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STEEL CORPORATION'S BOND PLAN. Stockholders of the United States Steel Corporation are now in pos- ession of the long expected circular regarding the proposed retirement $200,000,000 of preferred stock and issuance of $250,000,000 5 per cent. nds, and requesting proxies for use at the stockholders' meeting on 'May 19, when these recommendations of the board of directors will be yoted upon. : The policy of the management in proposing the substitution of bonds for two-fifths of the preferred stock has been widely criticized, on the ground that the addition of $10,000,000 a year to the fixed charges would weaken the position of the remaining preference shares and would be even more prejudicial to the position of the common stock; and it has been the view of many investors that the issue of the additional $50,000,000 ponds is ill-advised, as the extraordinary expenditures to which the pro- ceeds of these bonds are to be applied could have been met by deferring for two or three years the declaration of dividends on the common stock and adding to the fund thus accumulated the surplus earnings of the cor- poration. When it became known through the circular that $25,000,000 of the obligations to be discharged by the $50,000,000 bond issue repre- sented engagements made at or immediately after the time of the forma- tion of the corporation and before the declaration of the dividends had : been begun adverse comment on the part of stockholders unfavorable to : the bond issue was even more outspoken than when the bonds were first proposed. Anticipating and replying to these criticisms, the circular says, in setting forth the objects for which the proceeds of the $50,000,000 bonds are to be used: "Economies in manufacture still greater than those which already have been accomplished may be effected if plans of improvement now pro- posed be carried out. It is estimated by the executive committee that the expenditure of about $25,000,000 for such improvements will effect a saving in manufacture of, say, $10,000,000 annually, and also under normal © conditions would substantially increase the output, thus adding from $10,000,000 to $15,000,000 to the yearly profits. That these expenditures could be met gradually from surplus earnings the management does not doubt; but this would necessitate extending them over a period of years, and correspondingly would postpone the realization of the profits which, by the immediate use of the money, could be obtained promptly. In Feb, 1901, various subsidiary companies had under contemplation, and in many cases actually had begun, the construction of additions to their plants, which, in some instances, would have duplicated the facilities of othe subsidiary companies. The aggregate of these contemplated expendi- tures was something like $50,000,000. As stated in the preliminary report of Feb. 17, 1902, much that at the time of organization it was hoped might be accomplished in the way of avoiding wasteful expenditures for unnecessary enlargement of plants has been accomplished by co-opera- tion among the several companies, enabling one to utilize the facili- ties of the other. However, owing largely to advance commitments, it was impossible to stop all construction at the time your corporation was organized; and, in order to finish work then already under way, cash payments have been made during the year to the amount of $15,000,000. Within the next few months will fall due payments, aggregating about $10,000,000, for properties purchased almost immediately after your cor- poration was organized. In the preliminary report to stockholders these payments were described as 'purchase money obligations.' "The finance committee is unanimous in its support of the executive committee's recommendations, and belives that, as desired by the execu- tive committee, $25,000,000 should be made available for improvements. The finance committee also recommends capitalizing both the $15,000,000 expended during the year for commitments made prior to your corpora- tion's organization, and the $10,000,000 yet to be paid for properties as above stated. These three purposes in the aggregate call for $50,000,000. The problem confronting the finance committee has been to make pro- vision for this $50,000,000 without issuing preferred stock, which stock cannot be sold at less than par and which, if sold at par, would be entitled to dividends at the rate of 7 per cent. and would increase by $3,500,000 the present annual dividend requirements of the corporation." The question whether or not the management would be justified in recommending an increase in the bonded debt, the circular says, has been exhaustively considered; and the affirmative view is presented in this language: : _ "The unanimous conclusion of the finance and executive committees is that, considering the vast aggregate value of the physical properties, the proposed $250,000,000 increase of bonds from $300,000,000 to $550,000,000 is wise and conservative, the preferred stock issue being simultaneously decreased 40 per cent. or $200,000,000. The consequent $14,000,000 reduc- tion of dividend payments as compared with the $12,500,000 increase of interest would result in a net annual saving of $1,500,000, exceeding by $490,000 the annual sinking fund contribution of $1,010,000 to be required by the proposed mortgage and which, invested at 4 per cent., would be sufficient in sixty years to pay off all of the $250,000,000 bonds. An in- crease of bonded debt under such conditions, for such purposes and with such prospective results, is further justified by consideration of the net earnings of the properties, amounting in the past year to $111,000,000 (being fourfold the entire interest charge of $27,500,000 when and if the bonded debt shall be increased as above proposed) and which net earn- ings, by the consummation of important improvements, will be protected against the contingencies of periods of adverse business conditions. 'That the sinking fund may surely earn 4 per cent interest, a provision will be put in the bonds reserving to your corporation the right, any time after ten years, to call them at 110, which is better than a 4 per, cent. basis, thus making it certain that your corporation, by purchasing its own onds, can invest its sinking fund on' at least a 4 per cent. basis. During the first ten years that the bonds are running your corporation, to the extent required for sinking fund purposes, may buy the 'bonds in the Open market, provided, of course, that they can be purchased on a basis that will yield at least 4 per cent. To offset the exhaustion of ore beds, Coal lands and deterioration of plants, various sinking funds are now €ing maintained. The further provision of this additional sinking fund to retire the proposed new bonds is in effect equivalent to retiring ; Per cent. of the preferred stock in sixty years, without increasing the aggregate of the present interest and dividend charges--in fact, decreasing them by a net saving of about $500,000 a year. To do this, and also to obtain the substantial benefit of $10,000,000 or $15,000,000 annually from. MARINE REVIEW, 2. economies in manufacture, and additional i - ments, is the aim of the present plan." ae Accompanying the circular, which is signed by President Schwab and Chairman Gary, is a report of the finance committee to the board of directors. This report notes the enactment at Trenton of the Reed bill amending the New Jersey corporation act, under which authority is given to retire preferred stock by issuing bonds against it; and recites in full the resolutions adopted recently by the board and published at the time, declaring it to be advisable that $200,000,000 preferred stock shall be retired and an issue of $250,000,000 bonds be made, and calling a special meeting of stockholders for May 19 to act upon the recommenda- tions of the board. ETRURIA'S JURY RUDDER. The last issue of the Review contained an account of the towing of the big Cunard liner Etruria from the Azores to Liverpool, following the loss, a few weeks ago, of her propeller and rudder in mid ocean. Refer- ence was also made to the efforts of the officers and crew of the Etruria to rig up and make use of temporary steering apparatus before their ship was picked up and towed to the Azores by the Leyland liner William Cliff. A sketch of the jury rudder made aboard the Etruria is presented herewith. It is reproduced from Syren & Shipping of London. A tri- ETRURIA'S JURY RUDDER. angle of spars, weighted with a good-sized stream anchor from which the crown had been removed, was formed and the structure was decked over with planks which appear in the sketch to have been 'tween deck hatches. The barn-door-like triangle was then further weighted, and two chains were shackled to the ring of the anchor, and these were led one through each quarter pipe and another chain was shackled on for hanging. pur- poses. Wire pennants were attached to shackles in the crown pinholes and these were led up through blocks on the ends of two booms, which projected some 15 ft. over the poop on either side. These wire pennants were thus practically the rudder ropes, and the steering was done by tackles hooked on to them. On this question of the best method of making a temporary arrange- ment for steering, a correspondent in Engineering of London presents the accompanying diagram. "I am confident," he says, "that steam- spars together. The plan repre- sents a vessel 170 ft. long steered "No. 2 is equivalent to hard-a-starboard. "No. 3 is equivalent to hard-a-port." 'boat men who are accustomed when leaving a wharf or pontoon to cant the bow by backing on a with two spars, B, 20 ft. long and 1. ft. in diameter, attached to the bows with 80 ft. of rope or wire hawser, A, as delineated. To the forward end of each spar is attached spring, will at once see the feasi- bility of steering by reversing the about 60 ft. of ratline, C, and at D a man is stationed to haul in or slack away as required. A process. Having tried the method successfully, I am of opinion that the largest steamer afloat can be steered with spars 50 ft. long, rigged as per plan, the diameter 3 of the drag to 'be increased, if Z necessary, by lashing two or more "No. 1 represents the vessel on a straight course. Cary, Smith '& Barbey, naval architects and yacht brokers of New York, announce that they intend to move their offices about May 1 from the German-American building to 90 Wall street. 'In addition to our business of naval architecture," they say, "we have of late years given special attention to developing a brokerage department, which is in charge of Mr. Ernest E. Lorillard. Having London agents, we believe we have on our books all the most desirable yachts which are for sale or charter, not only in this country but abroad." The steam yacht Avenel, which has long been a familiar craft to yachtsmen along the New England coast, will fly the flag of the New York yacht club henceforth. The yacht has been sold through the efforts of Frank N. Tandy, yacht broker of Boston, to Harry Raymond of New York city. The former owner, William S. Spaulding, is now building a steam yacht of much greater size.