The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-11-15
OF
THE STEEL TRUST
Manager Gates Tells of
Its Workings.
ONE SCHEME THAT FAILED
ATTEMPT TO FORM A WORLD
WIDE COMBINE
Admits That the Price of Barbed
Wire Was Raised Because His
Company Had Monopoly
of Patents.
Special Dispatch 70 The Call.

WASHINGTON, Nov. l4.-In giving his
testimony before the Industrial Commits
sion to-day John w. Gates, managing d.
rector of the American Steel and Wire
Company, gave an interesting account OF
his efforts to form a consolidation of thu
plants of all the wire-producing countries
including the American nation. He says
he visited Great Britain, France, Ger
many, Belgium and Austria for this pur-
pose. Germany he found to be the prin-
cipal competitor, England's work in that
respect not being sufficient to deserve Sc
rious consideration.
In Germany he found the manufacturing
centers compete most seriously with the
United States, and bounties and subsidies
were given on every hand TO hold up the
manufacturing interests of that country.
The German manufacturers first proposed
that in case OF an International cOnsolida-
ton the United States should be content
with p per cent Of the product. This he
had declined and they had increased the
allowance TO SO per cent. He had run
away from Berlin to avoid accepting this
allowance. He had himself represented
the possibility of increasing prices TO the
extent OF about $40 ton in case OF the
proposed amalgamauon, but found that
the Germans had in view an increase of
about $50 ton.
mended in high terms the German method
of encouraging the producing and eX-
porting interests, saying that II the
United States Government would adopt
the plan there pursued 1t soon would be
doing 80 per cent of the iron and steel
business of the world. He advocated sub
sides to steamship lines and to national
corporations of $5,V00,00O capitalization and
over He would have the corporations
pay literally for such charters in the be-
ginning and then have them pay large
sums annually for the continuance OF the
franchise. increasing the amount as the
capita lization increased until the annual
fee should be no less than $l,000,0O0 for a
company capitalized at SlO0, 900 900. de ad-
Vocated Government supervision or all
such corporations. He said the protective
tariff had much TO do with building up the
iron and steel industry, and that the con-
tinuance of the policy was necessary 10
the future prosperity of the industry.
Mr. Gates said that consolidation had
been effected last January. numDer OF
plants that could not be operated had
been shut down. The company employed
So 900 men and wages had been increased
on an average of 40 per cent The com
pany did not, he said, recognize the trades
unions, dealing with its men as indlVld-
uaIs, and il would not recognize the
unions as such. He said the company
controlled all the barbed wire patents and
had a monopoly IN this respect On this
product a higher charge was made than
on other products because of the monop-
oily of the patents. This was because OF
the money spent in their acquisition. Cen
orally speaking, the advance IN WIRE prod
ucts had been only proportionate to the
Increase of the price OF raw material. He
considered that all these advances had
been due to demand and supply and not
TO the combination. Indeed, he asserted
that the American company did not seek
a monopoly of the production Of unpat-
ented articles nor seek to control the sell
ing price of its patrons. On the contrary,
the disposition was 10 encourage other or
CARNATIONS. 1t was not true, as people
seemed to believe, that the trusts con-
trolled the iron and steel business of the
country. AS a matter of fact, they con-
trolled only about 40 per cent.
Mr.. Gates deprecated the present high
prices of iron and steel products princi-
pally because of the high prices of raw
material. He, however, expressed the
opinion that the present price would con-
tinuo for the next two or three years,
predicting the opinion on his knowledge
of the demands of railroads, the ship
yards and the building trades. He said
that his company was exporting no less
than 1000 tons Of wire a day, supplying
the wire products purchased there. He
admitted that the goods were sold at
lower rates abroad than at home, but for
the present this was necessary to hold
the outside trade. He had found that in
Germany all lines of the iron and steel
industry were syndicated He had pro-
cured copies Of the agreements, but he
declined to produce them, laughingly say
ing that he had them stolen. He said the
American company had earned a divi-
dend on its common stock as well as on
its preferred the directors considering 1t
wiser to lay aside something for a posi-
BILE rainy day.
other witnesses Of the day were Max
Ham, counsel for the American Steel and
Wire Company; ]. G. Pierson, organizer
of the National Spear Company, and J.
Wiess. vice president of the last named