Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1912-02-29

exchanged. because peTsorce the anti
trust act would prevent the enforcement
Of any penalty for reducing prices or
exceeding ones share Of the business,
Previous pool agreements may have Been
broken and penalties inflicted by the
members themselves. although this was
soon discontinued II will be assumed,
even II fund had not been deposited,
that the men In the old pool would have
paid their fines.
''on the other hand, any contract may
be broken; any conspiracy may be upset
by recalcitrants. II Is surely no excuse
for the illegslity Of any arrangement In
restraint OF trade that II can be departed
from by thegpsrticipantS"
+ Profit. In Raw Materials.
Stress is laid In the financial section OF
the report upon the demonstration by
figures that the steel corporation re-
strains competition by making the greater
portion OF its profits in raw materials
and In plants producing semi-finlshed ma
iterials, while the finished product plants
make yery, low profits. This operates, It
Is declared. TO keep the price OF raw ma
terisls ore, coke and pig iron. on high
pane, to the advantage Of the corpora
tion and disadvantage Of the independent.
During the nine years from January I,
leo3. to December "a. 1919" the report says.
the productions of the corporation in
rolled and other finished steel amounted
to ~. MISC tons. and the adjusted net
earnings for the same period amounted
to u.sil.eos,ss. or an equivalent Of sp-
proximately ,is per ton. In order that an
idea may be had Of the net earnings in
dollars per ton Of the several operating
groups of the corporation. l have calcu-
lated these figures and find the approx
mate net earnings Of sis per ton OF fin
ished product TO have been earned as
follows:
by manufacturing companies. ss.0i per
ton: by coal and coke companies. 70
cents per ton: by iron mining companies,
s2.12 per ton; by transportation compa-
MES. 81 81 per ton; by miscellaneous com
panies, IS cents per ton. Total. SIS"
This, the report says, is equivalent to
an earning Of ~ per cent on cost,
In accounting for the discrepancy be-
tween the earnings claimed by the steei
corporation. sesoooesii. and his estimate
OF N.ics.li6 ,Oec. Mr. McRae restored TO
net earnings what had been eliminated by
the steel corporation in Its accounting,
including such things as interest on
bonds OF subsidiary companies. the
locked-up inter-eompany profits In In
ventories. special depreciation admittedly
charged 10 construction, employees bonus
funds and special compensations. account
preferred stock subscriptions. which have
been treated a. dividends from earnings
and not in the nature Of additional wages
to employees. and lastly interest on bonds.
mortgages and purchase money obliga-
tons OF subsidiary companies
As showing the result Of the policy Of
the steel corporation to make the bulk
OF It's profits in the raw and seml-fin-
ished material. Mr.. McRae submitted a
condensed statement of the dividends paid
by the subsidiary companies TO the steel
corporation and the interest paid by the
Carnegie company on its collateral trust
bonds, from April /. 1901. to April ]. 1910.
showing total OF s753.i2Lsss.s2
THE income from the Carnegie COM
pany in dividends and bond interest he
says, Amounted to ts6. sSe,b 5,fe. or
about 20 per cent OF the total The
American Bridge company paid the hold
ing company dividends on its preferred
stock durlnS this period to the amount Of
is.7ls.SI1.5e or Is per cent on the total"
Table of Dividends.
The table Of dividends for the nine
year period cents omitted follows
The Carnegie co npany. .s2z7. 70 900
Federal Steel company. common lltsle,lG
Tube Co.. COMMON. @IS,sb