The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1901-03-20
GIGANTIC Steel TRUST
The Capital Of the New Corporation
Will Be $l,l54,OOO,O00.
CARNEGIE GETS s25, 100000 CASH

An onicial Statement Issued by j. r
Morgan & Co. Relative to tho Plan OF
Consolidatlon-Syndica States That
It Gets No Profits Except Those Which
Come From tho Exchange Of Holdings
New York City.-A circular has been
issued by J. P. Morgan & Co. to the
stockholders of the Federal Steel Com
pany, National Steel Company. Nation
al Tube Company, American Steel and
Wire Company, American Tinplate
Company. American Steel Hoop Com
pany and American Sheet Steel Com
pany, which, together with the Car
negie Company. are to be merged into
the United States Steel Corporation.
1t is supplemented by an address Of
the Board Of Directors Of the various
companies, urging acceptance Of the
terms offered on the score Of decreased
expenses and larger net earnings with
out advance in prices of manufactured
product.
In order to carry out the provisions
Of the consolidation, the capitalization
Of the United States Steel Corporation
will be $1,154, 100000. Of this amount
S425, 100000 is seven per cent cumula-
tive preferred stock; an equal amount
Of common stock and $304, 100000 Of
five per cent. bonds. The bonds are to
be used only in acquiring the bonds
and sixty per cent Of the stock Of the
Carnegie Company. An underwriting
syndicate of S200,000,00O has been
formed to finance the plan.
J. P. Morgan & Co. will manage the
syndicate and exchange the bonds and
stock of the new corporation for those
IF the subordinate companies, and $780,
100000 in cash. The syndicate is to
retain all stocks not required for the
acquisition of combining companies.
According to statements made by
officials of the various companies en-
tering the combination their aggregate
net earnings for 1000 were sufficient
to pay dividends on both common and
preferred stocks Of the United States
Steel Corporation, besides allowances
for sinking funds and maintenance.
The capitalization Of the company may
be reduced if the entire capitalization
Of the subordinate companies is not
acquired.
The circular settles beyond cavil or
doubt that the Carnegie Company was
not acquired until Mr.. Carnegie's
terms, S25OOO,OO0 in cash. were ac-
ceded to. 1t says in reference to COM
mon stock dividends:
an nf hn
cessity Of interruption in the declara-
tion and payment Of dividends, when
earned, upon the common stock, con-
currently with the payment of divi-
dends upon the preferred stock, there
has been inserted in the charter Of the
United States Steel Corporation a prop
ositlon to the effect that whenever all
quarterly dividends accrued upon the
preferred stock for previous quarters
shall have been paid. the Board Of Dt-
rectors may declare dividends on the
common stock out of any remaining
surplus or net profits
In order that there may be no mis-
understanding, either now or in the fu-
ture, as to who is supreme in the
trust, the following statement is pade:
"The undersigned q. P. Morgan & Coz
are authorized to proceed with the pro-
posed transaction whenever in their
sole judgment a sufficient amount of
the stocks of said companies. or any Of
them, shall have been deposited. They
reserve the right, at any time, in their
discretion, to wholly abandon the
transaction and to withdraw their Of
fer herein contained as to all the de-
positors."
And while the supremacy question is
uppermost the circular says that all
forms of bonds and stock certificates,
"and the entire plan of organization
and management of the United States
Steel Corporation shall be determined
by ]. P. Morgan & Co."
The closing paragraph will gratlfy
the heretofore unsatisfied curious in
terest of every general reader, because
Mr.. Morgan has not been given to pub
licly making personal explanations of
any kind. 1t reads: 1T Is proper to
state that J. P. Morgan & Co. are to re-
ceive no compensation for their serv-
ices as syndicate managers beyond
share in any sum which ultimately
may be realized by the syndicate"