The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-02-09
DETAILS Of BIG DEAL
HOW THE HUGE CONSOLIDATION OF
STEEL COMPANIES WILL BE
ARRANGED
FOLLOWS THE CARNEGIE PLAN
WILL NOT BE A CONSOLIDATION
ABSOLUTELY IN ONE COR
PORATION
EFFECT THE SAME, HOWEVER
Gigantic Scheme of Combination Is
Practically an Accomplished
Fact-What Carnegie
Gets Out of 1t.

NEW YORK, Feb S.-The Mail and Ex-
press says:
"a gentleman Identified with the inter-
ests of the great steel companies under
the Morgan influence, said today that the
contracts calling for the sale of the Car
negie holdings of stock and the payment
for them, had actually been signed.
mr.. Carnegie will receive some cash,
but Will be paid mostly in bonds.
THE companies control of which is to
be merged are all characterized by a
common feature in their charters, giving
their boards of directors, with the con-
sent in writing and pursuant also to the
affirmative vote of the holders of a ma
jority of the stock issued and outstand-
ing, at a stockholders meeting, duly
called for that purpose, to sell, assign,
transfer or otherwise dispose of the prop
erty Of the company as an entirety, pro-
Vided always that majority of the Whole
board concur therein The apparent
hitch in the proceedings is only super
fetal and is due to the necessity of get
ting the written consent of the stock
holders of the various corporations inter
ested. These are said to include the Ma
tional Steel company, the National Tin
Plate company and others of the Moore
properties, together with the Federal
Steel group.
NOT IN ONE CORPORATION.
"There are two very good reasons why
an absolute consolidation of the steel in
dustries into one corporation is not con-
templated The purchase of a majority
Of the stock of the subsidiary companies
would not be sufficient in that case, but
the minority stockholders wuald be en-
titled to sell their holdings if they chose
at the same price. The taxation of such
a corporation would be enormous, owing
to its large capitalization. Not only
WO11l6 there . he tov 10
pay on the properties Of the subordinate
companies, but also a corporation tax,
which, if the company were incorporated
a 81 ,0O0O00000 in this state, would amount
to $,50OO60 per annum.
ION the other hand, the organization of
the Carnegie company presents perfect
model for Mr. Morgan and his associates.
This is for a syndicate company to be
formed, with a moderate capital to take
over a majority of the stock of each of
the subordinate companies which it thus
controls, just as the Carnegie company
supervises the Carnegie Steel company
and the other subsidiary companies I'M
der its control The general impression
is that the capitalization of this synd:-
cate company will be less than $500 O1a,-
GEO. The capital necessary would only be
large enough to take over the bare ma
jority of the stock of the subordinate
companies. which would be deposited in
IL SdIt uepOSlI UOA III lJ6 custody OIL some
trust company. On this security would be
issued the bonds necessary to float the
transa ctions, probably in the form of a
100-year mortgage of the syndicate COM
pany."
SOME DETAILS.
The new developments in connection
with the negotiations touching the trans
fer of the control of the Carnegie Steel
company to J. Pierpont Morgan and his
associates today, were, first that Mr..
Carnegie is to receive $1,5O0 for each
$1,000 share of his stock; second, that
minority holders who desire to sell will
receive the same terms as those given
to Mr.. Carnegie; third, that the present
stage of the negotiations contemplates
the formation of a new corporation whose
bonds will play large part in the price
to be paid Mr.. Carnegie, and, fourth, the
first public announcement in connection
with the pending negotiations of an Off
cial character, consisting of a statement
by E. H. Gary, president of the Federal
Steel company, confirming the news that
Continued on Seventh Page.