Omaha daily bee., 1912-05-25
GETS RICH BY SELLING OUT
John Stevenson Canny Scotsman,
Testifies in Steel Suit.
TIN PLATE MIL FIRST VENTURE
steel Plant sold 70 rrust for Thir-
teen Millions In Bond,-Too
mon stock, He Snys.

ir.. a Scotchnlan and a relative Of Robert /
Louis stevenson. enltvened the hearings |
In the federal suit TO dissolve the United
states steel corporation today when he
told in q rich Scotch accent Of the veri-
Gus deals by which he sold out half
dozen, steel properties to the Reid-Moore
syndicate, John W. Gates AMI the steel
corporation itself. each time striking a
profitable bargain.
Mr.. stevenson was called by the gov
eminent TO give evidence to support its
allegations of monopolistic intent in the
formation OF the various subsidiary COM
ldnations Of the steel trust in which
all Of stevenson's properties are now con-
stituent parts.
Enterins the employment Of the Carne-
gle Steel company in 1874 when his fell
low Scotchman, Andrew Carnegie. was
making his reputation as an iron master.
Stevenson in 1892 established at New
Castle, Pa. the first successful tin plate
mill in this country, he said. II was
capitalized at $4,000. Ten years later.
after selling out this and four other steel
plants which he subsequently built he
started the Sharon Steel company,
merged II with the Union Steel company,
| and then sold out to the steel corpora
tion. taking for the Sharon interests SIS
10000 in the corporations bonds. he
said.
He had built the Sharon steel plant,
he remarked. TO shake the apple tree
again"
You did not get shares for your In
terest?'' asked H. E. Cotton, attorney for
the government
mo sir. bonds said Stevenson.
That seems to be Scotch habit.
commented r. " Llndabury. attorney for
the steel corporation. apparently refer
ring TO the fact that Andrew Carnegie
had taken bonds when he sold the Car
negie Steel company to the corporation.
No, sir" retorted the witness. That
was wisdom. I'd been getting too much
common stock In other deals and there
was too much gambling about that"
Stevenson told how he sold his She
mango Valley steel plant. ..-..a
Lets see." he said. there was $4,000
stock in the company. $4,000 bonds and
the cash profits brought It up to an
even si.ooo.ooo I was lying in bed with
a broken leg and my wife and children
were begging me to sell IT, told w. f.
Rice. my president. to go ahead and sell
and I give him the credit for getting a
iudicious price. He sold II TO the same
old crowd that was bobbing up every
| where about that time for $4,000 In
common and preferred stock of the Ma
| tionAl Steel COMPANY"
who was that crowd1"
"oh. Judge Moore, Dan Reid and W. B.
Leeds"
His shenango Valley tinplato plant he
sold to the American Tinplate company
for sSS7ooc preferred and the same amount
OF common stock OF the latter company,
he said.
Gould you have got cashf'' ..#
III we had all demanded money from
that crowd In those days have my
doubts II We could have got IT, II was the
understanding that could take t2S7coo
cash instead. but the understanding was
not much more than hope"
Was competition keen in those days7"
1T got worse and worse the longer
was In the business"
II was because OF their being too many
wire mills in the business. the witness
said. that he surrendered his New Castle
wire and nail plant TO John W. Gates,
who had organized the Consolidated
Steel and Wire company. In 1892 there
were forty-six plants and competition
in two or three years had driven all but
eleven out Of the business. he declared.
He said there had been a meeting of
wire nail manufacturers IN Cleveland
where IT was agreed to fix prices at si.S0
a keg. ....
When the meeting was adjourned for
lunch. Frank Baackes went down and
sold by wire 10000 kegs at si.p." said
Stevenson. Il was going down for the
same purpose and the telegraph operator
handed me Backs telegram by mistake,
stuffed II in my pocket and took II
back TO the chairman OF the meeting.
What shall we do with nim?' said.
Kick him down stairs said the chair
man.
II can't said ! he's a bigger man
than I am"
This was Frank Backs. now vice
president Of the American Steel and
Wire company"
Yes. and very decent fellow"
Mr.. Llndabury brought out from the
witness a statement that demoraiized
conditions In the wire and tinplats trade
during the late 'sos had directly led to
the consolidation OF numerous plants
into the National Steel. the American Tin
Plate and the American Sheet Steel CON-
pany and that many of the manufacturers
had gone to Judge Moore ana asked 10