The Sentinel=record., 1912-01-23
SEGREGATE
 CORPORATIONS
COMMISSIONER OF CORPORA TiONS MAKES SPECIAL REPORT
 IN MATTER or ORE PROFITS
Says Profits Of steel Cooperation Are Exorbitant on Account of Trans portation Faciltties-R Recon
 mends q Separation,

mends Separation,
 Washmeton, D c.. ian 22En. reasonable profits are nal" on iroL ore ii the ta+se region excessive earn inss flow into the treasury of the United States Steel Corporation from its ore traasporlation raeut,les which suggest the necessity, tIou the star rd- point of public polky os sagre4aIing the ore of the railroad from .he si- ant corporations and larger interoom- pauy profits are made by consolidated orc, iron and steel complnies aceoIa- ing to preliminary report on the cost of production in the. steel .adus- try by Herbert Knox smith, commis- sioner of corporations. made public tonight
 The report was presented to Presi- dent Taft and sent to the house com. mittee on ways and means Tor con sideration in cunneeticu with the pro posed revision of the steel tariff Anhednle. upon which the democrats will caucus tomorrow
 The prices of lake ore, the re- port declares, have been kept for many years at an unreasonably high level, compared with the cost of pro duction and the cost of investment iu the producing ore properties'
 Iu connection with the alleged ex cessiye profits realized by the stee corporation from it's ore railroads Commissioner Smith says the contro of public agencies of transportation carries with il such possibilities o abuse, that the question is raised whether the public interest in this ~industry does not require a segrega ton of the ore railroads from tho steel corporation
 The report is based upon an lnves tigatlon of two-thirds of the couatry s production of iron and steel, from 1902 to 1906 inclusive Limited data for 1902 to 1910. Nr. smith adds makes ii clear that these five year figures substantially represent present condi. tions also
 Insofar SIS the steel corporation en- i joys monopolistit tto7et-, ? the report states. "it lies chiefly in its holdings of ore and its railroad transportation facilities This company, the report declares, has acquired unduly large ore reserves. holding at the close ol 1910 al least 60 years supply, at the present rate ot consumption exclu- sve of the great northern propereies. Etho lease of which has been caucelied effective January l, 1915 lt is esti- mated that inc corporation has fully l l20oc00 toms of other ore in the Lake region.
 Tie excessive profits on ore, the re- port says, handicap effective competi. tion in the production of pig iron and steel by concerns which must go into the open market for their ore
 The transportation profit of 60 cents a ton realized by the steel corporation on it's own ore. over it's prinaipaI ore carrying railroads, aad in lake vessels from 1902 10 1906, was grossly ex- cessivo. the report alleges. As evi- dence of this, lt is added the corpo- ration recently reduced the rates on lis two principal ore roads
 The report adds
 While integration of industry do permit Of large scale operations at mnimum costs, is exceedingly desir- able, these enormous profits of the steel corporation on the transportation of ore present problem Of iyery great importance
 "The situation is this: lntegfaton of the steel industry with respect to transportation thus far instead oi working to the advantage of the pub lic in the former costs to all shippers and lower prices. has inured to the ; benefit of great combination. This situation clearly raises the question whether Interests Of tho ! public may not require the sesrega ! tion of these railroad properties from the steel corporation It would thus , stop what is unquestionably an eyi and that Is the imposition of higl rates upon competitors shipments which puts them at great disadsan tage. while at the same time foreinl ] them by reason of the very fact t contribute aaauly to the profits Q } the steel corp@atog on traasporta ! ton.
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