The Birmingham age-herald., 1911-06-03
GARY EXPLAINS ABSORPTION : OF T. C. l. COMPANY BY
 us. STEEL CORPORATION

U. ,. NTEEL UUkPUhAIlUN
 (CONTINUED FROM PAGE 1.J e
  manipulated, but it was a stock that had been through a period of many years, raised from a low to a high price: it had been in control of a syn dicate that influenced great fluctua- tions.
 Tt was represented that Moore & Schley had pledged s6,Oo0,0OO of this stock in the various banks. Ledyard said there was no possible way to pre- vent the failure of Moore & Schley un- less we purchased this stock and, he believed the failure, of Moore & Schley would mean the failure of many banks.
 MT. Morgan said to me, I don't know whether the United States Steel corpora ton can afford to purchase this storx or not You know best as to that If 1t does not buy it If the United States not furnish relief, no man can say what the effect will be on the financial situa- ton throughout the country. l will turn Ledyard over to you to see what you can do.
 See President First
 T said I would not consider taking any action without going to Washington and taking up the situation with the President or the department of justice.
 Have they any right asked MT. Nor gan. to say whether the United States Steel corporation shall buy this company or not?' t4
 q said, No, but here is financial crisis, the purpose of buying this stock is to overcome the tendency toward a panic, and if the President or the de- partment of justice should find out that such action was being taken and should enjoin us on the ground that the acquisi- ton or holding of the stock created a monopoly, what we had done would make the financial situation much more worse than it Is now t.5 tf1
 MT. Morgan said this was forcible reasoning"
 Mir Gary said MT. Prick agreed with him that the stock was not worth more than 65. The finance committee of the Steel corporation was summoned to the Morgan library. 4tf
 "Mr. Prick, according to MT 4Gary, offered a resolution proposing that we offer to loan Mir Schley $5,Ovo.Uoo or s6.- 900, ,0e0 in cash, taking the Tennessee Coal and Iron company securities as collat- eral. If that offer failed. to supply MT. Schley's wants it was proposed then to buy the stock on the basis of 90, payable Tn Steel cOrpOrdtlOn StOck.. MT. frlCk and myself conferred with MT. Schley and tried to get him to take the loan"
 Had to Sell Stock
 MT. Gary said Schley told Prick he must sell the stock or keep him from bank ruptcy; that unless he was mistaken an assignment already had been drawn up for Moore & Schley for their creditors.
 tI have heard since, said Hr. Gary, I l,- through all right but any one who heard him at that time would not have thought so. Therefore, began to talk to Ledyard about purchasing the stock at 90. ana we finally agreed to 1t, subject to the objection that might possibly be made in Washington. 1F Es
 We were all clearly of the opinion" said MT. Gary, that the attorney gen. eral might not have the right to indorse the transaction"
 The Steel corporation, he said had at that time about 75,0o0000 on deposit in banks, and could not have withdrawn more than s5.0Oo,ooO without creating great financial disturbance
 After the agreement had been made to take the Tennessee stock at 9O'' said MT. Gary, "Ledyard and Schley had told him that the price of 90 could not let them out of their difficulty. I notice that Gates says in his testimony that when he got home from Europe he made them raise the price in the transaction. If he made that statement. it must have been by Mar conf, because the whole transaction was closed before his arrival from Europe. "On November at a meeting of the finance committee of the corporation the entire matter was again referred to the chairman and I agreed with Ledyard to raise the price to 100 to let Moore & Schley pull through. My bargain was en- tirely with Ledyard MT. Morgan cer- tainly did not participate in any way to induce the buying or selling. I hold no brief for MT. Morgan. but state this be- cause of the sensational statements that have been made"
 After the agreement to buy the stock at 100 the finance committee of the steel company met and discussed putting the deal up to President Roosevelt Mir. Gary said that at 10 o'clock Sunday night. November A. he called up the. Secretary of the President from New York to ar- range for the conference. He and Mir Prick left that night travelling on a spe- cial train and hurried to the White House ahead of the appointed hour, as ''Mr. Nor gan had told us that the conditions were so critical he would like to hear the re- suit of our conference at the earliest DOS sible moment
 COnfers With Roosevelt After hearing our story" continued Mr. Gary, the President said he would fix. | to- consult with the department of justice MT. Bonaparte was out of town and tn. President called Secretary of State Root into his office The President asked me again to state the case. did, and the re- suit of that interviewI immediately wired to New York"
 1 Did the President ask Secretar, I Roots opinion as to the legality of tn, transaction?" asked Mir, Littleton.
 "He did" said MT. Gary. land ther, was no disagreement between any O us.'' Mr. Gary then told the committA,