On the question of interlocking directorates the majority of the Stanley Committee expressed their grave apprehension of its menace to the country and pointed out that the Corporation, through its directors, had representation on the boards of railroads capitalized at $10,265,000,000; banks and trust companies whose capital, surplus, and undivided profits aggregated $3,315,000,000; industrial concerns capitalized at $2,803,509,000; and express, steamship, and terminal companies capitalized at $2,272,000,000.
Finally, the committee demanded that the railroads owned by the Steel Corporation be segregated from it as a matter of public necessity, the ownership of these roads giving the Corporation a great advantage over competitors.
A minority report, signed by Augustus P. Gardner, Henry G. Danforth, and H. O. Young, concurred with the main report in some particulars but suggested that the majority had singled out incidents to bolster up its arguments without regard to their relative unimportance, the result being an overdrawn picture of the iniquities claimed to have been perpetrated by the Corporation. While the second report unequivocally condemned the organization of the Corporation as an attempt by the Morgan interests to eliminate competition against the steel companies in which they were concerned and to do away with the ever-present menace that Andrew Carnegie was supposed to be, it said that the actual control of the actions of the great combine had been put into the hands of “exceedingly competent, although perhaps not altruistic, managers who have subsequently made it a success.”
The minority report also pointed out that significant fact that the price of steel, as based on a representative list of products, had declined from $38.80 a ton before the Corporation was formed to $36.11 in 1911.
Finally, the minority members did not favor the dissolution of the Corporation, merely contenting themselves with the suggestion that it be put under Federal control. Incidentally, such control over all corporate activities has been frequently urged by Judge Gary, head of the Corporation.
This did not end the list or reports as Representatives Young and Littleton each appended his personal views, both of which were favorable to the Steel Corporation in many respects.
A year or more after the presentation of the Stanley Committee reports some interesting events calculated to throw a new light on the causes that led to the inception of the investigation transpired. A man known as David Lamar (an assumed name on his own confession), one who bore so unsavory a reputation in financial circles that he was styled “The Wolf of Wall Street,” came forward with the assertion that he himself had written the Stanley resolution for investigation and had used it, or attempted to do so, as a club over the heads of the Morgan interests. This failing, he had sent the resolution to Stanley through Henry B. Martin, secretary of an association called the Anti-Trust League, and the Kentucky congressman had introduced it into the House.
Lamar’s story was confirmed by Martin and by Edward Lauterbach, a New York lawyer. It was followed by a denial on the part of Stanley who pointed out that the resolution was offered originally by him in 1910, a year before the time of its passage upon its second introduction, whereas Lauterbach had said that Lamar showed him the resolution in 1911. The record of the Senate committee which heard the Lamar evidence, however, shows that Lauterbach stated he had seen the resolution as early as 1908, or thereabouts, and that he thought it had been offered to the House in 1910. Upon a suggestion from a senator, who apparently was not cognizant of the fact that the resolution had been presented unsuccessfully a year before its passage, that it did not come before the House until 1911, Lauterbach corrected his date. Under the circumstances this correction was natural, although the original testimony was the more reliable.
However ignorant Stanley might have been of knowledge of Lamar’s authorship of the resolution, and however sincere his motives in bringing it before Congress, the connection of “The Wolf of Wall Street” with the matter, which seems fairly conclusively proven, was in itself sufficient to give a sinister aspect to the whole investigation, to suggest that its inception was the result of base motives.
Following the Stanley investigation came the Government’s Steel dissolution suit. That the one grew out of the other is easy to believe. In fact, it would be difficult to think otherwise. The United States Steel Corporation had been organized, had done business, and prospered under successive Republican administrations. It had been investigated by the governmental departments charged with such work but these had failed to find sufficient evidence to warrant the bringing of a suit against the big company. The Stanley resolution was passed by a House controlled by a Democratic majority and the measure had been applauded by a large body of voters who had been taught to believe by their political advisors that all big business was necessarily evil. The Republican Party was facing grave danger of defeat in the coming elections of 1912 and the advantage the investigation had gained for the Democrats among the class of voters referred to could only be offset, it seemed, by a political “grand-stand play” of the same nature. Here, again, we come to a question of motives, but all the evidence obtainable seems to show that this was at least one of the reasons why, on October 26, 1911, the Attorney-General for the United States, George W. Wickersham, caused to be filed at Trenton a suit for the dissolution of the United States Steel Corporation.