The Birmingham age-herald., 1909-02-03
STOCK OF TENNESSEE
 COMPANY IS POUNDED
Mir. schley Says That No One Wanted to Handle the Securities of the Tennessee Go. Because They
 Were Not on the Market.

formation of a syndicate to control the Tennessee Coal, Iron and Railroad com pany and of later negotiations for the sale of a majority of the stock of that concern to the United States Steel cor poration, were given today by Grant B. Schley of New York. member of the New York firm of Moore & Schley, who was a witness before the special commit tee of the Senate committee judiciary which is Investigating the Presidents au- thority for permitting the merger in Mo- vember, 1907.
 MT. Schley gave the names of the Is men who assembled themselves together to control the stock He told also of the arrangement for the sale of the stock to the Steel corporation, and in- dicated that this was brought about through the agency of J. P. Morgan & Co. At the time of the purchase of the stock in the fall of 1905 there was outstand- ing common stock valued at $22, ,55O,OOO and preferred stock to the amount of $l,- 100000 The association of business men obtained 11S,500 shares, which was more than half the total. MT Schley said the party had the idea of developing the property and was not speculating in the least About one-ha1f of the stock was paid for by the individuals and with drawn and about one-half, according to MT Scheys 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 a period of two years. The names Of the parties forming the association were given by Mir, Schley as follows:
 The Tennessee Company.
 o. H. Payne, l.. c. Hanna, c. R. Schley, J. P. Duke, E. J. Berwynd J. w. Gates. A. N Brady, C.. A. Gessler,s Oakleighe ,rhorne, who held 10.39e shares each; F. M Oglebay, II. s. Black. P. D. Stout, J. w Simpson. who held 5150 shares each; G. w. French, 2500 shares s. G. Cooper, 1900 shares, and J. A. Topping. 1000 shares. In the two years immediately follow ing the purchase of the stock about ST. OO0OOO was expended in Improvements and new stock was issued. MT. Schley estimated that in the fall of 1907, the Tennessee company owned from 5O0,0OO- GOO to 700, 600 tons of iron ore, 2,OOO- OO00OO tons of coal, a large amount of fuxing material and large quantities of all the other elements needed for the manufacture of steel
 Senator Culberson questioned the wit ness concerning loans made on Tennes- see Coal, Iron and Railroad stock and Mir Schley said that his firm had bor- rowed for himself and customers be- tween $5000,OO0 and $6,000000 which was outstanding on November 1. 1907, and that the total outstanding loans of Moore X Schley on that date amounted to about s33, ,0O0, GOO. It was positively stated by the witness that every demand made on his firm for the payment of the loan had been met promptly during the firms ex- 1stence.
 Out of the Market.
 It was asserted by MT. Schley that there were about 100000 shares of Tennes- see Coal, Iron and Railroad company stock in loans which they had placed
 
 came on there was nobody buying or selling this stock as so much of it was out of the market
 Tn the development of the panic" he continued 'the banks declined to loan upon a security where the market was apparently normal. So I would have con tinual calls-plaese take this Tennessee out of that loan; etc Now it became a very serious matter"
 Senator Culberson wanted to know why the Steel corporation could not have re- lieved the situation by simply taking care of that 100000 shares of stock which was in loans. He suggested that the Steel corporation might have deposited Steel bonds in lieu of the Tennessee stock for the S5O00,000 or $6,000000 which had been borrowed the latter. MT. Schley said such a thing had never been considered nor had he thought of it before. He did not think such thing would be practical Concerning the suggestion, MT. Schley said:
 Tt was natural to consider that when they took it they wanted the control I doubt if the Steel corporation would have wanted any interest in the Tennessee Coal, Iron and Railroad, property. leaving the control out of their own hands.
 Cheap Steel Made.
 Mr. Kittridge asked if the contemplated improvements when completed would, not enable the Tennessee company to manufacture steel cheaper than any other steel company in the country, and Mr. Schley replied: ''Yes, I believe that is so.'
 It was brought out by Senator Overman that all of the men making up the party which bought the Tennessee company's stock were men of great wealth and few of them would have been financially em- barrassed If the deal of the Steel corpor- ation had not been accomplished.
 MT. Schley said that if loans that Moore & Schley had on these stocks had been called by the banks it could not be told what would have resulted.
 Was ther any call on these men?'' asked Mir. Overman.
 MT. Schley replied that his firm was aging agent for these men and he had called on them but they could not respond. The witness then described his visit to Lewis Cass Ledyard, who was mentioned by former witnesses as being the man who first suggested the merger of the Tennessee company and the Steel corporation. MT. Schley said Ledyard was not his attorney but was the friend of J. P1erpont Morgan. The proposition made to MT. Ledyard was that he should go to MT. Morgan and suggest that the Steel corporation buy the stock of the Tennessee company on the basis of par and cash. MT. Schley said that Messrs Prick and Gary called on him and the deal developed and was made public in man. ner which brought some relief.
 Credit Being Destroyed.
 He said Moore & Schley was the sub