The San Juan islander. [volume] (Friday Harbor, Wash.) 1898-1914, 1909-02-26
ROOSEVELT
REBUKED
SENATORS CONDEMN LNAS'
TON IN STEEL TRUol
AFFAIR.
Subcommittee Says Sherman
law Was Violated By Absorb
ton of Tennessee Coal and Iron.
President Had No Authority TO
Stop Prosecution.

Washington, Feb. 22.-By vote OF
8 to 2 the subcommittee OF the sena'o
committee on judiciary, when mas
been investigating the merger OF tne
Tennessee Coal & Iron company anu
the Unietd States Steel Corporation,
Saturday decided to report to the 1u1l
committee that the president was ho1
authorized to permit the absorption
The committee found also that Pres
ident Roosevelt was equally unauthor-
lied to direct the attorney general not
to interfere in the merger and not TO
enforce the federal statutes against IL.
1t was decided also that as both con-
Germs were engaged in interstate COM
MERGE the absorption was in violation
of the Sherman anti trust law. 1t was
found that the effect and purpose OF
the absorption we're to monopollze the
iron ore supply of the country and gen.
orally to eliminate the Tennessee COM
pany as a competitor of the United
States Steel Corporation.
The fact that such a report was to
be made created consternnation in the
senate. It was realized that if the full
committee subscribes to the findings OF
the subcommittee the effect would be
to administer the severest of rebukes
toPresident Roosevelt and practically to
direct the attorney general to bring
proceedings against the steel corpora
ton under the Sherman law.
Committee Will Go Slow
Leaders in the senate make no secret
of the fact that they are willing to go
that far. Under these circumstances
the full committee probably will de-
eide to consider very carefully the pos
sible effect of the report before decid-
ing to adopt it. The report acted upon
was drafted by Senator Culberson, au-
thor of the resolution providing for the
inquiry.
The inquiry was conducted by sub
of five, Messrs. Clarke, of
Dillingham;, Kittredge, Gull
berson and Overman. The first three
of these are Republicans and the last
two Democrats. Senator Kittredge
joined with the two Democrats in MAX
ing the report. No minority report
was made by Senators Clarke and Dill
ingham. The subcommittee decided
not to make the text Of its report pub
lie, although the interest in it was so
great that the findings became known
to practically the entire senate during
the afternoon.
Findings of Fact.
In addition to the findings of law,
the committee reported on many ques-
tons of fact connected with the mer-
ger. 1t was found that during the
panic days of November, 1907, the
United States Steel Corporation pur-
chased all the stock of the Tennessee
Coal and Iron Company, except $780,
600, the amount of stock acquired be-
ing $50, 375,825 It is shown that only
1882, 656 in cash was paid for the stock
and that the. bonds of the steel corpo-
ration were issued to the amount of
$34, 684, 978, or nearly $1,000, 600 in
excess of the par value of the Tennes-
see copmany's stock purchased.
The report quotes from the presi-
dents message declaring the absorb
ton was necessary according to the
representations to him by Judge Gary
and H. G. Prick, on behalf of the steel
as certain business firm
of real Importance in New York would
undoubtedly fail unless the deal could
be made. From testimony of. a num-
Der of witnesses the report declares
that the firm of Moore & Schley, stock
brokers of New York, was the one re-
ferred to by Messrs. Gary and Prick.
This is the concern which managed
the affairs of party of financiers who
bought majority of the stock of the
Tennessee company and held it until
November, 1907.
Banks Pressed Stock Loans
It is asserted by the report that
banks in New York, some of them
known as Morgan banks, pressed the
loans on Tennessee Coal company stock
and that these demands
were met successfully until, fearful Of
the result on account of the business
uneasiness in regard to the Tennessee
stock, terms were made with the steel
corporation. It is asserted haiti the syn
dictate did not wish to sell it's stock but
was forced to do so.
Sarcastic references were made to
the reported statement of Judge Gary
and MI. Frick in their interview with
the president that they did not want to
buy the Tennessee concern. From the
testimony it is asserted that the Tenn
essee property is worth probably sew
eral hundred million dollars and would
give the steel corporation ultimate con-
troll OF the iron ore supply of the coun-
try and the ironand steel trade of the
South.