The Topeka state journal., 1909-02-22
Subcommittee Investigating the
Famous Steel Merger.
Files Its Report With the Full
Judiciary Committee.
AUTHORITY EXCEEDED
By President Roosevelt in the
Matter, 1t Holds.
Action May Lead to Prosecution
of the Trust.

Washington, Feb. 22-By a vote of |
three to two, the subcommittee of the |
committee on judiciary, which has
been investigating the merger of the |
Tennessee Coal and Iron company
and the United States Steel corporation
has decided to report to the full COM
mittee that the president was not
authorized to permit the absorption.
The committee found also that Presf-
dent Roosevelt was equally unauthor-
lied to direct the attorney general not
to interfere with the merger and not
to enforce the federal statutes against
| it. 1t was decided also that as both
companies were engaged in interstate
commerce, the absorption was in viola
| ton of the Sherman antitrust law. 1t
was found that the effect and purpose
of the absorption were to monopolize
| the iron supply of the country and
generally to eliminate the Tennessee
| company as competition of the Unit
| ed States steel corporation.
The fact that such a report was to
| be made created CONSERVATION in the
senate. 1t was realized that if the full
| conn mittee subscr1bes to the finding OF
the subcommittee the effect would be
to administer the seyerest of rebukeS
| to President Roosevelt and practically
| direct the attorney general to- bring
proceedings against the steel corpora
ton under the Sherman law. Leaders
| in the senate make no secret of the
fact that they are unwilling to go that
ifar. Under these circumstances, the
full committee when ii meets probably
/ will decide to consider very carefully
the possible effect of the report before
deciding to adopt 1t. 1t is considered
that the deliberations of the commit
4 tee must extend over many days, ana
it is likely that action can not De ndo
at this session.
Drawn by Culberson-
The report acted upon was drafted
by Senator Culberson, author OF the
resolution providing for the inquiry
The inquiry was conducted by SUD-
committee of five, MesSrS. clark OF
wyoming Dillingham;, Kittredge,. Gull
berson and Overman. The first three
of these are Republicans and the last
ioined with the two Democrats in
, making the majority report No min
ority report will be made by senators
Clark and Dillingham;, as they expect
when the whole matter is gone over
nv the full committee there Will De a
division requiring more than one re-
port Whatever report they Will make
will be to the senate. The suocom-
mtttee decided not to make the text
e log its report public, although the IN
terest in it was so great that the md
: tfngs became known to pract1cally tne
entire senate. ,o,,,
the COMMITTEES reported on many ques-
tions of fact connected with the mer-
ger. 1t was found that during the
panicky days of November. !SOf' the
TTnited states steel corporation pur-
: chased all the stock in Tennessee
Coal & Iron company, except $22O'-
$50 the amount of the stock acquired
: bei1r ssO.375,S25 1t is shown that
onIv SS32656 in cash was paid Tor
! of it's report public, although the IN
corporation were issued to the am0unt S19
of S346S497S, or nearly hve m1lIlon
} in excess of the par value OF the rem
| nessee company purchased
Quotes From Message.
The report quoted from the .presi-
DENTS message declaring the abSorp-
: fion was not according to the repre-
sentations to him by Judge Gary and
H G. Frick on behalf of the steel cor
poration, as certain business nrin ,o u
would undoubtedly fail unless the oeal
could be made. From testimony OF
l number of witnesses, the report de-
SchIey stock brokers of New York
citv was the one referred 10 py
: Messrs. Gary and Frick- This IS the
concern which managed the affairs OF
Z party of f1nanciers who bought a
: majority of the stock OF the tennessee
: company and held it until Novemper'
1907. It is asserted by the report @ @tnat
l banks in New York, some Of them
; known as Morgan banks, pressed the
! loans on Tennessee Coal company
I: | stock vigorously and that these de-
I nands were met successfully until a
; business 1uneasiness in regard to the
5 Tennessee stock. terms were made
| with the steel corporation 1t Is as
= serted the syndicate did not wish to
sell its stock, but was forced to do so
: After giving much of the testimony
I | on this point, the report specifically
$ denies the assertion of the president
: that the merger was necessary to save
: | any important banking concern OF
Z | business house in New York
Property of Great Value.
Several caustic references were
a made by the committee report to the
e statement of Judge Gary ana Mr
: | FTricl in their interview with the
: president. that they did not want tc
< buv the Tennessee concern and tina
hui little benefit would come to tht
steel corporation from the purchase
From the testimony it is asserted tina
the Tennessee property is very valu
-s able worth probably several hundred
d n1illion dollars and would give the
d steel corporation ultimate control o