Tuesday, June 28, 2011

Upcoming Smith Report to Show Extent of Steel Trust

It is expected that on Saturday, President Taft will submit a report to Congress by the Commission of Corporations, Herbert Knox Smith, on the extent of the Steel Trust and its effect on the steel industry. The expansive report is the culmination of a 5-6 year investigation conducted by the Bureau of Corporations.  The Washington Times suspects that the timing of the report's publication and submission to Congress is intended to allow it to share some of the public credit for dealing with the massive corporation.

According to the Times, the report will detail the business practices of the $1.4 Billion trust, how it has stifled competition within the steel industry, and how it has affected related industries such as coke, railroad transportation, and cement.  For example, the steel trust has bought up cement companies in order to prevent it from seriously competing against steel as a building material.  The Times compared this to the buying up of the beet sugar industry by the Sugar Trust.

According to the report, the Steel Trust was formed by a collection of iron, steel, coke, coal, and railroad companies that were combined by J. P. Morgan at the request of the owners of those companies.  Faced with intense competition from Andrew Carnegie who planned to build his own railroad to the Atlantic tide line, which would have made his Carnegie Steel Company as powerful as US Steel is today.  Carnegie would sell his company to US Steel in 1901.

Link: Steel Trust Mightest of All Combines [The Washington Times]
Link: Report of the commissioner of corporations on the Steel industry [Google Books]

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