Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1908-12-16
SCHWAB TAKES
ISSUE WITH
CARNEGIE
DECLARES STEEL TRADE
MUST HAVE PROTECTION
Conditions, He Says, Have
Changed Radically Since
Master of Skibo Was a Fac
tor in the Business,
lsy Morning journal Special Leased wirel


Washington. +. g. Dro. i5.-Dis
agreeing with the published views o.
Andrew Carnegie. with regard to the
steel schedule of the tariff, Charles
VI. Schwab, former president of tn,
United states Steel corporation. gave
valuable testimony before the house
ways and means committee ut the
tariff hearing today.
While he practically admitted that
the conditions which existed nine
years ago would have permitted a re-
duction in the steel schedule at that
time he said that the cost Of every
item entered into the manufacture of
steel rails, had increased to such an
extent that the conditions should
have to be changed to permit of tar
in reduction
In five years there will not be a
Besscmer steel converting works left
in the United States, Mr.. SchWab
predicted. "Bessemer steel win be
Of no use. The same is true Of struc
tural steel as well as rails. They all
viii be made by the open hearth pro
cess of manufacture. Costly changes
in the construction of the plant VIII
be necessary to make the improve
ment in the method of manufacture
Mr. Schwab also declared that with
in ten years the open hearth process
would be superseded by the electric
system of manufacture, which was be
ing developed in Germany.
These conditions in the process of
manufacture increase the quality of
the steel" he continued, but they
also slightly increase the cost of pro-
duction."
Mr. Schwab said he did not favor
any change IN thr tariff on steel and
steel puroducts "A moderate change |
would not make material differ
enco," he said. but a radical change |
might do considerable harm"
He admitted that the tariff could be |
taken off iron ore without affecting |
the value Of the Messaba ore of this
country Mr. Schwab stated that the
Bethlehem steel company of which
he is president imports all OF its iron
ore from cuba.
Chairman Payne of the committee
began cross fire of questions by
asking Mr. Schwab about letter
which had been referred to by a pre-
vious witness. This letter was writ
ten by Mr.. Schwab to Henry c. Frcl1
on May 16, 1899, and stated that rails
We're being made for less than $12
ton, or nearly seven mills more than
the cost in England. In the letter
Mr.. Schwab predicted that the Car
negie Steel company of which he was
then a member would be able to in
crease it's net earnings to $3600,000
a month and said it could sell all Of
its surplus production abroad at a
profit nearly equal to the profit on
domestic sales.
Before proceeding with his testi-
mony Mr.. Schwab said that the Beth
lchem Steel company, of which he is
president, is not affiliated with the
United States Steel corporation, but
said he was stookholder in the lat
ter corporation The steel magnate
said that the letter in question had
been prepared at Mr.. Frick's solicita-
ton and was written in an optimistic
vein.
Mr. Schwab gave a detailed state
ment Of the cost of making pig iron.
ana steel rails which indicated that
the present cost of manufacturing pig
iron is $14 a ton as compared with
IS ton i'm 1899; while i'm the cost
of steel rails today is $21.5O a ton
with $l2 ton nine years {
ago.
Mr.. Schwab replied to many qucs- q
tions bearing on the adyisability of $
the reducing of the tart1 on iron and $
steel I
He stated that in Germany the cost
of conversion into steel is about the t
same as in this country. The cost of /
in England is "a little J.
less than in Germany
IF the tariff on steel should be y
reduced, would the steel =
business be seriously affected? ?' asked C
Mr. Hill or Connecticut t
IF conditions are equal we can p
make steel rails as cheap as they can q
be- made anywhere" replied Mr.. q
Schwab "The cost of manufacturing
steel depends on two conditions. the q
cost Of the matter on the ground, and
he cost of labor If these conditions s.
are the same as elsewhere We don't
need the tariff but if the cost of trans a
portation or labor OF something else j'
IS greater here We need tarin for "
protection" j
Mr. Schwab claimed that he was
not aware Of any UNDERSTANDING be z
Ween the United states Steel corpora
ion and the German steel syndicate
md the English Rail syndicate.
AIr. Schwab said that the price of
teel rails was fixed by most Of the
american manufactures at S2S in r
s3s or 1896: that in 1885 during the N
steel war this price was not main laI
aimed but that following that war r.,
Was again agreed to maintain that d
'rice Since then no manufacturer ir
las attempted to lower this price for is
ear of starting another conflict. ID
Referring again to foreign cuun- "a
ries. Mr.. Schwab said. 81
The labor conditions in England q