The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1909-01-30
INQUIRY INTO
STEEL MERGER
DURING PANIC
Senate Committee on Judiciary
Trying TO Find Out RooSe-
veIt'S Part Therein.
GEORGE w. PERKINS
ON WITNESS STAND
TOLD OF THE VISIT OF FRICk
AND GARY TO WASHINGTON
AND OTHER MATTERS,

Washington. Jan. 29.-The merger OF
the Tennessee Coal & Iron company
and the United States Steel corporation
was Investigated by the senate com
mittee on the judiciary today.
The witnesses were Oakleigh ThoTne,
president Of the Trust Company Of
America and George w. Perkins of J.
p. Morgan & Co, which is also a mem
Der of the finance committee of the
steel corporation.
No efforts have been made by the
committee TO subpoena Judge Gary and
II. c. Prick.
The examination of both witnesses
today was conducted by Senator Gull
berson-
Trust companyis Interest.
Mr.. Thorne testified that the Trust
Company of America has no interest in
the stock of the Tennessee Coal & Iron
company as owner, but on Nov. /, 1907,
it had loaned s4S2, 700 to six individuals,
holding the stock at so as collateral.
All of these loans said Mr.. Thorne,
were paid off in November. with the
exception of two of $4,000 each.
Mr.. Thorne said that he considered
the security for the loans to be good,
and that his company had no interest
In the absorption of the Tennessee
company by the steel corporation, and
did not know of the negotiations until
after they were begun.
Member of Syndicate.
Senator Culberson then inquired Of
Mr.. Thorne whether he had knowl-
edge of a syndicate which owned the
controlling interest in the Tennessee
Coal & Iron company in the fall OF
1907. He replied that he had, and thai
he was a member of that syndicate, bu
he had withdrawn from the syndicate
and was not familiar with the syndi'
Gates operations. The original syndi
cate managers were given as Grant =
Schfey and Charles Guthrie.
Leonard Hanna of Cleveland took tn
place of Mr.. Guthrie after the latter
death. This syndicate, declared Mr.
Thorne, owned a majority of the stool
of the Tennessee company.
Simply Delivered His Stock.
In addition Mr.. Thorne mentioned
John W. Gates, Z. J. Berwin and H 5
Black. When asked IL he had any per
sonal knowledge of the actual sale of {
majority of the stock of the Tennessee
company in November, 1907, Mr.
Thorne replied:
"All that I know is that ] delivered
my stock to J. P. Morgan & Co. anC
got a receipt for it.
Senator Overman asked Mr.. Thorn,
if at the time of the merger the Trus
Company of America was financially
embarrassed. and if so, whether tbs
merger had a tendency to relieve 1t
He replied that it had no direct bear
ing on either himself or the company.
Price Went Up to 1913.
At the time the syndicate to contro
the Tennessee Coal & Iron company
was formed, said Mr.. Thorne, the syn
dictate price was s110 a share, but it,
market price was Se5. and it went VI
to s12s.
Mr. Thorne testified that when tn,
| Tennessee Company's stock was sur
rendered the owners received in return
United States Steel per cent bondi
on the basis of SIG par value for escf
share of the stock of the Tennessee
company. The steel corporation bond
were quoted by Mr.. ThoTne as bein.
worth from $50 to Ss4 at the time IN
received them, and being worth nov
between S102 and Sl03.
Perkins on the Stand.
/ zWhen Mr.. Perkins took the stand n.
said
'''The acquisition of the Tennssss,
Coal & Iron company by the GniteC
States Steel corporation was ueve
brought up or preached In any way, a.
far as my knowledge goes. until per
! haps the second or third acute stage o
the panic developed in New York, anC
then il came UP very suddenly f'ecaUs'
of the series of disturbances that eV
! listed in New. York as a result If rnt
| great depreciation in market valuei
and the unmarketability of a grea
many securities"
Mr. Perkins said that there was ;
/ general feeling which it would be DIFF
| ficuIt for any one to express IN con
crete statement that If the Tennesse'
1 Coal & Iron stocks were taken ont o
various loans. in some way it wouiI
prevent a great many failures aDC
avert a spread of the panic. Contiuu
| ing, he said:
The Trip to Washington.
Finally some one made a suggestion
which afterwards worked out. that tin
corporation might furnish ; pr cen
/ second mortgage bonds. in lieu Of cash
Continued on Page 2.