Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1911-05-28
R1cK OEE OF The HEAVY LOSERS
Morgan and SehwAb Power Behind
the Movement
SMALL CONCERNS SQUEEZED OUT
Carnegie Described as the Bull in the
China hop.
WOULDN'T STAND BY AGREEMENT
An-TiEht Meeting Held in New York.
al which So was Agreed to Merge
All Steel Compantes Into One
Great Corporation.

WASHINGTON Nav Z7.-How W H
Moore and H c. Prick lost 81 O000OO 10
7crow Carnegie in 1gy7 through the for
ft..-Te of an option on the Carnegie steel
- -Tirs and the manner IN which J Pier
ri Morgan. Charles N Schwab and him
s-.c conceived The IDEA Of the United States
sd corporation IN 1879 10 head off M
Cs-ncZie from engaging in the railroad
60 trbe manufs cturing business were re-
v--ses today by John ". Gates before the
h~-ss Steel trust investigating COMMITTEES.
1,c price Of finished steel" he said,
o. --E-as badly oernoralized in 1896 or 1877
- Trick and W. H Moore conceived the
,t-= uf securing an option from Mr.. Car
n--.a FOR his steel plant They got the
r. .la- and paid s. oOo.O00 for fl. soon after
-r1d Decentralization Of the business be
cr--s 40 great that they could not put the
ce7l through The price ] think was S1SU,
or rg0. They ha6 10 forfeit that option and
tsay were not particularly pleased. Pretty
zc-- tbs Fedora Steel company was formed
vith the consolidation Of the Lorraine Steel
c-TzTany. the Minnesota Iron company. the
Esinois Steel company and the Elgin,
=o.iot a Eastern railroad.
In 1929 OF 1870 J. Pierpont Morgan or
EzziEod the National Tube company and
=ss making money. Mr.. Carnegie then
srera Lake Erie around his plants and also
- erect a tube works At Ashtabula o.
IT Morgan heard Of II and consulted with
james j. HIn of the Great Northern rail-
read. Mr.. Morgan expressed fears that II
Carnegie went into the railroad business
ha would denorRliEe the railroad situation
Aa he had the steel business. and If he buft
c tube mill he would denora1ize stsel
prices.
Morgan sends for sehwab.
"Aftar considerable talk. Mr.. Hn sug-
Eested 20 Mr. Morgan that be talk TO me
shout H. ] went 70 see Mr. Morgan, who
asked me how 20 stop Mr.. cargenie. told
him the only man who had any influences
with Carnegie was Charles NJ schwhb.
4" Get SehwRh.' Nfr. Morgan told me. for
a conference I got Schwah. and that
night we went 70 Mr.. MorEAn'E house We
coufarrsd with Mr.. Morgan AL night. until
Q O'clock the next morning and when we
left we had formed the tentative plan 20
merge the Eteel corporations into one con-
eern. the United States steel corporation
Soon after that time Judge Moore went
20 see Mr.. Carnegie and said 20 him; II
you are going 90 take bonds for your prop
srty. make them cover the National Steel
company as wen.- Mr.. Carnegie followed
this advice, thereby gerting for the Ma
tional steel company S10.00o.D 200 more than
II Was worth"
Mr Ga1eE said the United States Steel
corporation paid s4s.sOO.oOO for the Amer
Scan Steel and Wire company. Of which
he was the presiding genius
The property. for which Mr- Carnegie had
given an option Of SlsO 0oO.00o. was turned
irto the steel corporation at S290 OOO. 600 said
Mr. Gates
The obligations Of the steel trust he
continued. were more than he could esti-
mate First. be said, were the underlying
bonds q the companies that had been
turned in. next the first mortgage bonds
issued by the United States Steel corpora
tion 70 pay off Carnegie: then bonus to
cover purchase mortgages. prior Hens and
the like.
What IL the Tangible property behind
these bonds, and this common and pre-
fsgrsd stockY~ asked Chairman Stanley.
''oh. anywhere from $500 0OO.OOo 10 s. .OOo.-
00oGOo"
DO you believe there IL any tkngfble
value behind the common stock you hold 20
asked Mr. Stanley.
i decline 70 answer" said Mr. CITES
Gates said Carnegie had always been
like bull IN a china shop, overthrowing
SxeFy agreement that was uaAdR between
the companies
Mr Gates thought n was Carnegie :
general attitude IN Threatening the whole
line Of the steel ind ustrz tfst had hsEtened
and brought about the organization Of the
United States steel corporation.
The special cornruittee Of which Repre-
sentative Stanley Of Kentucky is chairman
had determined that an Investigation OF the
Tennessee coal and iron deal which is said
% have been approved by President RoOse-
Welt should be the first subject taken Up
Coutinued on 1-tird PAE,)