Arizona republican., 1911-03-17
The Railroads and the Steel Trust

The Railroads and the Steel Trust.
Commenting upon the recent decis-
ion of the interstate commerce COM
mission against the proposed increase
in freight rates, President Daniel
Willard of the Baltimore < Ohio is
quoted as saying:
we must pay less for what we
get"
Meaning thereby, we suppose, that
the railway companies must be more
exacting of results from their pur-
chasing departments.
one of the big items of first cost
in the construction of a railroad is the
expenditure for steel rails. The same
factor enters into the cost of main
tenance, for rails and bridges have
to be renewed from time to time.
Much as railway presidents, general
managers, and the hired men gener-
ally may desire to make to their en-
ployers a satisfactory showing as To
tNptnull uItS, lLltN are COIi4ioi4ttu "
the impossibility of buying steel at
any other figure than the price die
tated by the steel trust Mr. PierpOnt
Morgan dominates the steel trust, and
has considerable TO say about how
the railroads of the country shall be
managed. Ownership of the steel
trust and control of the railways are
largely I'm the same hands-the hands
of Mr. Morgan and his associates. 1t
has been a matter OF constant COM
ment since the panic of 1907 that,
Notwithstanding the dull times the
steel trust was able to maintain its
prices at a high level There is no
mystery about it, however, when it
is remembered that the railroads are
the heaviest customers of the steel
trust, and that the same men are in
control Of the steel trust and the rail-
ways When the individual holder
of railroad securities expresses con-
Germ, he is told that his dividends are
not larger because of the high cost
of construction and the increasing
cost of operation and maintenance;
and when the shipper complains of
rates he is told by the worried Off
Gals that they find it extremely diff
ficult to make a profit from existing
rates-and that one of the burdens
of cost is the outlay for steel.
Referring to the common control
of the steel trust and the railways.
Golfers Weekly makes some pointed
suggestions for the benefit of the rail-
way owners:
We direct their attention to that
single source from which the rail
roads, in the year 1910, bought one
hundred million dollars worth of rails
to say nothing of bridge material.
spices and other forms Of steel. Here
is a partial directorate of the United
States Steel Corporation; Ohe need of
brevity prevents printing AID; under
each mans name is a list Of the rail-
roads in which he is also a director, |
as compiled from the latest editions |
of Moody's Manual and The Direc- |
tory of Directors:
y Pierpont Morgan-New York |
Central r. r, New Haven r. r.. Big |
Four r. r, Lake Shore r. r, and |
others.
George F. Baker-Central r. r. of |
New Jersey, Burlington r. r, Lacka- |
wanna R r.. Erie r. r, and others.
Daniel G. Reid-ROck sland r. r, |
Frisco r. r., Eastern Illinois r. r., |
and others.
Henry c. Frick-Reading r. r,
Pennsylvania r. r, Northwestern r. |
r.. and others.
Here is the point: When the New |
York Central Railroad bought 10000 |
tons of rails from the United States |
Steel Corporation, what was the ma
ture of the negotiations that preceded |
the signing of the contract? Where |
was the counterpart of that dickering |
which constitutes a purchase and a |
sale in the transactions of ordinary /
men? Was there that meeting of
minds which the law books tell us /
effects the contamination of con-
tract? probably yes for both minds
were within the same skull To which
trust was Mr.. Morgan faithful?-to
the stockholders of the railroad seek
ing the lowest price or to the stock
holders of the Steel Corporation seek
ing the highest price? Not the least
lettered lawyer in the remotest corn
field of Kansas but knows that the
position of all these directors is NOR
ally and legally indefensible.
Here is our constructive sugges-
ton. Let the railroads get together;
let that same impressive galaxy of
presidents and lawyers that lately APP
peared before the commerce commits
sion go once more to Washington. Let
them walk to the end of Pennsylvania
avenue, to the northeast corner of
the House office building. There they
will find fourteen men, the democratic
ways and means committee, duly cho-
sen and properly authorized by the
people of the nation to revise the
tariff Let the railroads give the
voice of their weight and authority