The Birmingham age-herald., 1911-05-28

ence over this bank?a persisted Mr Stanley.
 T don't know" said Mir Gates. "It Is difficult to tell where a mans influence starts or ends in Wall street;
 MT. Gates said that the bank in qnes- tion, the Trust Company of America wanted s1o,o000o0. And" he added, they got it.
 $1,O0O,OO0 Lost
 Judge II. Moore and H. c. Prick lost H,0o0,00o to Andrew Carnegie in lssi through the forfeiture of an option on the Carnegie Steel works. and the man her in which J. P. Morgan, Charles M. Schwab and himself conceived the idea of the United States Steel corporation III 1899 to head off MT Carnegie from en- gazing in the railroad and tube manuiac- turing business was revealed by j. M. Gates.
 "The price of finished steel he said, became badly demoralized in ls9o or 1897. MT. Prick and Judge W. II. Moore conceived the idea or seeufihs an option from MT Carnegie Tor ms paid s1 ,00O,0 ,000 for it. Soon afterWara demoralization of the business became so great that they could not put the deal through. The price, l think was sloo'- 000,000. They had to forfeit that option and they were not particularly pleaseo' Hfetty soon the fedefai SAeei N3A pany was formed
 Tn 1899 or 1900 Mir. ]. P. Morgan organized the National Tube company and was making money. MT. carnegie then took 1t into his head to build railroad from lakes around his plants and also to erect tube works al Asn tabula, Ohio. MT. Morgan heard ot It and consulted with MT. James Hill Of the Great Northwest railroad MT. Nor gan expressed fears that if Carnegie went into the railroad business he would demoralize the railroad situation as he had the steel business and If he built tube mill he would demoralize prices.
 After considerable talk Mr. Hill sug- gested to MT. Morgan that he talk to me about 1t. l went to Mir Morgan, who asked me how to stop MT. Car negie
 q told him the only man who had any influence with Carnegie was Charles w. Schwab.
 "Get schwab,' MT. Morgan told me for a conference.
 Steel Corporation Formed
 "I got Schwab and that night we went to MT. Morgans house. We con- ferred until o'clock the next morn- Ing. When we left we had formed ten tative plan to merge the steel corpor
  States Steel corporation.
 "Thereupon the plan for the United States Steel corporation was drafted
 Soon after that time Judge Moore went to see MT Carnegie and said to him: If you are going to take bonds for your property, make them cover the National Steel company as well. MT. Carnegie followed this advice, thereby getting for the National Steel company s10,000. 900 more than it was worth"
 MT. Gates said the United States Steel corporation paid $46s00,0OO for the Amer ican Steel and Wire company, of which he was the presiding genius.
 The property for which MT. Carnegie had given an option at 60,000000 was turned into the Steel corporation at s32O- O0O.oOO, said MT. Gates.
 The obligations of the steel trust, he continued. were more than he could es timate. First, he said, were the under lying bonds of the companies that had been turned. so next the first mortgage bonds issued by the United States Steel corporation to pay off Carnegle then bonds to cover purchase mortgages, prior liens and the like.
 What is the tangible property behind these bonds and this common and par stock?' asked Chairman Stanley.
 "Oh, anywhere from $500, 600 to $1, ,O0o- 900. .O0O."
 Do you believe there Is any tangible value behind the common stock you hold?" asked MT. Stanley.
 q decline to answer,n said Gates.
 MT. Gates said Mr. Carnegie had all ways been like a bull in China shop. overthrowing every agreement that was made between the companies. He thought 1t was. Carnegies attitude in threatening the wSHle line of steel industry that had hastE and brought about the organ izatieA9Wbf the United States Steel Scor poration.
 MT. Gates left Washington after the hearing. The next meeting of the com mittee will be held Tuesday. It is not known definitely who will appear before 1t on that day Among the witnesses expected, however. are E. H. Gary and Norman B. Ream of the United States Steel corporation.