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Show DENOUNCES SliEillllLfil' AS MIMIC Gary Would Be WllUng to , Hare Government Tlx Steel Prices. THINKS GOVERNMENT C0NTKCL IS COMING Declares Prices of Steel Ralls Must Be Increased Before Long. . WASHWOTON. una 2. Elbert H. , Gary.. Wf executive offlcar of tht United Btatas Steal corporation, restraint restra-int his teetlmony before tha bona "ttaaM treat" lnrsstlgstlnj committee today, danouoad tha Bharmaa antl- tow aa archaic and declared that (OTernmantal control of corporations erentusily would coma,' Kr Out asserted that tha steel cor poratloa would walcome sock a chang and would ha clad It tha corarament would (0 so far at to dictate tha prices of steal products. In explanation of tha reported world wide "trust," Mr.. Oary said a coo- wouii aaid 'n Brussels Joly 3 and 6 next to organise aa international inter-national steel institute similar to the American Iron snd btael institute. Tne latter, he asserted, waa formed to prevent demoralisation in trade and to permit an exchange of ideas for tha betterment of the steel industry. IT Unlawful Combination. la so instance. Mr. Oar aM V.4 there been any attempt at any unlawful unlaw-ful combination or aa expressed or implied im-plied agreement. - Mr. Gary said ha would, do all ha eould, morally and legally, to further tha proposed international institute. Increased prices ara to be charged r or steel rails in the near future, according ac-cording to Mr. Gary. Higher woet of labor nd raw material together with a demand for heavier rails, was given as the reason for the proposed advance ..M.!.' V"ry prepared to unfold ISL nvostiaators sll th he hopl lu sot-ompllah lor the beneilt of the str-i torts in puns h. hsd diaru.eed at I, famous (Jsrjr dinners to alee) rnn in iW . Jt. an1 '"rough tho Amertmn Iron and Sleel Institute, which Cn.nnian Stanley yesterday said was reported to ave for lla chief aim the ornittlon of aa 1neinatlonal steel mh,.... ...... i M- -1?r. WV about yesterday to 'explain 'ex-plain -all that I hope to do and jn.t EH'-kTJLP r-' Ihe commlt-'."I'"'. commlt-'."I'"'. I"1.. before ad (ournm.nt. Interrupted Mm with his statement reJ IStlng to the re porta of a pr.pvtd In-Li".'.'"".1 In-Li".'.'"".1 ,ru'" of the cliara-e tht Mr. Oary a "able and efflrient manna-, menr waa reaponalble therefore. t.,r Oary briefly denied It and averred thnl oranunant. Control Coming. y - ' Soon after the committee met tndav Mr. Oary declared that enforced publicity and government coutrol of corporations must come, even as to prines. He su .1 he believed the Sherman antl-truet law waa too archaic, to deal with modern sit. nations snd never could fully prevent freat combinations of capital. w,al the nlted Htatse steel corporation Wanted, he said, waa some reaponalble snd orm-ml department of the government to whom It could go and any: "What prices can we sliarg and just what can we dor 7'.r"0,,ll), 1 believe the Sherman act. aaid Mr. Oary. "does not now aod never will fully prevent the organising of great comblnatlone of capital. I believe be-lieve we must come to enforced publicity ti"ns governmental control of corpora- "tx you mean government control even aa to prices T" Mr. Stanley aaked. "yea. even aa to prices. So tar aa t am concerned, speaking for the United Statea ateel corporation. I would be very glad If we oould know exactly where wa stand and could bs free from the danaais and criticism of the public I wiaa we oould go to some reaponalble governmental govern-mental source and aay. 'Here are our facta, here la our business, hers Is our property snd our cost of production.' and onnld h told In. vh.l n.i.. . . j charge aod Just what -we could do." t Fronts Not X ProbWm. Mr. Oary said the real problem wa not the making of big profits but tt waa rather the establishment of a dennlta understanding un-derstanding of the legal situation. "Do 1 underatand that you believe la -st rlct govern men tai su nervlslon of oor poraftonsT" aaked Representative Littleton Little-ton of New Tork. "Yea, I do." said Mr. Oary. "I knoa that la a radical .posit ion. but something must be done' $ "Is It your conviction, Mr. Littleton inquired, "that the Sherman antl-trunl law Is archaic and unable to deal wlia the modern business situation?" "Tea." "Do not tne Interpretations of tht Sherman law practically order a continuance contin-uance of the old uompetltve system aa opposed to co-operative modern methods?" meth-ods?" asked Mr. Littleton. "I am afraid they do," Mr. Gary replied. re-plied. "We don't want a condition of uncertainty un-certainty tn which we don't know just what we have a right to do.' ftlght to Fix Prices. . ' Representative Toung of MJcbigaa asked Mr. Oary tf he thought the national na-tional government had a right to ax tie prices of cominodltlea of interstate com-nwrre. com-nwrre. "My opinion. aaid Mr. Oary. "la tha so far aa It relates to Interstate coni-men-e Die federal government has ttat right.-" - Mr. Gary, asked tf the United Statea Hteel corporation was lu a position to fix pricv. aaid co-operaUva businesa methods whkh had succeeded hiirtily I'ompetltlve methods had nutUe It possible for big corporations to Influence pr,os. "We cannot dominate thm." he said "It la mt the bta corporations that rhanre prices a mwh as th smalj corporations cor-porations that cut prlt-ea and force tha big oae to cacue down," Explains Oary fcinneTT. - Taktrta up the subject of the reported international trust and Gary dlnntrs. al whlvh tt hai r-een Intimated prK-ea were fljted. Mr. tiary aaid: "At the time of the panic In ll7 there jraa areat demoralisation temporarily In the steel business. The fear exmtfd that It would extend and bcime danieroi. The ron and stel Inquiry haa beMi re.fe-nlaed re.fe-nlaed aa orte of the leadlnx huroiwieri of trade. It was believed hmhiy import ent. If orat-tlcahle, to prevent greater demoralisation tn trade. Tle situation, he explained, caused )orrers all nT tf-i country to appeal to the r-or-Tr.. ..ti t r (L'outtuueU ua w.,e ) SHERMAN LAW (CftptinnH from nag 1.) do ecrme thing to prevent business chaos Mr. Gary railed tha, steel men of the country together at a dinner to dlecuss condition. Ho MM these dinners of consultation had proved so benelVlal tn maintaining the stability of reasonable frtoM thai preventatives of tha ateel nt crests would meet at Brussels .Inly next to determln whather an International Interna-tional ateel institute aim liar to the American Institute should ba organised. Wlli Help Orgaotia ZncUtoU. Ho mM ha would participate In the organisation of thta institute unless he becsme convinced that morally or locally it would not ho well to form ourh an organisation. or-ganisation. In elaborating tha lda of in "Oarv dinner" tha witness explained that when the panic came, the Jobbers held large quantities of materia.) for re-aale re-aale a n't If prtcea were reduced failure wero certain anil a prolonged panic ensue en-sue The Wnlted Pfate Uteel corporation, with M per rent of tho ateel buatneaa of the countrv." said Mr. ary. "thua waa confronted with two propositions. We had no right to endeavor to prevent a reduction reduc-tion In prices and maintain tha equilibrium equilibri-um of business hy mean a of an expressed or Implied agreement, nor had wa had a awful Huht to agree with our competitor competi-tor to maintain prices. "On tha other hand wa believed we had no moral or legal right to become Involved In-volved In a hitter and deal met I va competition com-petition atich aa follows any kind of depression de-pression In th Iron and ateel Industry, for tha reaann that If we did It It would mean a war for tha survival of tha fit-teat fit-teat and many persons engaged In the buatneaa would bo forced Into bank-! bank-! ruptcy. j Part Gary PUynd. 'Therefore. It waa believed hy me, at least, that It waa not for the beat Inter-eat Inter-eat of the manufacturers or the laborers or the people generally that prices be r-duced. r-duced. tnw,Jj"mwl Jnnf" bsg a monopoly by driving out competition In a hitter fight, the other of maintaining maintain-ing price without making an agreement. 7Ro ! invited a large percentage of the ateel (n tercet a of the country to meet me at dinner and 1 presented to them these views." Ho said he told tha exact situation and sua seated a remedy which waa ao- cepted hy the ateel men aa wise. f-l nggeetra' that the only way we could lawfully prevent auch demoralise-tlon demoralise-tlon ana maintain reasonable stranlnees In huelncea waa for the ateel men to come together occasionally and dlecloae to each other all th circumstance of their hoslness. Such Interchange was done and prevented demoralisation. We have not done more than that because we ooujd not do more." Aa to Org Supply. Chairman Stanley directed Mr. fjary'a attention to the question of the eupply of Iron ore. The latter denied that his organisation controlled the ultimate aup- Sly of Iron r In the 1'nlted States, rsplte his statement In !" to the waya and means rommlttr of th house aeem-Ingly aeem-Ingly to that effect. Independent manufacturer, manu-facturer, said Mr. Clary, have large hold-Inge. hold-Inge. After the discussion as to the supply Mr. Gary' attention waa dlrctd to th manufacture of ateel rails, lie denied that the ateel corporation controlled con-trolled the price of rails, adding that they could not b sold for I than a ton. ln this cAuntrvt" Interrunted Mr. Bartlett. In reply Mr. Gary undertiiok an explanation ex-planation of why ateel rails could be eold abroad cheaper than at home. He said, like th merchant who clear bis helves onoa a year by Belling hi goods at cost ao the ateel mamifscturee could aell hte eurplu abroad a' 124 or at cost. Th rmult wee tl mill were kept ruf.nlng. reducing the cost of production, keeping together a compact organisation and bringing to thia country large eums of money. Th ultimate effect, be added, waa to ledur th pri re to the domestic consumer. All countries practice dumping dump-ing Mr. Oary declared. r'How long hoe It been since any country coun-try 'dumped ralia on to u.T" Inquired Chairman Stanley. "In about lMIt r 1MI or lt." came the re,ly slcwly. 'lAei year some rails were 'dumpetl' on the Pacific coast." Trying to Btaar Mlddl Court. Representative Littleton, taking up the examination of the wttneas, Inquired If It waa not true that the steel manufacturers manu-facturers were trying te steer a nice course between the Sherman antl-lrust law on. the one hand and the obstacles of competition on the other. - "It Is," leplled Mr. Gary. "I wish ws knew how we could rightfully and lawfully law-fully do If." . "Then you think. In the light of the experlenc of the laat ton years, that present prices cannot be maintained for another long period and atlU avoid the stierp sornera of Sherman lawT" Mr. Littleton asked. "I do not think It can be done," eald Mr. Oary. "Ther I such a diversity of Interesta la the ateel buelneaa that It seeme to me thet ther must b some way devleed to ellow the manufacturer to protect themselvee from obstructive competition that will drive manufacturers out of business or els we will be In cnaoc- Thn., Mr. Uttloton eoirtlnuM. '6o you bllv thr Is no way compatltlnti can c-Anttnua 1ry mnd thm wtl buat-naa buat-naa tjavwlop and raauJt in banaflt to tha conaumarar "I do not think It ran aievpt under C OA-am ma nt control." aaltl Mr. Oary. Tim for Xw Folicy. Teu th'nk than tha tima haa cma vhan wa muat aunramlar tha eompatitlva method In bualnaas for accaptanra of a naw policy In bi bualnaa affaira?" "It iMmi to ma It haa." Chairman Stanlay akd Mr. Oarr If buainaa under grvrnmtnt control could atop short of abaoluta covarnmant ownar-ahlp. ownar-ahlp. "T 4hink it can ba dona." Mr. Oarr anawarad. "Tha banks and rallroada hava dona It .to a rarialn axtant. Tha hanks hava only a;ona to tha axtsnt of abaoiut pubHclty, and that demonstrates tha lacal rlcht of tha covarnmant to control con-trol business corporations." Mr. Littleton askad tho wltnaaa If tha I'nitad Atatae Bteei corporation could affect af-fect a dissolution pt tte subsidiary cor-poratlnn cor-poratlnn and abaorb them Into ona araat Operatliuj sompsny under ona heaa. "Tea, wa could, and readllv would. If by law or suggestion from official aoureaa wa could sea tha way clear." Answering cjucettona by Rapraacntatlva McOillcuddy of Maine oa tha subject of controlling; prices. Mr. 0.ry detailed methods bf which tha eost of produc-tloa produc-tloa In tha mllla la made uniformly low. BeMncinf Ooata. "By thua continually reducing- tha coat of production." suae est ton Mr. MeGHl-cuddv. MeGHl-cuddv. "U aervaa aa an advantaga for subsidiary companlea to be In tha corporation cor-poration rathsr than indeperkdrn 4oe It notT" Oh. yes." sal 4 Mr. Gary. "Than an outside competitor haa to compete against all your companlea that are striving together to reduce tha cost of production, doe a ha notT' "Te." waa the reply. "Wa have tha advantage of greater capital, of greater , talent for organisation, of lares funds In -a central bank, and tha like; and the', subsidiary companlea. by vlrtua of this I represents tlvaa of tha railroads. Theot of producing rails has arest-tv arest-tv increased in the laat ten years, said Mr. Oary- "Wagea hava increaaed. ape-clflcatlona ape-clflcatlona ara dmerent, fceavv equipment and tncreaeed apeed of the railroads demand de-mand Matter and better rails." Having failed In your strenuous effort ef-fort to keep prices down during the last ten years, vou are now going to run prtrea upV suggested Chairman Stanley "I hava given you tha fata. which apeak for themaetvea- You can characterise charac-terise tha testimony mttch better than I can. Mr. Chairman." waa Mr. Gary a response. organlsatron. do not need half aa much money aa any of them would need to operate Independently. These companies could not do one-half of tha export business busi-ness thev do today If thev were segregated. segre-gated. The export situation was one of the dominating causes of tha organisation organisa-tion of tha Lnlted flute Steel corporation." corpo-ration." - Mr. Oarv said tha atel oorpnraion could. If necessary, limit tha production In tha auhaidtarv companlea and control tha buatneaa methods in all of them. Chairman Stanley aaked Mr. Oary if It were true that ateel rails had been sold in Mexico ai4 Australia bv the steel corporation at a prica of $4 lower per ton than the fined prlca of 2S a ton. He read from an article which stated that "everrone knows It to be a fart." Oary ZHd Not Know of It. -gesryone would Include me." said Mr. Oarv, "and 1 did not know that, nor where the in forma tloa came from He further said that to his knowledge the only time when tha foreign price of rails waa higher than the domestic prices waa In lao. whew the foreign price waa tl cents hlaher per ton. Mr. Gary aroused the tn threat of the oommlfiee later ivy deHartng that It would bs necessary to Increase tha price of ralla ad that aa aJ ready had ao tod |