Mr. CARNEGIE. Yes; but you are pursuing the wrong policy. Mr. CARNEGIE. You are on the wrong track altogether. [Laughter.] The CHAIRMAN. I may be. My only endeavor is to find out the truth, to get it from you. I hope you will not discourage me in saying that I am on the wrong track in that. Mr. CARNEGIE. Listen to me a minute. Does any foreign country send rails here? The CHAIRMAN. Not to any extent, I think. Mr. CARNEGIE. No. The CHAIRMAN. There is a small importation, I think, every year, a very small importation; nothing to count at all. It is prohibitive now, so to speak. Mr. CARNEGIE. Very well. The CHAIRMAN. That satisfies you on that, does it not? The CHAIRMAN. But we have a pretty big duty now. Mr. CARNEGIE. You have $7 a ton. The CHAIRMAN. Seven dollars and eighty-four cents. - The CHAIRMAN. Yes. Mr. CARNEGIE. Seven dollars a ton is the duty. We go by net tons. I do not care how you fix it. The CHAIRMAN. I suppose they bring in a gross ton here when they bring them in. But there is no dispute about the duty; that undonbiedly is a strong factor that keeps them down. Our people, when they sell abroad, sometimes run up against about the same duty, and sometimes they pay a duty to get their steel rails into that country, but the bulk of it goes where there is open competition with Great Britain and Germany. That is the fact. Mr. CARNEGIE. The very year you speak of there we shipped abroad 345,000 tons to different countries, and we met German competition and English competition. The CHAIRMAN. But the German competition got away with more of the market than our people did. Mr. CARNEGIE. Because our people had a good home market. We consumed 22,500,000 tons of steel in our country, leaving about. 500.000 tons to be exported. The CHAIRMAN. And if Mr. Felton is right, they had to sell it at less than the cost in order to get it there. Mr. CARNEGIE. Yes. The CHAIRMAN. Mr. Felton is a high-toned man, is he not? Mr. CARNEGIE. I think he must be very high toned; yes. [Laughter.] The CHAIRMAN. You are speaking of it in a joking way. The CHAIRMAN. Mr. Felton made a very good appearance before the committee. I never had the honor of his acquaintance before that. Mr. CARNEGIE. Mr. Chairman, if the Pennsylvania Steel Company The CHAIRMAN. He is the president of the Pennsylvania Steel Company? Mr. CARNEGIE. Yes. That was in business before the Carnegie Steel Company. The CHAIRMAN. What is that? Mr. CARNEGIE. It was in business making steel before the Carnegie Steel Company started. It shows the grossest mismanagement if his cost is $26.50 per ton average, but his statement may be based upon a short period of production during dull times-products probably not one-half the average. This would bring cost very high. Let him show you his book cost for five years past. His statement without period may mislead you. The CHAIRMAN. I understand his concern is a very old concern. I do not know how long they made steel. Mr. DALZELL. He says it was in business before his concern. The CHAIRMAN. You say it was? I thought you asked me if it was. Mr. CARNEGIE. I will try to be plain. The Pennsylvania Steel Company was in business before the Carnegie Steel Company was built, and if at this day it can not make steel as cheap as its competitors, whose fault is it? The CHAIRMAN. Well, at first blush, I should say it was the fault of the management of the company. I might not be right about that; that would be a surface view. If I examined into it more, I might find out that there were some other difficulties, like location. It seems to me they have to carry their iron and coal, and I do not know but their limestone, quite a distance to get it to their works. Mr. CARNEGIE. Assuming that they made a wrong location, do you think that the Government of the United States is compelled to take hold of every corporation that has made a mistake? The CHAIRMAN. I made a proposition similar to that the other night about tannin extracts, and I did not know but I should be mobbed by the gentlemen who were presenting the question-whether they had not a bad location. Mr. CARNEGIE. I have asked you a question. [Laughter.] The CHAIRMAN. I have answered that question as freely as I know how. Mr. CARNEGIE. I refer it to the court if he answered my question. Shall I repeat it? [Laughter.] The CHAIRMAN. Now, Mr. Schwab says that the freight rates in 1899 were about one-third of what they are to-day, and he referred to Mr. Carnegie's article on rebates for proof. Mr. CARNEGIE. I am delighted he referred to so high an authority. [Laughter.] I do not remember; I do not understand what bearing this has. The CHAIRMAN. But if the article bears him out, of course there could not be any doubt about the truthfulness of the statement? Mr. CARNEGIE. What is the statement? I do not grasp your meaning. The CHAIRMAN. I say, if the article bears out his statement, there would not be any chance for dispute as to its truth. Mr. CARNEGIE. Well, sir, Mr. Schwab may have quoted a sentence or a paragraph, omitting facts and what it was dealing with, and he would give you a very false impression. The CHAIRMAN. Certainly. I said if the article bore him out. I did not say if a sentence in it could be twisted. Mr. CARNEGIE. That is such a large subject, I would like to read the article and see really what bearing it has. If I wrote it, I am disposed to believe it was a very sound article. [Laughter.] The CHAIRMAN. Mr. Schwab said that Mr. Gary's company was taking out about one-fourth of the ore on the property that they bought from Mr. Hill. Mr. CARNEGIE. I think you must have misunderstood him there. From my knowledge, what I hear, they have not shipped one load of ore. The CHAIRMAN. He understood it the other way; he did not claim to have personal knowledge of it. Mr. CARNEGIE. I think if you want to test Mr. Schwab's statement and mine, it would be very well to get somebody to ascertain what is correct about it. The CHAIRMAN. He was stating what he believed and you are stating what you believe, and one statement seems to offset the other. I think it is up to the committee to get a little more evidence on the subject to find out about it. Mr. CARNEGIE. Yes, sir. The CHAIRMAN. I agree with you on that. I did not know but you would confirm what he said. He said that the cost of coal land was $600 per acre in 1899 and $3,000 per acre now. Mr. CARNEGIE. Yes, sir. land. There are 9,000 tons it has increased to 30 cents. now it is $3.000? The CHAIRMAN. Yes. Now, let me answer that. That is coke of coke in an acre, and that means that What did he say it was, $600 then and Mr. CARNEGIE. That is five times the amount. The CHAIRMAN. He said that that was in the Connellsville district. Mr. CARNEGIE. Yes, sir; five times the amount. Five times the amount of $600 is $3,000. That means that the coke in the hill is now worth only 30 cents a ton, and then, in the olden times, when we bought coke property, it was 15 cents a ton. I think I am right—no, $600 for 9,000 tons. The CHAIRMAN. He said that the coke costs $1.50 a ton. Mr. CARNEGIE. I do not know what coke is costing to-day. The CHAIRMAN. And that the freight rate to Pittsburg is 85 cents. He qualified that and said he might be 10 cents out of the way on that, 75 or 85 cents a ton. Mr. CARNEGIE. Then, if he is 10 cents out of the way, the coke rate used to be 65 cents a ton, and it has been raised 10 cents a ton, and coke has been raised 30 cents a ton, that is 40 cents, and so, on the amount needed to make a ton of pig iron, you see, gentlemen, what figures you get. You take the conclusion that because the coal in the hill costs five times more; coke costs five times more. The CHAIRMAN. Mr. Schwab ought to know what coke costs. Mr. CARNEGIE. No, Mr. Chairman. You gentlemen, if you consider that you can possibly understand these figures, it is your fault as much as Schwab's. You read into his statement there of cost five times the ton of coke and begin to figure: What he told you was five times the cost in the hill, and that made a difference of 30 cents a ton. The CHAIRMAN. Well, he said $1.50 a ton. I do not know how we could construe that into anything else. Mr. CARNEGIE. That is when the coke is manufactured? The CHAIRMAN. Certainly. Mr. CARNEGIE. That is a very different thing. The CHAIRMAN. Cost of coke, $1.50; not for coal in the mine; I said for the coke. Mr. CARNEGIE. Mr. Chairman, if a ton of coke costs only $1.50 to-day, and that is five times more than it did cost, then coke only cost 30 cents a ton. It is ridiculous. The CHAIRMAN. I did not say anything about that. Mr. FORDNEY. He did not say that. Mr. CARNEGIE. That is what the chairman read here. The CHAIRMAN. He said coal lands, $3,000 an acre. I did not imagine you would carry that to the coke. Mr. Schwab said coke cost $1.50 a ton. Mr. CARNEGIE. Then, there is not much expense there. The CHAIRMAN. Then, you do not see anything on the face of that that would show it was not true? Mr. CARNEGIE. No; although I have heard of coke lands selling at $2,000 an acre. The CHAIRMAN. Coal land in the Connellsville district, $2,000 an acre. Mr. CARNEGIE. Gentlemen, if you were in the business, experts talking The CHAIRMAN. Even I would know enough to know that you did not mean $3,000 an acre for coke. Mr. RANDELL. He means coke coal. Mr. CARNEGIE. Mr. Schwab is talking as a Pittsburg manufacturer. Coal is one thing; coke is another. The CHAIRMAN. So I am aware. Mr. CARNEGIE. And the coal lands, increasing to $3,000 an acre from $600, would make a rise in the price of coke to 30 cents a ton. Mr. DALZELL. I think the misunderstanding is here, Mr. Carnegie. Mr. Schwab gave us the cost of coke at the time that he made his original estimate of $12 steel. Then he gave us the cost of coke at the present time; and then, to explain the reason why the cost of coke had risen in the meantime, he said that lands have gone up from $600 to $3,000 an acre, but he is $1,000 out, because I know coal lands in the Connellsville district are selling now at $4,000 an acre. Mr. CARNEGIE. Then that would raise the price of coke to 30 cents. Mr. DALZELL. He did not base the exact figure of rise on the different prices. The CHAIRMAN. He did not say it would cost five times as much; he said it was one element in the rise of coke. Mr. CARNEGIE. Gentlemen, when you analyze that and get its true basis it would account for an increase of 30 cents per ton in coke. Now, let me show you. What has that to do with a concern that has thousands of acres of coke that it bought at $200 and $300 an acre? The CHAIRMAN. It has this to do; we are trying to arrive at the cost in American factories of steel rails. That is one of the elements that goes into it; and trying to show why those rails-he was, not we; we are simply taking the facts-trying to show why those rails cost $22 now against $12, as he stated, in 1899. Mr. CARNEGIE. Yes, Mr. Chairman; but suppose that the United States Steel Company has 40,000 acres of coke land? The CHAIRMAN. We are talking about the Bethlehem Company; is that part of the United States Steel? Mr. CARNEGIE. Certainly. Mr. DALZELL. Not a part of the United States Steel Company? The CHAIRMAN. That is not a part of the United States Steel Company, is it? Mr. CARNEGIE. Oh, no. The CHAIRMAN. It is an independent company, as I understand it. Mr. CARNEGIE. Yes. The CHAIRMAN. We are talking about Mr. Schwab's production; we have left Mr. Gary. Mr. CARNEGIE. Very well. Mr. Schwab's coke costs him more than it did if he purchases his coke from a producer. The CHAIRMAN. He does not own coal lands? Mr. CARNEGIE. The Bethlehem does not. The CHAIRMAN. So they have to buy their coal? Mr. CARNEGIE. Certainly. The CHAIRMAN. Then he ought to know what it costs him, ought he not? Mr. CARNEGIE. What he buys it at; yes, sir. The CHAIRMAN. We will go a step further. He says that in 1899 a ton of coke would make a ton of pig iron, but since the iron in the ore has gone down from 58 per cent to 49 per cent on account of the other foreign material in the ore, it requires a ton and a quarter of coke to produce a ton of ore instead of a ton of coke. Do you know anything about that? Mr. CARNEGIE. I should think that is quite understandable, but did Mr. Schwab tell you that in utilizing the gases of his furnaces, which he did not do before, he makes a great saving? Mr. CALDERHEAD. I do not think he did. Mr. CARNEGIE. You know, gentlemen, the steel business has not stood still. Great improvements, cheapening the process, have resulted. Another instance occurs to me. The United States Steel Company is now utilizing the slag from making a ton of pig iron that we used to throw over the bank, and it cost us money to haul it away; but now that is a very valuable business, very profitable. The CHAIRMAN. How much slag is produced in making a ton of pig iron? Mr. CARNEGIE. I could not tell you that. The CHAIRMAN. Can you give us any account of the value? Mr. CARNEGIE. Of the slag? It was an expense. We threw it over the bank before. The CHAIRMAN. You say now it is valuable? Mr. CARNEGIE. Yes; it is. The CHAIRMAN. But you can not say how valuable it is? Mr. CARNEGIE. I would be afraid to tell you what I heard the president of the subsidiary company estimate it at. The CHAIRMAN. I wish you would tell me. I will go after the president and find out, not whether he told you, but the statement of fact on his part. |
