The Sentinel=record., 1911-08-10
Morgan and Company sSv,OOu,u JUL

P. Morgan and Company ssv,UUU,Uv,
 of preferred stock.
 "Second-Agree to exchange all of
 this or only forty per cent of it, al
 the option of the steel corporation tol
 second mortgage bonds.
 "Thifd-Take second mortgage
 bonds from the steel corporation at par, in exchange for s2O,OoO,0O0 In casn
 For this the steel corporation was to allow said syndicate four per cent commission on all the bonds 1t took
 in exchange for stock and four per cent commission on all the bonds II
 took at par for cash. so that if the
 transaction stood in the end in that
 form, viz: $SO,0OO,OOO bonds were IS.
 sued for stock and $2O,O00,000 bonds
 We're issued for cash, the steel cor
 poration would have paid to the syn
 dicate four per cent on $l00UOO,O00 or
 $4,000,000 and J. Pierpont Morgan and Company would have received. for guaranteeing the whole $lOO,UUU, : 900 for handling the syndicate and the securities and for finding a lark ct on behalf of the syndicate one-rifth of s4.00O,OOO or sSOO,0JO. The con tract moreover was made subject to the approval of the stockholders.
 The steel corporation reserved the right to offer to every preferrer stock holder in the corporation the option to subscribe for these new bonds to the extent of forty per cent of his preferred stock. In view of the act that the steel corporation had this contract with the syndicate if every preferred stockholder exercised his right and took the 40 per cent of bonds in exchange for his stock the syndicate would be placai in the condition where 1t would only get s20,0Oo.o00 of its ssO,0OO.o0O prefer red stock converted into bonds ana would be left with $4S,000,000 of the preferred stock on it's hands aitnougn 1t pledged itself to tie up this $SU.- 100000 of stock for eighteen months and could not sell 1t or in any way dispose of it no matter what became of the price of the stock or what became of business conditions in the country or how mucn any syndicate subscribed might need the funds.
 Tn consideration of all this risK the syndicate was given the right to receive a commission of four per cent on such bonds as were issued to pre- ferred stockholders. not members of the syndicate. The s10,O00.OOO tax. imum to the syndicate can only be received by it, provided the entire of purchasing S200, 0,000,- 900 of preferred stock and retiring 1t and then issuing it, and placing on the market $250,000,0O0 of second bonds at par is completed and consummated.
 Tt is true that the money could have been raised by stopping divi dends on the preferred and common stock for one year or on the common alone for two years and a half. This course was deemed unfair to the stockholders and particularly to the holders of common stock, which stock was held by thousands of small hola CTS. :"
 The committee today also ceterm. ined to demand that the steel corpor- ation produce books of the subsidiary companies, which 1t has refused to give up and instructed the chairman to take legal steps to procure them. At the close of the session, Chair. man Stanley announced that the com- mittee had decided not to probe fur ther into the affairs of the harvester and it's relation with the steel trust at this time, because he had been reliably informed that tne of justice intended to take action, along that lime.