The New York herald., 1922-06-03
GARY ADMITS MAKING
So TON MORE PROFIT
Than INDEPENDENTS
Lower Cost of Production
Adds $51,000,000 Yearly
to Earnings.
RAILROADS A BIG ASSET
Topping and Dinkey Scored
at Lockwood Commit
tee Hearing.
VI
HID MERGER, IT is SAID
Bonus to Bankers and $780,
100000 to Create Market i'm
New Shares Criticised.
HID MERGER, IT is SAID

Judge Ebert II. Gary, chairman OF
the board of the United States Steel
Corporation. was examined on his
company's affairs by Samuel Inter
myer before the Lockwood Housing
Committee yesterday. Although dis
agreeing with Mr. Untermyer in sew
eral important particulars, Judge Gary
admitted that the Steel Corporation
enjoyed preferential of at least SO q.
ton on it's manufactured products, as
testified to previously by heads Of in
dependent companies. and that this
meant additional profits of about $751;
10000 year on the present output.
Although differing in the effect OF
the corporations partial control of the \
steel industry. Judge Gary's examina-
ton proceeded without acrimony or
even friction. In this respect il was
in marked contrast to that of John
A. Topping. chairman of the board OF
the Republic Iron and Steel Company.
and A. c. Dinkey, president OF the
Midvale, who were examined regard
ing the merger of their companies and
the Inland Steel Company, announced
/ Thursday.
Untermycr Charges Suppression.
Such details Of the last named mer-
/ ger as were announced on Thursday
night were published in THE NEW
YoRK HznALD yesterday. and trading
began in the stock OF the new COM
pany on the curb market on a when
Issued basis. Mr.. Untermyer charged
Mr.. Topping and Mr.. Dinkey with de-
liberately suppressing details of the
merger from the press and the public.
He pointed out that the public had
not been informed of an agreement
by which Kuhn. Loeb & Co. are to
underwrte the new issue of stock OF
the North American Steel Company.
receive bonus and provide s2O.-
100000 fund for trading purposes to
create n market for the new issue.
Members OF the committee character
lied the proposed merger and the cir
cumstances Of its announcement 'onc
of the rawest deals ever put over. Mr..
Untermyer bluntly informed Mr.. Top
ping that the committee was outraged
at the attitude of himself and Mr.. DIM
key with regard to the merger. In the
late afternoon Mr.. Topping was sum
marily ordered from the witness stand
to produce the memorandum of agree
ment with Kuhn. Loeb & Co. that
would disclose the details OF the pool
ing arrangement.
A short time before a subpoena had
been Gent to the office of Thomas L.
Chadbourne. Jr. counsel for the three
companies involved. Mr.. Chadbourne
sent word that he was too busy" 10
appear subsequently, when Mr.. Top
ping was sent for the memorandum. word
was received that Mr.. Chadbourne and
Mr.. Topping would appear before the
committee to-day.
| Members OF the committee and Mr..
Cntermyer regarded as important Judge
Gary's admission that the United states
/ steel Corporation. which manufactures
at half its capacity Is per cent OF the
country's output. could cut its prices at
/ least 50 n ton on manufactured products
/ and still make money
Won't Admit Morgan Domination.
Judge Gary regarded the control OF
the steel business by the corporation
az a reasonable" rather than a "benev-
olent" despotism. He would not admit
that the firm of j. 2. Morgan & Co.
dominated the affairs OF the corpora
ton. although he said that Mr.. Nor
gan like every other member OF the
/ finance committee. was consulted in
matters of policy and personnel Of the
directorate. Neither would Judge Gary
agree that a corporation like the United
4 - ~
l Federal statute from owning railroads
in the same way that the railways arc
prohibited from owning mines. nor
would he admit that the Steel Corpora
ton could at Its own pleasure force the
independeu; companies from the field
by doubling its output 10 meet its ex-
isting capacity and eliminating its pref
or We ruthIessly drove the others out
Of business" he explained. I'VE would
ba N precisely the same position that
| some of these other companies were
N that we're dissolved By Government
lawsuits"
Eye on Lawsuit. Says untcrmyer.
''I see" remarked Mr.. Untermyer.
You had your eye 90 that lawsuit all
the time. You were in the courts and
YOU knew YOU would have TO behave
Yourself IN order 10 get the favor OF
the courts and you would have done
so anyway"
yes. For two good reasons; first.
because Il was right TO do Il, and. Sec
ond. because we had 10 do IT.
Suppose tho United states Steel
Corporation. in the evolution OF time.
With its great and increasing power.
roeu into the hands Of men who do not
practice benevolent despotism, but
a ruthless despotism; then II has these
men absolutely at its mercy"
II don't like the word 'benevolenr---
Judge Gary began.
II will call II a reasonable despotism."
Mr.. untermyer interjected.
IT see that they might have an ad-