Dakota farmers' leader. (Canton, S.D.) 1890-19??, 1912-03-08
STEEL TRUST HIT
ACCOUNTANT SAYS CORPORATION
OPERATES IN RESTRAINT
OF TRADE.
GARY DINNERS FIX PRICES
report Shows Morgan & Co. Received
Cash Profit Of 500, 3oo 900 for Or
sanizine Concern Which Controls
so Per Cent. of Industry.

Washington. - The United States
Steel corporation operates in restraint
of trade and j. Pierpont Morgan re.
ceived SIC, 100000 for organizing the
trust, according to +. J. McRae. expert
accountant. who made a report on the
inquiry into the books and minutes OF
the trust. His report reaches the con
clusion that the corporation prevents
competition through a manipulation OF
prices, through the influence OF the
so-called Gary dinners" by contro,
of raw materials and through a sys.
tenn OF ~interlocking directors in vari.
u companies.
Some of the charges made in the
report ire
That j. p. Morgan & Co., heading
the syndicate which organized the
Steel corporation, received a cash
profit of SOS, 300, 900, of which $62..
500. 900 was for promotion, n So
800, 900 for a bond conversion scheme
That the net earnings for nine
years were s. 1929, 685 $3.50, or an equiv
alent of approximately $13 a ton on
finished product, instead of $780, 900,
311 as claimed by the corporation In
its report.
That the statement made by Judge
Gary and H. G. Prick to President
Roosevelt in 1907 that the Steel o
poration did not control more than 81
per cent. of steel properties in the
country was wrong; that It controls
OF the contrary about 80 per cent. OF
the steel holdings.
The Gary dinners" where indie
pendent Is well as corporation steel
men assembled, and where the so
called Independents are Influenced to
reduce their production conformably
to their estimate of the reduction IN
the demand existing, and to maintain
prices, is Objectionable as far as II
operates to exclude free competition.
ut can be no justification of the
cooperation of the participants in the
Gary dinners that no penalty attaches
to a violation OF the declarations mu
tually exchanged. The antitrust act
would prevent the enforcement OF any
penalty for reducing prices or exceed
ing ones share of the business.
Restraint of competition is fur
thered by the policy of making the
greater portion of its profits in raw
materials while the finished product
plants make very low profits. The net
earning of $13 per ton of finished
products from 1902 to 1910 inclusive
was divided thus:
"By manufacturing companies, $500
per ton; coal and coke companies, 10
cents; iron mining companies, $2.12;
transportation companies, $1.S1: mis-.
cellaneous, Sc cents"
Backing up his contention that the
Steel corporation controlled 80 per
cent. of the steel business instead OF
GO per cent. as its officials asserted
to former President Roosevelt. Mr..
McRae says:
'The total property OF the Bethle-
hem, Cambria, Colorado, Lackawanna,
Pennsylvania and Tennessee compa-
MES. added to the capital stock OF
Jones & Laughlin because statement
Of property is not available), amoun
ed to $365, 76S, 889. these companies be-
ing the only important concerns in the
steel business in the United States.
outside of the United States Steel cor
poration. This amount added to that
Of the United States Steel corporation
equals a grand total of $1,811, 606.339.
of which the property account OF the
United States Steel corporation
amounts to $1,445.S37.450, or about Sc
per cent