The Birmingham age-herald., 1909-02-21
LEGAL ACTION MAY BE
 TAKEN ID BREAK MERCER
Violation of Antitrust Law Is Claimed By Senate Subcommittee and the President Is Held to Be
 the Great Offender.

committee on Judiciary, which has been Investigating the merger of the Tennessee Coal, Iron and Railroad company and the United States Steel corporation, today de- cided to report to the full committee that the President was not authorized to per init the absorption. The committee found 7 also that the President was equally un- authorized to direct the Attorney General not to interfere with the merger, and not to enforce the federal statutes against 1t. It was decided also that as both com panies were engaged in interstate com merce the absorption was in violation of the Sherman antitrust law and that the effect and purpose of the absorption was to monopolize the iron ore supply of the country and generally to eleminate the Tennessee company as a competitor of the United States Steel corporation.
 The fact that such a report was to be made created consternation Tn the Senate. It was realized that if the full commit tee subscribes to the findings of the sub committee the effect will be to administer the severest of rebukes to President Roosevelt and practically to instruct the Attorney General to bring proceedings against the Steel corporation under the Sherman antitrust law.
 An Unwilling senate.
 Leaders in the Senate make no secret of the fact that they are unwilling to so that far. Under these circumstances, tae full cofninftte when u meets Monday will probably consider very carefully the possible effect of the report before de- clding to adopt it. It is conceded that the deliberations of the coinmitte must extend over many days and it is- likely that action cannot be had al this session. "a hy Senator Culberson, author of the resolu- tions providing for the inquiry.
 The inquiry was conducted by sub committee of five-Messrs. Clark of Wyoming, Dillingham;, Kittridge, Culber- son and Overman.
 The first three of these are republicans and the last two democrats
 Senator Kittridge joined with the two democrats in making the majority report. NO minority report will be made by Sen ators Clark and Dillingham;, as they ex- pect that when the whole matter Is gone over by the full committee there will be division requiring more than one report. Whatever report they will make will be to the Senate. The subcommittee decided not to make the text of it's report public, although the interest in 1t was so great that the findings became known to prac tically the entire Senate during the after noon.
 Questions of Fact.
 In addition to the findings of the law, the committee reported on many questions of fact connected with the merger. It was found that during the panicky days of November, 1907 the United States Steel corporation purchased all of the stock of the Tennessee Coal, Iron and Railroad company except $220.160. the amount of stock acquired being S30,3l5,S25.
 It is shown that only S632655 in cash was paid for the stock and that bonds of the Steel corporation were issued to the amount of $S4,6S4,97S or nearly $5,000, 900 in excess of the par value of the Tennessee company stock purchased
 The report quotes from the Presi- dents message, declaring that the ab- sorption was necessary, according to the representations to him by Judge E. H. Gary and H. c. Prick, on be- half of the Steel corporation, as a certain business firm of importance in New York circles would undoubtedly fail unless the deal could be made.
 The Firm In Trouble.
 From testimony of a number of wit nesses the report declares that the firm of Moore & Schley, stockholders of New York city, was the one referred to by Messrs. Gary and Prick. This was the firm which managed the af- fairs of 2 party of financiers who bought a majority of the stock of the Tennessee company and held 1t until November, 1907.
 It is asserted by the report that banks in New York, some of them known as Morgan banks, pressed loans on Tennessee company stock vigorously and that these demands were met sue cessfully 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 that the syndicate did not wish to sell the stock but was forced to do so. After giving much of the testimony on this point the report officially denies the assertion of the President that the merger was necessary to save an important bank ing concern or business house in New York
 Sarcastic references were made by the report to the statement of Judge Gary and MT. Prick in their inter- view with the President that they did not want to buy the Tennessee con- cern. and that but little benefit would come to the Steel corporation from the purchase.
 Control of Iron Ore.
 From the testimony, 1t Is asserted that the Tennessee property is very valuable, worth probably several hun dred million dollars. and would give the steel corporation ultimate control of the Iron ore supply of the country and practical monopoly or the iron and steel trade of the south.
 It is asserted by the committee that whatever may be the supposed emer- gency, no discretion is lodged in the President as to the enforcement of the law It was found, in the opinion of a majority of the subcommittee, that the Presidents communication to the Attorney General was in effect direction not to interfere with the mer ger. It was pointed out that under the federal constitution the President Is the one official who Is expressly en- joined to take care that the laws Dc faithfully executed"