Evening star., 1911-06-09
Says Plan to Enter Tube Busi-
ness Not a Threat.
VIEW OF JAMES GAYLEY
Tells House Committee Of Carnegie
Company's Growth.
FREQUENT WARS ON PRICES
Says That It Became Necessary for
the Company to Extend
Scope Of Operations.

new line or testimony was sought 70
he developed by the Stanley steel trust
investigating committee at its session to-
day. the idea being TO bring out facts
connected with the absorption OF the Car
negie Steel Company by the steel trust
One phase of this transaction has been
related by John W. Gates. another by
Judge Gary and today the committee
started in 10 probe it from the Carnegie
! side. through James Gayley. who had
been one OF the Carnegie partners and
later an official OF the steel trust
The committee started late. and soon
took recess. however. and the fore
moons work was not very productive
Growth of the Carnegie Company.
James Gayley. who was first vice presi-
| dent OF the United States Steel Corpora
ton. from its inception to January /.
1909, took the stand at today's session.
At present he is interested In various
enterprises.' he said. From 1885 10 1892
he was connected with the Carnegie Steel
Company. superintendent OF its pig
| iron furnaces. and from 1892 unit. 1898
was with the Edgar Thompson Steel
Company.
| Questioned by Mr.. Young. Mr. Gayley
said that the progress OF the business
OF the Carnegie. company was tremendous,
its blast furnaces increasing from five to
eleven: 1t had increased the capacity OF
It's rail mills: il had acquired the
Duquesne mill and expanded II: II had
acquired the Homestead plant and built
II from a mill into a city of mills: II
| had obtained vast ore beds in the Lake
Superior district and bought large coking
coal acreages.
In addition there were constant i'm
/ provements in methods OF pig iron
making and the producing of steel and
iron. all OF which resulted in increased
| earnings.
At that time the Carnegie company
was using about 100000 tons of ore
annually.
Fixing Prices of Steel Rails.
what was the policy OF the Car
negie Company as TO fixing the prices
Of steel rails" he was asked
"As a rule. steel rails were standar rd
in price. 1t appeared te be generally
known what the prices OF steel rails
were. For long period the Pennsyl-
vania railroad practically fixed the
prices of rails Other roads deferred
| purchasing until the Pennsylvania
railroad placed its orders I recall Mr..
Carnegie saying that the Pennsyl-
| vania railroad placed its orders. 1 re-
| call Mr. Carnegie saying that the
| Pennsylvania railroad had given him
an order for G0.too tons without men
tioning the price: that seemed TO be
| understood"
How were the prices OF other steel
| products fiXed?"
In those days every company was alb
| solutely independent and took what prices
II could get But then this country was
80 ~Irx,xx <<sx.f
and the problem of the steel business
was to supply the demand.
War Among Steel Companies.
There were periods OF war between
certain steel companies which brought
down prices to all and were very de-
structive of prices generally. Compe-
tition was carried sometimes to a point
| threatening destruction.
Then they would pause. shake hands
and recuperate. and when they recuper-
ated the fight would be renewed"
did the Carnegie company owe any of
its growth TO these wars"
| mo. il absorbed none of its competitors
and / cannot imagine anything prospering
through the principles of destruction.
| Mr. Gayley said that the book valua-
tion in 1859, $4,000, 900, of the Carnegie
Steel Company. was not as large as its
pOtent1al
The Carnegie Steel Company often
found itself unable to run some branches
of its business for lack of demand and
| il became necessary to variegate the
output so as to employ to the fullest
the steel-producing capacity.
Tube Business Proposed.
The company thought Of going into
the tube business and the wire busi-
ness The tube business would have
brought competition with the National
Tube Company.
did Mr. Morgan have any interest
in the National Tube Company
II have since understood that he had.
although / did not know II at the time.
There has been a rumor." said Mr.
Young, that this move to build a tube
works was not made In good faith, but
was a threat.
In that: the Carnegie Company was 60
ing ahead with its own affairs" said Mr..
| Gayley.
"Do you know anything Of a propesi-
ton of the Carnegie Company to buiid
railroad to New York.!
Il never heard OF it..
sMr. Gayley said ne had approved the
sale of the Carnegie gle, steeI nora,Ioa COMPANY 70
At this point the committee TOOK re-
cess until O'Clock.
| Control Of Corporations.
In closing his Testimony yesterday
Judge Gary reiterated his advocacy OF
| legislation 10 protect property interests
and the welfare of the consumers, sup
Elemental 10 or as a substitute for the
Sherman law.
Constructive legislation Is what IS
needed in this country IL we are to re-
tain our position in the ranks with COM
mating nations Of the world"
Mr.. Gary's attention was again called
IN his former declaration that he Favored
government control OF corporations. ne
said that he would have the government
ncanse CORPORATIONS engaged in interstate
commerce first deciding whether IL was
so entitled under the antitrust law he
U,,,h rneke the license revocable for mis-
cnnfnct but In all cases would retain the
rt.tt ~ appeal to the courts. which night,
Re sdde6 lis the salvation OF this ooun-
try"
r,srts OF value placed by Andrew Car
nec1e upon his steel properties.
II understand that MI Carnegie 10 70
~ a v,itnees before this committee" said
NJ cary. With o smile, ''and I am 0ure
That he 10 q good Judge Of values. par
ticulariy REGARDING his own properties.
when Mr.. Carnegie appears I am sure
this committee win hear abo0t some very
high valuat1ons"