The New York herald., 1922-05-13
SENATE TO INQUIRE
INTO STEEL MERGER
Asks Trade Board and Attor-
ney-General Whether They
Tried to Block 1t.
ATTACK BY LA TOILETTE
Union Is Plan to Eliminate
Competition, He Asserts
in Speech.
Special Dispatch TO THE NEw York HEnALp.
New York Herald Bureau.

Special Dispatch to THE NEw York HERALD.
| New York Herald Bureau.
Washington. ID. c.. May 12.
| Without protest or record vote the
Senate to-day adopted the resolution in
troduced few days ago by Senator La
Toilette (Wis.) calling on the Federal
Trade Commission and the Department
OF Justice to inform the Senate what ac-
tlon they have taken or purpose to take
to block the proposed merger of large
independent steel companies.
! Before the vote was taken Senator La
Toilette delivered a speech in which he
said that never since the Sherman anti
trust law has been on the statute books
has there been an honest attempt by
either Democratic or Republican ad-
ministration to enforce it,
| Senator La Toilette called the pro-
posed merger "a plan to eliminate what
ever competition now exists in the steel
industry and the creation of situation
where prices may be fixed on a mon
opoly basis without fear of detection"
THE consummation of this merger
Toilette. This is the age Of steel and
1t is the base of every human activity.
These men who control this basic COM
modify control the nation. A little more
than twenty years ago they secured
complete control of one-half the indus
try by the formation of a corporation
so great that it staggered the nation.
They could control the other half of
the industry only by agreements and
understandings with the so-called inde-
pendent companies.
Refers to Gary Dinners.
"These agreements, reached through,
the medium Of the Gary dinners, work ed
well during the periods of prosperity,
but they were inconvenient and, like
all these gentlemen's agreements, were
apt to be broken when in periods of
depression there was q scramble for
| business.
| -o-day they are proposing to bring
the other half of the industry under
! one consolidated control SO that in the
| future. instead of operating through
| the medium of understanding to which
there were dozen or so parties, they
will be able to make firm and binding
| agreements between the two great cor
porations which will dominate the in
dustry''
| Senator La Toilette declared the
| formation of the United States Steel
Corporation was illegal and should have
been prevented when 1t was announced
| twenty years ago.
| He added that in his opinion the
United States Steel Corporation would
not object to the proposed merger
II call your attention to the fact that
the financing of this new steel trust"
| he went on, "is in the hands of Kuhn,
| Loeb e. Co. The committee on the con-
centration OF control of money and
credit, generally known as the Pujo
committee. reported in 1913 that the
most active agents in forwarding and
bringing about the concentration of con-
troll of money. credit and industry are
J. p. Morgan & Co.. First National Bank
of New York. National City Bank of
New York. Lee. Higginson e. Co., New
York and Boston: Kidder. Peabody Com
pany of New York and Boston and
Kuhn. Loeb & Co.
Acted In Combination.
THE report showed that these great
financial groups never acted alone on
any large transaction. but Invariably
acted in combination and shared the
spoils This was admitted by George F..
Baker in his testimony before the COM
mittee under the examination of Samuel
Untermyer.
There is every reason to believe that
while Kuhn, Loeb G. Co. Is the nominal
financial agent in the creation of this
consolidation, the firm is acting in con-
cert with the financial interests which
control the United States Steel Corpora
ton, Reports in the financial journals
demonstrate that the merger has already
dn6 fa IN N q
elimination Of competition and the fixing
OF prices on a monopoly basis.
"Wall Street knows that this will be
the result, for the prices Of the stocks
of the corporations which are TO be
absorbed have been steadily rising ever
since the merger was announced"
Steel men here declined to comment
formally on the attack of Senator La
Toilette on the proposed merger Of six
independent steel concerns. They indi-
Gated. however, their willingness to
submit to any investigation Congress
might make OF the matter.
Thomas l.. Chadbourne. attorney. who
Is engineering the six company merger.
on his return from an inspection OF the
steel properties early in the week. said
there was nothing In the merger plans
contrary either to the Clayton law or
the Sherman law.
Wall Street viewed the proposed SEN
ate investigation from the angle of the
suit against the United States Steel
Corporation. which was dismissed after
years in the United States Supreme
Court. 1t was argued that II the Gov
ernment could not maintain an action
against the United States Steel Cor
poration with its combined capitaliza-
ton and funded indebtedness of more
than billion dollars 1t could hardly
hope to show up the new concern with
less than half that amount as a trust.