The Minneapolis journal., 1902-08-27
SAY $l,400,000,000
Value of the Steel Trust Given in
the Conversion of the
Stock Case.
Suggestion of ''Strike" Tactics Ap-
4 pears in the Answer of the
Company To-day. .-

Trenton, N. j., Aug. 27.-The United
States Steel corporation to-day filed in the
court Of chancery an answer to the
amended bill of complaint Of J. Aspinwall
Hodge, Bernard Smith and William H.
Curtiss to restrain the proposed CONVEX
sion of S200,OOO,O0O per cent preferred
stocks into $500. 900, 900 second mortgage
bonds. The answer denies that the books
Of the corporation show Curtiss to be
the owner Of any stock of the concern.
Smith, 1t is averred, did not own any of
the stock of record until June "a, 1902,
after the plan of conversion had been
adopted and the stock now recorded in
Smiths name was voted in favor of the
plan. Hodge, it is admitted owns 100
shares of stock, but it is alleged that he
was not present at the stockholders meet
ing when the plan was submitted and that
his stock was not voted either by him
self or by proxy.
1t is denied that fifteen or more of the
directors Of the steel corporation are
members of the syndicate through whicn
the preferred stock was to be converted
into bonds. 1t is admitted that some of
the directors are members of the syndi-
cate, but that this fact was communicated
to every stockholder in the circular of
April II, 1902, in the following words:
ITO further the success of the plan
there has been formed syndicate in
Guiding some directors who will receive
four -ffths of the per cent commission
to be paid under the contract with ]. P.
Morgan 4 Co., mentioned in the notice
of stockholders meeting''
The answer says that the directors in
the syndicate are in a minority in the
board of directors but that they are large
stockholders and favored the conversion
plan because they believed 1t would be ad-
VantageOus to them as stockholders 1t is
denied that any stockholders had been Of
fered special terms in connection with
converting their preferred stock into
bonds In order to secure their affirma-
tive votes for the plan. 1t is denied that
the $5O,o0O,0OO of additional capital which
it was proposed to obtain was needed for
purposes that were chargeable to the earn
| ingS Of the company.
The answer then takes I'D the line of
argument made in the affidavit of George
| w. Perkins, chairman of the finance COM
mlttee filed last week. in which Mr.. Per-
kins claimed that this additional $50, ,OOO.- :
| 900 was needed to pay for improvements
and to give the company a larger sur
| plus. to permit it to do cash business
| and be protected against money string
| ency in the event of business depression.
! The answer says the earnings of the
| corporation for the year ending March 81.
April 1902, s12,32O, 1858; May s13,12O,39O:
June. s12,22o,362; July estimated Sill
900, or at the rate Of $3.50, ,OOO, 900 a
| year. An inventory is filed to show that
the company's property is worth $1;40O,-
OO0,O Oo0 more than the combined par value
of the preferred and common stock It is
| stated also that the companys surplus
| is now $63. 900, OOO
The answer emphasizes the point raised
by Mr.. Perkins to the effect that the con
| version plan would reduce the fxed
charges of the company and be advantae-
eous to all stockholders, both preferred
and common.