The Sentinel=record., 1911-08-05
SCHWAB. TELLS STEEL STORY
UNITED STATES STEEL WAS CHILD OF HIS BRAIN REAR
 ED BY MORGAN.
Andrew Carnegie Instrumental in Formation of Trust Afterwards Regrets His Action, Says
 MT. Schwab.

Schwab, now a competitor of the United States Steel Corporation to- day revealed that corporation before the house committee of inquiry as the child of his own brain, reared by Pierpont Morgan, with the acquies cence, since regretted, of Andrew Carnegie.
 Mr. Schwab pictured the steel cor poration as legal organization mol formed to curtail output, restrict tht competition or maintain prices, but to develop the steel industry of Am erica. Aside from -eeiting the in side history of the origin of the steel corporation, he gave the com mittee much information relating to traffic mergers, ore properties and steel manufacturers.
 The witness denied that the recent Brussels conference of steel manu- lecturers of the world, from which he returned recently, 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 ter ritory even mentioned. We were there to tell the exact truth"
 Representative Sterling of Illinois led Mr. Schwab into a general dis cussion of the tariff on steel, par. ticularly as to the relations of the business in this country and Ger many.
 Tine real purpose of the tariff or steel" Mr. Sterling suggested, lis to protect you in the home market. You say you can manufacture rails as cheaply as Germany and you still have the advantage in that they mus transport to our market
 Yes" but Germany can now trans port to our Pacific Coast for less than we can ship from Pittsburg tc the coast" said MT. Schwab.
 q don't want to argue the tariff, he said, but I cant for the life ol me see any disadvantage to America from liberal protection. It seems tC me mistake to have the tariff SC low that a foreign country can ever reach our Pacific Coast. That Is no the practice of Germany, France Austria or Italy, or of any foreigr country except England"
 "You could make rails for less thar $2S ton and still make some prof it, couldn't you?" MT. Beall inquir ed.
 'Oh, yes" was MT. Schwabs re ply. "but think BPS ton is too low. As matter of fact since have been president of the Bethle hem Steel Company we have neye sold rails for less than $50. We hav' sold them as high as s55 ton"
 MT. Schwab was a willing witnes on all points but one.
 When MT. Beall asked him con corning an option given before tn steel corporation combine by Ar drew Carnegie on his steel plants t judge which MT. Moore and H. c Prick, a deal never consummated t the financial loss of Mir. Moore an MT, Prick, MT. Sehwab said the op tion was secured for some one who's name never had been mentioned.
 "Who was it?" MT. Beall asked.
 'I prefer not to say"
 Was it some one now engaged the steel business?"
 Nothing can induce me to sa more." MT. Schwab answered.
 Tt was a purely personal and pri vate natter he added.
 The subject, was pressed no fu ther.
 Chairman Stanley referred to tn suit brought by H. e. Prick again' the Carnegie company in 1899 whe the former retired and when, on tn basis of an iron clad agreement ! was to have been paid his snare 0 book value of the property of abo' $75,O0O,00O. Prick in his suit place the value at 0,0O0,OO0. It was fl ally settled on an appraised valui ton of about s320,000,000.
 That was the same property, ws IL not?" asked MT. Stanley, "thi was sold few months afterward