The Minneapolis journal., 1902-08-27
SAY ,400,000,O0O
Value of the Steel Trust Given in
the Conversion of the
Stock Case.
Suggestion of ''Strike" Tactics Ap-
= 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. Aspinwal
Hodge, Bernard Smith and William H.
Curtiss to restrain the proposed CONVEX
sion of s2Oo,OOO.OOO per cent preferred
stocks into 5000, 00O 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, it 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 1t 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 IT, 1902, in the following words:
ITO further the success of the plan
there has been formed a syndicate in
Guiding some directors, who will receive
fOur-ffths of the 4 per cent commission
to be paid under the contract with j. P
| Morgan & Co., mentioned in the notice
| of stockholders meeting"
The answer says that the directors in
| the syndicate are in minority in the
| board of directors but that they are large
| stockholders and favored the conversion
plan because they believed it would be ad-
vantageous to them as stockholders 1t is
denied that any stockholders had been Of
tered 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 $50, 900, 900 of additional capital which
| 1T was proposed to obtain was needed for
purposes 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 com
mittee filed last week. in which Mr.. Per-
kins claimed that this additional s5O, ,O00,-
600 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 a money string.
ency in the event of a business depression
The answer says the earnings of the
corporation for the year ending March 81
1902, were Sill, ,503 ,054, for the month OF
April, 1902, s12,320, 1858; May, $1312O, 800
June, $12,220,362; July estimated s11.
100000, or at the rate of $780, 900, 900 E
year. An inventory is filed to show tina,
the company's property is worth $1;400,.
O,OOO, more than the combined par value
OF the preferred and common stock It /.
stated also that the company's surplu.
is now $63. 900, 900.
Inc answer emphasizes the point raised
by Mr. Perkins to the effect that, the con
version plan would reduce the fixed
charges of the company and be advantae
eous to all stockholders, both preferred
and common. =