Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1911-05-30
STORY OF THE STEEL TRUST.
John w. Gates Gives House Commit
tee Interesting Facts.

John w. Gates revealed to the house
steel trust" investigating committee
last Saturday the history Of the Unit
ed States Steel corporation. Present
at the birth Of the greatest manufac-
turing concern in the world, he de-
scribed how it was the natural out
come Of what he described as the
refusal of Andrew Carnegie to be
bound by the "gentlemen's agreement"
that marked the early days of open
competition In the steel business. He
told also of millions lost and created
almost in a breath, how the Carnegie
mills, appraised at $160,0O0,0O0, were
recognized as worth 1920, 100000 al
most within the time required to make
grim clash in the formative days when
John D. Rockefeller was dissuaded
from joining in the creation of the
corporation and the manner in which
others were prevented from engaging
in the steel trade.
Relating how Carnegie had been
forced to abandon plans for extending
his steel business, Mr.. Gates frankly
admitted that the gigantic industrial
combination was formed to throttle
competition, and he surprised the COM
mittee with the further information
that when John D. Rockefeller had
deal had been put through by which
the Standard Oil magnate was forced
to sell out for 40 cents on the dollar.
Characterizing Mr.. Carnegie as a
bull in a china shop" Mr.. Gates told
of a midnight conference between
himself Charles M. Schwab and
j. Pierpont Morgan, at which the steel
corporation was conceived and how 1t
resulted in Carnegie getting $320,000,-'
900 In the corporations securities for
his steel interest which he previously
had offered for $160,000,000 In cash.
Mr.. Gates also told the committee Of
the taking over Of the Tennessee Coal
& Iron company by the United States
Steel corporation during the panic Of
1907, deal in which he was interest
ed as a stockholder of the Tennessee
company. This, he declared, was a
forced transaction carried out by Mr..
Morgan and other financial leaders to
save from ruin the Trust Company of
America, threatened in the financial
upheaval because 1t loaned too much
money on stock Of the Tennessee Coal
& Iron Co.
Plans made by Mr.. Carnegie in 1899
and 1900 to circle his steel interests
with a railroad of his own and to COM
pete with the National Tube company,
just organized by Mr.. Morgan, by the
erection of a tube works at Ashtobula,
Ohio, were the factors that led to the
birth of the steel combine. The story
of the negotiations which led up to
the combination now the subject of
congressional inquiry, were entertain
ingly told by Mr.. Gates.
He revealed how Mr.. Morgan,
alarmed by Mr.. Carnegie's plans, had
sought the advice Of himself and
To NJ
Schwab. who, he said, was the only
man who had influence with Mr.. Car
negie, was called in to suggest way
to stop Carnegie and how the pion-
eer steel king Of the country was
curbed in his purpose, though greatly
to his financial gain. He explained
that the steel business was threatened
with several demoralizing forces when
Carnegie's plans became known and
that Mr.. Morgan and others became
alarmed, fearing that Carnegie would
demoralize both railroad interests and
steel prices.
This was the situation as described
by Mr.. Gates. himself a director at
present in the Republic Iron & Steel
Co., when Mr.. Morgan sent word to
him through James ]. Hill, seeking a
conference to determine what could be
done. Mr. Gates said he told Morgan
that Charles M. Schwab was the one
man who could influence Mr.. Carnegie.
Out of that came an all-night confer
ence at Mr.. Morgan's New York home,
the outcome of which was the United
States Steel corporation.
Mr.. Gates stirred members of the
committee somewhat when he declin-
ed to state what he thought was the
value of the common stock Of the steel
corporation.
Mr.. Gates was asked many hypo-
thetical questions relating to the pow
er of the steel corporation to dictate
prices and to command business. Ask
ed If he, as an independent manufac-
turer of tin plates, selling below the
trust" price, should receive sugges-
ton from the trust" that the price Of
his ore and transportation might be
advanced, would he attach weight to
the suggestion? He said:
Il would consider 1t a bluff. If I've
got the cash, can buy ore as cheaply
as any one else. Such threat wouldn't
deter me a particle l don't believe
the steel corporation makes any such
threats. If they did no one would
pay any attention to them"
Mr.. Gates left Washington after the
hearing. The next meeting Of the
committee will be held Tuesday. The
witnesses expected are E. II. Gary and
Norman B. Ream of the United States
Steel Corporation.