The age-herald., 1901-02-09
President Gary Makes the First
 Public Announcement
CARNEGIE WILL GET s13O,0O0.OO0
There Is Little Doubt That the Present Trading is Battle Royal Be- tween Financial Giants.
 Plan of Payment.

New York February 8.-The new develop ments in connection with the negotiations touching the transfer of the control of the Carnegie Steel Company to J. P. Nor gan and his associates today were first that MT. Carnegie is to receive $500 for each s1000 share of his stock; second, that minor- ity holders who desire to sell will receive the same terms those given to Mr. Carnegie; third. that the present stage of the negotiations contemplates the forma- tion of new corporation whose bonds will play a large part in the price to be paid MT. Carnegie and fourth, the first public announcement in connection with the pending negotiations of official charac- ter consisting of statement by President Gary of the Federal Steel Company. con- frming the news that J. P. Morgan is plan ming the acquisition of the properties of some of the largest iron and steel com- panies of this country. The statement by Judge Gary, however, threw little light upon the details of the transaction that is now in progress and it is probable that actual official information in this respect will not be obtainable until the deal is really completed
 The statement apparently confirms the general impression that all "the Morgan companies are actively interested in the transaction and while nothing was said as to the American Steel & Wire Company the fact that counsel of that company attended conferences between President Gary and MT. Morgan seems to leave little doubt that the negotiations include the steel and wire consolidation. Incidentally it is hinted that interesting developments may occur at the annual meeting of that corporation Feb ruary 18th. The Moore Companies' are not generally supposed to have any interest in the financial side of the new deal but it is believed they will be disposed to work in harmony with the Morgan interests at least while the market continues favor able. It appears not unlikely, however, that the Pennsylvania Steel Company may be included in the community of owner ship" plan.
 Carnegie Will Get $13o,0oo,ooo.
 If, as now seems certain, MT. Carnegie is to receive $1500 for each 5000 share of his stock the transfers in his case alone will be the equivalent of nearly $130 COG, 600, inas- much as the great steel magnates holdings at present amount to $S6 000,000. If, seems probable, the minority holders are to be looked after by MT. Morgans syndicate, the financiering will involve the equivalent of $240, 0O0G00
 This is certainly beyond even Mr Nor gan's ability to provide in cash on short tice for a single transaction without seri- ously affecting the money market and no surprise was therefore felt when Judge Gary made the statement that the actual transfers of cash would be small. Mir. Car negie Is not likely to give up such gilt edge security as the shares of his own company for anything less attractive. The financial plan contemplates either the reorganization on a greatly enlarged capital basis of one of the existing steel companies the form alton of an entirely new corporation to hold the controlling stock of the various com panies and especially the stock acquired by the Carnegie Company all of such stock to constitute the collateral of the new bonds which will be issued to MT. Carnegie and to such other of the present Carnegie Com pany stockholders may wish to sell out.
 A Plan of Payment.
 It was proposed today that a plan of payment might be agreed upon whereby MT Carnegie should receive a certain amount of cash and the balance in notes of the underwriting syndicate, coming due at specified dates, so that the transaction could be spread over a considerable period of time thus overcoming the difficulty of A possible stringency in the money market. These notes were to be secured by the de- posit in trust of the Carnegie stock as col- lateral This scheme, however, did not overcome Md. Carneg1eS s objection to part ing with personal control of the company until he had received full payment.
 There is little doubt that the present transactions .are the termination of a bat tie royal between financial giants. The con- test itself may be said to have grown out of the. ''community of interests idea, or policy, which Is now controlling the rail- roads It started on its most serious stage as A result of the Pennsylvania Railroads policy, instituted in a radical form by President Cassett of refusing cut rates in all directions regardless of whether he shippers were large or small. MT. Carnegie had been used to receiving favorable rates under an old contract because of the im- ,nensity of his shipments, and he objected, it is said, to the policy introduced by Pres- dent sCassatt. The latter, however, refused tos renew the old contract. MT Carnegie then appealed to MT Morgan, without suc- cess, and thus found himself bottled up," as it were, in Pittsburg, with the transpor- tation facilities no more advantageous than his smallest competitors.
 This was a situation to which man of his capital, nevre and energy could not be expected to submit, and the next thing heard was that he had purchased thou sands of acres on the lake shore front and that he had made definite pIans to compete with the other steel works by building enormous tube works on the lake shore.
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