The Washington times., 1911-12-12
BAIRD ADMITS THE
999.YEAR LEASE IN
THE STEEL INQUIRY
General Freight Agent Of
Bessemer and Lake Erie
Quizzed.

Seeking further light on the arrange
ment whereby a nine-mile railroad sub
sidiary to the Steel Corporation leased a
O0mtle road for a term of S99 years,
the Stanley committee investigating the
Steel trust .today again ouizzed F.. c.
Baird, general freight agent of the Bes-
somer and Lake Erie.
Mr.. Baird admitted that this short
road held a 999-year lease on the Pitts
burg-Bessemer and Lake Erie line; that
the short line was owned entirely by
the Steel Corporation, and that the
same company owned 81 per cent Of tho
the mnots IN I ana of the Ss0 iattsr
road received only 8 per cent dividend
As to the peculiar financial arrange
ed few details, explaining he was not
. dnanc1er.
Tail wags the Dog.
man Stanley. "this seems to be a genu-
ine case Of the tail wagging the dog"
The chairman wanted to know what
had become Of the millions earned by
this Steel trust subsidiary, inasmuch as
the minority stockholders seem to re-
cetye but per cent on their investment.
Mr.. Baird replied that about $500, 900
the minority stockholders had benefited
Il don't see much beneft. to them. y
said Chairman Stanley, FOR 1t looks
to me as II they will go ahead drawing
8 per cent for 500 years."
Table of Statistics.
Before resuming the examination Of
Mr.. Baird today, the steel committee
received from Congressman Young a
table of statistics, showing the value
Of ore deposits in Michigan. The fig-
ures, presented by L. A. Williams. Sec
retary to Mr.; Young. show that the
Mr. Baird was subjected to grilling
as to the means whereby the Bessemer
and Lake Erie road. nine-mile road.
Bessemer and Lake Erie.
Now, about this. matter OF the tall
wagging the dog" asked Chairman
.'The steel trust owns this short road
eyes," answered the witness.
And the. steel corporation owns 81
per cent Of the stock Of the 200-mile
road-the pittsburgh. Bessemer and
Lake IKE. ErieT' |.
Long Road Leased.
$50 the steel corporation leased the
long road to the short road for a term
Of something like 999 years?'
"Yes. but I don't know Of my own
knowledge the, duration Of the lease
satG H. MI; E.;ES Baird; a.n,a,ned that the LONG
road had been leased to the Steel trust
before the short line to the ore docks
had been constructed. The nine-mile
sosa ha naa ID fs RR rss by the the
the Steel trust was formed.
Chairman Stanley then developed that
the public, owning 40 per cent OF the
receives only 31h per cent on its stock
through the terms Of the lease.
Minority Stockholders.
II understand the minority stockhold'
ers get $224,0OO interest on their holdings
each year." said Stanley.
"I think so," said Baird.
what goes with the rest-about S.
100000 annually-made by this road?
It has gone mainly into reconstruc,
ton Of the bad the Is Dted noW the states
They have spent about 100000 on it.
"Yes." Interrupted Stanley. but Il
appears that after all these improve
the publlc-will go on $50 years gettins
"What do these minority stockho!ders
gain?" demanded Congressman Gard
"rhey are gaining in intrinsic m va value L1
bankrupt when leased by the Steel cor: cor
poration. Now you can't buy this
stock" answered Baird.
"But intrinsic value Of stock doesn''
count much If stock pays these minority
holders only per cent" observed Con-
"Yom must remember that this road
would have been two streaks of rust II
II were not for this lease said Mr.
y Baird THE road was not paying wher
leased"
"But I notice that the Steel Corpor
alton took pains to get 81 per cent OF
the stock before starting on this work
Of Transformation" tersely observed
Chairman Stanley.
"Do you know how the lease aerye'
ment between the roads was reached|
, asked Congressman Young.
"No; except that I understand 1t was
peaceful negotiations among stockhold
0rs," said the witness.
4