The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1902-04-25
REFUNDING PLAN.
to Steel Trust Stsck-
holders in Letter.

New York, April Stockholders Of
the u. S. Steel corporations received to-
day the circular letter of the corpora
ton. setting forth the exact terms under
which it is proposed to retire $500, 600, 900
Of per cent preferred stock and issue
$3.50, 100000 OF 5 per cent bonds. thereby
increasing the bonded debt from $780,
100000 to $3.50, coo 600
Accompanying this circular was a re-
port of the finance committee which
sets forth in detail various reasons why
the refunding plan should be approved,
together with a series of reasons as TO
how the plan is to be carried out.
The stockholders report, signed by
President schwab and Chairman Gary,
says in part:
In February 1901, various subsidiary
companies had under contemplation, and
in many cases actually had begun the
construction of additions to their plants
which in some instances would have
duplicated the facilities of other sub
sidiary companies. The aggregate of
something like $50, GOO, 600. AS stated in
the prelin mary report much that at the
time of the organization it was hoped
might be accomplished in the way OF
avoiding wasteful expenditures for IN
necessary enlargement of plants has
been accomplished by cooperating the
several companies, enabling one TO
utilize the facilities of the other. How
ever, owing largely to advance com
nittments, it was impossible to stop
all construction al the time your cor
poration was organized: and, in order
to finish work then already underway.
cash payments have been made during
the year to the amount of SIS, 600 600
1T was not possible to determine
how much of this contemplated expen-
diture of about $50,00e,o0o would have
to be made, nor in advance Of sufficient
experience would It have been wise to
capitalize any part Of the SIS, 900, 600
that have been actually expended.
within the next few months will fail
due payments aggrega ting about S10,
0000 600, for properties purchased almost
Immediately after your corporation was
organized. In the preliminary report 10
stockholders these payments were de-
The finance committee is unanimous in
its support of the executive commit
| tees recommendations, and believes
that, as desired by the executive COM
mittee SIS 600 600 should be made avail
able for Improvements.
The finance committee also recon-
mends capitaiizing both the SIS, 900 600
expended during the year for commit
nents made prior to your corporations
organization and the $40 GOO 000 vet to
be paid for properties as above stated
These three purposes in the aggregate
call for $50, 600.
THE problem confronting the finance
committee has been to make provision
for this 50,000, goo without issuing pre-
ferred stock. which stock cannot be sold
at less than par, and which, if sold at
| par. would be entitled to dividends at
/ the rate of { per cent. and would in
crease by $1,000 600 the present annual
dividend requirements of the corpora
ton
After discussion with some of the
/ principal stockholders it appeared prac-
/ ticable to rearrange your corporati s
4 capitalization (Which in round numbers
now consists of $500. 600 600 of bonds,
/ $780, 600. coo of preferred stock and $780,
/ 100000 of common stock by substi-
tuting for 5000, 900, 900 of the preferred
i stock 5000, GOO of sinking fund sixty
/ year 5 per cent. gold bonds and by SELL
/ ing $50 900 600 additional bonds of such
/ issues for cash
AS the preferred stock carries per cent
I dividends while the bonds would bear but
per cent interest, the $50. 090, 600 desired
could in this way be added to the eorpor-
ate resources, and the aggregate of the
annual charges for interests and dividends
instead of being increased s.. 500. o0a would
/ be decreased 81. 500. coo as compared With
/ the present sum total of these two require
/ ments
THE unanimous conclusion of the finance
! and executive committee is that, consid-
ering the vast aggregate value of the
/ physical properties, the proposed S250, go :
| 600 increase Of bonds from SEQ, coo 10