The Washington times., 1911-10-29
SUIT AGAINST STEEL CORPORATION
CONSIDERED FROM ALL VIEW POINTS
Wall Street Was Unped Dissolution Su-An Mar
ket Acted With Considerable
Cotton Crop-Money and Trade.
by JOHN GRANT DATER.
Representa Munsey

~. Special r
NEW YORK, Oct. 2s.--Despite a gen.
eral impression to the contrary. Wall
Street was not wholly prepared for the
action brought by the Government in
the Federal Circuit Court, on Thursday,
against the United States Steel Corpor-
alton. It Is true that there has been no
end Of rumors bearing upon this mat
ter, the latest rs recently as the third
week in September. when United States
Steel issues broke violently, and 1t is
true also that President Taft lost no
opportunity on his recent tour to out
line his policy on the Industrial trust
question. asserting over and over again
that the corporations must comply with
the Sherman act as interpreted by the
Supreme Court In the Standard OIL and
the American Tobacco Company cases,
and that all mon must prepare them
selves for a restoration Of competitive
conditions In business.
Many shrewd observers in the flnan-
cial district gave II as their opinion at
the time that the President was endeav-
orins to prepare the public mind for
Just such Q suit as that brought for the
dissolution of the Steel Company, but
elsewhere, and particularly among the
rank and file in the Street with whom
the Steel issues have always been great
favorttes, there developed a sentiment
that the Government did not have the
courage 10 take action or that II 80 the
proceedings would be deferred for
long while. No doubt, the reassuring
statement recently issued by J. P. Nor
gan and Judge e. H. Gary. announcing
that the company had no intention OF
dissolving voluntarily and that in the
opinion Of eminent counsel the cor
poration was not violating the Sherman
act, had very much to do with this
feeling Of fancied immunity.
Caught Unprepared.
Another matter, too. which contributed
somewhat to encourage a belief that the
Government would stay it's hand with
the Steel Corporation was the action OF
the officials in letting II be known that
they would abrogate the lease with the
Great Northern Ore properties. and that
they were about to reduce the freight
rate charges on Lake Superior ore
transported over their railways. Since
the Government had determined upon
it's course In the matter II may be re-
garded as in some degree fortunate that
It instituted proceedings when 1t did. for
only a few hours before the bill OF COM
plant was filed on Thursday the d.
rectors of the corporation met and took
formal action as above, voting a can
collation. Of the ore lease on January /.
1915, and a reduction Of from 60 to so
cents a ton on ore from points on the
Missabe iron range to Duluth.
Naturally an action like the above
precision that the corporation was squar-
Ing itself with the law. possible by tacit
agreement with the Government on the
only point-the control of the ore and
had been severely criticised in the re-
cent report Of the Commissioner of Cor
porations. As II was even the rumor OF
the contemplated action week ago was
proclaimed as bull argument on the
Steel stocks, and as pointed out In this
column, the ore lease, which was the
basis OF outrageous stock -Jooblng ma
neuvers In the Hill stocks in 1905, when
II was negotiated, was held to be a
lemon" now a good thing to get rid
Of AS a matter OF actual record. one
Of the thirteen directors who voted Tor
the recision Of the lease on nHGsday ,snS Gs6 az
| to the steel Corporation four years ago,
on which occasion he stated that he
would vote against Its sale by the COM
pany at any sum less than that.
Epoch Making Development.
In view Of the impression created by
the proposed cancellation Of the ore
lease It Is not much a matter Of sur
prise that many persons were caught
of their guard when the suit was an
nounced andu that United States Steel
issues should have been vulnerable In
Fridays market. When you consider
all that may be involved In the Gov
ernment's effort to disintegrate this
vast corporation, the largest In tine
world. and the far-reaching effect that
the suit is likely to have. actually and
sentimentally. not only upon the army
of Steel shareholders and upon the
army of employees but also upon other
Industrial combinations. and probably
upon industry itself, 1t must be
acknowledged that the general security
list showed great relative stability.
That this was due to the strong tech
nical position Of the general list, arising
out OF heavy outstanding short ac-
ing support was not much in evidence
on Fridays decline. Short covering also
impaired the chief element of strength
in Saturdays market.
appraise such a development as the
Governments suit against the Steel
Corporation. The proceeding Is epoch
making in the country's industrial
history and as a political affair 1t may
take rank with the action Of President
Andrew Jackson in terminating the
charter of the second bank OF the
United States. The suit Is not on a par
with those instituted against the
Standard Oil Company or the American
Tobacco Company, or any or all of the
numerous other companies against
which the Government has proceeded.
no more than the Steel Corporation
does not stand on all fours with these
| other concerns. The others are single
trusts made up. relatively, of a few
| integral parts, while the Steel Corpor-
| alton is a holding company for So
| called trusts, and the Government suit
| contemplates not only the undoing OF
this combination but also OF resolving
| these corpor rations back into theiI
original constituent companies.
Constructive Development Undone.
Whether it is possible after all these
many years to go back to a period prior
to the formation of the Steel Corpora.
ton and endeavor to resolve into theii
component parts such concerns as the
Federal Steel Company. the Carnegie
|