The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-08-09

statement in which he said that the in
formation sought was contained IN part
in the records of the New York Life In
surnnce Company
If you think you have the authority
to get It in that direction" he said. why
Dot seek il ,here' 1t is my opinion that
questions pertaining to the activities Of
hat company should not be embraced
IN an Investigation into the operations Of
the Steel Corporation"
After further controversy between
.reml,crs Of the committee and Mr.. Per-
kns Chairman Stanley asked the witness
to reconsider his decision not to answer
the questions OF Mr.. Beall.
Il will consider your suggestion" said
Mr.. Perkins.
COMMITTEE MAY 40 SLOW.
Mr.. Ferkins's alleged contempt Of the
committee NAV be considered at meeting
tomorrow. Tho committee is not disposed
toact sunnarily against Mr.. Perkins. The
indications are that he will be on the
stand every day for the remainder Of the
week. |, was apparent that Representa-
tive Realls questioning Mr.. Perkins
about the New York lifc's campaign con-
tributions had to do with the disclosures
made 10y the Hughes insurance investiga-
ton in New York and he hoped 10y show
ing that their contributions wero coa-
cealei in the company's book to create
the impression that the same method had
been followed by the Steel Corporation.
Mr.. Perkins being tho guiding spirit in
each instance.
Outside Of the clash between Repre-
sentative Bea.l and Mr.. Perkins the COM
mittee was favorably impressed by Mr..
Perkinss testimony. He testified in a
frank manner concerning the panic Of
1907 and told apparently without reserve
the motives that prompted the Steel Cor
poration officers in acquiring the stock
Of the Tennessee Coal and Iron Company
Mr.. Perkins paid high tribute to J. =.
Morgan. whom he characterized as n
"life saver and whom he likened to a
general on the field of battle. He said
that had il not been for the disinterested-
ness and patriotism Of Mr.. Morgan the
United States would have been plunged
in 1907 into the greatest panic any country
in the world had ever known.
Mr.. Perkins was accompanied to the
committee room by Mr.. Lindabury and
Frank A. Bancroft of Chicago. his per-
sonal counsel He was subjected to a
severe examination from the beginning
In examining the minutes Of the Steel
Corporation. which were submitted in
response to a subpoena. Chairman Stan
ley ran across a statement made by Mr..
Perkins to the executive committee of
the company on March 4, 1902. Mr.. Per-
kins proposed a conversion Of preferred
stock OF the corporation into ) per cent.
bonds.
CALLED IT GOLD BRICK" SCHEME.
Mr.. Stanley characterized this trans
action as gold brick scheme. Mr..
Perkins defended the proposed conver-
sion as sound in law and morals. At this
point Mr.. STANLEY introduced Mr.. Per-
kins's sta atement in evidence. The state-
ment began by referring to a great many
contracts for plant improvements that
the Steel Corporation had inherited when
the separate companies were brought to-
Gether. amounting to about sio,ooo,Ooo.
He added:
We think We can take up about ~ per
cent, OF the preferred stock. or $500 .ooo. 900.
which now costs $4,000 Ooo a year. in divi-
dends at per cent on 5000 600 .oCo, and in
place of that issue $3.50, 900 900 OF second
mortgage 5 per cent, bonds. That would
call for si2 ,5oo. 900 and then have $50 or. 900
OF new money in addition to saving 81 500 600
year: sl2. 500 900 a. against st, 200 .oon.
So We would get $50. 900 without cost
ing US anything and save 81 500. 600 a year
besides. There is no question that il would
be very desirable from the standpoint
OF the company If We can retire the pre-
ferred stock When We came 10 look
into that we concluded the only time 10 do
il was when the preferred stool; was below
par as il would then be some inducemeut
with people TO take the bonds. If they
had stock at e5, say. and could turn II into
bonds at par they might feel that there
was something in II.
And further We can only do il when the
preferred stock IL held in large blocks "a
We could get a syndicate Of IL. We began
to look about for tho large preferred stock
holders and have been successful after two
or three months work in getting up good
sized syndicate OF largo stockholders who
would put up their preferred stock ano
underwrite for the success of the thing
provided the stockholders generally did
not take it, The idea OF the finance com,
mittee was that We would make an Offer to
all of the preferred stock holders end say:
will YOU exchange 40 per cent. OF tho
preferred stock for these second mortgage
bonds'"
II they did not do il. then the syndicate
would stand ready To do so to a reasonable
extent, and If We did not get tho entire II
per cent, say, for instance, We only got y
per cent. We would issue IS per cent. OF
additional bonds for whatever stock We
took up.
That is if we took up 20 per cent. Of the
preferred stock, or slOo 600 900. We woulC
issue sc5 O0O, 900 of tonds in place Of s5n
Ooo, 600 We thought IT would be n dcsr'
able plan in a good many ways IL would
give us ESQ. .OoO. 900 OF cash without cost. il
would wipe out these inherited improve
ments and pay the Rockefeller notes
1t was the contention Of Mr.. Stanley
tina. the steel corporation in following
the advice Of Mr.. Perkins on this plar
inaugurated movement to depress the
price of steel preferred, forcing holder,
of tha. stock to purchase the fiv" pei
cent. gold bonds. While II was not hrol,u'
out in the testimony it was plainly in;i,
mated that Mr.. Perkins was actuated
partly by q purpose TO reap commission
on promotion and partly by desire &c
serve the interests Of the New York Life
Insurance Company. Mr.. Perkins had
testified thai Germany, where the New
York Life does business, placed an in.
hibition on insurance companies that
hold stocks. but that the German law
does not frown upon insurance COM
panies that hold bonds as investments.
Chairman Stanley questioned Mr.
Perkins sharply relative 70 his state
rnent to the steel officials urging the
conversion plan, He got little, salts,