The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1909-02-06
HOW PRESIDENT
STOPPED PANIC
Financier Gives Inside" Of
Steel Merger.
NAMES OF THOSE SAVED

List includes milIlonaires !. Q. Duke
and !. W. cates-Admisslon Made
That Tennessee Company After Pro.
posed improvements Gould Be Made
Would Have Been Able 10 Supply
Product Cheaper Than Anything On
the Market.
Details Of the formation Of a syndl-
cate 10 control the 7 tennessee Coal and
Iron company and of later negotiations
for the sale OF a majority OF the stock
OF that concern 10 the United States
Steel corporation We're given by Grant
b. schley OF New York. member OF
the New York firm Of Moore & Schley,
who was witness before the special
committee of the senate committee on
judiciary ut Washington which IS in
yestlgating the presidents authority
| for permitting the merger.
The names OF the persons forming
the association were given by Schley
as follows: o. II. Payne, l.. G. Hanna,
G.. b. schley }. b. Duke. u. J. Der
wind. j. w Gates, A. n. Brady, C. A.
Kessler, Oakleigh Thorne, who held
10000 shares each T.. w. Oglesbay.
II. S. Black, r. ID. Stout, J w. Simp-
son. who held $3.50 shares each; G. w.
French, $500. s. G. Cooper 1900; and
]. A. Topping. 900 shares.
In the two years following the pur.
chase of the stock 100000 was ex-
pended In improvements. schley esti-
mated that before the sale 10 the steel
corporation the Tennessee company
owned from 500 000. 900 to zoo, 100000
tons of iron ore. 2,00O.0O00OO tons OF
coal. large amount OF iuxing ma
tsrial and large quantities of all the
other elements needed for the manu-.
facture OF steel
"They Wanted Control"
Schley said that his firm had borrow
ed for himself and customers between
k5, 900 900 and $6.O00.000 which was
outstanding on Nov 1. 1907, and that
the total outstanding loans of Moore e.
5chley on that date amounted TO about
$50, 00O. OO0
Senator Culberson wanted TO know
why the steel corporation could not
have relieved the situation by simply
taking care OF that 100000 shares OF
stock which was In loans.
Schley said such a thing had never
been considered ut was natural TO
think that when they took the stock
they wanted control. the witness
added
Schley testified that the requirement
OF the Tennessee companys property
by the steel corporation added 10 the
value Of steel securities
Senator Kittredge asked II contem.
Plated improvements would have en-
abied the Tennessee company 20 manu-.
facture steel cheaper than any other
steel company in the country and
Schley replicd YES, ! believe that
IA So
II was brought out by Senator
Overman that all OF the men of the
party which bought the Tennessee
company's stock were men OF great
wealth and few OF them would have
been financially embarrassed II tho
uedi pt lhF hl'tl tolpolhliOH Hdu hol
been accomplished
Tells OF Panlcky Days.
The witness then described his visit
10 Lewis Cass Ledyard Schley said
Ledyard was not his attorney. but was
the friend OF J. Pierpont Morgan. The
proposition made 10 Ledyard was that
he should go to Morgan and suggest
that tho steel corporation buy the
stock OF the Tennessee corporation
on the basis OF par and cash. Schley
said that Messrs Frick and Gary call.
cd on him and the deal developed.
In response TO questions by Senator
Dillingham;. Schley said the effect OF
the purchase was TO relieve the situa-
tion most decidedly. The witness
gave a graphic description OF the pan
icky days and told OF the calls made
upon his firm. which he said amounted
20 s7.000,000 In three days, and he de-
rlarcd that nobody could pay all that
,nonov az onca "