Ladysmith news-budget. [volume] (Ladysmith, Rusk County, Wis.) 1907-1927, 1911-11-24
STEEL INQUIRY COMMITTEE
HEARS MERRITT's STORY OF
100000 DEAL.
JOHN D. PLAYS CONFIDENCE GAME
6lames Preacher Emissary for His
OBSERVATION-DISCLOSURES He Was Not
Schooied in Ways of "Money
Trust"

Washington, Nov. 22-Alfred Mer-
rift of Duluth, first president of the
Duluth, Misabe & Northern Railroad,
who styled himself a lumber jack"
unacquainted with the methods of the
money trust" told the house steel
trust Investigating committee that
through loans of less than $1,000,000
from John D. Rockefeller he had lost
his holdings in the Mesaba iron mines
and the railroad properties now owned
by the United States Steel corpora
ton and estimated to be worth today
as high as $7O0,OO0,000.
Merritt and his brother, Leonidas
Merritt, who will testify, were among
the original mine owners in the Lake
Superior region, and part owners and
builders of the Duluth, Misabe &
Northern railroad The elder Merritt
declared that he was induced through
F. D. Gates, Mr. Rockefeller's secre-
tary, lin charge of his charitable
work. to put up all his holdings as
collateral for loans from Mr.. Rookie
teller in 1892 and 1893. One loan was
for $4,000. Others were for various
sums.
Gates, he said, was Baptist
preacher, in whom he had confidence,
and who assured him that by placing
a call loan he would not be pressed
and that he would be taken care of.
Rockefeller ForecIoses.
The witness related how, two
months after he had put up his col
lateral with Mr.. Rockefeller, during
the panic of 1893, Rockefeller called
the loan, giving him "a hours to raise
S420,000; that being unable to raise
the money he and his brother lost
their property.
He admitted that Mr. Rockefeller
offered him an opportunity to buy his
property back within year, but de-
clared that the oil king told financiers
ito keep hands, off, and that he was
unable to raise money anywhere.
Dispute as to the nature of the
transaction arose when D. A. Reid,
counsel for the United States Steel
corporation, stated that the Merritts
had made actual sales of their stock
holdings to Rockefeller in order to
raise money, and that they never had
taken advantage of the opportunity to
repurchase within year.
Another brother, Mr.. Reid declared,
had redeemed his stock and secured
his pro-rata share at sos per share
when it was taken over at the time of
the organization of the United States
Steel corporation.
The Merritts were first parties to a
transaction with Mr.. Rockefeller and
others in determination of the Lake
Superior Consolidated Iron mines. In
this the mines of the region and the
Duluth, Mesaba & Northern were con-
solidated Out Of this, a suit by the
Merritts against Mr.. Rockefeller de-
veloped on the ground that misrepre-
sensations of mining properties were
turned in by the Rockefeller interests.
Subsequently, Rockefeller paid the
Merritts $525,000 in settlement for
this
G. H. Martz, engineer of the railroad,
testified that he was forced by Mr..
Rockefeller to sell his stock in the
road because he was an employee and
that he had been ordered to pad the
cost of the road in report to the Min
nesota railroad and warehouse COM
mission in order to justify ore rates
charged.