The Birmingham age-herald., 1903-05-03
MORGAN NETTED 4
 GOOD ROUND SUM Financier's Latest Piece of Jug
 gIerY in Steel Trust SUBSCRIBERS RESENTFUL Noteworthy Feature of the Stock Mar ket Is the Entire Absence of IL
 quidation in the Dips"
 Which Often Occur.
SUBSCRIBERS RESENTFUL
Ry W. c. NICHOLAS.

New York May 2.-Not all of the mem- bers of the famous steel underwriting syndicate are prepared to laugh gleeful- ly over the last joke played by J. Pier pont Morgan at their expense. In wind ing up the syndicate and making a final payment of s1O,OO00OO to the subscribers MT Morgan availed himself of the oppor- tunity to work off $4,000,000 of second mortgage steel bonds at par although they are selling in the open market be- low s5. This little juggle apparently nets MT. Morgan $500 900 but the syndicate subscribers have no recourse. Before they can get the $6,OOO 900 in cash plus the s4,- ooo.OOo in bonds they must surrender the receipts which J. Pierpont Morgan gave them when they paid in the $25,0OO,OOO originally on their $2O0,O0O,OO0 underwriting pledge. Many of the subscribers are open ly resentful but it is extremely doubtful if any of them will go to the length of refusing to accept the depreciated bonds in partial settlement of the last per cent dividend and in full cancellation of claims against the managers, J. Pier pont Morgan & Go. They will take out their discomfort in teeth -gnashing
 
 The steel syndicate Is the most success ful underwriting enterprise ever under taken in Wall street. The members obli- gated themselves to the amount of $2O0,- COG, 900 to aid in the Notation of the Uni ter States Steel corporation otherwise known as the steel trust. They were only called upon to pay s3,OOO,O0O or this amount or 12h per cent of their subscrlp- tions and this sum was repaid to them axrA he ThnU have since received $4S, 100000 profits, or nearly 200 per cent It has been officially stated that the expenses of the syndicate were s. GOO or whereabouts. That Is to say, J. Pierpont Morgan deducted that amount from the proceeds of the sale or the stock allotted the syndicate which was in round figures $130, ,OO0,OO0 race value -one half preferred and one-hah com mon MT. Keene who had charge of the stock manipulation on the exchange has stated that the entire syndicate hold ings were sold within thirty days after the organization of the company At the prices ruling during that period this should have netted about S9O,OO0,OOO It would appear therefore that the man agers paid back into the market some thing like $35,00Q000 to support the stock and assist in it's sale and distribution to the public The managers are under no
 
 Inside manipulation of the stock and with the surrender of the receipts held by the subscribers the deal comes to an end Some day insiders conversant with the facts may tell the story of the mar vicious deal Until that time the details will come out piecemeal, little here and a little there.
 It is the general understanding in the Street that J. P. Morgan x Co.'s share of the underwriting syndicate was 70 per cent, which would make their profits around 10000 900 plus $S,500,00O syndicate expenses" and something Clike $SOO,OOO charged originally by the firm for an or ganzation fee, and plus also what may have been made on the side during the two years of market manipulation under the direction of MT. Morgan and MT. Keene. There is also another partly se- cured $10,000,000 commission on the lat est bond conversion scheme. It would not be a wild guess to assume that the firms winnings in steel during the last two years have aggregated $40. 900 900. The amount may be much larger than that.
 Comparatively few of the members of the steel syndicate were allowed to re- main long in the possession of their pro- fits. A large majority of them were taken into the International Mercantile Marine underwriting syndicate which was call ed upon summarily to put up $50, O0,O0O. Not all of that Is a loss but the sub scribers have on hand to represent the investment a mass of bonds and prefer red and common stock of the corpora ton and 1t will be a long time before they work off their holdings. The bonds are now selling under par and the com mon and preferred stocks have never found a market. Quotations are ridicu- lously low and nobody appears to want the stuff at any price. There is now talk of complete ''re-adjustment' of the capitalization of the American steamship trust Coincidentally with this announce ment comes the statement that the trust is actually losing money by reason of the sharp competition for ocean business. This trust has been frost from the very beginning. Englishment jumped on the promoter of the scheme after talk ing his money for their boats at three to five times their value and the critic ism abroad was reflected here in open hostility. The result was that the under writing syndicate has been obliged to bear the brunt of a dismal failure and 1t is sweating under the load of unmer- chantable securities. It Is counted for tunate that the subscribers made such a fat thing out of the steel trust or