The Washington times., 1911-05-27
CONTINUED from First Page.)


United States" he said, where it could
be produced for less than Sill"
Mr.. Gates said that in 1867, before
the absorption, between $6,OO0,OO and
S. 00O, 900 had been spent to improve the
plant Of the Tennessee Coal and Iron
Company.
Mr.. Stanley said there was d certain
a large quantity OF Tennessee Coal and
Iron Company stock would fail II help
were not given. Mr.. Stanley asked Mr..
Gates if he knew of such firm or
bank.
Who Flew Distress Signal?
IT think not" said Mr.. Gates.
81 want to know who flew the signal
OF distress from the Tennessee Coal
and Iron Company" said Mr.. Stanley.
Il was told," said Mr.. Gates, that a
bank in New York had several millions
of loans on Tennessee Coal and Iron
stock.
"As a result Of an investigation, a
gentleman was invited to Mr.. Morgan's
house, and Mr.. Morgan suggested that
to relieve the situation the United States
Steel might acquire the Tennessee Coal
and Iron. That led up to the negotia-
ton for the absorption of Tennessee
II think Mr.. Morgan offered Mr.. Kess-
Ter $50 share for his stock, conditional
on the deal going through. This, was a
year before the deal went through"
Mr. Gates said he would be willing to
make affidavit to the correction of a
previous assertion by him that the to-
tai value of the Tennessee Coal and Iron
company was greater than that
of the nited States Steel Corporation.
Chairman Stanley based many Of his
questions on the message sent to the
Senate by former President Roosevelt
In relation to the deal.
Mr.. Stanley pressed Mr.. Gates as to
whether the purchase Of Tennessee Coal
and Iron was a patriotic effort to head
OF serious panic, of to save a prom
inent banker.
Il never heard of rumors that Mr.
Morgan would be forced into an assign
ment."
Mr.. Gates said he regarded the deal
as a forced sale.
what forced this sale?" asked Mr.
Stanley
The finding of a large amount OF
Tennessee Coal and Iron collateral ir
was responsible in my opinion said
Mr.. Gates
Did Morgan Infuence7
Did Mr.. Morgan have any influence
in the natter" asked Mr.. Stanley.
''I don't know" said Mr. Gates.
| Mr.. McGiLllicuddy asked for the to-
tai value OF the property. Mr. Gates
| said he could not give a definite an
swer. He said he believed the Morgan
OFFER of $50 a share was too low.
Considering the amount of time anC
money we put into Tennessee" saiC
Mr.. Gates Il think we lost money OIL
the deal. II the stock OF the Tennes
see Coal and Iron had not been undul!
| depressed IL would not have gon'
| down nnSSihla m
| because the Trust Company OF America
held so much Tennessee Coal and IroI
| collateral"
Was Mr. Morgan willing to go t,
dition he could get the Tennessee Goa
and Iron stock?" asked Representativ,
young.
Il don't know that Of my owl
! knowledge" said Mr. Gates
'On the day before Frick and Gar,
came down to see Roosevelt" saiC
Gates, IF a man had to buy $500 shares
OF Tennessee Coal and Iron he Nigh
have had to pay, l50 a share. II. oI
the other hand, he had to get rid o
PEELED to sell for between 10 and lis"
Not a dollar changed hands, saiC
Mr.. Gates, referring to the details o
| the financial arrangement of the deal
1T was merely an exchange Of col
lateral
Mr. Young asked a number Of ques
tions about the Republic Iron and Stee
Company.
Il thought you were investigating tn
United States Steel Corporation" SAT-
Mr.. Gates. Il don't think l want t
answer questions about the Republic"
No, sir; you're mixed: you're al
mixed up were remarks frequentl
made by Mr.. Gates when members o
the committee asked him question
about the deal.
Would Be In Saddle
IF you have continued in youf>man
agement of Tennessee Coal and Irol
could the United States Steel or an.
one else have dictated the price a
which you could sell rails?" aske
Chairman Stanley.
II think we would have been in tn
saddle" replied Mr.. Gates. I'VE woul
have had an advantage in our terri
When Mr.. Stanley asked to what MI
| Gates attributed the stability IN tn
price of rails the witness replied he wa
not a rail-maker, and therefore no
competent to answer the question.
At the request of Chairman STANLEY
he digressed long enough to go into
history of the Consolidated Steel an
Wire Company of Illinois, which after
ward became the American Steel an
Wire Company Of New Jersey:
Asked about the cost of barbed wire
Mr Gates volunteered the informatio
that there is a profit of 10 or 15 per cent
''Two-ffths of the wire plants oough