The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1912-01-23


reasona ole profits are made on Iron
ore or the lake region, excessive earn
ings flow into the treasury Of the
United States Steel Corporation from
its ore transportation facilities. which
suggest the necessity from the stand
point o! public policy OF scgregating
the ore from the gigantic corporation,
and large tntercompany pronts are
made By consolidated orc. iron and
steel companies, according TO a pre-
liminar2' report on the cost OF pro-
duc,ion in the steel industry By Her
bert Knox Smith. Commits s!oner OF
Corporations, made public tonight.
The report was presented TO Presi-
dent Tart and sent 10 the House Com
m!ttee on Ways and Means for con-
sderat!on in connection with the pro-
posed revis!on OF the steel tariff sched-
ule. upon which the Democrats will
caucue tomorrow.
Prices Unrensonably High.
The prices OF lake ora" the report
declares. have been kept for many
years at an unreasonably high level
compared with the cost OF production
and the cost OF the investment In the
producing ore properties"
In connection with the alleged ex-
cess.ve profits realized by the Steel
Corporation from Its ore railroads.
Commissioner Smith says that the con
troll OF public agencies Of transporta-
ton carries with 1t such possibilities
OF abuse that the question Is raised,
whether the public interest In this
country does not require a segregation
OF the ore railroads from the Steel
Corporation"
The report is based upon an inves-
tigauon OF two-thirds Of the country's
production of iron and steel from 1902
TO 1905. inclusive. Limited data for
1902 to 1910. Mr.. Smith adds. makes
1t clear that these nve-year figures
substantially represent present con-
ditions also.
In go far as the Steel Corporation
enjoys monopolisuc power" the re-
port states 1T lies chiefly in its hold
ings of ore and it's railroad transpor-
tation facilities. The company, tho
report declares. Inns acquired unduly
large ore reserves. holding at tho
close OF 1910 at least fifty years' cup
ply at the present rate OF consumption
exclusive of the Great Northern ore
properties. the lease of which has
been conceied. effective January l.
1915. 1t Is estimated that the CORPORA
ton has fully 100000 900 tons of 9th
er ore in the laka region.
The average cost or lake ore gen
orally. delivered ut lower lake ports.
from 1902 to 1905 was s2.G4 per ton.
The average transfer profit on ore was
66 cents per ton. This Is regarded as
excessive by the commissioner, repre-
senting in his judgment: from 10 to is
per cent. on the investment
1t may be stated. tho report adds, "as
notorious and incontrovertibie tact,
that the orics of Lake Superior ore
during tho greater part OF the period
1909 to 1905. and indeed back to 1895
has been established in large measure
by agreement among the principal ore
producing intorcsts."
Competition Handicapped.
The excessive proiiss on ore, the re-
port says, handicap effective comreu-
ton in the pro iuctInn OF pig Iron and
steel by concerns which must go into
the open market for their ore. I.
The transportation proht Of so
cents tone realized by the Steel Cor
poration on It's OWN ore over its prIn-
cipal ore-carrying railroads and in
lake vessels from 1909 to 1896 was
grossly excessiJ re" the report alleges.
The report adds:
while Indignation Of industry to
permit Of large price scale operations
at minimum costs Is exceedingly de-
sirable. these enormous profits Of the
Steel Corporation on the transportation
of ore present problem of very great
Importance. The situation is this: In
lEBf VI the Bleet INDUSTRY with
/ respect to transportation thus far, in
stead OF working to the advantage of
the public in the form of lower costs
! to all shippers and lower prices, has
Injured to tn beneflt OF great comb-
nation. On the other hand. to let the
Steel Corporation retain this advantage
Of low transportation cost and to let
this work itself out In the form of
lower prices might be undesirable, be-
n fa,,4 tn <,l,,a
Corporation an unrea sonable and I'M
desirable advantage over the competi-
tors In tho sale OF finished products.
"Thie situation clearly raises the
question whether the interests Of the
public may not require tho segregation
OF these railroad properties from the
steel Corporation. II would thus stop
| rates upon competitors shipments,
which puts them at great disadvan-
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