The Sentinel=record. (Hot Springs, Ark.) 1900-current, 1911-07-01

tioi' mdue possible by the commits :
sion OF such properties under a single
control, undoubtedly tend to reduce
costs eiaer through economies or
through removing the necessity of
paying profits to others.
Further insofar as the concen-
tration of the industry under control
of single concern gives to it mon
opolistic power over prices and pro-
duction, tais may result in an in
crease in its earning power and con-
sequently in an increase in its value
as going concern. This involves, how
ever, .he reduction of actual or po-
tential competition. TO allow a sin
gle company, which has secured the
bulk of a given industry, credit for
such merger value as basis on
which to earn profits raises there
fore question of far reaching pub
lie policy. To regard a valuation so
arrived at as justifying such profits
under these conditions would be rea-
soning in a circle, because the real
question is whether profits themsel-
yes used to determine the capitaliza-
tion, were reasonable
Since the corporation has been IA
recting its efforts particularly toward
acquiring and extending complete
control over ore properties its per-
eentage of production has decreased.
AS against sixty per cent of all crude
and finished production in 1901 says
the report the corporation now has
not much over so per cent, indicating
conclusiyely the continuous presence
eff strong and increasing indepeend-
ent production.
However, thee commissioner finds
that competition so far as prices are
concerned, has been modified by the
policy of cooperation" inaugurated
at the Gary dinners" about which so
much has been said before the con-
gressional steel investigating commit
lee.
The present valuation of the com
bines tangible property is placed at
$1.1S7, 100000 as against $1,46S,000,
900 outstanding securities an increase
of about s4S7, 100000 in property
while only about s66.0OO00o has ad-
led to capitalization
Reviewing the combines present
position in the industry, the report
says that from the beginning the
corporation has oversladowed its
principal rivals, even exceeding all
of its competitors combined, and while
in the ten years of operation its
control Of production has dropped
from sixty to fifty per cent, approx
mately its position in ore reserves IS
much stronger
The advantage of controlling rs
per cent of the lake ores, on which
the industry is based, is materially
enhanced by extensive control of rail
transportation from the mines to the
lakes.
In a letter accompanying the report
Commissioner Smith says that in
capacity, rather than in actual pro-
duction, the corporation is materially
stronger than the production figures
indicate, and suggests that in case OF
continued trade depression this
strength probably would show itself
in increased control
Todays report is the first OF three
parts of bindings by the bureau of
corporations in an exhaustive inquiry
into the steel industry and deals with
,ae United States Steel Corporation
the causes leading up to its formation,
lis actual investment contrasted with
is capitalization. its rate of profits
and its degree of control of the indus
try.
Later reports will be devoted to the
independents, those companies not
subsidiaries to the corporation.