Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-08-04
Charles M. SchWab Tells of In
ception of Big Combine.
MORGAN MADE 0VERTURES
Commissioned Schwab to Get Selling
Price From Carnegie.
IRONMASTER WAS RELUCTANT
Finally Accepted Advice Of His
Lieutenants and Parted With
the Properties.

NEW YORK, August 4-Charles NJ.
Schwab, president of the Bethlehem Steel
Company and former president of tho
United States Steel Corporation, faced tho
House committee Of inquiry into the
steel corporation today. Mr.. Schwab re-
Gently returned from Europe, where he
attended the International conference Of
steel manufacturers at Brussels. He was
questioned first about the Incorporation
of the United States Steel Corporation
Just prior to that he said that no was
president Of the Carnegie Steel Company.
Did you actively participate IN nego-
tiations prior to the foundation Of the
United States Steel Corporation" asked
Chairman Stanley.
''1 did"
II believe you first suggested the Or
ganization Of that corporation?'
II can't answer categor1cally as to
that. but 1t was a subject that had been
on my mind for some time
The chairman asked Mr. Schwab to tell
the whole story about Andrew Carneg1e's
desire to dispose Of his property, the pre-
liminary conferences with ]. Pierpont
Morgan and his part in the plans which
developed into the formation OF the
United States Steel Corporation.
Glad Of Opportunity.
IT am very glad Of the opportunity"
Mr.. Schwab began, "once and for all
definitely to tell the story about which
there have been so many m1sstatements
and So much rnieinforn fion
"In the fall Of 1890 J. Edward Simmons
prominent New York banker. and
Charles Stewart Smith rendered me a
dinner at the University Club. There
were present Mr.. Morgan, Mr.. Carnegie
York fnanciers. There 1 made an ad-
dress and chose as subject for my re-
marks the Future Development Of Man
ufacturing Steel in the United States"
l explained the great advantage to be
gained by the organization Of such a
corporation as United States Steel. There
outlined what became later the steel
corporation"
II gave my reason: in detail" Mr..
how I thought that, instead Of many
companies manufacturing the same
line Of goods. by organisation many
companies could get together and
manufacture different items. That
would result in great economy.
Economy in Distribution.
Il showed, secondly. how by such an
organization there would be great econ
omy In distribution. In my proposal
there was no thought Of limitation of
production or the maintenance Of price.
The possibility Of ninety blasting furnaces
coming together in that way in producing
economy proved so great that recently.
at the Brussels conference, / advocated
the idea of all Independent manufactur-
ers exchanging their cost sheets for the
ultimate benefit OF the steel industry"
Gould they do that without injury to
each other?" asked Chairman Stanley.
"Oh, yes; they can and do. I propose
to extend the idea still further and have
companies exchanging cost OF every item
that goes into a ton OF pig from"
Suppose asked you to furnish this
committee all your cost sheets, would you
be willing to do it?''
quite so; and We do do It."
Then is there any reason why the
United States Steel Corporation should
hesitate to submit its cost sheets?"
Il think not. Since leaving the United
States Steel Corporation I have had &C
cess to most Of their cost items"
Mr.. Schwab said he did not do It when
he was president of the United States
Steel Corporation because that was not
then the business policy