The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1913-05-15
PROVES
DOMINATION OF
STEEL TRUST
Statistics Also Given to Prove
Excessive Profits That %
Enter Golfers
"BOOK" FIGURES ARE
CLAIMED MISLEADING
Facts Valuable in Furthering In
vestigation Into COrpo-
ratiOn's Affairs

WASHINGTON, May IA. "A picture
OF huge and OF excessive profits or TIE
United States Steel corporation; lis
domination OF the rails and o!e indus
try; It's inside profits on transpor
tation. and its superior efficiency ana
coordination was presented tods! IL
report or the bureau OF corpora
items. The report was the third III
stallment OF The bureaus inNesusa
ton of the steel inrustry
That the trust made proht OF
l6i2 per cent on the steel rails III
1910 and l012 per cent on steer plates
according TO its investment, was de
clared in the report.
The net cost TO the steel corpora
ton for bessemer steel rails was
Sl667 per ton. and the average sell
In price SEAS. giving a proht mar
Gin OF $l0.7S" the report declared
That the corporation has s65. or capi-
tai invested in making ton OF rails
is stated.
The bureau declares that the book
cost" OF the steel corporation for MAX
ing rails WAS $2i.53. but that the act
ual cost properly chargeable was
sl6.67. Profits excessively high, the
report asserts. are made by the giant
steel company on its iron ore Dusl'
ness. The profits are estimated at
20 per cent. Net profits OF % and
nv per cent respectively are made
by the steel corporation on its Mime
scta ore railroads. the report de-
clares
These facts" the report concludes.
are obviously Of great value with re-
gard 10 various large questions oil
public policy and national welfare.
Book Costs and Net Coats.
The statements OF cost Of produc'
ton. as shown by the cost sheets o,
iron and steel manufacturing conLAh
OF profit accruing TO the same manu-
featuring interests. This arises from
the fact that the ore and coke used IN
Sy as 1s iron Largely
which sell such materials to the m'~u
featuring plants operated by the s'1n
Interests at prices which ordinarily IN
clude a profit, and In the case or or
very large profit
Pronts From Sale Of Ore.
Thus. Tor the Steel Corporation I
ore was no less item 81 80 per ton oul
OF an average ore price per ton o'
$4.1s In which there was, in addition
to, the profit OF sl.so, lurtner con
Owing TO the fact that about tor
OF ore were required TO make a ton ol
pig iron. this proht per ton In ore IN
wolves a profit OF about sz.4s per ton ii
the cost of pig iron on this accoun
alone For similar reasons. even large
amounts OF proft per ton are include
In the costs OF steel products. Hence
In order to obtain the net cost OF man
ufacture for such concerns. IL is>neces
sary to eliminate these intercompan ny
profits from the book , costs or costs
Furthermore some manufscturinG
concerns. and particularly the Steel
Corporation. have subsidiary compan
les engaged in the transportation II
raw materials for manufacture. The
cost OF transportation. however. In =
cluded in the book costs OF these ma =
going rates OF transportation charged
by the transportation agencies, and In
ciude large amounts OF intercompan
TRANSPORTATION proht Thus. the prom
Transportation OF It's own ore In lSlo
averaged over all its ore delivered
lower lake ports, was about 1907 pc
ton. This profit mounts up TO over
800 per ton Of pig iron.
Net Coats Of Pig Iron.
The bureau, therefore, IN us 81
ments OF costs OF various prodh
shown by the cost sheets OF manuf
turing companies. but also the net Ga
excluding such intermediate prohts
from certain average costs OF ali com
panles which are presented, the int"r-
company profits from the products %
raw materials are exc,nded. wh!ie :, -,
profits from both produe
ton and transportation are elimi nated
The Importance OF such eliminations Il
tntercompany pront are apparent FROM
the following comparisons Taking
again for Illustration, the costs of TIE
Steel Corporation. II appears directly
the average hook coat Of Bessemer pig
iron IN 1919 was Si4.3s per ton Unclud-
ing an assumed normal addition 10 fGi
mace cost Of $3.50 per ton for general
expense and depreciationl. while the
net cost. excluding intercompany prof
it's on materials and transportation.
was only S1o2i. The interconpany
therefore. was no less than s41s per
ton IT, however. only the intercom
pany profit or materials II excluded.
the bureau comrni'' ne net costs rs
Sii21 per ton, a. compared with the
book cost of sl4.3J The margin OF
pront oyer cost should. OF course be
related to a different Investment IN
Net Costs Of Rails.
similarly, for Bsssenler steel raiIs.
the average book cost OF the Steel Cor
poration In 1910 was s2l.5S per ton
ton to mill cost OF 80 for general
expense and depreciation). while the
net cost. excluding intercompany pro-
Was on,v sissi' Deductins only IN.
profits from materials. the
bureau computes the net cost at ST. ~
per ton.
profit On Ore Investment.
The necessity OF determining the ne
costs is clear when considers ton liz
given to the very high profits charged
on iron ore and OF the transportation
OF iron ore.
OF the average cost or ore property 1T
the time OF the formation OF the Steel
together with due allow
ance for subsequent investments OF the
Steel Corporation therein. the average
OF the steer Corporation ~
Lake ore was about N49 per tor or
ore produced in 1910 This investme mt
IL computed on the basis OF 3o-vear
supply tn reserves or ore. all add j
tionai investment In ore reserves being
excluded from consideration Tne
profit OF go per ton which was
charged by the steel Corporation in
1910 was equivalent. therefore, To a
rate OF - per cent on the computed
Investment in ore. Considering that
the steel Corporation owns or controls
the great bulk of the Lake ore supply
that In consequence OF the number q
It's mines. it's risk OF operating them
an assured maj ktt for the sale OF iis
ore 70 rrs uwrr- rftunt+fa.lt. sf4Hg- plants /.
and that its production or iron and
.t.--4-+s-xn-e extensive and diversified,
and so widely sold throughout TIE
world. that ~ very large OUTPUT is ai-
ways practicable. IL ~ evident that TIE
risk OF this business IL comparatively
small. and that the profit Is excessively
AIRh--
Profits Of Ore Railroads.
StmifIr conditions are found with re-
gard To the profits from the transport
Il. -. a.. ~