The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1912-02-29
STARTLING FIGURES IN
u. S. STEEL INQUIRY
PROFITS OVER BILLION
IN FIRST NINE YEARS
Expert McRae Says Corporation
Is Operating in Restraint
of Trade.
Declares Trust Controls so Per
Cent Of. Industry and
Roosevelt Erred.

WASHINGTON, Feb IS. The
House steel trust investigating COM
mittee today made public the result OF
the inquiry into the books and min
utes of the United States Steel Cor
poration conducted by FarquhAr ].
McRae, an expert accountant.
The McRae report reaches the con-
clusion that the Steel Corporation op-
crates In restraint OF trade and pre-
vents competition through a manipu-
iation OF 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. 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 & Co. heading the
syndicate which organized the steel
corporation, received a cash profit OF
SIS, 900. 900 OF which ,s2 900 was for
promotion, with an additional COM
version scheme.
That the net earnings OF the cor
poration for a period of nine years
were s1.O2s.ss53ss. or an equivalent
OF approximately sl3 d ton on finished
product. instead OF ssso.ooo.3if as
claimed by the Corporation In Its
report.
Controls 30 Per Cent Of Industry.
That the Steel Corporation, con-
trary to the statement made by Judge
Gary and II. c. Frick to- President
Roosevelt in 1907 that II did not con-
troll more than so per cent OF steel
properties in the country. controls
about so per cent Of the steel holdings.
Tho section Of the report dealing
with the Gary Dinners" where in
dependent as well 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 J. Ernest.
n New York lawyer. In which II is
declared that the conventions agreed
TO and enforced would be objection
able as regards their effect upon COM
petition"
The Gary dinner arrangement says
says the report Is designed. and intend
ed to operate, and has operated admit
tedly. as 60 standard steel rails. al
though ~ 10 claimed that the so-cAiled
independent participants can cut prices
without fear Of penalty. except the
dishonor OF declaring In favor OF a
: 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
20 n violation OF the declarations
mutually exchanged. because perforce
the Antitrust act would prevent the
enforcement Of any penalty"
The report draws the inference that
! the Gary dinner agreements was JUS
as binding on the steel manufacture.
ss the old pool agreements which the
sherman law ended.
Rsstrains Conpetition.
Stress - laid In the financial section
OF the report upon the demonstration
by nguros that the steel corporation
restrsins competition by making the
greater portion of It's profits In raw
materials and IN plants producing
semi finished materials. while the m T.
ished product plants make yery low
Ccontinasd on r.ss rvsivsD