The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1911-08-04
That Idea Of the Organization
Originated With Him.
TOLD 1T TO MORGAN
And the Financier Was at Once
FaVOrably Impressed.
Asked Witness to Get a Price
From Carnegie.

New York, Aug. 4.-Charles NJ.
! Schwab, president of the Bethlehem
Steel company and former president of
the q. S. Steel corporation, faced the
house committee of inquiry into the
steel corporation today. Mr.. Schwab
recently returned from Europe where
he attended the International confer
ence OF steel manufa cturers at Brus-
sells. He was questioned first about the
Incorporation of the u s. Steel cor
poration; just prior to that he said he
was president of the Carnegie Steel
company.
The chairman asked Mr.. Schwab to
tell the whole story about Andrew
Carnegies desire to dispose of his
property, the preliminary conferences
with J. P. Morgan and his part in the
plans which developed into the fOrma-
ton of the L. 5. Steel corporation
I am very glad of the opportunity"
Mr.. Schwab began, "once and for all
definitely to tell the story about which
there have been so many misstate-
ments and so much misinformation.
In the fall of 1899, J. Edward Sim
mons, a New York banker, and Charles
Stewart Smith rendered me a dinner
at the University club. There were
present Mr.. Morgan, Mr.. Carnegie and
seventy or eighty prominent New York
financiers.
There made an address and chose
as subject for my remarks the fu-
steel in the United States. I explained
the great advantage to be gained by
the organization of such a corporation
as United States Steel. There / out
lined what became later the steel
corporation.
Gave His Reasons.
Il gave my reasons in detail" said
Mr.. Schwab.
I showed first how I thought that
instead of many companies manufac-
turing the same line of goods that by
organization many companies could get
together and manufacture different
items that would result in great econ
omy.
4 showed secondly how by such an
organization there woui be great ecoT-
omy in distribution. In my proposal
thore w1s no thought of limitation of
production or the maintenance of
prices. The possibility of go blast fur
naces coming together in that way in.
producing economy proved so great that
recently at the Brussels conference I
advocated the idea of all Independent
manufacturers exchanging their cost
sheets for the ultimate benefit of the
steel industry
Gould tLey do that without injury
to each other?''
"Oh, yes, they can and do
Mr.. Schwab then resumed his story
of the organization Of the u. S. steel
corporation: 'SCme time after tn 1T din
L =
message from John w. Gates asking
me to meet J. P. Morgan
LAS soon as I met Mr.. Morgan ne
asked me to go over again in detail the
suggestin l made at the University club
dinner. I talked with him on the sub
ject for several hours, expanding my
ideas of forming the organization of
the steel manufacturers. Mr.. Morgan
told me that he was convinced of the
advantages of such an organization
and he asked me if I could get a price
from Mr.. Carnegie for his steel plants.
told him 1 would see.
Went to See Carnegie.
about a week later spent the day
with Carnegie and when a favorable
Cpprtunity presented itself l told him
what was in my mind and that Mr..
Morgan had requested me to get a
price for his steel plant. I advised Mr.
Carnegie that in view of his advanced
age and his philanthropic ideas of life,
that he ought to sell. I told him I
thought he would be benefited by such
a sale. Mr.. Carnegie received the pro-
position with a great deal of reluctance
but finally he agreed to sell. 1t is my
private opinion that shortly afterward
he very much regretted it.
L got a price from Mr.. Carnegie ana
took it to Mr.. Morgan.
AT the time of the organization of
the trust" Mr.. Stanley asked, did you
oppose the idea of restricting competi
tion 2''
Il have said there was no such idea
in the steel organization" SchWab re-
piled.