New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-06-03
GARY QUOTES HOAR
At STEEL HEARING
Late Senator's Opinion Used
by Defence to Justify
Early Pools.
STORY OF ONE AGREEMENT
Corporation Chairman Also
Tells of Purchase of Ten
nessee Co. and Visit
He Paid Roosevelt.

Pools or agreements respecting prices or
percentages IN the iron and steel industry
were not considered contrary to the pro-
visions Of the Sherman antitrust law
when It was first drafted. according TO the
late Senator George f. Hoar, who was in
strumtntal In the preparation of the
measure. This fact was brought To light
yesterday in the governments suit to dis
solve the United States Steel Corporation
when Judge Ebert H. Gary, chairman of
the board of directors. introduced in evil
dence legal opinion prepared by Senator
Hear. Its introduction by the defence
was as a partial justification of the early
existence OF pools I'm the industry
In his testimony regarding the existence
Of pools. Judge Gary declared it was the
early opinion OF manufacturers in the
Industry that certain forms Of such agree-
ments were entirely legal. Senator Hoar.
who was attorney for several wire COM
ranies during 1891. and was active in the
formation Of the bill. was engaged to pre-
pare an opinion instructng his clients as
TO what agreements they could make un-
der the measure.
The question put 10 him and copied in
his opinion under date OF August %. 1891.
was:
Question Propounded to hoar.
The question is proposed whether an
agreement with each other by several
companies. the product OF each Of whom
IS manufactured In one state TO be sold
and delivered in another or In a foreign
country. by which they supulate that
their product shall not be sold for less
than an agreed scale OF prices. and that
each shall pay into the common stock, TO
be divided in an agreed proportion, all
profits by II received beyond what comes
from a specified amount Of sales. is
illegal, and exposes those who take part
in il to the proceedings and penalties
provided in the act OF Congress. APP
proved July Q 1890, entitled An Act TO
protect trade and commerce against un-
lawful restraints and monopolies.'"
After considering individual cases in de-
tail. Senator Hoar summarized his opinion
as follows:
1T seems 10 me very clear that the
agreement by each OF the persons in the
contract above supposed furnishes an ade-
cate consideration for the agreement
Of all the others. Further. 1t seems TO
me that a contract. although in partial
restraint OF trade, which is reasonable
and reasonably limited in point of time,
which has for its object merely the saw
ing Of the parties from destructive COM
petition with each other, is not prohibited
by the statute above referred to-"
This opinion. Judge Gary said, was free
" circulated among the wire makers from
that time on for a number Of years and
was considered authoritative justification
for certain agreements. Up to 1897. when
ne first became actively interested In the
industry, the witness stated. he did not
know personally of the existence of any
wire pools. or Of other agreements, al
thought he had heard OF them.
Late in 1898 however, Judge Gary testi-
fed Of his knowledge OF pools. admitting.
as he said, for the first time" the ex.
istence OF a rail agreement in which he
had part.
Cannot Find Agreement.
After the failure OF the Empire Rail
agreement" he said, H. II. Porter told
me II. c. Prick had suggested We meet
Andrew Carnegie at his house and talk
over the rail situation. We did, and after
some discussion l drew up paper which
was signed by the four Of US providing
that We recommend 10 the Illinois Steel
and Carnegie Steel companies that they
divide 10 the extent Of 30 per cent each
the total standard rail tonnage secured
by the two companies. There was only
ore COPY OF that agreement made and l
thought It was i'm my desk, but am now
unable TO find IT,"
Later, the witness testified, the Colorado
Fuel and Iron Company was considered
in the agreement on a per cent basis
and still later. the Cambria Lackawanna
end PENNSYLVANIA Steel companies also
were represented Judge Gary denied,
however, having any recollection or
knowledge OF other so-called pools IN
which the subsidiaries Of the corporation
participated afte: its formation.
Il think Mr.. Corey is very much mis-
taken in saying he ever saw me at any
Of the pool agreement meetings he has
testified TO. I am sure he IS" Judge Gary
declared.
The witness also told in detail OF the
purchase of the Tennessee Coal and
Iron Company, and OF his visit TO former
President Roosevelt in the matter. deny
ing any Misrepresentation OF facts to him.
He also declared the ore lands of the
corporation were not in excess OF It's
ueeds-in fact their area was much less
than those OF some OF its competitors, he
said.
RACE MONEY FOR ILL POOR.