The Birmingham age-herald., 1909-01-26
GIVES T CONTROL
 IF OPEN HEARTH Value of Tennessee Company
 to Steel Cooperation COMMENT FROM NEW YORK Costly Improvements at Steel Plant Will Geratly Increase Net Rev
 enue From Company Prop
 critics in Alabama.
COMMENT FROM NEW YORK

In view of the wide interest aroused by the Culberson resolution in the United States senate asking for an investigation into the purchase of the Tennessee Co. by the Steel corporation, newspapers of the north and east are giving considerable attention to the subject. The New York World of Sunday has the following;
 While the financial panic of November, 1907, was on, the United States Steel cor poration bought practically all the stock of it's principal rival, the Tennessee Coal and Iron company. The Steel trust paid for this valuable property chiefly with per cent bonds of it's own issue. The actual figures were ss4,ss4, ,97764, par value of bonds. and s632, ,655 cash. making the total purchase price sS5, ,317. SEGA In re- turn the Steel corporation received about all of the Tennessee company's stock, having par value of 0,374.S25. The ex- change was at the rate of $119 of steel bonds for every $10O share of Tennessee stock.
 From statements made by Steel corpo- ration experts and by former owners of the Tennessee company, the trust has not made any profits during the past year out of the purchase, but in the near future there will be enormous return upon the investment. The reasons for this condi- ton follow:
 Owing to the business depression of the past year the Tennessee company's plant was operated on a, reduced scale and the profits from it's business were consider ably lessened. The highest dividends it has paid were per cent, and those only at irregular intervals. If the company had continued independent operation 1t is doubtful whether it would have paid any dividend for 1908.
 Five Millions for Betterments.
 Large sums of money have been spent annually in developing and expanding the company's property. The Steel cor portation has gone further than the orig ina1 plans, and in the past year has ex- pended s5,O0O,000 in improvements, which more than wiped out any profits from operation. These figures will be shown in detail in the annual report of the Steel corporation. to be issued In March
 The prospective profits, nevertheless, are painted in roseate colors, and are ex- pected to begin in the current year. These are based on two conditions which were altered by the purchase-monopoly of the steel and iron trade of the south and elimination of a dangerous competitor. Officers of the Steel corporation antic- pate great expansion of industry in the south. The possession of the Tennes- see company with it's enormous plant at Birmingham, Ala, will give 1t practically a territorial monopoly.
 The Tennessee company was foremost -4n the development of the open hearth system of making steel rails, which are in high favor with railroads and com mand higher prices than Bessemer rails from Pittsburg. The Steel corporation had no open hearth rail mills, and is only just completing a large plant of that kind at its new works in Gary, Ind. Even the Bethlehem Norks, operated by Charles M. Schwab, were ahead of them in this respect.
 At the Birmingham works the Ten nessee company had an open hearth plant with capacity of 3OOo00 tons per year. In6 SIeel trust mas increased this capacity to 650,o00 tons, or more than double. These steel rails can be made for S21 per ton. If the Tennessee plant should be operated to its full capacity there would be a profit of $5,2OO,00O per year to the Steel trust, equivalent to 15 per cent on its investment of $35, ,000, 900, not counting in other channels of profit
 The southern company possesses enor- nous deposits of iron ore and coal in the immediate region of It's plants. This bring ing together of the two principal elements entering into the manufacture of iron and steel permit of exceptional economies in operation. The northern plants of the Steel corporation have to transport ore from the Lake Superior region, besides paying royalties on much of 1t. By the purchase they eliminated a competitor who was in position to cut prices, for it has been demonstrated that iron and steel could be made at Birmingham cheap CT than anywhere else in the country.
 The Steel corporations annual report will seek to demonstrate that It's purchase involved only a very small percentage of the total iron and steel trade, and that it was not such a great panic bargain as currently believed. The figures for the