The Montgomery advertiser., 1909-02-03
DETAILS OF MERGER
FORE SENATE ooMniTTEE.
vurther Details sf Fermatien of synai- A cate to Centrei T. c. I. Stock
 and Negotiations for Merger ,slss
 With Steel Corporation. ;


 Tennessee Coal and Iron Company ana
 of the later negotiations for the sais
 cf,a majority of the stock of that con.
 cern to. the United states steel Cor
 poration. were given today by Gram
 3. Schiey, of New York, a member oi
 . New York firm of Moore and schley
 who was a witness before the specia
 committee of the Senate Committee or
 Judiciary, which Is investigating the
 Presidents authority for permitting
 the merger in November. 1s07.
 Mr. Schley gave the names of sixteen
 men who associated tn emseives togeth-
 sr to control the stock. He told also ef the arrangement of the sale of the stock to the Steel Corporation, and in- 3dicated that this was brought about through the agency Of J. F. Morgan q Co. S&
 At the time of the purchase of the stock In the fall ef 1905, there was out standing common stock valued at SEA- kse.ooo and preferred stock to the amount of szI, ,o0e.0 900. The association of buafness men obtained 1Is.50e shares, which was more than half the total. Mr. schley said the party had the idea of developing the property and was not speculating in the least About 'one-half of the stock was paid for by the individuals and withdrawn, end about one-half. according to MT. Echley's estimate, was borrowed upon by the holders. The only agreement made by members of the party was that they would not sell the stock for q period of two years. The names of the parties forming the association were given by Mir. Schiey as follows:
 o. H. Payne. L. O. Hanna. c. B. schley, J. E. Duke, F. J. Berwynd, q. W. Gates. A. N. Brady. a. A. -Gessier. oakleigh Thorne. who held 1.soe shares each; E. W. ogieby, H~ s. Black, F.. D. Stout, !. W. simpson, who held 5.Is0 shares each; c. w. French. 2.50o shares: s. c. Cooper, 1,5e0, and J. A. Topping. 1000 shares.
 In the. two years immediately fol- lowing the purchase of the stock about S7,Oo0,000 was expended in improve ments and new stock was issued. Mir. Schley estimated that fn the fall of 1907, the Tennessee Company. owned from seo,eoo 900 ton 7o0.ooo.ooo tons of iron ore; 2.00a. .009. 900 tens of coal, q large amount of fiuxing material and large quantities of ell the other eie- ments needed for the manufacture of steel.
 Senator cuIberson examined the witt ness concerning the loans made on Tennessee Coal and Iron stock, and 1fr. Schley said that hts firm had bor- Eowed for himself and customers. be- tween s5.0o0.Oo0 and es.0OO.o0o, which was outstanding on Nov. 1907. and that the total outstanding leans of Moore & Schley on that date amounted to about S33,00o,e00. 1t was positively stated by the witness that every de- mand made on hiis firm for the payment of the loan had been promptly made during the firms existence.k
 It was asserted by MT. Schiey that ehore were about 100000 shares of Tennessee Coal and Iron stock in banks and that when the panic came on. there was nobody buying or selI- ing this stock as So much of 1t was out of the market
 'Tn the deyeloprhent of the panic," he continued, sthe banks declined to loan upon a security where the mar ket was apparently normal. So I would have continual calls--'Please take this Tennessee out of that loan,' ste. Now it became a very serious matter
 Senator Culberson wanted to know why the Steel Corporation could not have relieved the situation by simply taking care of that 100000 shares of stpek which ,waa in loans. He vug- gested that the Steel Corporation might have deposited steel bonds in. lieu of tHG LcutAV911G HkVCtA HUT .AhC 4DfVVVbVOO or $6,0O0,OO0 which had been borrowed on the latter. Mr. Schley said such a thing had never been considered, nor had he thought of it before He did not think, such thing would be prac- ticable. Concerning the suggestion, Mir. Schley said:
 Tt was natural to consider that when they took 1t, they wanted to control. l doubt if the Steel Corpora fa, fA1 n nf in the Tennessee Coal and Iron prop erty leaving the control in their own hands direct"
 Mir. Kittridge asked if the contem- plated improvemen ents when completed would not enable the Tennessee Coal and Iron Company to manufacture steel cheaper than any othe CT steel company in the country. and MT. schley repiied; ''Yes. believe that is so." It was brought out by Senator overman that all the men making up the party which bought the Tennessee Company's stock were of great wealth and few of them would have been financially embarrass- ed if the deal of the steel Corporation had not been accomplished.
 MT. Schley said that if loans that Moore 6 Schley had on these stocks not be told what would have re- suited.
 'was there any call on these men?" asked MT. Overman.
 Sir. Sohley replied that his firm wss acting as 8 body of men and he had called on them. but they could not re- epond. The witness then declared his visit to Lewis Cass Ledyard, who was mentioned by former witnesses as be- ing the man who first suggested the merger of the Tennessee Coal. and Iron Company and the United States Steel Mir. Schley said Ledyard was not his attorney, but was the frieud of J. Pierpont Morgan. The proposition made to Mir. Ledyard was that he should so to Mir. Morgan and suggest that the Steel Corporation buy the stock of the Tennessee Coal and Iron Company on the basis of par and cash. MT. Schley said that Messrs. Prick and Gary called on him and the