The Birmingham age-herald., 1911-06-03


 House. he had written to Secretary Reot, reviewing the entire conference as he r9membered it, and asking Sec retary Root if this agreed with his recollection.
 This letter reviewed the facts pre- scented tot the President. namely, that the United States Steel corporation had the opportunity to purchase more than one half of the capital stock of the Tennessee Coal and Iron company at a price somewhat in excess of it's actual value; that the purchase would great ly benefit threatening financial condi- tfons and avert the failure of an inn rortant concern; that the purchase would not materially increase the amount of steel business controlled by the United States Steel corporation.
 Mir. Gary stated in his letter he un- derstood the President to say that while he would not make any promise as 10 what the government would do, he certainly would not stand in the way. . s3.
 MT. Root wrote MT. Gary on No vember II, saying the account of the conference fully agreed with his recol- lection and that he had sent a copy or MT. Gary's letter and his answer to the President, recommending that he transmit it to the department of jus tice for its permanent files. This let ter was followed by this acknowledge ment from President Roosevelt:
 Roosevelt Agrees to Facts
 "Mr. Gary states the facts as l re- member them"
 q remember" added MT. Gary. "tIat Mr Root said to the President that, oi course, he had no right to say we could buy this property. The President said he understood that, and that all we wished to know was what would be the attitude of the department of Justice. The President said that in case of objection we could not be permitted to buy I remember the President say ing also that he was glad to know that the percentage of steel production of tie United States Steel corporation was not increasing but was less than at the time the corporation was organized. think he said:
 " In view of the fact that your per centages of control of the steel industry has not increased, but decreased, and appreciating the financial distress, l don't believe it is necessary for me to say that I don't feel like objecting un- der the circumstances.
 When you went to the President did it amount to your obtaining an opinion as to whether the deal was violation of the law?'' asked MT. Littleton.
 
 MT. Gary, that if we acquired the securi- ties and afterwards there should be a proceeding by the government against us to prevent confirmation of the deal, it would amount to a great outrage"
 MT. Gary said he regretted that Chair man Stanley of. the committee believes that Mr. Prick sndN-I Suisrepresented the facts to President Roosevelt and he wanted to satisfy the committee by +e- Aot that fhera mis- representation. f sChairnan. Stanley said his opinion, whatever it was, had been formed after a careful study of the facts presented before the Senate committee and the ju- dicial interpretation of its members.
 q regarded the absorption of the Ten nessee Coal, Iron and Railroad company by the tacit consent of the President, with profound astonishment.' said MT. Stanley.
 f"I have always regretted that the full facts as to our conference with the Pres ident did not develop at that Senate hearing" said MT. Gary.
 Banks Call in Loans
 Questioned by MT. Littleton MT. Gary said Moore & Schley could not have failed if the banks had not called their loans.
 Did anyone try to find out the exact amount of these loans?" asked MT. Little
 
 ton.
 we tried tosverify their statements by sending two representatives to examine their books" said MT Gary. My only recollection is that they reported the loans to be very large"
 ''Was it not easy for you to have been deceived as to the necessity for pur- chasing the company unless you actually knew the amount Moore & Schley owed?' asked Mir IittletOn,
 ''Yes," said MT. Gary. "T think we were deceived In this respect at least. I be- lieve Moore & Schley had much larger amount of this stock deposited as collat- eral than they actually possessed"
 Referring to the testimony given by John w Gates last week In which nc said he regarded the taking over of the Tennessee company as rorced saie' MT Gary said
 .Mr. Gates says in his testimony that the board of directors passed. resolution that the minority stockholders should have the right to turn in their stock at the same price. I have no recollection or that if it is true it would look as though they were rather forcing us to buy than we were trying to make them sell.
 "As a matter of fact the original mem- orandum provided that we should take the minority stock at the same price as the other. This was consummated before MT. Gates returned from Europe. think he is mistaken in his memory of the facts" 7 .s ~s
 Representative Gardner asked if there were not men who also were interested in protecting the situation who would have shared with the Steel corporation the bur den of relieving the situation. MT. Gary replied that there were few men who took the view of financial crisis that MT. Morgan did.
 MT. Morgan is enc man., he said, "who on such an occasion rises and puts his own money into other banks or into the stock exchange to prevent panic and trou- ble and to help people who are in f1nan- cial distress. He has done 1t time and again. This time he risked his money and name to save the situation.
 Bankers all hoped the United States Steel corporation could afford to buy this stock I haven't said that the Unite1 States Steel. corporation expects to suffer ultimate loss on the transaction"
 But why didn't some one else buy it?' asked Representative Gardner.
 There was no other customer for it." said Mir Gary If 1t had been put on the market it would have gone very low and I believe the company would have been thrown into bankruptcy"
 Governmental Control !. Soon after the committee met today MT Gary declared that enforced pub. licity and governmental control of cor. porations must come, even as to prices He said he believed the Sherman anti. trust law was too archaic to deal with modern situations and never could fully ----------...--z,--.-----.----- -
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