The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1911-07-01


ever before. In 1sss-1so0 there were
three great comprehensive Carnegie
Steel-dominating the production of
crude and semi finished products, and
four concerns, the American Steel and
Wire, American Tin Plate, American
Steel Hoop, American Sheet Steel, Ma
tional Tube and Bridge, controlling the
lighter finished products.
STRUGGLE OF GIANTS.
This was the period when the "strug-
gle of the giants was impending and
when the formation of the United
and brought about. All nine of the
companies named were combined and
later the Union Steel Company, the
Calirton Steel Company and, in 1907,
the Tennessee Coal, Iron and Railway
Company was taken over. The pro-
noting syndicate putting the deal
through netted $62, 100000 in cash.
During the ten years Of its operation
the report says the steel trust has paid
average annual profits of IL per cent
on the money invested. In this con-
nection attention is called to the fact
that a considerable part of the invest
ment is in undeveloped or unworked
properties. showing that dividends
from paying properties must be much
larger than the average would indi-
cate. Insisting upon computing profits
upon a tangible property value basis,
the report says that the steel corpora
tion in defending it's book valuation
undoubtedly would claim that there
! was a merger value" AS to this, the
commissioner says:
1T is probably true that the various
hIy
| poration taken together with the or
| ganization of this company as a going
| concern, do have a value in excess of
| the sum of their values as separate
entities. The coordination and inte-
| grafton made possible by the combina-
ton of such properties under a single
! control undoubtedly tend to reduce
/ costs either through economies or
through removing the necessity of pay
! ing profits to others.
Further, in so far as the concentra-
| ton Of the industry under the control
of single concern gives to it monop-
olistic power over prices and produc-
ton. this may result in an increase in
! its earning power and consequently ir
an increase in its value as a going
| concern.
This involves, however, the reduc-
ton of actual or potential competition
To allow single company, which has
secured the bulk of given industry
credit for such merger value as s
basis on which to earn profits raises
therefore, a question of far-reachins
public policy. To regard a valuation
so arrived at as justifying such profit:
under these conditions would be rea.
soning in a circle, because the rea
question is whether the profits them
selves, used to determine the capital.
ization. were reasonable"
Since the corporation has been di.
recting its efforts especially toward ac
quiring and extending complete con.
troll over ore properties, it's percentag q
of production has decreased. AS agains
so per cent of all crude and finished
production in 1901, says the report, thu
corporation now has not much over 81
per cent, indicating conclusively tn
continuous presence of strong and in
creasing independent production"
COMPETITION MODIFIED.
| However the commissioner finds tina
competition, SO far as prices are con
cerned. has been modified by the policy
Of Corporation" inaugurated at tn,
Gary dinners" about which so muCi
has been said before the congressional
steel investigating committee.
| The present valuation of the com
bines tangible property is placed a
$11S7, 100000 as against $1.46S, 0O0. 00
outstanding securities, an increase o
about $4S7,OOO,O0O in property whil