The Birmingham age-herald., 1911-06-08

trade which was then small. It was necessary to increase the export trade in order that this country should get it's fair share of the business from neu- trai ports. We had q great deal of discussion about MT. Carnegie s'price, l having known that two years before he lad offered to sell for much less sum but realized that the Carnegie com pany had increased its earning capacity and its value.
 T told MT. Bacon then that if through the acquisition of the Carnegie company a corporation could be com pIeted large enough and rich enough to furnish adequate finishing mills and | increase the export business l believed his proposition was worth considering, and l agreed to meet MT. Morgan the next day, Monday.
 | T met Morgan, explaining my ideas and the details of the business reasons for entertaining the proposition. l said to him:
 i Tt seems to me that if you think a consolidation of steel interests on this line is practical that we should start with the Federal Steel company
 Meeting Called We decided to call in the men interest ed in Federal Steel and telephoned for Norman B. Ream H. II. Rogers. D. O. Mills and others. We got into long dis tance telephone communication also with Marshall Field of Chicago. who was also a director of the Federal Steel company. meeting was arranged and I told Of the proposition, explaining the business Opportunities as best I could. Mir. Nor gan then stated that he knew enormous financial responsibilities would be involved but that if we concluded it was good, safe and reliable undertaking he would G,,a, aioI n to carry it out. There was some oppo- sition at-first on the part of some of the Federal Steel company directors but they finally assented and that is where the United States Steel corporation was actu- ally born"
 MT. Gary then told of the details of working out the plan and of taking over the American Steel and Wire, the Ma tional Tube, the American Bridge, the National Steel and other concerns, the capitalization of the United Steel corpora tion at $950, ,oO0000.
 'sI want to say," he continued, that from the standpoint of the original cost of the concerns which were taken in and what 1t would have cost to reproduce them at the time there Is no doubt that the United States Steel corporation was over capitalized, but from the stand point of what all the properties were actually worth put together as a going concern, I do not believe the Steel cor poration was over capitalized'
 MT. Gary declared that fin all the ne- gotiations preceding the organization of the United States Steel corporation, he never had heard that the threat of MT. Carnegie to build plant to rival the National Tube company, organized by MT. Morgan. and to build a railroad from Pittsburg to New York, connect ing all his steel plants, had anything to do with 1t.
 Such matters as I learn, were testi- fled to by MT. Gates before this com mittee," MT. Gary said, never were spoken of in our deliberations. I do not remember that MT. Morgan ever mentioned these matters to me-"
 MT. Gary said that when 1t came to the matter of discussing the charter and form of organization of the Steel corporation MT Gates had nothing to do with it. MT. Gates connection, he said, was to look after the interests of the American Steel and Wire com pany in the transaction The commit tee today issued subpoena for the secretary of the United States Steel cor poration and for the production of the minutes of the corporations finance committees meetings at which the pur- chase of the Tennessee Coal and Iron company was discussed.
 Before the committee met MT. Gary was asked if he had any comment to make on the report that the govern ment had determined to review the finding of the bureau of corporation with regard to the steel trust where upon 1t was to determine whether court proceedings should be instituted.
 q have read several reports said MT Gary, which are repored to re- feet administration views, but l have absolutely nothing to say concerning tbem."
 Destroy Water Transportation
 Testimony of great interest to the cities of the Ohio and Mississippi val leys came out at the hearing today when it was declared that efforts were being made to destroy water trans portation for coal down the Ohio and Mississippi rivers now of great benefit to the industries in cities along these rivers.
 "Statements have been made by sen ator of the United States who has personal interest in the Pittsburg Coal and Coke company" said Chairman Stanley, that the Monongahela River company is now under the control of the Pittsburg Coal and Coke company, and that there is now pending a prop osition to exchange the securities of these two companies for the bonds of the Onlteu StdtcS oleei CoTpoidtioH with the inevitable result that the Ohio river will cease to be the me- dium of traffic for the carriage of this tonnage of coal" Members of the committee and attor- nesh for MT. Gary asked Chairman Stan ley to name their man and Mr. Stanley responded by calling to the stand MT. Hall former president of the Pitts burg stock exchange. | Mir. Hall related the history of the two companies and said the Steel cor poration has 25-year contract at a price that represented 8 loss to the min ing companies. deal is pending, he said, for the transfer to the Steel cor poration of a large acreage of coal, to be paid for in bonds guaranteed by the Steel corporation.
 "Theresis no doubt in my mind" MT. Hall declared, that the deal means the ultimate shipment of all coal in our district by rail and the eradication of water competition Senator Oliver agrees with this view"
 MT Hall has offered no evidence that we are getting control of these com panies," said MT Gary.
 Your contract Is better than owner 'ship would be-" replied MT. Hall. "It is cheaper to get the coal at your price than own the companies.'
 MT Hall testified that the Pittsburg Coal and Coke company, known as the rail company in the Pittsburg coal field, controls the Monongahela River company. which ships by river.
 We have no thought of acquiring con trol or an interest in either one of these companies" said Mir Gary. we have no interest in them except this contract