Evening star., 1911-06-03

does not buy 1t. II the United States Steel
Corporation or some one else does not
furnish relief no man can say what the
effect win be on the financial situation
th.oughout % the country. The situation na,i, !,
way clear to buy It I have no doubt
such action will relieve the situation.
viii turn Mr.. Ledyard over to you. to see
what you can do
II said I would not consider taking
any action without going to Washington
and taking the situation up with the
I President or the Department Of Justice.
Morgan. to say whether the United States
Steel Corporation shall buy this company
or notT
'I said: No. but there is financial
is to overcome the tendency toward a
panic. and II the President or the Depart
ment Of Justice should find out that such
action was being taken and should enjoin
! US on the ground that the acquisition or
holding of the stock created a monopoly
what we had done would make the hnan-
cial situation much worse than It Is
now Mr.. Morgan said this was forci-
BILE reasoning"
| Influenced by Story Of Panic.
| Mr.. Gary said Mr.. Frick agreed with
him that the stock was not worth more
than 65. Not until Mr.. Morgan told him
| Fr1ck give any encouragement to the
plan. The finance committee of the steel
| corporation was summoned to the Nor
gan library.
Mr.. Fr1ck." according to Mr.. Gary.
offered resolution proposing that we
oner to loan Mr.. Schley $5,O0O.OOO or
$6OOO.OO0 in cash, taking the Tennessee
lateral. If that offer failed to supply Mr..
| Schley's wants 1t was proposed then to
buy the stock on the basis Of 90 payable
in steel corporation stock
Mr.: Ledyard said that would not do at
all: that several people offered to loan
100000 each to Mr.. Schley. so that his
total resources would amount to $8, 900. .OO
| or $4,000. 900. but that he couldn't possibly
! get through with that. Mr.. Frick and
| myself then conferred with Mr.. Schley
and tried to get him to take the loan: we
didn't want the stock
| Mr. Gary said Schley told Frick he
must sell the stock to keep him from
bankruptcy: that. unless he was mis-
taken, an assignment already had been
drawn up for Moore & Schley for their
creditors. and that Schley's attorney.
Thomas Thatcher might be able to tell
| OF such an assignment.
Il have heard since.' said Mr.. Gary,
that Sohley has made statements that
| ne could have got through all right. but
any one who heard him at that time
would not have thought SO. Therefore I
began to talk to Ledyard about purchas Sc
Of the stock at 90. and we finally agreed
| to It. subject to the objection that might
possibly be made In Washington
We were all clearly of the opinion
| said Mr.. Gary to Representative Little
ton. that the Attorney General might
not have the right to indorse the transac-
tion."
Deposit Of $75,oOo,o00
The steel corporation, he said, had at
that time about $4,000. 600 on deposit in
banks. and could not have withdrawn
more than $5.oo0.oOO without creating
great financial disturbance.
After the agreement had been made
to take the Tennessee stock at 90" said
Mr.. Gary. "Ledyard came back to me
and said that Schley had told him that
the price Of 80 would not let them out
OF their difficulties. l notice that Gates
says in his testimony that when he got
home from Europe he made them raise
the price in the transaction. If he made
that statement 1t must have been by
MarcOni. because the whole transaction
was closed before his arrival from Eu-
rope.
"On November 4, at a meeting Of the
finance committee Of the corporation. the
entire matter was again referred to the
chairman ;,s and n,da agreed with Leayard
Moore & Schley pull through My bar
gain was entirely with Ledyard. Mr.
Morgan certainly did not participate in
any way to induce the buying or selling.
state this because Of the sensational
statements that have been made"
After the agreement to buy the stock
at 100 the finance committee Of the steel
deal up to President Roosevelt Mr..
Gary said that at 10 O'Clock Sunday
night, November 4, he called up the Sec
retary to the President, from New York.
| to arrange for the conference. He and
Mr.. Frick left that night, travelling on a
special train. and hurried to the White
House ahead Of the appointed hour. as
ditions were SO critical he would like to
| hear the result Of our conference at
the earliest possible moment"
/ President Consults Root.
After hearing our story" continued
Mr.. Gary. 1.-The President said he would
like to consult with the Department Of
Justice. Mr.. Bonaparte was out Of town.
and the President called Secretary Of
| State Root into his ONCE. The President
asked me again to state the case. 1
did. and as the result of that interview
I Immediately wired to New York"
did the President ask Secretary Roots
, opinion as to the legality of the trans
action?" asked Mr.. Littleton.
| He did, said Mr.. Gary, "and there
| was no disagreement between any of
U.S."
Mr.. Gary then told the committee that
he had a record Of what took place on
that occasion. November 7, two days
after the visit to the White House. he
had written to Secretary Root reviewing
the entire conference as he remembered
II, and asking Secretary Root II this
agreed with his recollection.
This letter reviewed the facts presented
to the President namely: That the United
States Steel Corporation had the op-
portunity to purchase more than one-half
Of the capital stock Of the Tennessee Coal
and Iron Company at price somewhat
in excess of its actual value; that the
purchase would greatly benefit threaten
ing financial conditions and avert the
failure of an important concern: that the
purchase would not materially increase