Barre evening telegram. (Barre, Vt.) 1898-19??, 1902-08-28
STEEL TRUSTS REPLY
Answer In Hodges Suit to Block
Bond Conversion.
DENIAL OF CHARGES MADE.
Emphasis Laid ON Point Raised nv
PERKINS iEHt Conversion Plan
Would lie AdVuntnaeous to
All Stockholders.
DENIAL OF CHARGES MADE.

Trenton, y. j., Aug. IS. The United
States Steel corporation has filed in
the court Of cAallcyry an answer to the
amended bill Of cun.piHillt If j. Asp.il-
wall Hodge, Bernard SMITH and VI H.
liam II. Clil1lSs t. +, strain the iiIo-
posed conversion of $500. UJ0,Nr0 per
cent preferred stock into S2VU.UtW.VUO
. Fer cent second MORTGAGE bonds.
The answer denies that the books of
the corporation show CurtlsS To he the
owner of ANY stock of the concern.
Smith. 1t is avcrrcu. did not own any
stock Of record until June "A. 1902 aft
er the plan of conversion had been
adopted, and that the stock now re
corded i'll Smiths name was voted in
favor Of the plan. Hodge, it is admit
ted, owns 100 shares of stock. but it is
alleged that be was not present at the
stockholders meeting when the plan
was submitted and that his stock was
not voted either by himself or by
proxy.
1t is denied that fifteen or more of
the directors of the Steel corporation
are members of the syndicate through
which the preferred sock was to be
converted into bonds. 1t is admitted
that some of the directors are mem
bers of the syndicate. but that this
fact was communicated to every stock
holder 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 re-
ceive four-fifths of the per cent COM
mission to be paid under the contract
with ]. p Morgan & Co.. mentioned in
the notice of stockholders meeting"
Syndicate Directors In Minority.
The answer says that the directors in
the syndicate are minority In the
board of directors, but that they are
large stockholders and favored the
conversion plan because they believe
it would be advantageous to them as
stockholders. 1t is denied that any
stockholders had been offered special
terms in connection with converting
their preferred stock into bonds IN Or
der to secure their affirmative votes for
the plan. 1t is denied that the 500
OOO, 600 Of additional capital it was
proposed to obtain was needed for pur-
poses that were chargeable to the earn
ings of the Company.
The answer then takes up the line
of argument made in the affidavit OF
George w. Perkins, chairman OF the
finance committee, filed last week, II
which Mr.. Perkins claimed that this
additional $5O,OOO,O0O was needed Il
nav for improvements and to give the
company larger surplus to permit i
to do a cash business and be protected
against money stringency in TN
event of a business depression.
The answer says the earnings OF tn
CORPORATION for the year ending Marcl
81 were Sill, 5O3,O54 for the month O
April S1232O, 766, May $13, 2O,39o
June $12,2 1862, July (estimate0 SILL
800 900, or at the rate of $3.50, 100000
wear. An inventory is filed to shoV
that the company's property is wort
81, 400, 100000, or more than the COIL
bined par value of the preferred an
common stock. 1t is stated also tina
the company's surplus is now $6o,ooo
900.
The answer emphasizes the poir
raised nv Mr.. Perkins to the effect tina
the conversion plan would reduce tn
fixed charges of the company and b
advantageous to all stockholders, Dot
preferred and common.