Omaha daily bee., 1911-08-09


WASHINGTON, Aug. s.-with George
w. Perkins, former chairman Of the fl
nance committee of the United States
Steel corporation on the stand, Chairman
Stanley OF the house steel trust investigat-
ing committee today produced a copy of
minutes Of the steel corporations execu-
tive committee showing that in March 1902,
Mr.. Perkins proposed plan to raise
$50 900 900 without costing the corporation
a cent.
There was nothing in the minutes to in
dicate that the plan had been carried
through, although it apparently met with
the approval Of those present at the meet
ing.
Representative Beall of Texas asked the
witness IT, after he became identified with
the steel corporation he did not participate
in campaign contributions in his capacity
as vice president of the New York insur-
ance company and IL he had not made
personal campaign contributions since he
became a director of the steel corporation.
Richard " Lindabury, counsel for the
steel corporation, objected to the question.
The chairman decided the matter was
germane.
Steel Trust Minutes.
Leading up TO this dispute the minutes
Of the steel corporation were read showing
that the company prior to the time II Sc
cured a legal opinion against making cam
paign contributions had contributed to the
American Protective Tariff league and
had made other contributions for circulat-
ing information on the tariff matters. Mr..
Perkins frankly admitted that minutes
produced must be correct, but he said he
had no personal recollection concerning
them.
Mr.. Perkins was confronted by copy of
the minutes of the United States Steel cor
poration's executive committee March L.
1907, In which he proposed plan to raise
SoOOOO,OOO without costing the corporation a
cent. The record of that meeting read to
Mr. Perkins was that of plan which tho
finance committee Of the corporation had
been talking over and was going to submit
that day to the board of directors Mr.
Perkins explained that when the separate
companies of the corporation were brought
together there were many contracts that
had recently been made for extensions and
improvements aggregating something over
s4O,0o0,O0o The corporation had reduced
them something like $50 100000. being forced
to carry the contracts along. In addition
he told the executive committee that the
purchase of the Rockefeller oil properties
had caused the corporation to give Mr..
Rockefeller a note maturing that year
amounting to about $40 ,OO0 leaving in
all about $4,000 900 that was not capitalized
and that I'VE have been somewhat bothered
to know just what to do with.
1T was not fair to take It out of the
earnings of the several companies, we
thought" Mr.. Perkins was quoted as hav-
inu z-a{d 20 ha
they were brought together. "and we have
given the matter a. good deal of thought
as to how and what to do with II and not
hurt the securities. And It brought about
this idea of an attempt to retire part OF the
preferred stock OF the company for second
mortgage bonds and have enough in doing
so that we could get out an extra amount
of bonds to cover these items.
Would Save Money Both Ways.
1--WE think we can take up about 40 per
cent of the preferred stock, $500, 700 900 which
now costs S14,000.0O0 in dividends at per
cent, and in place OF that issue $3.50 600 900
of second mortgage per cent bonds. This
would call for $12,SO0000 and then have
$50, 900 Of new money in addition to saw
ing s1,5O0,OOO a year. s12,5OO,oOO as against
$4,000 900. So we would get $4,000, 900 with
out costing us anything and save 81 500. .OC0
year besides. There IL no question that
it would be desirable from the standpoint
Of the company IL we can retire the pre-
ferred stock When we came to look into
that we concluded the only time to do IL
was when the preferred stock was below
par as 1t would then be some inducement
with people TO take the bonds. If they had
stock, at 95, say, and then turn In into bonds
at par they might feel that there was some
thing in 1t. And further we can only do II
when the preferred stock is held In large
blocks, so we could get a syndicate of 1t.
Proposed 10 Form Syndicate.
1--WE began to look about for the large
preferred stockholders and have been sue
cessful after two or three months work in
getting up a good sized syndicate of large
stockholders who would put up their pre-
ferred stock and underwrite for the success
Of things, provided the stockholders gener-
ally did not take It, The idea OF the finance
committee was that We would make an
offer to all OF the preferred stockholders
and say:
"'Win you change 40 per cent of the pre-