The Birmingham age-herald., 1911-06-03
Whole Matter Grew Out of Financial Difficulties of
 Tennessee Go. in 1907
FAVORS GOVERNMENT
 CONTROL OF PRICES
Judge Gary Astounds- the Committee When He Declares That Sherman Antitrust Law Is Archaic
 and Government Should
 Control Corporations

poration directorate, told the Stanley steel trust Investigating committee to- day that his corporation stood behind J.. Pierpont Morgan in averting disastrous financial upheavel in 1907.
 He insisted. challenging the statements of John w Gates before the committee, that the purchase by the Steel corpora tion of the. Tennessee Coal, Iron and Rail- road company at that time was made at price more than it was worth, and for the express purpose of preventing the crash of the New York banking firm of Moore 6 Schley
 Mir. Gary related dramatic story of the momentous events which preceded the absorption of the Tennessee concern. He described in detail how he and Henry c. Prick. at the instance of Mir. Nor gan, had revealed the plan of buying the company at price greater than its value, to President Roosevelt and MT. Root, the Secretary of State. He told how he had concluded, after their interview with MT. Roosevelt, that any government prosecution of their act would have been 'an outrage" MT. Gary made many sur prising statements during his eight hours examination, but none more startling than his declaration that government control and publicity of corporations in this coun- try must come. ! He said that through the American Iron and Steel institution, the heads of the steel industry were trying to steer course between the Sherman antitrust law, which he characterized as archaic" on the one hand, and the old-time meth- ods of destructive competition on the other, to operate for the public welfare.
 MT. Gary announced to the committee that he wanted everything known con- corning the Steel corporation and more than all he pleaded for some responsible government source to which such great corporation could appeal for guidance in the conduct of it's business. He agreed to furnish the committee as much infor- nation as 1t wishes to know and that he will be recalled when 1t meets again next Wednesday. Others who nave been sum fnoned to appear are B. Dickson of the Steel corporation and John Lambert of the Republic Iron and Steel company
 Explains T. c. I. Deal
  Iron company by the United States Steel company by the United States Steel corporation was taken up by the House steel trust investigating committee late this afternoon. Representative Lit tleton conducted the inquiry for the committed MT. Gary was permitted to make full statement regarding that transaction.
 Several offers." said MT. Gary, had been made to us. by people represent ing the Tennessee Coal and Iron com rany to sell at different times prior to the fall of 1907. The United States Steel corporation had always been op- posed to the purchase of the property and distintly said so on various occa- sions.
 Early in 1907 MT. Morgan sent for mo and said that MT. George Kessler, who had purchased stock of the Ten Eessee Coal and Iron company out side the Grant B. Schley syndicate, had approached him with the statement that the Tennessee company could be purchased at 130. I told MT Morgan ii vas not worth having at that price Mir. Prick later expressed the same opinion and the matter was dropped believe at that time MT. Morgan said hessler represented only himself and not any of the members of the Schley syndicate. But about October 2S, 19o7, Mr. Morgan asked me to come to his bunk and told me that Grant B. Schley managing director of the Tennessee company, was much In need of money to use at the bank for the firm of Moore & Schley. I think I saw MT. kchley then, but the business finally resulted in my accommodating Ur. Schey with a loan of $1,200, 900, par value, of United States Steel second bonds. and taking from him an agree mert to rethrn these bonds, and I re- ceived as security for the fulflllment of that agreement $2,O00,O00 par value stock of the Tennessee Coal and Iron company The agreement provided that + tile loan was not returned by April g 1908, the ownership of the $2.000,- Oo0 of Tennessee company stock should remain in the control of the United States Steel corporation. It was an ac- commodation to Schley at his very ur- gent request and because he stated that 1t was absolutely necessary to pro- ,ect him from financial troubles. That loan, you see, was taking Tennessee Coal ana Iron on lHe pdSiS ol w.
 Mir Gary submitted this agreement to the committee.
 Trust Company in Difficulty About November 2, 1907, amid the financial panic, the natter came up again. The Trust Company of America was in difficulty. John w. Gates testi- fled last week that this bank was re- spcnsiblef for Morgan's efforts t' sell the Tennessee company to the Steel corporation in order to save the Trust company which had loaned too heavily on the Tennessee stock. MT. Gary re- ferred to the possibility then o. suspension of many banks and the fail- ure of many people. He told of the . Morgan library conference with Mir. Morgan, Louis Cass Ledyard, counsel for Colonel Oliver Payne, one of the syndicate that purchased. the com trolling interest in the Tennessee com pany Mr. Gary said MT. Ledyard told him Moore and Schley were largely in- debted to MT. Payne and had many of hIs securities. They had deposited with their securities on their indebtedness of S30 0O0, 900 many shares of the Tennes- see Coal andi iron stock with many banks .x1
 The banks had called these loans,, |oaid Mr. Gary. and were insisting that Moore 6 Schley take up thc Tennessee Coal and Iron stock. 1t was. not sale- able Iwil not say that it had been
 
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