New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-06-21
RAIL POOL DESCRIBED
{. C. FELTON, Says It Was Formed
After RuinouS Price Cutting.

The existence Of a pool In steel rails from
! 1900 until 1903 in which the Steel Corpora
/ ton was interested, and at whose meetings
| il was represented by Judge Gary. was
! brought out yesterday at the hearing in the
governments suit for the dissolution OF the
alleged steel trust.
| +. c. Felton,, president of the Pennsyl-
/ vania Steel Company. gave detailed ac-
count Of this pool on being questioned by
/ Jacob NJ Dickinson, counsel for the govern
ment. The steel rail pool, he said. was
/ formed early in 1909 at a meeting at the
Waldorf-Astoria. at which. besides himself.
there were present Charles VI. Schwab, for
the Carnegie Steel Company. and Judge
Gary or John w. Gates for the Illinois
Steel Company. The pool was continued
after the formation Of the Steel Corpora
tion in 1901, the witness said, and among
the officials of the corporation who attend
ed the pool meetings were Judge Gary and
G. VI. Schwab.
The business I'm steel rails was dlstrib-
uted pro rata among the members OF the
pool. Mr.. FELTON, said, and the members
who ran ahead of their allotment paid into
a general fund TO compensate those who
had remained behind. The rail pool had no
commissioner, as Gld the steel wire pools,
the witness said, and the money was paid
IN to the attorney for the organization.
At the meetings a fair price for steel
rails was arrived at through discussion Of
the business situation, Mr.. FELTON, said,
and though tine members were not bound to
stick to that price, they generally adhered
to 1t quite closely. There never was n
written agreement between the members
of the rail pool, Mr.. FELTON, said.
on Cross-examinatlon ny Richard V.
Lindabury. counsel for the Steel Corpora
ton, Mr. FELTON, said that in 1898 and 1899,
the two years preceding the formation OF
the rail pool, there was the closest and
keenest competition IN the business. and
the two years were the worst I'm the history
Of the steel industry since he had been con-
nected with IT, There was ruinous price
cutting and everybody was losing money
he added. Then the plan OF a rail- pool was
preached, Mr.. FELTON, said, and It was taken
up because il waS thought that by getting
together prices could be increased and the
producers benefited.
Foster Millken. OF MilIkcn Brothers, an
independent steel company on staten Island
was recalled for cross-examination during
the morning session. He said that the pro-
duction Of steel by his company at It's
Brooklyn plant in 1900 and 1901 prior 10 the
building Of its new plant on Staten Island
was from $500 to 5000 tons year.
on redirect examination by counsel for
the government Mr. MiIliken was asked
about the fms difficulties encountered
during its efforts at rehabilitation from re-
ceivership. Mr.. Lindabury objected. and
his objection was met BY Mr.. Dickinson
with the explanation that the government
would show how Mllliken Brothers could
not get the accommodation from New York
banks which they thought they deserved.
Mr.. Lindabury wanted TO know whether
the government expected 20 connect the
Steel Corporation with this attitude OF the
banks. and Mr.. Dickinson replied that he
did not know. but he wanted 10 find out
1t was finally agreed that he would recall
the witness should he satisfy himself the
Steel Corporation had something TO do with
the situation.