IN NINE YEARS

Southland Times, Issue 17010, 6 April 1912, Page 5

IN NINE YEARS

“A BILLION DOLLARS PROFIT." EARXIXGS OF STEEL TRUST. SAX FRAXCISCO, March 8. There was presented to the House ot Representatives on the last day oi February a report by F. J. Mcßae, an expert accountant, representing tha Government, showing .that in the first nine years of its existence the United States Steel Corporation made a net profit of 1,029,685,389 dollars, or in excess of £200,000,000. The Trust had refused to produce its books before the Congressional Committee that is conducting an investigation of its affairs, and the expert was authorised to study the books and report. The profits of the Trust during the period referred to are equal to 13 dollars, or £2 14s per ton on finished product. Another fact brought out by the expert was that the firm of J. P. Morgan and Company, which organised the steel corporation, received in cash for its services approximately £14,000,000. The report of Mcßae reaches the conclusion that the steel corporation operates in restraint of trade and prevents competition through a manipulation of prices. In this connection such information is furnished relative to an interesting institution known as tha "Gary dinners.” Once a month E. H. Gary, president of the combine, entertained the heads of the different constituent concerns forming the Trust, as well as the heads of some supposedly independent steel companies. At thesa dinners selling and buying prices were fixed, and although no penalties were attached to violation of the declarations mutually exchanged, except a reputation for dishonour, the "gentlemen’s agreements” arrived at were always observed. The so-called independents were induced to reduce their production conformably to the estimate of the reduction in tha existing demand and to maintain prices* thus excluding free competition. Tha books of the company reveal also that competition was crushed out by tho acquisition of a large number of plants that were never operated, and some of which were dismantled. •The relations between the steel trust and the harvester combine were further enquired into at recent sessions of tha Congressional Committee that is investigating the former monopoly. That the United Slates Steel Corporation has been boycotted by the International Harvester Company during the last five or six years was the startling statement made by Mr J. A. Farrell, president of the steel trust. This assertion was questioned by members of Hie committee, inasmuch as the two corporations are interlocked by having to some extent the same directors. It has been generally supposed that the steel trust gave the harvest combine rebates. "Isn’t il a fact that tire Harvester Company gets larger rebates than are granted smaller concerns?” asked a committeeman of the president of the steel trust, to which, the latter replied: "We have done no business whatever with the International Harvester Company for five or six years. The International Harvester Company has had a boycott on this corporation. It all grew out of a controversy between one of our smaller subsidiary companies and the Harvester Company. It .started as a mere quibble between salesmen, and resulted in a complete .severance oj business relations. There is nothing E common taewtecn us. We don't do business with them."