The Birmingham age-herald., 1911-07-01

Washington, June 3o.-The long expect ed and much discussed report from the bureau of corporations on the United States Steel corporation, recently sub mitted to President Taft, was made pub lie here tonight
 Signed by Herbert Knox Smith. com missioner of corporations, the report makes no recommendations, and is almost wholly narrative in form. MT. Smith declared that restriction of competition was prime object of the organizers of the Steel corporation, so-called trust" Capitalized at sl. .4o2. GOO, 900. the corpora ton, he asserts. had tangible property worth only sss2,oo0 ,Ooo By a constant re- investment of earnings. however, the re- port points out much ot the water" in tie company has beei eliminated.
 The Steel corporation now owns 75 per cent of the lake ores. having recently concentrated it's efforts to securing these properties. On this point the sreport says
 Indeed insofar as the Steel corpoya- tion's position in the entire iron and steel industry is of monopolistic character. 1t is chiefly through it's control of ore hold ings and of ore.''
 Discussing in detail how ''the innpend- ing struggle of the giants, was averted almost over night by the formation of the greatest combination of combina- tions, taking in 25o subsidiary companies controlling Co per cent of the total crude and finished steel production of the country, the report says:
 Until 1898 the bulk of the business was distributed among very consider able number of concerns. There was sharp competition, modified by frequent pools of greater or less duration and ef- fectveness'
 Then came an era of great combna- tions, the report continues, with capital nations ranging from s3o,oooooO to $1Oo- 000,Ooo. mergers of many smaller com panies, which instead of eliminating com petition, threatened to bring price-cutting on larger scale than ever before. Tn lS99-1e0O there were three great com panies-the Carnegie company, Federal Steel and National Steel-dominating the production of crude and semi-finished products and six concerns-the American Steel and Wire. American Tin Plate American Steel Hoop, American Sheet Steel, National Tube and American Bridge controlling the lighter finished products
 Struggle of the Giants"
 This was the period when the ''strug- gle of the giants" was impending and when the formation of the United States Steel corporation was conceived and brought about All nine of the companies named were combined and later the Union Steel company, the Clairton Steel com pany. and, in 1907. the Tennessee Coal. Iron and Railroad company were taken over The promoting syndicate putting the deal through netted ss2,5Oo,ooO in cash.
 During the 10 years of It's operation. the report says, the steel trust has paid average annual profits of 12 per cent on the money invested. In this connection attention is called to the fact that a. considerable part of the investment is in undeveloped or unworlSed properties showing that dividends from paying prop critics must be much larger than the average would indicate. Insisting upon computing profits upon tangible prop erty value basis. the report says that the Steel corporation. in defending its
  that there was a merger value" As to this, the commissioner says: Merger Value"
 ''It is probably true that the various properties acquired by the Steel corpor- ation. taken together with the sorganiza- tion of this company as going con cern, do have value in excess of the sum of their values as separate entities. The coordination and integration made possible by the combination of such prop critics under a single control undoubted ly tend to reduce costs, either through economies or through removing the neces- sity of paying profits to others.
 Further. in so far as the copcentra- ton of the industry under the control of a single concern gives to 1t monop- oistic power over prices and produc- ton, this may result In an Increase in fits earning power and consequently in an increase in it's value as growing concern
 This involves. however. the reduction of actual or potential competition. To allow single company, which has se- cured the bulk of a given industry, credit for such merger value as basis on which to earn profits raises. Is. there