THE TENNESSEE PURCHASE
On the events of the year 1907 the United States Steel Corporation
must, to a certain extent, stand or fall at the bar of public judgment.
This was the year of the panic and of the Tennessee Coal, Iron &
Railroad purchase.
The panic, enemies of the Corporation have asserted, was precipitated
by the big “trust” by the immoral use of its immense financial
resources to enable it to “gobble up” the properties of the Tennessee
company, a competitor said to have been making big inroads into the
business of the larger concern and which it had therefore become
necessary either to destroy or absorb.
The friends of the Corporation, on the other hand, are emphatic in
asseverating that the competition offered by the Tennessee company
was not such as to cause anxiety to the management of the Steel
Corporation, that it was not a very valuable property, and that the
Corporation purchased its stock only upon solicitation by the interests
controlling the company and their assurance that a refusal to do so
would result in the failure of an important security house, which
would add greatly to the severity and danger of the panic. They claim
further that the price paid was more than the actual value of the stock
and that, far from using any advantage it may have had to squeeze the
smaller concern, the “Steel Trust,” against the better judgment of
its management and with the single purpose of alleviating the panic
dangers, paid for the securities it took over something like 60 per
cent. more than good business practice seemed to warrant.
If the claims of the first are correct and the Corporation did use
its power to force a competitor to the wall, regardless of the fact
that in so doing it was bringing misery and calamity to the ninety
millions of people of the United States, this act alone must be more
than sufficient to convict it on a more serious charge than “monopoly
in restraint of trade”--of high treason and betrayal of the trust which
big business, willy nilly, undertakes. But if the Corporation, through
its directors, put the national welfare before all other considerations
this, conversely, should prejudice public opinion, properly informed,
in its favor. And this is why the year was by far the most important
epoch in the Corporation’s history and its events are worthy of careful
consideration.
After a careful search made by the writer through all the evidence
submitted by the Government to this end in its suit against the big
company, he failed to find one iota of evidence which connected the
Corporation with the panic or upheld the charge that it conspired to
force the Tennessee stockholders to sell. A man who had been a member
of the syndicate that controlled the fortunes of the Tennessee company
before it was absorbed and who, if the allegations referred to are
correct, was one of those who suffered at the Corporation’s hands, in
reply to the question: “Did the Steel Corporation use its power to
create the panic of 1907 so as to gain possession of the Tennessee
stock?” replied: “Absurd. The charge is baseless--except in politics.
The sale of the Tennessee company was an incident arising in the course
of the panic, not a cause. The Corporation was offered a chance to get
what I consider a valuable property and seized it. But let me tell
you,” he added, “the Corporation did not get the property cheap.”
And the Supreme Court, in its opinion, said on this subject:
“There is, however, an important circumstance in connection with that
of the Tennessee Company which is worthy to be noted. It was submitted
to President Roosevelt and he gave it his approval. His approval, of
course, did not make it legal, but it gives assurance of its legality,
and we know from his earnestness in the public welfare he would have
approved of nothing that had even a tendency to its detriment. And he
testified he was not deceived and that he believed that ‘the Tennessee
Coal and Iron people had a property which was almost worthless in their
hands, nearly worthless to them, nearly worthless to the communities
in which it was situated, and entirely worthless to any financial
institution that had the securities the minute that any panic came, and
that the only way to give value to it was to put it in the hands of
people whose possession of it would be a guarantee that there was value
to it.’ Such being the emergency it seems like an extreme accusation to
say that the Corporation which relieved it, and, perhaps, rescued the
company and the communities dependent upon it from disaster, was urged
by unworthy motives.”
[Illustration: Mine Stables]
The Tennessee Coal, Iron & Railroad Co. was a reorganization of an
earlier concern of the same name located in Alabama. The reorganization
brought into control of the company new and powerful interests, and
these spent a good deal of money in improving the plants, so that,
about the beginning of 1907, it was pointed to as a probable important
competitor of the Corporation. It was also considered as the nucleus
for a possible merger of the steel-making concerns of the South such as
would be able to cut severely into the Corporation’s business. Not long
before the panic broke the company secured an order from the railroads
controlled by the late E. H. Harriman for 150,000 tons of steel rails
and it was supposed by some that the loss of this order had caused
considerable worriment to the heads of the Steel Corporation--which
doubtless it did. Then came the panic, and when its dust cleared
away the Tennessee company was a subsidiary of the “Steel Trust.” The
sequence has served to lend plausibility to the charges made against
the Corporation in connection with the purchase. But a full recital of
the events bearing on the deal tends to throw a different light on the
matter, and an attempt to set down the more important of these details
will be made here.
[Illustration: Modern Coal Mining by Machinery]
Emphasis has been laid on the Harriman order, particularly because the
Tennessee company had contracted to supply the lines controlled by the
great railroad magnate with the new open-hearth steel rail, then coming
into popular favor with the railroad experts and which to-day are
used almost exclusively by the larger transportation systems. It has
been alleged that the Corporation was very desirous of adding to its
properties the plants making this new kind of steel rail and getting
immediate control of their manufacture. The facts are that the southern
company did not make a pure open-hearth rail, its steel being made
by a combination of the Bessemer and open-hearth processes, and the
Corporation at the time was engaged in building its new plant at Gary,
a plant which was to include a large rail mill to make open-hearth
rails exclusively. When the Corporation took charge of the Tennessee
properties it was found that the company’s rail mill was being operated
at a loss of nearly $4 a ton. Further, a very large percentage of the
rails which had been supplied the Harriman roads before the transfer of
the properties proved defective and the new management had to bear the
loss of replacing these.
It is unnecessary and futile, in this brief chapter, to go fully
into the story of the panic of 1907, or of the events that preceded
it. Suffice it to say that the panic followed a period of enormous
expansion and of extension of credit eventually carried to a point
where business overreached itself and, in a country lacking an elastic
currency system, such as the United States then was, financial
stringency was bound to follow. The first rumblings of the coming
storm went unheeded, and it was not until late in the year that there
was any realization of the desperate state of affairs. Then one big
trust company closed its doors and was followed by others. Banks
stopped specie payments, stocks tumbled headlong on the exchanges of
the country, industry halted, throwing thousands out of employment, and
the financial hurricane swept over the country, leaving ruin in its
wake and making its effects felt over the whole world.
While the panic came like a thunderclap to the average citizen, without
warning, the big bankers had seen the danger threatening and had made
an effort to prevent any occurrence which might precipitate matters.
In the latter part of October rumors gained circulation that the
Knickerbocker Trust Co., one of the leading financial institutions of
New York City, was in trouble and the late J. Pierpont Morgan, who had
assumed the leadership of the country’s bankers in the crisis, and
others had an examination made of the company’s affairs with a view to
rendering it assistance. Apparently the result of this investigation
was unsatisfactory. Anyway, the Knickerbocker Trust Co. was abandoned
to its fate and, at fifteen minutes to one, on October 22nd, closed
its doors after a sensational run, many stock exchange firms being
overwhelmed in the crash.
Thus did the panic storm break. Rumors of trouble in connection with
other institutions then came thick and fast, and one concern, the
Trust Co. of America, was especially talked of. This institution
had a capital of $2,000,000 and resources of $74,000,000, including
$12,000,000 cash in its vaults at the time. Under normal conditions
it was perfectly solvent and able to meet its depositors’ claims, but
that it was not in a position to withstand a prolonged run was proved
by subsequent events. Realizing that the failure of the Trust Co.
of America would make the crisis far more acute Mr. Morgan and his
associates resolved to come to its assistance, provided it could prove
that its statements of condition were correct.
Meanwhile, George Cortelyou, Secretary of the United States Treasury,
had hurried on to New York from Washington and on the night of the
22nd he held a conference at the Hotel Manhattan with Morgan, George
W. Perkins, one of his partners, James Stillman, and Henry P. Davison
of the National City Bank, and others. After the conference, which
lasted over the greater part of the evening, Perkins and Davison
adjourned to the Union League Club, where they were met by Oakleigh
Thorne, president of the Trust Co. of America, who had been summoned by
telephone.
These were strenuous days for bankers. No coming downtown late and
leaving early. The confab at the club started at nearly midnight and
lasted until long after. Thorne made a statement of the financial
condition of his company and the others promised that, if the facts
were as represented, he would be assisted. No time was to be lost.
Perkins immediately arranged for the examination and Thorne was at
his desk at half-past six on the morning of the 23rd. By seven the
examiners were at work.
But the newspapers were on the watch, and the fact that the Trust Co.
of America was in need of assistance was known and discussed over the
breakfast tables of New York, and, in fact, of the country. By the
time the company opened its doors that day there was a clamorous mob
outside, each individual seeking to save himself before the crash came,
and the crowd surged through the doors and up to the paying teller’s
window, demanding its money.
In vain did the officers of the company put seven tellers to work
instead of the usual one, in vain were all deposits paid promptly and
unhesitatingly. Denser and denser grew the crowd of depositors, and it
became obvious that the millions that had been passed over the counters
in the morning hours would not suffice to stem the tide. Thorne
hurried over to the Morgan offices and there succeeded in obtaining
$2,500,000 immediately. This loan was subsequently augmented by another
of $10,000,000 made a few days later, and a third of $15,000,000 made
early in November.
On this one day, October 23rd, $13,500,000 was paid out over the trust
company’s counters! But this was not enough to stem the run which
continued for more than a week and did not abate until, so far as can
be estimated, something between $30,000,000 and $35,000,000 was paid to
depositors.
But the Trust Co. of America was saved. It has been claimed that the
price of its salvation was the surrender by its president of some 5,500
shares of Tennessee Coal, Iron & Railroad stock which he owned. It
seems plain, however, that the suggestion that the Steel Corporation
should take over the control of the Tennessee company came first from
the people who had the majority stock of the company and after the
beginning of November, before which time the bankers, headed by Morgan,
had loaned the trust company $12,500,000 without any mention of or
question regarding the stock. It also appears that the transfer of
Thorne’s stock to the Corporation had no connection whatsoever with the
trust company’s difficulties and its extrication therefrom, but was
part of a separate and distinct transaction.
Particular attention has been given here to the affairs of the Trust
Co. of America, because of the allegations connecting the help
rendered the company with the Tennessee purchase. But it really
constituted only a small part of the situation with which Morgan and
his fellow-bankers were faced. There were many others that needed help,
banking institutions, investment houses, brokers, and so on. The whole
financial community had turned to Morgan as its Joshua to lead it out
of the desert. Upon his shoulders fell the burden of saving the country
from financial ruin.
The Morgan library became as the headquarters of an army. Here were
congregated at all hours of the day and night bankers, brokers,
business men of all kinds, both those who needed help and those who
could assist the banker in the work he had thrust upon him and the
arduous duties which he had assumed. Men rushed in and out of that
library, pleaded for help, begged for information and, awaiting their
turn, slept in its luxurious chairs.
The task that Morgan and his associates had undertaken was one of
exceedingly great difficulty. Despite all that had been done to dam the
torrent of financial disruption and the fact that each weak spot was
strengthened as soon as discovered, the banker knew that his herculean
efforts might be brought to nothing by one big failure which would let
loose the panic fears it was sought to allay. Hence it may be imagined
with what consternation the financier received the news, brought to
him by Lewis Cass Ledyard, a prominent lawyer and a close friend of
his, that Moore & Schley, one of the leading brokerage firms in the
“Street,” was in serious difficulties and needed several millions of
dollars to save it from disaster.
Moore & Schley was deeply mixed up with the affairs of the Tennessee
Coal, Iron & Railroad Co. One of the members of the firm was a member
of the syndicate that controlled the company, and Tennessee stock
constituted a considerable proportion of the collateral which it had
put up to secure loans for itself and its customers. This stock,
considered good collateral in normal times, failed to find favor with
the bankers to whom Moore & Schley was heavily committed in the time of
stress, and the brokers were called on to replace the securities with
others of a more approved character--which they were unable to do--or
to suffer the calling of their loans and consequent bankruptcy.
Only two courses were open to the brokers, either to borrow a sum large
enough to meet their loans or to negotiate an exchange of the Tennessee
stock for some other security which the banks would accept. They chose
the latter and, realizing that the United States Steel Corporation
was the only possible buyer of the Tennessee stock, approached Morgan
through Ledyard to that end.
Suggestions that the Steel Corporation should purchase control of the
Tennessee properties had been made in the past to the Corporation
interests by one or more of the directors of the southern company. It
does not appear, however, that these suggestions were authorized by the
Tennessee syndicate as a whole. Be that as it may, they came to naught,
as the directors in question seemed to have a very high idea of the
value of the Tennessee stock, and the divergence of opinion on this
question between them and the possible purchasers was so great that
no middle ground was possible. Never did the tentative offers to sell
reach a point where they were worthy of the term “negotiations.”
One of the reasons alleged for the Steel Corporation’s supposed fear
of the Tennessee company’s competition was that the company was the
potential basis for a merger of the steel concerns in the South which
would not only be strong enough to offer a stubborn fight to the
“trust” for business in the section below the Mason and Dixon line, but
would have a distinct advantage over it in exporting steel to Mexico
and Central and South America.
John A. Topping, head of the Tennessee Coal, Iron & Railroad Co. and
of the Republic Iron & Steel Co.--dominated by the same interests--had
actually taken steps for the establishment of a market on the Gulf
coast. In the Rivers and Harbors Act of 1899 the construction of locks
and dams and other improvements on the Warrior River so as to give
slack water communication between Birmingham, Ala., near which city the
mills of the Tennessee company were situated, and Mobile, was decided
on. But the matter rested there until Topping, by his efforts, secured
an appropriation to carry out the improvements, since completed. Not
only would the water route have been important to the Tennessee
company in regard to the markets mentioned, but it would have enabled
the company to enter the markets on the northern Atlantic coast of the
United States, from which it had been debarred by the high rail freight
rates.
Reports that a steel merger in the South was contemplated or actually
under way had been circulated from time to time. The three companies
mentioned as constituting the consolidation were the Tennessee Coal,
Iron & Railroad Co., the Republic Iron & Steel Co., and the Sloss
Sheffield Steel & Iron Co. Other less important concerns were also
suggested. The Sloss Sheffield company was engaged entirely in the
manufacture of iron and was a rather small concern as compared with
the steel giants of the day. But it was conservatively capitalized and
managed and had at the time an unbroken dividend record in respect to
its preferred stock. At its head was Colonel J. C. Maben, a veteran
iron maker and one of the best known and most respected figures in
the industry. Colonel Maben was approached by one of the Tennessee
directors with a merger proposition, but refused to consider it
because, as he has since said, he did not think the financial condition
of the Tennessee company sound. If there had ever been any possibility
of the merger going through Colonel Maben’s attitude would have
effectually stopped it.
From this it would appear that the proposal to merge all the larger
steel and iron companies of the South never developed beyond the
nebulous stage. However, a consolidation of the two largest of these
concerns, the Tennessee and the Republic companies, had been definitely
decided on. The two concerns were controlled by the same financial
interests and their managements were practically identical. While it
is not unlikely that some of the directors of the companies, among
whom were John Warne, or “Bet You a Million” Gates, looked upon their
investment therein first and foremost as a speculation and would, in
consequence, have regarded favorably the opportunity to sell out
at a fair figure, there were others who had implicit belief in the
possibilities for the expansion of the steel industry in that section
and considered that they had in their hands the opportunity to build
up a southern steel empire. The amalgamation of the two companies,
naturally, would have been the first step to this end, and, as has been
stated, it had been decided on and its consummation was being delayed
only until what seemed to be a favorable time should arrive. But their
dream of empire was doomed to disappointment.
Another reason advanced for the Steel Corporation’s supposed anxiety to
get its clutches on the Tennessee Coal, Iron & Railroad Co. was that
the latter concern owned ore mines estimated to contain some three
quarters of a billion tons of iron ore, besides coal resources placed
at two billion tons, as well as limestone and other raw materials
necessary in the manufacture of steel. The company also enjoyed the
undoubted advantage of having both its coal and iron in the ground
within a twenty-five-mile radius of its ovens and furnaces--it was
“sitting on its raw material”--whereas the steel mills in the North
were great distances from their raw supplies--Pittsburgh, for instance,
depending for its ore on the vast iron ranges of northern Minnesota.
The proximity of its mines is, of course, a material advantage to
the Southern company, as transportation charges on raw material play
a very important part in the cost of steel making. It is perhaps
not so generally known that this advantage is to a large extent
counterbalanced in other ways. Were it not for the saving thus gained
it is questionable whether it would be possible to manufacture steel
commercially in the South.
In the Hill lease the price which the Steel Corporation was to pay on
the ore taken out of the Great Northern holdings in the Mesaba region
was based on an iron content of 59 per cent. Northern ore averages well
over 50 per cent. metallic content and that yielding much under 50
per cent. is not considered commercially available, although some of
the lower grade ore is treated by a concentrating process and made so.
Moreover, much of the ore of the Great Lakes region lies in immense
bodies within a few feet of the earth’s surface and is mined by the
simple process of removing the top layer of soil--technically known as
stripping--and then putting a steam shovel to work.
But the ore beds from which the Tennessee company draws its raw
supplies average well under 40 per cent. in iron, actually from 36 per
cent. to 37 per cent.; nor does the ore lie near the surface, and the
process of making it into iron and steel is necessarily more tedious
and more costly than is the case with the richer and more easily
reached northern iron.
In the first place, more labor is required, particularly in winning the
raw materials, as the coal fields are badly disturbed geologically,
making the expense of mining very much higher. And the ore is nearly
all hard ore, requiring to be drilled, blasted, and crushed. Further,
the low iron content requires the use of about one and three quarter
times as much ore per ton of pig iron, and the poor quality of the
Alabama ore necessitates the use of about half as much again of coke to
make a ton of iron as compared with that coming from the Lake Superior
district.
The high phosphorous content of southern pig iron prevents the use
of the cheaper Bessemer process which is used on the low phosphorous
pig iron of the northern district and the fact that no Bessemer steel
industry exists in the South to furnish the scrap required in the
straight open-hearth process prevents the economical use of this
process in the South, a disadvantage which does not exist in the North,
where scrap is available. Hence it is advisable in the Birmingham
district to use a combination of the two processes, the iron being
first bessemerized, then worked through the open-hearth furnace. And
this adds greatly to the cost of converting a ton of pig iron into
steel.
Another difficult problem with which the Tennessee company had to
contend was that of labor. The large majority of the common labor
supply in the South is made up of negro labor and, while the colored
man often makes a satisfactory worker if properly “bossed,” he is
unreliable and too often has as his motto “never do to-day what you can
put off until to-morrow.” Given assurance of enough to eat for a day or
two and a dollar in his pocket, he is likely to refuse to work until
again urged by the spur of necessity--childlike, his vision of the
future is limited. And this disposition to take life from day to day
is, to put it mildly, trying to the manufacturer who needs a full force
to get out tonnage.
And even when the negro is reliable he is seldom fitted to take
positions of responsibility, so that workmen must be brought from
the North to undertake the skilled work or that requiring managerial
ability. And as the opportunities for such men are greater in the
North, the keeping of an efficient organization together means
a constant struggle on the part of the manufacturer, becomes an
ever-present and pressing problem.
The expansion of the steel industry in the South is further limited
by the fact that it is an agricultural, not an industrial, section.
A steel mill does not, in the main, make products to be sold direct
to the ultimate consumer. Its output must be manufactured by other
companies into machinery, locomotives, and a thousand and one other
things. Its customers are other industries, and there are comparatively
few industries in the South. Thus it would seem that the formation of a
great southern steel merger or the expansion of the Tennessee company
to a size sufficiently large to cause apprehension to the “Steel Trust”
was a very remote contingency.
It might not be out of place here to point to the significance of the
fact that the Republic Iron & Steel Co., which owns important tracts
of ore and coal lands in the South just as conveniently situated to
its furnaces as are the Tennessee’s holdings, has not made marked
use of the supposed advantages which it obtained from its southern
properties. The company’s expansion since 1907, under John A. Topping’s
able management, has been great, but it has been almost entirely in the
North.
These things, the conditions that surrounded and influenced steel
making in Alabama, were well known in the steel trade. Therefore it was
hardly to be wondered at that when Ledyard, through Morgan, suggested
to the directors of the Steel Corporation that the controlling interest
in the Tennessee company should be purchased by its bigger and richer
rival, the proposal was not enthusiastically received. The deal, for
any other reason than the saving of the financial situation, was
opposed by both Gary and Frick. The latter, in particular, seemed to
think that almost any other course was to be preferred to an absorption
of the Tennessee company, and it was he who suggested that a loan of
$5,000,000 be proffered Moore & Schley to save them from bankruptcy.
But the members of the firm rejected this offer.
It was not a time for delays, for dickering. The financial situation
was a seething volcano which might erupt at any minute. From Friday,
November 1st, when Ledyard first presented the matter to the banker,
meetings of the Steel Corporation’s finance committee and conferences
between Gary and Frick and representatives of Moore & Schley were held
almost continuously until Sunday, November 3rd, on which date the Steel
Corporation management finally yielded to the insistence of the brokers
and agreed to purchase the controlling stock of the Tennessee Coal,
Iron & Railroad Co. at par, or $100 a share, about twice the value that
had been set on the stock by Gary in his earlier talks with Ledyard.
Followed the now famous visit to Washington. The deal, though
practically completed on Sunday, was not formally closed. Gary insisted
that the President of the United States should be consulted and that
his attitude should be ascertained, and Frick demanded and received an
assurance from Morgan that every assistance possible would be rendered
other companies which were in difficulties before the purchase should
be consummated.
At midnight Sunday a special train left Jersey City bearing the two
Steel Corporation directors and they were delivered at the national
capital shortly after daybreak Monday. Theodore Roosevelt, then
President, was breakfasting when the two arrived at the White House,
but he gave them immediate audience and to him the steel men explained
the situation and asked whether the Government would be antagonistic
to the absorption of the southern company. Gary, who was spokesman,
told the President that he and his associates realized that the deal
might be used as a handle to attack the Corporation for attempted
monopoly--prophetic words--that they were only considering the purchase
because of the strained financial situation which it would tend to
alleviate, and finally that the taking over of the Tennessee properties
would still leave the big company with less than a 60 per cent.
control of the country’s steel trade. This percentage, Gary explained,
was the limit which the Corporation had set for itself and was one,
incidentally, from which it was gradually receding, its percentage
of the steel production of the United States having shown an almost
uninterrupted decrease from year to year.
With President Roosevelt at the interview were his private Secretary,
William Loeb, afterward Collector of Customs of New York, and Elihu
Root, Secretary of State. The President consulted with the head of
the State Department and decided that it was not in his province
to give formal approval to such a transaction. He nevertheless
gave satisfactory assurance to Gary and Frick that the Federal
Government would put no obstacle in the way of the completion of the
transaction. These views Mr. Roosevelt later repeated in a letter to
Attorney-General Bonaparte.
No sooner was Gary satisfied as to the President’s attitude than he
informed Morgan by long distance--a ’phone having been kept open in
readiness--of the course of the interview, and the banker announced
to the financial interests of New York that the Steel Corporation had
arranged to purchase control of the Tennessee Coal, Iron & Railroad Co.
That memorable morning, Monday, November 4th, had dawned dark and
gloomy for the financial world for which Wall Street is the nerve
centre, but no sooner had Morgan’s announcement become known than,
as Mr. Morgan often stated, a marked change toward a more optimistic
sentiment, a genuine improvement in the situation, became apparent.
Immediately on the return of the two steel directors to New York the
purchase was completed, Moore & Schley turning over to the Corporation
157,700 shares of common stock of the Tennessee Coal, Iron & Railroad
Co. and receiving therefor $18,774,000 in second mortgage bonds of the
Corporation, it having been agreed that the stock was to be paid for at
par, in bonds at a market value of 84. Other common stockholders of the
Tennessee company were offered the same terms, and the Corporation has
since acquired all but $68,092.50 of the outstanding common stock of
the southern company; $72,500 preferred stock and $123,100 guaranteed
preferred is still held outside the Corporation.
George G. Crawford, manager of the plants of the National Tube Co.
at McKeesport, was appointed president of the Tennessee Coal, Iron
& Railroad Co. under the new management. Crawford accepted somewhat
hesitatingly at first, knowing that a great deal of money was required
before it would be possible to put the company on a satisfactory
earning basis. Indeed, he had previously refused to consider an offer
of the position of manager under the former control. Under his guidance
the company did rather better than expected and by about the end of its
second year as a “Steel Trust” subsidiary was showing a small profit.
All earnings, however, were put back into extensions and betterments,
as was also a large amount of cash supplied by the controlling
Corporation, and it was not until the year 1914 that the first dividend
on the common stock, 1 per cent., was declared.
By that time the expenditures made by the Corporation in extending
the Tennessee properties and enhancing their earning power had begun
to show visible results, and when the enormous war demand for steel
started to make itself felt early in 1915, the southern company was
in a position to take full advantage of it and to reap large profits
therefrom.
The Corporation does not make public the operating results of its
separate subsidiaries, hence it is impossible to more than guess at the
probable earning power of the Tennessee company. But there is reason
to believe that its future operations will justify the expenditures of
the Corporation, both for purchasing and improving its plants--that the
investment will prove a paying one.