Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1911-06-03
Judge Gary Tells House Com
mittee That Government Reg
ulatiOn and Publicity for Big
Business Are Inevitable.
HIS COMPANY STOOD
BEHIND MORGAN IN PANIC
Purchase of Tennessee Coal
During Dark Days of Panic
Was 10 Avert Financial Up
hevaL
lBy Morning journal Special Leased wirel


lBy Morning Journal Special Leased wirsl
Washington, June 2.---Elbert Ii.
Gary, chairman of the United States
Steel corporation. directorate. told the
Stanley steel trust Investigating com
mittee today that his CORPORATION
stood behind J. r. Morgan in avert
ing disastrous financial upheaval In
1907.
He insisted, challenging the state
ments of John w. Gates before the
committee, that the purchase by the
steel corporation of the Tennessee
Coal and Iron company at that time,
was made at a price more than II was
worth for the express purpose of pre-
venting the crash OF the New York
banking firm of Moore and Schiey.
Mr.. Gary related dramatic story
of the momentous events which pre-
reded the absorption OF the Tennessee
concern. He described in detail how
he and Henry c. Frick. at the in
stance of Mr. Morgan had revealed the
plan OF buying the company at
price greater than Its value to Presi-
dent Roosevelt and Mr.. Root. then
secretary of state. He told how he
had concluded after their interview
with Mr., Roosevelt that any govern
ment prosecution OF their nct would
have been an outrage
Mr. Cary made many surprising
statements during his eight hours ex-
animation but none more startling
than his declaration that government
control and publicity OF corporations
In this country must cer1e. He said
that through the American Iron and
Steel institute. the heads of the steel
industry were trying to steer
course between the Sherman anti
trust law which he characterized as
archaic" on the one hand. and the
old time methods of destructive COM
petition on the other, in order to op-
crate Tor the public welfare.
Mr., Gary announced to the commit
tee that he wanted everything known
concerning the steel corporation and
more than all he pleaded for some re-
sponsihle government source to which
such necessary great corporation
could appeal for guidance in the con-
duct of its business. He agreed to fur
nish the committee with as much In
formation as IL wished to know. He
viii be recalled when II meets again
Wednesday
Others who have been summoned
Steel corporation and John Lambert
of the Republic Iron and Steel COM
pany
Several offers" said Mr.. Gary, had
been made to us by persons represent
ing the Tennessee Coal and Iron COM
pany to sell at different times prior
% the fall of 1901 The United States
Steel corporation had always been op-
posed to the purchase, and said so on
various occasions.
early in 1907 Mr.. Morgan sent for
me and said George Kessler who had
purchased stocks OF the Tennessee Coal
and Iron company outside the Grant
II. Schley syndicate, had approached
him with the statement that the Ten
nessee company could be purchased at
1870. | told Mr. Morgan II was not
worth having at that price"
Mr.. Frick later advanced the same
opinion and the matter then was
dropped.
The business finally resulted in my
accommodating Mr.. Schley with a
loan Of 81 200, 900 par value of United
States steel mortgage bonds and TAX
Ing from him an agreement to leturn
these bonds and I received az security
for the mlfillment of that agreement
$4,000. 600 par value stock of the
Tennessee Coal and Iron company.
The agreement provided that II the
loan was not returned by April 20,
1905, the ownership Of the s2,OOO,ooo
Tennessee Coal stock should remain
with the United States steel corpo-
ration.
II was an accommodation to SchleN
lat his very urgent request. and because
he said II was absolutely necessary TO
protect him from financial trouble.
That loan. you see. was taking Tennes-
see Coal and Iron on the basis of six
""
About November ?, 1907, amid
financial panic. the matter came up
again. The Trust Company OF Ameri-
"a was In difficulty
John w, Gates testified last week
that this bank was responsible for Mr..
Morgan's efforts TO sell the Tennes-
see company to the steel corporation
In order to save the trust company
yvhfph nad loaned roo henVilv on the
Tennessee stock.
Mr.. Gary referred TO the possibility
then of suspension of many banks and
failure Of many persons He told or
the conference with Mr. Morgan. Louis
Cass Ledyard, counsel for Colonel
oliver Payne, of the syndicate that
purchased the controlling interest In
the Tennessee company
Mr., Gary stid Mr. tcdyard told him