Mr. REED. Connellsville.

Mr. CARNEGIE. At Connellsville, which is in the Pittsburgh region.

Mr. GARDNER. You would be getting your coke in trains which in their northward trip would be full, and on their southbound trip would be empty?

Mr. CARNEGIE. Let me explain.

We had a great many blast furnaces at Pittsburgh, to which we had to take ore, you understand?

Mr. GARDNER. I see. So that you would have a full trip for the cars both ways?

Mr. CARNEGIE. Yes. We balanced the coke and the ore.

Mr. GARDNER. I see the idea. You would haul your coke north to Conneaut, and you would haul your ore for your blast furnaces to Pittsburgh?

Mr. CARNEGIE. Yes; and therefore the coke for Conneaut would cost us nothing, practically, for hauling.

Mr. GARDNER. I get the idea exactly. The transportation of it was so much clear gain, because you had to pay 11 cents, anyway, for those cars to return. Is that the idea?

Mr. CARNEGIE. Yes. And therefore we saved so much. We got our coke delivered at Conneaut for 11 cents, and we got our ore delivered at Conneaut a great deal cheaper than at Pittsburgh.

Mr. GARDNER. I see. You had a full trainload coming back, instead of having an empty train coming back, for which you would have had to pay 11 cents, anyway?

Mr. CARNEGIE. My dear sir, the railroad had to be maintained, whether the cars were going up empty or not. Do you get that point, Mr. Chairman?

The CHAIRMAN. All of them, and then some.

Mr. GARDNER. I think I understand that; but I do not think you understand my question that I asked you a while ago. I think your counsel will explain.

The CHAIRMAN. As I understand, your road had to be maintained? Mr. CARNEGIE. Certainly.

The CHAIRMAN. The same number of cars had to be run?

Mr. CARNEGIE. Certainly.

The CHAIRMAN. You had in each train a certain number of empty cars, and the only real additional cost, then, was the train service for moving these empty cars along with the other cars that carried ordinary freight. Is that it?

Mr. CARNEGIE. It was all clear profit. The railroad expenditures, the interest, the deterioration of the railroad, and all that was the same. But if you hauled an empty train north to Conneaut it cost you for service 11 cents, because the locomotives used a little less fuel hauling empty cars down than it did hauling loaded cars up. The CHAIRMAN. I see. At that point, realizing these great advantages, you did not talk about that? That was not generally known, was it?

Mr. CARNEGIE. We did not publish it in the newspapers. [Laughter.]

The CHAIRMAN. It was not possible that Mr. Morgan or any of these people who owned the steel corporation ever knew that you had these big advantages, and that you had already got a site for that plant, was it?

Mr. CARNEGIE. I would not say what they knew.

The CHAIRMAN. Was anything ever said about this great steel plant that you were going to build and the tremendous advantages you had?

Mr. CARNEGIE. We bought the land, and that was known. The CHAIRMAN. And you knew what you were going to do? Mr. CARNEGIE. Yes; indeed we did. [Laughter.]

The CHAIRMAN. There has been some intimation that, even with your sanguine temperament, and your long experience, that the Carnegie works, like Napoleon at Waterloo, were face to face with a combination so extensive, manned by men so experienced, and sustained by resources so tremendous, with Judge Gary, for instance, in the Federal Steel Co., with Mr. Gates in the Steel & Wire Co., and with Mr. Morgan as godfather and titular head, that with their organization outside of the Carnegie Co. possessed sufficient power to have made it no longer interesting for you to have continued in the steel business; and that perhaps you escaped destructive competition by retiring from the field.

Was it possible for the Carnegie Co. to have met these combined forces?

Mr. CARNEGIE. Nonsense. [Laughter.] Why did Morgan send word to me that he would like to buy me out?

The CHAIRMAN. I understand that he was uneasy about the condition of your health, and gave that as a reason.

Mr. CARNEGIE. I was still able to take sustenance. [Laughter.] Mr. BARTLETT. And you were able to take notice, too, I think. Mr. CARNEGIE. There is a different story than that. But do not

let us go into that. That is a good joke. Ask Schwab about that.

Mr. YOUNG. One gentleman expressed it in this way: He said that these gentlemen who organized the Steel Corporation were about to make a very fine plum pudding, and that they ascertained that Mr. Carnegie had all the plums. [Laughter.]

Mr. CARNEGIE. Gentlemen, it is a great pity that they approached me and asked if I would retire from business.

I had formed my career, and laid down the law to myself that I would not spend my old age in accumulating more dollars. I showed that when we got the offer of $320,000,000 for our property, and when Mr. Schwab came and sat down and showed me what he thought I could get, I said: "Schwab, it is just as my partners say. That is entirely satisfactory to me. It is all the money I ever want to make."

I did not realize then so fully that it takes a great deal more anxious thought and labor to distribute money wisely than it ever did to me to make it.

I do not like to be called a philanthropist. That means a man, usually, with more money than brains.

You can do more harm distributing money unwisely, and do more to pauperize people than you can do good, almost, in trying to assist them.

CHAPTER VII

FACTORS' AGREEMENTS

NOTE

THE general aim and purpose of factors' agreements is too well known to require any extended consideration by the editor. They may like pools be established with a variety of purposes in view. Primarily their object is to fix prices. But they may be readily used to suppress competition by requiring that the factor shall not deal in the goods of a competitor. Other objects may come within the scope of the agreement as is shown by the exhibits following. The Dr. Miles Medical Company decision, excerpts of which have been made a part of this chapter, dealt a severe blow to the factors' agreement. Hereafter it will probably prove a somewhat emasculated device for the furtherance of combination and consolidation, and the limitation of competition.-Ed.

EXHIBIT I

TABLE AND STAIR OIL CLOTH ASSOCIATION 1

This agreement made this......day of......one thousand eight hundred and eighty-seven, between. ....of the city of

State of..... .., party of the first part, and the Table and Stair Oil-cloth Association, party of the second part, witnesseth: First. That the party of the first part will, during the continuance of this agreement, on or before the tenth day of each calendar month, and beginning on the 10th day of July, 1887, make and render to the commissioner of the party of the second part an accurate statement of all goods of......own manufacture, of the character specified in schedules "A and B", hereto annexed, sold and shipped by the party of the first part during the preceding month, which statement shall contain the names of the persons to

1 Report of the Senate Committee on General Laws on Investigation relative to Trusts, N. Y. Senate Document, No. 50, 1888, pp. 609-617.

whom the sales were made, and the amount of each kind of goods sold to each purchaser; such statement shall be verified by the oath or affirmation........of the party of the first part, and some employe of......having knowledge of the facts, and there shall be incorporated in such verification a statement that the party of the first part has not made any sales at lower prices or on better terms than those permitted by this agreement. Such statement and verification shall be made on blank forms to be furnished by the party of the second part, and shall conform to the requirements ot such blanks.

Second. That on or before the fifteenth day of June in each year, the party of the first part will pay to the party of the second part twenty-five cents for each and every piece of goods of...... own manufacture, except goods specified in schedule "C", hereto annexed, sold by......during the preceding six calendar months, and on the fifteenth day of December in each year twenty-five cents for each and every piece of goods of..... ....own manufacture, except goods specified in said schedule "C", sold by......during the preceding six calendar months. But it is expressly understood and agreed between the parties hereto that if any dividend or debt duly audited shall be payable from the party of the second part to the party of the first part, the amount thereof shall be offset against the payment above provided for and that, if after such offset, there shall be a difference in favor of one party as against the other, only such difference shall be paid in cash. For the purposes of this section, forty-eight yards in length of shelf oil-cloth, and thirty-six yards in length of stair oil-cloth, and twelve yards in length of table oil-cloth shall constitute a piece.

Third. The party of the first part further agrees that...... will keep full, true and accurate books of account of all goods of the character specified in said schedules "A", "B", and "C", and of all such goods sold and delivered by......during the continuance of this agreement, including the prices and terms of such sales, and that......will at all times permit the commissioner of the party of the second part, to have access to such accounts and to all mercantile books and papers, relating to this business of the party of the first part, for the purpose of comparing such books and papers with the reports or statements made by the party of the first part to said commissioner, or for the purpose of discovering whether the party of the first part has violated or evaded any of the covenants, 1 Thus in original.-Ed.