The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-05-20
PROTESTS NOT Needed
NEW BONDS WILL BE ISSUED BY THE
STEEL CORPORATION.
Objections to the Conversion Scheme
Raised by Minority Stockholders,
but without Avail.

NEW YORK, May ia special meeting
of the stockholders of the United States
Steel Corporation was held to-day at the
New Jersey office of the corporation in
Hoboken, to consider resolutions adopted
by the directors providing for the retire
ment of $500, 600 of preferred stock and
the issuing of $3.50, 900, 900 of new bonds. c.
II. Venner, of Boston, entered a formal
protest against the carrying out of the
plan for exchanging bonds for stock. He
objected on the ground that there was
no authority of law for the corporation to
change its stocks for bonds, and further
that the act of the New Jersey Legislature
permitting the company to make this ex-
change was unconstitutional and void. On
motion, the protest was received and placed
on file. George Richter jr., who said he
represented holders of 1000 shares of stock
protested against the proposed payment of
per cent. commission 60 the underwriters
of the issue of $25O.0OO.O0O bonds.
Resolutions authorizing the changes pro-
posed by the directors, the secretary of
the meeting announced that so per cent.
of the preferred and rs per cent of the
common shares were voted in favor of the
plan. Before the resolutions were adopted,
Samuel l.. Strong, of Providence protested
against the plan. He said he wrote on May
to get copy of the contract between
the corporation and j. P. Morgan & Co.,
relative to the underwriting of the new
bond issue. He failed to get prompt re-
ply, but after writing several more let
tiers he got an answer on Friday last and
received a copy of the contract. He said
he believed that a good many stockholders
who had sent proxies TO the meeting had
never had an opportunity to see the con-
tract at all. In view of these circumstan-
ces he moved that the meeting should be
adjourned for one month so that all the
stockholders might have a chance to learn
just what they were asked to vote on. The
motion was lost
Former Judge Gary, chairman of the ex-
ecutlve committee, said that he believed
that the gentlemen who had made protests
We're actuated by proper motives. The ex-
eXutfve committee, however he said, had
considered every objection that had been
raised and had come to the conclusion that
the best interests of the corporation would
be served by carrying out the proposition
to be voted on. He said the professors,
represented only very small amount of
the stockholders and that the MANAGEMENT
had received proxies representing so per
cent. of the preferred stock and 76 per cent.
of the common in favor Of the proposition.
He believed, therefore, that the plan of
bond conversion should be made in justice
to the wishes of the majority.
At the close of the stockholders meet
ing Chairman George w. Perkins of the
finance committee. made this statement;
when we found IL necessary to raise more
money TO complete and perfect our plan
we considered two propositions The first
one was TO sell 100000 preferred stock
This stock we could probably have placed
at 30. That would have been an initial loss
of S5,OOOOO0 on the par value This new
issue would also call for per cent interest
or 100000 per year and for every year
thereafter. The second proposition was &c
sell $5OOOO,OOO of second mortgage pei
cent bonds. These bonds would probably
have been placed at 90 and that would have
meant an initial loss of s.. 500, 900. Neither OF
these schemes seemed to meet the situation
and were open to criticism The thirC
scheme was then considered, namely, &c
raise $25OOOO,O0O by exchanging 500. 900 90,
or the per cent. preferred stock for ar
equal amount of 5 per cent. second mort.
gage bonds and 100000 of such bond.
for cash. The interest at per cent on $500.
100000 of preferred stock equals Sl4 900 OG
per year. The interest on $3.50 900 sec
ond mortgage bonds at per cent. would
equal $12,5OO.OOO per year. a saving of ST..
100000 per year. To carry this plan out com
missions of 4 per cent. would be required
by the syndicate. This would mean an INF
tial expense Of 100000 900, but the third plar
provides for sinking fund which would
wipe out the SIC, 600 cost in less thar
ten years and would provide for the paw
ment of the entire bond issue in ski,
years"