The Birmingham age-herald., 1911-06-14
ktLlo,.
 NO Apulu.
 asa Roosevelt and Morgan To Appear Before Stanley Committee
STEEL MERGER PUT
 AN END TO POOLS
MT. Gayley Admits Price Agreements Were Made and That There Were Fines for Violation
 of Them


 Washington. June 18.-Frank H. Kef-
 log. special counsel of the department of justice in the prosecution of the Standard oil company, and known as the trust buster" told the Stanley steel trust Investigating committee to- day he had been special counsel of sub sidiary companies of the United States Steel corporation in Minnesota for years and that he had no apologies to make for it.
 Chairman Stanley said the committee would summon any one-be he the President of the United States or J.
 Pierpont Morgan--to ascertain how
 certain railroads owned by the Steel
 corporation were able to declare enor-
 nous dividends on small capitaliza-
 tion. It is probable former President
 Roosevelt and MT Morgan will be
 asked to appear before the committee
 when it holds sessions in New York. T think we ought to summon both
 those persons" said Representative
 Young of Michigan, a member of the committee.
 You mean the former President Of the United States. don't you?" asked Chairman Stanley.
 "Nes, of course," MT. Young replied. Mir Kellogg referred to a letter he had sent to the committee in which he ex- plained that he and his firm. Davis. Kellogg & Stevens, had for years represented the Duluth and Iron Range railroad and the Duluth, Mesa and i. Northern railroad, subsidiary companies since 1901 of the United States Steel corporation. Denying that while acting as special counsel for the government he had performed any services for the Steel corporation, Mir. Kellogg frankly said that fee of s15,0o0 for his ser vices previously performed had been approved by officials of the United States Steel corporation and paid to
 him in October, 1907. after he had un- | dertaken trust prosecution for the gox- ernment
 i No Apologies To Make
 There has been q good deal said,'
 Mir. Kellogg told the committee. about my connections with tho goveramest and with the Steel corporation To be- 1 gin with, l have no apologies to make. have explained to this committee my services with the subsidiary companies to the Steel corporation. They did not concern the Steel corporation as an or sanization
 Since 1907 l have given my time to the government in the Standard oil and a few other cases until they were concluded and l have done little, if any other busi- ness. My firm has still continued as coun- se for these roads and both my firm and myself are taking all the legitimate busi- pae ear PC have anOlORV n make to the American people for appear ing for any corporation or individual. l have never advised the organization Of any corporation or the operation of any corporation under the Sherman law. I wish to make this statement as broad as possible"
 He said his firm had represented the Duluth and Iron Range company as coun- sel for over 20 years, long before it went into the Steel corporation. Since the Steel corporation had taken over the property he understood all bills over S10,000 were passed upon by the Steel corporation heads and that he had had several such bills.
 James Gayley, former vice president of the Steel corporation, who also was a wit ness today and will continue tomorrow. | is the only corporation witness under sub
 poena to appear here at present. Sev- eral western witnesses are to be heard and the committee then probably will ad-
 iourn over until the wool bill is passed and meet later in New York. Several New York witnesses have been told they would be examined in New York. Put An End To Pools l Organization of the United States Steel corporation in 1901 put an end to pools and agreements in the steel industry. de- clared MT Gayley, former vice president of the corporation. today to the House steel trust Investigating committee. MT. Gayley denied that combinations or agreements existed in the steel trade to- day.
 Mr Gayley said that prior to 1901 there were agreements by which manufactur- CTS were apportioned certain shares of the steel business and those who failed to get their allotted share were provided for with a. proportion of the general profits.
 Mir. Gayley declared that for long time before 1897 the price of steel rails was practically uniform at S2S a ton. It
 represented an understanding between manufacturers of rails and the railroads. He admitted that previous to 1900 agree ments were made among various manu- lecturers regarding other steel products.
 in which the Carnegie Steel company par ticipated. These agreements provided
 fines for violations.
 | MT. Gayley did not know what body | imposed the fines but said he thought the | fine fund was provided pro rata among l the different companies. When asked
 who could explain the agreements and
 fines, Mir Gayley said he presumed Charles M. Schwab, the president, or E. A Peacock, the vice president of tho | Carnegie company, could tell. | Mir Gayley further admitted that be- | fore 1900 there were agreements as to the proportion of business each manufacturer | was to have.
 | Nr Gavley said he understood that if | the companies did not get their share they were given the profits anyway. | That there were any such agreements
 now, Mir Gayley denied. He described changed conditions in the steel business
 since organization of the Steel corpora | ton and discussed the Gary dinners. He | said he first was opposed to the Gary cooperative ideas, but later came to be- l lieve in them.