New-York tribune., 1912-02-20
FEDERAL GRAND Jury
TAKES UP u. S. STEEL
indictments Expected Shortly OF
Number of Men High in Cor
poration'S Councils.
INQUIRY CAUSES GUESSING
Government Said To Be Fish
ing" for Information for Use
in Trenton Dissolu-
ton Suit.

Under the direction Of the Department
Of Justice a federal grand jury IN thls
district has begun to investigate the al
fairs of the United States Steel Corpora
tion. and indictments Of a number OF
mon high In the councils of the corpora
tion are expected within a short time.
Henry f. Cotton, Special Assistant Al
tornev General, came here from WASH
,ngton on Saturday to take charge OF the
investigation. Mr.. Cotton was the led
ersl attorney who recently secured an
Injunction from Judge Gray in the DIS
trict Court at Trenton, n. j., restraining
the steel Corporation from further oe-
stroving papers which might be wanted
NV the government in it's equity suit Tor
.he dissolution of the alleged steel trust
Runors In Wall Street and in the FED
eral Building that the impending prose
cution Is directed against the men VINO
were responsible for the destruction OF
,runkfuI Of papers were discredited both
r.. rnen in a position to know the facts
rd ~, the circumstances surrounding
the investigation.
A corporation counsel Of high standing
snd in close contact with the affairs ot
the United States Steel Corporation said
yesterday that a prosecution based on
the destruction of the papers would seem
absolutely preposterous.
No Mystery About the Papers.
The facts surrounding that affair had
been made clear beyond doubt by all
the parties TO the transaction, he said.
Henry A. Wise, United States ATTORNEY
who turned over the papers to Charles
MacVeagh. general solicitor of the Steel
Corporation, made a statement that fuliy
coincided with the explanation later IS
sued by Elbert H. Gary, chairman Of the
corporations board Of directors, and
showed that there had been no wrong In
tent, but that the papers were destroyer
through a misunderstanding.
Further. the lawyer said, it would seem
ridiculous TO subpoena scores of wit
nesses before a grand jury In an effort
to secure indictments for something that
has been admittedly done and the man
who did It could be reached without the
testimony of so many witnesses. Frank
\ Baackes vice president Of the American
NJ Steel and Wire Company, acknowledged
that he ordered the destruction of the
papers, thinking they were no longer
necessary.
The only plausible explanation of this
vigorous activity of the Department of
Justice would appear to be that the gov
ernment has decided TO get a mass If
evidence against the Steel Corporation
by means Of an attempted criminal pros
etutlon,' said we'll known lawyer yes
terday TO me IT seems to be what we
call fishing expedition to secure in |
formation that might be used in the gov.
ernments equity action instituted /,
Trenton, N. J.
Inc government, naturally. will nor
call witnesses in the Trenton suit about
whose testimony it cannot inform itself
In advance. II has to establish whether
the witness about to be called would
prove one in favor of or against the gov
ernments cause. Otherwise the govern
ment would have to swear witness
"lthout knowing exactly what he might
bring out on the stand, and in case his
testimony should be favorable to the cor.
poration the government would have IN
abide by the statements of its own wit
ness.
testimony to Serve as Guide.
Anybody they might choose to call
before the grand jury can be pumned
dry OF everything he knows about the
corporations business, and that testi
mony will then serve as a guide 10 the
government in its litigation"
Mr.. Cotton refused to discuss tho mat
ter. saying that proceedings before q
federal grand jury were strictly confiden-
tial and government officials were ab.
solutely debarred from speaking about
them. 1t became known however. that
extensive preparations were made before
the investigation by the grand Jury was
begun. Henry A. Wise. United States
Attorney delegated the charge Of his
Office TO one Of his assistants on return
ing from a visit to Washington early this
month. After that Mr. Wise and his as
sistant, John w II. Grim, who has
worked on most Of the trust and rebate
cases in this district within the last two
years. have devoted all of the last ten
days TO work on e. particular matter.
The witnesses subpenaed before the
grand jury were said to be employees OF
che various companies subsidiary to the
Steel Corporation. and the absence from
the number OF any one filing a high
place in the corporation was interpreted
as an indication that the government
wanted TO guard against an uninten-
tional grant OF immunity to any man
higher up.
Mr.. Wise's recent trip to Boston and
his absence from the Office yesterday and
to-day were attributed TO his activity
in preparing the case. The inquiry is to
be an exhaustive one apparently for
one witnesse was examined two hours
yesterday and is to be recalled before
the grand jury to-day. Mr.. Cotton has
made his headquarters in the Federal
Building and stacks of papers and other
documents have been brought here from !
Washington.