Vernon County censor. [volume] (Viroqua, Wis.) 1865-1955, 1912-03-06
BIG PROFIT FOR
MORGAN IN STEEL
Financier Got 100000 for Or
gaming Trust Says Expert.
cENSURE FOR GARY DINNERS
Report Of Investigator Finds Trade
Is Restrained. That 30 Per Cent.
Of Properties Controlled
BY Monopoly.

Washington.-Ho the $i.0OO,O00.-
900 United States Steel corpora
tion and It's agent. the United
States Steel Products company. con
stitute a double trust that fixes prices
and controls the steel export business
and so per cent of the domestic iron
and steel trade of the United States.
was made public in report submit
ted to the steel trust investigating
committee of the house Of representa-
tives by Farquhar ] McRae. it's expert
accountant
That the big corporation makes It's
gigantic profits through restraint OF
trade and manipulation of prices is
the conclusion drawn from the ex-
pert's study of the trusts books.
Competition is killed by the influ-
ence exerted at the famous Gary din
ners. by control of raw materials. and
by system of interlocking directors
in various companies.
Not the least sensational Of the dis
closures Is the showing that J. p Nor
gan & Co. prontcd TO the extent Of
S69.300,000 in the organization of tie
trust or this amount $62 10000 was
the profit for the promotion Of the
deal and s6.s00000 was cleaned from
the conversion Of the bonds
The officials of the trust objected 20
producing their books before the com
mittee. but later agreed TO submit
them TO the inspection OF the expert.
In his report McRae points out many
discrepancies between what he found
on the books and what the trust Off
Gals told the committee.
McRae found that in less than nine
years the steel corporations net earn.
ings we're 81 029. 6s5. 1888. or an equiya-
lent of s13 a ton of the finished prod
uct In its report the corporation
says its net earnings for that period
were S9s0.000,31l.
Chairman Gary and II. C. Frick told
President Roosevelt that the trust
controlled only 60 per cent. of the
steel properties of the country az the
time IL wanted IT, absorb the fennes,
see Coal and I:on company McRae
reports that It's actual degree OF dom
inatioE exceeded so per cent.
The golden rule" policy which per
vaded the Gary dinners to Independent
as well as trust steel producers Is rep
resented IA one of the most subtle
but effective schemes for evading the
Sherman antitrust law.
THE Gary dinner arrangement"
.avs che ,onrrf ts,.5horaat tha en- coIlod
independents are Influenced TO reduce
their production comfortably to their
estimate OF the reduction in the he
mand existing. and to maintain prices.
is Objectionable as far as II operates
to exclude free competition. The ar
is designed and intended
10 operate and has operated admit
teily. as 20 standard steel rails, al.
though It Is claimed that the so-called |
participants can cut
prices without fear of penalty. except
the dishonor % declaring in favor
Of named price and then selling at
some other price
As showing the result OF the policy
of the steel corporation TO make the
bulk OF It's profits in the raw and semi
finished material. Mr. McRea submitted
a condemned statement of 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 a total
of 75S.124.3s653,
In it's conclusion the report says:
THE United States Steel corporation
is merely a holding company. engag.
ing in no business except the control
through stock ownership of the sub
sidiary companies. There were nc.
qulred and brought under single con.
troll upward of $50 concerns in lines
of business allied with the steelmak
ing business. including ore owning and
mining companies which are now re.
strained from competing In the sale
of ore.
There were acquired a large num-
Der of major concerns at much in
fated valuations