New-York tribune., 1909-01-30
TELL OF T. G.. AND I. DEAL
q. ". PERKINS THINKS 1T
CHECKED PANIC.
Did Not Help His Company, Oak
leigh Thorne Says Stock Held
By Syndicate.
TFrom The Tribune Bureau

! ident of the Trust Company of America and
George ". Perkins. Of ]. P Morgan & Co. in
/ the inquiry into the facts attending the alb
sorption of the Tennessee Coal and Iron Com
! pany by the United States Steel Corporation
to those engaged in the inquiry
Mr.. Thorne testified that his COMPANY had
| lent S4S2, 700 the stock of the Tennessee
! Coal and Iron Company at 90, and that he him.
| self held 5000 of the 1880 shares owned by
! the syndicate organized to hold the stock of
! that company, but that neither his bank nor
| himself was interested in the merger, and that
! he knew nothing of it until it had been all ar
| ranged for. He did not think that the merger
had any appreciable effect on the financial
| standing Of the trust company. He said that
| the majority of the stock of the Tennessee COM
| pany was controlled by syndicate of which
| Grant 3. Schley and Leonard Hanna were the
| managers.
! Mr. Perkins said he thought the merger had
an excellent effect the financial situation He
| said the Steel Corporation was reluctant to alb
| sorb the Tennessee company, both because of
the high price of the latter's securities and the
| criticism which it feared would follow Mr.
! Perkins received word by telephone that there
| would be opposition by the government from
! Judge Gary, who had been in conference with
! the President
Mr.. Perkins was unable to remember most OF
! the details asked by the committee and had
brought no notes with him He was pressed to
! disclose the concern which held the majority of
| the stock of the Tennessee company or to de-
scribe II. He thought it ought not TO be called a
| firm, and he did not like the term corporation.
| Finally he described it as IAN association of in
| divduals"
| MR. THORNE HEARD FIRST.
The examination of both witnesses was con-
Quoted by Senator Cuberson Mr.. Thorne who
| first took the stand said that the loan OF S4S2-
| 700 made November 1. 1907, to six indi-
| viduals collateral. All these loans were paid
off in November with the exception OF two Of
| $4,000 each. MIR. Thorne said he considered the
| security for the loans absolutely good.
Senator Culberson asked Mr.. Thorne whether
| he knew of a syndicate which owned the con-
| trolling interest in the Tennessee Coal and Iron
| Company IN the fall Of 1907. He replied that he
| did. and that he member Of that syndi-
| cato. but had bought his stock and Withdrawn
it. and therefore not familiar with the syn
dIeate's operations. Tae names or the original
syndicate managers were given as Grant B.
| Schley and Charles Guthrie. Leonard Hanna Of
! Cleveland, took the place Of Mr.. Guthrie after
| his death. This syndicate declared Mr.. Thorne
| owned majority OF the stock of the Tennessee
/ company. In addition TO naming Messrs Schiey
| Guthrie and Hanna as being interested In the
| syndicate. Mr.. Thorne mentioned John w Gates
| E. J. Berwind and H s. Black.
When asked If he had any personal knowledge
OF the actual sale of majority of the stock of
| the Tennessee company in November, 1907 Mr.
! Thorne replied:
"All I know is that I delivered my stock to
J. P. Morgan & Co. and got receipt for it"
Senator Overrnan asked Mr Thorne f. at the
| time of the merger. the Trust Company OF
! America financially embarrassed and. if so,
whether the merger had tendency to relieve
! the embarrassment.
| Mr.. Thorna replied that 1t had direct bear
ing on either himself or the company. but as it
! assisted the general situation naturally 1t
! sisted his institution.
Mr. Overman inquired IL he his institution
would have been embarrassed If the merger had
| not been made and Mr.. Thorne replied: mo.
I don't think it made any difference in that
! line"
At the time the syndicate to control the Ten
| nessee Coal and Iron Company was formed said
| Mr. Thorne the syndicate price was $11O a
| share but It's market price was 80, and 1t went
! I'D TO 12S. Mr.. Thorne testified that when the
| Tennessee companys stock surrendered the
| owners received in return United States Steel
! 3 per cent bonds the basis of 119 PAR value
! for each share Of the stock of the tennessee
| company The Steel Corporation bonds were
| quoted by Mr. Thorne being worth nom ~
| m "a AT the time he received them, and being
worth now between 102 and lob.
MIR PERKINs's TESTIMONY.
| When Mr.. Perkins took the stand he was asked
70 state any knowledge he had Of the absorption
| 80 III. Tennessee company by the United States
| Steel CORPORATION, and he said:
! The question Of the acquisition OF the Ten
| nessee Coal and Iron Company by the steel
| or-,oration was never brought up or broached
| T., on,, vyav so far as my knowledge goes. until
n-bans the second or third acute stage OF the
| nan,c developed In New York, and then IT came
| ,o worry suddenly because of the panic and very
| serious disturbance that existed in New YORK
as the result of the great depression In the mar
ket value OF things and the unmarketab1lity OF a
| great many securities.
| Mr. Perkins said there was general ieeliiis'
which it would be difficult for any one 10 eH-
nrass in a concrete statement, that II the len
| nessee Coal and Iron stocks taken out of
various loans in some way it would prevent a
great many failures and avert a further spread
| of the panic Continuing, he said:
| "Of course at that time almost every one III
| Ney York was using their resources in every
| a,rec+,on TO allay the panic and some one-1
| 5on,t know that 1 know who-made a suggestion
| that the steel corporation was the one that
| tight take these particular sc -urities and re-
| Iieve that part of the situation remember IL
uas discussed as to whether cash could be pro-
| idsd or whether It could not, and how 1t might
no done Finally some one made suggestion.
| b;cb afterward worked out that the corpora
tion might furnish its per cent second mort
| 80 bonds in lieu of cash, and in this way put
| a, Han Of these loans securities that were mar
| ketable." , =,
The panicky feeling as to the depression III