Evening journal., 1911-06-09
CARNEGIE AND
STEEL TRUST
James E. Gayley TeStifieS Be-
fore the Congressional
Committee
BY the United Press.

by the united fleSS.
WASHINGTON, June 9.-The mas
terful activities of Andrew Carnegie,
the iron MASTER which steel mag
mates declare forced the formation Of
the United States Corporation, were
detailed to the Stanley Steel Trust
Investigating Committee of the House
today by James E. Gayley, one OF
Carnegie's early associates.
Gayley at the formation of the steel
trust was a superintendent of blast
furnaces in the Carnegie Steel Com
pany, the original steel property OF
the iron master When he took the
stand, Representative Young (Rep.
Mich.) took up his examination, leav-
ing the big committee table and fac
ing Gayley across a smaller table at
which the witness sat. Gayley was
slightly deaf and leaned forward with
hand to ear to catch the questions
At times he spoke so low that the
committee could scarcely hear him.
Prior to the organization of the steel
trust. Gayley declared "ruinous, cut
throat competition" obtained.
"In the old days when all the steel
companies we're independent" he said
I'VE worked under the old method
The companies would wage war and
then when almost exhausted, make
price agreements that they might re-
cuperate and prepare to fight some
more. Carried on steadily this com
netition would have meant monopoly
of the steel business by the strongest
company.
Under Youngs examination. Gayley
rubbed his head refectively and cor
roborated the testimony of Beta
Million" Gates that Carnegie con-
templated entering the steel tube
business i'm competition with the Ma
tional Tube Works, controlled by j.
p. Morgan.
AT that time was Carnegie anxious
to sell his steel works. asked Young
well. would say he was willing,
answered Gayley.
did he contemplate building q
steel tube works at Conneaut?'
THE Carnegie Steel Company in It's
growth found itself unable to run ir
some branches because the demands
for its products was not continuous
Conditions arose when you couldnt
give steel rails away to the railroads
The mills would have to shut up. We
we're constantly seeking some avenue
70 rthe sale Of the steel our furnacel
we're turning out
I'VE bought about 1000 acres o
land at Conneaut, Ohio. about 1893
and looked into various propositions
We contemplated building a tube mil
and then again we thought of goini
into the wire business"
with whom would pou have com
peted in the tube business" askel
Young.
THE National Tube Works, whicl
l later learned was controlled by
Piermont Morgan" said Gayley.
Where we're it's plants?"
AT Riverside and McKeesport, Pa
j There was an independent tube mi
at Chester, Pa" said Gayley.
Young then questioned him as to th
SIS 100000 valuation placed on th
Carnegie properties during the Fricl
Carnegie litigation.
THAT was only the book value.' sal
Gayley. land did not represent any
thing like the potential value of tn
plant.
What do you mean by potentis
value" asked Young.
"Why the earning capacity" replie
the witness. He declared he knee
nothing OF the details of the sale {
the properties to the Steel trust IN
til Carnegie. himself. presented III
proposal at a meeting of the Carnegi
directors in Pittsburg.