Cut Arithmetic
8L
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