The Richmond Virginian. (Richmond, Va.) 1910-1920, 1911-05-27
To SWEEP AWAY
MYS1ERY's VEIL
Continued from First Page. J

absorption Of the Tennessee Coal and
Iron Company by the steel trust.
"A syndicate was formed during my
absence in Texas in September "
October. 1904 or 1906" said Mr.
Gates. Grant B. SchIey, of the firm
Of schley & Moore. and Charles Guth-
rte, then president OF the Republic
Iron and Steel Company, were made
managers of the syndicate. and they
acquired for the syndicate g. large
majority Of the stock Of the Tennes-
see Coal and Iron Company. I went
into the deal and took proportionate
share of the stock--200, 900 shares.
think. There were ten or twelve or
fifteen men in the Tenne ssee Coal and
Iron Company. Schley and Guthrie
had the right TO sell the stock held bv
the syndicate at any time-provided
they sold at profit
Schley died. and l. Z. Hanna. OF
Cleveland. o., brother of Mark Han
ma, succeeded him continued Mfr
Gates
Il went to Europe in Jdly. 1907.
and returned on election day the same
year. When ] reached the Plaza
Hotel from the steamer found note
from Schley and went to his office In
Fifth avenue. There | found nego-
r X.
Judge Gary and Morgan, and Schley.
Hanna and our associate. | was told
that they were all at 1sr. Morgan 8
house. Gary. Friek and, Morgan ysara
trying 10 secure our Tennessee Coal
and Iron stock in exchange for an
equal amount Of United States Steel
second mortgage 'fves, That Is, each
ten shares Of Tennessee Coal and Iron
would exchange for one bond.
Deal is Made.
The next day the trade was made.
! We vera to resign a. directors. and
the Steel Corporation was to taha
charge. l forced an agreement that
the minority holders of Tennessee Coal
and Iron stock should be treated ex-
acty as the majority holders were
treated
Gates gave the names of those con-
cerned in the Tennessee Company. He
declared that the United States Steel
bonds represented only the preferred
stock of the Steel COMPANY, while the
| Tennessee stock. given in exchange,
represented real value
Under examination by Stanley,
Gates declared that the property OF
the Tennessee Coal and Iron Company
was the best steel property in the
country
age, he said. and proha bly, from three
10 seven hundred million tons of coal
Stanley asked If he would accept the
statement OF. Gustav Schwab that pig
iron could be manufactured there for
81 ton.
Il learned what I knew through
hard knocks" said Gates, and not
from the other fellow. What MIR.
Schwab said would not affect me"
Gates said that pig iron could be
made in Birmingham ny the Tennes-
see Company at 50 ton.
Teddy Is Mistaken.
Stanley then took up the letter OF
explanation sent to the Senate by
President Roosevelt, In which he said
that he gave Frick and Cary permits
sion to absorb the Tennessee Coal and
Iron Company because they told him
It was in bad shape and its absorp-
ton might avert the panic.
f'' was that comfitfon apparent 7
asked Stanley.
Net - 'tfufiar 'scffank sd hands III
the transaction" said Gates. INC
bank received any additional assets
The transaction could not affect husl.
ness generally"
What want TO know" said Stan.
ley is who flew that aueged sigma
of distress that gave the impression
that the Tennessee Coal and Iron
Company was tottering7"
Underground Wires.
There are great many under
| ground wires in Nav York" saia
| Gates; there Is a clearing house as
ISOLATION there. I was told that a
certain bank or trust company Wen
to the clearing house for help There
| was a run on the bank. A committee
from the clearing house wen. over
the banks collateral and reported tha'
| too much was loaned on r. c.
stock The bank needed 100000
This situation was taken to Nor
gan, who suggested that the steel cor