The Birmingham age-herald., 1911-08-05
U. 5. STEEL IS THE CHILD 0F HIS OWN BRAIN SAYS SCHWAb Reared By Morgan and
 Carnegie, Who Now
 Regrets It FORMED TO DEVELOP THE STEEL INDUSTRY Witness Declares Corporation Is Not Illegal, Does Not Curtail Output Nor Control Prices-Favors
 Protective Tariff

| New York, August 4.-Charles M. Schwab. now competitor of the United States Steel corporation. today revealed that corporation before the House com mittee of inquiry as the child of his own brain, reared by J. Pierpont Morgan, with the acquescence, since regretted, of Andrew Carnegie
 MT. Schwab pictured the Steel corpora ton as a legal organization not formed to curtail output restrict competition nor | maintain prices, but to develop the steel industry of America. Aside from re- citing the inside history of the origin of the Steel corporation, he gave the com mittee much information relating to traf- fic matters. ore properties and steel man. ufactures.
 | The witness denied that the recent Brus- sels conference of steel manufacturers of the world. from which he returned re- gently, had anything to do with fixing prices.
 'I want to assure you," he said, that at no time was the question of prices or division of business territory even men | toned. We were there to tell the exact truth.Y
 Representative Sterling of Illinois led MT. Schwab into general discussion of the tariff on steel, particularly as to the relations of the business in this coun- try and Germany.
 The real purpose of the tariff on stee,' Mr., Sterling suggested. "is to protect you ltva Oar, ,o manufacture rails cheaply as Ger many and you still have the advantage in thai they must transport to our market?" "Yes, but Germany can now transport to our Pacific coast for less than we can shlp from Pittsburg to the coast" said MT. Schwab.
 Wants Protection ''I do not want to argue the tariff,' he said, but I cannot for the life of me see any disadvantage to America from liberal protection. It seems to me to be a mis- take to have the tariff so low that a for eign competitor can even reach our Pa cific coast That Is not the practice of Germany, France. Austria or Italy, or of any country except England. You could make rails for less than SS per ton and still make some profit, couldn't you?" MT. Beal inquired.
 "Gh. yes" was MT. .Schwab's reply, but think s2S ton is too low. As matter of tact, since l have been president of the Bethlehem Steel company we have never sold rails for less than S3o. We Have sold them as high as $o5 a ton.'
 MT. Schwab was willing witness on all points but one When MT. Beall asked him concerning an option given before the Steel corporation combine by Andrew Carnegie on his steel plants to Judge w. II. Moore and H. c. Prick
 tal NV, CDl,,x !, said the option was secured for some one yylose name never had been mentioned. 4 'sWho was 9, MT. Beall asked.
 II prefer not to say
 Was 1t some one now engaged in the steel business?"
 Nothing can induce me to say more" Nil. Schwab answered.
 Tt was a purely personal and private natter he added. The subject was pr essed no further
 Chairman Stanley referred to the suit bi ought by II. C. Prick against the Car nc gie company in 1S99 when the former r, tired and when, on the basis of the ironclad agreement, he was to have been paid his share on a book value of the property of about s75.aoo,oOo. Prick in his suit, placed the value a $250, 900, coo It was finally settled on an appraised valuation of about ss2o,000,O00
 That was the same property, was 1t rot" asked MT. Stanley. what was sold a few months afterward to the United States Steel corporation for S520,- O0,000?v
 Mir. Schwab said it was but ex- lfained that the book value estimate was based on the actual dollars mem CTS of the company had put in the ooncern and that each member In case ol death or retirement had agreed, MT rick among them. to sell his stock to ether members of the company on that basis.
 live up % his own agreement" he add ed We finally reorsanized and agreed upon a $320,000, ,000 valuation"
 MT Schwab will appear before the committee again tomorrow. Hearings in New York probably will be con cluded tomorrow night and the com mi ittee will return to Washington George w. Perkins probably will ap- rear before the committee there nex. Tuesday.
 MT. Schwab told the committee he had in public addresses both before and after the formation of the Steel corpora ton de- olared that any so-called combination or interests based on the false issue of re- striction of output and maintenance of prices was bound to fall.
 fAt the time of the organization of the steer tTuSl !! NIT. StdHlcN idSNeu, Diu you oppose the idea of restricting competi~ tion?"
 "I have said there was no such idea in the steel organization MT Schwab TO- plied. g-
 His Idea of Trust
 Mr. Stanley led Mir Schwab to state his idea of trust.
 'Take 100 plants making the same rrod- uct; 95 of them combine into one organ ization with the intention to restrict out put and maintain the price-that is q trust,' said MT. Schwab.
 "Gentlemans' agreements Mir. Schwat declared. were never made for any definite period and they were usually broken when one felt like it''
 '"Were you president of the Carnegie steel company at the time the Steel Plate association was formed in 190o?''
 q think r was'
 ..,rhat was price fixing, output re-