The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-07-30

, must be taken up at par or the trans
action wouldn't save the brokerage house
Judge Gary seemed to think 1t wasn't
worth more than 90. Mr. Ledyard said
he agreed that it might drop as low as rs.
but that unless proper price we're paid
for II there wouldn't be chance OF avert
ing the disastrous failure.
On Sunday. night when Mr.. .Ledyard
went to Mr.. Morgan's library there had
been a number of conferences between
Judge Gary MIR. Frick and Mr.. Morgan.
Mr.. Morgan told me-" said the lawyer
yesterday. that they went to Washington
TO tell the President about the situation
and TO tell him that they wanted him to
help them; that they would 20 ahead with
the transaction il they could be sure that
the Government wouldn't interfere.
Il stayed there until 8 o o'clock in the
morning with Mr. Morgan Then he told
me to 20 home and get some sleep and
come back by half past 8. As he expected
to hear from Washington about by long
distance. ] went home, but ! couldn't
sleep. SO got a cup of coffee and bath
and came back. Mr.. Morgan said he had
had a fine sleep and a good breakfas: and
felt very we'll We waited for a long
time. but no word came. Itfinally reached
: us through the downtown Office some time
before O'Clock that afternoon"
what was that message?" asked MIR.
. Littleton.
"1he result was, as understood it, that
there would be no objection. l don't
want that message to be taken literally.
! only know that the Government wouldn't
feel that it's duty was to attack this trans
action. / never asked Judge Gary or
MIR. Frick and they never talked to me
about it,"
A number of questions and answers
brought out that Moore 4 Schley had in
reality considerable amount Of 40 called
free stock Of Tennessee Coal and Iron
that is stock that wasn't syndicated-
which had come to them from customers
who had defaulted in keeping up their
margins in declining market. Mr.
Iedyard remembered one such customer
in particular. Mr.. Littleton asked II that
wasn't George A. kessler, and MIR. Led
yard dropped his head and said he didn't
know these things of his own knowledge.
But he said that the free stock didn't swing
the deal. and the syndicated stock didn't
either. The tail didn't wag the dog and
the dog didn't wag the tail. They both
worked together.
Moore { Schlev wanted cash for their
stocE. but TO this the Steel Corporation
wouldn't agree. However. IA soon a. the
t!eal for Steel bonds was arranged much
greater amount of trading was done in
these Steel bonds. said the lawyer. In
October there was the normal amount
recorded on the exchange, something
like 1000, 600 or jOOO,OOO hut in November
It went close to 10000, 900. he said, and the
eame sort of cash converting went on the
following month. Besides. he knew Of
many outside transactions that were
never recorded on the exchange.
it twas while the deal was still uncertain
that Col. Payne sent Mr.. Ledyard enough
securities To give Col. Payne a cash credit
Of 81 100000 with j. y. Morgan 4 Co.
Mr.. Schlev's brother law. Mr.. RAker
CT the First National contributed q like
sum. and there was a third million added
by another man to make up q guaranty
fund to see the deal through. Col. Payne
also gave the brokerage firm a number Of
stable securities Of his own and took their
more fuctuating ones in exchange. a
year later, said Mr.. Ledyard. II was figured
up that Col. Payne had made d .ooo, ,ooO
nv the deal. lie was very anQrv at this,
returned the securities which had re-
bounded, profit and all, and took back his
stocks on the original basis.
Mr.. l.edvard said that none of the so
called Morgan banks had objected to
holding tho T. G. 4 /. stock a. collat-
eral. but he knew that Moore h Schlev
were constantly called on to shift this
in other banks. Mr.. Morgan char ged
nothing for his servi ices nor for those of
hte Office force in the great amount Of
mechanical work in the sale.
farl W. OGlehay Of Cleveland. who
owned 5000 shares in the syndicate hold
ings, preceded Mr.. Ledysrd on the stand
on the stand on Friday. said that he had
not bought an interest in the Tennessee
concern to sell ont He had looked upo n
it as an investment.
The committee adjourned Yesterday to
come together on Tuesday.