The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-07-30
CARNEGIE THE BULL
IN THE CHINA SHOP
Report Of Herbert Knox Smith on
Formation of Steel Corpora
ton Made Public.
RIVALS MENACED BY LAIRD
In Averting the Danger the Op-
portunity of Forming a Trust
Presented Itself,
RIVALS MENACED BY LAIRI
Special to The Tribune

Special to The Tribune.
WASHINGTON, July 29.-When Her
bert Knox Smith was before the Stanley
steel committe he refused to give the
committee the contents of the report
made on July L TO the president Of the
facts connected with the formation of the
United States Steel corporation or any
data contained in that report Mr.. Stan
ley urged him to obtain the consent of
President Taft that the report might be
did as requested. The record of the tes-
timony OF Commissioner Smith con tains
the reply In full 1t impuLes the forma-
tlon OF the trust Immediately to the
threat OF Mr. Carnegie TO build tube
plant near Cleveland and invade the do
mains OF finished manufacturers. The
report goes on to say
Saw Great Opportunity.
steel men, and the various associated
financial interests regarded this situation
they saw great danger TO their business.
especially to the profitable quasi monopo-
Hes In certain branches OF the trade. In
averting 1t they also saw great oppor-
tunity. The extraordinary era OF indus
trial expansion was still on, the public
were still eagerly absorbing large Issues
OF securities. BY merging these conflict
ing interests into great corporation. the
threatened steel war" would be averted
and great profits realized from the flote-
tion OF securities.
weeks the United States Steel corporation
was thus organized and began business
on April J. lsol Its totsl ds oon capitalization
bonds). 1t is strictly Il holding com
pany-that is. 1t does not mime. manu-
fncture. transport or sell, II simply owns
constituent concerns. Thus competition
between these Combined corporations)
concerns was eliminated. while, enormous
stock commission to the underwriting
syndicate, which netted a clear profit OF
about s62 800, 900 In cash.
Control Of Market.
AT It's forms ton the United States Steel
corporation ,(referred To herein as the
thrds GrPsF@'" Of the h eo"ntpys prediction SH Of
crude Steel and from one half TO four
ffths OF the principal rolled steel
Speaking broadly, as against 60 per
cent of all crude and finished steel pro-
duction in 1901: the corporation now. has
eating conclusively the continuous pres
ence. OF strong and increasing Independent
productions The competition OF these
Important Independents with the steel
corporation, so far prices are con-
cerned. has been modified by the policy OF
co operation.
as the menace" 10 the steel industry
and says:
There can be little doubt that many
interests in the steel industry regarded
Mr. CarneGies personal influence as a
menace to themselves and their business
and desired to secure his retirement from
the trade. The purchase Of that con-
Germ obviously could not be financed with
cash, ARRANGEMENTS were, however. ef
fected with Mr.. Carnegie for taking over
his large holdings in his company in ex
change for bonds OF the new oonsolida
Water In the Stock.
/ The report places the physical value of
the properties OF the trust at about one
| hnlf It's Capitalization, including bonds
The valuation arrived at by the bureau
| by the first method. which Is chiefly for
| tangible assets, is approximately $685.
100000. the valuation arrived at BY tho
| sscond method. which includes intangible
considerations or market VALUATIONS. is
approximately s1s3, ,O00. 600. the valuation
arrived at by the bureau by the third
| and more precise method. this being for
| tangible assets only or n detailed esti-
matc Of the. physioaI properties. Is hp-
| pro1imately $685., ,090, 900
| While IL is not the purpose OF this
| report to kay what should have been the
| capitalization OF tho steel corporation, IL
| la obvious that the company was heavily
Iovercapitalized. Judged by any reasonable
standard"