The Birmingham age-herald., 1913-05-28

1t contemplates doing, something like s15,-
000,0oo for additional Improvements of the
Tennessee plants at Birmingham, the
total investment of new capital for expan-
sion and improvements and for perfecting
economies in the plants of the Tennessee
company-the Tennessee Coal, Iron and
Railroad company is always spoken of in
business circles simply as the "Tennes-
see company will amount to about sSs,-
600. That is only $1,000 600 less than the
| corporation spent in harmonizing its va
rous plants some years ago 1t is about
one-half of the sum expended in estab-
fishing the steel city of Gary, at the head
of Lake Michigan.
In the course of the hearings now in
progress in New York, at which testimony
Is being taken for use in the suit brought
by the government against this corpora
tion, 1t is probable that exhaustive evi-
denee will be given and equally exhaus-
tive cross examination will be made for
the purpose of learning whether or not
the purchase by the corporation of the
Tennessee company in the panic days of
1907 was in violation of the sherman anti
trust law. This testimony may prove to
be the cruX of the entire prosecution.
Many lawyers have been of the opinion
that If the government is to succeed in
prosecuting the corporation under the
Sherman law the success will be based
chiefly, if not entirely, upon the absorp-
tion of the Tennessee company by the
corporation.
1t is possible now to outline the testi-
mony upon which the corporation will
rely for the justification of its claim that
the purchase of the Tennessee company
was well within the Sherman law.
Unsurpassed Facilities
The Tennessee company, it will be ad-
mitted in the testimony, possesses almost
unsurpassed facilities for economic as
sembling of the various materials which
enter into the manufacture of steel and
| iron products. These facilities should en-
able the company to manufacture, so far
as raw material is concerned, at less cost
than can almost all other steel and iron
| companies. But other considerations,
some of them of a geographical nature,
some of them financial, have in the past
prevented the Tennessee company from
entering into or maintaining a competitive
struggle with the corporation, even had
it desired to do So
| The normal boundary line of the mar
lets for the products of the Tennessee
| company, it will be affirmed, is also the
boundary of Virginia and line extending
| ta,I,- n 4I,.-
boundary the transportation rates serve
| as a protection against the competition
which otherwise the Tennessee company
might have been able to maintain. On the
| other hand, that is equally true in great
measure of the southern market for the
products of the corporation.
In the next place, the Tennessee COM
pany has been greatly circumscribed in its
operation by the fact that until recently,
at least, no very great markets for iron
and steel products were to be found with
| in the territory which 1t could economi-
cally cover, although the amazing indus
trial development of the south in the past
four or five years has served consider
ably to increase the natural markets for
the products of the Tennessee company.
Story of Conditions
After the corporation bought the Ten
IteSSee cOupdHN, tNllduSllNt StuuN was
made of all of the conditions natural and
artificial, which characterized the latter.
The superb facilities for assembling with
great economy the raw materials were
carefully studied and We're acknowleded.
The command of such domestic markets
as could be found south of the Virginia
line was also recognized. This investi-
cation led, as the corporation manage
ment believes, to a perfect demonstration
nf hot nnscibi1itiaG pr. on
portunites that lurked in the resources of
the Tennessee company were. 1t was
about the time that the corporation was
beginning to get the greater results of its
systematic organization for the purpose of
commanding or securing foreign markets.
The Tennessee company, it was demon
strsted at least so the corporation man
aeement believes, could be utilized ad-
nl;rably for the further facilitation of our
foreign trade. The improvements repre-
sented by the large expenditure of $23,-
G00,000 and further to be represented by
the contemplated expenditure of millions
more had chiefly in view the utilization
of the Tennessee company for the further
dc elopment of the wonderfully increased
foreign trade in steel and iron products
OF course, it was seen that the direct and
the indirect effects of policy of this kind
would inevitably tend greatly TO stimu-
late industrial development in the south
That development the Tennessee company
will undoubtedly for the most part take
care of. Furthermore, it was recognized
that with the Panama canal opened Cor
navigation the Tennessee company could
be, if its plants We're perfected, one Of
the chief instrumentalities in the increase
in our trade in steel and iron products
with the countries of the west coast Of
South America and also to a considerable
extent with our Pacific, coast.
Contemplates Specialization
Testimony will be offered to show that
the corporations MANAGEMENT contem-
plates specialization to considerable eX
tent of the Tennessee plant and organza-
ton with view Of greatly increasing our
markets abroad for iron and steel prod
Ucts.
1t may also be asserted and testimony
may be offered to prove the assertion
that in order perfectly to master the op-
portunities which the Tennessee company
possesses, especially in its nearness to the
gulf and lower Atlantic seaports and the
low cost of assembling materials for man.
Ifacture it was essential that very
large amount of new capital be invested
in these great southern properties. Possi-
...-.-A