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The Commoner.
15
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vent the enforcement of any penalty
for reducing pricetf or exceeding
one's share of the business. Previous
pool agreements may have been
broken and penalties inflicted by the
members themselves, although this
was soon discontinued. It will bo
assumed, even if a fund had not been
deposited, that the men in the old
pool would have paid their fines. If
this be assumed, it can also be as
sumed that the word of the partici-j
pants in the Gary dinners is ample
security for the professions of co
operation in the policy almost unani
mously subscribed to at the dinners."
The McRae report reaches the
conclusion that the steel corporation
operates in 'restraint of trade and
prevents competition through a ma
nipulation of prices, through the in
fluence of the so-called "Gary din
ners," by control of raw materials;
and through a system of interlock
ing directors in various companies.
It also tends to contradict some of
the testimony given by steel trust
officials.
Some of the figures dealt with in
the report are startling. It is shown
that J. P. Morgan & Co. received ap
proximately 570,000,000 in cash
profits for organizing the big steel
combine, and that the net profits of
the concern for the first nine years
of its existence were more than a
billion dollars. McRae finds:
That J. P. Morgan & Co., heading
the syndicate which organized the
steel corporation, received a cash
profit of $69,300,000, of which $62,
500,000 was for promotion, with an
additional commission of $6,800,000
for a bond conversion scheme.
That the net earnings of the cor
poration for a period of nine years
were $1,029,685,389, or an equiva
lent of approximately $13 a ton on
finished product, instead of $980,
000, 311, as claimed by the corpora
tion in its report.
That the..,B,tQel corporation, con
trary to the statement made by Judge
Gary and H. C. Frick to President
Roosevelt in 1907, that it did not
control more than 60 per cent of
steel properties in the country, con
trols about 80 per cent.
The approximate net earnings, the
report says, are equivalent to an
earning of 40 per cent on cost.
In, accounting for the discrepancy
between the earnings claimed by the
steel corporation, $980,000,311, and
his estimate of $1,109,146,093, Mc-
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Rao restored to not earnings what
had been eliminated by tho steel cor
poration in its accounting, includ
ing such things as "interest on bonds
of subsidiary companies, the lockcd
up inter-company profits in inven
tories, Bpecial depreciation admitted
ly charged to construction, employes'
bonus funds and special compensa
tions, account of preferred stock sub
scriptions, which have been treated as
dividends from earnings and not in
the nature of additional wages to em
ployes, and, lastly, interest on bonds,
mortgages and purchase monoy obli
gations of subsidiary companies.
Competition between previously
competing concerns was terminated
by tho concentration of the control
of upwards of 180 corporations into
one security-holding company, known
as tho United States Steel corpora
tion. The United States Steel corpora
tion is merely a holding company
engaging in no business except the
control through stock ownership of
the subsidiary companies.
Tho policy of the corporation re
sulted in enhancing the prices of raw
and finished material, of which the
report says: "Tho steel corporation
officers openly declared tho policy of
buying all the available supply in
order to keep up the price."
"The result," the report says, "of
.enforcing these resolutions and ar
rangements is that materials for ex
port must be bought from the United
States Steel Products company, and
buyers in the United States who wish
to buy goods for export are com
pelled to pay an additional profit to
the United States Steel Products
company."
That the United States Steel cor
poration has earned $4,339,140 in
eight years through its subsidiary,
the Union Supply company, which
sells goods to employes, is the con
clusion of an exhibit submitted with
the' report. The expert includes in
his report the following quotation
from the testimony from E. H. Gary,
chairman of the board of steel cor
poration, before the steel committee
last summer:
"Where the steel corporation has
stores and we have not very many
we made it certain that tho goods
were sold to the men at prices less
than they could purchase the same
things elsewhere."
The report also refers to the state
ment made before the committee re
cently by Percival Roberts, jr., a
director of the steel corporation, to
the effect that the corporation "had
done more for laborers than any
other agency in the United States."
Then the report sets forth facts
and figures tending to show that
through the Union Supply company
the steel corporation had made 100
per cent on its investment.
The exhibit represents that the
capital stock of the Union Supply
company, Ltd., was $75,000 and that
It was increased to $500,000 in
April, 1902, when the company was
incorporated; that 366 2-3 per cent
dividends were paid by the Union
Supply company, Ltd., from January
1 to October 1, 1898, before the steel
corporation was formed, these data
being supplemented with, extracts
from minutes of directors' meetings
of the Hr C. Fricke Coke company,
taken over later by the steel corpora
tion that 200 per cent dividends were
paid by the company for the year
1900, 100 per cent dividends paid
in 1901, and that the dividends on
1902, after the reorganization of tho
company amounted to $413,066.66.
The total earnings of the Union
Supply company from 1902 to 1910,
inclusive, were $4,339,140, and the
dividends in that period $3,550,000.
The cost of the Union Supply com
pany the report shows to have been
$274,000, while the corporation
J claims interest on $1,398,873.53,
fojttrmm
5HBP The
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frfyy. -r
Here's
Road to Comfort
A vanished thirst a cool body and a
refreshed one; the sure way the only
way is via a glass or bottle of
fc"
&
Ideally delicious pure as purity crisp and
sparkling as frost.
"P Our new booklet, telling
A iC6 of Coca-Cola vindication
at Chattanooga, for the asking
Demand the Genuine
as made by
THE COCA-COLA CO.
ATLANTA, GA.
W
Whenever
you see an
Arrow think
of Coca-Cola.
HYim
CM LAY
Rubber Roofing
v.WarraitSM
-
For Twenty-Five Year.
ABU UK, except Texas, OV'a..
H.
Kin. and
BON. BDedal
&IiTaWeJtittSSllMU Its gmure Fee, II.lt nerrelL
YWO-FXiT aWefglM4l2lHl It 8aM Feet, fl.3t McreO
VHRK&F&T aWifflMf51lMt Its guure , fUUSf errU
TERMS CASH We tare yon tlie yrhoUmler and retailers' profit . Pint
f pedal prices only bold food for inuaediate vhipneat.
fruit titjotibl) far Hsitt. Cotd. tun or Bate,
Writ for FREE SAMPLES or order direct from tkb adrertieement. Baitefaeiloei
giaraateei oaoey refanded. We refer yoate Southern UlinoU National Basic
Century Manufacturing Co,, S$X'nRl;u$t&
which includes a surplus of $615,-641.52.
NATURE'S BLUNDER
Even the greatest actor-managers
do not. know all there is to be known
about stagecraft, to judge from a
curious story concerning Sir Herbert
Beerbohm Tree, in the London Times.
It appears that at the rehearsal
of a certain play at his Majesty's
theater a wonderful climax had been
reached, which was to be heightened
by the effective use of the usual
thunder and lightning. The stage
carpenter was given the order. The
PATENTS
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Patent Lawyer, Washington,
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Gates reasonable. ,nib3t reference, JJeetserricM.
words were spoken, and instantly a
noise which resembled a succession
of pistol-shots was heard off tho
wings.
"What on earth are you doing,
man?" shouted Sir Herbert, rushing
behind the scenes. "Do you call that
thunder? It's not a bit like it."
"Awfully sorry, sir," responded
the carpenter; "but the fact is, sir,
I couldn't hear you because of the
storm. That was real thunder, sir!"
1
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