Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-03-12
TRUSTS IN TROUBLE,
The Cordage Combine Called
on to Defend Its Exist
ence i'm Court.
VERY PECULIAR HISTORY
Of a Combination That Has Had Its
Own Way a Long Time.
HOW 1T MANIPULATED A MARKET
And Maintained Prices While 1t Kept Down
the Raw Material
VERY PECULIAR HISTORY
HOW IT MANIPULATED A MARKET
A SERIES OF BROEEN-UP CONTRACTS
rePEcrAI TELEGRAM TO THE DrsPArcE., F,

relating TO the methodS OF the Cordage
Trust have Just leaked out that may be OF
value to the Federal authorities, who are
reported to be seeking evidence that
will warrant proceedings against the
directors of the National Cordage CON-
psny similar TO those instituted against
the officials of the Whisky Trust. The dis
closures are the outcome of suit brought
by one of the stockholders of the Elizabeth
port Cordalge Company, one of the four firms
which originated the Cordage Trust The
suit brings in question the legality of the
deal between the Elizabethport Cordage
Company and the National Cordage Com
pany, and endangers the charter of both cor
porations.
Internal dissensions have now made it
possible to obtain evidence which will show
that the National Cordage Company has
bought up nearly all of the cordage estab-
hshments in the United State, has advanced
the price of rope and twine, and at the same
time kept down the price of hemp, manipu-
lated the stock market, and, in fact, created
monopoly whose operations are in re-
straint of trade and violate the laws of the
State of New jersey and the statutes of the
United States.
History of the Cordage Trust.
The history of the formation of the Cord
age Trust and of the methods EMPLOYED to
extend its operations has never been told in
print The details were kept as secret as
possible, as the success of the combine de-
pended largely upon the ability of the man.
ayers TO hoodwink the general public. The
National Cordage Company was formed five
wears ago, by uniting four big cordage
manufacturing concerns of this city ahd
vicinity. They were the Elizabethport
Cordage Company, at the head of which was
F. NJ. Fulton, Sr., to whose energy
and brains is largely due the building
up of the National Company; the firm Of
l. Waterbury s. Co., the head of which is j.
N. Waterbury, now the President of the
Cordage Trust, and its chief manager since
Mr.. Fulton has retired; the well-known
firm of William Wallis. Sons. and the
Tucker s. Carter Cordage Company.
These were known as the ''Big Four" of
the cordage combine. After uniting to form
the National Company, they proceeded to
organize trust under the first form this
product of modern fnanciering assumed.
The National Company issued trust GER
tifcates to all concerns that could be in
duced TO join it. 1t got in nine cordage
companies scattered throughout the coun-
try. The National controlled the plants OF
these concerns and increased or decreased
the product of rope and twine at will.
haDlpulSUlOnS OF Ine SOmD1ne.
Seeing the necessity of tying up the COM
panies not in the combine, the National
made contracts with q majority of them
with the object of getting control of
prices and, above all, control of hemp.
As all of the hemp used in this
country is imported, it is subject to specu-
lation, and the managers of the Trust at
tempted to keep down the price of the raw
material, while at the same time they ad-
yanced the price of the manufactured pro-
duct
These operations raised storm Of obiec-
tions about the heads of the manipulators,
and 1t was decided to change the trust to a
corporation. This was done by taking out
charter in New Jersey and increasing the
capital stock TO SIS, ,00O 900, OF which S., ,OOO,-
600 was preferred and $10,000,00O CON-
mon stock. The common stock was
exchanged for the trust certifi-
cate, the National Company becoming the
owner Of the factories and other property
possessed by the different firms and COM
panles, and these concerns parting with
their plant for blocks of common stock
The bulk of this common stock was placed
in pool and manipulated for the benefit Of
all concerned by certain members of the
Board of Directors of the National Com
psny.
How Stock Prices Were Maintained.
The preferred stock was placed on the
market and sold at about par, on the under
standing that it was to come in ahead of any
obligation which the company could as
sume The price of this stock has been
maintained by the repeated declaration that
il was first lien on all dividends and assets
of the company. There is rumor on the
street that this obligation has not been
lived up 10.
After time 1t was found that the system
of contracts with outside cordage manu-
facturers did not work satisfactorily. The
company accordingly broke these contracts,
telling the other side to go where they
pleased. There were over 20 of these con-
tracts. Most of the concerns sued the COM
pany and some of the suits are still pending.
The answer of the National Cordage Com
pany to one of these suits is unique. It
claims that the contract is null and void on
the ground that it was made in restraint of
trade and for the sole purpose of controlling
the output of binder twine, and hence an IL
legal contract. though couched in legal terms
This frank admission is made bv the
National Company in its answer to the suit
Of the Field Cordage Company of Xenia,
O.. and the funniest part of the business is
the fsct that the National Company re-
Gently purchased the entire plant of the
Field Company, but by an oversight did
assets purchased.
The Hemp Market Manipulated.
In order to manipulate the hemp market
the cordage people formed what was called
''The Association" The members of this
mysterious body pledged themselves to
stand together through the heaviest falls
They had an understanding with nearly all
the hemp brokers in this country
and in England, and with the four
principal exporters at Manila and also
those in Yucatan. Their theory was that they
yvouId be able to control all of the MANILA
and sisal fiber which came to this country.
The scheme proved dismal failure. The |
chief reason that the hemp combination |
broke was that the members refused to take |
the fiber at prices put on it by the National |
COMPANY. This left large quantity of |
bigh priced fiber in the hands of the |
National which they were obliged to |
Ike into cordage, although they had |
big stock of twine held over from the pre- |
vious years production.
Last spring the National people began |
negotiations looking to the purchase of |
c4Tdage establishments on a new plan, ard |
Ev November last contracts had been i
made for the purchase or lease |
of most of the principal concerns in |
fl,is country. Like the schemes Of Colonel |
sellers ''there were millions in it."
md while an enormous outlay was re- |
,Iired the establishment of a monopoly |
would give the manipulators plenty OF op- |
portunItv to reimburse themselves.
The Concerns That Were Gobbled.
Here are the concerns which were gobbled |
-ha National CompaQy.