The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1912-02-28
MORGAN GOT MILLIONS
Was Paid s6s,soo,ooo For Organizing
the Big Trust Which
is Being Investi-
gated.
Steel From the inside.


ports:
That the United States Steel cor
poration operates in restraint Of trade,
and controls so per cent of the coun-
try's steel trade
1t manipulates prices through the
Gary dinners
Eliminates competition through con-
control of companies
]. P. Morgan and company were CIV
en- $70,000,000 in profits for promoting
the trust.
In the first nine years OF it's exist
ence, the. trust made aggregate profits
of over billion dollars.
| UNITED Press Leased Wire Service. |
WASHINGTON, Feb 2s.That the
social functions known as Gary din
ners'' control absolutely the prices in
the steel industry, and that the Unit
| ed States Steel corporation is in re-
straint of trade through this price con-
ltrol and its domination of raw mater
ial, were the conclusions reported to
the Stanley steel committee OF the
house today by Farquhar j. McRae,
the committees expert accountant.
MacRae's report was the result OF
a detailed examination of the books
Of the steel trust, made while the rec
ords were under subpoena by the com.
mittee. In several particulars the
report contradicts testimony given by
officials of the trust before the COM
mittee.
The Gary dinners, the report says,
operate to maintain prices and ex-
clude competition.
THE arrangement is designed and
4 intended so to operate 1t continues,
land it does SO operate, as to steel
rails, although it is claimed that the
: so-called independent companies can
!. cut prices without fear of penalty, ex-
cept the dishonor of declaring in favor
OF named price and then selling at
some other price.
cat the Gary dinners reports of the
steel corporation and independent con-
Germs meet and agree to reduce their
production conformably to their estj-
mate of the demand existing.
1T can be no justification of the
operation Of the participants in the
Gary dinners that no penalty attaches
to violation because, perforce, the
antitrust act would prevent the en-
lforcement of any penalty for reducing
prices or exceeding ones share of the
business
The report drew the conclusion that
the Gary dinner agreements We're in
: reality just as binding on steel manu-
facturers as the pool agreement of the
cid days, which We're legislated
!. against in the Sherman act
! A total OF s69,300,00o was paid the
e Morgan concerns for financing the
7 syndicate that organized the trust
= the report says OF this $62 100000
e was promoters profit, while the re
!. naming s6,S00,000 was the profit on 9
bond conversion scheme. In the frs
nine years of its existence the cor
e roration earned net, the report said
I 81, 029, 4S5,3S9, instead of S930,444,311
e as it set forth in the report of TIL.
It corporation officials. This amounts tt
a net profit Of $13 ton on finished
q steel products.
Il Eighty percent Of the steel produc
ing properties of the country ar,
/? dominated by the corporation, the re
e port says, although e. H. Gary ant
8 H. c. Frick told President Roosevelt
@ when they absorbed the Tennessee
o Coal and iron company in 1907, tina
o the trust controlled, and desired t,
e control, less than sixty per cent of tn
p steel business.
a. Even in making its profits, the re
e port charges, the steel corporation re
If strains competition by concentratin!
d. the great profits of raw materials an
semi-finished products, while confir
le ing the finished product plants to
IL low profit This operates, according t
le the report, to keep the price of ra!
III materials up, to the advantage of tn
sr corporation and the detriment of il
dependent competitors.
The report. showed in detail tn
dividends paid by the subsidiary cor
ranies of the steel trust during tn
40 first nine years of its existence. tt
ID total amount was s75s, 1868 Til
~ facts that the subsidiary companie
Al operating in raw materials, mac
~ greater dividends than the finishe
70 products concern was cited to sho
y. that the corporations kept the prit
H. Of raw material up, to the embarras
of nent OF competitors
A yoluminous argument in IA Sc
tions to prove the steel trust tru
in restraint of trade was presented
the conclusions of the report. 1t say
~ "One hundred and eighty-one pr
Z yiously competing corporations we
!" concentrated under the control of
single holding security compal