The Savannah morning news., 1902-07-21

is printed IN the New 1OFh OOilliilSl-
ciaI Advertiser, Mr.. Gates tells of his
career as a steel magnate, describes
the history of the formation of the
Steel Trust and expresses his opinions
upon railroad and other matters.
Those who figure much on the future
of American railroads will find ex-
ceeding interest in the assurances of
Mr.. Gates that Notwithstanding the
tendency toward lower freight rates
railways during the next decade will
show handsomer earnings than even
the present marvellous exhibits con-
tain.
THE railroad interests of this coun-
try" he said, ARE to go through a
continual process of consolidation.
Small lines will be absorbed by larger
ones. The tendency of freight rates
in the United States will within the
next ten years be lower, and yet the
profits of the railroads will, in my
judgment, be even greater with the
lower rates, owing 10 the improve
ments in rolling stock and motive pow
er, roadbed, the cutting out of curves
and cutting down of grades and in
creasing train loads.
1.-The railroad situation in the United
States to-day is better than ever in its
history.
No More Rate Wars.
"Fratricidal rate wars will no longer
be INDUCED in. In many instances rate
wars have been the result of the hot
Medicines of freight agents, traffic
managers or general managers, ~
the consequence that such contests
cost their companies millions of dol
larC and r6Cl11ta6 in q actual lose tn
the parties who got the lower freight
rates for the reason that the mer-
chants were inclined to overbuy when
freight rates were made low.
IF some of the politicians of high
degree would look more carefully inNo
the financial requirements OF this
country and bring forward a PROPOSE
ton that could be passed by Congress,
increasing the currency whereby bust
ness might be done more nearly on a
cash basis and less credit required the
violent fluctuations, tight money and
the like which exist at times would
soon disappear and any rate for mon
ey in legitimate channels above 5 per
cent would be looked upon as extor-
ton"
Two Financial CIiques.
Financial control of the United
States chief industries is beyond doubt
centered in certain powerful factions.
just what men compose these collossi
has for long time been a matter of
much speculation. Mr. Gates sums
them up as being the National City
Bank Standard Oil contingent on the
one hand and j. P. Morgan & Co. with
their various associates on the other.
In the National City Bank coterie is
included the Standard Oil Company,
Kuhn. Loeb & Co., Hartman and, to
a certain extent George j. Gould-only
TO certain extent. The greatest spec
ulators in Wall street are the Stan
dard Oil crowd. 1t is supposed that the
Standard Oil and National City con-
tingent control more money than what
is known as the other set.
The other crowd" are ]. P. Morgan
& Co. and the men who go with them.
Not that the Standard crowd don't GO
with the Morgan interests in some
instances, for they do. Mr.. Morgan
has with him such men as J. j. HILL
the big Philadelphia people-Fox,
Welsh, Widener. Elkins and Griscom.
In Chicago he commanded the back
ing of Marshall Field, Norman B
Ream and Pullman.
The l.. & N. Coup.
The facts of the Louisville and
Nashville struggle for control were set
forth by Mr.. Gates as follows:
"On Louisville and Nashville we had
the opinions of the best experts and
auditors in the country that it was
worth more per share than Illinois
Central before we started into it. We
knew it had $25, 100000 of quick cash
assets in its treasury. The public did
not know that. When we started In
to buy the stock we started in know
ing the actual intrinsic value of the
company and its exact physical condi-
tion and we had reports of auditors
on it's financial condition. When we
obtained 100000 shares OF stock-tht
amount we started out to get-there
was a short interest in the market OF
100000 shares. OF 1t 100000 shares were
foreign short interest; 80 900 were stock
Mr. Belmont had sold under a resolu.
ton of the board authorizing its sale
These $4,000 shares were not good de.
liveries for thirty days, and IL we haC
called the stock and insisted upon this
specific performance of contracts, al
we had every right to do, we coulc
have caused a panic greater than th'
May panic.
1.-THE proposition was made to me By
a thoroughly responsible man finan
cially that if would call and insis
upon delivery of Louisville he woulc
sell 100000 shares of stock and give ms
half of the profits for doing 1t. Mr.
Morgan's people sent to my hotel anc
awakened me at 1880 In the morning
and said that at a meeting of bankers
it had been determined that we wert
owners of Louisville and Nashville
and they wanted to know what W.
proposed to do about it, saying tina
it meant q panic probably greater thar
the May 9 panic. / told them tn,
proposition that had been made to me
but that under no circumstances would
we insist upon specific performances
of the deliveries of Louisville anl
Nashville stock, as we had no wisl
whatever to cause any panic or t
make anyone lose money in stock!
they held. We let Mr.. Belmont's PEG
pie have all the stock they wanted
without any premium charged.
THE people interested with me il
the purchase of Louisville and Nash
willie were able to have paid for th'
stock they bought four times over il
cash.
Ship Subsidies.
Discussing government subsidies fo
American built ships, Mr.. Gates sale
that what this country lacks most to-
day TO further reach the markets o
the world properly is better shipping
facilities by water. This could only
be accomplished to his mind by sub
sidizing steamship lines.
When he had made the foregoing
review OF railroad and financial con
ditions and other subjects, Mr.. Gate,
told of his business career from tn,
time that he first began to build III
the manufacture and sale of steel wirt
products.
Mr.. Gates first identification with tn
steel industry found him employed as