New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-06-08
GARY W DESCRIBES s..
i. S. STEEL'S BIRTH
Tells How Morgan Was Finally
Persuaded to Become Its
Sponsor.
]. W. GATES CoNTRAD|CTED
First Suggestion Came from
vrick-Carnegie Did Not
Force Purchase OF
His Mills.
W. GATES CONTRADICTED
frr,,o The Tribune Burcau.l


..,sf in the ultimate governmental con-
~, # large corporations; declaring that
~-..,dent Roosevelt's acQuiescence N
,,,eroor of the Tennessee Coal ana
,,,n Company was a piece OF CON
..,c,ive craftsmanship" denying state
.,r,s ~ John W. Gates that Andre"
carnegie had forced the United states
- Cornoration TO buy the Carnegie
.,ar,s and telling how the steel Corpo-
-, came 10 be formed, ex-JudGe Il
Gary spent another day on the VIII
-1ss stand before the House investisat-
,ng committee to-day.
p.r,vlnr 10 questions by Representa-
.re Young. Of Michigan. Mr. 'Gary SAID
:. wanted 10 tell the circumstances De-
use Of recent statements on the sub
,.ct with which he did not agree.
.Tbe Federal Steel Company" he saiu'
a,sd been in existence about two years
,,6 half. I was its president. IhiS
.s some time in 1900. and Mr.. Flick
.,ms 10 my office and suggested that the
r.3.ral steel Company could be very
,.r,h improved and he believed the
carnegie Steel interests were for sale.
That was the first suggestion IN my
ooinlon. which led to the organization
80 che United States Steel Corporation.
Mr.. Morean's Suggestion
",eer Mr.. Frick had talked to me
snoke 10 Mr.. Morgan about it. and he
.n,cested that other directors OF the
FEDERAL Steel Company be consulted re-
e.-ding the Carnegie proposition MI
r-;ot talked with II. II. Rogers ana
o,bAr directors Of the Federal steel
companv about II. but nothing came OIL
Z, AT that particular time. The next
,tiog heard was that W. II. Moore anu
o,bers had secured an option from MI
c,,reeiA for the sale Of his steel plants.
had nothing TO do with that option
,r, knew that the MoOres consulted
-5,b the First National Bank of New
yo-k regarding the option. and that OIL
,,-s of the bank consulted with MI
Morgan. Mr.. Morgan sent representa-
i've of his firm to me 10 discuss the
,nestion Of utilizing the option on inc
r,-nssiA steel interests AS presenter
N ne ! did not think much OF II ana
,hs matter was dropped. Soon after
,ha, Charles NJ. Schwab suggested 10
No ,ha, the Carnegie Steel Company
night be acquired by the Federal steer
Compsny. and l determined again 10
srsak N Mr.. Morgan about II. knowing
,sa, srch 2 deal would involve fnanciai
hacking Mr. Morgan then did not give
much encouragement.
Tdid not report to Mr.. SChwab about
nv conference with Mr.. Morgan out he
came 10 see me several times afterWard'
and shout that time ]. Edward Sim
mons. president Of the Clearing House
Association Of New York. gave dinner
al the request of Mr.. Frick. TO bankers
and men interested in the steel bnsl-
ness Mr.. Schwab. Mr.. Morgan ana
others were present. and Mr.. Sch"ao
made a statement which made quite an
impression on Mr.. Morgan concerning
the Carnegie steel Company. a descrp-
ton Of its export business. its costs OF
production and the like. was not
there. but have no doubt that Nj.
schwab had i'm mind the advantages or
& Consolidation Of steel interests
Bacon Brouoht MESSAGE from Morgan.
"The next thing / heard about it was
on a Sunday morning. not long after TINS
dinner. when Robert Bacon, then
partner in the firm Of j. Pierpont Nor
San q Co. came 10 my home. He said
thst the night before Mr.. Schwab had
surprised Mr. Morgan by showing him
letter from Mr. Carnegie saying that he
would sell his steel property and take
bonds IN payment for it. There had been
a conference at Mr.. Morgan's house.
Nr Bacon did not tell me anything about
John W Gates having been there. l
never heard that he was there until ]
read his testimony before this commit
zee. in which he said he was at Mr..
Norsan's house and that the plan Of the
United states Steel Corporation was
formulated there. 1 cannot see how it
could be that such plans were made that
light
sehwab Submitted Carneeie's Offer.
Dir. Bacon said that Mr.. Schwab had
fuomitted the Carnegie letter which fixed
pFlce for the steel plants. and that Mr..
morgan had told him TO submit the
'hole matter 10 me. We went over the
"hole matter until luncheon time. and
"f Bacon went TO see Mr.. Morgan and
'sine back, and we spent the entire even
"s going over the matter. At that time
we Federal Steel Company was in need
u hnishirg mills. and sought a corpora
'oh of sufficient financial strength to in
Uesse its lines Of business, and particu-
amy lis export trade, which was then
mai" IL was necessary 10 Increase the
Ap'Ft trade in order that this country
.~Ou'd get its fair share Of the business
H neutral ports. We had great deal
discussion about Mr.. Carnegie's price,
having known that two years before he
ohered TO sell for a much less sum,
realized that the Carnegie company
a. increased its earning capacity and
- "'d Air. Bacon then that If through
4uisilion Of the Carnegie company
pOfatlon could be completed large
~'ush and rich enough to furnish ade-
hnishins mills and increase the
business | believed his proposition
worth considering, and / agreed 10
A.. "r Morgan the next day-Mon-