The Washington herald., 1911-07-01
The Steel Trust Report.

Dispassionate in its tone and appar-
endy based upon thorough examina-
ftion, the report of the Commissioner of
/ Corporations upon the steel trust is an
interesting and notable contribution to
Official literature
Briefly stated, the report shows that
from 1898 to 1900 the steel concerns
pursued a policy of cut-throat compe-
Elton. Trade conditions became demor-
allied. 1t became question of COM
bination or destruction. Naturally, the
former was accomplished All the lead
ing plants were amalgamated into the
United States Steel Corporation, with
an aggregate capital of $f,4oo,oooooo,
A very large part of the report is de-
voted to proving that this capitalization
was excessive. According to the in
yestigations of the bureau, the value of
the plants, mines, and railroads was
only 500 100000 Even this assertion is
! not convincing, because the steel trust
officials claim that their ore deposits
e alone worth S7oooooooo, while the
bureaus valuation is just one-seventh of
that amount
In the ten years that have elapsed
since the trust was formed, its holdings
have materially increased in value The
trust claims that they are now worth
$7oooooooo more than the entire capi-
talization, and the bureau admits that
they should be appraised at over one
billion dollars. 1t is apparent, therefore,
that much of the original imitation has
disappeared. The average profit of the
trust has been II per cent
There are three points in the report
worthy of emphasis. The first is that
the enormous sum of $6z, 100000 was
realized by the promoters of the COM
bine as their compensation They liter
ally put millions of dollars into their
pockets. At the same time, they took
large risks, for if the trust proved a
failure their losses would have amount
ed to millions In the second place,
the trust has not been able to stife all
competition NThe evidence, on the
whole" says the report, indicates that
competition in the industry has stead
lily been increasing" The trusts pro-
portion of the business in nearly every
important product except pig iron and
steel rails is less than it was in 1901.
1t makes only 81 per, cent of the total
output of steel iEgots and castings, and,
finally, it is important to note that IL |
the steel trust is a monopoly it is chiefly
through its control of ore holdings and
the transportation of ore
The gravamen of the case against the
steel trust is that il was tremendously
overcapitalized and that millions of the
"watered" stock went into the pockets
of the promoters. The first statement,
although denied by the trust officials, is
probably true, while the second asser-
ton is unquestionably fact 1t will be
said, of course, that the trust should
not have overcapitalized, and its
promoters should not have made a for
tune for themselves 1t merely dupli-
Gated, however, the history of nearly
every corporation in the country, the
only difference being that it dealth IN
millions where other corporations were
confined to thousands. With other ques-
tions of vital public concern the report
does not deal at all 1t does not dis
cuss the question whether the trust has !
absolutely controlled prices or whether
the public has been made to suffer as
the result of the combination. Above
all. there is not the slightest mixing
that the steel trust has been guilty of
the reprehensible methods pursued BY
the Standard Oil Company in securing
a monopoly Of business.
Perhaps, however. future reports viii
sdeal with iniquities not yet revealed