The Sentinel=record. (Hot Springs, Ark.) 1900-current, 1911-07-01
REPORT ON
Steel TRUST
RESTRICTION OF COMPETITION
THE PRIME OBJECT OF THE
BIG CORPORATION.
Capitalized at $f,4o2, 100000 II Has
Only $es2,ooo,ooo In Tane-
bic Property, Most of
II In Ore.

WASHINGTON, June 3U.--Jtl6 long
expected and much discussed report
frem the bureau of corporations Oil
the United States Steel Corporation,
recently submitted to President Taft
was made public here tonigat.
Signed by Herbert Knox Smith
commissioner of corporations. the re-
port makes no recommendations and
is wholly narrative in form. Mr..
Smith declares that restriction OF
competition was prime object OF
the organizers of the steel corpora
tion. or SO called trust.
CapltalIzeL at $I.4U2, 900 200, The
corporation, he asserts. aad tangible
property worth only $6S2, 100000. BY
a constant re-inyestment of earnings,
however. the report points out much
of the water" in the company has
been eliminated.
The steel corporation now owns
rs per cent of the lake ores. having
recently concentrated its efforts to
securing these properties. On this
point the report says:
Indeed, fksofar as the steel cor
poration's position in the entire iron
and steel industries is of monopolis-
tic character, IL is chiefly through
It's control of ore holdings and of
ore"
Discussing in detail how "the i'm
pending struggle of the giants" was
was averted almost over night by
the formation of t5e great eombina-
tion OF companies taking in $50 sub
sidiary companies, controlling sixty
per cent of total crule and finished
steel production of the country. the
report says:
"until 1898 the bulk Of business was
distributed among very considera-
Bile number of concerns. There was
sharp competition modified by fire.
quent pools of greater or less dura-
tion and effectiveness"
Then came an era of great commits
sions the report continues, with capi-
talizations ranging from $30'0O0,00O
to s100.000,000, mergers of many
smaller companies, watch instead of
eliminating competition threatened to
bring price cutting on a larger scale
than ever before.
In 1s99-1S9O there were three great
companiesryhe Carnegie company,
Federal Steel and National Steel
dominating the production of crude
and semi finished products. and six
concerns--the American Steel and
Wire, American Tin Plate, American
steel Hoop, American Sheet sSssSs;
National Tube and American Bridge
controlling the lighter finished pro-
gucts.
This was the period when the
"Struggle of the Giants" was impend
ing and when the formation OF the
United States Steel Corporation was
conceived ami brought about. All
nine of the companies named We're
combined. and later the Union steel
company. the Clarion Steel company,
and in 1897, the Tennessee Coal Iron
and Railroad company were take
over. The promoting syndicate put
ting the .eal through netted $62,6o0.
900 in cash.
During the ten years Of its opera
tion the report says. the steel trust
has paid average annual profits OF IL
per cent on the money invested. In
this connection attention is called to
the fact that considerable part OF
the investment is in undeveloped OF
unworked properties, showing that
dividends from paying properties
must be much larger taan the aver
age would indicate. Insisting upon
computing profits upon tangible
property value basis, the report says
that the steel corporation in defend
Ing its book valuation undoubtedly
will claim that there was merger
value AS to this. the commissioner
says.
sit is probably true that the var
ious properties acquired by the stee
corporation, taken together Win tne
organization of this company as
going concern do nave a value II
excess of the sum of their values a
separate entities.
sThe coordination and integra'