The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-08-05
|U.S. STEEL WAS SCHWAB'SIDEA
TELLS THE STANLEY COMMIT.
TEE or IT'S FORMATION
And Il Rcticent on only Three Points
Doesn't Believe That Restriction Of
Competition and Price Fixing Are
Necessary Trade Agreements Broken

Charles A. Schwab. the first president
Of the Steel Corporation and the head
Of the Bethlehem Steel Company. had
the stand all day yesterday before the
Congress committee at its hearing at the
City Hall.
There were only three times that the
Congressman came up against a wall
in their examination. Once was when
they asked Mr.. Schwab for the cost Of
production Of ton OF pig iron in his
Bethlehem mills: another was when they
asked him how much he paid for high
grade ore In Sweden. and the third time
was when he was asked for the name
of the third person for whom H. c. Frick
held an option for the purchase of the
Carnegie Steel Company.
What did 1t cost you to buy that ore
in Sweden?" asked Representative Sterling
near tho close OF the days session.
Il shouldn't like to tell" answered
Mr.. Schwab.
"Id like to know" urged the Congress-
man
-I'm sure you would" smiled the steel
man. There are a lot of people who
would like to know. and there it ended.
Was the third person for whom Mr.
Frick held an option man interested
in steel9" asked Mr.. Beall when this matter
was being discussed.
Il really must object to answering that
question" said Mr. Schwab.
But that wouldn't give us very good
idea Of who 1t was"
Il don't intend to give you very good
idea." returned the witness.
Chairman Stanley began his examina-
ton.
AT the time Of the Incorporation OF the
Steel Corporation you were president
of the Carnegie Steel Company. were
you not?" he asked. Mr.. Schawb said that
he was, that he was subsequently presi-
dent Of the Steel Corporation and that
he participated actively in the arrange
ments prior to it's formation.
Il believe you made the first suggestion.
did you not?"
81 can't answer that positively. said
Mr.. Schwab But the matter was in my
mind and discussed by me at that time.
The chairman told him at this point to &C
on and tell the story of how the Steel
Corporation came into existence.
sCHwAB's STORY OF THE STEEL DINNER.
well. Mr.. Chairman" said Mr. Schwab.
folding his hands on his end Of the lon &
table and looking down its length to the
chairman at the other end beyond the
committeeman ranged along the sides,
Il am very glad Of the opportunity once
and for all to tell the definite story about
which there have been so many misrepre-
sentations and misstatements. and il you
will be patient I will do 40. with such
details as can remember at this time.
In the fall of 1872. and while I was
president Of the Carnegie Steel Company.
J. Edward Simmons. a banker Of New
York. and Charles Stewart Smith. also
an important business man Of New York
and particular friends OF mine. rendered
me dinner at the University Club and
invited to that dinner some seventy or
eighty of New York's most distinguished
financiers and business men.
Il was very much fattered and honored
at this dinner and had chosen rs the sub.
ject of my remarks my idea Of the future
development Of manufactures in the United
States. especially "a relating to our in.
dustries. and while expected to occupy
but few minutes the matter was OF such
great interest to the gentlemen that much
time was taken
| Il explained at that meeting the very
great advantages that would result ir
manufacture from such an organization
as the United States Steel Corporation
and gave my reasons in detail TO them
First of all, that instead of manufacturing
steel as it was then manufactured by {
number Of companies. each OF which
manufactured the same lines. it wa,
my idea that the organization, TO he trul,
successful and to control the business O
the world mean to have eminence il
the business of the world should be mad,
Of such a character that one mill coult
be run on one product and not one mil
on fifty products as was then the practice
NO IDEA or LIMITING PRODUCTION.
Il made particular efforts to state a
that time that my idea of this great or
ganization was not with view OF estab
fishing any arrangement with reference
to the limitation of production or the in
crease or maintenance Of prices, but thai
the economies resulting from these thing,
would be so great as to make capital in
vested in any OF the individual enter
prises much more valuable
Not limiting production" he continued
'but exciting the skill of the managers tt
the best production. So strong has tha
idea been with me that at the Brussels
conference I advocated that the indie
pendent manufacturers should compar,
their cost sheets"
DO you mean to say that they coulc
AFFORD to tell each other these valuable
trade secrets?" asked Mr., Stanley.
They not only could but they do.
was the answer. The British Iron and
Steel Institute is occupied each year with
what ! proposed in a technical way"
Returning to his story Mr.. ,cnwat
said that at the dinner Mr. Morgan "a,
on his right and that Mr. Carnegie anc
T.. II. Hartman were among those at the
table.
| MORGAN AND GATES INTERESTED.
Il went back to Pittsburg," he con-
tlnued, and thought no more about it
Then one day ! received long distance
phone call from Mr., Gates. He asked
me whether ] could meet Mr. Morgan in
Philadelphia the next day went to
Philadelphia, but Mr. Morgan was i'll, anc
on the following day, I think, saw hin
at his house. He asked me to 90 owe,
IN more detail the substance OF what
had spoken of at the dinner.
| within day or two Mr.. Morgan tolC