The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1911-05-28
"STEEL TRUST
STORY IS TOLD
John w. Gates Makes Highly
Interesting Statement Be-
fore House Committee.
HOW THE CORPORATION
CAME TO BE ORGANIZED
Power of Andrew Carnegie
Feared; Taking Over of the
Rival During Panic.
By Associated Press

by Associated Press
WASHINGTON, May 27.-John w
Gates told the house steel trust IN
vestiostinp committee today the his
tory of the United States Steel corpo-
ration. Present at its birth he de
scribed how it was the natural outcome
of what he described as the refusal of
Andrew Carnegie to be bound by the
E'gentlemen IS agreements that
marked the early days of open compe-
titon in the steel business.
He also told of millions lost and
created almost in breath; how the
Carnegie mills appraised at $l60.000,-
600 wero reorganized as worth $500
100000, almost within the time re-
auired to make the transfer to the cor
poration; the clash in the formative days
when John D. Rockefeller was dis.
suaded from Joining in the creation of
the corporation and the manner in
which others were prevented from en-
gaging in the steel trade.
Relating how Carnegie had been
forced to abandon plans for extending
his steel business. Mr.. Gates frankly
admitted the combination was formed
to throttle competition. and that when
John D. Rockefeller had sought 10 en-.
ter tho steel business deal was put
through which forced him to sell out
for 40 cents on the dollar.
ttThe price of finished steel" be
said. "becamo badly demoralized in
1896 or 1897. Mr.. Frick and Judge
W II. Moore conceived the idea of Sc
his steel plant. They got the option
and paid sl,ooo,0o0 for it. Soon after
ward decentralization of the business be-
came so great that they could not put
the deal through. The price. think,
was s160,0o0,00o. They had to for
felt that option and they were not par
ticularly pleased. Pretty soon the Fed
eral Steel company was formed with
the consolidation of the Lorain Steel
the Illinois Steel company. and the
Elgin, Joliet & Eastern railroad
Carnegie Feared,
SIN 1895 or 1899 MI Morgan or
ganized the National Tube company
then took it into his head to build
railroad from Lake Erie around his
plants and also to erect tube works
at Ashtabula, o. Mr.. Morgan heard
of it and consulted with J. J. Hill of
the Great Northern. Mr.. Morgan ex-
pressed fears that if Carnegie went in
to the railroad business he would de-
moralize the railroad situation as he had
the steel business and if he built a
tuoe mill ne would uemorallze steel
prices
'fAfter considerable talk Mr.. Hill
suggested to Mr.. Morgan that he talk
to me about it. 1 went to see Mr.
Morgan who asked me TO stop Mr.. Car
negie 1 told him the only man who
had any influence with Carnegie was
Charles M. Schwab
"'Get Schwab, Mr.. Morgan told
me. for conference, I got Schwab
and that night we went to Mr.. Nor
gan IS house We conferred with Mr.,
Morgan all night until o'clock the
next morning. and when we left we
had formed the tentative plan to merge
the steel corporations into one concern
the United States Steel corporation.
Soon after that time Judge Moore went
to see Mr.. Carnegie, and said to him:
IF you are going to take bonds
for your property, make them cover the
National Steel company as well,
Secured an Extra S1o,ooO,ooo.
ftMr. Carnegie followed this advice,
thereby getting for the National Steel
company $I0,000,000 more than it was
WORTH
Mr.. Gates said the United States
Steel corporation paid $4s,0000 900 for
the American Steel and Wire company,
of which he was the presiding genius.
The property for which Mr. Carnegie