The Birmingham age-herald., 1911-05-28
DESCRIBES BIRTH OF
 STEEL CORPORATION
fcoNTINUED FROM PAGE D

market. One result of it, he declared, was ito convert lot of doubtful assets into cash" by broadening the market for corporation shares.
 The special committee, of which Rep resentative Stanley of Kentucky is chair man. had determined that an investiga-
 tion of the Tennessee Coal. Iron and Rail- road deal which is said to have been ap- pTesed by President Roosevelt, should be the first subject taken up. MT. Gates was the first winess to appear before the | committee. ..-.
 Bank Embarrassed
 Asked by MT Stanley if the deal with the United States Steel company was not prompted by the embarrassment of the Trust company of America, Mir. Gates de- clared that he had heard that J. P. Nor gan had suggested the transaction to re- lieve a distressed condition of a banking house
 l Tt has been stated on apparently good authority" said Mir. Stanley, that at the time the Tennessee Coal and Iron con- pany was acquired by the United States Steel corporation, a certain business 4rm the name not given, would have failed If help had not been given and that this firm had among it's assets the majority of the stock of the Tennessee Coal and Iron company, and that advances were
  ation to purchase this stock in order to avert panic. What do you know about that?'
 'In the exchange of this stock" MT. Gates replied, mot a dollar changed hands. No bank gained any assets by it." Did any member of a firm or bank make 8 proposition to the United States Steel corporation to accept the Tennessee Coal and Iron as comparatively worthless property?' asked MT. Stanley. "In other words, who flew the signal of distressY'
 There are a great many underground wires in America" MT. Gates replied. q was told a certain bank in November, 1907 applied to the clearing house for as- sistance. A committee examined it's as- l sets and discovered several millions of the banks funds out on the stock of the Ten nessee company, reporting to the clearing house that too much had been loaned on Tennessee Coal and Iron collateral. 1 "Stock brokers told me that as a result of this investigation a gentleman was in- | vited to Mir Morgan's house. MT Morgan suggested to him that to relieve the situ- alton the United States Steel corporation Iron company. That led up to the nego- tiations afterward concluded" Was It Attempted Monopoly? | MT. Stanley wanted to know if MT. Nor gan and others had ever tried to acquire the Tennessee company before with view of securing a monopoly. MT. Gates said he could not tell what was in the mind of the purchasers.
 | He outlined at length the sale of inc stock to the United States Steel corpora tion. He said that in 1904 or 1905 a sym dicate was formed, managed by Grant l B. Schley and Charles H. Guthrie, then | president of the Republic Iron and Steel company. which purchased the stock of the Tennessee Coal, Iron and Railroad l company
 T returned from Europe November 6, l9Vl, and read that the stock of the Ten nessee Coal. Iron and Railroad company ] had been sold to the United States. Steel corporation. The panic was then on. | "l met MT. Schey as soon as I reached New York and found negotiations going on between MT. Schley and his associates and Judge Gary, MT Prick and Mr. Mor- gan The latter was trying to acquire the Tennessee Coal, Iron and Railroad company stock. They called up and wanted to know if the deal was going tc | be closed
 The terms proposed were that for eacr ten shares of Tennessee Coal, Iron anf
 Railroad stock, we were to get one United States Steel second 5s mortgage bond
 said it was not enough and held out unti
 we made trade on the basis of 119% il
 United States Steel sinking fund 5s. Tn,
 next day I insisted that the minority
 stockholders be given the same terms ant
 the deal was made.
 MT. Schley," suggested MT. Stanley
 "has declared that the sale of Tennessee
 Coal Iron and Railroad company was
 forced sale. Do you so consider it''
 T regarded it as forced sale." sai'
 MT. Gates.
 . What financial power forced it?''
 Well. as have said, surn1ise it wa the finding of too much Tennessee Goa
 and Iron as collateral in one of tn , banks
 - .'Did MT. Morgan have a decided infu