Dewey County advocate. [volume] (Timber Lake, S.D.) 1910-1913, 1912-03-08
MAcRAE FINDS THAT CORPORA
TON Is OPERATING IN RE.
sTAiNT OF TRADE.
EXPERT MAKES REPORT
Net Earnings for Nine Years About
$13 Ton-controi Of Minnesota
Ore Declared Basis for Control
Of 80 Per cent Of Business.

United States Steel corporation is q
combination in restraint of trade, and
that its control of the ore fields of Min.
nesota is the basis for the control OF
80 per cent Of the steel business Of the
country is the statement made in a re.
port to the Stanley steel investigating
committee by Farquhar J. MacRae, an
expert accountant who Investigated the
accounts of the corporation by author.
ity of the committee.
Mr.. MacRae takes issue with the
steel corporation officials that it con.
trolls only so per cent of the steel bust
ness, and that it mas control of only
80 per cent of the ore.
Mr.. MacRae says, in part:
"The per cent of ore owned and con.
trolled by the corporation must be
viewed as to it's effect in the light of
the conduct and policy of the corpora
tion. The passive ownership of large
reserves would be of not effect upon
the steel business except, of course,
the effect of removing from use part
of the available supply.
"But the ownership of rs per cent
of the competitive ore in Minnesota, as
estimated by the Minnesota tax COM
mission, and 500,00O,O00 tons in the
south, or, in all, 2.500,000.00O out Of
1852, 100000 tons OF commercially
available ore in the United States, but
which is held by owners engaged in
a line OF business in which new compe-
tition is inherently and unusually diff
cult because of the immense initial
outlay required and under which own.
ers do not sell ore, but enhance the
price of pigiron by purchasing all the
known available supply, who monopo.
lie 80 per cent of the export sales
largely at prices below domestic
prices, who through combinations are
able to maintain standing cash bal
ance of $75,00O,O0O who have so much
lowered cost Of production that it is
admitted that the so-called independ-
ents cannot compete with the men
who have power to recoup the dimin.
ished profits or expenses of one branch
from another branch of the articulated
organization, who while operating in
this manner keep down the prices Of
finished products, such as rails-this
is an ownership and control Of ore
which must interfere with competi-
ton"
The report also says that by means
of consultations, the ore roads in Min
nesota are prevented from competing.
The MacRae report reaches the con-
clusion that the steel corporation oper-
ates in restraint of trade and prevents
competition through a manipulation 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. 1t also tends to contradict
some Of the testimony given by steel
trust officials.
Some of the figures dealt with in
the report are startling. It is shown
that J. P. Morgan & Co. received ap-
proximately $70,O00,000 in cash profits
for organizing the big steel combine,
and that the net profits of the concern
for the first nine years Of its existence
were more than. $1.000,000,000.
J. P. Morgan & Co.. heading the
syndicate which organized the steel
corporation, received a cash profit of
$69, 100000, of which $62,5OO,00O was
for promotion, with an additional COM
mission of $6,800,000 for a bond con-
version scheme.
The net earnings of the corporation
for period of nine years were $1,029,-
6S5,389, or an equivalent of approx
mately $13 ton on finished product,
instead of $980,000,311, as asserted by
the corporation in it's report.