The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-07-16
A STUNNING ARRAY
Of TRUST FIGURES
The Steel Corporations Value
and Earnings.
- OIVIA1A NO NTAT ATEAMCMT
SCHWAB'S. STATEMENT
Answer to Suit to Prevent the Fond
Conversion Plan.
ONE BILLION FOUR HUNDRED MILLIONS
This Represents in Dollars the Corporations
Value. Its Earning at the Rate of More
Than One Hundred and Forty
Millions Year.
Millions a Year.
(By the Associated Press.)


Newark, N. j., July 15-The answer of
the United States Steel Corporation to
the suit brought by ]. Aspinwall Hodge,
William H. Curtis and Bernard Smith,
who asked for an injunction to prevent
the company from carrying out its bond
conversion plan, was filed today before
Vice Chancellor Emery. The case was
put over until July %. The answer was
sworn to by Charles NJ. Schwab, as
president. The assets of the properties
of the subsidiary companies, it is stated,
include four hundred producing mills of
the value of $500, 900, 900; seventy-fiv
blast furnaces of the value of $4S, 900, 600;
iron and Bessemer ore properties of the
value of 100000, 900; coal and coke prop
critics of the value of $100 900 000 natural
gas fields of the value of 81, 900, 900; cash
in bank 70 the amount of $66, 900, 900 and
over $S0,000,00 of material in process of
manufacture. The total value of the
companys property including cash and
cash assets is placed at ST. 400, 000, 900 by
Mr.. Schwab in an affidavit which is part
of the corporations reply. The COM
pany's earnings are stated to be at the
rate of more than $40 000, 900 year
saving of $30,000 900 year is credited to
the ore properties, and it is estimated
that the ownership of transportation fa-
cities saves the company $10,000,0 900 an
nually. The earnings of the coal and
coke properties are stated to be more
than 81 900, 900 a month. These state
ments as to values and earnings were
presented to disprove a charge by the
plaintiffs that Mr.. Schwab the president,
and Mr. Trimble, the secretary, made a
false certificate when they certified that
ntheir judgment the properties were
worth at least the par value of the pre-
ferred stock after deducting all indebt-
edness. The corporation declares it has
no knowledge that Hodge is the owner
of 100 shares of it's preferred stock but
admits that in August 1901 one hun
dred shares of the preferred stock was
transferred to his name on the company's
books. 1t is denied that William
Curtiss is the owner of any of the com
pany's stock and it is declared that Ber-
nard Smith is the holder of 200 shares
of preferred stock which was transferred
to him. on June 26, 1902. The conversion
plan was agreed upon at stockholders
meeting on May 10. The answer admits
that the conversion plan includes pay
ment CT S10,000,000 to ]. P. Morgan &c
Company. 1t denies that any of the acts
contemplated will work fraud on injury
to the complainants but says that on the
contrary such acts, when consummated
will be greatly to the benefit of the cor
poration and of every stockholder. The
answer says that some of the directors
are members of the syndicate formed by
J. p. Morgan & Company to float bonds
and that that fact was communicated to
stockholders i'll a circular dated April II,
1902. II is further declared that the di-
Tcctors so interested constitute a minor
ity of the board of directors that they
were individually at the time of the for
nation of such syndicate and now are
owners and holders of large amounts of
the stock of the defendant corporation,
and that they became parties to said
syndicate and assumed their proportion
of the liability thereof norder to as
sure the success of the plan of purchas-
ing and retiring the preferred stock, as
they believed such plan to be of great
value to the defendant corporation and
it's stockholders.
Mr.. Schwab's answer contains the fol-
lowing statement of the value of the
corporations property, which estimate
he says re regards as below it's real
value.
Iron and Bessemer ore properties
$500, 100000.
Plants, mills fixtures, machinery,
equipment, tools and real estate $780,
1000
Coal and coke fields (S7,5S9 acres)
800, 1000 900.
Transportation properties, including
railroads Il ,467 miles, terminals, docks,
ships 112), equipment (23,1S5 cars and
42S locomotives), $50, 900, 000
Blast furnaces $4S,000,00
Natural gas fields $40, 600, 000
Limestone properties, s4,000,000
Cash and cash assets as of June j.,
1902, s14S 291 900. Total, $1,400, POI GOO.
Mr. Schwab calls attention to the value
of 1920, ,000, 900 placed on the Carnegie
properties, as a result of the Frick liti-
CATION The present fixed charges of the
United States Steel Corporation are )
per cent per annum on $303 057 900 of
bonds, and an annual sinking fund of
SO, ,040, ,00O making an annual charge of
$1S 227 $780, and when the proposed issue
of second mortgage bonds is outstanding,
namely $250000,0 600 at per cent, to-
gether with an annual sinking fund of