The Washington times., 1909-05-06
Speaks in Support of His
Amendment, Embodying
Famous Iowa Idea
TELLS OF PROFITS
MADE BY COMBINE
Would Prevent Tariff From ShfE-
tering Monopolies and From
Reciprocity Provision.


in the Senate this afternoon, declared
| for lower duties on iron and steel. for
1 free lumber and discussed general
I phases of the tariff question. He spoke
In support of his amendment to prevent
the tariff from sheltering monopolies.
embodying the famous Iowa idea," and
| also for q broader provision for reci-
procity IN the tariff bill than is con-
tained In the maximum and minimum
I provisions Of the AIdrich bill.
Striking In importance In Senator
Cummins' speech were his statements
as to the enormous profits of the
4 United States Steel Corporation and
4 his demonstration of the fact that this,
concern does not need protection.
According to Senator Cummins, the
Urited States Steel Corporation last
year, the poorest year In it's history, sold
its product at an average of 1924 per
ton more than was necessary TO make
fair and reasonable profit. He de-
clared the corporation excessively capi-
tsiized. that capitalization being in
round numbers s.. .4oO. 100000 He sought
to Snow that II il had been capitalized
on 8 fair basis the capital would not
4 have exceeded $50, ,000. 000
Excessive Profits.
/
profit of per cent on last years busi-
ness, Senator Cummins found that It
/ had S57.S5S. .5s5 of excessive profit that
year. He argued from t1is that it was
not entitled to protection.
Going in detail into the affairs of the
Steel trust. Senator Cummins said:
The company, when IL began business
on the LIST of April. 1901, had property
which upon the most liberal estimaEe
1 n -
though it represented capitalization
consisting OF stocks and bonds aggre-
eating. In round numbers, s, 400, ,O00, 900.
This value has been Increased since that
time. but IL has grown wholly from the
extraordinary profits which II has ex-
torted from a defenseless people.
Il hope IL will not weary you il give
you little more fully one csapte- IN
its organization with which am very
familiar. In 1885 there was organized.
under the laws of New Jersey. a cor
poration known as the American Steel
and Wire Company. II Issued $9o, ,000. 900
Of capital stock. so, ,0o0 900 common. and
$40. 90 preferred Under the plans of
its organization a subscriber TO one
SHIRE of the preferred stock, which il
was assumed was paid for at par, re-
CeiveG one and one-fifth shares of the
common stock It became the owner
Of a series of steel plants. and / know
that in the opinion of those who we're
interested I'm the promotion of the enter
prise all the plants and all the property
which came into It's possession did not
exceed In value $32,O0O.0e0; and yet when
ii was all over the company had these
plants and there was outstanding
against them 10000, 600 of capital stock
Its Organization.
when the United States Steel Cerpor-
alton was organized in 1901 the American
Steel and Wire Company was merged
into IL, and in the merger premium
was paid on both the common and pre-
ferred stock Of the American Steel and
Wire Company. Every other plant that
became a part of the combination in
1901 was valued in the same extrayagant
and exaggerated way. The whole world
knows that Carnegie and his associates
received four or FIVE times as much as
the most imaginative appraiser would
put upon sire property transferred.
The wnole world knows that the
United States Steel Corporation took the
carnegie ants at valuation which
did not pr 5tend to represent the real
worth of the properties. but did repre-
sent the capitalization or their extraor-
within bounds when / say that II the
United States Steel Corporation had
been honestly capitalized, the capital to
be rewarded with a return from the
profits of the business would have been
less than s7O0.000,000
The Government may have 10 penalty
that IL car. Impose for this sort nf orime,
but at least X can In viewing the sub
1ect we are now considering, adjust
its import duties with reference 10 the
truth, and not initiate them to meet the
necessities Of a financial lie. 1 give
therefore TO the United States Steel Cor
poration a legitimate capital of 500. .0O6,-
900 upon which IL may j<Stly esk a re-
turn. If IT hac paid per cent upon
have paid out for that purpose $42, ,00o-
00O, which. being deducted from its Eet
income. leaves So, ,S5S .GS5.6 of excessive
profit, so far as We Are concerned in
framing tartff law.
Years Products.
According to the report to which I
have referred. its rolled and other fin
ished steel products fox sale during the
year aggregated 6aO6 sS2 tons. Apply
ing the whole OF the excessive profits
to these products, we have the aston
ishing result of 1924 per ton; that is
to say, during the last year, which was
probably the poorest year in the history
of the company, IL sold its product upon
an average of 1924 per ton more than
was necessary to make fair reason
able profit. / do not attempt TO appor-
ton this excessive profit among the
various forms OF manufactured steel, !
for it is not necessary TO enter per-
centages.
.'The outcome is so striking and inn
pressive that for my purpose l need
go no further. There is not Senator
here but who knows that this average Is
unnecessary, and L had almost said un-
lawful, profit largely exceeds the dif-
ference between the price OF these same
products in the markets OF the foreign
world and the price in the markets of
the United States. Permit me TO state
l. in another way: The United states
Steel Corporation could have sold its
entire output in the United States at the
prices prevailing in the markets of
Europe, and would still have made more
than s per cent upon its lawful capital,
and that in the most Improbable year
OF its existence. II seems 10 me that
TO assert In the light OF this history
that the United States Steel Corpora
tion has need of any protection is to
invite the indignation of any right
thinking man
Iset us max e the history complete The