New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-07-01
Greatest Industrial Concern.

The Steel Corporation is the greatest m
dustrial concern in the United states WIN
the largest properties. ana o. lnternatiolal
importance. II is the most conSpicuouS
example OF the modern corporate organ
izatiOn of great businesses. AS such, the
relation Of its investments 10 lis cdpltai-
zation and 10 It's earning power are maj,
tiers OF public concern. TIE corporation
itself has recognized this fact in its pub
lie reports. and has also furnished very
extensive information TO the bureau. H..
The CORPORATION was organized win IN
round numbers) S5l0,0O0000 OF preferred
stock sos 600 900 OF common stock S5OS'Vn-
O0O of corporation bonds, and about S8l,vQ-
900 OF underlying and m N sS dna nS o.
Speaking broadly, such capitalization
amounted to the claim the representation,
that there was a value in this concern
which would Justify fair business return
on this Capitalization. The bureau finds
on the contrary. that in 1901 the fair mar
ket value Of its tangible property was
about S7oo"0.ooO. slightly less thaH nan one-h IA,
It's capitalization. The other half. the eX,
cess OF about s70O.0oQ000 is thus separated
and stands out, embodying the essential
public questions raised by the bureau
ANALYSIS Of its investment. In so far as
that excess represented value In 1901, II
was value due either 10 increased earning
power from elimination of competition
concentrated ownership Of the basic nat
ural resources iron ore and coal; or. In
some degree indignation efficiency.
To sum up: Tne actual market value
Of the Steel Corporations entire tangible
properties at it's formation. emitting all
factors Of merger, integration and con-
centration, was not over SfO0OOO,OOO, Just
about one half it's capitalization.
The bureau does not assume 10 say tna'
the Capitalization should have been one
half what IL was or indorse At this time
any particular theory of capitalization II
has simply separated the market value or
physical property in this vast concern from
value baseh on earning power derived from
intangible factors. II has defined these In
tangible factors and pointed out their
peculiar relationship To price policy and the
public interest. to wit. merger value. In
tegration value. mOnoDoliStic value, and.
above all the incalculable industrial power
that rests on the control Of the bulk OF the
available iron ore Of the country.
increases in Property.
Since its formation the corporation, from
surplus earnings ALLOWING for depreciation
and changes in securities, has made good
much of the original excess Of its cap-
talization over tangible property. That ex-
cess in 1901 was about 100000 600, or 100 pei
cent and in 1910 only about s2s0,00,6o0, or
"a per cent. The total tangible value IN
1910 was 81 49,. 10000. AS in 1901 there Ia
omitted here all the merger values hereto
fore referred TO, and all appreciation OF
natural resources above the actual cost
thereof TO the corporation
The rate OF profit has been calculated.
not on the corporations capital stock, but
on the total investment as computed by
the bureau. Operating, administrative and
general expenses, as well as taxes. have
probation a matter Of some intricaey.