The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-12-16
SAYS COST IS
HIGHER NOW
THAN IN 1888
Charles M. SchWab TeStifieS
Regarding Steel Production
Before House Committee.
TESTIMONY DOES NOT
AGREE WITH LETTER
HARVARD PROFESSOR ,ADVO-
GATES FREE TRADE IN
MANY RAW MATERIALS.

Washington. Dec. 15.-Disagreeing
with the published views of Andrew
Carnegie with regard to the steel sched-
ule of the tariff, Charles NJ. Schwab,
former president Of the United States
Steel corporation gave valuable testi-
mOny before the house ways and means
committee at the tariff hearing today
While he practically admitted that
the conditions which existed nine years
ago would have permitted reduction
in the steel schedule at that time, he
said that the cost of every item en-
tering into the manufacture of steel
rails had increased to such an extent
that the conditions should be changed
to permit of tariff reduction
In five years there viii not be a bes-
Sener steel converting works left in
the United States" Mr.. Schwab pre-
dicted. "BeSselner steel viii be of no
use. The same is true of structural
steel as well as rails. They will all be
made oy the open hearth process of
manufacture. Costly changes in. the
construction of the plant Will be neces-
sary 10 make the improvement in the
method Of manufacture"
Electric System Coming.
MI Schwab also declared that within
ten years the open hearth process
would be superseded by the electric
system of manufacture, which was
being 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 produc-
lion"
Mr.. Schwab said he was not in favor
Of any changed tariff on steel and steel
products
y moderate change would not make
a material difference he said. but a
radical change might do considerable
harm"
he Admitted that the tariff could be
taken of iron ore without affecting
the value of the Mesaba ore of this
country.
Mr.. Schwab stated that the Bethle-
hem company. of which he is president
imports all of its iron ore, from Cuba
schwab's Letter.
Chairman Payne Of the COMMITTEES
began a cross-fire of questions by ask
ing Mr.. Schwab about a letter which
had been referred To by a previous wit
ness. This letter was written by Mr.
Sehwab to Henry c. Frick on May 16.
1899. and stated that rails were being
made for less than S12 a ton, or nearly
s. less than the cost in England. In the
letter Mr.. Schwab predicted that the
Carnegie Steel company. of which ne
was then president. would be able to
increase its Let earnings to $3,69O,OOO 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 testimony
MIR. Schwab said that the Bethlehem
Steel company, of which he is president
is not affiliated With the United States
Steel corporation, but he said that he
was stakeholder in the latter corpo-
ration. The steel magnate said that the
letter in question had been prepared az
Mr.. Tricks solicitation and was writ
ten in an optimistic vein.
Cost of Pig Iron and Steel Rails.
Mr.. Schwab gave detailed state
ment of the cost of making pig iron
and steel rails, which indicated that
The present cost of manufacturing pig
Continued on Page 2.