New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-06-04
Jail Threats
Fly as Schiff
Is Examined
tcs.t.u,s Tres pas. sso

ever. was brought out m the testimony
Of Alfred B. Sturgcs, secretary Of the
New York Curb Market. From him II
was learned that about 10000 shares
Of the new company stock had changed
hands on the curb within two hours
after l o'clock Friday afternoon at
from $50 20 ISL a share. IL WAS sold
as when issued" stock. He went into
details how syndicates place new Sc
curities on the market.
"Do YOU believe there we're buyers
and sellers for 10000 shares that
rushed there and took that stoeS7 ?"
asked Mr. Untermyer.
Il believe there was that amount OF
stock traded" replied the witness.
you know how that is done"
oueried the counsel
yes" was the laconic answer.
The curb market received the re-
quest for permission 20 deal In the
stock from Emil Nosbacher, curb
broker. Of s. Exchange Place. Mr.. I'm
termyer was anxious 10 discover II
Nosbachcr was acting on his own re-
sponsibility CT for some one else, and
subpocnaed him 10 appear before the
committee for questioning. He failed
20 show up, although he had been
served with subpoena, and was held
by the committee in default. with the
chances Of suffering contempt proceed
ings.
Mr.. Schif began his testimony with
the assertion that he became identified
with the merger for the first time last
October and that the relationship was
purely as banker and had nothing 10
do with the promotion Of the consoli-
dation. The memorandum he produced
purportinc 20 contain the details Of
the financial arrangements reads as
follows:
"The following tentative financial
plan Is approved IN connection with
the proposed accession OF Midvale
steel and Ordnance Company, under
that or some other name, OF the assets
and properties Of the Inland Steel
Company and Republic Iron and Steel
Company, as set forth in the attached
memorandum; II is proposed that the
bankers are 20 organize a syndicate or
eyndicatcs with the cash application Of
SEA ,O64. 935. The syndicate is 20 agree
with the Midvale Company that after
the merger therein Of the Inland com
pany and accession Of the Republic
Iron and Steel Company's properties
10 will purchase s25,35i,475, par value,
OF preferred stock. and 505.33l shares
of common stock without par value OF
said Midvale Company for S44,064,S25
20 provide for the cash payment Of
S24.O64. 926 20 Inland stock holders and
10 provide additional cash working
capital for such Midvale Company.
"The syndicate is also 10 provide up 10
$4,000 600 cash 20 be used IN the dis
erection Of the syndicate managers in
the purchase Of additional shares OF
stock Of said Midvale Company from
the company or otherwise. As man
ayers Of the foregoing syndicate or
syndicatos the bankers shall have the
right 10 charge a commission as man.
ayers not 10 exceed is per centum Of
the profits thereof. $4,000 additional
shares Of Midvale stock without par
value shall be sold TO the bankers at
the price Of $40 per share in order 20
assure 10 them a substantial interest
in the said Midvale Company, and 2b,5OO
shares Of said common stock shall be
sold Of the same price 10 Thomas L.
Chadbourrc. who has directed negotia-
iions OF The plan as outlined IN the at
tachCl u uCiandum.
K, L. & Co.
MAY 2s 1922"
Schi0 Appeals TO Chairman
Mr Schif began making some full
explanations Of the matter, but Nh
Untermyer insisted on his answering
the questions" Mr. Schif appealed to
the chairman, "May ! be permitted 20
answer the question IN my own way?
He admitted having figures furnished
him giving the values. earnings
and records Of the companies entering
the merger. but declined % produce
them on the ground that they we're pri-
vate documents which the committee
had no power 10 subpoena.
Despite the withdrawal Of the lacka'
wanna from the combination. the wit
ness said that the Brier Hill and the
Sheet and Tube companies were still
In the discussion, having neither
said yes or no" The transaction was
still opcn 10 them. Mr.. Chadbourne
added later that another unnamed firm
also was discussed for possible con-
solidation.
In going over the arrangements he
said that Mr.. Chadbourne was 10 70.
ceivc "the privilege Of buying 25,b0C
shares Of stock 40 $40 share in con.
siderstion Of work he has put in IN
- bringing this matter 20 fruition."
Kuhn. Loeb & Co. "are going 20 buy
b. 800 shares a. SO share. as We
Dconsider II desirable 20 have our con.
tinuinr interest In the company" said
Mr. achif. I'm reply 10 n question from
Mr.. Untcrmycr he said this was tho
same stock for which the company was
70 receive SAB share Mr.. Inter
nlyer pointed out that this would net
the firm about S200o000.
u developed ~ this point that the
firm was 20 get 10 per cent profit
on the syndicate IF the syndicate
makes q profit. VIC get ~ per cent foi
our services and management" said
Mr. Schif "lf II does not make profit
Ne do not get anything
"The syndicate is bound 70 make g
profit" the counsel offered
"Why. / wish you would guarantee
~, Mr. Untormycr,' replied the banker
Not Making any Market
Mr. Untcrmycr then went into the
question Of the making Of n market
for the stock 10 be issued by the syn.
dictate. Mr. Schif protested that the
svndicate was not making any market
How mud stock has thus far beer
provided for"
Between two and three million
shares" said Mr. Schif. He explained
that Inland cot about 10000 shares OF
this. Midvale 100000 and Republic
10000. making a total OF 100000. Ap.
proxmately 100000 shares are 10 be
sold for cash.
The matter Of $4,000. 900 20 he used
as working capital then came up.
"Are you going 90 buy and sell the
same stock >" asked the counsel
1--WE do not buy and sell the same
stock" replied Mr.. Schif somewhat
exeitedlv. He moved his head for
.vsrd and addressed the chairman. Il