Santa Fe new Mexican. [volume] (Santa Fe, N.M.) 1898-1951, 1911-05-27
STEEL TRUST
UNDER FIRE
"Bet You Million" Gates Re-
veals Methods Of High and
Frenzied Finance
Trip FROM BANK EXAMINER
1t Helped J. Pierpont Morgan
to Gobble Up Tennessee
Iron Concern.
!, s s s = s s s s s $ s s = \ \

s s s s. = s s s s s $ s s = = =
4 Special to the New Mexican. s.
\ Washington, D. c., May 81 y
x Chairman Smith, Republican, =
x Of Michigan, of the Senate COM =
s mittee on territories, only to- X
= day received the House joint =
s resolution on statehood for =
s. New Mexico and Arizona. Ow- y
s ing to many charges of fraud, s
s corruption, threats, intimida- s
y ton, incompetency, violence, =
s made in the record before the s
= House committee, it will take s
= the members of the Senate con- s
= siderable time to make an ex- s
= animation on or before the day =
s set for a meeting OF the Senate s
s committee, and the resolution =
y may not be reported during the s
y special session. N
is Delegate Andrews presented =
IS Vincent B. May and wife of =
IS Las Cruces to President Taft X
is today. Andrews and May left X
y for New York.
s s s s = s s S s s s s $ s s y
Gates Ought to Know.
Washington, D. c., May 27.-John
w. Gates, who appeared as witness
before the special house committee in
vestigating the steel trust, today de-
clared that the accumulation by the
Trust Company of American, of New
York, in 1907. Of great block Of the
collateral of the Tennessee Coal and
Iron Company made possible the ac
quisition of that company by the Unit
ed States Steel Corporation. Mr.
Gates said he regarded the transaction
as a forced sale.
/ Giving Away State Secrets.
/ Washington, d. c., May 27.-The
special committee of which Represen
tative Stanley of Kentucky, is chair
man, had determined that an investi
| cation of the Tennessee Coal and Iror
deal, which is said to have been ap
proved by President Roosevelt, SHOULD
be the first subject taken up. Mr.
&, Bates was the first witness to appeal
before the committee. did any mem
ber of firm or bank, make a propo
sition to the United States Steel Cor
poration to accept the Tennessee Goa
& Iron Co. as comparatively worth
less property" asked Mr.. Stanley.
! In other words, who flew the sigma
of distress?'
/ There are great many under
ground wires in New York." Mr.. aGtes
replied. Il was told that certain
hank in November 1907, applied t.
the clearing house for assistance. 4
committee was appointed to examin,
its assets. They discovered severa
millions of the banks funds out OF
stock of the Tennessee Coal & Irol
Company. They reported to the clear
, ing house that too much had beel
loaned on Tennessee Coal and Irol
collateral. Stock brokers told M
that as a result of this investigation
"a gentleman was invited to Mr.. MOI
;gan's house. Mr.. Morgan suggested t.
him that to relieve the situation, tn
i United States Steel Corporation Nigh
| acquire the Tennessee Coal and Irol
r Company. That led up to the negotis
: tions afterward concluded"
q, Mr.. Stanley wanted to know if Nj
e Morgan and others had ever tried t
I acquire the Tennessee company b,
r fore with view to securing monol
l oily. Mr.. Gates could not tell wha
+ was in the mind of the purchasers. H
outlined at length the sale of stoc
i. to the United States Steel Corporate
!. He said that in 1904 or 1905 during hi
e absence in Texas, a syndicate wa
e. formed, managed by Grant b. Schle
i Land Charles s. Guthrie, then presidel
t !cf the Republic Steel and Iron Cor
e pany, which purchased the stock
s the Tennessee Coal and Iron Compan
o He related how Mr.. Guthrie die
e soon afterward and s. c. Hanna, brot
n er of former Senator Hanna had bee
|. made associated manager. s'a'
nj I'm July 1907" said Mr.. aGtes, -
!. sailed for Europe" returned in N
2 vember, 1907, and on the ship bougl
) 8 paper and read that the stock Of Il
d Tennessee Steel and Iron Compar
]. had been sold to the United Stat,
n Steel Corporation. The panic was {
then. I met Mr.. Schley at his Off,
as soon as reached New York al
found negotiations going on betwe,
/. Mr.. Schley. Mr.. Hanna, and their a
sociates and Judge Gary, Mr.. Fri.
,e and Mr.. Morgan. The latter were tn,
d in conference in Morgan's house II
70 Ing to acquire the Tennessee Co
le and Iron stock. The terms propos
ri were that for each ten shares OF Te
le nessee Coal and Iron stock we we
d to get one United States steel secol
Of fives mortgage bonds. said 1t W,
" not enough and held out until we ma,
is trade on the basis Of 119 3-4 in Un
to ed steel sinking fund IS. The ne
day Insisted that the minority sto,
al holders be given the same terms al
IS, the deal was made.
9, "Mr. Schley." suggested Mr.. Sta
as ley, has declared that the sale
1e Tennessee Coal and Iron Compar
vi was forced sale. DO you consid
a. it," Il regarded It a. a forced sal
ie said Mr.. Gates. What financial 30
b. er forced IT." "Well, as have -
- -4a- 49,. - ).