Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1912-02-29
STEEL COMBINE is A TRUST
Expert McRae Reports on Analysis
Of Companies Books.
frfees ManipuiateA Through Gary
Dinners and Profit. Multiplied
By Means of Raw Ma
terial.

WASHINGTON. Feb. S-The house
Steal trust investigating committee today
made public the result of the Inquiry into
the books and minutes OF the United
States Steel corporation conducted b.
Farouhar J. McRae. an expert account
ant.
The MeRae report reaches the eonciu-
sion that the steel corporation operates In
restraint Of trade and presents competi-
ton through manipulation Of prices.
through the influence of the so-esilsd
Gary dinners" by control of raw ma
terisls and through a system OF inter
locking directors in various companies.
II also. tends to contradict some Of the
testimony given BY Steel trust officials
some OF the figures dealt with In the
report are startling. II is shown that J.
p. Morgan q Co. received approximately
So.oooco in cash profits for organizing
the big steel combine. and that the net
profits Of the concern for the first nine
years OF Its existence were more than
q 900. 100000
Morsan's Profit. Immense.
Steel corporation officials objected to
producing their books before the COM
mittee in this city. but consented to place
them freely at the disposal Of an expert
to be named by the committee. Mr. Nc
Rae made a thorough study OF the books
and minutes. and In his report to the
committee he pointed out these salient
features:
the statement made by Judge Gary and
H.. c.. Prick to President Roosevelt in
1907, that II did not control more than
90 per cent OF steel properties In the
country. controls about 20 per cent OF the
steel holdings.
That j. p. Morgan & Co, beading the
pora lion. received q cash profit OF 49,
10000. Of which 81, 500 900 was for promo
ton. with an additional commission OF
U.s. 90 for bond conversion scheme.
That the net earnings Of the corpora
nGe 1T Or S s1 81 ass s Il spO,os
mately SIS ton on finished product, IN
stead of sasoop. nj. as claimed by the
corporation IN It's report.
That the steel corporation. contrary to
Fsnctions OF Gary Dinners.
The section of the report. dealing with
the Gary dinners" where independent as
well as corporation steel men assembled
TO discuss conditions In trade. contains an
analysis Of the legal effect Of the golden
rule" policy prepared by Anthony J.
Ernest New York lawyer. In which II
Is declared that the Conventions agreed
to and enforced would be Questionable
ms regards their effect upon composition"
The Gary dinner arrangement" says
the report. whereof the so-called inde-
pendents are Influenced to reduce their
production conformabiy TO their estimate
Of the reduction in the demand existing.
and TO maintain prices. Is Objectionable
a. far as IL operates to exclude free COM
petition. The arrangement is designed
and intended to operate. and has operated
as 10 standard steel rails.
Although II is claimed that the so-cailed
independent participants can cut prices
without fear Of penalty. except the dis
honor OF declaring In favor OF named
price and then selling at some other price
1T can be no justification OF The CO.
operation OF the participants IN the Gary
dinners that no penalty attaches to a
violation OF the declarations mutually