The sun., 1909-02-21
CONDEMNS YHE PRESIDENT
FOR PERMITTING THE r. C. T..
STEEL MERGER.
Report OF the Subj Committee OF the Sem
ate Judiciary Committee Says u
Amounted TO suspend,nS n Law, and
the President Dlsregarded HIS Oath.

mittee OF the Senate COMMITTEES on the
Judiciary by n vote Of 8 to 2 decided
to-day IN the form OF the report TO be
submitted to the full committee on Mon
day in response to the Culberson resolu-
ton directing the committee TO investi-
gate and report whether the President
exceeded his authority In permitting the
merger OF the Tennessee Coal and Iron
Company with the United States Steel
Corporation. The report is n sweeping
condemnation Of the Presidents action.
On tho question OF whether II should
be submitted to the full COMMITTEES, Sena-
tor A. b. Kittredge OF South Dakota.
Republican. and Senators Charles A.
Culberson of Texas and Lee $. Overman
of North Carolina. Democrats, voted In
the affirmative. The two negative votes
were cast by Senator Clark Of Wyoming,
chairman OF the Judiciary Committee.
and Senator Dillingham; Of Vermont.
Among the findings reported by the
committee are: That the Tennessee
Coal. Iron and Railroad Company was alb
sorbed by the United States Steel Corpo-
ration on or about November 5. 1907: that
the stock Of the Tennessee corporation
when acquired was quoted around 30.
while the bonds given in exchange were
quoted five or ak points higher from
which the committee concludes that the
price paid for the stock Of the Tennessee
company was about one-fifth more than
the market quotation.
The committee concludes from the cor
respondence that passed betw cen the Presi-
dent and the Attorney General and from
other testimony submitted that the
President actually approved Of the pro-
posed merger. IL finds also that the
firm OF Moore A Schley did not hold as
assets. as represented 20 the President
by officers OF the Steel Corporation. any
Of the stock Of the Tennessee Coal and
Iron Company. The conclusion Is also
reached in the report that the Tennessee
Coal and Iron Company was driven to
make terms with the Steel Corporation
and that the holders OF the securities OF
the first named company were unwilling
TO sell TO the Steel Corporation until they
were forced to do 30.
The committee denies that there is
any warrant for the statement that the
merger was necessary TO save the firm
Of Moore a Sohley. The committee holds
that the acquisition OF the Tennessee
corporation was very valuable to the
nI
practically gives IL the control OF 62I
per cent. OF the total supply Of high grade
iron ore in the country. having added
to its estimated holdings Of a. per cent.
1871 per cent. represented by tho hold
ings OF the Tennessee corporation. This
is characterized as a monopoly which
will ultimately give 10 the Steel Cor
poration the practical control OF the ore
supply Of the United States.
The committee concludes that the prop
erty is very valuable. being worth several
hundred million dollars. and gives TO the
Steel Corporation as a result Of the mer-
ger the control Of the open hearth output
Of steel rails, the ultimate control OF the
iron. ore supply Of the country and a
monopoly Of the iron and steel trade OF
the South. aud eliminates a very strong
competitor.
In it's conclusions OF law the sub
committee practically says that the
President was not authorized TO permit
the merger and that his action in per-
mitting it amounted to annulling or sis
pending a law and that in 30 doing the
President disre garded his oath to see
that the laws -be faithfully executed
The point is made that the President is
without discretion in the matter OF en-
forcing the laws. because this is a gov
ernment Of laws and not Of persons.
The conclusion Of law is also submitted
that the President was unauthorized to
give the directions he gave to the At
torney General The Attorney General
is condemned for his failure TO execute
the law. a duty which devolves upon
him under the statute. regardless Of
instructions or directions from the
President
Without equivocation the subcom-
mittee reports that in its judgment the
merger was plain violation OF the Sher-
man antitrust law. The Steel Corpora
ton, the report declares, is the greatest
combination Of capital in the country.
In reaching the conclusions OF fact the
committee relied not only on the testi-
mony taken at it's hearings but also
on the testimony given by Judge +, II
Gary, chairman OF the United States
Steel Corporation. at his hearing before
the Ways and Means Committee
In it's final conclusions the sub-com-
mittee takes the ground that the absorp-
ton was illegal and within the prohibition
Of the statute because the direct effect Of
the merger was TO create monopoly and
eliminate a competitor. although neither
element was necessary TO bring 1t within
the prohibition OF the statute.
The Judiciary Committee will meet
Monday to take up the consideration Of
the report The committee is composed
Of seven Repu blicans and five Democrats.
Il is reported to-day on very high author
ity that the report Of the subcommittee
will be adopted by the full committee and
in that form will 90 TO the Senate. II Is
not certain yet whether minority report
will be submitted by Senators Clark and
Dillingham;
"a Amoesty for Obstlnste Suicides