New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-05-28
JUDGE GARY TELLS HOW
STELL TRUST STARTED
Memoranda by Morgan Clerk of
Moore & SChIey'S 7. c. !.
Holdings in Evidence.
BACKS UP STORY OF 7. R,
President Farrell's Gross Elk
animation Aimed to Discredit
Story That Foreign Market
Was Formerly a Dump"

Judge Ebert II. Gary had his innings
Yesterday in the suit Of the government
TO dissolve the United States Steel Cor
poration. Before he took the witness
stand in defence Of the corporations right
to exist. now evidence was introduced by
the defence to show that he and II. G.
Frick had not made misrepresentation to
President Roosevelt in connection with
the stock Of the Tennessee Coal and Iron
Company. which the corporation asserts
it took over TO stay the panic Of 1907.
Thomas W. Joyce. a security clerk in
the Offices OF J. p Morgan & Co.,
testified that he had examined the books
Of Moore & Schlev at the direction OF j..
Pierpont Morgan. and had found that
concern held majority Of the outstand-
ing stock Of the Coal and Iron company.
This was the statement which Judge Gary
is said to have made to Colonel Roose-
Welt and which the prosecution declares
was not correct
Judge Gary outlined his connection with
the steel industry, in which In his own
of directors. chairman of the finance com
mittee and chief executive ofhcer of the
United States steel Corporation
The purpose OF the formation Of the
500. 10000 Federal steel Company In 1885
me witness declared. was to increase the
productiveness Of the Illinois Steel Com
many. which. he thought had never paid
dividends. The Illinois was one of seven
nlants.. valued at 100000, which were
aualgamated None Of the plants com
peted with another. Judge Gary stated,
except the Illinois Steel and Lorraine.
Roth made girder rails, he said, but the
Lorraine production was small
Details Of the organization and final
amalCamation OF the interests with the
steel Corporation will be brought out to-
dav when Judge Gary continues his tes-
tmony
BEFORE Judge Gary took the stand Joyce
introduced memoranda prepared al Nor
cams direction on November 3. 1907. show
ing the stock Of the Tennessee Coal ana
Iron Company appearing on the DOCKS
NJ Moore e. Schley. This memoranda
formed the basis of Judge Gary's deciara-
,ion IA Colonel Roosevelt on the following
dov in Washington that TO avert panic
&, would be necessary TO take over the
ma ioritv of stock which that trm held 10
save Il from failure.
Jovce's memoranda showed that the
brokers carried on their books l5IWO
sbares of the 29s.000. In round numbers
outstanding OF these 157.7OO shares, l2l,7
,,ora nledged and 5000 free" The 5000
,,oiebt have been owned by others than
the brokerage firm, the witness admitted
According TO the prosecution, the 5oWo
"frea" shares invalidated the majority
held by the concern. The fact that they
annear rcd on the books as assets. however
ond we're so reported to Morgan, ana
later sold with the rest Of the loA'"V
sbares proved. according TO the prosecu-
ton. .hat Judge Garys statement TO the
president was not made in good faith
ard was therefore not good evidence Tor
the defence.
The cross-examination Of James A. far-
rell president Of the corporation occu-
MED the remainder of the day and was
conducted principally TO dscredit MT
rarrelrs declaration that before the or
ean,zation OF the corporation American
steel manufacturers used the foreign mar
he, as dump" for their over-produc-
,,op The witness was able to name only
80 concern the Carnegie Steel Company
which did this.