Omaha daily bee., 1911-08-05
HE FIRST SUGGESTED SCHEME
Speech He Made at Dinner Attracted
Attention of Mr.. Morgan.
CENTRAL IDEA WAS ECONOMY
Advocated Association of Companies,
Each to Have q Speciality.
LATER MORGh mt FOR HIM
He Denies Implication that Control
of Output or Fixing of Prices
Was Considered In Forming
the Combine.

NEW YORK. Aug. 4-Charles NJ.
schwab, president Of the Bethlehem steel
company and former president Of the
United States Steel corporation, faced the
house committee Of inquiry into the steel
corporation today.
He was questioned about the Incorporation
of the United States Steel corporation; just
prior to that he said he was president of
the Carnegie Steel company.
The chairman asked Mr. Schwab TO tell
the whole story about Andrew Carnegie 5
desire TO dispose OF his property, the pre-
liminary conference with j. p Morgan and
his part in the plans which developed into
the formation of the United States Steel
corporation.
'I am very glad of the opportunity" Mr..
Schwab began, "once and for all definitely
to tell the story about which there have
been so many misstatements and so much
misinformation. In the fall of 1899 j. Ed
ward Simmons, a prominent New York
banker, and Mr.. Charles Stewart Smith,
rendered me a dinner at the University
club. There were present Mr. Morgan, Mr..
Carnegie and seventy or eighty prominent
New York financiers. There l made an ad-
dress and chose for my remarks the future
development of manufacturing steel in the
United States. l explained the great ad-
vantage to be gained by the organization
Of such corporations as United States
Steel. There 1 outlined what became later
the steel corporation. I gave my reasons in
detail"
Economy Central Thought.
at showed first how I thought that in
stead of many companies manufacturing
the same line Of goods, that by organiza-
ton many companies could get together
and manufacture different items That
would result in great economy. l showed,
secondly, how by such an organization
there would be great economy in distribu-
ton. In my proposal there was no thought
of limitation of production or the mainte-
nance OF price. The possibility of ninety
blast furnaces coming together in that way
in producing economy proved so great, that
recently at the Brussels conference I advo-
Gated the idea Of all independent manufac-
turers exchanging their cost sheets for
the ultimate benefit of the steel industry
Talk with Morgan.
The witness said that some time after the
dinner at Pittsburg he saw Mr.. Morgan at
his home here, and added:
''Mr. Morgan asked me to go over again
in detail the suggestion 1 made at the
University club dinner. talked with him
on the subject for several hours. expanding
my ideas of forming the organization OF
the steel manufacturers Mr.. Morgan told
me that he was convinced of the advan-
tages of such an organization and he asked
me IL could get price from Mr. Carnegie
for his steel plants. told him 1 would see.
About a week later / spent the day with
Mr.. Carnegie and I told him what was
in my mind and that Mr. Morgan had re-
! quested me to get a price for his stee
plant. 1 advised Mr.. Carnegie that in view
of his advanced age and his phianthropic
life he ought to sell. l told him 1 thought
he would be benefited by such a sale. Mr.
Carnegie received the proposition with g
great deal of reluctance, but finally he
| agreed to SELL 1t is my private poinion
that shortly afterward he very much re-
GREETED 1t.
81 got a price from Mr.. Carnegie and
took 1t to Mr.. Morgan. Beyond being con.
suited about details with reference to the
properties 1 had nothing further to dc
with the organization of the United States
Steel corporation"
| "At the time Of the organization of the
steel trust" Mr.. Stanley asked, did you
oppose the idea of restricting competition?' %
"I have said there was no such idea
in the steel organization" Mr. Schwab re-
| piled.