The New York herald., 1922-06-03

| any more? A. No, I do not think they
are. They may make steel. You mean
] the fabricating.
Q. Now, the organization of the United
! States Steel Company therefore elimi-
mated a large amount of competition
| in structural steel through that COM
bination. didn't it, and the combination
of the American Bridge Company pre-
| ceded it-there is no doubt of that? A.
/ think so.
Q. Wouldn't the same follow in a
relative degree from these mergers that
are now under consideration? Here is
the Midvale the Inland, the Republic
4 IL they are all making structural steel.
| and they combine in the ordinary course
| of things, the making of structural steel
as matter of economy would be al
| lotted to one mill. 1t would be one Of
the advantages Of consolidation? A. In
the sense OF two different plants cover
ing the same job, of course you are
| right, but l should think they would
| give the work to the plant that could
| do it to the best advantage according
! to the location.
@. But the competition in bidding for
/ the work would be at an end, wouldn't
/ it? A. / think it would.
1921 s'Lean' Year. Says Gary.
Mr.. Untermyer began Judge Gary's ex-
animation by getting into the record the
! organization figures of the Steel Cor
| poration. and a statement of profits for
! 1921, which Judge Gary described a
! lean year. This showed net profits
of s92. .726.O57. including a charge of s27,-
e05.045 for depreciation and sinking funds
on bonds of subsidiary companies. The
testimony ran:
| Q. As chairman of the board of di-
| rectors you are the official head of the
| United States Steel Corporation, are
q. Do you happen to have the last
statement here? A. Yes, we have the
report here.
Q. Suppose we put that in?
Q. The total volume of business ap-
pears to be, s655.407. .5Ss? A. That is
right.
@. And that was a A. A lean year.
@. 1t was decrease of what per
cent from the. A. Previous year.
q. Previous year? A. 1853.
Q. After paying interest on underly-
ing bonds the net profit for 1921 in
that lean year was s9e,7 ,7a6, ,057s2. You
do not consider sinking funds proper
charge against net earnings, do you?
| That Is a payment on account of the
| capital isn't It? A. Well you see
how the books are kept.
Q. Yes but, Judge Gary, won't you
answer me? You do not regard a
sinking fund payment on the retirement
of bonds as a charge against net earn
ings, do you? A. Well. l.
@. Won't you answer me? A. From
hn ufa ax.dx tp& 10 hn tf,t nj
should say yes.
Title of Sinking Fund Payment.
Q. Would you say that the money
that is paid out OF net earnings, toward
reducing the debt OF the company OK
| its bonds is a charge against its net
earnings; or Is il n payment out of net
4 earnings toward the reduction of In
! debtedncss? A. That is probably what
| 1t is.
@. You notice the other item there.
27.905.045.44 against net earnings OF
S92.726. .057.92. includes also sinking
funds on bonds of subsidiary COM
! panies, doesn't It? A. Yes.
Q. How much of that was a payment
for sinking fund? A. cant distinguish
! from recollection.
Q. What? A. I can't tell you.
Q. Then for all purposes of this inves-
tigation this exceedingly lean year
showed n profit. did it not. OF over ss2.-
! 900. 900 on about $685.. .000, 900 of busi-
ness? A. do not think so. A large
part OF this Is for deprecia ton. and
think certainly that Is properly charge
able.
@. Yes: there Is 10 doubt deprecia-
ton Is properly cEarrcable against net
earnings A. The larger part of this
! s27, 600, 900 is for depreciation.
! @. You don't know how much Of Il?
/ A. No, do not. but certainly most of II.
Charges Put Into One Item.
/ O. Well. you have charged not only
\ depreciation but you have charged for
| depletion. haven't you, and you have
charged for replacement funds and sink
| ing funds all in that one item, have you
| sidiary companies. which are compara-
lively small.
@. But stlll they are payments on ac-
count OF capital. aren't they? A. Yes,
on inc same line OF reasoning which you
offer to the other
@. Don't you agree with me as 70
that? A. Yes. / think do. whatever the
I amount Is.
/ @. Now you say that was an exceed
/ ingly lean year and Il showed a reduc-
I tion In business in tonnage of about
I 4s3 per cent, Is that right? A. think
I
| so.
O. From the preceding year. Have
| you any statistics showing the net earn
ings OF the company for the last ten
years as compared with Its sales? A.
| No. ! have not tsat here.
O. Can you furnish that data? IL IL
public property, isn't Il? A. Yes, Mr..
1 Untcrmyer
! Nothing Hidden. Says Gary.
C. The policy OF your company Is ono
/ Of pitiless publicity. is II not? A. Yes.
Mr.. Untermyer. we will furnish you any
! thing concerning any part OF our busi-
I ness that is germane to your inquiry.
o. DO you notice earnings OF 1920
before deducting the depreciation and be-
fore deuctins for the payments on ac-
count OF capital into the sinking fund
were siTGeS6.s9s.t17 A. do.
O. on what volume OF business Is this
! predicated? Is II not, upon figures
showing a business for that year OF
! $f.219.6s4.904 A. That Ia right.
/ O. That In about 10 per cent. on the
total business, isn't II. in round figures?
I A. think so.
@. Now those were lean years. both
1 OF them. were they not? A. Nineteen
hundred and twenty was pretty good
year
! ~ NJ "A 4. .s.~.... ra~1 ..... -