The Sentinel=record., 1911-06-03
GARY DENIES
GATES STORY
SAYS STEEL TRUST HELPED TO
3 AVERT PANIC IN 1907 BY AID
ING MORGAN.
Denies Story Told by John w. Gates
and Gives History of the Purchase
of the Tennessee Coal and
Iron Company.

Washington, June 2.--Elbert Ii
Gary. chairman Of the United States
Steel Corporation directorate, told
the Stanley Steel Trust investigating
Committee today that his corporation
stood behind j. Pierpont Morgan in
averting a disastrous financial up
heayed in 1907.
He insisted challenging the state
ments of John w. Gates before the
committee, that the purchase of the
steel corporation of the Tennessee
Coal and Iron Company at that time
was made at price more than II was
worth for the express purpose OF pre-
venting the crash of the New York
banking firm of Moore and Schley.
Mr.. Gary related a dramatic story
of the momentous events which pre-
ceded the absorption of the Tennessee
conern. He described In detail how he
and Henry G. Frick. at the Instance
of Mr.. Morgan had revealed the plan
of buying the company at a price
greater than it's value TO President
Roosevelt and Mr.. Root, the secretary
of state. He told how he had concIud-
ed after their interview with Mr..
Roosevelt, that any government CON
troll and publicity of corporations in
this country must come. He said that
though the American Iron and Steel
institute. the heads of the steel In
dustry were trying to steer course
between the Sherman antitrust law
which he characterized as archaic
on the. one hand. and the old time
methods OF destructive competition.
on the other, to operate for the public
welfare.
Mr. Gary announced to the commit
tee that he wanted everything known
concerning the steel corporation ana
more than all he pleaded for same re-
sponsible government source to which
such corporation could appeal FOR
guidance in the conduct OF its busi-
ness. He agreed to furnish the com
mittee so much as It wishes to know,
that he will be recalled when 1t meets
again next w dnesday. Others who
have been summoned to appear are W.
B. Dickson. of the steel corporation
and John Lambert. OF the Republic
Iron and Steel Company.
Representative Littleton conducted
the inquiry for the committee. Mr.
Gary was permitted to make a full
statement of the acquisition OF the
Tennessee Coal and Iron Corporation
Mr.. Gary said many overtures had
been made to the corporation to ac-
quire the Tennessee concern, but IT
did not desire to do so. But in Octo-
ber' 1907, Grant B. Schley. managing
director of the Tennessee Company.
needed large amount of money for
the use OF Moore and Schley, accord
ing to J. p Morgan, who, Mr.. Gary
said. brought the matter to his atten-
tion The upshot of the situation was
that Mr.. Gary loaned Mr.. SchIey
81 100000 par value Of United States
Steel Corporation bonds taking $4,000
900 par value of the Tennessee Coal
and Iron Company stock as security,
the ownership of the stock to remain
in the control of the United states
steel Corporation.
About November 2, 1907. amid n
nancial panic, the matter came up
again. Moore and Schley owed $780,
100000 and the banks had called Their
loans and were insisting that Moore
and Schley take up the Tennessee
Coal and Iron Company stock which,
with other securities, they had depos
tied as collateral. 1t was represented
that unless the steel corporation pur-
chased the stock there was no way TO
prevent the failure Of Moore and
Schley. Even Mr.. Morgan said II the
Steel Corporation did not come
to the rescue mo man can say what
the effect will be on the financial ST
uation throughout the country"
Il said would not consider tax
ing any action said Mr., Gary. with
out going to Washington and taking
up the situation with the president OF
the department Of justice.
Have, they any right said Mr.
Morgan. according to Gary. TO say
whether 4 pc United states Steel Cor
rorafion ahall buy this company or