Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1902-05-14
TRUSTS OBLIGATIONS
UNITED STATES STEEL
DEALS IN MILLIONS
Interesting Circular Telling Of Methods
Used in Financing Obligations
Wise and Conservative
Millions.

New York, April 25.-Stockholders
Of the United States Steel Corporation
today received the circular letter OF
the corporation setting forth the exact
terms under which Il is proposed to re-
tire 5000 000. 900 of ! per cent stock
and issue $3.50 100000 of ) per cent
bonds. thereby increasing the bonded
debt from s3OO.OOO.OOO to s55O,OOO 900
Accompanying this circular was re,
port of the finance committee which
set forth In detail various reasons why
the refunding plan should bs approx
ed, together with a series of re ~.
tens reciting how the plan is to be
carried out.
The stockholders report. signed Ny
President Schwab and Chairman Gary,
says in part: within the next few
Cnths will fall due payments aggre.
eating about sl0.0O0,000 for properties
purchased almost Immediately after
your corporation was organized. In
the preliminary report to stockholders
these payments were described az
purchase money obligations. The fin.
ance committee Is unanimous in its
support Of the executive committees
recommendation and believes that, as
dcsired by the executive committee
$25, O00O 600 should he made available
Tor Improvements. The finance com.
m'ttee also recommends ospitalizIns
both the srj0Oo.O0 expended during
the year for commitments made prior
30 your corporations organization and
the Sl0000Oj3 yet to be paid for
properties a. above stated. These three
Purposes in the aggregate call for $50.
100000.
The problem confronting the fin.
auce committee has been to make pro
! 'is'on for this $50 1000 900 without issu,
Ing preferred stock, which cannot be
sold at less than par ana which. II
sold at par, would be entitled to dlvi.
dends at the rate Of per cent. and
would increase by s3,66O,OOO the pres
ent annual dividend requirements OF
th' corporation. After discussion with
some Of the principal stockholders II
appeared practical to rearrange your
, corporation capitalization, which in
I rcund numbers now consists of $500.
I COO 900 Of bonds, $500, 10000 preferred
stock and $500 100000 of common
stock, by substituting for 5000. 900 900
OF the preferred stock 5000, 900, 900 OF
sinking fund 6)-year per cent mort
gage and gold bonds. and by selling
Z $4,000 O0 additional bonds OF such is
cues tor cash.
AS the preferred stock carries : ne,
cent dividends, while the bonds would
bear but S per cent interest, the $50.
O0O.OOc desired could in this way bs
added 10 the corporate resources, and
the aggregate of the annual charges
for interest ana Dividends. instead OF
'N'HS ii'' Sd9Vh pO'ODV,VUU, would be
otcreased $l,50O,OOO as compared with
the present sum total OF these two re-
quirements.
The unanimous conclusion of the
finance and executive committees IA
that, considering the vast aggregate
value OF the physical properties, the
proposed $250O0o 900 Increase of bonds
from $3OOOO0,Ij0 to s55O,OOO.OOO ia
wise \ani conservative, the preferred
stock issue being simultaneously de,
creased 10 per cent or 500, 0O0, 900. The
consequent sl+OGO,OOO reduction of
dividend payments, as compared with
he $l2500,0OO increase of interest,
would result In a net annual saving OF
~ 100000. exceeding by $3.50, 900 the
annual sinking fund contribution of
sl,OlO.OOO to be required by the pro.
r"sed mortgage, and which, invested
1T per cent would be sufficient in
sixty years to pay OFF all OF the $3.50.
100000 bonds"