New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-11-20
BOND SCHEME LIMITED.
OFF BEYOND sI70,O00,0 900.
Estimated That Morgan Syndicate
Has Made SeUeraL Millions.

Z II
TOTS OF the United States steel Corporation. late
yesterday afternoon gave out a statement
which viii attract much attention in Wall
Street Il dealt with the syndicate contract
for the conversion OF preferred stock OF the
Steel Corporation into second mortgage ) per
cent bonds. When the contract with the syndi-
cate was made IL was proposed 10 convert $780,
CgOOJ0 Of the preferred stock into bonds and
issue 100000 additional bonds, 70 be sold
for cash, and the syndicate was 70 receive
per cent on the amount OF the bonds taken by
il for stock OF for cash Mr. Gary's statement
shows that there is 10 be no further CONVEX
sion Of preferred stock by the syndicate beyond
S150OpO-OOo, and the syndicate takes for cash
at par only S20co00o0 Of the new bonds Mr..
Ga-y's statement follows:
At meeting Of the finance committee Of the
United states Steel Corporation. held yesterday.
IL was by unanimous vote decided to suggest
20 Messrs. J. ?. Morgan & Co. that he syn
dictate contract for the conversion Of preferred
stock into second mortgage , per cent bonds
should be cancelled and terminated beyond the
amount Of SlJoootcOu which figure has very
Z nearly been reached.
Nessrs J. P. Morgan & CO. Immediately ac-
Cede5 70 the request Of the finance Committee,
ard no further exchanges wiz be made for ac-
count Of the syndicate beyond the amount
stated.
The matter now stands as follows:
Bonds ALREADY issued IN exchange for stock 80,
T
5ats z''l - o. ssl15Oo
sr5Ser and already sz5zi 80 -. aao2 900
Ponds sard At taar toT aass gpon which . per
uaIl 20 The corporation October
a5.l 3 pr eez- szsa s. esIed t5r and
paid lI.oset'o
Total outstanding Issue ............... 700
The balance OF S30Oe001O Of bonds available
for sale for cash viii be executed as stipulated
4 in the lndenture. and De placed in the treasury
j OF the corporation as an asset --
rr-.4
{ issued. The SJ0O0OeDO remaining available for
/ exchange for preferred stock viii be held sub
5ect TO the exclusive right OF the corporation it
self 10 deal with from time 20 tine as the board
II Is nor the present intention Of the corpora
/ ton TO make any further conversion Of preferred
/ stock into bonds.
/ Financiers in Wall Street who saw copies Of
! M Gary's statement last evening said they
4 thought the syndicate had not lost much by its
/ operations As they figured II out. the syndi-
! cate lost about thirty points on the S2oovoVo
I OF new bonds taken at par for cash. as the
bonds have been selling around 20 This would
/ make loss Of about 100000 The syndi-
1 cate however receives per cent on the $50
! GoeO00 OF bonds taken in exchange for pre-
I ferred stock and that amounts to SoVooVt
4 The prof- and loss. therefore, would balance
/ but for the fact that the syndicate has made a
/ large percentage If recent conversions OF STOCK
/ into bonds The preferred stock OF the Steel
/ Corporation has been selling down near % OF
/ late and the difference in the price Of preferred
/ stock and Of the per cent bonds has ranged
/ from 70 20 points. II is impossible Tor per
! sons Oh the outside 70 estimate the average
/ profit which the syndicate made IN the CONVEX
/ sion OF Sl51COOO00 OF preferred stock into
! bonds. but The total profit may run into the
/ millions.
/ The consent Of TIE syndicate 10 letting the
1 corporation itself arrange for the exchange OF
$4,000 O0O Of preferred stock for bonds cuts OF
from The syndicate a profit Of S2,0o0OcO and the
/ additional profit it might make through the diI-
! ference between the prices Of the bonds and
I stock. A prominent fnancier said Of the situa-
+ ton last evening.
With S1J0O00G00 Of cumulative : per cent
preferred stock converted into , per cent 2oIldss
( the Steel Corporation has effected 2 Saving o.
- 0Oo0J0 year K has sod S-oVpUV,Os o. ~ H.
, pcr cent bonds calling Tor interest o. 90, 80
COO year. that the net saving IS S--NI3'ol $1,000
/ z ve1r. II Il should ever sell the SoU.vy5'VeV
! nov IN the treasury, the interest WoulG pe
! 81 100000 q year more, and there "ou4a SIN 0e
! q saving OF $4,000 a year. ,,., -,
/ Another factor Is that SlJt-Dyo,ovo PFs4SIISg
/ Stock has been taken out OF the market 80
! -iacea in q position where year by year, Il VIII
4 be entirely wiped out through the e1ect OF 1he
] ss-IrinC fund provisions II the bonds
/ rDenfaI vas made by high official Of the re-
/ - that 2 new syndicate was 70 be formed TO
- ,,-s- he United States Steel Corporations
! - ,-srstions- The existing syndicate, IL was
4 ,s5es nv this authority, VIII continue until il
sv,s-es bv, Limitation II July. 1904