Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-06-03

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was permitted To make full state
Iment, regarding that transaction.
| Several offers" said he, had been
made to us by people representing the
| Tennessee Coal e. Iron Co. to sell at
different times prior to the fall of 1907,
The United States steel Corporation
4 had always been opposed to the pur-
chase of the property and distinctly
said 50 on various occasions.
| Early in 1902 Mr. Morgan sent for
me and said that George Kessler, who
| had purchased stocks of the Tennessee
Coal Il Iron Co., outside the Grant b.
Schley Syndicate. had approached him
with the statement that the Tennessee
leo. could be purchased al 1870. ! told
Mr.. Morgan it was not worth having
at that price. Mr.. Frick later ex-
pressed the same opinion and the mat
ter then was dropped. / believe at
that time Mr.. Morgan said that Kess-
Ter represented only himself and not
Iany of the members of the Schev syn
dictate. But about Oct. %. 1907. Mr..
Morgan asked me to come to his bank
land told me- that Grant y. Schley.
managing director of the Tennessee
| Co. was much in need of money to
1 ~
Schley. | think saw Mr. Schley then
but the business finally resulted in my
accommodating Mr.. Schlev with a loan
| of $1,200.000 par value of United States
Steel second bonds and taking from
him an agreement to return those
bonds and ! received as security for
the fulfilment of that agreement So
100000 par value stock of the Tonnes
| see Coal & Iron Co. The agreement
provided that if the loan was not re-
turned by April -. 1909. the owner
ship of the $2,000.00 of Tennessee Co.
stock should remain in the control of
the United States Corporation It was
an accommodation TO Schley at his
| very urgent request and because he
| stated that it was absolutely neces-
sary 10 protect him from financial
trouble. That loan, your see. was TAX
ing Tennessee Coal & Iron on the basis
of 60"
Mr.. Cary submitted this loan agree
| ment 20 the committee.
About NaT. > 1907 during the ffnan-
| cial panic the matter came up again.
The Trust Company of America was in
! difficulty. John W. Gates testified last
week that this bank was responsible
| for Morgans efforts to sell the Tonnes
| see Co. To the Steel Corporation To save
| the Trust Company which had loaned
| very heavily on the Tennessee COS.
| stock. Mr. Gary described the consul
tation in Mr.. Morgan's library with Mr..
| Morgan and Louis CaSs Ledyard c0un-
| sci for Col. oliver PAYNE, one Of the
| syndicate which purchased the con
trolling interests in the Tennessee Co.
| Mr.. Carr said Mr. Ledyafd told hinn
Moore & Schley were largely indebted
to Mr.. PAYNE and had many of his Sc
| curities. They had deposited with their
| security on their Indebtedness of 800
000,0o0 many shares of Tennessee Coal
| and iron stock with many banks.
Tho banks had called these leans"
| said Mr.. Gary, and We're insisting
| that Moore & Schiey take up the Ten
| nessee Coal and Iron stock 1t VAS not
saleable | viii not say that il had been
| manipulated. but IL was a stock that
lad ncer. through period Of smany
| years. raised from a low TO a high
| price; il had been in control of syn
dictate that influenced great fiuctua-
| tions. 1t was reported that Moore q
Schley lad pledged $G.d00000 Of this
stock in the various banks Mr.. Led
ward said there was no possible way
| to prevent the failure of Moore d
| Schley unless we purchased this stock;
and he believed tine failure of Moore
| $. Sehley would mean the failure of
many banks.
Mr. Morgan said 10 mel don't
know whether the United States Steel
Corpora ton can afford to purchase
| this stock or not. You know best as
| to that If it Goes not buy it: if the
United states Steel Corporation or
some one else does not furnish relief,
| no man can say what the effect will be
| on the financial situation throughout
the country. The situation is extremely
critical. If YOU can see Your way clear
| to buy it. | have no doubt such action
will relieve the situation. | will turn
| Mr.. Ledyard over to YOU, TO see what
| you can do
Il said | would not consider taking
envy action without going to Washing
| ton. and taking the situation up with
| the President or the department of JUS
| tice.
Have they any right asked Mr..
Morgan. to say whether the United
| states Steel Corporation shall buy this
company or not
Il SAID: No. but here is a financial
crisis: the purpose of buying this
stock is to overcome the tendency
toward . panic; and if the President
or the department. of justice should
! End out that such. action was being
| taken and should enioin us on the
ground that the acquisition or hold
ing of the stock created a MONOPOLY
what we had done would make the
financial situation much worse than
| it is now
Mr.. Morgan said this was forcible
| easonir g.
Mr.. Gary said Mr.. Frick agreed
with him that the stock was not
Worth more than 65. Not until Mr.
Morgan told him what he thought
about the panic did Mr. Frick give
| any encouraeement to the plan. The
| finance committee of the steel eorpor-
alton was summoned to Mr. Morgan's
library,
Mr.. Friek," according to Mr.. Gary,