The Birmingham age-herald., 1902-08-28
HALF A MILLION
 EARNED IN 4 DAY  Steel Trust Files Answer to the
 Bill of Complaint IS WORTH S1,4OO,OOO,oOO Papers h Famous Case Show That Surplus of se5.ooo,ooo wIll In, crease the capltal-No spe-
 cial Terms Offered.
IS WORTH ,4OO,OOO,0OO

Trenton, N. J., August 27.-The United 1 States Steel corporation tooay nIed in the court of ehanoery an answer to the amended bill of complaint of J. Aspinwall Hodge, Bernard Smith and William H. sion of s9oo, 100000 per cent preferred stock Into S20o, OoO0O0 5 per cent second mortgage bonds.
 The answer denies that the books of the corporation show Curtiss to be the own CT of any stocks of the concern. Smith, 1t Is averred, did not own any stock of record. until June 24, 1902, after the plan of conversion had been. adopted and that the stock now recorded in smiths name was voted In favor of the plan.
 Hodge, it Is admitted. owns 100 shares of stock. but it is alleged that he was not present at the stockholders meeting when the plan was submitted, and that his stock was not voted either by him. self or proxy.
 It Is denied that fifteen or more of the directors of the steel corporation arc members of the syndicate through which the preferred stock was. to be converted into bonds.
 Some Members of Syndicate.
 It is admitted that some of the directors are members, of the syndicate, but that this fact was communicated to every ,stockholder in the circular of April r. 1902 in the following words:
 ITO further the success of the plan there has been formed a syndicate in cluding some directors, who will receive four-hfths of the 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 corporations are a minority in the board of directors, but they are large stockholders and favored the conversion plan because they believed it would be advantageous to them as stockholders.
 It is denied that any stockholders had been offered special term in connection with converting their preferred stock Into bonds in order to secure their affirma- tive votes for the plan
 It is denied that the $50,000,000 of addi- tional capital which it was proposed to obtain was needed for purposes that were chargeable to the earnings of the com pany.
 Needed Larger Surplus.
 The answer then takes up the line of argument made in the affidavit of George w. Perkins, chairman of the finance committee, filed last week in which MT. l Perkins claimed that this additional s5O,- O0O,0OO was needed to pay for improve ments and to give the company a larger surplus to permit 1t to do a cash busi- ness and be protected against a money stringency in thssevent of a business de- pression. The answer says the earnings of the corporation for the year ending March s1, 1902 were $1i1 sos, ,O54; for the month of April 1902, SIP. 92O 766; May, s1s,- l2O,S9O; June, $1222O,36O; July estimated s1l,s0O0OO. or at the rate of s15OOOo,0OO a year.
 An inventory is filed to show that the company's property is worth s1 400. 1000. more than the combined par value of the preferred and common stocks. It is stat ed also that the company's surplus Is $65, 0000 GOO. The answer emphasizes the point raised by MT. Perkins to the effect that the conversion plan would reduce the fixed charges of the company and be advantageous to all stockholders, both preferred and common.