New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-10-19
Brokers So interpret Decision to
Cancel Its Great Northern
Ore Lease.
"a MONOPOLISTIC FEATURE"
Step Recalls Statement in bu-
reau of Corporations Report
Stocks Weak on An
nouncement.


United states Steel Corporation Saiu -
have been one Of the largest indus'rla'
contracts ever made. is to be cancei'eu'
q was officially announced yesterday
No reason for this decision was inao'
nphl,c il being merely stated that the
Steel Corporation had decided 10 ''Ne
advantage Of the clause in the agree
ment giving it the right, upon two years
prior notice Of such intention. 10 'eri'll-
nate the lease on January /. 1915.
II appeared TO be the general beHeI
in Wall street. however that the pro-
uosed cancellation of the lease was
move by the steel corporation to avoid
prosecution under the sherman anti
trust law Wall Street was quick TO
recall that Herbert Knox Smith. Com
missioner Of Corporations. made special
reference in his report in June on the
steel Corporation to its enormous ore
holdings ard the like as a monopoistic
feature The Commissioners words
were as follows:
Not only on account Of It's great hold
i7us OF orc. but also en- sccourt OF these
peculiar advantages enjoyed IN the
transportation Of the ore. It occupies an
extremely commanding position in the
iron and steel industry. noeed, in 50
far as the Steel Corporations position
in The entire iron and steel industry is
of nnonorostio character, it is chiefly
throuah its control Of ore holdings and
the transportation Of ore.
After considering these facts the fnar-
cial district jumped TO the conclusion
that fy giving up its lease on the Great
Northern iron ore properties the Steel
Corporation would be in position to
defend successfully any action that the
government might bring against it,
Rogers Called It a Bad Bargain.
in some quarters. however. it WAS
thought that the Steel Corporations pri-
mary reason for abrogating the lease
was because II was dissatisfied with its
bargain. which the late II. H. Roge-s
once said he regarded as a very bad
one II was recalled that a { the time the
contract was made there was a dis
crepancy Of from 80 900 900 to 80 900
O0n tons between the estimates Of James
]. Hiu and the Western officers Of 1he
Steel Corporation as TO the amount IF
iron ore i'm the properties. Mr.. Hilfs
figures were j00O000G 70 700.00O.Oo0
tons while the steel Corporation officers
pu. the total at about 1JO.O00.06O tons.
The latest estimates are that the prop
critics contain 100000 900 tons Of avail
able ore
Those who held that the steel Corpora
tion was not satisfied with its lease Of
further confirmation OF their belief that
It has been losing money on tho con-
tract. which was signed In October 1906,
although il had only itself TO blame for
this state Of affairs The terms Of he
agreement provided that in 1907 the cor
poration was to mine a minimum e
10000 tons Of ore. and that the mini
mum should he increased by 1000 tons
q year until II reached S.2jO,ooO tons,
when il was to continue on that bass.
I'll minimum stipulated TO be paid Cor
each year whether the ore was mined or
not The price agreed upon to he paid
for the orc was 81 Gj a ton delivered at
the upper lake docks. with an increase Of
81 cents n ton each succeeding year.
Practically No Ore Mined
No ore 10 speak Of was mined by the
Steel Corporation in 1907. 1905 and 1909
and II is not thought that any consider
able amount was taken out in 1910. al
though under the terms OF the contract
tn minimum amount mined last year
should have been 100000 tons. This
year the corporation will have 10 pay the
Great Northern S3G97 800 for ore. very
little Of which II will probably remove
from the property and by 1919. when the
le.se is 10 he terminated, the yearly pay
ments will amount to more than $500
O" In addition 10 paying out large
sums for ore that it has never received
the steel Corporation has expended sew
eral million dollars in developing the IRE
lands
The ore land holdings OF the United
States Steel Corporation, outside Of the
Hill properties are estimated al be-
tween l2OOOOOOOO and 1900 100000
tons. some Of the mines being in the
Mesaba range. where the Great North
oin ore lands also are The corporation.
therefore, will not lack supplies of the
raw material for its furnaces for some
fIFsg 4
fonted with a shortage in the future
II will doubtless have the same oppor-
tuniiy as other users Of iron ore to pur-
chase its supplies from the Great North
ern.
There is considerable interest in steel
ton OF the lease Of the Great Northern
ore properties will have upon the city
Of Gary which was built on the shores
OF Lake Michigan that 1t might have the
benefit Of cheap water transportation
Tor It's raw supplies from the mines.
Now Gary Gets Its Ore by Water.
The shipping point for ore from the
Great Northern properties is Duluth
and from there it IS carried by steamers
'hiough Lake Superior and down Lake
Michisan direct TO the docks immediate
iy adjoining the blast furnaces Of the
Cty Of Gary Should the output OF the
Corporations own mines in the Lake
superior region not prove sufficient III
Inc future for its wants. the Gary plant
NiIl be under the necessity Of getting
us supplies elsewhere and may have to