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MARINE REVIEW Entered at Cleveland Post Office as Second-class Mail Matter. Published every Thursday at 418-19 Perry- Payne Bldg., by the Marine Review Pub. Co. Vout. XXIII. CLEVELAND, O., FEB. 28,’ 1901. Subscription $3.00 a year. Foreign $4 50 a year, No. 9 UNITED STATES STEEL CORPORATION. ORGANIZATION OF THE GIANT CONCERN THAT ABSORBS THE CARNEGIE AND ALL THE LARGE STEEL COMPANIES—ROCKEFELLER PROPERTIES NOT INCLUDED—CAPITAL, TERMS OF STOCK TRANSFER, ETC. Probably the greatest surprise in connection with details of the United States Steel Corporation, now quite reliably set forth and in some respects officially announced, is the statement that “the Rockefeller mines and ships on the great lakes will not go into the combination immediately, but will probably be taken over later on.’ Immediately following the first intimation of negotiations for the formation of this great corporation it was expected that the Rockefeller interest would at least take a prominent part in the finances, but the definite announcements now at hand do not in any way bear out this expectation. The Consolidated iron mines, con- trolled to the extent of probably four-fifths of its stock by Mr. Rockefel- ler, owns more Lake Superior ore property than several of the othe: large steel corporations put together, and also owns the Duluth, Mesabi & Northern Railway, one of the most profitable of the ore roads in the Lake Superior region. This corporation also owns in fee several of very large ore mines of the Mesabi range that are leased by the Carnegie and other companies, and which leases are thus transferred to the new steel consolidation. The Consolidated iron mines is, therefore, together with some fifty-five or fifty-six Rockefeller ships on the great lakes, a very important factor outside of the big consolidation. The first reliable information regarding this world’s greatest industrial organization, to be known as the United States Steel Corporation, fol- lowed the publication of the articles of incorporation at Trenton, N. J., on Monday last. The capital was nominally placed at $3,000 and the in- corporators were William J. ‘Curtis, Charles McVeagh and Charles C. Cluff. The former two are lawyers and the latter is the general eastern agent of the Illinois Steel Co. The announcement of the incorporation had a decidedly bullish effect upon the stocks of the constituent compa- nies. The outstanding securities of the various companies admitted to the combination are as follows: PMETICAT AO TCe UOOD! spoke to vie wns «casted sisrsue ain wma . $14,000,000 imei cane Linyee lates sv acincicce = sates ae oe se aoe 46,325,000 (Nomericans sheet Steels. cn chai. gets bt sie faces 05s 52,000,000 Neola bese cso Ga asiis see ea hiner se ce 80,000,000 INitplotaa le Steeles ose. cssey ecvamntsers co mem beas pele Rt cians hog 59,000,000 PRE ET ICA TI StCOl dr G VV LEeass vials oss cieraremaue ee wi ie eee 90,000,000 Bamiecicn COMPANY. son urs corny ag eusioe cee ioe oie 316,000,000 The new company is to be eventually capitalized at $1,100,000,000, the terms of the charter being such as to permit of an indefinite increase in capitalization. Of the stock, $400,000,000 will be 7 per cent. preferred and $400,000,000 will be common. Bonds amounting to $300,000,000 and bear- ing 5 per cent. interest will be issued. These bonds will be largely used to buy out Mr. Carnegie’s interest in the Carnegie company. He will not have a dollar’s worth of stock, nor will he be given a cent in cash. His present stock in the Carnegie company, amounting to $86,379,000, will be paid for by about $130,000,000 of bonds; $160,000,000 of the bonds will be issued to redeem the $160,000,000 worth of ‘Carnegie company’s bonds now outstanding. The $400,000,000 7 per cent. preferred stock will be used to buy the preferred stock of the various companies and the $400,000,000 ot common stock to buy their common stock. There is really no positive statement as to what ‘Mr. Carnegie is to receive. The best information is to the effect that he will get $1,300 a share for his stock, the par value of which is $1,000. Neither is there an official announcement regarding the settlements to be made with minority stock holders of the Carnegie company, but it is more than probable that they will receive for their holdings $1,500 a share in the common stock of the new company and an equal amount of the preferred stock, or about $110,431,500 of each kind of stock. Charles M. Schwab will be the president of the new company and Henry C. Frick will be the chairman of the board of directors. BASIS OF TRANSFERS—OFFICIAL ANNOUNCEMENT. As regards the basis upon which securities of the various companies other than the Carnegie (not a stock exchange security) will ultimately be received for conversion into the securities of the new corporation, an official statement was made so as to forestall Wall street manipulators. Following is the offer made for stock of the several companies named: New New preferred. common. ieeral Steel, preferred, s/s. be sees one oe ees ele Phe Wedotal Steel COmMmon 22 .c wel et ae. AES 04 1.07% Am Steel & ‘Wire; preferred f.0..0. 00 ik eee 1.17% : Ain Steel-G Wire common 2226... ee eer ee ids 1.02% National Dube, preterred: 2.205 or ee ee ee eh we ee ee 1.25 is National Mube, COMMON: 0826 ee ce pe es ee ee .088 1.25 National Steel, preferred 2... 2c. cee ede ee ee. 1.25 vee National Steel; common 2... 0200503 .0cie sete te ie ees SEs 1.25 Ama Piniplate, preferred. 5.25661 sees ee wen e ee c eee ee 1.25 aes ate Hire tate. COMMON ©. sce c eee elec et ete ws eae .20 1.25 American Steel Hoop, preferred ................+2-- 1.00 Nee American Steel Hoop; common: ...........2.52-000.- eres 1.00 (American Sheet Steel, preferred ..... 2.000505. 00 e sae 1.00 Le, American Sheet Steel, common .............-+eeeeees 2 1.00 As to the stocks of the last four companies, Mr. Morgan explained that the aggregate amount of stocks so to be offered was arranged with the principal stockholders of those companies, who have requested the distribution of such amount among the four companies to be made in the percentages as stated. This means that for 100 shares of Federal Stee! preferred 110 shares of United States Steel preferred will be exchanged; and so on. It will be seen that Federal Steel common, National Tube common and American Tin Plate common get a bonus of preferred stock. That is to say: Every holder of 100 shares of Federal Steel common will receive 107% shares of the common stock of the new company and four shares of the new preferred stock. _ It was also explained by Mr. Morgan that this arrangement regard- ing the particular stocks mentioned should not be regarded as a bonus, but rather as an estimated value of the old common shares as compared with common shares of the new company for which they are to be ex- changed. In determining the basis of exchange, it was assumed by the negotiators that the common stock of the new company is worth 40 and the preferred stock par. Measured by this standard, arbitrary as it is ad- mitted to be, two and one-half shares of the new common are worth one share of the new preferred. Employing this standard for the purpose of further comparing values, it is found that the holders of 100 shares of the common stock of Federal Steel, National Tube and American Tin Plate would receive, respectively, in the common stock of the new com- pany, 117% shares, 147 shares and 175 shares. Another official announcement was to the effect that the exchange would be made of the preferred shares of all the combining companies as if the actual exchange were made on April 1, so that the dividends, all of which are cumulative, accruing on that date will be paid to the stock- holders of record. If there be any dividends on the common stock, they will be adjusted according to the rules of the New York stock exchange. It was also stated that there will be no division of treasury assets in tak- ing over the stock of the old companies. Following these announcements, both classes of stock in the new or- ganization were traded in largely in the outside securities market in New York Wednesday and the preferred, which sold up to 87 and down to 82, closed at 82%, while the common sold up to 40 and down to 87 and closed at 3734. PROVISIONS OF SWEEPING CHARTER. “To manufacture iron, steel, manganese, coke, copper, lumber and other materials and all or any articles consisting or partly consisting of iron, steel, copper, wood or other materials, and all or any product thereof. To acquire, lease, own, occupy, use or develop any lands con- taining coal or iron manganese, stone or other ores or oil and any wood- lands or other lands for any purpose of the company. To mine, or other- wise to extract or remove coal, ores, stone and other minerals and tim- ber from any lands owned, acquired, leased or occupied by the company, or from any. other lands. To buy and sell, or otherwise to deal or to traf- fic in, iron, steel, manganese, copper, stone, ores, coal, coke, wood, lum- ber and other materials and any part of the product thereof and any arti- cles consisting or partly consisting thereof. “To construct bridges, buildings, machinery, ships, boats, engines, cars and other equipment, railroads, docks, slips, elevators, water works, gas works and electric works, viaducts, aqueducts, canals and other water- ways and any other means of transportation, and to sell the same or other- wise to dispose thereof, or to maintain or operate the same, except that the company shall not maintain or operate any railroad or canal in the state of New Jersey. To apply for, obtain, register, purchase, lease or otherwise to acquire and to hold, own, operate and introduce, and to sell, assign or otherwise to dispose of any trade marks, trade names, patents, inventions, improvements and purchases used in connection with or se- cured under letters patent of the United States, or elsewhere, or other- wise, and to use, exercise, develop, grant, license in respect of, or other- wise to turn to account any such trade marks, patents, licenses, processes, and the like, or any such property or rights. To engage in any other manufacturing, mining, construction or transportation business of any kind or character whatsoever, and to that end to acquire, hold, own and dispose of any and all property, assets, stocks, bonds and rights of any and every kind, but not to engage in any business here under which shall require the exercise of the right of eminent domain within the state of New Jersey. “To acquire by purchase, subscription or otherwise and to hold and dispose of stocks, bonds or any other obligations of any corporation formed for or then or therefore engaged in pursuing any one or more of the kinds of business, purposes, objects or operations above indicated, or owning or holding any property of any kind herein mentioned; or of any corporation owning or holding the stock or the obligations of any such corporation. To hold for investment or otherwise, to use, sell or dispose of any stock, bonds or other obligations of any such other corporation, to aid in any manner any corporation, whose stock, bonds or other obli- gations are held or are in any manner guaranteed by this company, and to do any other acts or things for the preservation, protection, improve- ment or enhancement of the value of any such stock, bonds or other ob- ligations, or to do anything or acts designed for any such purpose, while owner of any such stocks, bonds or other obligations to exercise all the rights, powers and privileges of ownership thereof and to exercise any and all voting powers thereon. “The business or purpose of this company is from time to time to doany one or more of the acts herein set forth; and it may conduct its business in other states and in the territories and foreign countries, and have one office and keep the books of the company outside the state of New Jer- sey, except as otherwise may be provided by law; and may hold, purchase, mortgage and convey real and personal property, either in or out of the state of New Jersey. Without in any particular limiting any of the ob- jects and powers of the corporation it is hereby expressly declared and provided that the corporation shall have power to issue bonds and other obligations in payment for property purchased or acquired. by it, or for any other object in or about its business; to mortgage or pledge any stocks, bonds or other obligations of any property which may be acquired by it to secure any bonds or other obligations by it issued or incurred furthering any of its objects to do any and all other acts and things and to exercise any and all other powers of a copartnership or person.