Evening star., 1911-06-02
Chairman Gary for Federal
Regulation of Corporations.
CITES CASE OF RAIL WAYS
Denies That the Proposition Leads
to Government 0wnership.
CALLS SHERMAN ACT ARCHAIC
Head Of Steel Corporation Again
Heard by Committee Investi-
eating the Steel Trust.

Governmental control even II 80
should extend to the point OF fixing
prices. is the only solution OF the prob
lem of protecting the consumer and
the producers Of steel products In this
country was the opinion expressed to-
day by Mr.. Gary OF the United States
Steel Corporation to the House steel
trust investigating committee.
Judge Gary gave this dictum with
great earnestness IN the course OF an
exceedingly frank statement to the
committee.
Are we. then," asked Mr.. Littleton.
brought face to faca with the propo-
sition to abandon our system OF open
competition and engrafting a new in
dustrfal policy upon the country7"
Il believe We are" replied Judge Gary.
I'VE must find some middle ground be-
tween the obligations Of the Sherman act
upon the one hand and ruinous competi-
ton upon the other"
Docs not such an alternative lead to
government ownership" he was asked.
1T does not. You have governmental
control over prices to be charged by the
| railroads and you have governmental SUI
pervision of national banks. There Is no
approach to governmental ownership In
either case"
Judge Gary said he was convinced that
| the Sherman act will not suffice to pro-
tect the public against the possibility OF
industrial aggregattons controlling prices
and that the alternative must be some
| kind of governmental supervision whion
will say to manufacturers that they can
not charge higher than specified prices.
Stability Of Prices Desirable
Explaining his opinion that govern
| mental supervision would be desirable. he
| said that it is more valuable to the pro
| ducer. the consumer and workingman TO
have stability Of prices than to have de-
moralization OF prices In time OF pants
and higher prices when times are good.
Mr.. Gary made earnest profession 70
| the committee OF the policy OF the
| steel corporation as to obeying the
| Sherman act, declaring that II was tho
policy of the finance committee, OF
| which he was chairman. Of the execu-
| poration itself. He declared that at the
forthcoming meeting OF international
| steel makers in Brussels. the project
| of establishing an international iron
and steel institute along the lines Of
| the American institute. will be consid-
| cred. but that 1t will not be accom-
| plished by the violation either of Law
| or moral ethics.
Mr.. Gary admitted that the United
| States Steel Corporation sometimes sells
| steel rails abroad lower than It does
| at home, but he insisted that In it's net
| result this policy was not preJudicial
| to the domestic consumer. since II kept
| the industry active in this country and
| maintained stability OF prices.
Cannot Control Prices.
Mr.. Gary declared that tho United
States Steel Company lie not In q position
where IL can control prices.
I'VE can keep prices down." he said.
| but we cannot put them up"
Elaborating that statement he said that
| frequently within the past few years the
| Independent makers OF steel rails have
urged an increase in the price OF the
| rails. but that the steel corporation re-
fused to put them up. and In consequence
the other makers dared not increase their
prices.
But an increase in prices is inevitable
4 In the near future. he said, owing to tho
increase In the cost OF production. The
cost Of producing steel rails had increased
| $3 a ton In the past ten years.
Mr.. Gary said he did not believe IN
Interchangeable prices, but he was op-
posed to changing prices by general
agreement, since that would be clear
violation Of the Sherman act He told
the committee how prices had been
eral Interchange among steel makers
OF their experiences. diff1culdes. etc.,
and the knowledge which each manu-
facturer thus obtained OF tho general
state of the trade.
Handling Domestic Output.
does not handle moro than 90 per cent
-
said the United States steel CoFporafion
was q holding corporation for ths nine or
more subsidiary companies. and thsA
OF course, the parent company could a.
rect the output and operations OF tho
subsidiaries.
He declared that tho value OF tho sap
port business was the dominating reason
Steel Corporation. and he was sure the4
| the subsidiary companies could not DO
one-fourth the business they now do =
they we're disorganized.
This advantage was derived from inc
combined talent, experience, physical fe-
| cilities, finances and general knowledge
| of the various companies. He explained
| how the cost Of production In each nin
mill was running higher In cost ste0s
were taken to correct the trouble.
Predicts Federal Control.
Early in his testimony today Nh. Gary
declared that ~nforced publicity and gov
ernmentaI control Of corporations must
come, even as to prices. He said he be-
lieved the Sherman antitrust law was
too archaic to deal with modern situa-
| tions and never could fully prevent great
combinations OF capital. What the United
States Steel Corporation wanted. he said.
was some responsible and official depart
ment of government to whom II could go
and say: What prices can we charge
and just what can we do?"
Personally. / believe the Sherman
act" said Mr.. Gary. does not now and
never will prevent the organization OF
great combinations of capital believe
We must come to enforced publicity and
governmental control OF corporations"
do you mean government control even
as to prices?" Mr.. Stanley asked.
Yes even as to prices. So far as am
concerned speaking for the United Statee
Steel Corporation, I would be very glad
III we could know exactly where we stand
and could be free from the dangers and
criticism Of the public. wish We could
90 to some responsible governmental
source and say. Here are our facts; hsre
is our business; here 10 our property and
our cost OF production and could be told
lust what prices We could charge and
just what we could DO"
Mr. Gary said the real problem was not
the making OF big profits. but II was
rather the establishment OF Q dG0nito
understanding Of the legal situation.
do I understand thAt xeu esusvo q