The evening world., 1903-11-19
RUMORS OF A SUIT TO RECOVER
$40, OOO,O 900 BY STOCKHOLDERS.
Interesting Disclosures Expected of How the
Preferred and Common Steel Stocks We're
Squeezed to Low Figures and Oceans OF
Water Poured Into the Organization.

lN pau " SOhFSi SOobOoJOO VI P'SiiiSa OWN VI pS OAN~~.
States Steel Corporation into 5 per cent. second mortgage bonds has been
abandoned and the syndicate has been dissolved. UP to date over St46-
100000 of stock has been converted and the profits TO j. PiTpont Nor
gan & Co, who organized the conversion syndicate, have been enormous
How much the corporation made out of the deal remains to be seen.
A statement containing the information that the scheme to issue
s2oooooooo in bonds for a like amount of stock had been abandoned
was issued this afternoon from the Morgan banking office. 1t reads:
The following statement was issued to-day by E. H. Gary. chairman OF
the Board of Directors of the United States Steel Corporation:
AT a meeting of the Finance Committee of the United States Steel Cor
'poration. held yesterday. it was by unanimous vote decided to suggest TO
). Porpont Morgan 6 Co. that the syndicate conditions for the convorssca
Of preferred stock into second mortgage 5 per cent bonds be cancelled and
terminated beond the amount of sl5ooOoooO 100. which figure has nearly been
reached. .....- Eft-
"Mcssrs ] p. Morgan & Co. acceded to the request of the Finances
Committee and no further exchange will be made for the account. OF the
syndicate beyond the amount stated. The mattern now stands a follows:
"s1463ss 500 of bonds has already been issued in exchange for stock
"sss115 500 remains to be issued for preferred stock ito be converted by
the syndicate
"$2so2OOO in bonds has been sold at par for cash and paid for in full
~sl7oss 900 of bonds have been sold at par for cash, upon which IS per
cent, wa paid and which will be issued whenever the remaining rs per cent
shall be called for and paid. 81
This makes a total issue outstanding of srOOOcOoo. A balance of
100000 % of bonds available for sale for cash will be executed as sdpu-
lated in the indenture and Will be placed in the treasury of the corporation
as a n asset
ing available for exchange for preferred stock will be held subject to the
exclusive right of the corporation itself to deal with from time to time as
he Board eot eDirectors may see 1T It Is not the present intention Of
the corporation to make any further conversion u preferred stock into
bonds"
The commonly accepted lead pipe cinch" is a Ease of tearing none,
into bits and tossing the bits into a sewer compared w1th the advantage n
Morgan house had in the conversion scheme. The inside history of it re
mains to be published and it is not unlikely that dissatisfied bOrSholders
will force another hearing such as that which brought out so much OF dis
credit to the e who formed the shpbufldmg Trust, AT any rate a plan
for bringing such a hearing about has been talked OF
PERKINS MADE
In the first place George Perkins, of the Morgan partnership, is chair
man of the Finance Committee OF the Steel Trust In that capacity he
made a n agreement with j. F. Morgan & Company, practically an agree
.ment with himself, to negotiate the conversion of the $20o0OoOO0 of stock
into bonds for a compensation of 4 per cent
On ali the stock that has been converted J.. T, Morgan & Co. have
made $3.50 OOO. In addition to this there as been an enormous profit In
the operation. #sg
The difference between the price of the preferred stock and the price of
the bonds has never been less than Is points. Buying in the stock at .
certain figure and then selling the bonds for the stock at a figure 10 points
higher has netted the Morgan firm in the judgment of wellinformed men in
Wall street at least S16OOO0W. This, added to the legitimate 4 per cent.
commission o the transaction makes the total winning on the deal close TO
s2OO00O0O,
But this is not all that J. P. Morgan & Co. have got out of the Steel
Trust. In underwriting the first conversion Morgan 6 Co. put up only
500 900 900. On this investment s560O0O0O was realized. This, added to
The $4,000 900 credited TO the firm by common report as profits out of tho
asst conversion scheme, makes the total profit to Morgan & Co up to date
s76O0oOOo.
SUIT AGAINST MORGAN FIRM.
Outsiders interested in the Steel Trust but not let in on the Morgan
nanipuaions ar not satisfied. A combination Of the macontents had been
tentatively arranged and a movement is o. foot to sue J. P. Morgan &sCos
for at least the profits accrued from the conversion by commission.
Those interested in the plan to SUE w that Morgan & Co.'S profit
realized from buying the stock and selling the bonds is ample compensation
for the work that has been done. There is likelihood that a suit more In
teresting and more illustrative of Wall street methods than even the Ship
bulding Trust suit will grow out of the conversion scheme. ta
There is a possibility that the prospect of such a suit has ID TO- . plan
to dissolve the syndicate, even though the object for which II q formed
has not been accomplished. In case a new syndicate ID FORM torEan =
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