The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1911-06-01
STEEL TRUST BORN
TO CURB CARNEGIE
John w. Gates Gives Some In
side History.
BARES FORMING OF TRUST
Organized Because Morgan Feared
Iron Master Would Invade Rail.
road Field and to Throt-
tie Competition.

Washington, May 29.-John W.
Gates gave to the house steel trust
! investigating committee the history or
the United States Steel corporation.
Present at the birth of the greatest
steel manufacturing concern In the
world. he described how 1t was the
natural outcome Of what he described
as the refusal Of Andrew Carnegie to
be bound by the "gentlemen's agree
ments" that marked the early days OF
open competition in the steel business.
He told also of millions lost and
created almost In breath; how the
Carnegie mills, appraised at S16O,000,-
600, were recognized as worth $780,
900 900 almost within the time re-
quired to make the transfer to the cor
poration; the grim clash in the forma-
tive days when John d. Rockefeller
was dissuaded from joining in the
formation Of the corporation and the
manner In which others were pre-
vented from engaging in the steel
trade.
Rockefeller Sells Out.
Relating how Carnegie had been
forced to abandon plans for extending
his stee! business, Mr.. Gates frankly
admitted that the gigantic industrial
combination was formed to throttle
competition, and he surprised the com
mittee with the further information
that when John ID. Rockefeller had
sought to enter the steel business a
deal had been put through by which
the STANDARD Oil magnate was forced
to sell out for 40 cents on the dollar,
Characterizing Mr.. Carnegie as "a
bull In a china shop" Mr.. Gates told
OF q midnight conference between
himself Charles M. Schwab and j.
Pierpont Morgan, at which the steel
corporation was conceived, and how
It resulted in Carnegie getting $780,
600, 900 in the corporations securities
for his steel interests, which he pre-
viously had offered for 100000 600 In
cash.
Mr.. Gates also told the committee
of the taking over of the Tennessee
Coal and Iron company by the United
States Steel corporation during the
panic of 1907, deal in which he was
interested as a stakeholder Of the
Tennessee company. This, he de-
clared, was a forced transaction car
ried out by Mr.. Morgan and other
financial leaders to save from ruin the
Trust Company of America, threatened
in the financial upheaval, because 1t
had loaned too much money on stock
of the Tennessee Goa. and Iron COM
pany.
Carnegie Beats Opponents.
Plans made by Mr.. Carnegie in 1899
and 1900 to circle his steel interests
with railroad of his own and to COM
pete with the National Tube company
Just organized by Mr.. Morgan by the
erection of tube works at Ashtabula,
O., were the factors that led to the
birth of the steel combine. The story
Of the negotiations which led up to
the combination, now the subject of
congressional inquiry, was entertain
ingly told by Mr.. Gates.
He revealed how Mr.. Morgan,
sought the advice of himself and
James J. Hill; how Charles NJ.
Schwab, who he said was the only
man who had influence with Mr.. Car
negie, was called in to suggest way
to stop Carnegie" and how the
1t,
curbed In his purpose, though greatly
to his financial gain.
Morgan Alarmed.
He explained that the steel bust
ness was threatened with several
demoralizing forces when Carnegie S
plans became known and that Mr.
Morgan and others became alarmed
fearing Carnegie would demoralize
both railroad interests and steel
prices.
This was the situation as described
by Mr.. Gates. himself a director al
present In the Republic Iron and Stee
company, when Mr.. Morgan sent WORD
to him through James j. Hill seeking
a conference to determine what coult
be done Mr.. Gates said he told Nor
gan that Charles NJ. Schwab was the
one man who could influence Mr.. Car
negie Out of that came an all-nigh
conference at Mr.. Morgan's New Yorl
| home, the outcome of which was The
| United States Steel corporation
John d. Rockefeller's name came III
in the hearing when Mr. Gates was de
scribing Mr.. Carnegie's desire t.
branch out after the organization o
the National Tube company
John d. Rockefeller" he said
"once started steel mill and threat
ened to put US out Of business, Tha
did not last long. deal was mad
whereby Rockefeller's steel interest
were bought out at 40 cents on tn
dollar"
Refuses to Answer.
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