The Birmingham age-herald., 1911-10-27


 . steel business.
 the conditions in the steel trade in the different consultations of 1S9S-19OO, and the formation of the Federal Steel com pany, the Carnegie company of New Jer- sey the American Steel and Wire com pany, the National Tube company, the National Steel company, the American Tin Plate company, the American steel Hoop company, the American Sheet steel company and other corporations prior to the formation of the United States Steel corporation itself in 1901. l Describing the corporations acquisition of the Tennessee Coal, Iron and Rail- read company, the petition relates;
 1907 Sensation
 Tn 1907 the corporation acquired the | control and almost the entire ownership of the Tennessee Coal, Iron and Railroad l company. The properties of this company were located mainly in Alabama and Ten ressee
 lowing to the character of it's coal and
 iron deposits, the Tennessee company could manufacture pig iron cheaper than
 it could be made in any other part of the United States. On account of it's vast holdings of coal and iron properties
 e was a strong probable future competi- tor of the corporation. Most of the rails
 in the United States had been made out of Bessemer ores On account of acci- dents attributed to weakness such rails q demand arose for an open hearth rail- and for such process the ores owned by the Tennessee company were available.
 Tn 1907 a sensation was created in the steel rail market by E. H. Hartman or dering from the Tennessee company 157,- coo tons of open hearth steel rails at S1 more per ton than the price of Bessemer rails. This at once put that company into | cit of n corporation, and of a possible competitor l that could not be ignored of great pc- tentiality.
 "The corporation was not slow to dis cern the situation James Gayley, first ;, vice president of the corporation having acquainted himself with the properties of the Tennessee company, had already rec commended by MT. Prick, who then was a director of the corporation, that it acquire the properties of the Tennessee company
 Grant B. Schley of the firm of Moore X Schley of New York city was one of the syndicate holding majority of the stock This was known to the off cers of the corporation. Moore & Schley In October 1907, owed large sums of money in New York and else where from s35,000,000 to $3S,000, 900 upon call and time loans which were running to maturity. Some of these loans were partly secured by pledge of | amount fluctuatng
 Tn October of 1907 a great panic came and New York was the storm center.
 Those in control of the corporation obtained intimate knowledge of the af fairs of Moore X Schley and of their holdings of Tennessee stock. The credit of Moore & Schley and the character of their stockholdngs, such as Ten nessee stock, Republic Iron and Steel stock and other industrials, were dis cussed on the street, and among bank CTS and the question of their failure was mooted The Tennessee stock was especially subjected to criticism, and in Wall street parlance, was hammered as collateral
 Gary Negotiates
 "H. c. Prick and E. H. Gray, repre- senting the corporation, took up the negotiation with Schley for the pur- | chase of the syndicate stock of the l Tennessee company, offering him first the equivalent of 50 cents on the dol lar and afterward 75 cents on the 100 cents in cash for the stock, which 1 Schley declined. Oakleigh Thorne, who was president of the Trust company of America, a New York institution, was one of the syndicate that purchased the majority of the stock of the Tennessee company, having subscribed for 12,5oo shares.
 Tn a New York paper of October 23 appeared a statement headed, Aid Trust Company of America Among other things it said that at a meeting the night before of the chief bankers of the city, headed by J. P Morgan x Co" it was formally decided that the point then needing buttressing was the Trust company of America, and that this de- termination was announced after MT. Perkins (meaning George w. Perkins of J. P. Morgan & Co) had been in con- ference subsequest to said gathering of bankers
 "A part of the article sub headed The Official Statement said:
 The chief sore point is the Trust company of America
 After expressing confidence in the con- dition of the company, and stating that it would be aided and cash had been guaranteed therefor, it was stated that these steps were taken for the purpose of announcing that the company would De taken care of if an examination into It's affairs, which had been authorized, showed conditions to be as sound as there was every reason to believe them to De. T his announcement helped materially to cause run on the said trust company and aggravated the general uneasy condi- tion. and made the position of Moore and Schley more desperate. It was generally known that Thorn and Schlely were mem ,, , hers of the Tennessee syndicate. 'Regardless of the intent in giving out the statement and the facts are not suf- I fciently known to make any charge Tn this regard, the fact Is that II coh'rip- uted directly and strongly toward bring ing Moore and Schley to a pont oi .in- { mediate failure, although they were ann ply solvent" it says. Their position had become desperate. It being generally re , garded by bankers and financiers that 1 their failure might preciptate general crisis, they q. P. Morgan &t Col taking f the lead, exerted themselves by advances ? Of ready money to meet pressing demands B and also to prevent their suspension Much of the effort, however, resolved