Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-01-30
MERCER TO RELIEVE PANIC
GEORGE W. PERKINS BEFORE
SENATE COMMITTEE.
Oakleigh Thorne Declares Trust
Company of America Was Not
in Need Of Help.

George w. Perkins Of New York, man
ager Of the banking house of j. Pier
pont Morgan & Co., and Oakleieh
Thorne, also of New York president OF
the Trust Company of America, told the
Clark subcommittee of the Senate COM
mttee on Judiciary what they knew about
the merger of the United-States Steel Cor
poration and the Tennessee Coal and Iron
Company yesterday.
Mr.. Perkins had been subpoenaed. Mr.
Thorne had come voluntarily.
Senator CulberSon of Texas, author OF
the resolution under which the subcom-
mittee is Investigating the subject to de-
ternline whether or not the President was
authorized to permit the consolidation,
tried to get the witnesses to tell what
large financial institution was saved by
the merger, as stated by the President In
his recent letter TO the Senate.
1t had been generally understood that
the President referred to the Trust Com
pany of America Mr.. Thorne fatty de-
MED that this institution was ever in dan
ger of failure. 1t was to relieve the gen.
eral panicky condition of November. 1907,
that the merger was effected, declared Mr..
Perkins
In his opening statement he said:
The question of the acquisition of the
Tennessee Coal and Iron Company by the
steel corporation was never brought up,
so far as my knowledge goes, until per-
hapS the second or third acute stage of
the panic developed in New York.
Mr.. Perkins said there was a general
feeling that If the Tennessee Coal and
iron stocks were taken out of various
loans in some way, II would prevent a
great many failures.
'Of course, at that time most every one
in New York was using his resources in
every direction to allay the panic. Some
one-I don't know that / know who
made a suggestion that the steel cor
poration was the one that might take
these particular securities and relieve that
part of the situation.
Il remember it was discussed as to
whether cash could be provided, or
whether it could not, and how it might
be done. Finally some one made sug-
gestion, which afterward worked out. that
the corporation might furnish its per
cent second-mOrtgage bonds in lieu of
cash, and in this way put in lieu of these
loans securities that were marketable.
Mr.. Perkins said there never had been
any intention on the part of the steel
corporation of acquiring the Tennessee
Coal and Iron Company. He said the
transaction was carried out With but one
purpose in view, namely to allay the I'M
settled conditions that existed at the time
Responding to questions by Chairman
Clark as to the effect of exchanging steel
company, Mr.. Perkins said:
Whether or not the steel bonds were
intrinsically any better than the Tennes-
see Coal and Iron stock was not SO much
the question as it was that the public
thought they were"
Mr. Culberson wanted to know of Mr..
Thorne whether he had knowledge of a
syndicate which owned the controlling in
tereSt in the Tennessee Coal and Iron
Company In the fall of 1907. He replied
he was member of that syndicate, but
that he had bought his stock and with
drawn it from the syndicate. and there
fore was not familiar with the syndicate's
operations.
The names of the original syndicate
managers were given as Grant B. Schley
and Charles Guthrie. Leonard Hanna of
Cleveland. took the place of Mr. Guthrie
after the latter's death.
Mr.. Thorne said this syndicate owned
a majority of the stock of the Tennessee
company. In addition to naming Messrs.
Schley, Guthrie and Hanna as interested
in the syndicate, Mr.. Thorne mentioned
John w. Gates, E. ]. Berwin and H. 8.
Black.
When asked if he had any personal
knowledge of the actual sale of a ma
jority of the stock of the Tennessee com
Piled:
'.AIl L know is that l delivered my stock
to j. P Morgan & Co, and got receipt
for it
bearing on either himself or his company,
but, as it assisted the general situation,
naturally it assisted his institution.
Commissioner Herbert Knox Smith of
The bureau of corporations told some
Thing of Investigations which are pro-
Ceeding under his direction into the af-
fairs of several OF the great corporations
and alleged trusts.
Concerning the United States Steel
Corporation, Commissioner Smith said
the inquiry thus far was confined to an
investigation of prices. profits apd cost
of production. This information is being
gathered. he said, not with a view to
prosecution
I'VE do not consider that our duty is
that in any way of a prosecuting agent. p"
said Mr.. Smith.
Responding to questions by Senator Gull
berson. Mr.. Smith said he had investi-
gated the creation of the Standard Oil
Company. and that all OF the facts OBJ
tanned by him had been published by
order of the President. The sugar trust
las not been prObed according to Mr.
Smith. except that this concern has been
considered briefly i'm connection with
other work.
As to the tobacco trust. he said:
We are working OF that now-not
from the standpoint of the legality of the
corporation. but of facts connected with
its conduct Of business.
Numerous Investigations are proceeding
at the request OF Congress Among
these Mr.. Smith mentioned the oil indus
try. lumber industry. International har-
Nester trust and cotton exchanges