Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1916-02-09
NEWS OF STEELTON
MIDVALE MAY
BUY PA. STEEL
Donner Goes Along on Mid
vale-Cambria Deal With This
Understanding. 1t Is Said

Philadelphia, Feb. a.-Having pur-
chased the controlling stock in the
Cambria Steel Company at SS1 per
share. it was reported yesterday that
the Midvale Steel and Ordnance Com
pany may also purchase controlling
interest in the Pennsylvania Steel Com
panE. William IL. Donner. president
or Cambria Steel, is chairman of the
executive committee and the dominant
factor in PENNSYLVANIA Steel.
AS a result of the options he eNer-
clsed last Fall on Cambria Steel and
Fehnsylvania Steel, held by Pennsylva-
ma Railroad and Reading interests,
Mr.. Donner holds 3S per cent. of the
steel, while the Pennsylvania Railroad
interests hold "a per cent. the Read
ing, 1! per cent, leaving "a per cent.
in the hands of the public.
company which recently purchased a
majority interest in the Cambria Steel
company at $S1 share announced to-
day that it had arranged to finance
the deal through the issue of $50. .OOO.-
600 of twenty-year five per cent. bonds
convertible into stock and the issue
IN addition of S25,00O,0OO treasury
stock
Arrangements were also made, it
was announced. for the purchase of
additional outstanding Cambria stock
at the same price.
Before ]. Leonard Replogle organ
lied the syndicate which purchased the
100000 remaining shares of Cambria
steel held by the Pennsylvania Rail-
road interests Mr.. Donner planned to
consolidate the Cambria Steel and
Pennsylvania Steel Companies into a
new holding company, but his plans
were upset by the Replogle purchase
and the formation of the Drexel-
Replogle syndicate. The syndicate
planned to put Cambria Steel into
new steel combine along with Lacka-
wanna Steel and Youngstown Sheet
and Tube.
Bonner Opposed Merger
1t is no secret that President Donner
was not favorable to these merger
plans. and it was generally felt that
the Replogle and Donner forces were
not pulling together. AS the owner of
10000 shares of Cambria and having a
host of friends, Mr.. Donner was
factor to be reckoned with, and after
a number of conferences at the office
of Drexel & Co. it was limited that Mr..
Donner had agreed to so along upon a
certain basis.
One report heard yesterday was that
TINS basis was an understanding or
possibility that the Midvale Steel and
Ordnance Company would also pur-
tlidSt NiS bonner interests IN the
pennsylvania Steel Company. The
Pennsylvania Steel Company has steel
plants at Steelton, owns valuable iron
ore beds in Cuba and also owns the
Maryland Steel Company. which has
an important shipbuilding plant at
Sparrows Point. Md. BY the acqui-
sition of Pennsylvania Steel. NIidvale
Steel and Ordnance would still further
augment the diversity of its operations
and still be within the pale of the law,
as its units would still be supplemental
and not competitive. While both Cam
bria and Pennsylvania Steel make some
products which are similar, this could
be remedied by placing each class of
work in the plant best equipped to
handle it.
Reports from Washington say it is
likely the Department of Justice will
investigate the Midvale merger. but if
ii finds the companies are engaged in
different lines of manufacture no ad-
verse action will be taken.
Market interest subsided in Cambria
steel yesterday and turned to the Mid
vale Steel shares and to the futures of
the Pennsylvania Steel and Donner
Steel Companies, in which William II.
Donner, president of Cambria Steel, is
the dominant factor.
rhe natural inference is that Presi-
dent Donner will retire as the head Of
nual meeting in March, and devote
his attention entirely to Pennsylvania
Steel.
When Mr. Donner was asked about
the report of the offer of his stock to
Schwab his answer was that there
were no negotiations on. There is a
belief on the street that either Schwab
or some other big concern will seek
to annex the Pennsylvania Steel
plant, it being especially sought for
it's shipbuilding facilities. Mr.. Donner
is known to have extensive plans for
his Donner Steel Company, in New
York State.
1t is not likely that the Morgan
DreXel-Corey interests will see the
Pennsylvania Steel Company go to
Schwab and his Bethlehem Steel Cor
poration if they can prevent il. If
Pennsylvania Steel does not go to
Midvale, Mr.. Donner may consolidate
it with Donner Steel and so form a
new steel combine.
Pennsylvania Steel shares were
fairly active on the Philadelphia
Stock Exchange yesterday, 175 shares
of the common selling around so
and 6S3 shares of the preferred SELL
ing between "a and Sc. 1t closed
with a gain of 2 points.