Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1912-02-28
M'RAE REPORT SAYS THAT
STEEL COMPANY OPERATES
I'm RESTRAINT OF TRADE
Some Of Figures Dealt With
Are Of Startling
Nature
People .Bluylag for Export
Most Pay Higher
Prices

' 'ssS'sO'
Prices
BY Associated Press.
WASHINGTON, Feb. 28.-The house
steel trust investigating committee to-
day made public the result Of the in
quiry into the books and minutes OF
the United States Steel corporation
conducted by FarQuhar J. McRae, an
expert accountant.
The McRAo report reaches the con.
clusion that the steel corporation
operates in restraint Of trade and
prevents COR petition through man
ipulation Of prices, through the in
huence OF the so-called Gary din
ners," by control of raw materials
and through q system Of interlocking
directors in various companies. It
also tends to contradict some OF the
Testimony given by steel trust omic.
ials. r!@%%..%-.t =.
Some Of the iigures dealt with in
the report are startling. 1t II shown
that J. p. Morgan e Co.. received
approximately $70,o00,O0o in cash
profits for organizing the big steel
combine. and that the net profits of
tie concern for the first nine years OF
its existence were more than a
billion dollars. ~
Steel corporation officials objected
to producing their books before the
committee in this city, but consented
to place them freely at the disposal
Of m expert to be named BY the com
mittee. Mr., McRae made 4 thorough
study Of the books. and minutes, and
In His report to the, committee he
pointed out these salient features: !:
That J. p. Morgan & Co., heading
the syndicate which organized the
steel corporation. received cash
profit Of $69, 900. 900 of which $62,500
600 was for promotion, with an ad-
dittonal commission of $6,s00'o00 for
a bond conversion scheme.
That the net earnings Of the cor
poration for a period Of nine years
were 81, a,029.eS5 ,3s9, or an equivalent
Of approximately $13 a ton on finished
product, instead Of $3.50, 0,000311, so
claimed by the corporation in its re-
port.
That the steel corporation, con.
trar yto the statement made by Judge
Gary and H. c. Frick to President
Roosevelt In 1907 that it did not con. j
troll more than 60 per cent Of steel
properties in the country, controls
about 80 per cent of the steel hold
ingc.
The section Of the report dealing |!
with the Gary dinners" where inde- !
pendent as we'll as corporation steel
men assembled, to discuss conditions !
In the trade. contains an analysis of !,
the legal effects of the golden rule"
policy prepared by Anthony J. Ernest,
a New York lawyer, in which it is
declared that the conventions agreed
to and enforced would be objection.
able as regards their effect upon
competition"
''The Gary dinner arrangement"
says the report, "whereat the so-called
are influenced to reduce
their production to their estimate Of
the reduction in the demand existing
and to maintain prices, is objection
able as far as it operates to exclude
free competition. The arrangement
is designed and intended to operated
admittedly, as to standard steel rails,
although 1t is claimed that the So
called independent participants can
cut prices without fear of penalty,
except the dishonor of declaring in
favor Of 4 named price and then sell.
ing at some other price.
1T can be no justification Of the
cooperation Of the participants in
the Gary dinners that no penalty at
taches to q violation Of the declare
lions mutually exchanged, because
the antitrust act would pre-
vent the enforcement Of any penalty q =
or reducing prices or exceeding ones =,
,hare Of the business Previous pool !:
agreements may have been broken =, .
md penalties inflicted by the MEM ::
oers themselves, although this was !,
loon discontinued. 1t will be assum- . -.
y, even II fund had not been de-
,osited, that the men in the old pool, ;,
would haye paid their fines. II this !.
u assumed. It eau also be assumed {
hat the word of the participants in -.
he Gary dinners 10 ample security -
or thesprofession of cooperation in
he policy almost unanimously sub
cFibed to at the dinners. :.
''on the other hand, any contract /,
nay be broken; any conspiracy may r
e upset by recalcitrants. It is sure b
? NO excuse for the illegality Of any o
in restraint of trades e
CONTINUED on page 81 a