Democratic Northwest. [volume] (Napoleon, Ohio) 1869-1894, 1891-10-01
THE AGE OF TRUSTS.
Immense Combinations Organized
to Enjoy McKinleyism.
The Steel Rail Association.

"PITTsBURGH,P PA, Jan. 90, 1S91.-The
recent purchase of the Allegheny Bes-
semer steel works by the Carnegies,
and of the Scranton steel works by the
Lackawanna coal and iron company,
have directed attention to the fact that
steel rail manufacturing is slowly but
surely becoming a monopoly. In 1880
the field of steel rail making was cut
up by the competition of ten different
concerns. Now there are but six In
the decade intervening nine other con-
Germs have either discontinued the bus
mess or been absorbed.
pennsylvania produces two-thirds
of the steel rails made in this country.
"There is tacit understanding
among the six concerns now making
rails which prevents cutting in prices
and insures division of orders. None
of the companies is powerful enough to
absorb the other, but the business has
been so centralized as to make the
formation of trust an easy matter
whenever the manufacturers feel so
disposed. Associated Press,
NOT A POOL, AN ASSOCIATION.
The above report of the absorption
of the Scranton Steel Co. by the rail-
makers trust evoked this explanation
from the secretary of the Illinois Steel
Co.:
'The Dispatch calls the combination
of steel-rail makers a pool. This is not
correct The various companies have
formed the Railmakers' Association.
The object of the association is simply
70 prevent a ruinous cutting of rates.
There is absolutely nothing in the
rumor that our profits are pooled. Each
company is independent of the other,
save in one matter of underselling.
Now that the Scranton company has
Joined the association there are no rail
companies outside. The Scranton COM
pany has been disturbing element for
a long time, but l suppose that it has
found that it would be more profta BILE
to join the association"
That the new concern is not pool, {"
but an association" will be comfort
to consumers of steel rails who are
thus officially assured that the MEM
bers of the association" will find it
more profitable to join" and prevent
the ruinous cutting of rates" The
league, pool, trust or association will
not, | presume, interfere with a ruin
Gus Ito consumers initiation of rates up
to the full limit permitted by the Nc
Kinley tariff
The manufacture of rails has thus
been concentrated in the hands of six
companies, and the price of rails has
been advanced about $3. 90 or $4. 90 from
the very lowest figures. There were for
merly eleven companies which produced
rails, without counting the Troy or
Cleveland works. The Illinois Steel
Co. absorbed three companies, the
Carnegies bought out one, and the
Lackawanna Coal and Iron Co. and the
Scranton Steel Co. have consolidated.
This leaves the Il nois Steel Co., the
Carnegies, the new Lackawanna Co.,
the Cambria, the Pennsylvania and the
Bethlehem Iron Cos. in possession of the
field. 1t is understood that the new
Lackawanna Co. will issue SO, roo, 900 in
stock, and it's capacity i be 400, 600
tons per annum.
During the year 1887, 2,O49,639 tons of
steel rails were produced in this
country. The combination with the
aid and protection of the tariff WALL
forced the prices up from $S7 per ton.
in 1885, to $40 per ton at the beginning
of 1887. Prices then declined to $32. so,
under the pressure of the railroad COM
binati7n, which found it profitable to
import 100000 tons, Notwithstanding
the duty. This importation of 1,soO,-
900 tons of steel rails, conclusively
shows that American combination
prices are, on an average, ST. per ton
higher than English prices
Previous to 1870 the duty on steel
rails imported was 45 per cent sd va
loren. Up to 1869 and 1870 Sir Henry
Bessemer had a patent on the steel
rail process, and, like any other article
patented, he might have charged any
price for it. In 1869 he was selling steel
rails at $l10 per ton. In 1870 his patent
ran out and steel rails fell to $53 per
ton In 1869, in this country, the price
of Bessemer steel rails was $132 so per
ton, and in 1871 the price was $102 per ton;
and the manufacturers of steel rails in
this country, seeing that they could
now have the benefit of Bessemer's in
vention, and wishing to ward off for
eign competition, sent confidential
b
ways and means of congress, asking
for duty of two cents pound, or
S44.SO per ton, on steel. Notice right
here, that this duty was proposed by
the very men who expected to reap the
benefits and not by congress at it's own
instance. They did not wish the real
reasons and motives to be known This
letter, nevertheless, was a very honest
document; they. put in no idle words
They proposed, by means of a heavy
duty on foreign steel, to keep that out
of the country, and with their own
mills, then running, to supply the
whole domestic market. But the COM
mittee andcongress did not give them all
that they asked-two cents per pound,
or $44 50 per ton--but only tive-eighths
of. what they asked, or $2S per ton.
Now, how did this duty operate-frst,
so far as the people were concerned;
second, SO far as the laborers were con-
cerned?
First, then, as to how it affects the
people. For the thirteen years ending
in 1888, there were produced in the
United States GOA, $50 tons Of steel
rails. The average higher American
price for rails for those thirteen years
than English rails, was 1872. Is per ton,
which average higher price was the
only motive for laying the duty on the
foreign rails. That is to say, the effect
of the laving of the duty was to in