The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-06-03

tuS lenIceSeN NOhl anu lTOu SuOCh on Ln0
basis OF 80 cente
The next event in the chain that led up
70 the absorption Of the Tennessee Coal
and Iron Company occurred on Novem-
ber Of the same year. when the country
wa a in the throes Of the panic Of which
rumblings were already being heard
when MIR. Schley made his first loan.
Judge Gary explained the threatening
conditions that confronted New York
banks and banks generally over the
country. Hardly day passed, he said.
but that the Steel Corporation received
urgent appeals for help. Judge Gary
had himself ordered the comptroller and
the cashier Of the Steel Corporation. at
the suggestion Of Mr.. Morgan. TO in
vestigate one OF these banks with view
to finding out II It was in a condition TO
warrant support. Judge Gary had done
this because Mr.. Morgan and the bankers
associated with him were so completely
overwhelmed with applications for aid
that they could not attend to this case.
Bankers Of the city of New York.
ssid Judge Gary. were in session almost
night and day. There is no doubt that
We we're In the throes OF a panic that
might lead TO most disastrous results.
including the suspension Of a large num-
ber OF banks and the failure Of many
people. There could be no doubt that
The country was in grave danger Of one
Of the worst financial panics II had ever
seem
uRoED TO BUY TENNESSEE COAL AND IRON
STOCK.
This was the situation when Judge
Gary was again requested by Mr.. Morgan
70 call at his library Mr.. Gary found
Lewis Cass Ledyard and Grant b. Schley
at the library. Mr.. Ledyari said that the
Arm Of Moore 4 Schley was in very great
financial distress: that it WAS largely
Indebted to Mr.. Payne. his client. and
had a great many securities deposited
a. collateral for loans in many banks.
These banks had called upon Moore 4
6chley to take up the loans because the
Tennessee Coal and Iron stock was not
readily salable. Mr.. Ledyard said, so
Judge Gary testified. that there was
apparently no way Of preventing the
failure Of Moore 4 Schley unless the
Steel Corporation purchased the Ten
nessee Coal and Iron stock. J. p. Morgan.
according TO Judge Gary. then made this
statement to him:
-Idont know whether the United States
Steal Corporation can AFFORD to buy this
stock, but will say IL 1t does not or unless
some one else furnishes relief no one can
say what the result will be in financial
circles In this country. The situation is
critical II you can sec vour way clear
TO buy. no doubt it will help the situation
4 said to Mr. Morgan testified Judge
Gary. that " ould not think of consider
ing the purchase before going to Wash
ington and taking the matter up with
the President and the Department of
Justice He said: Why. have they anv
right to say whether you shall buy or not"
] said No. but there ia IA financial crisis,
and you say that the object is TO allay
dhe storm. but IL representatives OF the
tere about to purchase this company
Ind enjoin the transaction OH the ground
that il would increase our holdings and
tend to a monopoly you can see that We
would have made the financial conditions
very much worse"
Nr. Morgan agreed with Judge Gary in
this view, and the Steel Corporation head
then telephoned for Mr. Prick and asked
him to come Immediately to the Morgan
library. Judge Gary asked Mr.. Frick
to get ready for the trip 20 Washington
and MIR Frick replied that the question
TO consider first was whether the Steel
Corporation would purchase the Ten
nessee Coal and Iron Company under any
circumstances.
Il had said testified Judge Gary. that
the stock was not worth more than IS
and Mr.. Frick expressed the same opln-
ion. He was very much opposed to the
Transaction and il was not until Mr. Nor
gan personally had explained TO him the
critical situation confronting the financial
world that he gave any encouragement
10 the suggestion
OFFERED ANOTHER LOAN TO scHLrY.
Judge Gary called meeting Of the
finance committee of the Steel Corpora
Uon in Mr.. Morgan library and II was
finally decided TO offer loan Of 81, 900, 900
TO Moore 4 Schley. taking the Tennessee
Coal and Iron stock as collateral. II that
was not acceptable the Steel CORPORATION
was TO offer TO buy ON "A basis of M for the
stock. payment to be made in bonds Of the
Steel Corporation. Judge Gary conferred
with Mr.. I/edyard and the latter replied
that the loan OF 5000 600 would not do
Mr.. Ledyard informed him that Oliver
H. PAYNE and one or two Others had Of
that this. With the $500. 900. making
$4,000 OOO in all. would not carry Moore
4 6chley through.
Judge Gary said that he talked with
6chley personally and urged him to ac-
cept the offer Of loan. explaining that
the Steel Corporation did not want the
Tennessee Coal and Iron property and
that IL did not believe the stock was worth
more than 85. Schley's reply to him. ac-
cOrding 10 the witness. was that the only
way to keep the firm from going 10 the
wall was for the Steel Corporation TO buy
the stock outright,
Judge Gary was inclined 70 question
the statements made by Mr. Schley year
or 90 ago before a Senate committee that
he could have pulled through the panic
without the sale of the Tennessee Coal
and Iron stock.
ANYBODY who saw him then would not
have believed" said Judge Gary. that he
could get through"
OYER TO PURCHASE 7. c. al STOCK AT 40.
Tho possibility OF making loan to
Moore 4 Schley having fallen through.
Judge Gary then offered to purchase the
stock on basis OF 80. but Ledyard came
back TO the Morgan library and said that
sale even at 90 would not let Schley out
Another meeting of the finance committee
Of the Steel Corporation was then called
and the figure was raised To 100
y notice." said Judge Gary, that Mr.
Gates John WI said when he was on the
stand that he made us raise the price,
but I would like to aay that the whole
transaction was closed before he arrived