Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-02-21
ACCUSES PRESIDENT
Of COUNTENANC|NG
VIOLATION OF LAW
Senate SubC0mmittee'S Re-.
port on Steel Merger.
DECLARES HIS ACTION
EXCEEDED AUTHORITY
Had No Power to Permit Consoli.
dation of Interests.
SIGNED BY THREE MEMBERS
Predicted Report Will Be Adopted
by Full Committee When It
Reaches That Body. Prob
ably Tomorrow.

President Roosevelt. in the opinion of
a majority of the subcommittee of the
Senate committee on the judiciary. which
was directed by the Culberson resolution
to investigate the merger of the United
States Steel Corporation. known as the
steel trust" and the Tennessee Coal and
Iron Company during the panic of io0I.
permitted that merger, and IN doing SO
eountenanced d tlcdr violation of the
law of the land.
In acting as he did the ma jorty of the
subcommittee believes. President Roose-
velc proceeded entirely without author
ity OF any kind. since he is charged as
the chief executive merely with the en-
forcement of the law as it is laid down
by Congress.
BY vote of three to :wo the subcon,-
mittee adopted report setting forth
the above views late yesterday alter
nocn. 1t was signed by Senator Kit
tredge of South Dakota. Senator Culber-
son of Texas and Senator Overman of
North Carolina, the last two being DEM
ocrats. Senator Clark of Wyoming,
chairman of the subcommittee, as we'll
as of the full committee on the judi
ciary and Senator Dillingham;. also a
member Of the subcommittee, would not
sign 1t. 1t is not known for certain
whether they will present a minority
report The majority report was writ
ten by Senator Culberson.
The news that the subcommittee had
adopted such report created something
,akiI to CONSERVATION among the Presi-
dents friends in the Senate. If 1t is
adopted by the full committee, as seems
to be very likely, II will be the severest
rebuke that could possibly be drafted. 1t
II rumored that the republican leaders.
who make no secret of their antagonism
to Mr. Roosevelt. are not willing to go
quite as far as this report goes
May Report Tomorrow.
The action of the subcommittee will be
reported to the full committee next week,
perhaps Monday. 1t is confidently ex-
pected that the committee will sustain
the action. although it is admitted that
the vote will be close. There are thirteen
senator's on the committee. eight repub-
licans and five democrats. 1t is taken for
granted that all of the democrats will
vote for the report. and that makes it
necessary that two republicans join them
in order 10 give a majority in it's favor.
Senator kittredGe has already signed
the report. and il is understood that SEN
ator Foraker of Ohio will also support 1t.
This assures it's adoption and presenta-
tion to the Senate. The other republican
members of the committee are Senator'S
Nelson of Minnesota. Depew of New
York. Knox of Pennsylvania and Fulton
of Oregon, and there may be one or more
among their number who will agree with
the majority of the subcommittee.
The report first recites the message of
the President in which he told of writing
10 Attorney General Bonaparte November
4. 1907 and saying. While. of course
could not advise them TO take the action
proposed ! felt 1t no public duty of mine
to interpose any objection" This state
ment Mr.. Roosevelt told Mr.. Bonaparte, he
made to Judge +. III. Gary and III. G..
FTick. representing the steel corporation,
who had called upon him and informed
him That there was certain business
firm of real Importance in New York
business circles that would fail unless
the steel corporation was allowed to ab-
sorb the Tennessee company.
In the same message the President fur
ther stated that he had instructed the
Attorney General mot TO respond to that
poTion of the resolution which calls for
a statement OF his reasons for non ACTION"
He said. however, II was advised orally
by the Attorney General that in his opin-
ion no sufficient grounds existed for legal
proceedings against the steel corpora
lion. and that the situation had been in
no way changed by its acquisition Of the
Tennessee Coal and Iron Company"
Sanctioned by Merger
In reply to these statements of The
President the subcommittee has found
that the President not only permitted but
bc
and Furthermore that at the time the
stock OF the Tennessee company was ac-
qured by the steel corporation it was
quoted around 80 on the exchange. while
the steel bonds of the kind given in ex-
change were quoted at So and ST. so that
the price paid for the Tennessee stock
was about - per cent more than its
market quotation. Sarcastic reference is
made 10 the testimony of Messrs. Frick
and Gary that the steel trust did not
want to buy the Tennessee company.
The report states clearly that 1t was
not until the understanding with the
President was telephoned by Messrs
Frick and Gary TO New York from Wash
ington that the absorption was effected
No bank or important business concern
was saved by the transaction, notwith-
standing the Presidents Information, says
the subcommittee. Ii is stated that il
appears from the testimony of Grant B.
Schley that if the $5,0O0OO0 or S6OOOOOO
loans which the private brokerage firm
of Moore e. Schley had with the several
banks with the Tennessee company
stock as collateral. had been cared for
il would have relieved that firm, but that
nothing more nor less than control of the
Tennessee company was considered by
the steel trust.
If the panic was checked by the trans
action, as President Roosevelt said II
was, the subcommittee believes il was
done by taking "A few dollars out of one
pocket and putting millions into another
BY the merger the subcommittee bs-
liaves the steel trust gained the control
of the open hearth output of steel rails
TIE ultimate control of the iron ore sup
ply of the country, tho practical mo-
nopoly of the iron and steel trade of the
south and the elimination of a stron.
and growing competitor IL is shown