Mr. FORDNEY. I do not think I have ever met a man more thoroughly posted in the business in which he is engaged and who could give such detailed statement of the cost from the raw ore in the ground to the finished steel as Mr. Schwab. We took his testimony and are weighing it for what it is worth. Mr. Gary came here and gave testimony. I believe him to be a thoroughly honest man in the statement which he made. He gave his testimony to the best of his knowledge. You have referred to him as a very competent and a very-well posted man, and if I interpreted your Scotch story correctly, you intended to mean that he was a very "slick article? Mr. CARNEGIE. No, no. [Laughter.]

Mr. FORDNEY. Then, I stand corrected. I do not speak Scotch, but some man whispered in my ear that that meant in English "a very slick article."

Mr. CARNEGIE. Not the slightest. On the contrary, it means one of the most lovable and friendly natures. I can not explain exactly what it does mean. It means he is shrewd; it means that he is deeply interested and does not neglect number one, and yet it means that he has such a delightful and sweet nature, yet very shrewd. You have to examine closely what he says. [Laughter.] Now, that does not quite give it to you. But he is not an expert in steel; he has to get his figures from others; then comes in his powers of generalization, which tells him he needs no tariff on steel. Judge Gary had no intention of misrepresenting the conditions-

Mr. FORDNEY. No; I do not believe he did.

Mr. CARNEGIE (continuing). But I think it was the cleverest dodge I have heard of in pushing his weak brethren forward to invoke your sympathy for them and not on his account, not for the world, to forbear abolishing the duties on steel. He can stand it, but his poor brethren [laughter]; for their sake forbear. I have stated my honest opinion. Judge Gary makes the mistake of his life if he thinks that he can compete with his poor brothers without ruining his own company. The difference can not be more and I put it at the extreme-I do not believe that he can have $2 a ton profit on the few miles of railroad transportation, and beyond that he has nothing.

Mr. FORDNEY. I accept your explanation of what you meant by the Scotch story.

Mr. DALZELL. In your description of Mr. Schwab you forgot the very sweet smile which he always has.

Mr. CARNEGIE. He learned that from me. [Laughter.]

Mr. FORDNEY. After hearing Mr. Schwab and Judge Gary, and after hearing the other men in the steel industry, and now hearing you, and believing that each and every witness, including yourself, testifying aims to tell the whole truth and nothing but the truth, if this committee should form an opinion different from the one they would form if they heard your testimony only, would you criticise it?

Mr. CARNEGIE. Not the slightest; but you must remember that if you form an opinion different from what I have given you, that Judge Gary and myself are together; that Judge Gary expresses an opinion, but when he comes and you ask the question, "Can you do without a tariff on steel," he tells you, "Yes," and the President-elect says that tariff's no doubt enable a combination to exact excessive profits, and therefore we should have as little only as needed. Therefore, as a

good Republican, on the Republican platform, I hold it to be your duty to accept Judge Gary's statement.

Mr. FORDNEY. Do you think it only possible to form a combination on account of the tariff?

Mr. CARNEGIE. Why, certainly. On account of the tariff, yes; and raise the price of everything up to the point where the cost to the producer and the freights coming here, plus the tariff, $7, enables them to raise the price. I think the President-elect is entirely right

about that.

Mr. HILL. Is there not a steel-rail combination existing to-day in Great Britain, the United States, and Germany, fixing the price, where there is no tariff? I have asked that question of every man who has been on the stand, and I would like to ask you.

Mr. CARNEGIE. I must say to you that I am not conversant with international arrangements. I heard it stated by a witness who was before you-Mr. Miles but the proper party to ask that question of is the party that you think is in the combination. He could tell you. Mr. HILL. I have asked that question, but get no satisfaction. I will repeat this question: The official report of our consul in Great Britain says that the three greatest trusts or combinations in the iron trade to-day are the United States Steel Corporation, the German Steel Syndicate, and the International Rail Syndicate, which has its headquarters in London, controlling an output of some 4,000,000 tons of rails annually in the United States, Germany, and the United Kingdom. That was in 1905, if I am not mistaken. Do you know anything about such a combination controlling 4,000,000 tons or any other amount of steel rails in the United States, Germany, and Great Britain and fixing the price?

Mr. CARNEGIE. Mr. Hill, that is a question that you should ask of parties interested in it, if there be such a combination.

Mr. HILL. I was not here when Mr. Gary testified. I have asked that question of everybody else, and my recollection is that they all stated that they did not know of such a combination as our consul reported. Now I am asking you if you know?

Mr. CARNEGIE. I do not know. I have heard it stated. You have the evidence of Mr. Miles that there is an international organization, but I think it highly probable

Mr. HILL. But

Mr. CARNEGIE (interrupting). Wait a moment. I do not think, Mr. Chairman, that that is a proper question to ask me, is it? I am not in it.

The CHAIRMAN. If you do not know, of course you can say so; but if you do know, you can give the information.

Mr. CARNEGIE. Well, I would not be telling the whole truth if I said I did not believe there was such a thing.

Mr. HILL. Whether it exists or whether it does not exist, if it exists would changing the tariff here have any effect on the price of steel rails to the consumer if that price was fixed in London?

Mr. CARNEGIE. If that price was fixed in London and it was made permanent and the companies were bound by enormous penalties if they broke it, I would consider, as long as that existed, that it would of course prevent competition here.

Mr. HILL. I would like to supplement that question in regard to steel rails with the same question that I have asked of everybody ex

cept Mr. Gary, and I was not present when he was on the stand: Do you know of any combination that exists by which the price of tin plate is fixed internationally?

Mr. CARNEGIE. I do not.

Mr. HILL. Do you know of any combination by which the price of wire nails is fixed internationally?

Mr. CARNEGIE. I do not.

Mr. HILL. You do not answer with as much positiveness in regard to steel rails?

Mr. CARNEGIE. Because I have heard so much. I read Mr. Miles's testimony. Has Mr. Miles's statement been contradicted?

Mr. FORDNEY. He contradicted himself all the time.

Mr. DALZELL. It was not necessary to do that.

Mr. CARNEGIE. Please remember that I do not pose as an authority; that I speak absolutely without knowledge of any combination of that kind, and yet I would not tell you the whole truth if I did not say that I had heard it spoken of.

Mr. HILL. Then I will shape the question in this form: If the official statement of our consul is correct, and 4,000.000 tons of rails are controlled in the United States, Germany, and the United Kingdom by an international arrangement, would any change in the tariff affect the price here?

Mr. CARNEGIE. As long as they continued such an agreement as you specify, why, tariff or no tariff has no bearing upon it. But why do you ask me a question so obvious as that?

Mr. HILL. Because it does control, evidently, in Great Britain, where there is no tariff, just the same as it controls here, where there is a tariff of $7.80 a ton.

Mr. CARNEGIE. Great Britain is the great exporting country of steel. It does not consume the steel that it makes. It has relations all over the world.

Mr. HILL. Let me supplement that by this: You retired in 1901 from the steel business. The price of steel rails then was $28 a ton, as it is now. Was there any international agreement then, when you were in business?

Mr. CARNEGIE. Not that I remember of. Oh, I never heard of such a thing.

Mr. CALDERHEAD. If this tariff was removed, would it not be easier to form an international agreement or combination to maintain prices?

Mr. CARNEGIE. I do not think it affects the formation one iota. The American producer would get more favorable terms if he had a tariff than he would get if he had none; but the formation of a trust, Mr. Chairman, I do not know of anything that can prevent it if it be lawful.

Mr. FORDNEY. If I understood you correctly, you stated that you had read or heard of Mr. Miles's statement here, and you gave some credence to what he said?

Mr. CARNEGIE. I did. It is not likely that he would invent it.

Mr. FORDNEY. I am not criticising you for that.

Mr. CARNEGIE. I hope not.

Mr. FORDNEY. I do not believe that I ever heard a man deal more in theory and hearsay, lest it be one man, in my life.

Mr. COCKRAN. He stated some facts very clearly. He wanted his own article on the free list.

Mr. FORDNEY. You can question the witness as you choose, but I think I am right in my premises.

Mr. Carnegie, if we are entitled to give credence and to believe. what we hear from people who appear before this committee, hearing so many men on this subject, we are entitled to give credence, then, to the statements made by Mr. Schwab and Mr. Gary, who are thoroughly posted in the business that they are engaged in, are they not? Let me supplement that a little further. When Mr. Hill asked you a question about a combination, you stated, "You must ask a man who is engaged in it. I do not know anything about it. I am not in it." and you suggested that he ask a man in the business to get reliable information. If that is true in the case Mr. Hill asked you about, is it not also true in getting information from Mr. Schwab and Mr. Gary and you?

Mr. CARNEGIE. The case is different. Whether there is or is not a combination is a single question of fact. If you wish details then you need an expert. From partial statements of cost from interested parties none but experts are capable of drawing the right conclusion. [Laughter.]

Mr. FORDNEY. I may be far more incapable than I look. [Laughter.] · Mr. CARNEGIE. You can get honest men to take different views of questions. Now, one man will tell you that it will be very serious for the steel business if you reduce the tariff, and Judge Gary will tell you that it will not be. They deal so much with opinions that neither of them knows exactly what the future will be, and so with the cost; one concern will estimate cost in one way and some in another. The steel business is a business by itself, and the cost to one man means a very different thing from the cost to another.

Mr. FORDNEY. If we can not get reliable information as we are now aiming to get, how can we get it; can you tell us?

Mr. CARNEGIE. You ought to cease trying to get it. You have gone wrong in trying to get it. When a gentleman of Judge Gary's character comes to you and tells you that he does not need a tariff, you ought to believe him.

Mr. LONGWORTH. The Republican platform, which you have spoken of with admiration on this subject, says that we must revise the tariff on the basis of the difference between the cost abroad and the cost at home. If there is no way of ascertaining that cost approximately, is not that a rather bare statement in the platform?

Mr. CARNEGIE. Yes, sir; and it requires a man practiced in the art, interested in neither, to estimate the cost upon the same systems, and, as I have stated, from the best judgment I can form, if a commission were appointed and spent a month in the mill that now holds the record for the cheapest steel made in the world, and that is ours, the Carnegie Steel Company, and a month in the foremost works of England or Germany, you would find that the difference in cost, estimated in the same form, every company credited only with the outlay required, including transportation of the ore, mines, and everything there is, and the same to the foreign manufacturers, you will find that the foreign manufacturer's cost of steel at his works exceeds slightly-I should say, will be the same. You can not do this offhand; it needs time; for during the month one mill might be run

ning finely, and at the other mill there may be some trouble, and vice versa, or the one running full, the other only turning out half its usual amount. The cost at the foreign mill is equal to the best mill in this country, and that leaves a natural tariff between the two, the transportation here, and the many disadvatages under which a foreign manufacturer labors in selling a foreign product to a patriotic American. Therefore, I have stated to Mr. Cockran, perhaps to his great disappointment, that my judgment is that we could start with free trade to-morrow and it would not seriously affect the price, but it would give the combination here the power to raise the price to the consumer to the amount of the duty imposed.

Mr. BONYNGE. If we put steel products on the free list, the present price to the consumer would practically be maintained, in your judgment?

Mr. CARNEGIE. No; I think that the tendency of combination is to raise prices and to exact from the consumer what they safely can.

Mr. BONYNGE. But as to steel rails, I understood you to say, in answer to Mr. Cockran, that you believed the price of $28 would be maintained; if steel rails were put on the free list, that the price would be maintained.

Mr. CARNEGIE. Excuse me; I did not say that the price would be maintained, but I do say that the present arrangement is a fair one, in my judgment, between the consumer and the producer. Let me show you the difference. If there is no tariff, the combination comes together and fixes a price, and it will fix a price lower than if there is a tariff. I think you will agree with me that the tendency of human nature is to get a good profit.

Mr. BONYNGE. Certainly.

Mr. CARNEGIE. And that the tariff would enable them to raise the price to the extent of the duty.

Mr. BONYNGE. But you do not think that the price of steel rails has been raised above what it should be at the present time, $28 a ton? Mr. CARNEGIE. Steel rails-I say, I think that the railways are not paying too much for steel rails, and I think that the steel-rail mills are making a fair profit.

Mr. BONYNGE. How about other steel products besides steel rails; what about the other present prices; are they above what they should be structural steel and other steel-do you know?

Mr. CARNEGIE. I do not. I have not a word to say about the price of anything. That is not my province. I came to give you my views of what the effect would be of taking off the duty.

Mr. FORDNEY. When Judge Gary stated, as you put it--I will tell you my recollection of what he said when we get through--when Judge Gary said they could get along without protection on steel, we could believe him?

Mr. CARNEGIE. Yes, sir.

Mr. FORDNEY. Judge Gary in making up his figures of cost showed a profit on steel rails, Bessemer and open hearth rails, the difference in cost-that is to say, the difference in price-showed a profit to his company of $4.69 a ton. Would you have us believe him?

Mr. CARNEGIE. I would have asked him to explain that statement. Mr. FORDNEY. He did, in the most detailed manner.

Mr. CARNEGIE. Very well.

Mr. FORDNEY. Do you regard one statement as inconsistent with the other?