The Washington times., 1911-08-10

n
| Oakleigh Thorne's Trust Company OF
/ America during the panic OF 1901, based
on the apparent belief of Representa-
tive Beall that hostility toward the
Thorne Company actuated some of ths
1 financial powers in the effort to put
that concern in a bad light Mr.. Per
kins explained that Mr.. Thorne had
come TO the Morgan people, greatly
alarmed over conditions, and, after fu-
| tile efforts to induce some of the trust
companies to cooperate in mutual pro-
| lection, Secretary of the Treasury Cor
Government cash where 1t could be
placed at the disposal of the Thorne
Company to tide II over.
The Steel Corporations financial plan
| for converting $20O,000,OOO Of preferred
stock into second-mortgage bonds, was
explained in detail by Mr.. Perkins A
syndicate was formed to convert, not
500, ,OOO, 100. but $SO.Oo0,0OO. The preferred
stock for conversion was to be deposit
ed with Morgan & Co, and either 4C
per cent or the entire amount OF 1t was
subject to be exchanged for the second
mortgage bonds.
Cash In Exchange for Bonds.
The syndicate, in addition to making
this exchange. was to provide $50, ,00O
cash in exchange for that amount of
the second mortgage bonds. The COM
mission was to be paid by the Steel
Corporation, 4 per cent commission on
bonds taken for cash and also on those
taken in exchange for the preferreL
stock. The Steel Corporation reserved
the right to allow every preferred
stockholder to subscribe for these bonds
to the extent of 40 per cent of his
preferred holdings.
The money, thus raised for additional
working capital, could, of course, have
hean raised nf dfvilandS :
for the necessary period, but the cor
poration did not consider that procedure
fair one to the stockholders.
AS a result of the appeal by the
Stanley committee to President Taft,
the latter has agreed that the commit
tee may consult certain of the data
gathered by the Bureau of Corporations.
This will be confined to materials whose
use would violate no condolences which
were imposed when the data were Sc
cured from the corporations involved.
Il fully believe you, Mr. Perkins,
when you say that. but I'd like to- know
how such things can take place with
out the knowledge of the directors Of
the Steel Corporation? To the Steel
Corporation directors in October, 1907,
Judge Gary made statement that eX-
eCutives of the subsidiary corporations
were in frequent conferences, and that
the Steel Corporation was advised of
these matters; finance affairs of the
subsidiaries were referred to the finance
committee of the Steel Corporation y
Mr. Gardner showed that this coop
Grafton was very close, and asked:
This seems to indicate, in connection
with the pleas of guilty in the recent
cases, that there is very serious cog
loose somewhere. Assuming that the
plate agreement existed and that the
wire agreement existed. how do you eH-
plain that You and other high officials
of the Steel Company knew nothing of
it,
"Oh. the working of human nature.
a father has four sons. He instTacts
them in a line of conduct and assumes
that they obey. He learns later that
they have been. under pressure of con-
ditions surrounding them. violating his
instructions"
Representative Young pointed out that
the plate association continued three
years after the Steel Corporation was
organized. The Carnegie Company had
been a party to the association, and
continued such. Mr.. Schwab had been
president of the Carnegie and became
president of the SteHl Corporation.
How could Mr.. SChw:b as president of
the Steel Corporation have failed to
know about it" persisted Mr.. Young.
All New to Him.
Mr.. Perkins replied tina: all these mat
terS were as new to him as to the COM
mittee members. He had not the infor-
nation from which to answer.
Take the four sons in your illustra-
ton" pursued Mr.. Gardner. Why
should the four sons violate the fathers
instructions. and take all the risks in
volved in that course. when the proht
must all accrue, not to the sors, but TO
the father for whom they worked?
Mr.. Perkins replied that this raised
the very question which the Steel Cor
poration people hal at many times dis
cuSsed.
If the laws "ould be understood to
certainty. and would allow" he said,
we would have had a single operating
company long ago. Then we could have
given orders. not advice, TO subsidiary
executives"
Mr.. Perkins paid a high tribute to the
skill. energy, and ability of the men
managing these concerns subsidiary TO
the Steel Corporation; -,
stated a truer thing than that his
organization was worth more than
turning to finance. Mr.. Gardner
wanted to know what could be done
to stop panic: DO you 9.G approve oT,I
30, that would take two or three
days" laughed Mr.. Perkins, the COM
mittee joining.
But surely We should have a plan
gether in cooperation to protect fin
ancial conditions. Further, you GER
tainly ought to be able to give us a
law that would prevent banks all over
the country depositing their money
in New York during the slack sea-
son of summer, and then drawing 1t
ali out again and leaving US with
close money and high, rates at the
time when the country most needs
cheap and easy funds"