The Washington times., 1912-07-29
WANTS UNCLE SAM
TO REGULATE ALL
VI BIG CORPORATIONS
Minority of Stanley Board
Recommends Federal
Supervision.
By THEODORE TILLER.

Federal Incorporation and supervision
OF all large interpretations, and the crea-
ton OF an Interstate Commission of In
dustry. Is the keynote recommendation
In the report OF the minority members
OF the Stanley steel investigating COM
mittee presented to the House today.
Two of the Republican members Of
the committee go further and approve
the Gary-Perkins plan for Federal regu-
lation Of prices, IL other remedies sug-
gested prove Inefficient in meeting the
great trust problem.
The four minority members-Con-
sressmen Gardner. Danforth, Sterling
ana Young (of Michigan)-agree on the
findings of fact as developed by the
nrteen months investigation of the So
called Steel trust.
These findings of fact, as we'll as the
Recommendations of the minority are
startling.
That ]. P. Morgan & Co. and
the underwriting syndicate received s62,-
o0O,0o0 for organizing the United States
steel Corporation. in 1901-and that this
commission was exorbitant considering
the services performed-is one of the
bald statements made In the minority's 8
treatment OF the Steel corporation.
Congressman Sterling files dissent
Ing report in which he vigorously op-
ment should embark upon the task of
fixing the prices charged by Industrial
corporations existing under United
States charter. Mr.. Sterling still holds
trusts may prove panacea for current
Ills. -.
Congressman Young also dissents [,
the extent of saying that the Interstate
Commerce Commission and State rail
road commissions have power to d.
vorce industrial corporations and rail-
roads, and that additional legislation
and agencies are not needed. Mr..
Young u also unwilling to embrace now
the doctrine of Federal price fixing, but
he Is open to conviction on this point.
IT. Party Differences.
The minority and majority reports OF
the steel Investigators draw the line Of
demarcation between the two parties
on the trust question. The majority be-
lieves in the strict enforcement of ths
Sherman law, and radical amendments
thereto. The minority appears to have
about lost faith in, the Sherman law
and recommends radical supplementary
agencies -,
: President Taft, In a recent message
to Congress, suggested Federal incor-
poration of large industrials. The
minority steel Investigators go the
President one better and suggest Fed
eral regulation Of prices.
The report of the majority members
of the steel committee will be filed In
the House Thursday. In presenting their
views in advance of the. Democrats. the
Republican niefnbcrs Of the Stanley
I scommittee put one over" which dis
concerted the majority probers for a
time. z
In condemning the enormous profits
; exacted by ]. P. Morgan q Co. in re-
turn for the formation of the United
States Steel Corporation the minority
"The fact is a very sharp line Of
discrimination ought to be. drawn
between the conduct of the banking
ton and the conduct of the exceed
ingly competent, although. perhaps
not altruistic, managers who have
subsequently made 1t success.
ain return for promotion services
and risks, the firm of Morgan & Co.
exacted $62,50O.COO in compensation
for itself and the underwriting syn
dfcate which 1t managed. such sum
bore no relation whatever to the serv-
capital advanced;
transaction Of Morgan & Co. must
stand condemned before the more en- en-
yours One-Half Water.
The minority members say they are
In substantial agreement with the re-
port of the commissioner of corpora
tions on the capitalization, average
earnings. and proportion of output
of the steel trust. The minority finds
that the United States Steel Corpora
ton was organized in April, 1907
with about $1.400, 0,000.0 900 capital, of
which approximately $600.O00.O00 to
500, 100000 was watered. stock.
averaged from IL to IL per cent an
nually on the actual value of its
property as shown by the earnings
for the past decade uoort "t,ot ,r
1901 the Steel Corporation produced
about 42h per cent of the total out
put Of the pig iron Of the United States,
and 1t produced about 43'per cent In 1910;
In 1901, the Steel Corporation produced
about 60 per cent of all the crude and
finished steel output of the United
States. BY 1911, its percentage Of that
output had dropped to little over oV
Steel Prices Set.
The minority members agree with the
Democrats that there Is complete ac-
cord between the United States Steel
Corporation anu al thc lhucpSHuSiito'
The report says that the corporation
generally sets the prices and the inde-
pendents folltw suit.
The minority members do not con-
denim as severely as do the' Democrats
the famous Gary dinners" at which
it has been alleged steel prices were
fxed by means of "gentlemen's agree
ent."
1--WE regard these functions as the
gastronomic shadow of the price under
standings rather than as their sub
stance" says the minority report.
While admitting that the system ol
interlocking directorates has insidious
consequences which no man car
gauge" the minority believes that the
evil is not as great today as It was five
years ago. The report says that these
interlocking dlrectorates undoubtedly
facilitate 'insde management" and
have often been used to stife com
petition, yet 1t. is .contended that II
n any communities 1t is a distinct ad'
vantage not to limit the sphere of use
fulness of any business man.
The report continues:
I'VE believe that interlocking direc'
torates, like so many other human
agencies, are fit subjects for regulation
rather than destruction. We doubt tho
wisdom of their absolute prohibition
unless regulation shall fail to abate thF
evil"
The minority members estimate that
exclusive of the Hill Leases. which