The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1913-05-21
STEEL MAGNATE
CHANGES TONE
c. M. Schwab, on Stand in
Government Inquiry, Asks
Correction in Testimony.
COMPETITION is DENIED
Freely Admits Formation of Pools in
Steel Trade Before Birth Of
Corporation.

New York. May 2O.-Under cross-exami-
nation, Charles NJ. Schwab today con-
tinued before the special commissioner
appointed TO hear the testimony in the
suit of the government to dissolve the
United States Steel Corporation on the
ground it is a monopoly in restraint OF
trade. Mr.. Schwab was the first presi-
dent of the corporation. Speaking of
pools in the steel trade previous TO the
formation of the Steel Corporation, he
said:
I'VE did not want competitors, and
those who even threatened to go into
rail making. even on a small scale, we
took in, in order to control prices"
AS soon as he took the stand Mr..
Schwab asked that his testimony of yes
teTday, in which he admitted that the
Carnegie Steel Company and the Illinois
Steel Company, subsidiaries of the United
States Steel Corporation, were competi-
tors prior to the organization of the
United States Company, be corrected.
Today Mr.. Schwab declared that the two
concerns were not in competition. This
change in his testimony is unfaVorable
TO the prosecution, since one of the chief
contentious of the government is that
the organization of the great steel corpo-
ration supplied its competition.
The Illinois Company" said Mr..
and was not in reality in competition
with the Carnegie Company"
Judge Dickinson kept at the witness
on the point of competition suppression
Counsel for the prosecution read from
the minutes from the Carnegie direc-
tors during the few years prior to the
organization of the Steel Corporal ion
At one meeting. according to the rec
ord. Mr. Schwah was quoted as saying
that The johnson Company might sell
rails for $40 A tom
Discusses steel Pools.
Il don't believe the johnson Company
was in commercial condition TO make
rails then, added the witness. Judge
DickinsOns line OF questioning tried TO
bring out other cases OF competition be-
tween the Carnegie concern and COM
panies other than the Illinois Company.
thus hoping to establish general sup
preston of competition. The witness
had no hesitanCy in discussing the rail
pool which existed before the Steel Cor
pOration was founded.
Reading from the record of Carnegie
meetings. tending to show that the Car
negie Company had met the prices" of
the Illinois Company in rail sales, coun-
sci for the prosecution questioned Mr..
Schwab on that point. The witness re-
piled that the minutes spoke for them
SERVES, Out explained IHdl Ine record
referred to the general rail pool price.
Another extract from the record of
past meetings indicated that the Car
negie company had sold 400 tons of
bars in the Illinois territory.
That was a small sale. though"
commented Mr.. Schwab.
But enough to make the Illinois sit
up and take notice. wasn't it?' pro-
coeeded Judge Dickinson.
10.
Mr SChwab.
Returning TO the question of competi-
ton between the Illinois and Carnegie
companies Mr.. Schwah made il clear
that the two companies had no conflict
a. regards the sale Of structural steel
as the Illinois only manufactured the So
called small products" The small
products, h" explained, are classed as
merchant bars"
Division of Business.
Continuing on the question of competi-'
tion. Judge Dickinson asked Mr.. Schwab
II the Carneg gle did not sell in the terri
tories Of the Illinois and Cambria Com
panirs after their triple rail pool ended.
we did if we could" said the witness
And got the business asked cOun-
SCI.
Sometimes" answered Mr.. Schwab.
What competitor did you meet in the
Chicago territory"
'Th" Illinois Steel Company" conceded
Mr. Schwab. Witness added that the
Carnegie found the Illinois a competitor
m the Cincinnati territory also. Mr.
SchWab then told about another rail pool
in 1899 between the Carnegie. Illinois
and other companies Under this pool,
the witness said. there was no COMPETE
tinn between the Illinois and Carnegie
companies, since they divided the bust
ness. The territory proper. however was
never divided. Mr.. Schwab said