Omaha daily bee., 1911-07-29
BEFORE INVESTIGATING BODY
Absorption Was Just to Help Banks
Holding Some of the Stock.
COST WAS SIMPLY NOTHING
Property in Tennessee Was a Most
Valuable Asset.
INCLUDED BOTH IRON AND COAL
Merger Effected in MOrEan's office
After Gary and Frick Returned
from Washington to secure
ROOseveIt's Approval.

NEW YORK, July 2s.-That the financing
of the Tennessee Coal and Iron syndicate
in 1905 did not cost as much as postage
stamp was the declaration made today by
L. c. Hanna of Cleveland o.. before the
Stanley steel trust investigating commit
tee, Mr. Hanna, who was manager of that
syndicate before the company was absorbed
by the United States Steel corporation in
1907, also testified that the main purpose
Of the men who took over the Tennessee
company, in competition with the steel cor
poration, was to develop the great mineral
resources rather than the mechanical
equipment of the property.
In the organization Of that syndicate"
Mr.. Stanley asked, aid you employ Mr.
Morgan or any other financial syndicate
to float your bonds?'
The financing of the Tennessee COM
pany did not cost as much as the price of
a postage stamp" Mr.. Hanna said. There
were no bankers employed.
did you ever get an order for steel rails
from Mr.. Hartmann" asked the chairman.
Yes" Mr.. Hanna replied.
4 \"Mr. Hartman gave us an order for
l57, 800 tons OF steel rails"
How long was 1t after Hartman gave
you this order" asked Mr.. Stanley, It'll
you lehfneu bnal your SOhpahS "oS a"
trouble in Wall street2'
81 don't remember exactly, but think 1t
was several months"
Tennessee Property valuable.
Mr. Hanna said he thought the Tennessee
Coal and Iron syndicate was formed about
November, 1905. In the original purchase
of it's stock he had 10000 shares. AS to the
values OF the Tennessee property Mr.,
Hanna said:
ut was a well known fact that the Ten
nessee company owned large amount OF
mineral, iron and coal and flux-stone, and
the values of ore have greatly increased In
the last ten years." -B
That advance the witness attributed TO
the greatly Increased consumption OF Iron
and steel. the growing export trade and
aheyincreasa. Of transportation facilities,
The witness then described how the stock
Of the syndicate had been placed in the
hands Of the managers with an agreement
that It should not be sold below par. the
agreement which John w. Gates explained
to the committee some time before
WAS the purpose of that agreement
placing the stock in the hands of your
self and Moore & Schley, to make the
sale easier or to prevent it,? asked Mr.
Stanley.
THE purpose was to prevent IT and there
never was any official effort made to DIS
pose of the stock until the panic Oh 1907. ="
At the time of the sale Mr.. Hanna said
there were 223, 900 shares of Tennessee stock.
He was asked about the financial condition
OF the chief members of the syndicate at
the time of the sale and said they were all
regarded as financially sound.
The witness described how banks holding
considerable Tennessee collateral were in
trouble and were demanding additional col
lateral He described how the Tennessee
stock was regarded In Wall street as peg
stock" because II was controlled by a
syndicate and tied up for a fixed period
Its nominal value was about 40 TO 1870.
Sale for Benefit of banks.
At the time of the sale OF the Tennessee
to the United States Steel corporation, Mr..
Hanna declared that the Tennessee com
pany was in good financial condition and
did not need to sell, but the sale was neces-
sary 10 avoid the failure OF Moore a Schley
and the threatened spread of a ruinous
panic.
Mr. Hanna related the story OF the con-
ference held In ]. Pierpont Morgan's II.
brary where the merger was effected after
Judge Gary and II. c. Frick returned from
their hurried trip TO Washington TO get