Amarillo daily news. [volume] (Amarillo, Tex.) 19??-current, 1912-02-28
Result of Inquiry Into
Books by House Com
mittee Announced
SOME FIGURES STARTLING
SHOWS NET EARNINGS on COR
PORATION TOH MINI We AIS
MORE THAN EII.IloN
DCI.LARS.

washington, ". u, rto' -. nv
House steel trust investigating CON-
mi,tee today made public the result
of the inquiry into the books ani
minutes of the United State Steel
Corporation conducted by Farsuhar
J. McRae, an expert accountant.
The McRae report reaches the cor
clusion that the Steel Corporatto
operates in restrain of trade and pre-
vents competition through a manipu-
iation of prices. through the intlu-
ence of the so-callcd Gary dinners,
hy control OF raw materials and
through system of ;nterlocking di-
rectors IN various companies. IL al
so tends to contradict some OF the
testimony given by stee' trust otii-
cials.
Some OF the figures dealt with in
the report are startling. II is shown
that J. =. Morgan q Co received ali
proximately $40 OO0. 600 in cash pro-
fits for organizing the big steel COM
bine and that the net profits or the
concern for the first nine years of its
existence were more than a billion
dollays.
Steel Corporation officials object
ed 10 Producing thei books before
the committee In this city, put cen
sented to place them freely at tn.
disposal OF an expert to be named by
the committee Mr.. McRae made a
thorough study of the books and min
rtes. and In his report TO the com
mittec he pointed out these salient
features
That J. p. Morgan & Co. heading
the syndicate which organized the
steel corporation. received a cash
profit of 500 500 600 of which S6",-
500 zoe was for promotion, with an
additional commission of S6,S"0.Oo
for n bond conversion scheme.
That the net earnings of the ycor
poration for period of nine years
were S1.029.6S5.3S9. on an .e1uita-
lent Of approximately slS n ton on
finished product, instead of s9SO''
0oO.3ll as claimed Ivy the Corpora
ton IN its report.
That the steel corporation. coz
trary to the statement made by Judge
GARY and II c Frick 10 President
Roosevelt In 1907 that Il did lot
control more than GO Ter cent oil stee'
properties in the country. controls
about so per cent of the steel hold.
ings.
The section of the report dealln"
with the "Gart dinners where indc'
pendent as we'll as corporation steel
men gathered To discuss conditions
In the trade. contains an analysis OF
the legal eject Of the golden rule
pohcv prepared nv Anthony !. FL
nest. n New York lawyer, in which II
IL declared that the conventions
agreed n and enforced would he oh.
iectionable "a regards thcii effects
upon competition
THE Gary dinner arrangement
saws the report. "whercat tho social
ed In dependents are influenced to rc
duce their production conformably
10 their estimate Of the reduction ir
the demand existing, and to maintain
prices. IL Objectionable as far as II
operates to exclvde free competition.
The arrangement Is designed and In
tended to operate and has operated
admittedly. as to standard steel rails
although II IL claimed that the So
called independent participants can
cut prices without fear Of penalty
except the dishonor OF declaring in
favor Of named price and then sell
ing at some other price.
1T can be no justification % tho
cooperation OF the participants In
he Gary dinners n at no penalty A.
taches to the violation Of the de-
clarations mutually eXcharged. no
cause perforce the antitrust ac,
would prevent the enforcement Of
any penalty for reducing prices or
exceeding ones share of tho business.
Previous pool agreements may hav'
been broken and penalties inflicted
nv the members themselves. At
though this was soon discontinucc
II viii be assumed even u fund
had not been deposited. that the mon
In the old pool would have paid thei'
fines II this be assumed Il can alal
br assumed that the word OF the rar
ticipants In the Gary dinners is ampl,
security for the professions oi coop.
CONTINUED on Page 81