New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-05-29
JUDGE GARY DEFINES
STEEL Competition
Corporation Head as a Witness
Undertakes What He Calls
a Difficult lob.
SECRETS OF 0RGANIzArIou
Says Federal COMPANY W..
"Try-Out" Before the Por
nation of More Powerful
American Association

What compel ton is foolish -,
senslcaF and what is 'legi,i,na,. non
reasonable" figured yesterday a. .l and
ing Of the governments suit FOR - A's'-
solution Of the United States ST., ' as
poratlon as a sitter of cor,,o.,' w
Judge Ebert II. Gary. executive v s...a
the corporation, on the witnosa sG
said the effort Of the organlys,'o. sant
and has been TO extend trade ana vas
competition" and that it has spccs. ,,s.s'
done so. sSil.y
In proof Of this he outlined n.
history OF the growth OF the con. s"u'
ton idea up to the time Of the for..+. 's'
Of the corporation. in April 1901 ten a@
a matter-of-fact way Of business
actions involving millions OF capi,s, '
gave, moreover. the principles whit,
said the corporation founders bsd. o. a'
lowed. '0''
We made our selections Of concers.
the principle" he said. of securing r't ~
seemed TO US the best located comra,,.,
with good facilities for carrying On ,b...
respective branches OF the iron and 49,,
industry In such a way as 10 sccorn..'
date one another and form and co,,,,".'
an organizatio- which would give n,
self-contained. complete. roundsd',a'
business proposition that would ensbl. -
10 manufacture al the lowest cos, ..
principal form Of finished steel us.d !.
all parts Of the worm. We did m, S.
or attempt to secure any Of the o,s..
companies, although We might have do,'
so, because In our opinion We d,d -.
need them for the business purposs, +,
have stated.
Federal Steel a "Try.out."
When Judge Clry resumed the stand :,
the morning he went back 10 desrs1
account Of the formation Of the FEEDER,
Steel Company which was effected i
lses. J. +. Morgan & co. financed II.
transaction, Judge Gary said. and y.
purpose OF the organization was "a
manufacture steel" The Question a,
monopoly was not al any time discussed
the witness said. although the govern.
ment alleges the concern is a monopoy
and should De- dissolved along With us
United States Steel Corporation
On the board OF directors Of the com.
pany. according 20 the witness, were .o,.
mer Governor Roswell p. Flower h
Rogers, Robert Bacon. D. y. Mills. Mar.
shall Field and Norman b. Ream. Al.
thou D ley had hoped by consolidating
seven concerns as the Federal Steel Con.
pany to get a better roundabout scheme
Of steel production. its organizers wee
disappointed. Judge Gary said.
The plan and organization. he sad.
were good 50 lar as they went, but be
organization was too small, the capita
employed was too small and the facilities
for furnishing steel were not sufficiently
diversified. We lacked furnishing mills
and our locations were not the best or
good enough 10 extend our trade as We
had hoped. I'm fact. the Federal stse
was only the beginning OF plan. or or
ganization. TO carry into practical AMI
successful effect what we mad IN mind
and what We were endeayor!as 10 a..
compish"
So the idea OF the Steel Corporation Vas
first conceived, according to the witness.
Il. {. Frick. he said. came 70 him in Ike
and suggested that the Carnegie Ste'l
Company could he purchased with per-
haps other concerns. I'm 1900 Mr.. SchEsa
came to him with his scheme Judss
Gary said. and he later without W.
Schwab's knowledge, preached the SUB
ject TO Mr.. Morgan and Robert Bacor'
his partner.
Mr.. Morgan was not Immediately !nIs''
ested. however. and it was not until ailsr
the dinner to ,Ir. Schwab, at Whlca De
told Mr. Morgan personally Of MS sas@
for an amalgamation OF interests inN
the Morgan house conferred again WIZ
Judge Gary and finally agreed TO float TIE
corporation.
Definition Of Competition
1t is difficult 10 define competition
its natural and general sense Juas'
Gary said. The Carnegie Company Z"
instance. could and did at times IN prev
Gus years sell steel in small quan'lhes ~
the Chicago district at a price lower 'A'A
the Illinois Steel Company eoud *
those rails II proper charges ana .
counting were made. To that eA'''
there was competition.
Il want TO distinguish. though oe'''',
competition that is simply foolish az
and competition that 10
sonable and legitimate. The CaTnss
Company could sell a quantity oil ram .
a different price as a matter OF ls'A".
ton or FOR any other reason ana eV-
do what they came very near oohe
one time-forcing the Illinois steel |0'.
pany into the hands Of receiver,
1896. II ! am not mistaken. the il" NM,
Steel Company did have very near Us
a.A. Do, tn.t tho nnners were drawn.