The Richmond Virginian. (Richmond, Va.) 1910-1920, 1912-02-29
NIAGARA Of WkIu
IS FLOOD Of G0Q
J. PiERPONT MORGAN AND c.
rANY REAP BIc PROFIT \!
IN STEEL.
EXPERT GIVES REPOKT
MARGIN OF PROFIT IN BUS1xu'
~ 20 FER CENT, WHICH IA
JUDGE GARY SAYS II NH
NOT ENOUGH. S

WASHINGTON. Feb. :s.-Provtn4s
by facts and figures that J. r. 0e&~5
San a. Co. reaped the prodigiouD pe044s
of nearly sia.uvv.tV0 for orgAufW0xS
the steel trust. and that the profit 90
the selling price OF steel IL 10 -
cent. which f. II. Gary, OF the trusesS
contends is not high enough. -. III
McRae, the expert OF the Stanley sfeo1s
committee. made his report to In
chairman today. He also produces
for the committees considerations III
copy OF IA receipt for a $4,000 auU@;
scription from the Steel CorporA11C4s
To the Republican National COmMlt~S
tee. during the 1904 campaign. tt
contributZn was acknowledged by AS
7. Stotesbury. partner of j. r. Nor
gan. September 10. 1904.
The report reveals what is perhaps
the greatest romance Of money tlsaE
has ever been enacted in this cou4s1
try. 1t shows how the Niagara Of 49,:
ter turned into the steel trust secure
ties by the financial genius Of More
gan was converted into flood o.
gold when 1t poured into the co6etDs
of the great banker and his favored!
associates 80, !;
The Report. s
The report goes into the utmoeS
detail and comprises 1000 paGe4 &.
printed matter. W
The report says:
THE United States Steel Corpora
ton Is holding company. Including.
In its operations about twelve majCE
concerns. which control over one hun-1
dred and eighty suhsididry companies
throughout the United States In va
rious lines of business. 1t receives
revenues from dividends upon the
capital stocks of Its subsidiary COM
pantas. and. In the case of the Car
negie company, interests on the Carr
lateral trust bonds owned. together
with certain other miscellaneous In
come
In the nine years and nine months.
from April l, 1901, to December 81;
1910, the income derived from these
sources amounted to $801.369,401.O0 o..
OF this amount $s75.l64.S4S.O4 wAs'
received as dividends on the stocks o.
the subsidiary companies owned byI
1t, and s77.959.637.4S was reoeived ~:
interest on the Carnegie Company col
lateral trust bonds. From the amounts
so received theLCnited States Steel
Corporation paid as interest on It's nj
ty-year- five per cent. gold bonds the
sum OF s14S. .5s7.49. and az inter-
est on its ten to sixty-year Ave Per
cent gold bonds the sum of $67,sS7.-
3s9.l3. 1t paid In dividends on IL
common stock the sum OF $I24.Si1.-
660.50. and dividends on its preferred
stock amounting to $26s.414.S2s.ss.
Enormous Profits.
The gross sales and earnings Of the
Steel Corporation for the nine years
ending December al, 1910. amounted
to 1924 1881, O46.14, OF which the salea
to outside customers amounted TO a.
b6s.S2S. 995. 81. The net earnings
Tor the same period. as shown bv the
corporation reports amounted q
$905.03S. s07.77.
The percentage OF the net earninxDl
due to sales to outside customers for
this period amounts to 20 DER cam.
Twenty-Five per cent. on selling prices
Is equivalent to 40 per cent. profit On
cost.
No steel mill connected with tho
corporation SHOWS such enormous
earnings on its capitalization an haa
the Union Supply Company. which
feeds and clothes steel corporation en-
ployes. 1t amounted to 1866 Der cent.
in 1898; 500 ner cent. in 1900. and -
per cent. in 1901. on capital Of t7G.-
600. 1t was raised to $500. 600 and thos
dividends since have averaged 100 ~
cent.
The compensation Of J. r. NORMA
& Company and the syndicate for the
promotion OF the Steel CorporatSohs
was about s4xty-two million OF dOlIay1.
and fort he bond conversion echou0E
by which George W. Perkins subsft.i
tuted per cent. second mOrtgaaos
bonds for per cent. preferred stock a.
the Steel Corporation. amounted III
$6,S00.000. In this Connection Mr.. Mo-
Rae says: A
The dominating influence Of y. III
Morgan 4 Company was ever present
In the corporation as illustrated by IT,
fact that various members of the firI1.$
George w. Perkins Charles StS1loss
Robert Bacon and J. p Moran. II
were present at a majority of ~
meetings of the finance and executive
committees Of the corporation ss ss
s4s