Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1911-05-28


into the steel market. one result of
IT, he declared, was ITO convert a
lot of doubtful assets into cash" by
broadening the market for corpora
tion shares.
The special committee of which
Representative Stanley OF KenuCks.
is chairman, had determined that an
Investigation of the Tennessee Coal a
iron deal, which is said TO have been
approved by President Roosevelt.
should be the first subject taken up.
Mr. Gates was the first witness to
appear before the COMMITTEES.
Did any member of firm or
hank make proposition TO the Unit
ed States steel corporation to accept
the Tennessee Coal a Iron company
as a comparatively worthless prop
erty." asked Mr. STANLEY
IN otaer words, VINO flew the sig
nal of distress?"
There are great many under
ground wires in New York" MIR.
Gates replied. Il was told that a GER
tain bank in November. 1907. applied
TO the clearing house for assistance.
conmittee was appointed to ex-
awine lis assets. They discovered
several millions OF the banks funds
out OF tie Tennessee Coal and Iron
company. They reported to the clear
Ing house too much had been loaned
on Tennessee Coal and Iron collateral,
stock brokers told me that as a result
~ this Investigation a gentleman was
Invited TO Mr.. Morgan's house. Mr..
Morgan suggested to him that to re-
reve the situation the United states
Steel corporation might acquire the
Tennessee Coal and Iron company
That led up to the negotiations after
ward concluded
Mr. Stanley wanted TO know II MIR.
Morgan and others had ever tried
to acqcire the Tennessee company be-
fore with a view to securing a mo-
nopoly Mr.. Gates said he could not
tell what was In the mind of the pur-
chaser5.
He outlined at length the sale OF
stock to the United States Steel cor
poration. He said that in 1904 OF
1896 during his absence in Texas a
syndicate was formed. managed by
Grant u. Schley and Charles s. Guth-
rie. then president of the RepublI,
steel and Iron company which pur
chased the stock of the Tennessee
Coal and Iron company, lie related
how Mr.. Guthrie died soon afterward
and s. G. Hanna, brother of former
Senator Hanna, had been made asso-
ciata manager.
"In July. 1907 said Mr. Gates, Il
sailed for Europe. ] returned In No
vember, 1907, and on the ship
bought a paper and read that the
stock of the Tennessee Coal ana iror
con paly had been sold to the United
States steel corporation The panic
was on then. / met Mr.. Schley at his
office as soon as | reached New Yorh
and found negotiations going on be.
tween Mr.. Schley, Mr. Hanna ant
their associates and Judge Gary Mr.
Frlck and Mr.. Morgan. The latter
were then In conference at Morgan's
house trying to acquire the Tennessee
Coal and Iron stock The terms pro-
posed were that for each ten shares
of Tennessee Coal and Iron stock W,
were to get the United States secont
SIS mortgage bonds. | said II wa
not enough and held out until VI
made a trade on the basis Of 1l9 81
in United states steel sinking fun'
SIS. The next day | insisted that tn
minority stockholders be given tn
sane terms and the deal was made.
"Mr Schley." suggested Mr.. stan
ley, has declared that the sale o.
Tennessee Coal and Iron company
was a forced sale. Do you SO consider
it,"
81 regarded ii as forced sale, said
Mr.. Gates.
what financial power forced IT.
well, as | have said, | surmised u
was the finding OF too much Tennes,
see Coal and Iron stock as collateral
In one of the banks"
did Mr.. Morgan have a decided IN
fluence over this bank" asked MT
Stanley. 49,.
II do not know" said Mr.. Gates II
IL dl flcult to tell where "a mans IN
fluence starts or ends In Wall street.
Mr.. Gates said that the bank IT
question the Trust Company OF Am
erica, wanted sl0.0OO,0O0 and, ne
added, they got 1t.
Mr.. Gates left Washington after the
hearing. The next meeting OF IN,
committee will be held Tuesday. II
is not known definitely who VIII APP
pear before II on that daN. Anon
the witnesses, however are ~ ~
Gary and Norman u. Reab ,of the
United States steel corporation.