Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-08-05


president of the Bethlehem Steel Co,
we have never sold rails for less than
$3.50 We have sold them as high as
$55 q ton"
can you suggest any limit that might
be reached in the price of rails?" MIR
Bean continued
only by flight of the Imagination"
Mr.. sehwab replied, provoking consider
able laughter.
Mr. Schwab was a willing witness on
all points but one When Mr. BealI asked
him about an option given by Andrew
Carnegie on his steel plants, before the
Steel Corporation was formed, to Judge
w, II Moore and H. - Frick--a deal
never contaminated to the financial loss
said that the option was obtained for
someone whose name had never been
mentioned.
Who was ii % Mr. BeaH asked.
Il prefer not to say"
WAS 1t someone now engaged in the
steel BUSINESS"
Nothing can induce me to say more,
Mr. Sehwab answered 1T was a purely
personal and private natter
The subject was pressed no further
ARNd4h AiAf CibBt Ol tue udNr CHAIRMAN
Stanley referred to the suit brought by
II. c. Prick against the Carnegie Co. in
1899 when the former retired. On the i,a-
Sis of the ironelad agreement he was to
have been paid his share on a book value
of the property of abouts s75.OO0.000 In
his suit F'riek placed the value at $3.50
00O,0o0 1t was finally settled on an APP
praised value of about 1920, 600 600.
81 u
not asked Mr. Stanley. that was sold
q few months iaterward 20 the United
States Steel Corporation for $500 600 00o?"
Mr.. Sehwab said It was. but explained
that the hook value estimate was based
on the actual dollars members of the
company had put into the concern and
that each member, in ease Of death or
retirement, had agreed, Mr. Frick among
them, To sell his stock to other members
of the company on that basis
we were trying to make Mr. Prick
live up to his own agreement, he added
We finally reorganized and agreed upon
u $3.50 900 valuation"
Mr.. Sehwab will appear before the com
mittee again tomorrow George w. Per-
kins probably will appear before the com
mittee in Washington next Tuesday.
New York, Aug. 4.-Charles NJ
Schwab, president of the Bethlehem
Steel Co. and former president of the
United states Steel Corporation. faced
the House committee of inquiry into
the Steel Corporation today. Mr..
Schwab recently returned from
Europe. where he attended the inter
national conference Of steel manufac-
turers at Brussels.
Chairman Stanley asked Mr. Schwab
TO tell the whole story about Andrew
Garnegie's desire to dispose of his
property. the preliminary conferences
with j. F. Morgan and his part In the
plans which developed into the forma-
ton of the United States Steel Corpor-
alton
Il am very glad of the opportunity
Mr. Schwab began, once and for all
definitely to tell the story about which
there have been SO many misstate-
ments and SO much INSTRUMENTATION In
the tall of 1899 j. Edward Simmons, a
prominent New York banker and
Charles Stewart Smith rendered me a
dinner at the University Club There
were present Mr.. Morgan, Mr.. Carne-
gle and 20 or so prominent New York
hhanciers. There | made an address
and chose as a subject for my remarks
the future developments OF making
steel in the United States / explained
The great advantage to be gained by
the organization of such a corporation
as United States Steel. There | out
lined what became later the Steel Cor
poratton"
Il gave my reasons in detail" Mr..
Schwab continued Il showed first
how / thought that instead of many
conn anies manufacturing the same
lire Of goods, that by organization
many companies could get together
and manufacture different items. That
would result in great economy.
II showed secondly how by such an
organization there would be great
economy in distribution. In my propos-
al there was 40 thought of limitation
Of production or the maintenance of
price"
MI Schwab said he would be willing
to furnish the committee all his cost
sheets. He thought the United States
Steel Corporation would be willing to
submit its cost sheets.
Mr. SchWab then resumed his story
OF the organization of the United |
states Steel Corporation.
Some time after that dinner l was |
az Ptttsburg and received a message |
from John w. Gates. asking me to |
meet j. p. Morgan the next day in
Philadelphia. When | met Mr. Morgan |
talked with him for several hours
explaining my ideas Of forming the or
ganization Of the steel manufacturers
Mr.. Morgan said he was convinced of
the advantages of such an organiza-
ton and he asked me if l could get
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