New-York tribune., 1909-02-21
ATTACK PRESIDENT
m MERGER REPORT
pROSECTTTON URGED IN
TENNESSEE co. CASE.
Senate Judiciary Committee Not
Likely to adopt Findings
Of CaibersOn.
Of Caibers0n.
Iron The Tribune Bureau.l


,r-sb;neton Feb 2O-There have been tur-
mil snd contention throughout the day in the
e,-s.s committee on judiciary the report
--s,ared bv Senator CuIberson on the merger
I, +be United States Steel Corporation and the
tennessee Coal and Iron Company The Demo-
-s,.c leaders. seeking TO make the most po-
l;,;c,l cspital possible out OF the matter. have
.-,f,a5 p report which severely condemns the
p-asidert declares the merger contrary TO law
"a urges the Attorney General to undertake
s-osac1tion irrespective of the Presidents as
.noe TO the Steel company. Senator Kit
.-.sge. whose antagonism 70 the President knows
a hounds has deserted his colleagues. Senators
clark and Dillingham;, on the subcommittee
- voted with the Democrats. Senators Culber-
con and Overman. which gives them majority
os the smaller body
II is not believed there is the slightest likeli-
h0os that this report will be fathered by the fun
,anmjttee 10 which the subcommittee must re
nor. The friends Of the administration are dis
,ospd 10 treat the matter as inconsequentiaL es-
rsci.llv as many Senators who are not too
.,sndlv to the administration. but are con-
versaat with the financial conditions which led
:, Yhe Presidents approval Of the merger, de-
csre that it vas a great stroke Of statesman
shin and one which saved the country from &
disastrous extension Of the panic.
PRESIDENTS ACTS CRITICISED.
rba -eport cf the subcommittee which was
.sau.ed by a vote Of 3 20 >. says that the Pres
iss5t ras not authorized TO permit the absorp-
tion Of the Tennessee Coal and Iron Company.
and that he was equally unauthorized 10 direct
.he attorney General not to interfere with the
.rerser and not TO enforce the federal statutes
AGAINST it. II was decided also that as both
companies were engaged in interstate commerce
tne absorption in violation Of the Sherman
,Bti-tr1,st law It was found that the effect and
purpese Of the absorption were TO monopolize
he iron ore supply OF the country and generally
70 slnirate the Tennessee company as COM
pettor OF the United States Steel Corporation.
The subcommittee decided not 20 make the
text Of its report public although the interest in
Fl vas so great that the findings became known
70 practically the entire Senate during the after
noon
in addition to the findings of law, the COM
rnittee reported on many questions Of fact con-
nected with the merger It was found that dur
Ing the panicky days of November. 1907. the
United States Steel Corporation purchased all
the stock Of the Tennessee Coal and Iron Com
rsny except s2eu.l60. the amount OF stock &C
oured being ss0375s25. It is shown that only
tsses55 IN cash was paid for the stock. and
fha: bonds Of the Steel Corporation were issued
70 the amount Of s346s4a7S or nearly s5.0oo000
In excess Of the par value OF the Tennessee
company stock purchased.
The report quotes from the Presidents mes
sage declaring the absorption was necessary,
according TO the representations to him by
Judge E. H. Gary and II. c Frick. on behalf
of the steel corporation. as a certain business
Hrr Of Importance in New York circles would
Undoubtedly fail unless the deal could be made =
From the testimony of a number OF witnesses.
the report declares that the firm Of Moore &
schlsy stock brokers Of New York City, was
the one referred to by Messrs. Gary and Frick-
This is the concern which managed the affairs
Of a party Of fnanciers who bought majority
q the stock Of the Tennessee company and held
Il uatiI November. 1907.
SYNDICATE FORCED TO SELL
II is asserted by the report that banks in New
York some Of them known Morgan banks.
pressed loans on Tennessee company stock Wig
orously. and that these demands were met sue
cessfuIly until, fearful of the result on account
Of the business uneasiness in regard to the Ten
nessee stock, terms We're made with the steel
separation II IS assrted that the syndicate
did not wish TO sell its stock. but was forced to
90 50. After giving much OF the testimony on
this point the report specifically denies the as
ssrtion OF the President that the merger was
Necessary to save any important banking con-
cern or business house in New York
Sarcastic references were made by the report
&c the statement Of Judge Gary and Mr.. Frick
Il their interview with the President, that they
Gid not want TO buy the Tennessee concern and
tina; little benefit would come TO the steel cor
poration from the purchase. From the testi-
nOny it is asserted that the Tennessee property
Is very valuable. worth probably several hundred
million dollars. and would give the steel cor
poration ultimate control OF the iron ore supply
q the country and practical monopoly Of the
non and steel trade Of the South.>
il vas asserted by the committee that what
ever might be the supposed emergency, no dis
Getion was lodged in the President as to the
enforcernent Of the Law. II found, In the
opinion Of ma Jority Of the sub committee that
ne Presidents communication TO Attorney Cen
tfSi Bonsparte was. in effect. direction not to
interfere with the merger. It was pointed out
lnat under the federal Constitution the Presi-
cert Is the official who is expressly enjoined
70 take care that the laws be faithfully exc
cuted"