The Birmingham age-herald., 1911-08-09
Steel Magnate Now Faces Citation Before Bar of
 the House
TELLS REMARKABLE STORY OF MERGER
Admits Steel Corporation Contributed to Spread of Protective Tariff Doctrine-Is Believed Crisis
 Will Not Be Reached i

f washington, August S.-George W. Per kins, a director of the United States Steel Horporation and one of the men said to have aided in averting financial disaster during the panic of 1907. faces tonight the alternative of answering questions to the House committee on inquiry into the Steel corporation, bearing on his perso- nal campaign contributions and such con- tributions by the New York Life Insur- ance company or being cited before the bar of the House of Representatives.
 Should the House sustain the majority of the committee and order MT. Perkins answer and he should then refuse he may be adjudged in contempt of Congress and imprisoned. It is believed, however, lthat this crisis will not be reached, MT. Perkins having expressed a desire to reflect on his position.
 ! Mr Perkins, though personally willing to talk about campaign contributions, frefused on the advice of counsel to an- swer interrogatories on that line put to him by Chairman Stanley and Repre- sentative BeaIl of Texas. Richard Linda bury, counsel for the Steel corporation,
 
 for MT. Perkins, insisted that the author ity given the committee in this inquiry made irrelevant an attempt to inquire into the private campaign contributions of the witness of his relations with cor porations foreign to the Steel corpora tion.
 Late today after MT. Perkins, his coun- sellors and the committee had wrangled long over the hitch and the chairman's decision that he answer had been sus- tained after an appeal by Representative Young of Michigan, Chairman Stanley warned Mir. Perkins that 1t might be necessary to cite him to the bar of the House. The chairman later suggested that the New York financier appear be- fore the House tomorrow to avoid being taken into custody by the serSeant-at- arms. -fF~ I When matters reached this stage MT. Perkins said the situation was so criti- cal that he wished time to consider. This was granted and the investigation pro- ceeded along other lines. A MT. Perkins," Chairman Stanley said tonight, will be given another oppor- tunity to answer. If he still persists in re-
  ing to do but to cite him before the bar of the House. The procedure will be for the committee to turn him over to the sergeant-at-arms.
 Tells Remarkable Story MT. Perkins told the committee re- markable story of the panic of 1907 and the events said to have made necessary the absorption of the Tennessee Coal and 1ron company by the United States Steel corporation. He admitted the Steel cor poration had contributed to the spread of protective tariff by doctrine and verified records produced by Chairman Stanley that the Steel corporation in 1906 should legal advice which directed that, as q cor poration, 1t should not make contribu- tions to campaign funds. The witness was subjected to vigorous examination by MT. Stanley relating to the record If the minutes of the executive committee of the Steel corporation, at which Mfr. Perkins proposed a plan of converting t200,000,0O0 worth of steel preferred stock Unto S2J0 100000 per cent second mort Eage bonds, thus gaining 5O,00O, GOO with out costing the corporation anything. } In this connection Chairman Stanley ex- pianed that the New York Life Insurance company bought some of the second mort gage bonds and stated that this was one of the reasons why the committee in- sisted upon the relevancy of inquiry per Raining to the insurance company, of which MT. Perkins formerly was vice president and chairman of the finance committee. ] After reading the minutes, in which Mir. Perkins was quoted regarding the bond conversion transaction, Chairman Stanley said:
 ] Did you ever propose to operate this transaction so as to get $50, GOO O0O for noth- 1ng?"
 No sir" Mir Perkins said.
 You suggested this plan of conversion did you not?''
 .on that line and have prepared state .ment concerning just what I did do" MT. Perkins said, which I will ask permis- sion to submit later.'
 '"Well by this transaction you were to get $5O,OOO GOO more working capital?"
 '"rhe net result was to get $50, 100000 at s1,50O,OOo less cost year." MT. Perkins said.
 Was Plan Right?
 ! Ibid you think it right morally or ethi- cally, to get s5O.0oo,Ooo from your stock holders without cost?"
 ] 'I think the plan as devised and op- erated was right in every respect | MT. Stanley quoted from the minutes, in which MT Perkins was quoted as hay
 
 preferred stock in obligations maturing 1n 50 years we would be creating sink ing fund for retiring what is considered some of the water in the concern
 How much water was there in the Steel corporation?" the chairman asked.
 T did not feel that there was any, but 1t was the common criticism at the time that there was water in the corporation
 The chairman referred to statement made by MT. Perkins at the same meet ing in answer to question by Chairman E H. Gary if it was his idea to make an elastic stock so that he could issue bonds in place of preferred stock. MT. Perkins Is said to have declared he thought that lAvould be 'dangerous
 Dangerous to whom?" asked Mir. stan Hey.
 1T really don't know" Mir. Perkins re- piled.
 In this same meeting the chairman quot ed Judge Gary as stating that he believed 1t a pretty good plan and that the corpor- ation must raise more money somewhere.
 MT. Perkins said he didn't remem- Der it.
 Well, enter into the record all of this remarkable statement, the