New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-09-13
Bethlehem Steel
Needs Capital to
Help the Nation
Issue of $3O,OOO,OOo New
Stock Imperative, Court
Is Told

NEWARK. Sept. II. Decision was
reserved by Vice Chancellor Merritt b.
Lane to-day on the application OF Gar
encc II. Venncr for an order onJoIning
the Bethlehem Steel Corporation from
amending it's charter by incorporating
in it a provision for a proposed issue
of $50 100000 Of 3 per cent cumulative,
convertible preferred stock, and iur-
Their issue of $4,000 900 of Class b
non-voting common stock, TO be eyentu-
ally used for the redemption OF the
new per cent preferred.
Mr.. Venner asked for the enJolning
order in the name of the General IN
vcstment Company and the Continental
Securities Company, Of which he IS
president. The former concern holds
100 shares of Bethlehem common and
the latter 100 shares Of Bethlehem pre-
ferred. Venner sought last winter to
prevent the Bethlehem corporation
from increasing its capital stock'from
100000, O0O-150,000 shares of per
cent preferred and 10000 shares OF
common-to s75,OOO,0OO by the issuance
of s45,0OOOOO of non-votings common
stock. That proceeding was before
Vice Chancellor Lane also, but Venner
was unsuccessful.
Attorney Denounces Fenner
Richard V. Lndabury, attorney for
the Bethlehem Steel Corporation bit
terly denounced Venner as n 'profes
Sional opposer of corporation plans
whose motives are more than suspl-
cious." He told the court that should
the corporation be enjoined from seek
ing additional capital by the issuance
of the S30000,000 Of per cent pre-
ferred the result would be disastrous
and would prevent the corporation from
continuing its present service TO the
government.
Both sides admitted that the plan of
providing for the redemption Of pre-
ferred stock in shares of common stock
was a departure in stock subscription.
This, it was pointed out, was an ext
gency of the war situation and an IN
ducement TO the investor TO become
partner in war profits. The per cent
DTtlcTItu may ne ff'AtflIcu llllluthldNt
ly in common at Sll5-a penalty of SIS
or may be converted into the Class B
non-voting stock at the end of three
years.
Asked for precedents, the steel cor
poration attorney mentioned the Stand
ard Oil Company as having followed
this practice.
Stock Juggling Alleged
Robert H. McCarter, attorney for
Venner, called the proposed issue a
stock juggling scheme to the detriment
Of the older stockholders. 81 myself
have du Pont preferred that I'd be
mighty glad to convert into common
at this time" he said.
Mr.. Lindabury said the company's
need for greater capital had become
imperative because of war conditions
two-thirds of its business consisting OF
war necessities.
ut is the governments needs that
have produced the need for capital" he
said, land because Of this situation the
corporation should be entitled to the
favorable and indulgent consideration
of the court"
Mr. McCarter replied that the corpo-
ration should go to the government for
money rather than adopt methods of
finance that were illegal. His conten-
tion is that the placing of a new issue
of 8 per cent cumulative stock ahead
of the existing per ceIk cumulative
preferred and common and Class
common stocks is a violation of the
contract rights of the previous stock
holders as stipulated in the company's
charter.
Stockholders to Meet
After the hearing Vice Chancellor
Lane modified the temporary restrain
ing order he made several days ago so
that the stockholders can hold their
meeting Friday at the Fidelity Trust
Company's Offices in Newark. The new
issues will be voted then and held in
abeyarCe until Saturday, when the Vice
Chancellor will announce his decision.
He indicated that he might be in
tiuenced in his decision by the attitude
the stockholders take at the meeting
Friday
Nenner told the court he would op-
pose any method by which the corpora
ton attempts to increase its stock
Paul ID. Cravath, of the New York bar
appeared with Mr.. Linda5ury for the
corporation. Eugene Grace. president
OF the Bethlehem corporation. was pres
ent.