The San Juan islander. [volume] (Friday Harbor, Wash.) 1898-1914, 1911-07-07

pected and much-discussed report from
the bureau of corporations on the Uni
ted States Steel Corporation recently
submitted to President Taft, was made
public here last night. Signed by
Herbert Knox Smith, commissioner of
corporations, the report makes no
recommendations and is almost Who'll
clares that restriction of competition
was a prime object of the organizers
of the steel corporation or so-called
trust"
Capitalized at $1,402, 100000, the cor
poration, asserts the report, had tan
gible property worth only $685., 200, 900
BY a constant reinvestment of earn
ings, however, the report points out,
much of the water" in the company
has been eliminated.
Controls Lake Ores.
The steel corporation now owns Is
per cent of the lake ores, having re-
Gently concentrated it's efforts to Sc
curing these properties. On this point
the report says:
Indeed, in so far as the steel cor
poration's position in the entire iron
and steel industries is of monopolistic
character, it is chiefly through its con-
troll of ore holdings and the trans
portation of ore"
Discussing in detail how "the inn
pending struggle of the giants" was
averted, almost over night, by the
formation of the great combination
taking in $50 subsidiary companies,
controlling 60 per cent of the total
the country, the report says:
crude and finished steel production of
Until 1898 the bulk of the business
was distributed among very consid-
cradle number of concerns. There
was sharp competition, modified by fire.
quent pools of greater or less dura-
ton and effectiveness"
Then came an era of great combina-
| lions, the report continues, with CAPT
talizations ranging from $50, O0O, 900 to
500, 100000; mergers of many smaller
companies, which, instead of eliminat-
ing competition, threatened to begin
price-cutting on a larger scale than
ever before.
In 1S99-1900 there were three great
companies-the Carnegie Steel Com
pany, Federal Steel and National
Steel-dominating the production of
crude and semi-finished products, and
six concerns-the American Steel &
Wire, American Tin Plate, American
Steel Hoop, American Sheet Steel, Ma
tional Tube and American Bridge
controlling the lighter finished prod
| ucts.
Titanic Struggle Impending.
This was the period when the
struggle of the giants" was impending
and when the formation of the United
States Steel Corporation was brought
about. All nine of the companies
named were combined, and later the
Union Steel Company, the Clarion
Steel Company and in 1907 the Ten
nessee Coal, Iron & Railroad Com
pany were taken over. The promot-
ing syndicate putting the deal
through netted $62,50O,OO cash.
During the ten years of its opera.
ton. the report says, the trust has
paid annual profits of IL per cent on
the money invested. Attention is call.
ed to the fact that considerable part
of the investment is in undeveloped or
unworked property, showing that divi.
dends from paying properties must be
much larger than the average would
indicate. Insisting upon computing
profits upon the tangible property
value basis. the report says that the
steel corporation in defending its book
valuation undoubtedly would claim
that there was merger value" AS
to this, the commissioner says:
Combination Increased Value.
1T is probably true that the varions
properties acquired by the steel cor
poration taken together with the or
ganization Of this company as a going
concern do have value in excess Of
the sum of their values as separate
entities. The coordination and inte-
grafton made possible by the combina.
ton Of such properties under q single
control undoubtedly tend to reduce
costs either through economy o.
through removing the necessity Of