The Mena weekly star., 1912-03-07
THE STEEL TRUST
COMBINE EXPOSED
Investigation Committee Makes Re
port Showing About so Per Cent
OF Holdings Are in Trust Con-
trol--Some of Methods Shown.


Corporation, conducted by Far
lquhar J. McRae, an expert ac-
lcountant.
The McRae report reaches the
conclusion that the steel corpora
ttion operates in restraint Of trade
and prevents competition through
a manipulation of prices, through
1.-THE influence of the so-oalled Gary
dinners by control of raw materi-
ais on which the great bulk of
profit is made, and through sys-
tenn of interlocking directors in
various companies. 1t also tends
To contradict some of the testimony
lgiven by steel trust officials.
Some of the figures dealt with
in the report are startling. 1t is
shown that J. p Morgan a. Co. re-
ceiyed approximately $70,000000 in
leash profits for organizing the big
steel combine, and that the net
profits for the first nine years of
Its existence were more than bill
llion dollars.
That J P. Morgan & Co., heading
the syndicate which organized the
lsteel corporation, received cash
Iprofit Of S69, 100000 Of which &c.,
100000 was for promotion, with an
additional commission of S6,800,000
for a bond conversion scheme.
That the net earnings Of the Cor
lporation for a period of nine years
were Si,029685, $780, or an equiva-
Ilent of approximately Si3 a ton on
finished product, instead of $780,
l0e0.3ii as claimed by the corpora
tion in its report.
| That the steel corporation, con-
Itrary to the statement made by
IJudge Gary and H. G. Prick to
president Roosevelt in 1907 that it
Ibid not control more than 60 per
Icent Of steel properties in the
country, controls so per cent of the
Isteel holdings.
The Gary dinner arrangement"
Isavs the report, "whereat the So
lcalled Independents are influenced
I4o reduce their production con-
formally to their estimate of the
Production in the demand existing,
land to maintain prices, is objec-
ltenable as far as it operates to ex-
Icude free competition. The ar
lrangement is designed and intend
ed to operate, and has operated, adj
lmiiFedly, as to standard steel rails,
lallhough it is claimed that the So
lealled independent participants can
lieut. prices without fear of penalty
SeeRa the dishonor -of declaring in
flavor Of a named price and then
iselng at some other price"
Where Trust Is Foxy.
Stress is laid in the financial sec
ltion of the report upon the dem
Ionstration by figures that the stee
corporation restraints competition
Thy making the greater portion OF
Its profits in raw materials and ir
lplanis producing semi-finished ma
lterials. while the finished product
lDIanis make very low profits. This
loperates. it is declared, to keep the
lnfiee of raw materials, ore, coke
land pig iron on a high plane, to the
advantage of the corporation anc
disadvantage of the independent.
During the years from Jan. 1
1902, to Dec. 81, 1870" the report
says, ''the productions of the COR
lporation in rolled and other finish
ed steel amounted to Si.029,6S5, $3.50
or an equivalent of approximately
1873 per ton In order that ar
Idea may be had Of the net earn
| ings in dollars per ton of the sew
eral operating groups Of the cor
| noraii0n. / have calculated these
figures and find the approximate
met earnings of si3 per ton Of fin
lished product to have been earned
as follows:
by manufacturing companies
Is8.0i per ton. By iron MINING
companies, 1912 per ton. BY trans
portation companies si8i per ton
1 Inv miscellaneous companies, S0.3'
lper ton. Total, $780,"
Trust Takes 20 Per Cent Profit.
This. the report says, is equiva
, llent 10 an earning of 40 per cen
I on cost.
Y IN accounting for the discrepanc,
{ between the earnings claimed b,
1.-THE steel corporation, S9S0,000,3ii
7 land his estimate of %,f09,i4609:
Mr.. McRae restored to net earning
what had been eliminated by tn
steel corporation in its accounting
Including such things as "interes
lon bonds of subsidiary companies
1.-THE lookup inter-company profit
lin inventories, special depreciation
admittedly charged to construction
Iemployes' bonus funds and specis
lcompensations, account preferre
stock subscriptions. which hav
lheen treated as dividends frof
earnings. and not in the nature {
: additional wages to employees, an
lastly interest on bonds. mortgage
land purchase money obligation {
subsidiary companies"
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The "Childs Welfare" movemer
has challenged the attention (
I thoughtful people eyerywher
Mothers are natural supporter
4 snd will find in foleys Honey an
Z lTar Compound a most valuable ali
lCnuchs and colds unchecko
Head IL Group bronchitis and pneu
monia. WELD quickly 10 fhf heaiin