The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1909-01-30
MAGNATES TELL
OF STEEL MERGER
Contained from Page one


Roosevelt is TO remain IN Office or not, Il
1 is the duty OF the Committee on the JU-
dietary TO investigate the matter thor
oughly and make q report.
/ K came out in the testimony given BY
Mr. Thorne and Mr. Perkins that q syndi-
cate had been formed in New York for the
purpose. which L accomplished. Of getting
z control OF q majority OF the Tennessee
( Company's stock. The business hrB5 whose
failure was regarded as imminent II It
did not dispose Of its Tennessee Company
+ securities 10 the Steel Corporation. had
organized the syndicate.
Loans Were Called In.
Loans obtained with this Tennessee
CompaEy's stock as security were called
: in. in the panic Of 1907. and it was feared
that the business firm represented 70 have
{ been involved in the matter would be IN
able to meet them and would 90 to the
wall unless It obtained money or market
able securities When permission was
given by President Roosevelt for the steel
Corporation to acquire the Tennessee
Company's securities the stock OF the Ten
inessee Company was exchanged for Steel
Corporation marketable bonds.
/ Mr.. ThOrne testified that he was 2
member Of the syndicate. but that after
paying for his stock, 1850 shares. which
4 he owned personally. he took IL out OF
the syndicate and WAS not familiar with
the syndlcate's operations thereafter. He
said that the Trust Company Of America
/ had no interest in the stock Of the Ten
nessee Company as owner, not having
owned a share
/ In answer 10 questions from Senator
/ culberson. Mr.. Thorne said that Grant
( 3. Schley and Charles Guthrie were the
original syndicate managers. When Mr.
Guthrie died. Leonard Hanna was sub
sttuted. Mr. Thorne said that al the
dealings he had IN connection with the
/ Tennessee Company's syndicate were
with these syndicate managers. and not
with the firm Of Moore & Schley-
J. W. Gates Interested in Deal.
Among those Interested in the syndi-
cate, according to Mr.. Thorne. were John
". Gates. z. J. Berwin, and, ne thought.
H. S. Black. When the merger was ef-
feeted he delivered his stock 10 J. P.
Morgan & CO. and got a receipt for It.
| In answer 10 a question by Senator
Overman as to whether at the time OF
the merger Mr.. Thorne and the Trust
/ Company OF America were financially
! embarrassed and, II so, did the merger
have tendency to relieve the embarrass-
ment, Mr.. TbOrne said:
1T had no direct bearing on either
myself OF the company because 1 did
not owe any money on my stock The
stock WAS locked up in nv box and tie
company only had these loans il had.
therefore. no direct bearing upon either
myself or the company. but as Il assisted
the general situation. naturally Il as
sisted our institution 10 that extent. and
We participated T. al the rest Of t."
Mr.. Perkins. who explained that be had
general information as 10 the causes that
led ID 10 the acquisition Of the Tennessee
cOmpany's stock by the Steel Corpora
ton and the conferences held in cOnnec-
ton with its consummation. made the
following statement;
THE question 81 The acquisition OF the
Tennessee Coal and Iron Company by
the Steei Corporation was never brought
Up OF preached IN any way. so far as
my knowledge goes. until perhaps the
second or third acute stage Of the panic
developed IN New York. and then It came
Up suddenly because OF the panic.
1t would be difficult, think. for any one
to express Il IN any concrete sentence or
statemenf-that II the Tennessee Coal and
Iron stocks. which were in various loans.
were taken out Of those loans n some
way. II would prevent a great many
failures and avert a further spread OF the
panic OF course al that time most eT-
eTyOns IN New York WAS using al his
resources in every direction 20 aIlay the
paniC-and some one made a suggestion
that the Steel Corporation was the one
that might take these particular securi-
ties and relieve that part 81 the situation
Situation Puzzled Financiers.
7 remember It was discussed whether
cash could be provided. or whether it
could not. and how it might be done. Fl
nslly. some one made the suggestion,
which afterward worked out, that the
corporation might furnish its 5 per cent
second mortgage bonds in leu Of cash
and in this way put in lieu OF these loans
securities that were marketable-that had
some actual value on the exchange In
that form. in a general way. the trans
action was carried out
The causes that lead up 70 this con-
ditiOn in the matter OF the Tennessee
Coal and Iron stocks that were in sep
arate loans it would be difficult Il give.
as II was the result Of the psnicky con-
GitiOns. Whether the stock had q real
intrinsic value Of 81 OF 81 coo I do not
believe ever entered into e Il was a
part Of the hysteria that existed at the
time. and this particular situation was
hit upon and made much of, and was
bringing on a serious crisis.
AS I remember, this was at the end
OF a week. on Friday or Saturday. and
think this particular phase OF the panic
eliminated on Saturday. 1 remember
well that on Sunday there was great ap-
prehension as to what would happen on
Monday On Monday morning the prices
OF our securities came much lower from
London. and we were greatly disturbed.
1T was that Sunday night that Judge
Gary, the chairman OF the steel corpora (
ton. and Mr.. Prick came over here 20
see the President, and practically every
thing was at a standstin until we got
the word from them Of what seemed TO |
be the feeling here.
President stopped Panic.
That was telephoned TO me by Judge
Gary about 70 O'clock. about the time
the market opened. the news that his
transaction would probably be made was /
given out. and had an instantaneous ef- (
feet for the better on the market. and, /
have always believed. stopped the panic. /
At any rate. from that time forth mat /
ters righted themselves
There had never been any intention
whatsoever on the part Of the Steel Cor
poration Of acquiring the, Tennessee Coal 7
and Iron Company
CuIbersOn rs Interrogafor.
senator CuIberson wanted TO know If I
it was not fact that by this transac-
ton the Steel Corporation obtained all
the stock Of the Tennessee company ex-
cept about $4,000. but Mr.. Perkins said