New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-06-03


change to prevent panic and trouble ana
10 help people who are in financial dis-
tress He has done it time and again
This time he risked his money and his
name to save the situation"
GARY ON T. C. AND !. SALE
Tells of Conference with Mr..
Roosevelt.
Washington. June 1.-The acquisition of
the Tennessee Coal and Iron Company by
the United states steel Corporation was
taken up late this afternoon. Representa-
tive Littleton conducted the inquiry for the
committee Mr. Gary was permitted 10
make a full statement regarding that
transaction. lie said:
Several offers had been made TO us by
persons representing the Tennessee Coal
and Iron Company 10 sell al different times
prior to the fail of 1907. The United states
Steel Corporal lion had always been opposed
20 the purchase OF the property, and dis
tinctly said so on various occasions.
Early In 1907 Mr.. Morgan sent for me and
said that George Kessler, who had pur-
Iron Company outside the Grant y. Schley
syndicate. had approached him with the
statement that the tennessee COMPANY
gan il was not worth having at that price.
Mr.. Prick later expressed the same OPINION
and the matter then was dropped. ! believe
at that time Mr. Morgan said that kessler
represented only himself. and not any Or
the members OF the Schley syndicate Eut
about October q. 1901 Mr.. Morgan asked
M 10 come 10 his bank and told me that
Grant r. Schley. managing director Of the
Tennessee company. was much in need OF
money 10 use al the bank of the firm OF
Moore & Schley.
Loan on Tennessee Coal and Iron.
think I saw Mr. schley then. but TIE
business finally resulted in my accommc-
par value of United States Steel second
bonds. and taking from him An agreement
10 return those bonds. and ! received as
security for the fulflment If that agree
ment g., 900 par value stock Of the Ten
nessee Coal and Iron Company;
The agreement provided that If the loan
was not returned by April e. 1909, TIE
company stock should remain in the con-
troll Of the United States Steel Corpora
ton. II was accommodation TO Schley, at
his very urgent request, and because he
stated that il was absolutely necessary to
protect him from financial trouble. That
loan, YOU see was taking Tennessee Coal
and Iron on the basis Of Co.
Mr. Gary submitted this loan agreement
20 the committee.
About November ?. 1907, amid a financial
panic, the matter came up again. The
Trust Company of America was in diff
Guilty. John w. Gates testified last week
that this bank was responsible for Nor
CANS efforts to sell the Tennessee company
TO the Steel Corporation in order TO save
!. the trust company. which had loaned very
heavily on the Tennessee stock. Mr.. Gary
referred 10 the possibility then of suspension
Of many banks and failure of many people.
He told Of the Morgan library conference
with Mr. Morgan and Lewis Cass Ledyard.
counsel for Colonel Oliver Payne, one OF
the syndicate that purchased the controlling
interest in the Tennessee company. Mr..
Gary said Mr.. Ledyard told him Moore &
Schley were largely indebted to Mr. Payne
and had \many od his securities They had
deposited with their securities on their in
debtedness Of s3o 10000 many shares Of
Tennessee Coal and Iron stock with many
hanks.
Banks Called Schey Loans
The banks had called these loans" said
Mr.. Gary, and were insisting that Moore
e. schley take up the Tennessee Coal and
Iron stock. 1t was not sals BILE. | will not
ssy that il had been manipulated, but it
was a stock that had been. through a
Ieriod Of many years, raised from a low to
high price; it had been in control Of a
syndicate that Influenced great fluctuations
1t was represented that Moore e. Schey
had pledged 100000 of this stock in the
various banks. Mr.. Ledysrd said there was
no possible way 10 prevent the failure of
More & Schley unless We purchased this
stcSk. and he believed the failure of Moore
& schley would mean the failure of many
hanks.
Mi Morgan said 10 me: L don't know
whether the Cnited States Steel Corpora
ton can afford TO purchase this stock or
not You know best az 10 that. II il
does not buy it. If the United States Steel
Corporation or some one else does not fur
nish relief, no man can say what the effect
will be on the financial situation through
out the country. The situation is extreme
~ critical II YOU can see your way clear
TO buy II. ! have no doubt such action will
relieve the situation. J will turn Mr. Led
yard over to you. 10 see what you can do
Il said would not consider taking any
action without going 10 Washington. and
taking up the situation with the President
or the Department Of Justice
"'Have they any right asked Mr.. Nor
gan. TO say whether the United States
Steel Corporation shall buy this company
or not?
Il said No. but here is a financial crisis;
the purpose Of buying this stock is to over
corpe the tendency toward a panic. and
II the President or the Department OF Jus
tice should find out that such action was
being taken and should enjoin US on the
ground that the acquisition or holding of
tho stock created a monopoly, what we
had done would make the financial situa-
ton much worse than II is now
Mr.. Morgan said this was forcible rea-
soning'
Didn't Want the Tennessee Stock.
Mr.. Gary said Mr.. Frick agreed with
him that the stock was not worth moro
than IS Not until Nj Morgan told him
what he thought about the panic did Nj
.Frick give any encouragement 10 the plan
The finance committee OF the Steel Cor
roration Was summoned 20 the Morgan
library.
"Mr. Frick." according 10 Mr.. Gary. 'of-
fered resolution proposing that we offer
to loan Mr. Schley S5.oo0.ooo or ss.coo,0co in