The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1911-05-30
(By the Associated Press.)

(By the Associated PresS.)
Washington, D.. C, May 21.-John
w. Gates revealed to the House steel
trust" investigating committee today
the history of the United States Steel
Corporation. Present at the birth OF
the greatest steel manufacturing con-
Germ in the world, he described how
1t was the natural outcome OF what
he described as the refusal of Andrew
Carnegie to be bound by the gentle
mans agreement that mark ed the
early days Of open competition in he
steel business. He told also of mil
lions lost and created almost in a
breath; how the Carnegie mills, ap-
praised al $780, 0O, 0O6, were recog-
nized as worth $32O,000,00 almost
within the time required to make the
transfer to the corporations; the grim
clash in the formative days when
John Rockefeller was ~dissuaded from
joining in the creation of the corpo-
ration, and the manner in which
others were prevented from engaging
In the steel trade.
Relating how Carnegie had been
forced to abandon plans for extending
his steel business. Mr.. Gates frankly
admitted that the gigantic industrial
AOkI O. - W
competition, and he surprised the
committee with the further informa-
toin that when John d. Rockefeller
had sought to enter the steel business
a deal had been put through by
which the Standard Oil magnate was
forced to sell out for forty cents on
the dollar.
Characterizing Mr.. Carnegies as "a
bull in a china shop" Mr.. Gates told
of a midnight conference between
himself. Chas. M. Scwab and j. Pier
pont Morgan, at which the Steel Cor
poration was conceived and how it re-
suited in Carnegie getting $500, 000,-
900 in the corporations securities for
his steel interests, which he pre-
viously offered for $50, 900, 900 in
cash.
Mr.. Gates also old the committee
of the taking over Of the Tennessee
Coal and Iron Company by the United
States Steel Corporation during the
panic Of 1907, a deal in which he was
interested as a stakeholder in the Ten
nessee This, he declared,
was a forced transaction carried out
by Mr.. Morgan and other financial
leaders to save from ruin the Trust
Company OF America, threatened in
the financial uphAval because it had
loaned too much money on stock Of
the Tennessee Coal and Iron Com
pay.
Plans made by Mr.. Carnegie in
1899 and 1900 to circle his steel inter-
ests with a railroad of his own and to
compete with the National Tube Com
pany, just organized by Mr.. Morgan,
by the erecting of a tube works at
Ashtabula, Ohio, were tho factors that
led to the birth Of the steel combine.
The story Of the negotiations which
led up to the combination now the
subject of Congressional inquiry,
were e~ntertainingly told by Mr.. Gates.
alarmed by Mr.. Carnegie's plans. had
James J. Hill, how Chas. NJ. Schwab,
who, he said, was the only man Of
influence with Mr.. Carnegie, was
called in to suggest a way to ."stop
Carnegie" and how the pioneer steel
king of the country was curbed in his
though greatly to his finan-
cial gain. He explained that the steel
business was threatened with several
demoralizing forces when C~arnegie's
plans became known and that Mr..
Morgan and others became alarmed,
fearing that Carnegie would demon
alize both railroad interests and steel
prices.
This was the SITUATION as described
by Mr.. Gates, himself a director at
present in the Republic Iron and Steel
Company, when Mr.. Morgan sent word
to him through James j. Hill, seeking
a conference to determine what could
be done. Mr.. Gates said he told
Mr.. MOrgan that Charles NJ. SchWab
was the one man who could influence