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Published every Thursday at Vor. XXV. 39-41 Wade Bldg., by the Marine Review Pub. Co --_--_ _-- RETIRING STEEL CORPORATION STOCK. For the first time since the United States Steel 'Corporation was organized there was opposition from the stockholders to a financial pro- position made by the directors at the meeting on Tuesday of this week in New York. The opposition, however, was little more than nominal, and the proposition, which is to convert 2,000,000 shares of the preferred stock into $200,000,000 of 5 per cent. sixty-year second-mortgage bonds, and for an additional issue of $50,000,000 of such bonds for cash, was ap- proved by the following vote: For--38,745,731 shares of the preferred stock and 3,958,557 shares of the common stock. Against--4,865 shares of the preferred stock and 7,678 shares of the common stock. The opposition was not so much against the proposition to retire the preferred stock by a bond issue as to the underwriting contract with J. P. Morgan & Co., by the terms of which the underwriters are to receive 4 per cent. commission upon all bonds placed. Samuel S. Stone of Provi- dence, R. I., who holds twenty-five shares of preferred stock and twenty shares of common, was the chief spokesman of the opponents of the scheme, He said he didn't think it was at all necessary to pay a com- mission of $8,000,000 for converting stock worth 90 into bonds, the as- sured prospective value of which is 95. "It seems to me," he said, "that the public will jump at such a proposition as that without any coaxing and the stockholders can attend to the business of retiring the preferred stock without the help of an underwriting syndicate." Judge Gary replied for the officials of the corportion that over 77 per cent. of the holders of both preferred and common stock had sent proxies in favor of the proposition. John Trehane, a member of the American bar, now living in London, the owner of fifty shares, also entered a protest. The plan of issuing $50,- 000,000 new bonds for the purpose of improving old properties and paying for new ones Mr. Trehane approved, his criticism being chiefly directed to the proposal to add $10,800,000 a year to the fixed charges of the cor- poration by issuing $200,000,000 bonds in exchange for an equal amount of preferred stock. He added: "And what is to be the consideration to the corporation for this enormous responsibility which you are urging us to force upon it? Not one dollar; but, on the contrary, it is to pay out of its coffers the considerable sum of $8,000,000 to the syndicate which shelters some of your number, for the skill and energy displayed in fas- tening this heavy burden on its back. To pay a man a commission for getting one money is a common enough transaction, but to pay him a commission for getting one into debt is a financial novelty which would be amusing were it less expensive." After adjournment of the meeting Mr, George W. Perkins, a member of the board of directors, made a speech and invited the stockholders to take notes. He said: : "T know that there has been some feeling here today, but I believe that the opposition sprung from worthy motives and that the opponents thought they were acting in the best interests of the United States Steel Corporation. When the company was put together we had money enough to cover every expense except one, which was an unknown quantity--the expenditure for which the subsidiary companies had already arranged. We found afterward that these contemplated expenses amounted to $40,- 000,000 or $50,000,000. They were reduced to about $15,000,000. To capi- talize that and to round out the general plan and harmonize the different parts about $50,000,000 is needed. We might have got it by issuing more preferred stock. We couldn't have got more than 90 for it, or $45,000,000 for $50,000,000 face value. There would have been an initial cost of $5,000,000, but, the expense of raising our $50,000,000 wouldn't have stopped there, because we would have had so much more stock to pay 7 per cent. dividends on or an additional expense each year of $3,500,000. We might have issued a second mortgage bond, but couldn't have got more than 95 for it. There would have been an initial cost of $2,500,000 and an interest cost of $2,500,000 every year. But by the scheme we have finally adopted we have an initial cost of $10,000,000, but the expenses stop right there. For the rest, we save the difference between our 7 per cent. dividends and the 5 per cent. interest on the bonds. We have been criticized for being overcapitalized. It is rather a pleasant thing, then, to retire some of the stock." EXPANSION OF OUR FOREIGN COMMERCE. Mr. O. P. Austin, chief of the United States treasury department bureau of statistics, delivered an address before the. Manufacturers Club of Philadelphia on Monday evening last on the subject, "The Expansion of Our Foreign Commerce." : The rapid expansion of the foreign commerce of the United States, Mr. Austin said, is the natural consequence of the rapid expansion of pro- duction which followed the great development in railway construction 1n the closing quarter of the nineteenth century. Following the construction of the transcontinental line which was completed in 1869, came the ex- tension of other lines through the great Mississippi valley and the south, and this resulted in the opening of the great agricultural, forest and min- eral areas whose natural supplies have made this the greatest producing country of the world; while the multiplication of railways facilitated the assembling of these natural products for use in manufacturing. As a re- sult, agricultural production has doubled, and in many cases more than 'doubled:and 'the value of farm products increased from less than $2,500,- 000,000 in 1870 to about $4.375,000,000 in 1900. In products of mantifacture 'the ittcrease has been even more rapid. The production of coal. a ak necessity in manufacturing, grew from 33,000,000 tons in 1870 to 290,000,00 CLEVELAND, G., MAY 22, Leo. Foreign MARINE REVIEW Entered at Cleveland Post Office as Second-class Mail Matter. Subscription $3.00 a year. 4.50 a year. 10 cents. No. 21 Single Copy in 1901; pig iron, from less than 2,000,000 tons to over 13,000,000; and steel, from less than 70,000 tons to over 10,000,000 tons. Meantime the railways had grown from 52,000 miles in 1870 to practically 200,000 miles at the present time, and rates for rail transportation have fallen to about one-third the rates of 1870. The result of all this is that the United States has become the greatest exporting nation in the world, having risen from fourth place in 1870 to first place in 1901. The value of our exports during that time has practically quadrupled, the figures having been, in 1870, $393,000,000; in 1901, $1,487,000,000. Meantime imports have scarcely doubled, the import figures being, in 1870, $436,000,000; in 1901, $823,000,- 000, the per capita of imports having fallen from $11.06 to $10.58, while those of exports increased from $9.77 to $18.81. _ The causes of this wonderful development in exports, in Mr. Austin's opinion, are to be found in the fact that the United States is the world's largest producer of.the great articles required by man for his daily life. The chief requirements of man are food, clothing, heat, light and manu- factures; and of all these the United States is the world's largest producer. The principal articles of food are breadstuffs and meats, and of wheat the United States produces more than any other country, and of corn more than all other countries combined; while of meats the United States is also' the world's largest producer. For clothing the article of largest require- ment is cotton, and of this the United States produces more than three- fourths of the world's supply. For heat, coal is the greatest requirement, and of this the United States is now the world's largest producer and our supply exceeds that of any other country; while for light our: production of petroleum furnishes a larger quantity of refined illuminating' oil than that of any other nation. In manufactures the United States is also the world's largest producer, the value of our manufactures being nearly double that of the United Kingdom, and nearly equal to that of France, Germany, and Russia combined. This commanding position in the world's commerce is, in Mr. Aus- tin's opinion, likely to be retained by the United States. The power of production shows no signs of abatement, while we may reasonably expect that the development of science and invention and the application of American energy will still further reduce the cost of production and trans- portation. This high standing of the United States as an exporting nation will, Mr. Austin said, be welcomed by the commercial world rather than antagonized, as has been intimated and feared in certain quarters. The commercial world buys the products of our fields and factories because it requires them for daily use and because it can obtain them more readily and cheaply from the United States than from any other part of the world. Suggestions of the exclusion of American products of the field or factory seem scarcely likely, in Mr. Austin's opinion, to be realized. The effect of the refusal of Europe to purchase from the United States any of the great articles of which we furnish so large a proportion of the world's supply would be to cause an advance in the price of those articles in other parts of the world. The United States supplies one-fifth of the wheat entering into international commerce, three-fourths of the cotton, and practically all of the corn; while our proportion in the meat supplies of Europe is also large. To thus eliminate our production from the world's supply of these great articles of daily requirement would be to cause an ad- vance in the prices of the limited supplies which could be obtained from other parts of the world. Hence, in these natural products, it may be expected that the demand will continue indefinitely, while the fact that the United States in 1901 sold to Europe alone more manufactures than she had ever sold to the entire world in any year prior to 1895, shows the progress that American manufacturers are making in Europe, the great manufacturing center of the world. Turning to the import side, Mr. Austin said that it must be expected that our imports will continue to grow. In the present fiscal year they will exceed those of any earlier year in our history, and the reasons for continuous growth are coincident with our growth in manufactures. While the United States is the world's greatest producer in the chief elements required in manufacturing, it does not produce certain articles of tropical and subtropical growth of which the manufacturers are requir- ing constantly increasing quantities, such as raw silk, fibers, Egyptian cotton, india rubber, and many other articles of this character. Add to this the tropical requirements forefood, such as coffee, cocoa, tea and such portions of the sugar and tropical fruits as are not produced at home, and it is apparent that the importations must increase, and especially those from the tropics. The value of tropical and subtropical products im- ported has grown from $143,000,000 in 1870 to over $400,000,000 in 1901, and the share which they form in our imports has grown from 31 per cent. in 1870 to nearly 50 per cent. in 1901, and this proportion seems likely to increase. This fact of our growing dependence upon the tropics, indicates, in Mr. Austin's opinion, not only that our imports must continue to grow, but that the events of the past four years have been of incalculable ad- vantage to us in the fact that they have brought under the American flag an area capable of producing'a large share of these tropical requirements, and taking an equal quantity of our products in exchange therefore. NAVAL ARCHITECTS IN GERMANY. The summer meeting of the German Society of Naval Architects will be held at Dusseldorf from June 2 to 5. The program of papers to be read includes the following: 'Iron Industry and Ship Building in Germany," by Mr. Schrodte; '""'The Materials and Tools for Ship Building at the Dusseldorf Exhibition,' by Mr. Gotthard Sachsenberg; "Development of Navigation on the Rhine," by Baron v. Rolf; "The Use of Steel Wire Rope for Navigation,' by Mr. 'Schleifenbaum. Technical; excutsionsewill be made to several of the important ship yards and iron works in' the vicinity of Dusseldorf. It will be seen that the program*from the technical standpoint is not extensive. In fact it seems to be largely social. Ex- tended trips down the Rhine are contemplated.