The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1911-05-28
Frankly Tells Investiga-
tors How Steel Corpo-
ration Was Formed.
STARTLING TALE
OF HIGH FINANCE
AS Result of His Revelations,
Morgan, Carnegie, Gary and
Perhaps Rockefeller Will Be
Asked to Tel What They
Know-Gates a Will
ing Witness.
Especial to Tho Times-pispatch.l

Washington, ID. c., sIay 27--Johss
w. Gates to-dny under oath laid bnro
before the Stanley steel trust inves-.
tigating committee these startling
fncts concerning the steel trust ind thu
steel induntry of the United Slater,
The steel trust WINS born at IN ar.
night meeting Mt Che homo Of J. z,
Morgan In New York, and had fts IN.
aspiration In threats by Andro,v Cars
neEic TO go into railroad constructors i
and steel tube manufacturing.
Carnegie had been n demora1artnfa
Influence IN the steel industry, und IL
was feared he would become troubieS
come In the rnilrond busincss.
Cnrnesic WINS pnid sa2o,poo,ooo a,
bondn for his controlling intereat IN
the Carnegie Steel Company, for vyhiuh
he Ind given mn option ono year hc,
fore for s16o,oOO,Oo0. incidentally. ho
pocketed the 100000 option forfeit.
The Tennessee Coal and Iron Come
pany was acquired by tho Steel Corr
poration after squeeze OF tho syndts
cate controlling the majority stock
without the transfers of a dollar in
cash. ]. Pierpont Morgan ana hia
partner. George Perkins, arranged the
shifting OF securities The majority
stockholders in the Tennessee Coal ana
Iron Company received about sos
valuc in Steel Corporation securities
for tho stock which they had refused
10 sell to Morgan year before for
$3.50 per share.
Cannot Control Industry.
The Steel Corporation cannot cons
troll the steel Industry in the United
States. according to Mr.. Gates. excepn
In special lines. Arbitrary abuse and
power gained through ownership OF
transportation companies. however.
would enable the steel trust to crush
independent opera tons forced to usa
tho Lake Superior region ore.
Gates. controlling stakeholder In ahn
Republic Coal and Iron Company, told
the committee that he favors an open
market. with competition and the sur.
vival of the fittest n
j. p. Morgan will be summoned as
witness In the investigations To-day'a
revelations make this necessary There
can be no escape for him, and the In
Vestigation will be continued. If nao-
essary. through a year, in order to get
the big financler's testimony i1. 4;
Moreover, committee members saw
that to-day's proceedings merely
scratched the surface and paved the
way Tor the testimony of Morgan, Car
nesie and Judge Gary. There is infor-
nation at hand that even John D. I
Rockefeller will be called, Fills mama
was brought into the testimony OF
Gates to- day 1lHilIFlS
The opening gun at the hearing. a
hashlight photograph OF the commit
tee. was fired at 1880 a. NJ Mr. Gates
was on hand, debonnaire smiling, alert.
lie was dressed In n new summer suit
or light gray, straw hat, tan shoes,
negligee shirt and blue ito. His body
guard of advisors consisted Of his son,
charles G. Gates, and Richard Jones',
Jr.. his personal attorney and gen erai
counsel for the Republic Coal and IRON
Company ij;
Notes Effect of Pieasantries,
An easy. revolving chair was given
"Bet-you- million" Gates at the Wit
ness table and from time to tims dur,
Ing the session he swung about to note
tho effect OF his pleasantries on the
spectators. He was always at ease
With his Investigators. giving infor-
nation when he desired willingly
Withholding IL at times with ready Jest
He wanted to get through. When the
committee suggested recess he de.
mnnded: Can you be back here no
2:15Y Tf,
I'VE can" said the committee.
II want to leave on tho O'clock
train" explained Mr.. Gates He left
on that train. z.
When the committee assembled thia
morning. with all members present ex-
cept Martin w. Iittleton, Chairman
Stanley swore Mr.. Gates, and without
further ceremony asked him to tell OF
the merger OF the Tennessee Coal and
Iron Company with tho Steel Corpora
tion. Al.
This is the crux OF the entire situa.
ton. The merger was In plain viola.
ton Of the Sherman antitrust law.
its sole basis was the approval Of for-
mer President Roosevelt, who refused /
to permit his Attorney General to at
tack tho merger in the courts. Honco
the important and far-reaching pro.
ceedings begun to-day spl
Mr.. Gates dropped back IN his chair.
crossed his knees and launched forths
In 1904, I think. syndicate took
control Of the majority stock oflthe
company There were no bonds. Grant 4
S. Schley and Charles s. Guthrie wero
given authority to sell at n profit. but
not at a loss, without conuulting tho
syndicate. We purchased in the open
market about 100000 shares. several [
OF us taking IL. 900 shares each. There
sTsra afteen- mon IN sths 'sgndieAtaf "