Omaha daily bee., 1912-01-11
PANICS DUE TO
BANKING SYSTEM
Andrew Carnegie Makes Above
Statement in Testimony Before
House Committee.
HE TAKES OPTIMISTIC VIEW
Asserts Freedom of Trade from
Monopoly Will Come.
ALL INTERESTS ARE IDENTICAL
Predicts Square Deal for Consumer
and Producer.
HISTORY OF STEEL TRADE
HE TAKES OPTIMISTIC VIEW
ALL INTERESTS ARE IDENTICAL
HISTORY OF STEEL TRADE
Magnate sketches Growth Of In
dustry in United States
Says Charlie Schwab is
Great Genius.

| WASHINGTuE. Jan. i0.-Andrew Car
negie was an involuntary witness today
before the house committee probing the
affairs Of the United States Steel cor
poratiOn Mr. Carnegie, who was firs
requested To appear ana on declining that
invitation was peremptorily summoned
TO Washington, was wanted 10 elucidatt
many Of the details Of the organization
and operation OF :he ''steel trust and
its domination Of an industry In which
he was for SO many years a predominant
| figure.
Mr. Carnegie reached the hearing room
ahead OF time. lie talked commonplace
with Chairman Stanley and other mem'
, bers Of the committee. Mr.. Carnegie had
once expressed willingness to appear
but recently declined to testify on the
ground that he was named as a defendant
| in the governments suit against the stee
corporation.
When Mr.. Carnegie took the witness
stand he furnished the committee with a
statement regarding steel industry condi.
tions and told of his career in the bust
ness from the outset
MIR. Carnegie was accompanied by J. II,
Reed Of Pittsburgh, his counsel. The
committee room was crowded with spec
tators, including many women. lie was
sworn by Chairman Stanley.
Early History of steel Trade.
MIR. Carnegie said he began his stee
career in November. 1861. with the firm oi
Miller & Small and that In 1862 he bor-
rowed $3.50 from the National bank OF
Pittsburgh to engage in a partnership in
the Keystone Bridge company at Pitts
burgh.
Five or six OF US" he said. were en-
gagged in this. In 1853 we built another
mill in Pittsburgh and in 1864 l was one
OF the organizers Of the Superior ore mill
and furnace. In 1866 We built the loco
motive works in Pittsburgh and In 1861
we united two other mills in Pittsburgh.
That was the beginning u the Carnegie
Steel company, limited
I'm interesting other men with you In
those early days" Chairman Stanley
asked did you do - by selling stocks
in Wall street or other exchanges, or did
you get men OF experience in the iron
buslness?''
oh no. I did not look for men who
had no experience In the iron business.
| was one Of the youngest Of these men
and we had very little capital. At diff.
ferent times We would put in seO.ooO or
900 each"
What was the capital Of your prop
critics In the slxtles?'
My dear sir. | have no more idea than
you have"
Il have an idea" replied Stanley.
was II as much as s5oo.o00?"
''oh, yes. the Superior will alone was
worth that, but | do not want to guess.
Give me time and | will give you all the
figures"
Banking system Causes Panics.
Mr.. Carnegie denounced the banking
system Of the United States as a dis
grace TO civilization
When panics come In this country ''
he said, they are due to the fact that
we have the worst banking system In the
world. Panics spread ruin and II the bill
now before congress is passed you will
have something to prevent such panlcs &"
Mr.. Carnegie In the written statement
filed with the committee pointed out that
the steel committees task had arisen
from the fact that the law OF competition
in business has seemed recently TO be i'm
paired In certain fields. notably those of
natural oil, steel and tobacco. Even
now gigantic railway system. embrac-
ing nearly one-half OF the worlds rail-
way mileage. has been affected. and sew.
cral companies have been tried and con-
vleted under the Sherman law
I'VE are in n transition stage" said
Mr.. Carnegie, 'and naturally suggestions
are numerous for effective compliance
with the Sherman act as interpreted by
the supreme court. That a satisfactory
measure will finally be evolved is certain
one which does not go further than
actually necessary TO prevent restraint Of
trade and monopoly.
Revolution Not Necessary.
There Is no cause at present for
either alarm or haste on the part Of the
courts. congress or producers or con-
sumers. whose interests will become mu-
tual wherever freedom Of trade from
monopoly is established. Nothing reyO-
lutlonary is required
Mr. Carnegie said that during the civil
war lie suffered a suBstroke and was
ordered to spend his summers in a cool
climate.
Il went 10 my native Scotland and
there watched the Bessemer process Of
making steel. There. too, / met a Mr.
Dodds, who had Invented a patent for
hardening the face Of steel / purchased
the patent and brought Mr.. Dodds 20
Pittsburgh. where we built furnace and
made the first nard surface rails in this
country"
Sehwab In Genins.
Nr Carnegie referred 10 that great
mechanical genius. Charlie Schwab," as
he greatest man I ever knew in that
line"
Mr.. Carnegie said he suggested 10
Schwab that he test process for making
ore In open hearth furnaces and then
build an open hearth furnace"
Charlie" according 10 Sir. Carnegie
said re would Try. and it was not more
than week later that ne came TO my
Office in New York with plans for eight
ms gnincent open hearth furnaces. We
sold open hearth steel for s. ton more
than other steel"
slr Carnegie said that in the open
hearth mills at Homestead. the greatest
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