Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1912-02-28
:M''RAE REPORT

49,. w. o1tuD 3oA3 Ooo .
Continued from page ~
that It can be departed from by the
participants" $751;.
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 prof
it's in raw material and in plants pro-
ducing semi-f1inshed materials while
the finished product plants make
very low profits. This operates, it is
declared, to keep the price of raw ma
terials ore, COKE and pig iron on a
high plane, to the advantage of the
corporation and disadvantage of the
independent.
During the 8 years from Jan. i.
1902 to Dec. 81, 1910', the report says,
''the production of the corporation in
rolled and other finished steel
amounted to 79,267,363 tons and the
adjusted net earnings for the same
period amounted to $ ,029,6S5,3S9 or
an equivalent of approximately $13
per ton. In order that an idea may
be had of the net earnings in dollars
per ton of the several operating
groups of the corporation, l have cal
culated these figures and find the ap.
proximate net earnings of $13 per ton
of finished product to have been
earned as follows:
''By manufacturing companies 1901
per ton. By Coal & Coke companies
$40 per ton. BY Iron Mining com.
panies $2.12 per ton. BY Transpor-
tation companies $1.81 per ton. BY
Miscellaneous companies $3.50 per ton.
Total $1,000.
: This, the report says, is equiva-
lent to the earnings Of 40 per cent on
cost.
In accounting for the discrepancy
between the earnings claimed by the
steel corporation, $9S0OOO,311 and
; his estimate of 81 ,1O9, 146,093, Mr..
McRae resorted to net earnings what
had been eliminated by the steel cor
poation in it's accounting, including
such things as interest on bonds OF
subsidiary companies, the locked-up
inter-company profits in inventories.
special depreciation admittedly charg-
ed to construction, employees bonus
funds and special compensations, &C.
count preferred stock subscriptions.
which ave been treated as dividents
from earnings and not In the nature
of additional wages to employees, and
lastly interest on bonds, mortgages
and purchase money obligations OF
subsidiary companies"
AS showing the result Of the policy
of the steel corporation to make the
bulk Of its profits in the raw and semi
finished material, Mr.. McKae sub.
mitted a condensed statement of the
dividends paid by the subsidiary CON-
panies to the steel corporation and
the interest paid by the Carnegie CON-
pany on its collateral trust bonds,
from April 1, 1901 to April /, 1910.
showing total of $753, 124 1858.
Relating to restraint Of trade there
, are fourteen conclusions in the report
one Of which deals with percentages
OF business done by the corporation,
and in. witch the ore and other hold
ings are discussed.
: Percentages of the business done
by the United States Steel Corpora
ton the report says, ARE deceiving
and misleading unless segregated with
reference to Particular products. For
example. Mr.. Roosevelt refers to an
estimate that the United States Steel
corporation did not have above 60 per
cent of steel properties or steel
holdings and when he was asked If
Gary and Frick a. the time Of the
purchase of the Tennessee c al &
Iron Co., said anything about the ore
properties that they were buying at
that time. he answered, They did not
go INTO details at ALL and he also
stated that he understood they were
going to buy the Tennessee company's
plant.
If this estimate of 60 per cent re-.
fers to property and investment in
the steel business, it may be noted.
in that year (1907,) that the total
property of the Bethlehem, Cambria.
Colorado, Lackawanna, Pennsylvania.
dAu ACuACoSCC COApe1uAC5 ouuCu w
the capital stock of Jones & Laughlin
(because statement of property is not
avaifable) amounted to 1866, 76S,8 S9,
these companies being the only i'm.
portant concerns in the steel business
j the United tates, outside of the
United States Steel corporation. This
amount added to what the United
States Steel corporation equals
grand total of $1.S1 1,606,339; of which
the property account of the United
States Steel corporation amounts to
81. AS, 1891, $50 or about 80 per cent"
Conclusions in the report bearing
on restraint of trade are embodied in
fourteen sections. some containing
voluminous quotations from the min
utes of meetings of the corporation
and Of the subsidiary companies.
Summarized the report concludes:
Competition between previously