The free lance. (Fredericksburg, Va.) 1885-1926, 1911-06-13
Gdyley Says Morgan Was
Not Held Up by Carnegie.
DENIES STORY CT GATES
Vice President of U S. Steel Cor
poration Declares There Was
No Coercion in Formation
OF Trust.

washington, June l's-d"i''' N"'
ley, former vice president OF the Unit
ed States Steel corporation ami also
formerly Of the Carnegie Steel com
pany. was witness before the an
ley investigating committee.
Mr.. Gayley denied the charge made
by John W. Gates that Andrew Carne-
gle had forced the Morgan interests
to buy him out by threats 10 build a
tube mill at Conneaut, and so forced
the formation OF the United states
Steel corporation.
Mr.. Gayley acknowledged in his tes-
timony that the steel companies, prior
to the organization OF the United
States Steel corporation counselled
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" j. Pierpont Nor
gan and in 50 doing had forced sted
manufacturers to combine.
No Coercion by Carnegie.
Mr. Gayley said he had no personal
knowledge that Andrew Carnegie had
threatened to build a tube mill at Con
neaut to force the Morgan interests to
buy out the plant. as charged by John
w. Gates
The Carnegie company had pur'
chased land at Conneaut, he said, for
the location OF new plant. but II was
not determined whether tube works
or a wire mill works would be erected.
The purpose Of building either. he
sald. would have been 10 furnish an
outlet for the steel Of the Carnegie
works near Pittsburg. which steel had
formerly been taken by the National
Tube company. Morgan enterprise.
There has been a statement, or a
rumor," said Representative Young. OF
Michigan, that Mr.. Carnegie's pro-
posal to build tube mill was not in
good faith; that 1t was really a threat
to aid him in acquiring other property
OF to force others to buy him out. Do
you know the facts?"
There was no proposal to any one,
said Mr. Gayley. and there was GER
;ainly no threat to build a tube mill.
The Carnegie company went ahead to
carry out plans 1t had determined on;
but il had never been decided whether
a tube mill or a wire mill would be
constructed.
The National Tube company had
ceased to be a customer Of the Carne-
gle works, having constructed its own
blast furnaces. The witness added that
II was not known that Mr. Morgan was
Interested in the National Tube com
pany until after the United States
Steel corporation was organized.
Mr.. Gayley was asked whether any
additions had been made to the Carne-
gle Steel company's property after II
had been appraised at book value oil
SIG. .OOO. 900 and before IT was sold to
the Steel Corporation for nearly $780,
5000.
The company was always building
and expanding its works and acquiring
more property" he replied.
Mr. Gayley said he had no active
part in the negotiations which result
ed in the formation Of the United
States Steel corporation. He knew on
ly Of the developments in the transac-
tion from hearsay, but approved the
deal whereby the Carnegie company
was acquired when Mr. Carnegie sub
mitted his terms to the board Of d.
rectors.
Mr. Gayley, who Judge E. II. Gary.
head of the Steel Corporation, told
the committee was a practical steel
man, gave information on many tech
nical subjects relating to the busi-
ness. Mr.. Gayley was formerly in the
Carnegie Steel company.
Mr.. Gayley. questioned by Repre-
sentative Young. Of Michigan, gave
the history of the Carnegie Steel
company from 1885 to 1901. when the
Steel Corporation was formed. He de-
scribed periods Of destructive com
petition" between different companies
and the ultimate progress and devel-
opment of the Carnegie company.
He also described new methods OF
manufacturing steel and dwelt upon
their effect I'm advancing the value OF
steel properties.
Asked as to the price OF rails In
the early period, Mr.. Gayley declared
that the price usually was fixed in
conference with railroad officials,
chiefly those of the Pennsylvania rail-
road.
Were there any agreements as to
prices in those days?" asked Mr..
Young.
"In those days all the steel COM
panles were Independent" said Mr.
Gayley, "and there were periods OF
war so destructive that agreements
we're necessary for all to recoup. Then
would come other destructive wars.
Agreements were necessary from time
to time or ultimately one company
would have gained a monopoly of the
business"