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The Commoner
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The Facts About the Tennessee Coal
and Iron Grab
Tho absorption of tho Tennessee Coal, Iron
and Railroad company by the United States Steel
corporation, so much discussed in connection
with tho third term candidacy, is presented in
brand new dress in tho democratic text book for
1912. Excerpts from minutes of meetings of
tho United States Steol corporation, and of its
principal subsidiary, the Carnegie Steel com
pany, showing that for a year and a half before
tho grab was effocted high ofllcials of tho steel
trust were in constant fear of tho growing popu
larity of the "opep hearth" steel rail, made al
most exclusively by the T. C. I. Co., are given;
also letters relating to a contribution of $10,
000 to Roosevelt's campaign fund in 1904.
Thoso excerpts havo never before been published
in newspapers.
Tho story as told in tho democratic text book,
a simple record of events as they happened, is as
follows:
THE STEEL TRUST'S GREAT FEAR
(From tho minutes, of a meeting of the board '
of directors of tho Carnegie Steel Co., largest
subsidiary of tho United States Steel corpora
tion, June 11, 1906.)
Vice President Dope
With the adjournment of congress
I believe business will go right along. These in
vestigations have naturally caused a little doubt
in the minds of men as to just what is going to
happen. Wo are going into a new era, and, like
every case of that sort where men can not see
what is ahead of them, they hesitate a little.
The same conditions prevailed six or seven years
ago when the large combinations of capital be
gan to be formed which marked a new era in the
industrial world. x These things were a benefit at
that time, and are a benefit today, yet on ac
count of the abuses which somo of them have un
doubtedly been guilty of we will have to figure
that there will havo to be some sort of control
or regulation, and wo will have to take it and
make the best of it; and I do not know but what
It will bo better to havo these things done by
republicans than by democrats. A great many
people fear this agitation may cause tho elec
tion of a democratic congress this fall, and I
believe legislation of thiB kind would have a
worse effect upon business if enacted by a demo-
cratic than by a republican congress.
(Note Tho republicans retained control of .
congress at tho November, 1906, election.)
A FEW RECEIPTS
THE REPUBLICAN NATIONAL COMMITTEE
Madison Square, New York,
September 17, 1904.
Received from United States Steel, $10,000.
C. H. DUEL, Assistant Treasurer.
w Philadelphia, Pa., Sept. 19, 1904.
UNITED STATES STEEL CORPORATION.
My Dear Sirs: I Inclose horewith tho republi
can national committee's receipt for your sub
icription to the campaign fund.
Respectfully yours,
t, m . . B T STOTESBURY, Chairman.
E. T. Stotosbury, a member of the firm of X
P. Morgan & Co., was chairman of one of several
finance committees of tho republican national
commltteo in 1904.
In 1904 Theodpre Roosevelt was tho republi
can nominee for president and was elected.
George W. Perkins, chairman of the executive
committee of the third term party, was a mem
ber of tho firm of J. P. Morgan & Co. and chair
man of the finance committee of the United
States S.teol corporation in 1904. Mr. Perkins,
at that time vice-president of the New York Lifo
Insurance company, also contributed $48,000
to tho Roosevelt campaign in 1904 and reim
bursed himself from tho New York Lifo Insur
ance company's treasury. When Treasurer Ed
mund Randolph told about it in 1906 before tho
Armstrong committee investigating the great
Insurance scandals, ho refunded the money.
WANTED THE T. C. & I. CO.
At a meeting of the board of directors of the
Carnegie Steel company, tho largest subsidiary
of the United States Steel corporation, held
March 19, 1906, Henry B. Pope, the vice presi
dent, said:
'The general superintendent of tho Pittsburg
and Lake Erie told us. tho other .day that af tor -testing
openJiearlh rails furnished ithom by. the .
Tennessee Coal and Iron -company and our -
Bessemer rails they have decldod that operi
hoarth are twice as good as Bessemer rails. He
wanted to know when wo would be able to make
open-hearth rails, and said they would be will
ing to pay a little moro for open-hearth than for
Bessemer. The same thing has come to us from
two or three other people, indicating that the
railroads are paying a little attention to the'
matter. At the time when they wore buying
rails we could not make open-hearth anywhere
in this country for tho next year and a half.
But I Imagine that when tho demand for rails
falls off, which will probably bo in 1907, on
account of the heavy purchases made last year
and this, then, we will be up against the open
hearth proposition good and hard."
(From report of Richard Trimble, secretary of
, the United States Steel corporation, to board
of directors at executive session, June 26, 1906.)
You also saw a statoment in the newspapers
.this morning that tho government was making
investigations . of the United States Steel cor
poration, and that Mr. Smith, one of the deputies
in. tho commissioner's department, had testified
before tho committee to. that effect. I have no
doubt the -deputy did make tho statements which
were published. At the last session of congress
a resolution was passed by both houses asking
the commissioner to investigate the United
States Steel corporation. The commissioner did
not pay any attention to that resolution; but
soon after congress adjourned he appeared at
this office and stated that ho believed it was his
duty to know the general purposes in detail of
our business about our corporation, its capital
stock, its liabilities, its assets,- the amount of its
business, the costs of production and its methods
generally. After considering the question very
carefully, our finance committee seemed to think
that it was good policy, and, perhaps, advisable
to aid the commissioner in making his investiga
tion; and tho investigation has been going on
more or less since that time. As stated, how
ever, by the deputy commissioner, we decided
to furnish the information that was requested '
at our own expense and by our own labor.
"IN TOUCH WITH ROOSEVELT"
I am making this explanation.because you are
interested in it and because you may be more
or less disturbed without reason. The -finance
committee has been in .close touch with 'the mat-
ter all the time. We have been in frequent and
almost constant communication with Commis
sioner Garfield, and more or less with the presi
dent himself, concerning these matters.
In August, 1907, the late E. H. Harriman
?Se2 fom tho Tennessee Coal and Iron Co.,
157,500 tons of open hearth steel rails, at $2
per ton more than the U. S. Steel corporation
was receiving for Bessemer steel rails.
The Knickerbocker Trust company, with its
m?ire nva W hunlred mHon deposits,
failed October 22, 1907. Depositors in other
trust companies were panic-stricken. The Trust
Company of America, one of the -four largest
in the country, with assets of $74,000,000, be-
T? nl Wi BpecIal Mention. Its presi
dent, Oakleigh i Thorne, owner of 12.500 shares
of the 118.500 shares of Tennessee Coal! Iron
otUTCheld by the controlling VnT
cato, attended by invitation that evening a con
ference of bankers at the Union Leaedub
the nXEffi rpUK,Cln BOC,al organisation in
i ? ?d ?tatea,: the banl(s assured him that
ho would get ample assistance if any were needed
Net YnVm3lltteS f accountent8 from tne
New York Clearing House, of which tho Trust
Company of America was not a member; would
8unHflftW?h0?M V 'C,0Cl1 a' m" OrtolX 28
sunrise the following morning.
None of Thome's 12,500 shares of T. C & I
stock was pledged as collateral for loans' with
the Trust Company of America or with any
other han or trust company. Six ontifrWa
tion on the basis of $60 a share, whereas the
stock was quoted at around $110 a share
Mr. Thorne tarried at the club for' a few
minutes following the conference to discuss the
goneral Bltijation with H. P. Davidson, a partner
of J. P. Morgan, and chairman of the finance
committee of the United States Steel coVpora-
t t " lusomur auu weni directly to tho
Hotel Manhattan, where, he gave out a statemont '
published i follows in the ..New Yorkimw '
-and in slightly different ; wording, lnotfcw Now
VOLUME 12, NUMBER 42
York morning newspapers several hours bofora
the examination of the assets of the Trust Pom
pany of America could be begun:
"The chief sore point is the Trust Co nf
America. Tho conferees feel that the situation
there is such that the company is sound Pm
vision has been made to supply all the cash
needed this morning. The conferees feel bu
tho company will be able to pull through ti a
company has $12,000,000 cash and as' much
more as needed has been pledged for this mir
pose. It is safe to assume that J. P. Morgan &
Co., will be leaders in this movement to furnish
funds.
"A committee has been named, including a
representative of Morgan & Co., and others to
look over tho accounts of the Trust Company of
America, with the idea of definitely determining
its position.
"The guaranties of cash made last night aro
for" the purpose of meeting any demands upon
the Trust Company of America, ponding tho
completion of this examination."
ANYTHING TO GET T, C. & I. STOCK
A run started and by 3 o'clock the Trust Com
pany of America paid out $13,500,000. J. p.
Morgan & Co. and tho Morgan banks saw tho
trust company of America through, lending mil
lions of dollars on gilt-edged securities, but all
banks having stocks of the Tennessee Coal &
Iron company, a concern known to be in splendid
financial condition, as collateral for loans wero
notified to call them or substitute other securi
ties. Moore and Schley were about to go to
the wall; J. P. Morgan Co. offered to save them
if the entire syndicate .holdings of Tennesseo
Coal & Iron stocks, .of which .syndicate Mr.
Schley was a manager, were sold to the United
States Steel corporation. The other partners in
the syndicate consented because all offers of
money were rejected. They were given tho
alternative of selling or causing chaos.
On Sunday night, November 3, Judge E. H.
Gary, chairman of the executive board, and H.
C. Frick, a member of the executive board of tho
United States Steel corporation, rushed to Wash
ington on a special train. They had an appoint
ment with President Roosevelt at 9 o'clock a. in.,
November 4, but called at the White House at
8:30, got a solemn promise that tho department
of justice would keep hands off, telephoned tho
glad tidings directly from the White House to
Wall street and in just one year seven months
and fourteen days after Vice President Bopo
warned his fellow directors of the Carnegio
Steel company, the dreaded competition was at
an end. Tho trust owned the T. C. & I.
(From the minutes of a meeting of tho board
of directors of the Carnegie Steel company, July
13 1908.)
Vice President Bope said: "The political
situation, I believe, is going to settle itself
reasonably quick if we can get the mills in opera
tion, for this is necessary. I think it is going
to be put before the people in tho light that the
presidency is the biggest job 'in the country for
which two men have applied, and from a busi
ness standpoint the one best equipped to do it
should be elected, and if looked upon in this
way the drift will be toward Taft very early in
the campaign. Tho situation will be helped,
if it is true, as recorded in the morning papers,
that preparations have been made and the presi
dent has directed that contracts be entered into
immediately covering all supplies needed by the
government, which will mean a large number of
contracts and amount to something like $750,
000,000. Even if the contracts are not started
on right away, this would havo a very good
effect, as it will give people assurance to go
ahead in other directions."
(From the minutes of a meeting of tho board
of directors of tho Carnegie Steel company, held
October 12, 1908.)
"REVISION MUST BE BY REPUBLICANS"
Vice President Bope said: "With regard to
tho political situation, after talking with our
agents, who were all here during the week, I can
not help but feel that the drift has .now set in
steadily for Taft, not on his own account, but
simply because business men are beginning not
only to think but to talk, that the interests of
the country demand his election, and that if the
tariff must be revised it had better bo done by
tho republican than the democratic party."
(From the minutes of a meeting of the board
of directors of the Carnegie Steel company, held
January 4, 1909.)
"The whole outlook in fact appears to us to he
distinctly better. The only two clouds that wo
can see now-are the tariff and. the Sherman anti
trust act."
In 'November, 1910, a democratic house of
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