Smyrna times., 1911-06-14
DENIES CARNEGIE
HELD UP MORGAN
Says There Was No Coercion
in Forming Steel Trust.
RAILWAYS FIXED" PRICES
James GayIey Declares Prices of Rails
Were Changed at Suggestion ot
Railroad Presidents.

Were Changed at Suggestion OF
Railroad Presidents.
Denial that Andrew Carnegie com
yelled, by threats, the formation OF
the United States Steel corporation |
marked the testimony of James Gay
ley, vice president of the corporation
and an officer of the Carnegie Stee'
company for many years, before the
house steel trust" investigating com
mittee.
Mr. Gayley acknowledged in his tes
timony that the steel companies, prior
to the organization of the Unite,
States Steel corporation counselledI
with the railroads as to the price OF
steel, particularly of rails.
Mr. Gayley said such understand
ings with the railroads were neces
sary to prevent a monopoly in the
steel business, and denied that Mr.
Carnegie, as charged by John W
Gates, had held up" ]. Pierpont Nor
gan and in SO doing had forced steel
manufacturers to combine.
Mr.. Gayley said he had no persona
knowledge that Andrew Carnegie haC
threatened to build tube mill at Con
neaut to force the Morgan interests tt
buy out the plant, as charged by John
| w. Gates.
The Carnegie company had pur
chased land at Conneaut, he said, fo'
the location of a new plant, but it wa!
not determined whether a tube work
or a wire mill works would be erected
The purpose of building either, HI
said, would have been to furnish a.
outlet for the steel of the Carnegi
works near Pittsburg, which steel h;
formerly been taken by the Nationa
Tube company, Morgan enterprise.
There has been a statement, or
rumor," said Representative Young, O
Michigan, that Mr.. Carnegies pr
posal to build a tube mill was not
good faith; that it was really threa
to aid him in acquiring other properC
or to force others to buy him out. d
you know the facts?"
: There was no proposal to any one
said Mr.. Gayley, land there was ce
tainly no threat to build tube mil
The Carnegie company went ahead
carry out plans it had determined or
but it had never been decided wheth'
a tube mill or a wire mill would
\ constructed"
The National Tube company hs
ceased to be customer of the earn
gle works, having constructed its oN
l,lact frrDaoac Tho vritnaSc added th
it was not known that Mr.. Morgan W;
interested in the National Tube col
pany until after the United Stat
Steel corporation was organized.
J Mr. Gayley was asked whether al
additions had been made to the earn
gle Steel company's property after
had been appraised at book value
$76,OOO 900 and before it was sold
the Steel Corporation for nearly $50
100000.
"The company was always buildii
l. and expanding it's works and acquiri
more property" he replied.
Mr.. Gayley said he had no acti
part in the negotiations which resu
rs ed in the formation of the Unit
!, | States steel ne hiltM
ly of the developments in the trans
ID tion from hearsay, but approved
deal whereby the Carnegie compa
4 was acquired when Mr.. Carnegie s.
mitted his terms to the board of
u rectors.
in Asked as to the price of rails
the early period, Mr. Gayley declal
that the price usually was fixed
he conference with railroad offici5
chiefly those of the Pennsylvania r
road.
"Were there any agreements as
prices in those days?" asked
Young.
n 'In those days all the steel CT
- panies were independent" said
Gayley, land there were periods
RI war so destructive that agreeme
were necessary for all to recoup. II
would come other destructive W;
- Agreements were necessary from Il
- to time or ultimately one comps
would have gained a monopoly of