New-York tribune., 1912-02-01

"Riuhts Have Grown Up Follow
ina ACquiesCing of Govern
ment in Organization"
ANSWER FILED IN TRENTON
Up. Morgan and Other lndivldu-
ais Join with Corporation In
Step Against Dissolution
Proceedings.


Proceedings.
trenton. n. j.. Jan. 31.-Answers to
Tho governments suit under the Sher-
man act for the dissolution OF the
Tn,ted States Steel Corporation, when
-, 10 e1ad in the United States District
Court here tomorrow by the Steel Cor
o,;or Andrew Carnegie, John d.
pockefeller and Edmund c. Converse
.,ore made public to-day. The answer
of the steel Corporation was joined oy
tho following individual defendants TO
tba governments action: J. Plerpont
Norean. Elbert II. Gary, Charles NJ
schwab. Charles Steele, Henry {. FrlcH'
lanes Gavley. William H. Moore, James
y Moore. Percival Roberts. jr, Daniel
q Reid. Norman b. Ream. George w.
Perkins and Peter A. : Widener'
All the answers contained a general
6aniaI Of the alleged violations of the
sherman law, while the Steel Corpora
tion. in denying that it ever violated or
intended TO violate this law. particnlar'y
deniet. that il was now engaged in Vlo-
,ating the act, and said that the COM
nlaint against IL therefore should be dis
missed.
As a principal reason why the steel
CORPORATION should not be compelled 10
dissolve now, the answer submitted
that after acquiescing in the organlZa-
tion Of the Steel Corporation for so long
q time and after rights of so sacred
character have grown up hereunder II
Is now too late for the government 10 IN
sist in a court of equity that such or
ganization was in itself and without re-
garG to its after practices an illegal
thing"
Answer Describes Sacred Rights.
The sacred rights mentioned We're de-
scribed in the following paragraph:
That not only has tie steel Corporation
gone on for ten years without oD)eCuon
from the government and IN the hchet that
its organization and practices were IN con
formity to law. but that IN the mean Nlht
its stock has been sold several tunes over
and the same Is now held ~ nHluluue
OF small investors in this and foreign couh-
tries who purchased tine same IN entire
good faith not doubling tie legality elmer
of its issue or OF the corporation Whlch
issued il: that Of these holders a2'-'V are
registered as common stock hO!ceIs anu
5.ll3 as preferred; that of the holders OF
the common stock 81 05S, or s. per cent dIu
Of the preferred 62.l9s, or % per cent, hoLo
not more than 100 sharcs edch. mat fEECh
Of the remail der OF the STOCK has resi'
I'D aovf1 n =
sons or firms who hold the same in trust
for others and have issued certhcattS IN
evidence thereof; that the number OF SuCh
certificate holders Is probably my thou-
sand making the actual number OF the
5enehcial owners Of the stock about one
hundred and fifty thousand, that among
the registered holders Of the corpoTdlioi, ;
stock are over twenty-five thousand OF lts
employees, and thar eight thousand OF shch
employees in addition are subscribers there-
for
Summarized the answer defended the
organization of the subsidiary companies
and denied that they were formed III
violation of the antitrust act. IL set
forth that they were a normal ana nee
essary development of the times, ana IN
sisted that instead Of restraining trade
or commerce they have developed and
Increased it.
How Corporation Arose.
Describing the organization Of the
United States steel Corporation. the
answer said that the organization was
suggested and induced by the officers
and directors Of the Federal Steel Com
rsny. which. although largely integratcd,
was without finishing mills for sum
GENTLY diversified product or sufficient
capital either to build or 10 acquire
them. Upon receipt of information that
the Carnegie company and the Ameri-
can steel and Wire Company could he
bought negotiations were opened
through ]. p. Morgan & Co. for the
acquisition Of these two and other com
panies
The reasons which led to the organ
ization o. The Steel Corporation, the
answer said. were that the officers and
directors OF the Federal Steel Company
had learned by experience that greater
economies could be effected by inte-
grating the plants and processes en-
ployod in the manufacture Of steel; that
foreign commerce in steel products could
be much more successfully carried on by
s,antially all finished products of steel
and put them down in foreign markets
in large quantities and at alluring prices.
II vas for these reasons alone that the
Steel Corporation was formed, the an
s~er added. and that if any company &C
qulred by the steel Corporation had been
organized i'm restraint of trade, neither
'he organizers nor the Steel Corporation
mad any knowledge thereof when the
companies were acquired they had been
IN existence for a number, Of years, and
their organization bad been known to
the public and the officers of the United
states government, and had never been
'haheneed in any way, and their pur-
ehase By the Steel Corporation was in
entire good faith simply because their
properties were suitable for the purposes
OF the Steel Corporation
Not Hidden from Government.
The answer then went on 10 say:
tHdt SAID purposes substantially as
.nerein stated were made public at the time
ey ney were FORMED. in many speeches, cir
yuiSIS' newspaper articles ard official re-
tyih as Yves every detail OF the organiZa-
~ 0i me steel Corporation; that the at
thuon OF the officers of the United States
sytsihnent was particularly directed 10
ssid organization at the time IL was effect
e1 ana they have since examined into II
ssaih dtd again, EOnictiines with great iul-
- ana al great length. but that never
Wni Wiihn few months, so far as these
.tlHmnanlA are aMarn and aa lheN hallnAe