New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-06-08
BIRTH OF STEEL TRUST
Continued from first page

you think a consolidation OF So ,,..
terests on this line Is prac'''"'
should start with the Federal steel Co'''
pany.'
Mr.. Morgan Decides To Be sp0"So''
1--WE decided to call in the men nv
ested in Federal Steel and teiepho"eu
Norman b. Ream, II. II. Rogers
Mills and others. We got ih'o 'oo
distance telephone communication ais!
with Marshall Field. OF Chicago WHO was
also a director Of the Federal Steel Com
pany A meeting was arranged anu
told Of the proposition, expiai'ii"e
business opportunities as best L ,ou'n
Mr.. Morgan then stated that ne h"e''
enormous financial responsibilities "ouio
be involved, but that If we concluded II
was a good. safe and reliable undertake
ing he would act as financial sponsor u
syndicate to carry II out. 1here was
some opposition at first on the part VI
some Of the Federal steel directors ou
they finally assented. and that Is wher'
the United States Steel Corporation "d'
actually BORN
Mr.. Gary then told the committee VI
the details of working out the plan anu
Of taking over the American steel aho
Wire. the National Tube. the American
Bridge. the National Ste,l and other con
Germs. and the capitalization OF uhe
United states Steel Corporation al
$3.50. 100000.
Il want to say" he continued tha'
from the point of view OF the orisiiia
cost Of the concerns which were taken III
and what it would have cost to Reproduce
them at the time there is no DOUBT tha'
the United States steel Corporation was
overcapitalized but from the point OF
view of what all the properties were
actually worth put together as going
concern. 1 do not believe that the Steel
CORPORATION was apitalized.'
Mr.. Gary declared that in all the
negotiations preceding the organization
of the United States Steel Corporation
he never had heard that the threat OF
Mr.. Carnegie to build plant to rival the
! National Tube Company. organized by
: Mr. Morgan. and to build a railroad from
Pittsburg to New York connecting all
his steel plants, had anything TO dc
with it.
Such matters as I learned were testi-
! fed to by Mr.. Gates before this COM
mittee." Mr. Gary said. never were
spoken Of in our deliberations. 1 do not
remember that Mr.. Morgan ever men
toned these matters to me-"
Mr.. Gary said that when 1t came tt
discussing the charter and form of or
ganization Of the Steel Corporation Mr.
Gates had nothing to do with it. Mr.
Gates's connection. he said. was TO look
after the interests of the American Stee
and Wire Company In the transaction.
Mr.. Gary will go on the stand to-mor-
row TO explain in detail what companies
were competing and what competing
when the United States Steel Corpora.
tion became holding company Of va,
, rious subsidiaries.
The Tennessee Coal Deal.
The political bias Of the committee wa.
shown when Mr.. Gary. relating agar
the story Of the financial frenzy that pos
sessed New York in the 1907 panic wher
was effected, observed:
/ II would say that President Roosevelt
gave tacit acquiescence to the plan
after we had told him OF the desperat,
situation. Mr.. Roosevelt. in my opinion
showed constructive craftsmanship II
that decision"
You mean craftsmanship constructive
Of the Steel Corporation" suggested Rep
resentative Littleton. MIR. Gary did no
accept the amendment
yes. It was constructive and destruc
i've" interpOsed Chairman Stanley. 81
was constructive Of the Steel Trust an(
destructive of the law
Again Mr.. Gary disagreed with tn.
members OF the committee and attempted
To make its members understand that i
the firm of Moore e. Schley, holdns
Tennessee Coal and Iron Company Sc
curities. had been allowed TO go to tn,
wall it would have involved severa
banks and large fortunes.
A loan to Moore & Schley. he said
would not have saved the situation. TIL,
franciers who finally took over the stool
were assured that only an outright pur
chase would suffice to put the firm on III
feet. and to steady the widely fluctuatn.
market.
Financial Frenzy Here.
You have no idea" Mr.. Gary said. 20