New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-03-03
u. s. TNDICTS HARVESTER
METHODS; TRUST DENIES
Monopoly and Objectionable
Competitive Methods Alleged
in Bureau Report.
CLOSE TO MONEY POWER
Not Overcapitalized and Prod
ucts Are Sold at Home More
Cheaply than Abroad,
Admits Mr.. Conant.

Washington, March 1.-The power OF
the international Harvester Company, the
so--alled Harvester trust. which the GOV
crnraent s seeking 10 dissolve under the
sherman law. lies in its monopolistic po-
sitior. its superior command OF capital,
including its connections with J. r Nor
gan & 60. and John n. Rockefeller. and
certain Questionable competitive methods,
according 10 Luther Conant. jr, Commits
sioner Of Corporations. in his report on the
operations OF the giant corporation. sub
mitted to President Taft to-day
The Harvester investigation was made
In response to a Senate resolution passed
several years ago. Recently request
was made by representatives Of the COM
pany that the report be withheld pending
the outcome of the antitrust suit, bU,
Presiden, Taft decided 10 make il public
The combination. the report declares,
was arranged in 1902 b. the former own
ers Of five leading competing concerns,
and was not. "as frequently asserted" q
mere sale Of their properties 10 new in
tcresis
Great resources came 10 the company
il is asserted, through the combination,
the financial support OF J. 7. Morgan g.
Co. its fiscal agents and large loans So
cured from John u. Rockefeller. father-in-
law of a member of the Mccormick fam
lily. which owns a large portion of the
total stock Of the corporation.
These exceptional resources. Mr.. CO.
nant maintains. not only enable the Har-
Vester Company 10 Secure Tho economies
of large scale operations. which, as rule
give it marked advantages in manufact-
uring costs but also enable il TO maintain
a very elaborate selling Organization by
virtue Of the variety and extent Of its
business Furthermore, they give il a
sreat advantage in extending credits 10
purchasers. an exceedingly important feat
ure Of the farm machinery industry
Hetween 1893 and 1904 the company is
declared ty the Commissioner to have ac-
quircd. secretly, control Of ID. NJ. Os-
borne & Co. its chief competitor; the
Minnie Harvester Company, the Ault-
man. Miller Company and the Keystone
Company. These are referred 10 as
bogus Independents The secret con-
trol OF the Osborne company. the report
says. was maintained for nearly two
years while IL was being advertised as
an Independent concern. These repre-
sensations. ii is alleged. were supported
by It's managers in sworn statements
that it was an independent company
Another rather general complaint is
that statesmen OF the international Har-
Vester Company represent that purchas-
ers of competing lines Of harvesting ma
chimes will he unable 20 secure repair
parts. a matter Of much practical i'm
Qortance
The company at one time openly at
tempted. through clause in It's commits
sion contracts. TO control the price paid
for IFS machines b. the farmer 10 the
retail dealer
Although new competition Of great sig
nificance has begun 10 appear, the Com
missioner points out that the combination
in 1911 still had about SO per cent OF the
production OF binders. IS per cent OF the
production Of mowers and - per cent OF
the production Of rakes In manure
sprcaders. he adds, il appears to have
over one-half OF the business. in disk har-
rows approximately 40 per cent and 20 be
increasing it's proportion in several other
lines. such as wagons AID gasolene en-
s!nes.
The extraordinary oveYCapitalization
which characterized most OF the large in
dustrial consultations Of the period OF
1895 to 1901" was absent in the case %
the International Harvester Company.
saws Mr.. Conant The original capital OF
$4,000 900 included 10000 600 in cash
and $50, 900. 900 representing the appraisal
value Of plants. inventions. etc.
Excessive valuation. the Commissioner
particularly points out, was placed upon
the ore leases OF the Dee,ing Harvester
Company. IL was appraised at s7,s6S.-
$50 estimated by Mr. Conant TO have been
$1,000 600 too high at that time. These
ore valuations. he adds, caused much dis
satisfaction among the combining inter
ests themselves. especially the McCor-
micks.
Pointing 10 the recent action Of the
company in splitting into two corpora
lions. each with $4,000. 600 capital stock,
ore retaining the old Harvester machine
nIants and the other taking over the new
lines and foreign business. Mr. Conant
comments
"1f this is intended as part of a plan for
ultimate disintegration Of the combination
in the opinion Of the bureau 1t is unsatis-
factory"
The investigation. the report says dis
closed low rates Of profit in the early
years Of the combination. partly owing 10
imperfect organization and internal Jesl-
ousies. but much higher rates insreccnt
Years, averaging about l2ia per cent In
leO9-I1 on net assets exclusive OF good
wild. according TO the bureaus estimates.
Generally speaking. says the Commits
sioner. the prices obtained by the com
pany on foreign sales are relatively high
er than those in the domestic market net
ting in some cases a lower margin OF