Akron daily Democrat. [volume] (Akron, Ohio) 1892-1902, 1902-07-16
BILLION
Does Not Cover
Trusts Assets.
Schwab's Statement
Filed In Court.
~ ~ ..
Earnings at the Rate Of 81, 4OO,'
100000 Net Annually.

~" "tUuSS ~ tv NusS ~ VS.
900, 900 Net Annually.
Newark, N. j., July 16.-The answer
of the United States steel corporation
to the suit brought by j. Aspinwall
Hodge. William II. Curtiss and Ber-
nard Smith, who asked for an injunc-
ton to prevent the company from car
rying out it's bond conversion plan,
was filed late yesterday before Vice
Chancellor Emery. When the case
came up before the vice chancellor it
was put over until July %.
The answer is sworn to by Charles
NJ. Schwab. as president. For the
first time since the organization Of
the steel corporation detailed state
ment Of the assets Of the properties
of the subsidiary companies is fur
nished. These assets. it Is stated,
include 400 producing mills of the
value Of 100000. .OO0;. IS blast fur
naces Of the value of $4S,000, 900; iron
and bassemeq! ore properties of the
value of $IO000O,0o0; coal and coke
properties of the value of 800, 100000;
natural gas fields of the value Of S20,-
100000; cash in bank to the amount
Of $66,000,000, and over $S0,000,0OO
of materials in process of manufac-
ture.
The total value of the company's
property. including cash and cash as
SETS is placed at 81, 100000, 900 by Mr.
Schwab in an affidavit which is part
of the corporations reply.
The company's earnings are stated
to be at the rate of more than S14O,-
100000 year. A saving Of $3o000,-
900 year is credited to the ore prop
critics, and it is estimated that the
ownership of transportation facilities
saves the company $10,0Oo,000 annual
ly. The earnings of the coal and coke
properties are stated to be. more than
81 100000 month.
These statements as to values and
earnings were presented to disprove
" =
a charge by the plaintiffs that Mr..
Schwab. the president, and Mr.. Trim
bic, the secretary, made a false certi-
hcate when they certified that in their
Judgment the properties were worth
at least the par value of the preferred
stock after deducting all Indebtedness.
The corporation declares 1t has no
knowledge that Hodge is the owner
of 100 shares of its preferred stock,
but admits that in August, 1901, 100
shares Of preferred stock were trans
ferred to his name on the company s
books. 1t is denied that William H.
| SultlSS 10 LnC OMhCG VI dDy VI thC
company's stock and it is declared
that Bernard Smith is the holder of
200 shares of preferred stock, which
was transferred to him on June 20
1902.
The concersior plan was agreed up
on at a stockholders meeting on May
10. The answer admits that the con-
version plan includes q payment OF
$10,000,000 to j. P. Morgan & Co. II
denies that any of the acts contem
plated will work fraud or injury tC
the cemplainants, but says that on the
contrary such acts when consummatet
will be greatly to the benefit of the
corporation and of every stockholder
The answer says that some Of the di
rectors are members of the syndicat,
formed by j. p. Morgan &c Co. to float
bonds and that that fact was commu
nicated to stockholders in a circular
dated April II, 1902.
1t is further declared that the di
rectors so interested constitute mi
nority of the board Of directors, tina
they We're individually at the tim,
of the formation of such syndicate ant
now are owners and holders of larg,
amounts of the stock of the defendan
corporation and that they becam,
parties to said syndicate and assume,
their proportion of the liability there
of in order to assume the success o
the plan Of purchasing and retiring
the preferred stock, as they believes
such plan to be Of great value to tn
defendant corporation and its stock
holders. W si-ef@
Mr.. Schwab calls attention to tn
value of $320,O000o0 placed on tn
Carnegie properties. as a result of tn
Frick litigation. 1t is set forth ais
that the present fixed charges OF tn
United States steel corporation ar
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