Omaha daily bee., 1911-07-30
LEWIS c. LEDYARp TEsT1FTEs
Attorney Says that No Effort Was
Made to Call Loan.
STEEL MERGER WAS LEGAL
Says There Was No Violation of Law
in Combine.
SHERMAN Law NOT INVOLVED
Morgan IL Held Up as Financial
Angel of Firm that Was Dan
EerousIy Near Ruin and
Needed Help.


saved from ruin in 1907 ~ ,SN7 Sdr-
chase of the Tennes slE Iron
company by the ~ Steel cor
poration owed NJ ]. Pierpont
Morgan & Co., ,yr y was secured by
Tennessee Coal & Fron stock as collateral.
was today revealed to the steel trust in
vestigating committee by Lewis Case
Ledyard.
Representative Littleton asked Mr.
Ledyard about the nature of Moore &
Schleys loans. He saids
The firm of j. Pieroont Morgan &
! Co. had loaned the firm a considerable
sum-"
! WAS it secured by Tennessee Coal K
Iron stock?" asked Mr.. Littleton.
Yes, It was, but the Morgan firm had
never bothered Moore & Schley and did
not call the loan"
There never was a more Infamous
outrage than the suggestion that has been
made that either Mr.. Morgan or the
United States Steel corporation brought
about, engineered, or inspired an attack
on the Tennessee Coal & Iron company.
Such a thing is absolutely false" said
Mr.. Ledyard.
Mr. Ledyard made a defense of the
ABSORPTION of the Tennessee company and
said he never saw anything illegal in q
He said:
"since the recent decisions of our
learned chief justice. am more than ever
convinced that IT was not illegal"
Payne Originated Scheme.
Lewis Case Ledyard, counsel for oliver
Payne. who was one of the syndicate
which owned the Tennessee Coal & Iron
company, told the committee today that
his client, Mr.. Payne, was the first to
suggest the acquisition of the Tennessee
/ coNmpany by the United States Steel cor
/ poration in 1907.
Mr. Ledyard declared that he never
represented the Tennessee syndicate in
the negotiations leading up to that
transaction, nor did he ever act as coun-
sci ror the firm of Moore e. Schley, or
Grant B. schley of that firm.
Mr.. Ledyard told the committee at the
outset that he was the first man TO In
FORM j. Pierpont Morgan of the threat
ening condition OF the firm OF Moore q
Schiey' because of excessive loans on
tennessee stocks. and that he asked Mr.
morgan on request of Mr., Payne TO seek
TO have the United States Steel corpora-
tlon come to Moore & Schley's rescue
Inc first knew about this trouble was
curing the last week in October. 1907" ME-
Ledyard said. "Mr. Payne told me that
Moore q Schley was likely to get into deem
| trouble. N
Mr.. Payne suggested that It would be
well for me to see Mr. Morgan and ask
him to put the proposition to take ovar
the Tennessee company up 10 Ahe IJnited
States Steel corporation.
That I did" The witness said he went
to Mr. Morgans house and told him what
was going on
Meeting mt MOrGan's House.
Mr.. Morgan declared that it would be
serious to let Moore & schley 20 and after
l suggested the United States Steel cor
poration be called in he said that we should
get Judge Gary and Mr.. Frick. Mr. Gary
came right over to Mr. Morgans house
Later Mr.. FTick came and the whole situa-
tion was made known.
81 went into another room" Mr.. Led
yard continued, while Mr.. Morgan. Mr.
Gary and Mr. Frick had a conference. 1
do not know what was said there. 1 do
know however. that Judge Gary expressed
great reluctance in taking over the Tennes-
zee Coal and Iron company He did not
think It was necessary and / recall that
he Offered to loan Moore & schley 100000
That, he was told by Mr.. Schley, would be
perfectly useless"
The firm, according TO Mr.. Ledyard, had
other loans which the banks were anxious
about.
The witness related In detail the de-
velopments which followed the final agree
ment and the trip of Judge Gary and H. c.
Frick to Washington TO see President
Roosevelt.
Says Frick Was Criticised.
Just before. the judge and Mr.. .Frick
left Mr.. Morgan's house." said Mr.. Led
yard. ''dr. Frick came to me and said: I
don't think that We ought to put this
transaction through unless the situation
can be entirely saved He meant that the
deal should include some assurances to
take care of various trust companies I'm
volYed told him did not see how that
could be done / was with Mr. Morgan all
that night talking the situation over. He
told me TO come back the next day and
late that day we heard over the telephone
that Mr.. Gary had learned from the gov
ernment that there would be no objection
to the deal"
Mr. Littleton asked the witness partieu-
lsrly with refeIen TO the origin Of the
trouble, whether It was caused by specu-
lation in the Tennessee Coal & Iron syn
dicate. or free stocks.
Il want to find out I'm this transaction"
Mr. LAttletOn said, whether Il was a
case OF the tail wagging the dog"
Mr.. Littleton," said Mr.. Ledyard. slap
ping the table. lit was neither a case OF
the tail wagging the dog or the dog wag-
ging the tail II was the effort OF Moore
& Schley and their friends TO save them
selves from ruin the only possible way they
could do IT, That was all there was to it,"
Osiebay COrrObOrates Hanna.
Z, w. oglebay OF Cleveland. a practical
steel man, who was a member OF the syn
1 dlcate headed by Grant b. schIey. l. c.
Hanna. John W. Gates ana others. who
took over the Tennessee's manufacturing
and ore properties in 1905. testified that
he was induced TO go into the syndicate
by Mr.. Hanna. his lifelong friend His
Continued on Second PAse)