Evening star., 1932-07-09
special dispatch to The star.

Special Dispatch to The star
NEW YORK, July "a New York
Stock Exchange firm that for years has
been closely identified with the market
movements in United States Steel Cor
noration securities has issued an analy-
sis of this company's financial position
to illustrate the extent to which prop
ertv values are now being disregarded
by the public.
AS an introduction to its set-up Of the
main items in the balance sheet OF the
corporation. the circular asks this ques
tion: Have investors lost their ability
to Judge values?" 1t then states there
are many companies whose securities
are selling for approximately the value
of their quick assets, thus giving no
credit whatever to property account" i"
and it cites the issues OF the United
States Steel Corporation as an ex-
ample.
Current Assets.
Taking the last public statement, that
of December 81, 1881, 1t IS indicated
that current assets of the Steel Corpo-
ration e't at that time aggregated nearly
s4e5 600 600. Included in them was
Il so 806. 329 in cash and marketable Sc
curities. 1902, 500, TAT or inventories and
sal 126. .73O in bills receivable. Current
Iiabilities were less than S64,000,000,
leaving net working capital Of over
s430 600 900. There were other assets
aggregating $31 900, 900, so the total of
ali assets. other than fixed or Intangible,
was nearly $462, 100000.
Tn 1929 the Steel Corporation retired
all of it's first and second mortgage col
lateral trust sinking fund bonds. To-
dav it has bonds outstanding in the
hands of the public OF approximately
500 600 900. compared with S456, 6,6O2,4lo
in 1928. Consequently its fixed charges
are small. This has been an important
fact during the past year OF steaolly
declining net income. Together with
honded debt. mining royalty notes Of
S1o 783 72I. employees stock subscription
inefallnents and minority interests In
subsidiary companies, there are total
OBLIGATIONS of $120, 1904 ,699. This gives
the corporation an excess OF net assets
other than properties over all liabilities
of S341 1853, ,529.
Steel 7 per cent preferred STOCK was
selling at S54 a share. 1t has recently
been within points OF its aH-tlme
low. AS there are 3,6O2'0ll snares OF
preferred stock outstanding, It's market
value on June 90 was about Sl95OO0,-
600, leaving an excess OF assets over the
market value of the preferred STOCK on
that date of about SAT 000,O 600. 1t may
be said in passing that since 1901 dlVl-
dends amounting to over S8OO,OOO, ,UUO
have been paid to the holders OF United
States Steel preferred stock.
Three weeks from now the directors
of the United States Steel Corporation
meet to decide on the preferred stock
dividend. At present, and for several
months past, nothing has been earned
on this stock Therefore, If the divi-
dend is declared, payment Of it must
come from the fund of about $151 ,000,-
900 which the corporation possessed at
the end of last December, but which, OBJ
viously, has been cut into since then
through payment of unearned divi-
dends. 1t is the opinion of those closest
to the Steel Corporation and to its
banking afiliates that, rather than
disturb it's uninterrupted record for
paying dividends, the management on
July 26 will vote to maintain the cur
rent quarterly rate of 124 per cent.
This stock is held by careful investors
all over the world.
Market Value.
The market value of 8703,252 shares
Of common stock at S22 a share at the
end of June was $191 All, ,544, or only
S44, ,663 ,80e above the excess of assets
of the corporation over the market
value of the preferred stock. 1t is
pointed out in the Stock Exchange
firms analysis that this balance of less
than $45, 100000 represents the COM
pany's investments in property having