stock and 649,988 shares of common stock, making a total combined par value of $129,997,500, as consideration for the supplying of $25,000,000 in cash and as commission for putting the business together. The remainder of the preferred and common stock was issued in exchange for properties received in the combination of the constituent concerns. According to a report made by the Bureau of Corporations, United States Department of Commerce and Labor, in 1911, as of 1901, the entire issue of common stock of the par value of $508,227,400 and approximately $212,000,000 of the preferred stock had no tangible properties in back of it, and thus approximately $720,000,000 of the stock issued in the formation of the United States Steel Corp. represented only intangible values. The large variance between the assigned values on the books of United States Steel and the values as reached by the Department of Commerce and Labor in its report was due largely to a difference in valuation of the ore reserves.

The Morgan syndicate then marketed the stock which it had received plus the stock of certain groups from among those who had received United States Steel stock in exchange for their former holdings of the component companies. When the Morgan syndicate commenced marketing of the stock, the preferred stock was initially quoted at about $82.50 and the common stock at about $37.50, making an aggregate of $120 per unit combination and making a total initial market value for Morgan's 1,300,000 shares of $78,000,000. The gross proceeds approximated $90,500,000 and were disposed of as follows: $25,000,000 as reimbursement for the cash raised by the syndicate; $3,000,000 for expenses of the syndicate; approximately $12,500,000 or 20 percent of the total profits of approxi mately $62,500,000 to J. P. Morgan & Co. as syndicate manager; and then $50,000,000 of net profits divided among all the syndicate members.

The syndicate agreement provided that the syndicate manager (J. P. Morgan & Co.) could at any time wholly abandon the transaction, in which event the stockholders in the component companies were to have no claim against J. P. Morgan & Co. and the syndicate.

In 1903 the Morgan group managed the exchange of 1,500,000 shares of preferred stock for $150,000,000 of 5-percent bonds, and sold an additional $20,000,000 of the 5-percent bonds of the same series to the public.

In 1927, the common stock was increased by a 40 percent stock dividend, bringing the total amount of common stock outstanding to 7,116,325 shares. In 1929, United States Steel made a rights offering to its stockholders which was not underwritten and which increased the common stock outstanding to 8,132,840 shares. From the sale of the additional stock in 1929, United States Steel received $142,324,700.

In 1930 and 1931, the common stock was increased to 8,703,252 shares by the issuance of stock for the assets of the Atlas Portland Cement Co., the Columbia Steel Corp. and the Oil Well Supply Co.

In 1938, United States Steel issued $100,000,000 of 34 percent bonds which were underwritten by a syndicate headed by Morgan Stanley & Co. That same year the common stock was changed from $100 par to no par value.

In 1949, the common stock was split 3 for 1, bringing the amount outstanding to 26,109,756 shares.

United States Steel has over its life sold significant amounts of its own stock through employee stock subscriptions. The stock offered under the plan was purchased in the market by the corporation and resold to employees. Two years after incorporation, in 1903, the management offered preferred stock to its em ployees. Beginning in 1909 the common stock was also offered to employees and by 1916, employee offerings were confined to common stock. During the 12 years that the preferred stock was offered, employees purchased 351,115 shares at a total cost of $34,090,593. The last offering of common stock to employees was in 1933, when 200,000 shares were offered at $27 (gross receipts $5,400,000). The employee stock plan was abrogated in 1935.

United States Steel has never financed itself by an underwritten public offering of stock for its own account through investment bankers. The only common stock sold for a cash consideration was the rights offering to its stockholders in 1929.

The capitalization including long-term debt of United States Steel Corp. as of December 31, 1949, was as follows:

Long-term debt---

Preferred stock, 7 percent cumulative, $100 par (3,602,811 shares) _
Common stock and surplus:

$65, 944, 000 360, 281, 000

The second largest steel company with blast furnace facilities and the largest shipbuilder in the United States is Bethlehem Steel Corp. which was incorporated in 1904 as a combination of steel companies, one of which had been in existence since 1857. Public financing by this company has been extensive.

Bethlehem has continued to grow through the acquisition of additional companies. Typical of the method followed in plant expansion was the acquisition by Bethlehem of Lackawanna Steel Co. in 1922, at which time Bethlehem acquired Lackawanna's assets in exchange for $12,500,000 of 7 percent preferred stock, $22,608,500 of class B common stock, and $473,509 in cash. In similar fashion also in 1922, Bethlehem acquired the assets of the Midvale & Cambria properties in exchange for $97,681,400 par value of its common stock. In each case Bethlehem assumed certain liabilities of the acquired companies.

The first public issue of Bethlehem Steel Corp. securities occurred in 1912, when $15,200,000 of 5 percent bonds were offered by a syndicate headed by Hallgarten & Co., Harvey Fisk & Sons, and William Salomon & Co. The second public offering of Bethlehem securities took place in 1916, when $16,000,000 of 5-percent bonds were offered by a syndicate headed by Clark, Dodge & Co., Brown Bros. & Co., E. W. Clark & Co., and E. L. Stokes.

In 1917, the corporation sold 150,000 shares of class B common stock of $100 per (total par value $15,000,000) to its common-stock holders; the offering was underwritten by a group headed by J. & W. Seligman & Co. At the same time the company issued 300,000 shares of class B nonvoting common stock as a 200percent stock dividend on the 150,000 shares of class B common stock. Also in 1917 the company offered 300,000 shares of 8-percent convertible preferred stock at $100 par (total par value $30,000,000) to holders of the common and the class B common stocks; this offering was underwritten by a syndicate headed by Guaranty Trust Co., Bankers Trust Co., and J. & W. Seligman & Co.

The next two financings by Bethlehem were headed by the Guaranty Trust Co. and Bankers Trust Co. In 1920, Bethlehem issued $20,000,000 of 7-percent bonds and $2,660,000 of 7-percent equipment trust certificates.

In 1923-24 the company issued $32,500,000 of 6-percent series A bonds and $25,000,000 of 5-percent series B bonds, the financing being headed by Guaranty Co. and Bankers Trust Co., and 2 years later Bethlehem issued $10,000,000 of 5-percent serial notes.

All previously outstanding preferred stock was retired in 1926 when 350,000 shares of 7-percent noncallable preferred stock (total par value $35,000,000) were offered by a group headed by Guaranty Co., Bankers Trust Co., National City Co., J. & W. Seligman & Co., Lee, Higgison & Co., and Charles D. Barney & Co.

In 1929, the company made two rights offerings of its common stock to its stockholders for which it received the sums of $51,000,000 and $88,000,000, respectively. The available records do not indicate who underwrote these two offerings, mentioning only "the corporation's bankers."

Beginning in 1935, Bethlehem Steel Corp. commenced a refunding program which appears to have been managed throughout by Kuhn, Loeb & Co. and certain other investment bankers.

In 1935, $55,000,000 of 44-percent series D bonds were offered through a syndicate headed by Kuhn, Loeb & Co. and Edward B. Smith & Co. The following year the same bankers headed a syndicate which offered $55,000,000 of 34-percent series E bonds.

In 1937, $48,000,000 of 31⁄2-percent convertible bonds were offered by a syndicate headed by Kuhn, Loeb & Co., Edward B. Smith & Co., and Mellon Securities Corp.

96347-50-ser. 14, pt. 4b- -24

During the years 1939 to 1949, the following offerings were made through a group headed by Kuhn, Loeb & Co., Smith Barney & Co., and, except for three issues (marked with an asterisk), Mellon Securities Corp.:

1939-34-percent series F bonds-

1940-3-percent series G bonds.

1940-34-percent series H bonds.

1940 1940

Serial debentures.

Serial debentures (which were placed privately with 12 banks

and insurance companies).

1945-24-percent series I bonds. 1946-24-percent series J bonds. 1949-3-percent series K bonds_-_

$25,000,000 30, 000, 000 40, 000, 000

35, 000, 000

*20, 000, 000

75, 000, 000 *50, 000, 000

*50, 000, 000

In 1949 also, Bethlehem offered 627,960 shares of common stock at $32%2 through a group of underwriters headed by Kuhn, Loeb & Co. and Smith Barney & Co. which grossed the sum of $20,408,700.

Bethlehem's refunding program has left the corporation with only four issues of long-term debt securities now outstanding: $74,900,000 of 24-percent series I bonds due 1970: $43,750,000 of 24-percent series J bonds due 1976: $50,000,000 of 3-percent series K bonds due 1979; and $914,000 of noncallable, purchasemoney 6-percent bonds issued in 1901 and due in 1998.

The Bethlehem Steel Corp. had a stock-purchase plan for its employees from 1924 through 1931. Under the allocation system of the plan an employee could apply for one share of 7-percent preferred stock for each $400 of annual earnings. The employee would receive credit for regular dividends as well as incentive payments for the retention of the stock and continued employment. The stock could be purchased on the installment plan, with the employee paying $4 per month per share. The stock offered under the plan was purchased by the corporation in the market and resold to employees. The first offering of 7-percent preferred stock of par $100 was in 1924 at $94 and the second offer in 1925 at $100. Annual offers continued to be made at $101, $107, $120, $122, $125, and $121 in 1931, respectively.

The capitalization including long-term debt of Bethlehem Steel Corp. as of December 31, 1949, was as follows:

Long-term debt

$169, 564, 000

Preferred stock, 7 percent cumulative, $100 par (933,887 shares). 93, 389,000 Common stock and surplus:

The third largest steel company in the country is Republic Steel Corp., which was originally incorporated in 1899 as Republic Iron & Steel Co.; the latter was in turn a consolidation of 24 smaller steel companies which operated rolling mills, blast furnaces and iron mines in 7 States. As of June 30, 1900, Republic's balance sheet showed $51,369,217 in assets. Like the other steel companies incorporated at the turn of the century, Republic continued to acquire additional properties throughout its existence.

The first public offering of Republic securities was in 1910 when $5,000,000 of 5-percent bonds were offered by a group headed by Hallgarten & Co. and J. & W. Seligman Co. In 1912 $2,000,000 of the same series were offered through a group headed by Blair & Co., and in 1915 an additional $2,000,000 of the same bonds were offered by the same group.

In 1923, Republic issued $10,000,000 of 5% percent series A bonds through a group headed by Kuhn, Loeb & Co. and Blair & Co., and the following year $1.090.000 of 5-percent notes were offered through a group headed by Bankers Trust Co.

In 1928 Republic offered its stockholders rights to subscribe to 145,232 shares of common stock at $65 underwritten by a syndicate of bankers, the identities of which we have not been able to ascertain; gross proceeds of the offering were $2,440,080.

In 1930 there was a further consolidation of smaller steel companies into Republic Steel Corp. In that same year Republic issued 600,000 shares of 6percent cumulative convertible preferred stock (total $60,000,000) partially in exchange for stocks of the constituent companies, underwritten by a group headed by Otis & Co. and Guaranty Co.

In 1935, $24,000,000 of 42-percent convertible series A bonds were offered through a group headed by Kuhn, Loeb & Co. and Field Glore & Co. and, in the following year, a syndicate headed by these two firms offered Republic's $45,000,000 of 41⁄2-percent series B bonds. In 1936, also, a syndicate headed by Kuhn, Loeb & Co. offered $25,000,000 of 42-percent series C bonds.

From the money received through the 1935 offerings, Republic retired its 5%-percent series A bonds offered in 1923. The $24,000,000 of 42-percent convertible series A bonds which had been offered in 1935 were converted or redeemed by the end of 1938.

In 1944, Republic sold $50,000,000 of 31⁄2-percent bonds privately to 11 insurance companies through a group headed by Dillon, Read & Co., Glore, Forgan & Co., and Lehman Bros. In the same year the corporation itself sold $19,250,000 of serial notes to commercial banks.

In 1945, Republic sold $50,000,000 of 3-percent bonds directly to certain insurance companies and used the proceeds to retire the 32-percent bonds placed with insurance companies the previous year. In 1945 Republic also issued $19,250,000 of 14-percent series notes to 15 banks headed by Chase National Bank and National City Bank and used the proceeds therefrom to retire the 24-percent serial notes placed with commercial banks the previous year. In 1947, Republic purchased a plant from the RFC, giving as part payment therefor its $30,000,000 purchase money note.

The only recorded public offerings of stock by the Republic Steel Corp. were the rights offering in 1928, underwritten by a group the identity of which we have not been able to ascertain, and the $60,000,000 of 6-percent convertible preferred stock underwritten in 1930 by a group headed by Otis & Co. and Guaranty Co.

The capitalization including long-term debt of Republic Steel Corp. as of December 31, 1949, was as follows:

Long-term debt_

Preferred stock, 6-percent cumulative, convertible, $100 par

(282,043 shares) __

Common stock and surplus:

Common stock, no par (5,893,103 shares).

Capital surplus_.

Earned surplus

Total common stock and surplus‒‒‒‒‒

Total capitalization---

$58, 967, 000

28, 204, 000

$135, 979, 000

64, 432, 000 126, 311, 000

326, 722, 000

413, 893, 000

JONES & LAUGHLIN STEEL CORP.

The Jones & Laughlin Steel Corp. was incorporated in 1902 as the Jones & Laughlin Steel Co. to acquire the business of Jones & Laughlin's Ltd., a partnership formed from a steel business originally established in 1850. The first public financing by Jones & Laughlin was in 1911, when the corporation issued $10,000,000 of 5-percent bonds through a group headed by the First Trust & Savings Bank of Chicago and Blair & Co.

In 1922 there was offered 140,000 shares of the corporation's 7-percent preferred stock at $1071⁄2 (gross receipts $15,050,000) by a group headed by the Union Trust Co. of Pittsburgh, Guaranty Co., and Bankers Trust Co. This preferred stock was a secondary sale (i. e. not for the account of the corporation) resulting from the issue by Jones & Laughlin Steel Corp. of 600,000 shares of 7-percent preferred stock and 600,000 shares of common stock in exchange for the assets of the Jones & Laughlin Steel Co.

In 1936 the corporation issued $30,000,000 of 44-percent series A bonds through a group headed by the Mellon Securities Co., Inc. The proceeds of the latter offering were used in part to retire the 5-percent bonds issued in 1911. In 1938 the corporation placed $8,100,000 of its 4-percent series B bonds and $5,400,000 of its 44-percent series B bonds privately with 10 banks and 1 insurance company through the Mellon Securities Corp. The $28,000,000 issue of 34 series C bonds in 1941 was also underwritten by a group headed by Mellon

Securities Corp. In the same year the corporation borrowed $14,000,000 at 21⁄4 percent from seven banks. From the proceeds of its 1941 financing, Jones & Laughlin retired the series A and series B bonds.

In a 1941 recapitalization, the 7-percent preferred stock received 5-percent preferred stock, class B convertible preferred stock and common stock. The common stock was changed in the recapitalization from $100 par to no-par value. The class B convertible preferred stock was retired in 1946.

The corporation sold $60,000,000 of its 24 series A bonds in 1947 privately to institutional investors through the First Boston Corp. The proceeds of this offering were used to retire the 34 series C bonds.

A bank credit agreement was established in 1948 providing for loans up to $40,000,000 at 3 percent; none of the credit was used in 1948 and only a small amount in 1949.

The name of the Mellon Securities Corp. (or the First Boston Corp., into which Mellon was merged in 1946) appears frequently throughout the financing history of the Jones & Laughlin Steel Corp.

The capitalization including long-term debt of Jones & Laughlin Steel Corp. as of December 31, 1949 was as follows:

Long-term debt_.

Preferred stock, 5-percent cumulative, $100 par (293,568 shares)

Common stock and surplus:

$60, 461, 000 29,357,000

The Youngstown Sheet & Tube Co. was incorporated in 1900, bringing together under one management properties in the Mesabi Range, coal lands in Pennsylvania, and steel plants in Ohio. Additional properties have been acquired by Youngstown through the years.

The first large public financing by the company itself appeared in 1923 when Youngstown issued $40,000,000 of 6-percent debenture bonds through a group headed by the Bankers Trust Co. and the Guaranty Co. In 1927, the company issued $75,000,000 of 5-percent series A bonds through a group headed by Kuhn, Loeb & Co. The money received from this offering was used to refund the entire higher interest-bearing debt.

The following year the company issued 150,000 shares of 51⁄2-percent preferred stock of $100 par value (total par value $15,000,000) through a group headed by the Cleveland Trust Co. The proceeds from this offering were used to retire the company's 7-percent preferred stock originally issued in 1911.

In 1931, $25,000,000 of 5-percent series B bonds were offered by virtually the same group which had handled the 1923 $40,000,000 debentures.

In 1936, $60,000,00 of 4-percent series C bonds and $30,000,000 of 3%-percent convertible bonds were offered by a syndicate headed by Kuhn, Loeb & Co. and Edward B. Smith & Co. The funds obtained from these offerings were used to retire the series A bonds and the series B bonds. The $30,000,000 of 3%-percent convertible bonds originally issued in 1936 were retired by the end of the following year. The company in 1938 issued a $30,000,000 4-percent convertible bond issue through a group headed by Kuhn, Loeb & Co. and Edward B. Smith & Co. In 1940 $45,000,000 of 34-percent series D bonds were offered by a group headed by Kuhn, Loeb & Co., and Smith, Barney & Co. With the proceeds of this offer and other funds the company retired the series C bonds. In the same year, the company privately sold two issues of serial notes aggregating $20,500,000 to banks and insurance companies through a group headed by Kuhn, Loeb & Co. and Smith, Barney & Co.

In 1945, the company itself privately sold $30,000,000 of 24-percent series E bonds. These series E bonds remain as Youngstown's only funded debt since the 1945 retirement of all other bonds, convertible debentures and serial notes.