The Cairo bulletin., 1909-02-21
TO ALLOW ABSORPTION or TEN
NESSEE CO. BY U. S. STEEL
CORPORATION.
SUBCOMMITTEE DECIDE
To so Report to Full Committee
May Result in Severe Rebuke
and Action Against steel
Co. If Adopted.

NdSHlUBtbH, rtD. Gu-TN by futE III
i3 to 2 the subcommittee OF the com.
mittee on judiciary. which has been
investigating the merger of TIE Ten.
! nessee Coal and Iron CompaPy ana
the United States Steel Corporation.
today decided to report to the full
committee that the president was not
! authorized to permit the absorption,
The committee found also that
| President Roosevelt was equally un-
authorized to direct the att0rneygen-
eral not to interfere with the merger
and not TO enforce the federal stat
ues against 1t. II was decided also
| that both companies were engaged
in Interstate commerce absorption
| that was In violation of the Sherman
antitrust law 1t was that the eff
iect and purpose of the absorption
were to monopolize the iron ore sup
| ply of the country and generally to
eliminate the Tennessee company as
a competitor of the United States
| Steel Corporation. The fact that such
| a report was to be made created con-
sternation in the senate. 1t was
realized that If the full committees
subscribes to the finding of the sub
committee the effect would be to ad.
minister the severest of rebukes to
| President Roosevelt and practically
to direct the attorney general to
bring proceedings against the steel
corporation under the Sherman law.
The leaders in the senate make no
secret of the fact that they are nn
willing to go that far. Under thess
| circumstances the full committee
when it meets Monday, probably viii
| decide tC consider very carefully the
possible effect of the report before
deciding to adopt. Ii is likely that
action cannot be had at this session
In addition to the findings of law
the committee reported on many
| questions Of fact connected with the
merger 1t was found that during
the panicky days of November, 1907
the United States Steel Corporation
purchased all the stocks of the Ten
nessee Coal and Iron Company for
s220,1G0, the amount of stock acquir'
ed being $30375,S25.
Cash was paid for the stock and
bonds of the steel corporation were
issued to the amount of $345Si, 1913
Or nearly five million in excess oi
the par value of the Tennessee com
panys stock purchased.
The report quotes from the presi
dents message declaring that the ab
sorption was necessary according te
Representations made to him b.
Judge Gary and II. c. Frick, on be
half of the steel corporation as
certain business firm of real import
lnce in New York circles would un
doubtedly fail unless the deal coil,
be made.
From the testimony of a number o
witnesses the report declared tina
the firm of Moore and Schley, stoc!
brokers, New York, was the one re
ferred to. This is the concern whicl
managed the affairs of the party fl
1anciers who bought the majority o
he stock of the Tennessee compan'
and held It until November, 1907
II Is asserted that banks In New
York, some known as Morgan banks
pressed loans on the Tennessee com
pany's stock vigorously. and tina
these demands were met snccessfull!
until, fearful of the result on accoun
Of the business uneasiness In regar'
10 the Tennessee stock. terms wer'
made with the steel corporation.
1t is asserted that the syndicate di'
not wish to sell its stock, but wa
forced to do so. The report specifi
cally denies the assertion of the pres
lent that the merger was necessar!
% save an important banking conceri
Dr business house in New York.
II is asserted by tho committe
that whatever may be supposed 0
the emergency no discretion is lodge
in the president as to the enforce
ment of the law.
4