Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1911-10-27

Y The filing of tic suit was huge sur
: prise TO official Washington.
I. Special agents of the department
= OF Justice have been at work ON the
II case. but it was not generally sup
s posed that action against the giant
II corporation was SO near at hand.
The government reviews in detail the
= conditions m tie steel trade before
the consultations of 1s9S-l900 and the
formation of the federal steel com
many. the Carnegie Co. of New Jer-
sew. the American Steel and Wire CO.
the National Tube Co. the National
. Steel 90. the American Tin Plate Co.,
the American Steel Hoop Co, the
American Sheet Steel Co, and other
corporations prior to the formation Of
the United states Steel Corporation
itself in 1901 Describing the corpora
TONS acquisition of the Tennessee
Iron and Coal Co. the petition relates:
IN 1907 the corporation acquired the
control and almost the entire ownership
of the Tennessee Coal Iron & Railroad
Co
lowing to the character of its coal
and iron deposits the Tennessee Iron Co.
could manufacture pig iron cheaper than
it could be made in any other part of tue
United States. On account of its vast
holdings of coal and iron properties It
was a strong probable future competitor
of the corporation. Most of the rails n
the United States had been made out of
, Bessemer ore After score of accidents
attributed to weakness in such rails inn
mediately arose for an open heart rail
: and for such process the ores owned by
: the Tennessee Co. was available. In 1907
a sensation was created in the steel mar
: ket by f. II. Hartman ordering from the
I Tennessee Co. 157,7o0 tons of open hearth
. rails at 81 more per ton than the price
of Bessemer rails. This at once put that
company into position of an actual
competitor of Incorporation, and as
:, a possible competitor that could not be
!. ignored.
= The corporation was not slow TO discern
:. the situation. james Gayley, first vice
= president of the corporation. having ac-
= guainted himself with the properties of
the Tennessee Co, had already recon-
- mended to Mr. Prick. who then was a Oh
- rector of the corporation that it acquire
:. the properties of the Tennessee Co.
70 Grant r Sehley, of the firm Of
n Moore & sehley, OF New York, was
one of the syndicate holding ma
Ia
& the officers Of the corporation. Moore
/ a. Schley. in October, 1897, owned
N large sums Of money in New York aud
* elsewhere. from $35. 000. 900 to $500
v 900 upon call and time loans which
were running to maturity. Some OF
n these loans were partly secured by
pledge of 100000 shares of Tennessee
d stock, the amount fluctuating
nil "a q
4 and New York was the storm center.
+ "Those in control of the corporation
J, obtained intimate knowledge of the
. affairs of Moore & Schey, and OF
;, tneir holdings of Tennessee stock. The
It credit ef Moore & Schley and the
Q character of their stock holdings. such
9 as Tennessee stock, Republic Iron and
4 Steel stock. and other industrials were
O discussed on the street end among
c bankers and the question of their fail
t ure was mooted The Tennessee stock
: was specifically subjected to criticism.
: II. C. Frick and f. H. Gary, repre-
, sent;ng the corporation took up the
{ negotiation with Schley for the pur-
chase of the syndicate stock of the
Tennessee Co, offering him first the
? equivalent of so cents on the dollar
and afterwards IS cents on the dollar
in cash for the stock which Schley de-
clined.
"kleigh Thorn who was president of
the Trust Co of America, a New
York institution, was one of the syn
dictate that purchased the majority of
the stock of the Tennessee Co, having
, subscribed for 10000 shares. In a New
York paper of Oct. % appeared a
statement headed Aid Trust Co. Of
IAmerica. Among other things it said
that at a meeting the night before Of
the chief bankers of the city, headed
by j. p. Morgan & Co, it was formal
~ decided that the point then need
ing buttressing was the Trust Co. of
America and that this determination
Twas announced after Mr.. Perkins
(meaning George w. Perkins, of J. +.
Morgan & Coz had been in conference
subsequent to the gathering of bank
ers. A part of the article sub-headcd
The official Statement said:
THE chief sore point is the Trust
Co of America
After expressing confidence in the con-
dtion of the company and stating that
it would be aided, that cash had been
guaranteed therefor, it was stated that
these steps were taken for the purpose of
announcing that the company would be
taken care of if an examination into its
affairs which had been authorized, show
ed conditions to be as sound as there was
every reason to believe them to be. This
announcement helped materially to cause
a run on the said trust company. and ag-
gravated the general uneasy conditions
and made the position of Moore & Schley
more desperate 1t was generally known
that Thorne & Schley were members Of
the Tennessee syndicate.
Regardless of the intent in giving out
the statement the fact is that
it contributed directly and strongly to-
ward bringing Moore & Schley TO a point
of imminent failure. although they were
! amply solvent. Their condition had be-
, come desperate. 1t being generally re-
! garded by bankers and financers that
. their failure might precipitate general
q crisis, they, j. =. Morgan & Co. taking
4 the lead exerted themselves by advances
n of ready money to meet the pressing de-