The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1912-02-28
Report to the House
Finds Many Things to
Criticise
ACQUIRED COMPETITORS N
ORDER TO CONTROL SUPPLY
Lengthy Discussion Of the Plans BY
Which the Several Independent OPP
orators We're Brought Under the
Power Of the General Concern.

Washington. Feb. 28.-The house
steel trust investigating committee
today made public the result of the
inquiry into the books and minutes of
the United States Steel corporation
conducted by Farquhar J. McRae. an
expert accountant
The McRae report reaches the con.
clusion that the steel corporation OPP
crates in restraint Of trade and pre-
lation o! prices, through the influence
Of the so-called Gary dinners" by
control Of raw materials and through
a system Of interlocking directors in
various companies. 1t also tends TO
contradict some Of the testimony
given by steel trust officials.
Some Of the figures dealt with In
the report are startling. 1t is shown
that ]. p. Morgan and company. re-
ceived approximately s70.0OO.0O0 in
cash profits for organizing the big
of the concern for the first nine years
OF Its existence We're more than a bill
lion dollars.
Steel corr oration officials objected
to producing their books before the
committee In this city, but consented
to place them freely at the disposal Of
an expert to be named by the commit
tee. Mr.. McRae made thorough
study of the books and minutes. and
in his report to the committee he
pointed out these salient features:
That J. P Morgan and company.
heading the syndicate which organic
ed the steel corporation. received a
cash profit Of $69.300,000 Of which
$62. 100000 was for promotion, with
an additional commission Of $6,S00,-
900 for hond conversion scheme.
That the net earnings of the cor
poration for a period Of nine years
we're $1.02S,6S5.3S9: OF an equivalent
OF approximately $l3 a ton on finish
claimed byj the corporation in its re-
claimed by the corporation, in it's re-
Cnntrolled Eighty Fer Cent.
That the steel corporation. contrary
to the statement made, by Judge Gary
and H. c. Frick to President Roose-
velt. in 1907 that 1t did not control
more than 60 per cent Of steel proper
ties in the country. controls about so
per cent of the steel holdings.
The section Of the report dealing
with the Cary dinners" where inde-
pendent as we'll as corporation steel
men assembled to discuss conditions
in the trade. contains an analysis of
the legal effect Of the golden rule"
policy prepared by Anthony ]. Ernest,
q New York lawyer. in which 1t is de-
to and enforced would be objection
able az regards their effect upon com.
petition"
THE Gary dinner arrangement, 80
says the report, "whereat the social.
ed independents are Influenced to re-
duce their production conformably to
their estimate of the reduction in the
demand existing, and to maintain
prices. is Objectionable as far as it OPP
crates to exclude free competition.
The arrangement is designed and in
tended to operate and has operated
admittedly. as to standard steel rails,
although it Is claimed that the So
called independent participants can
cut prices without fear Of penalty, ex-
cept the dishonor of declaring in fa-
vor Of a named price and then selling
at some other price.
1T can be no justification of the CO.
operation Of the participants in tne
Gary dinners that no penalty attaches
tually exchanged. because perforce
the antitrust act would prevent the
enforcement Of any penalty for reduc-
ing prices or exceeding ones share Of
the business. Previous pool agree
ments may have been broken and
penalties inflicted by the members
themselves, although this was soon
discontinued. 1t will be assumed,
even if a fund had not been deposit
have paid their fines. If this be as
sumed, 1t can also be assumed that
the word Of the participants in the
Gary dinners is ample security for the
professions Of cooperation in the
policy almost unanimously subscribed
to at the dinners.
ION the other hand. any contract
may be broken: any conspiracy may
be upset by recaloitrants. It is sure
arrangement In restraint Of trade that
It can be departed from by the parti.
cipants."
Stress is laid in the financial Sec
ton Of the report upon the demon.
stration by figures that the steel cor.
poration restraints competition by
making the greater portion Of its
profits In raw materials and in plants
producing semi-fsnished materials.
It is declared. to keep the price of raw
materials. ore, coke. and pig iron on
a high plane. to the advantage Of the
corporation and disadvantage of the
During the nine years from Jan. 1.
1902. to Dec. 81. 1870" the report
says. "the productions Of the corpora
ton In rolled and other finished steel
to 7s.2s7.3s3 tons and the
adjusted net earnings for the same
period. amounted to s1,02s. .ss5, ,3s9 or
an equivalent Of approximately $l3
per ton. In order that an idea may
be had Of the net earnings In dollars
pery ton Of the several operating
groups Of tho corporation. have cal
culated these figures and ind the ap.
proximate net earnings Of SIS per ton
Of finished product to have been earn.
Cd a. follows:
by manufacturing companies 3s.o1
per ton. BY coal and coke companies
70 cents per ton. BY iron mining
$2.12 per ton. BY trans.
companies $l.sl per ton. BY
H..