The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-07-16
TOTAL OF Sl,4OO,29l,OOO
VALUE OF ASSETS OF THE UNITED
STATES STEEL CORPORATION.
Mr.. Schwab's Reply to the Suit
Oppose Issue of New Bonds.

NEWARK, n. j., July 15.-The answer of
the United States Steel Corporation to the
suit designed to prevent the 5000, 900 900 bond
conversion plan brought by ]. Aspinwall
Hodge, William H. Curtis and Bernard
Smith were filed to-day before Vice Chan
celor Emery The suit is based on the con-
tention that the corporation assets do not
equal the amount Of its preferred stock
and that, therefore. it cannot proceed as
intended under the act of 1902 The answer,
which is supported by an affidavit of
Charles NJ. Schwab, states the assets
amount to the entire stock. bonds, common
and preferred, or more than 81, 400, 900 900.
Mr.. Schwab in his affidavit maintains that
his position is such as to give him knowl-
edge of the actual worth Of the property
and lists his estimates of their value He
says among other things that the earnings
of the corporation in the fifteen months of
its existence have been in excess of 10 per
cent. of the entire capital stock
Mr.. Schwab's answer contains the follow
ing statement Of the value of the corpora
tion's property, which estimate, he says,
he regards as below its real value:
Iron and bessemer ore properties 500 900 600
Plants, mills, fixtures, machinery
equipment, tools and real es-
tate OBSERVATION-DISCLOSURES. 200 Ooo GOO
Coal and coke fields (S7,5S9 acresj 100000
Transportation properties, in
Guiding railroads Q,167 miles,,
terminals. ships Q12), equip
ments (231S5 cars and 42S loco
motives), etc................... SOOOO,OOO
Blast furnaces. Observation-Disclosures. $4,000 600
Natural gas fields. ................. 2OOOOOOO
Limestone properties. 1000, 900
Cash and cash assets as OF June
/, 1902. 1881. 900
Total 81 4OO, 291, 900
Mr.. Schwab calls attention to the value
of 1920 100000 placed on the Carnegie prop
critics as a result of the Frick litigation.
1t is set forth also that the present fixed
charges of the United States Steel Cor
poration are per cent. per annum on 1903
900 of bonds and an annual sinking fund
of s.. $4,000, making annual charge of $1S-
27,S50; and that when the proposed issue OF
second mortgage bonds is outstanding
namely s25O,OOO.OO0 at per cent, together
with an annual sinking fund of 100000,
the total fixed charges of the United States
Steel Corporation for interest and bond
sinking funds will be $31. 49,, $50. TO provide
which Mr.. Schwab says the corporation is
now earning at the rate of $40, 000, 900 per
snnum. The profits of the steel corporation,
he says. could be reduced more than rs
per cent and there would still be ample
funds to pay the interest and
sinking funds upon the first and
second mortgage bonds. Instead OF a mar
gin of per cent. as intimated in the afi-
davit Of Smith, there is a margin of 70 per
cent. before the solvency or financial
ability of the steel corporation can posi-
bly, bs questioned.
other affidavits corroborative OF Mr.
Schwab's estimate the companys prop
critics were presented by A. H Gary, chair
man Of the corporations executive com
mittee; James Gayley. vice president; John
Birkinbine, a consulting engineer; Thomas
/ Lynch president OF the H. c. Frick Coke
! Company; William n. Page, president Of
/ the Gauley Mountain Coal Company: J. H
Deed. president OF the Pittsburg, Bessemer
secretary of the United States Steel Cor
| poration.