The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1911-10-27

BEFORE the consolidation of le0S-l90
n the formation OF the Federal Stee
Company. the Carnegie Company. q
New Jersey. tho American Steel ant
Company. the National Steel Com,
pany, the American Tin Plate Com,
any the American Steel Hoop Com,
pany. the American Sheet Steel Com,
pany and other corporations prior &c
the formation OF the United state.
steel Corporation itself In 1901.
Acquisition OF tennessee.
Describing the corporations acquisi-
ton OF the Tennessee Coal and Iron
Company the petition relates:
I'm l907 the corporation acquired
the control and almost the entire own
ership of the Tennessee Coal, Iron and
Railroad Company. The properties of
this ompan were located mainly in
Alabama and Tennessee Owing to the
character OF It's coal and iron deposits
the Tennessee Company could manu-
facturo pig iron cheaper han II could
be made in any other part OF the
United states. On account of it's vast
holdings OF coal and iron properties,
petitor OF the corporation. Most of
the rails In the United States had been
made out of Bessemer ores. On ac-
count OF accidents attributed to weak
ness in such rails, 81 demand arose for
an open hearth rail, and for such pro-
cess the ores owned by the Tennessee
Company were available.
In 1907 O sensation was created in
the steel rail market by L. IL. Harri-
man, ordering from the Tennessee
Company 157,500 tons of open hearth
ateei rails at 81 more per ton thar the
price OF BesserUer rails. This as ice
put that company into a position OF
an actual competitor of the corpora
tion. and OF a possible competitor that
could not be ignored, OF great poten-
tlality.
The corporation was not slow to
discern the situation. James Galley.
1irst vfce-president of the corporations,
having acquainted himself with the
properties of the Tennessee Company,
had already recomnlended to Mr.. Frlck.
who was then a director of the cor
poration, that it acquire the properties
of the Tennessee Company.
Grant d. Schley. OF the hrm of
AiooSe &; Schley, of New York City, was
one OF the syndicate holding a major
ity of the stock. This was known TO
the officers of the corporation. Moore
~ Schley, in October. 1907. owed large
sums of money in New ork and elsa
where. from $500 900 to $3S, 600, O0t
dlph II tllut lounS, winch were
cumming to maturity. Some of these
loans were partly secured by pledse
of 100000 shares OF Tennessee stock.
the amount fluctuating.
In october, 1907. a great panic
came, and New York was the storm
centre.
Those in control of the corpora
ton obtained intimate knowledge Of
the AFFAIRS OF Moore X Schley. and Of
their holdings OF Tennessee stock. The
credit of Moore 81 Schley and the
character of their stock holdings. such
as Tennessee stock. Republic Iron ard
steel stock and other industrials. was
discussed on the street and among
bankers. and the question of their faii-
ure was mooted. The Tennessee stock
was speedily subjected to criticism,
and, In Wall Street parlance, was
'ha mnlered' as a collateral. II. C.
Irtck and f. II. Gary, r~epresentlrg
the corporation. tool up the negotia-l
ton with Schley for the purchase OF
the syndicate stock of the Tennessee
Offering first the equivalent
of so cents on the dollar, and AFTER
IS cents on the dollar In cash
Tor the stock, which Schley decl'ned.i
Thorne. who was president,
of the Trust Company of America, a
New York Institution, was one OF the
that purchased the maiorityi
of the stock of the Tennessee Col,-i
pany, having subscribed for 12,50Ol
shares.
I'm a New York paper OF October 20
appeared a sta tement headed Aid Trust
Company of America Among other
Things 1T said that at a meeting tho