Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-06-02
Talks Frankly with Senate In
vesiigaiing Committee.
Admits That U. S. Steel Controls
Subsidiary Companies.

prices of steel throughout the world;
and frankly admitted that the Steel
Corporation has absolute domination
over is subsidiary companies. Mr..
Gary's examination will be continued
tomorrow, when the committee Will
seek To learn from him further facts
relating to the taking over by the Steel
Corporation of the Tennessee Coal and
Iron CO.
The disclaimer as to the world wide
combination was called out by Il
statement by Chairman Stanley that
Mr. Gary was accredited with being the
directing genius of such trust"
When Chairman Stanley called the
committee to order there were also
present in response to official sum-
mons. Norman p. Ream. Percival Rob-
erts, James Daley and w. B. Dickin-
sen of the directorate of the Steel Cor
poration. Whether all would be exam
ined today Chairman Stanley would
not say.
There is not any doubt" Mr.. Gary
told the committee today, that the
United states Steel Corporation as the
owner of most of the stocks of the sub
sidiary companies, ultimately controls
those subsidiary companies, including
their management and conduct"
Asked if the Carnegie Steel Co. now
completes with other subsidiary com
panies in the Steel Corporation, Mr..
Gary said:
/ III should say it does. putting my inter
pretatioH on the word. I came TO be
frank and not to give you the exact
faets-that you may put your own con-
struetion on them.
THE subsidiary companies have their
own direcsorsssnd officers and have a
right to act Independently, but as the
Steel Corporation owns the securities if
the conduct of a subsidiary company was
antagonfstic in any way IL would only
be question of time when the adminis-
tIationsof tfiat subsidiary company would
be changed"
You mean the parent company would
control the poitices of any subsidiary
company
''It might not for the moment or the
month, but when the time to elect officers
arrived il would
cit would exercise the recall. as it
were?" asked Rep. Brantley of Georgia.
ives, you might put it that way" Mr..
Gary answered.
fare the profits of one subsidiary con-
Germ measured as the profits OF ail?"
Chairman Stanley asked. THAT is, does
the parent company distribute the divi-
dends of alp
1.-The earnings of the subsidiary compa-
Mes" Mr.. Gary answered whenever
dividends are declared, so into the treas
ury of the United States Steel Corpora
ton. That corporation, being the owner
of the dividends, of course distributes
them as it sees fit. The subsidiary COM
panies have no interest in the dividends
after they are declared"
who chooses the officers of the sub
sidiary companies?"
"of course their boards of directors
choose them. but nevertheless a sugges-
ton from the parent company. as you
call It, would be recognized.
Mr. Gary said he was chairman of the
board of directors. chairman of the fl
nance committee and chief executive Of
ficer of the Steel Corporation and a
member of the board of directors in the
subsidiary companies, such as the Amer
lean Bridge Co, American Steel & Wire
Co. Carnegie Steel Co. and American
Sheet and Tin Plate Co.
Mr.. Gary declared that the bureau
of corporations, the report of which
the committee had been endeavoring
to get from Sec. Nagel. with the con-
sent of the President, had been in
vestigating the Steel Corporation for
five or six years.
THE governments investigation
through that source has been most
exhaustive" said Mr.. Gary. 1.-THE b1-
reau of corporations must have q
House full of facts. 1t has cost the
Steel Corporation hundreds of thou
sands of dollars to comply with the
requests of that bureau for informa-
ton and statistics"
Mr.. Stanley asked as to the nature
of the American Iron & Steel Insti-
tute. Mr. Gary answered that il was
an organization of iron and steel mer
| which met to discuss matters in which
steel men We're Interested.
Chairman Stanley said:
II have heard from time to time
and have read in foreign journals
and others, that the ultimate purpose
/ of the American IRON and Steel IN
| stitute was to reach an amicablt
| agreement among steel men in thi:
| and foreign countries so that there
might be necessary steadying o
prices in the rest of the world, sim
liar to the steadying of steel prices
in this country. One of the moving
causes why | introduced the resolu
ton providing for this inquiry wa
the dread that within 80 days thi
institute or some similar one woult
/ have effected such an agreement.
He asked Mr. Gary to prepare
CONTINUED on Page Twelys.)