The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1909-02-03
PINCHED BY THE
MORGAN BANKS
True InWardneSS of the Sale
of the Tennessee Coal
& Iron Company.
STORY OF GRANT B. SCHLEY
STOCK PUT UP AS COLLATERAL
FOR MONEY BORROWED.

Washington. Feb. 2.-Grant 3. Schley
Of New York, one of the men who man
aged the syndicate that was said TO
have controlled d majority of the stock
of the Tennessee Coal & Iron company
when it was absorbed by the United
States Steel corporation, was witness
today before the special committee OF
the judiciary committee which is max
ing an inquiry into the presidents aU-
th0rity for permitting the merger.
Mr.. Schley testified that in company
with fifteen others he bought a majority
interest in the Tennessee Coal & Iron
company in 1905. He gave the names
Of the persons interested in the syndi-
cate as follows: o. II. Payne, L. q.
Hanna, G. 3. Schley. ]. B. Duke. Z. J.
Berwynd ]. W. Gates, A. n. Brady, c.
A. Kessler and Oakleigh Thorne, 10000
shares each; +. w. Oglesby, II, s,
Black. F. V. Sout and J. w. Simpson,
$3.50 shares each; G.. W. French, 2,5oe
shares; S. c. Cooper, 1,500 shares, and
J. a. Tapping, 1000 shares.
Put Up as Security.
The people associated in the syndi-
cate for the most part withdrew their
stock, although some Of them left it
with the firm of Moore & Schley, stock
brokers, and a great deal of it found its
way into banks as security for loans.
Of the amount in the control of Moore
& Schley between 5000, 600 and $1,000
600 was pledged as security, which con-
dition existed in November, 1907. The
suspicion was directed against this
stock during the panic of October and
November, and there came a demand
from several banking firms. according
to Mr.. Schley, for the removal of the
stock and the substitution Of other Sc
| curities AS a result Mr.. Schley sug-
/ gested that the J. 2. Morgan interests
/ should purchase the Tennessee Coal &
/ Iron stock and issue steel bonds in ITS
stead in order to relieve the market.
The stock was purchased by the as
! ISOLATION of business men at no, and in
/ the two years it was held by them they
/ expended, according to Mr.. Schiey, be-
tween Sc. 600, 600 and $1,000 600 in Better
ments, which ran the list of their stock
up to about 11s or 100.
Had Full Control.
! At the time of the purchase of the
| stock, in the fall of 1907, there was out
/ standing common stock valued at S22
/ $50. 600, and preferred stock to the
amount OF S1,00O.000. The association
/ Of business men obtained lis, 500 shares,
which was more than half of the total
I Mr.. SchlSy said the party had the idea
/ of developing the property, and was
not specializing in the least. About one
half of the stock was paid for by the
/ individuals and withdrawn, and about
| one-half. according to Mr.. Schley's es-
/ innate. was borrowed upon by holders.
/ Mr. Schley estimated that in the fall
of 1907 the Tennessee company owned
l from 500 000. 900 to ZOO 900, 600 tons Of iron
| ore. 1000, 000, 900 tons of coal, a large
amount of fiuxing material and large
/ quantities of all the other elements
/ needed for the manufacture of steel
Borrowed From Morgan.
{ 1t was shown that a considerable
amount of Moore & Sehley's loans were
with the so-called Morgan banks.
I The witness then described his visit
/ to Lewis Cass Ledyard, mentioned as
/ being the man who first suggested the
| merger of the Tennessee Coal & Iron
/ company and the United states Steel
/ corporation. Mr.. Schiey said Ledyard
was not his attorney. but was the
/ friend of ?. PieTpont Morgan The
/ deal was made and brought some re-
/ lief.
| The witness described the panicky
days, and said the calls made upon his
! firm amounted to 100000 in three
days. and he declared that nobody
could pay all that money at once