The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1903-05-25
WALL STREET NEWS LETTER.
By w. G. Nicholas.


scheme, whereby Il was proposed to
retire s2OO,OOO.0O) of The Z per ce.t
preferred stock and issue $3.50 - .cac
II the 3 per cent second mo"sage
bonds. appears to Laws been a d1 I'll
cal failure. Tho ian was % ex
change s2OO,O0O,OO0 OF the bonds for
like amount of the preferred stock
and realize cash on the remaining
$5O,OOO.OOO. The underwriting syndi-
cate undertook to furnish sS0,000,000
in preferred stock and pay cash for
$20,000,OOO OF the bonds at par. The
term of the conversion privilege ex-
pired on Saturday. May 16. AT the
office Of ]. Pierpont Morgan e Co.
they refused this week to make any
statement of the result, but 1t has
become known through unofficial
sources that in addition to the $50.
100000 of preferred stock furnished
ty the underwriting syndicate only
about $f0,OOO,0O0 was presented for
conN ersion by outside holders and
that tie only bonds sold at par fcr
cash was the block of $20.000.009
which the syndicate under its con-
tract had to take. It is not to be
wondered at that outside holders of
the preferred stock declined to avail
themselves OF the privilege to pay for
a bond that has been selling below
So In the open market for a long
~ G. So IL would seem that the ac-
tual conversion involved only Sl20,-
100000 of preferred stock, of which
The under w.i'inS syndicate furnished
ssO,OOO,O00 and outside stockholders
$40,000,0O0, a total of 100000, 900.
The syndicate paid cash for an addi-
tional $20,0O0,O0O in bonds, causing
the entire transaction to amount, in
conversion and cash, to $4,000, 900.
The underwriting syndicate receives
4 per cent commission of this total
or s5.600,000. This commission, Of
course, is to be deducted from the
$20,000,0O0 cash, so that the United
States Steel Corporation realizes only
$14,400,0O0 net. In other words, the
underwriting syndicate exchanged
$SO,OO0,000 per cent preferred stock
for like amount OF per cent bonds,
paid cash for $2O,OOO,OOO more bonds
at par and received back $500, 900 as
a commission. Its s20,OO0,OO0 block
of bonds, therefore nets 1t only
s14 100000. With the bonds selling
in the market around there would
seem to be very little profit in the
transaction for the syndicate but it
does not deserve perhaps the sympa-
thy that has been wasted upon it,
United States Steel is more written
about, more talked about and more
thought about than any other FIVE
stocks in the market. This is not to
be wondered at If one but stop to
consider how much bigger the United
States Steel corporation is than any
thing else ever attempted in the line
of trust finance and how much more
widely its shares are distributed than
those OF any other corporation on
earth. There is probably not a town
of 10000 inhabitants in the whole
United States that is without some
Steel stock. The common shares are
more widely distributed than the pre-
ferred. The subject is almost mex
haustible. Every other man you meet
in Wall street has a new arithmetic
for United States Steel In this
you see two men on the street corner,
in brokerage office or on the floor
of the stock exchange fourishing fig
ures in each others faces you may be
sure that United States Steel is the
matter of contention. All this has
been more or less true since the for
nation of the Steel combine, but the
irrepressible discussion has seemed
during the past few weeks to be
more active than 1t formerly was, ow-
ing, perhaps. to certain vague appre-
tensions of a reaction in the steel
trade.
The practical failure of the United
States Steel Corporations conversion
scheme recalls one of the most strik-
ing incidents of Mr.. Morgan's finan-
cial career It occurred many years
ago before his prestige in the world
of finance was anything near as pow
erful as 1t is today His banking
house undertook to sell by subscription
a block OF new securities. The mat
ter was freely advertised in the finan-
cial press and subscriptions invited
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