The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-03-11
ADVISED ACTION
PRIOR TO PANIC
Gaylcy Wanted U. S. Steel to
Take Over Tennessee Coal
and Iron Company.
SAYS MORE ORE WAS NEEDED
Denies That Step Was Taken
to Order to Suppress Com
petition.
Ispeclal to rhe rImes.plspateh. ]

Especial to The Times Dispatch
New York. March 1o.-James Gay
ley. formerly vice president of the
United States Steel Corporation. testi-
field to-day under cross examination
by Mr.. Severance. of counsel for tho
corporation. In the governments suit
to dissolve that corporation. that he
advised tho action of tho ore reserves
of the Tennessee Coal and Iron Com
pany by tho Steel Corporation many
months before the business depression
of 1907. 1t was If this period OF de-
preston that the control of the Ten
nessee company was obtained by tho
Steel Corporation
Mr.. Gayley said he had spoken to
II. g. Frick. advising the purchase OF
the Tennessee company properties. but
at that time Frick thought the prop
erty could not be purchased at a rea-
sonable price. After the panic had
set In lie spoke TO Judge Gary about
the Tennessee company. He said he
personally had nothing 10 do with ne
gotiations for the purchase. His in
terest in the Tennessee properties had
been aroused originally by n chance
conversation with exports employed by
the Tennessee company to report on
the value of it's ores and other raw
materials preliminary to n combine
ton with other Southern steel and iron
corporations.
Favored Control OF More Orc.
Following an inquiry by Lawyer
Severance into the acquisition Of the
Union and Sharon Steel Companies
Mr. Gayley said he favored any move
by the corporation toward the control
of moro ore.
81 believed we were short OF ore"
said he.
Was anything said about suppress
ing competition by means of acquiring
the Union Sharon"
Nothing"
To prove the relations OF the steel
Corporation with supposedly indepen-
dent concerns, the government intro
duced evidence to show that Henry
Clay Frick is the owner OF 3T,100 shares
of the Cambria Steel Company. He
also had II large block OF the Ameri-
can Can Company. heavy consumer OF
steel. operating independently, but dis
posed of 1t. so the fact was not put
down on record.
Regarding the lease OF the Great
Northern ore lands. Air. Ciayley said
he considered the price paid was too
high, but that tho corporation needed
these reserves and did not have to con-
slider the cost. The sale Of royalties
didn't matter much, he explained, be-
cause the iron would have been ex
hausted before the exorbitant figure
was reached. After the leases were
executed, il was found that there were
In sight 1o0,O00.000 tons moro than any
one expected. These leases were can
ceied prior to the institution OF the
dissolution action.
Judge Dickinson. at the corclusio,
OF Mr.. Severancc's cross-cNamination
asked Mr.. Gaylcy to explain the aban-
comment Of tho proposed Conneaut
tube and Wire Plant by Andrew Car
negie, in 1900. Tho erection OF this
plant was said to be part OF Carneric.s
ouy him out AS Il dangerous competi
tor.
Judge Dickinson read the Carnepie
minutes of November 6. 1900 quoting
Charles Nj. Schwab as saying that ].
L. Morgan and sent for him. Schw,h
dlont 80 because he thought the H.
hancier wanted TO talk about rail
roads, but later on he saw Mr. steele
~ 4. MorEan's chieg assistant and learn
ed from him that the banker was 1nucb
alarmed at the talk about a new tuba
pant Tor the Carnegie company, and
the prospect of n rival $1,000, 900 plant
was not encouraging. Steele told
Schwab. according to the minutes, that
j. L. Morgan wanted "A definite am
nouncement OF our intention"
it was not long after this that the
Conneaut plant was dropped
Tries tn break Down Statemnn,
Judge Dickinson also tried to heal,
down Mr.. Gayley's assertion made Iaxt
FRIDAY that the Steel Corporation rcaI
~ mad no monopoly of the steel busi-
ness, and that there were several creot
ore tracts Il: this country over which
~ mas no control, especially ono g.,
Northern New York. Judge Dicllinson
asked II 1t wero not true that this req.
ION turned out about 228 per cent or
the total output In the United States
Mr. Gayley would not admit this. hut
SAID from three to four hundred thous-
ana tons OF ore was mined up State
And what was the OUTPUT or Tho
corporations" INC
After some hesitation, Mr.. Gnvlev nd
inltted that in the first year II was
"uo,GOo tons. and has been increa sine
ever since.
And hasn't Wisconsin nrodrced
about POP per cent OF the national out
put! asked Judge Dickinson.
Mr.. Gayley couldn't say. bnt h. 81
mitted that the Minnesota field NAV
~ controlled by the corporation hns
been the largest producer Of ore sInce
1901. SINCE
Mr., Gayley probably will conclude
MS testimony tomorrow. YIe has bean
in poor health Of late. and wishes r.
leave the city rs soon as he can be
excused