New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-06-03
Admits Corporation Has
Advantage Of So a Ton
Over Its Rivals Through
Owning Four Railroads
Denies Mergers
Mean Monopoly
Charges That Public Was
Deceived by Financial
Statements Are Made
in Lockwood Hearing

The testimony Of Ebert II, Cary,
chairman Of the board n directors
of the United States Steel Corpora.
tion. and startling statements con.
cernine The financial arrangements
surrounding the three.compsny steel
merger. made yesterday session 81
the Lockwood housing committee ore
Of The most interesting 10 its two
year history.
Mr. Gary made The admissions
that his corporation enjoyed the ad
vantage Of a 50 ton difercntial
over other steel companies. which, he
agreed. gave il the power of "rea-
sonaole despotism." rejecting the
Characterization o. benevolent des.
potism" by Samuel Untermyer, the
examining counsel.
Mr.. Gary denied that the firm o.
J. p. Morgan & Co. dominated the
steel corporation. or that u exercised
a dictatorship in naming its dlrec-
tors. he said he had more 70 DO
with this than did the banking house.
He declared il was true that the cor
poration obtained its greatest ad
vantage through the ownership of
the lines Of transportation 20 handle
the company's ores and products and
would not consent % Federal proni-
bition against ownership Of railways
by industrial concerns
Composition Yet Possible
Despite the Steel corporsuon'' al
vantage ove- m. Independents, Mr.
CARY said there were "t~o good rea
sons" vhy his company was no, ruth.
le.sly driving its competitors out OF
business. These we're because "it vas
no, right 20 do ~ and because "tnsJ
had 20" take this attitude.
While he held with Mr. Cntsrnysf
that combinations Of steel concerns
that were engaged m manufacturing
structurai steel would eliminate com
petjtion In this product he did DOT
think that the announced msraer %
the Midyale, Inland and Republic com
panies would put an end 20 competition
in steel for housing purposes.
The disclosures respecting tne insaf
details OF the merger we're only
brought out after the most insistent
demands by Mr.. Untermyer for 'ha sd-
ditional facts bearing on the question.
II had been implied by the statements
issued 20 the press in connection wi'n
the proceedings that virtually all the
stock involved had been accounted for
n appeared from yesterdays testimony.
however. that there rs 70 be an issue ot
2. 900 900 new shares Of common stock
OF no par value, that no mention na9
been made o. any amount OF preferred
stock. and that certain amount OF
working capital is 10 be raised BY the
syndicate handling the transaction 70
operate the stock deals. II was also
shown that the Republic gas 20 get
ss15. .00o in cash for unpaid dividends.
II was further disclosed that ap-
proximately se4, 600 900 was 70 be rsises
10 nut over the merger The money
was 20 be used for the purchase Of
$4,000 900 Of preferred A. seb and
SOC. 900 900 Of common stock ~ $50
The remaining $4,000 900. according 70
the testimony, was 10 be used for deal
ing in the securities and creating
market for them.
silent on Kuhn.Loeb Bonus
There was no mention OF what bonus
Kuhn. Loeb & Co. were 20 get for
handling the financial arrang nents.
Despite the most persistent efforts Of
the counsel no admissions could be OBJ
tanned from the witncsse that might
throw any light on this phase Of the
merger.
Aiya c. Dinkey. president Of the
Midvale Steel and Ordnance Company.
and John A. Topping, chairman Of tho
board and executive committee Of the
Republic Steel and Iron Company, had
on the previous day expressed conc
plete ignorance OF the existence OF any
definite figures in connection with the
deal. and did not know how long 10
would be before anything tangible
could be expected. The counsel. re-
calling the men 70 the stand yester-
day, demanded an explanation OF their
conduct" asserting that the commit
tee had been Outraged and de-
eeiyed." and that the men had sup
nre.sed facts He branded the formal
abatement issued on the day before as
bunk" and declared that the witnesses
knew il did not represent the real
transaction.
Determined 20 get At the bottom
~ the matter, Mr. Untcrmyer sent for
Thomas l.. Chadbourne, attorney Ia
charge OF the negotiations Mr, Chad.
bourne replied che VAS too busy and
could not come. The counsel then
called upon Mr. Topping q produce
the papers said 70 be IN possession OF
Mr.. 'Chadbourne and an Adjournment
was taken until this morning. when
both men will be put on the stand.
Hurricane Of Questions
Mr.. Gary took the witness stand
with pleasant ar, maintaining =
calm and smiling eounteuance all
through his examination. Mr. Unter-
myer, however, wanted 10 know so
much about the steel company's sf-
fairs that the questions came tumbling
out seemingly too fast for the cor
poration head, whose answers 70 .
large degree consisted Of Shrugs Of the
shoulders, shakes Of the head, n raised
anger, OF well. now" and other
such uncompleted efforts.
When the Judge hesitatcd Mr.. Inter.
myer would say, Judge Gary, Won't
you answer me-" Once Mr. Gary va,