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Mr. CLARK. Why do you want the tariff retained on iron ore. I thought you said it ought to be taken off the iron ore?

Mr. SHIMER. Simply because if it starts with iron ore it would affect the pig iron.

Mr. CLARK. Why would it affect the pig iron, or your profits in pig iron?

Mr. SHIMER. I have to buy my ore.

Mr. CLARK. If you buy your ore cheaper you could afford to make pig iron cheaper, could you not?

Mr. SHIMER. No, sir; we would sell it at the same price. We would have to sell it that much cheaper.

Mr. CLARK. Is that not exactly what I asked you, that if you bought your ore cheaper

Mr. SHIMER. And make the same amount of money, we could sell the iron cheaper.

Mr. CLARK. You mean that you could make your iron cheaper?
Mr. SHIMER. Yes, sir.

Mr. CLARK. And sell it cheaper?

Mr. SHIMER. Yes, sir.

Mr. CLARK. Then what do you want the tariff retained on iron ore for?

Mr. SHIMER. Simply for the benefit of the trade in general it should be retained.

Mr. CLARK. Do you not think you would have plenty to do to look out for your own particular phase of the trade?

Mr. SHIMER. The Pennsylvania iron ores we used up until the discovery of the ore up in the Lakes. We have some 8,000 acres of ore land carrying ore underlaid, 33, 34, and 35 per cent iron that it is impossible to-day to smelt because the cost would be above the German price.

Mr. CLARK. Now, really, when Mr. Boutell asked you if we should take the duty off of iron ore if it would not help you to manufacture the pig iron, you harked back then in your mind to the fact that you also own iron lands?

Mr. SHIMER. Not available at the present time.

Mr. CLARK. I know; but you ought to make them available.

Mr. SHIMER. No, sir; they would not be available with a dollar a ton duty on them.

Mr. CLARK. Then, why do you want the tariff on iron ore kept on,

then?

Mr. SHIMER. Because they would be less available if it was taken off.

Mr. CLARK. If they are not available now they could not be less available, could they?

Mr. SHIMER. Yes, sir; by reason of the lowering in percentage of metallic contents quality of the Lake iron and by reason of the point of delivery, Pennsylvania, as against the Lake ores, they may become more available.

Mr. CLARK. Do you not know that the United States Steel Trust is buying up low-grade ores all over the country as reserve stock to be held 20 or 30 or 50 years?

Mr. SHIMER. I do.

Mr. CLARK. Why do they not take your ores then? It is because you will not sell them, is it not?

Mr. SHIMER. They are not large enough for them. They want to buy 50,000 acres.

Mr. CLARK. You are not arguing for the tariff to be cut down on the steel product or iron ore, are you?

Mr. SHIMER. Not the slightest. I do not want anything cut off. Mr. CLARK. How much have you got invested in this business, if I may inquire?

Mr. SHIMER. Something like $4,000,000.

Mr. CLARK. How long have you been at it?

Mr. SHIMER. Something like 35 years.

Mr. CLARK. Did you make $4,000,000 out of the iron business? Mr. SHIMER. No, sir.

Mr. CLARK. Did you inherit it?

Mr. SHIMER. No, sir.

Mr. CLARK. Where did you get it?

Mr. SHIMER. I made part of it out of farming.

Mr. CLARK. I will withdraw that question. Do you know anybody who is farming, who is worth $4,000,000?

Mr. SHIMER. No, sir. I am not worth $4,000,000 either.

Mr. CLARK. I asked you how much you were worth?

Mr. SHIMER. No, sir; I did not so understand you. You asked me how much I had invested; you did not ask me how much I was worth.

Mr. CLARK. As a matter of fact do you not know that there is only one farmer in the United States who is worth a million dollars? Mr. SHIMER. One farmer?

Mr. CLARK. I say a general farmer worth a million dollars, and he lives in Missouri.

Mr. SHILMER. It does not make any difference; I am worth a part of a million dollars, and I have farmed and have made part of a million out of farms.

Mr. CLARK. Now how long has it been since you have had $4,000,000 invested?

Mr. SHIMER. I think since about in 1872, around there, or 1875. Mr. CLARK. How much profit did it make in 1907?

Mr. SHIMER. Something like $150,000.

Mr. CLARK. What did you make in 1906?

Mr. SHIMER. About the same amount.

Mr. CLARK. That was 2 or 3 per cent, was it not?

Mr. SHIMER. About that; it has never paid any dividends.

Mr. CLARK. What did you do with the profits that you got out of it?

Mr. SHIMER. We bought coal lands.

Mr. CLARK. You got coal lands?

Mr. SHIMER. Yes, sir.

Mr. CLARK. Now, how much profit in a year did you make out of it?

Mr. SHIMER. About $150,000 net.

Mr. CLARK. That represents the entire profit?

Mr. SHIMER. Net profit.

Mr. CLARK. On $4,000,000?

Mr. SHIMER. On four millions of value.

Mr. CLARK. That would be about 3 per cent, would it not?

Mr. SHIMER. Something like that.

Mr. CLARK. That is all the iron business pays, is it?

Mr. SHIMER. That is all the independent iron business pays at the present time. When you buy your Lake ore and make your coke it takes every solitary cent that you can possibly save to pay the current present rate of labor and keep running.

Mr. CLARK. And yet you can take money and lend it on first rate real estate security and get 6 per cent?

Mr. SHIMER. Well, you know that interest would go down to 1 per cent if everybody should lend it on first-class security.

Mr. CLARK. I ask you if that is not the case, that you can lend money on first-class real estate security at 6 per cent interest?

Mr. SHIMER. In Oklahoma we can get 8 and 10 per cent.

Mr. CLARK. You can get it in Missouri, and the money is just as safe as if you had it locked up in a vault. Of course I know there is some shylocking in Oklahoma. You can lend it at 12 per cent if you were down there with personal security.

Mr. SHIMER. No, sir; I mean real estate, checks, and tax certificates, and anything that you want money on.

Mr. CLARK. Now, the reason that you do not make any more money in the Pig Iron Trust is because the Steel Trust squeezed you; did it not?

Mr. SHIMER. No, sir; we can make pig iron in a general way nearly as cheap as they can.

Mr. CLARK. It is astonishing that no one makes anything out of this business, or any other business that has been suggested here. Mr. BOUTELL. Except tin plate.

Mr. COCKRAN. And yet nobody speaks in figures of millions. Mr. SHIMER. You have to renew your plant every three years. The thing gets ahead of you.

Mr. CLARK. I understand that. I would be glad to have somebody tell me how there happened to be so many millionaires and multi-millionaires, and so many rich men in the iron and steel businos when some of them make over 6 per cent interest?

Mr. SHIMER. I do not make 6; that is the trouble with me.

Mr. CLARK. How do they all get rich?

Mr. SHIMER. I do not know.

Mr. CLARK. How much do they pay the president of your company?

Mr. SHIMER. I think he gets something like a hundred dollars a month.

Mr. CLARK. Are all the stockholders of the company officers?
Mr. SHIMER. No, sir.

Mr. CLARK. Now, did you say that you paid the president of your company $100 a month?

Mr. SHIMER. Yes, sir.

Mr. CLARK. Is that all you pay him?

Mr. SHIMER. That is all that is paid him. We pay the manager a little more than that.

Mr. CLARK. How much do you pay the manager?

Mr. SHIMER. Six thousand dollars a year.

Mr. CLARK. Is that the highest-priced officer in the company?
Mr. SHIMER. That is the highest-price oflicer in the bunch.

Mr. CLARK. Now, these steel men expect people to believe statements that none of them are making over 3 or 4 or 5 per cent? Mr. SHIMER. I think you ought to believe what they say.

Mr. CLARK. But there is such a thing as appearances, and the reputed fortunes that they have and the acknowledged fortunes that they have do not correspond.

Mr. SHIMER. But it is largely on paper.

Mr. CLARK. Andrew Carnegie could not have made $500,000,000 if he had lived until he was as old as Methuselah?

Mr. SHIMER. Unless he had sold out. [Laughter.]

Mr. CLARK. He did not have to sell out to have two or three millions?

Mr. SHIMER. I do not know whether he did or not; I can not tell you about that; but unless he had sold out he would never had made anything in the steel or iron business. You can never make anything in the iron business until you sell out.

Mr. CLARK. How did Frick make his money; did he sell out?
Mr. SHIMER. Yes, sir.

Mr. CLARK. How did Carnegie happen to get a million dollars in salary?

Mr. SHIMER. They gave it to him.

Mr. CLARK. And Schwab?

Mr. SHIMER. That is another matter.

Mr. CLARK. If they can afford to pay such salaries they are making money?

Mr. SHIMER. Undoubtedly they are.

Mr. CLARK. You can not afford to pay it out of dividends of 3 or 4 per cent?

Mr. SHIMER. No, sir; but they can buy ore lands, which is a sort of unearned increment."

The CHAIRMAN. That is the way you get at it?

Mr. SHIMER. Yes, sir.

The CHAIRMAN. And that is the way you got the $1,000,000 invested?

Mr. SHIMER. Yes, sir.

The CHAIRMAN. And the money you invested in the business brought it up to $4,000,000, did it not?

Mr. SHIMER. Yes, sir.

The CHAIRMAN. And you were paying three and three-quarters per cent on that?

Mr. SHIMER. Yes, sir.

STATEMENT OF JOSEPH G. BUTLER, JR., OF YOUNGSTOWN, OHIO, REPRESENTING A LARGE PERCENTAGE OF THE MERCHANT BLAST FURNACES OF THE UNITED STATES.

WEDNESDAY, November 25, 1908. Mr. BUTLER. Mr. Chairman and gentlemen of the committee, I represent a large percentage of the merchant blast furnaces of the United States. The product of these furnaces is used in the malleable works, foundries, cast-iron pipe works, and the independent steel works in the form of basic iron. I get my authority for this representation, first, by letters that I have from, perhaps, 30 or more of the independent furnaces; and, second, as the result of a meeting which was held in Cleveland on last Wednesday, which was largely

attended; and at that meeting a committee was appointed to meet with the eastern producers in New York on Monday. We met with them on Monday and again on Tuesday, and the matter was then placed in my hands. I may say that I think perhaps there are one or two others that may want to be heard on this question.

The CHAIRMAN. What are their names? Have we got them? Mr. BUTLER. The only one that I know of positively is Mr. Schirmer-Mr. Samuel M. Schirmer. He is an eastern man.

I want to say that this matter was placed practically in my hands yesterday, and I am not prepared to give you the information that it seems to me you should have. I judge from the questions that have been asked here this morning that what you want is information, and not opinions.

I intend to go home and prepare and file as quickly as I can get it ready a brief showing the cost of making iron in the different localities, showing the labor, and showing the transportation rates; and I intend, further, to get some information from abroad with reference to the same matter. I have already sent off two long cable messages, and when I get through I intend to do it conscientiously and fairly, and I will file my brief with the committee.

At the third meeting, which was held in New York on Tuesday (yesterday), there was official action taken which I will read; and I want to file this as a preliminary paper:

At a meeting of the pig-iron producers, held in New York on November 24, the following resolution was unanimously adopted:

"We recommend that ferro-manganese be placed on the free list, but that no change be made in the balance of the pig-iron schedule, believing that any reduction will be to the detriment of the manufacturing interests, the transportation companies, and the labor employed in the production of pig iron, coke, and iron ore."

Mr. GAINES. You want to file a brief, you say?

Mr. BUTLER. I am going to file a brief; and, as I have said, I am going to make it complete, and I am going to try to give you the information that it seems to me you ought to have in order to formulate this bill.

The CHAIRMAN. Does any gentleman wish to inquire about this resolution any further?

Mr. UNDERWOOD. I would like to ask you who you represent-what companies?

Mr. BUTLER. My particular company is the Brier Hill Iron and Coal Company, of Youngstown.

Mr. UNDERWOOD. And you say you have not the information to answer the questions we desire to ask you now?

Mr. BUTLER. I do not think I could answer them satisfactorily. I think I know pretty nearly what you ought to have, and I am going to try to get it for you.

Mr. CLARK. I think if you will get a copy of these hearings on this iron-ore business as they have been reported here, you can find out every phase of it, possibly, that you want to.

Mr. BUTLER. There are a lot of things that you already have in the way of statistics.

Mr. CLARK. I know; but they are not very definite, most of them.
Mr. BUTLER. I will try to make definite what I send you.
Mr. CLARK. I wish you would.

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