Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1916-06-30
UNITED STATES COURT
REFUSES TO HALT SALE
OF PENNA. STEEL co.
Judge Mcpherson Declines to In
terfere With Purchase of Cor
poration and Subsidiaries
by Bethlehem
SEVEN SISTERS" ISSUE

Judge Mcpherson, of the United States
Circuit Court of Appeals, today, In an opin-
ion refused to interfere with the plan OF
the Bethlehem Steel Company to purchase
the assets of the Pennsylvania Steel Com
pany of New Jersey and its subsidiaries.
The decision Of Judge Mcpherson was
given on the appeal of Clarence H. Venner,
of New York, from the refusal of Judge
Rellstab. OF the District Court of New Jer-
sey. to issue n preliminary injunction to re-
strain the contamination OF the deal. Judge
Rellstab, however, directed the Steel Com
pany to deposit $4,000 In court TO protect
Eenner against any possible loss through
the transaction The opinion affirms Judge
Rellstab's refusal to issue the preliminary
injunction.
Venner attacked the contemplated sale of
the Pennsylvania Steel Company's assets to
the Bethlehem Company on the ground that
II violated the Federal antitrust law and
the statutes of New Jersey coloquially
known as 1.-The Seven Sisters law.
This position" says Judge Mcpherson,
has received our careful consideration, but
we are decidedly OF opinion that on the
present record-which consists mainly of
cx-parte affldavts-the plaintiffs charges
cannot be safely determined. A court
should have facts before 1t, satisfactorily
proved in accordance with the usual we'll
tested rules, before deciding questions of
such gravity as were presented on the
taking evidence has not yet arrived. these
questions must for the present be left un-
determined"
The proposal of the Bethlehem Company
was to pay $31,941,63O in its own per
cent. 20-year gold bonds, secured by a
mortgage on the property conveyed, for the
assets of the Pennsylvania Steel Company
of New Jersey and its allied companies.
Venner, who owns "a shares Of the COM
mon stock of the Pennsylvania Company,
protested that the proposal violated the
New Jersey statutes, which requires that
part of the price be paid In cash.
The Bethlehem Company denied that no
cash is to be paid, and pointed out that 1t
agreed to pay off certain of the Pennsyl-
vania Companys current obligations, and
insisting that this is the plain equivalent
Of cash.
Here Also" says Judge Mcpherson. I'VE
ought to know the precise facts before de-
Gliding. and these can hardly be ascertained
until the lquidating trustees of the de-
fendant (the Pennsylvania Company have
finally agreed on all the details of the
SALE
In his opinion Judge Mcpherson points
out that 80 per cent. of the preferred stock
of the Pennsylvania Company and 90 per
cent OF the common stock voted in favor
of the proposal, Attention is also directed
to the fact that Venner bought his shares
IL days after the stockholders OF the COM
pany had been notified that meeting
would be held on May last to consider
the plan suggested by the Bethlehem Com.
pany
Among the dissentients. besides venner,
was Joseph II. Brandt. owner of 1879 shares
OF preferred stock. who was the original
plaintiff in the proceeding
Speaking of the action of Venner in at
tempting to block the proposed sale. Judge
Mcpherson says:
And 1t is evident also that the present
plaintiff, who is apparently not without ex-
perience In litigation. cannot expect us to
regard him as having undertaken a public
duty"
Nevertheless. declared Judge Mcpherson,
Venner is entitled to his legal rights, but
as the facts are not before the court upon
which there could be a determination of the
contentious of Venner that the proposed
plan was unlawful from the beginning,
these questions, for the present, are left un-
The only question decided was whether
the lower court abused its discretion in
a preliminary injunction and
ordering the protective deposit Of $4,000.
The objection can hardly be directed
against the deposit as such, for instead OF
attacking that feature OF the order the
plaintiff should rather commend It," says
Judge Mcpherson.
The Pennsylvania Steel Company of New
Jersey is the holding company of the Mary
land Steel Company, having its plant at
Sparrows Point, Md; the Pennsylvania Steel
Of Pennsylvania, with plants in
Steelton and Lebanon, and OF several other