The Richmond Virginian. (Richmond, Va.) 1910-1920, 1911-06-09
CARNEGIE FORCED
TRUSTS FORMATION
NASTERLY ACTIVITIES OF CAM
NY sCOTCHMEN COMPELLED
RIVALS TO BUY HIM OUT.

WASHINGTON, ID. c., June o.
The masterful activities of Andrew
Carnegie. the Iron master" which
steel magnates declare. forced the for
nation OF the United States Steel Cor
poration, were detailed to the Stanley
steel trust investigating committee OF
the House to-day by James e. Gay
ley, one OF Carnegte's early associates.
Gayley, prior to the formation OF
the steel trust. was superintendent
OF blast furnaces in the Carnegie Steel
company. the original steel property
OF the iron master. When he took
the stand, Representative Young Gre
ptnhcan), OF Michigan. took up his
examination, leaving the big commit.
tee table, and facing Gayley across a
smaller table at which the witness
sat. Gayley was slightly deaf, and
leaned forward with hand to ear to
catch the questions At times he
spoke so 10. that the COMMITTEES could
scarcely hear him.
"Ruinous Competition.
Prior to the organization of the
steer trust, Gayley declared "runous.
cut-throat competition" obtained.
I'm the old days when ali the s,ee,
companies were independent" he
SAID, we worked under the old meth
o. The companies would wage war
ana then when almost exhau ed make
price agreements that they might re.
cuperate and prepare to fight some
more Carried on steadily, this com
petition would have meant a monop
ols OF the steel business by the strong
est company" no
Under Youngs examination. Cav
ley rubbed his head reflectiveIy ana
onorated the testimony of Beta
fniiiioh Gates that Carnegie contem
piateo entering the steel tube busiess
IN competition with the National
iupe works, controlled by J, p. Nor
gan. oA
AZ that time was Carnegie anxious
W sell ms steel works." asked Young.
.p carnegie Was Willing.
answered Gayley.
Did he contemuIate building a
steel tube works at ConneautP
Inc Carnegie Steel Companv in
us growth found itself unable to run
III some branches because the do
i iiiahos Tor Its products was not CON
'ihuous. Conditions arose when yo,,
couidnt give steel rails away tn The
railroads. The mills would have tn
shu' up We were constantly seeking
some avenue for the sale OF the steel
'oi furnaces were turning out.
we bought about 5000 acres If
,aiia at Conneaut, o., about 1899. and
iooheo into various propositions. We
o a building tube mill.
ana tnen again we thought of going
| INTO the wire business,
with whom would you have corn
Young. asked
Inc National Tube Works, which
l. iater learned was controlled by T
rierpont Morgan" said GayIey.
Where were it's plantsra
~ riverside and Mckeesport, Pa.
mere was an Independent tube mill
al Chester Pa" said Gayiey.
1oans then questioned him as to
me sIo'ooo.oo0 valuation placed on
cue Sarhegie property during the
ffick-Carnegie litigation.
Only the Book yaIue
That was only the book value :.
said Gayley, "and did NOT renrsser,
anything like the potentla, ya,na ~
the plant" u
What do YOU mean by potential
Valuef'' asked Young.
why, the earning capacity re
piied the witness He declared no
Knew nothing of the details of rho
sale Of the properties to the steel
trust until Carnegie himself present
Cd the proposal at meeting of the
earnesle directors in Pittsburg.
NAT ala you get for your inter-
est In the Carnegie company ash
ed Young.
received par value for my Car
mcgee bonds Gayley said, and one
ana one-half shares of steel preferred
ana one and one-half shares of steel
common for every share OF my Car
negie stock"
| Gayley then related his connection
| win the steel trust. He became first
vice president or the steel coIpora
uon ana took charge of the ore
gathering and handling of raw mate