The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1911-05-27
TRUST USED
FORCED SALE
John W. Gates Gives Important
Testimony
COMMITTEE INVESTIGATING
GREAT FiNANcIER SAYS THAT
STEEL TRUST ACQUIRED COAL
AND IRON COMPANY BY WHAT.
Mr.. GATES BELIEVED WAS A
FORCED SALE.
INSIDE SECRETS
Are DIVULGED

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Washington, May Elbow w.
H. Moore and II. G. Flick lost mil
lions of dollars TO Andrew Carne-
gle Steel Works and the manner
in which j. p. Morgan, Charles M.
Schwab and himself conceived the
idea Of the United States Steel
corporation in 1898 to head off Mr..
Carnegie from engaging in the rail-
road and tube manufacturing
business were revealed today by
John w. Gates before the house
steel trust" investigating commit
tee.
Mr.. Gates said the price of An
ished steel became so badly de-
moralized in 1896 and 1897 that
Flick and Judge Moore conceived
the idea of securing an option from
Carnegie for his steel plant.
They paid s1,00O,000 for It. Then
business slump came and they lost
the million. being unable to put
deal through.
In 1899 or 1900 Gates then told
how Morgan organized the Ma
tional Tube Co. and how Carnegie
talked Of building a railroad from
Lake Erie around his plants and
also to erect a tube works at Ash
tabula, o. Mr. Morgan heard of it
and consulted with Hill of the
Great Northern railroad
Morgan expressed fears that If
Carnegie went into the railroad
business he would demorallize the
railroad situation as he had the
steel business. and il he built a
tube mill he would demoralize steel
prices.
After several conferences later,
which included Schwab, who had
influence with Carnegie, the plan OF
the United States Steel corpora
ton was drafted. soon after that
time Judge Moore suggested to
Carnegie that the bonds he was to
take for his property. cover the
National Steel Co. Mr.. Carnegie
agreed, getting for the National
steel Co. $10.000,00O more than it
was worth.
Gates said the steel corporation
paid s46,s00,000 for the American
Steel g. Wire Co. The property
for which Carnegie had given the
option at $160,00O.000 was turned
into the steel corporation at $780,
100000.
He thought it was Carnegie's
general attitude that brought about
the organization of the United
States steel corporation.
washington, May 27-John w. Gates
Who today appeared as witness be,
ore a special committee of the house
declared that the accumulation By tn,
trust Company of America of New
York, in 1907, OF great block Of col
ateral of the Tennessee Coal & IroH
20, made possible the acquisition o
hat company by the United States
steel corporation.
Mr.. Gates said he regarded the trans,
.ction, as forced sale.
The hearing before the special com.
nittee selected by the house OF repre-
to determine whether III,
United States steel corporation is op,
rating in violation of the Sherna
law. interstate corainerc,
avs or the national banking laws, be-
.an today. Mr.. Gates was called is,
,ecially to enlighten the committee re,
,arding the amalgamation OF the Unit,
d States Steel corporation and sht
Tennessee Coal & Iron Co. The com,
nittee also purposed questioning Mr.
sates concerning the steel corpora.
IONS relations with the American
steel a. Wire Co.
Roosevelt's Name Mentioned.
The special committee. Of which
representative Stanley Of Kentucky i
hartman, Is determined that an inves
igation OF the Tennessee Coal & IroI
20. deal. which is said to have beer
approved by President Roosevelt
mould be the first subject taken up,
Asked by Mr.. Stanley If the dea
With the United States Steel Co. wa
lot prompted by the embarrassment q
he Trust Company Of America. Mr.
Sates declared 1e had heard that r
Morgan had suggested the transaction
o relieve the distressed condition o
he banking house.