The Washington herald., 1911-05-28


House yesterday began an lnvestl-
CATION of the United States Steel
Corporation, with John w. Gates
as chief witness. The New York
speculator was on the stand for
four hours, and seemed to enjoy
the experience.
One statement that the commit
tee drew from him was that the
United States Steel Corporation
had its inception in fear on the part
of J. P. Morgan and others that
Andrew Carnegie would attempt to
break into the railroad situation Of
the country and undertake the ex-
tension of his steel manufacturing
interests along new lines.
Gates relieved himself of several
frank expressions in regard to the
Laird of Skibo, to whom he irrev-
erently referred to as ANDY
CARNEGIE WAS CRAFTY.
He declared in effect that Carnegie had
made threats to enter new fields in the
steel manufacturing industry because he
had something to sell, and a result he
sold it for $500, 900, co., about $3.50, 100000 in
excess of what he had offered to take a
year previously. Gates also told how
Andy" ignoring agreements. used to
cut prices when the other fellows were
not looking.
As to Gates own interest in the organi-
zation of the United States Steel Cor
poration 1t was very simple.
Il wished to convert" he said. "a lot Of
doubtful assets into cash" He succeeded,
according to his own statement.
The chief purpose of the tSanley COM
mittee in summoning Gates was to get
his version OF the sale of the majority
stock of the Tennessee Coal and 1rion
Company to the steel corporation.
The Democratic committee aims to dis
credit, if possible, the statements made
by President Roosevelt at the time of the
transaction, that the sale was pus
through as a means of avering a panic
Corporation had any desire to acquire
this property.
The committee did not accomplish very
much along this line. In fact, the entire
three days proceedings left the impress
sion that the steel investigation is a DEM
ocratic fishing excursion"
Gates described the sale. of the Tennes-
see Coal and Iron stock as forced" The
tal L. -l,oS f,,or 0ial
power had forced the sale. Gates said
that the finding of the large amount of
Tennessee Coal and Iron stock as COL
lateral in the Trust Company of America
had forced the sale. He also regarded it
as "a bargain sale"
Trust Company Aided.
Later he acknowledged that the Trust
Company of America needed $10.OOOOOO of
ready foney in the panic days. and that
they got it as soon as they had relieved
themselves of the Tennessee Coal and
Iron stock as collateral on loans Gates
did not attempt to reconcile this state
mcnt with his earlier statement ha no
financial institution received relief as the
result of the absorption of the Tennessee
Coal and Iron.
rs 1t your understanding" asked the
chairman. that Mr.. Morgan was willing
10 come to the relief of the bank, pro-
vided he got the stock?"
Il have no definite knowledge on that
subject" was Mr.. Gates comment
AS to whether the Steel corporation
had wanted the Tennessee Coal and
Iron Company stock before the final
purchase was made. Gates could not
say definitely. He knew that Kessler
had come to him about a year previous
and had asked him if he would agree
TO sell his stock atl50. Kessler told
him that Morgan had made this offer
and that his understanding was that
the offer was to be ratified by Judge
Gary and Frick
The committee questioned Gates in
regard to the taking over of the Amer
lean Steel and Wire Company by the
steel corporation.
What was the basis of exchange in
this transaction" asked Chairman
Stanley.
''It's n shame to tell you,' said John.
We'll. overcome your modesty." sug-
geted the chairman. |
But Gate shook his head. 1t was then
that the witness told OF the conditions |
and negotiations that had resulted I'm the
organization of the United States Steel |
Corporation.
Chairman Stanley asked the witness II |
the real reason for the organization of |
the United States Steel Corporation was |
not to avert threatened competition.
Call Pierpont Morgan.
Il don't want to assume what was in |
Morgan's mind said Gates. Call him
down here and let him tell you. He is |
get-at-able. |
The chairman persisted and wanted to |!
know II Carnegie was not threateneding
competition In all lines.
Il guess he was threatening the whole
line: he wantee to sell out. and he did,"
said John w.
The witness added. however, that he
personally never had feared Carnegie in |
the wire business.
He put s1.oooooo into that business"
said Gates, land we bought hi mout for
s500,o0o''
Gates said in effect that he had also
called John d. Rockefeller's biuff.
.Rockefeller." he said. told me he
would build glass furnaces all over the