Cornell University Library HD2769.S72W67 THE LIBRARY OF THE NEW YORK STATE SCHOOL OF INDUSTRIAL AND LABOR RELATIONS AT CORNELL UNIVERSITY Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924002365579 A STUDY OF THE United States Steel Corporation IN ITS INDUSTRIAL AND LEGAL ASPECTS BEING THREE LECTURES DELIVERED TO THE CLASS IN PRIVATE CORPORATIONS, IN THE UNIVERSITY OF MICHIGAN, JUNE 3, 4 AND S, 1901 BY HORACE L. WILGUS rif Professor of Law of Torts and Private Corporations, University of Michigan. COaNELL UNiVeRSlTY Chicago CALLAGHAN & COMPANY 1901 OOVOIHO •00 DsiiiasadAi MOdooo-sivoaa JLQ KOIXISOdKOO ANVJWOO ^ NVHeVllVO X06X IHOMiJOO tC^esc lectures ate bebicateb to tiji ^90^ class in tlje £att> of Corporations in t^e Unipersity of ZlTic^igan, at rol^ose request t^eg roere prepared. tj. £. W. PREFATORY NOTE. When the class in corporations asked me to lecture upon the United States Steel Corporation, I replied I had not at hand such of the documents used in its organization as would justify a legal discussion, and I did not wish to rely upon newspaper reports as to their contents, I promised, however, to try to secure authentic information. In order to do this, I wrote Messrs. J. P. Morgan & Co., requesting copies of such papers as were not considered private, stating what use was to be made of them. In reply to this request, they very kindly sent me copies of the Charter, By-laws, and Circulars used in organizing the company, printed in the Appendix. When the lectures were prepared, there was no expectation of publishing them; after the delivery, many requests for them in more permanent form, than mere notes taken at the time they were delivered, have induced me to print them. They appear sub- stantially as read to the class. The legal view taken herein, requires, in fairness, that the documents upon which it is based, should be given in fuD, in order that those who are interested will have before them the materials for forming inde- pendent conclusions. I am indebted to the kindness of Mr. James B. Dill for copies of the Charter and By-laws of the Carnegie Company. Credit due to other sources of information is given in the not«s. H. L. W. Ann Arbor, MUMgan, October IS, 1901. CONTENTS. PAOB I. FOEMATIOK 1 1. What is it 1 (1) General description 1 (2) Enormous capitalization, — comparison with other things 2 (3) Interests directly controlled 4 (4) Allied interests 5 2. Who formed the combination 8 (1) Parties and interests represented 8 (2) Mr. Morgan as master-financier 10 (3) Mr. Carnegie as master-manufacturer 13 3. Why it was formed 20 (1) Tendency to consolidate 20 (2) Condition of money market 20 (3) Mr. Carnegie's desire to retire 23 (4) Prevention of competition 24 (5) Prospects of profits 27 4. How formed 27 (1) Organization in New Jersey 28 (2) Formation of a syndicate 28 (3) Contract between the syndicate and the corporation.. 28 (4) Securing stocks and bonds of the various companies. . 28 A. Of the Carnegie Company 28 B. Of the other companies 29 C. Conditions imposed 33 (a) Full power of Morgan ft Company 30 (b) Irrevocable deposit of shares SO (c) Discretion to proceed or abandon 31 (d) Amount of capital stock 31 (e) Plan of organization, and form of securities. . 31 (f) Compensation of financiers 32 (g) Consummation of the deal ,. 32 (5) Summary of financial details 33 (6) Water in the stock 34 II. Indtjstbiai posmoN 35 1. Industrial details 33 (1) Iron ore 35 (2) Transportation of ore 38 vii Vlli CONTENTS II. Industrial position— Continued. ^^°^ (3) Coke product 41 (4) Limestone 41 (5) Pig iron , 42 (6) Steel billets 43 (7) Steel rails '. 43 (8) Structural steel 44 (9) Plate steel 44 (10) Steel sheets 45 (11) Bars iand hdops 45 (12) Hbbps and cotton ties. , 45 (13) Tin plate 45 (14) Tubes 45 (15) Wii-e'and ■ftii'e rods 46 (16) Wire nails 46 (17) Barbed wire 46 (18) Woven wire fence. 46 (19) Bridges and buildings 46 2. Potential competition 48 3. Summary of industrial details ,. 49 (1) Property and employees 49 (2) Products 49 III. Management 51 1. Objects and powers 51 (1) Business powers 51 ■! Iron Age, Peb'y 14, 1901. 78 Iron Age, Feb'y 14, 1901. TO Compiled from report of Am. Steel and Wire Co., Oct. 31, 1900; Iron Age Supp., Dec. 27, 1900, p. 16; and Age of Steel, Feb'y 4, 1899, 85 Vol., p. 16. 80 Ibid. 81 Testimony of Chairman Gates, before Indus. Com., Vol. 1, p. 1010. 82 Ibid. THE UNITED STATES STEEL CORPORATION. 47 pany, member of the new corporation, has a capacity to put up 600,000 out of the. Y00,000 tons of iron and steel bridges and frame structures put up in the United States in a year, or from eighty-five to ninety per cent of all.*' The principal com- petitors are the Phoenix Iron Company, Phoenixville, Penn- sylvania and the, Passaic Rolling Mill Company, of Paterson, 'Eevr Jersey.** This review of the industrial details *' of the control of the new company in mining, manufacturing, transportation, and markets, makes the statement of the advantages claimed, as given in the Iron Age, seem to be an under rather than an over statement; this paper says: "It is urged that many facilities cannot be duplicated at any price, and that the new consolida- tion ovra mineral properties, both as to fuel and ore, which give them enormous advantage as to cost of production. Very large sums will be saved in distributing finished and half- finished products; Pittsburg can furnish steel rails in the East, Chicago, in the West; Chicago mills will furnish steel billets and wire rods to the wire works; Lorain will furnish Cleveland ; Youngstown, Pennsylvania will deliver to the roll- ing mills in the valleys. It, with very few exceptions, owns the very best equipped plants, not alone in the United States but in the world. Not one, but many, can produce finished 83 Supp. Iron Age, Dec. 27, 1900, p. 8. 84 Iron Age, Feb'y 14, 1901. 85 Since the foregoing was written, the new company has absorbed the Shelby Steel Tube Co. (largest manufacturers of seamless tubing in the world, making from 100,000,000 to 125,000,000 feet of tubing yearly, mainly for bicycles), 89 Age of Steel, June 29, 1901, pp. 15-16. The Beth- lehem Steel Co., seems also to have passed into the control (by stock ownership by Mr. Schwab) of the new company, although the exact facts are known to only a few persons; meetings called to assemble, Aug. 15 and 16, may make clear where the management is. The Conemaugh Steel Co. was incorporated July 6, 1901, with ?50,000,000 capital stock to take over the control of the Cambria Co.; The Penn- sylvania Steel Co. have largely increased their ore property, and have passed into the control of the Penn. R. R. Co., but will be friendly to the U. S. Steel Corp. There seems to be a "friendly understanding" between the Bethlehem, Lackawanna, Cambria, and Pennsylvania Steel and the U. S. Steel Corp. 89 Age of Steel, June 22, 29; July 6 and 13, 1901. [Since this note was written, it is certain that the Bethlehem Steel and Iron Companies have passed into Mr. Schwab's control.] 48 THE UNITED STATES STEEL CORPORATIOK. products at costs which, few outsiders can reach."^® On its manufacturing side it will be capable of making cheaper and better than any other company in the world, nearly everything in iron and steel that is made, from the smallest tack to the largest spike, from the hair wire to the steel rail, or engine shaft ; from the thinnest sheet to the heaviest armor plate ; from the smallest rod to the enormous bridge or the frame of an Eiffel tower. 2. Potential competition.*^ Reports state that a new steel company has been incorporated with $50,000,000 capital stock to construct a new steel plant to be located at the "Soo" in Michigan, which will compete with the United States Steel Corporation. It has been intimated that the Cleveland Cliffs Iron Company, whose mines are the largest independent ones left in the Lake Superior region, and for which the United States Steel Corporation had an option (which was not carried out), to purchase at $8,000,000, is interested in this proposed "Soo" company.** 'No better location could be found, and if carried through would perhaps be able to compete successfully with the United States Steel Corporation. It is said also that J. W. Gates, the former president of the American Steel and Wire Company, who was given the cold shoulder in the organization of the United States Steel Corporation, has obtained control of the Colorado Fuel and Iron Company, and intends to issue $10,000,000 in bonds for the enlargement of this plant, in order to make tin plates, wire nails, sheet steel, and other products made by the United States Steel Corporation.*" What will be developed in this direction is not yet apparent. 86 Iron Age, Peb'y 28, 1901. 87 See note 85, preceding page. 88 Detroit Free Press, April 20, 1901. so N. Y. Independent, May 23, 1901, p. 1217. Since the foregoing was written, tliese plans have been carried out. 89 Age of Steel, May 25, 1901, p. 26; Ibid., July 13, 1901, p. 17. It is also said that the Union Steel Co. has increased its holdings upon the MesabI range, and will soon complete an 800-ton per day rod and wire mill plant, and will THE UNITED STATES STEEL CORPORATION. 49 3. StrKMAKY OF IITDUSTEIAL DETAILS :'** (1) Property and employees: Mines, numie)* 41 Lands : Ore, containing, tons, 750,000,000 to 1,000,000,000 Coal, acres 108,000 Gas and oil,acres (with 130 oil wells) 98,000 Other, acres 610,000 Plants, (located in 18 states), number. 213 Including: Blast furnaces 78 Steel works 149 Finishing plants 6 Kod mills 25 Sheet mills 160 Tin plate mills 300 Coke ovens 20,503 Transportation : Railroad, miles 983 Pipe lines, miles 3,000 Vessels, lake 112 Vessels, capacity, annually, tons . . . 12,800,000 Employes, number 200,000 to 250,000 (2) Prodiicts: U.S. U.S. St. Corp. Millions. Per Cent. Iron Ore product, tons 25.0 13.0 52 Coke, tons 17.6 9.2 54 Pig iron, tons 13.8 ^^ 6.8 49 Steel, Bessemer and open hearth, tons 10.5 6.4 60 Steel rails, tons 2.4 1.6 67 Finished products, iron and steel, tons 21.0 11.4 60 soon build two 600-ton blast furnaces, and a 1,000-ton steel plant. 89 Age of Steel, June 22, 1901, p. 24. Also that the Lake Sup. Co. (Consol.) have completed plans to build at Sault Ste. Marie, Ontario, a mill of 2,500 tons daily capacity, subsidized by Canadian government. It owns ore lands with 30,000,000 tons in sight 89 Age of Steel, May 25, 1901, p. 33. 90 See Tables VI, VII, VIII, IX, infra. SI Engineering and Min. Journal's estimate for 1900, Is 13,789,242 gross tons; 1899, 13,620,703; 1898, 11,773,934; 1897, 9,652,680. N. Y. Ind., Jan'y 31, 1901, p. 288; N. Y. Ind., July 18, 1901, p. 1702. PF?0PG:RTY 0!=" !. fr^^ARY utvj ynr.v .?r"-- r-'-.-m oo,,^^ 50 THE UNITED STATES STEEL CORPORATION. U. 8.^ U. S. 8t. Corp. Millions. Per Cent. Wire rods, tons 1.9 1.2 63 Wire, tons 1.64 1.45 94 Wire nails, kegs 14.0 13.4 95 Tubes, pipes, etc., tons 1.2 1.13 94 Tin plates, boxes 9.4 9.0 95 Bridges, tons 0.7 0.6 85 Woven wire fence, miles 25,000. all Barbed wire all Copperas «, 66 THE UNITED STATES STEEL CORPORATION. 51 III. MANAGEMENT. In describing the. management of the new corporation, we shall consider : 1. The objects and powers of the corporation. 2. The machinery of management. 3. The method of man- agement. 4. The personnel of the management, 5. The probable policy. 1. As TO THE OBJECTS. The corporation's powers may be classed as, (1) those authorizing it to engage in certain lines of business,^ — ^which we will designate "business powers;" and (2) those authorizing it to control other corporations engaged in like businesses; these will designate "trust" or "monopolizing" powers. (1) Business powers. — The business powers may be sum- marized ®^ as authorizing it to engage in, (a) Manufacturing, — anything made, or partly made, of metals and wood. (b) Mining, — ^to acquire and work any mineral or timber land anywhere. (c) Trading, — dealing or trafficking in any minerals or lumber, or any article made or partly made thereof. (d) Building, — gonstructing any building, machine, ver hide, vessel, works or ways of any kind. (e.) Transportation, — ^build, own, sell, or operate any vehicle, vessel, machine, or road, railroad, canal, or other way, used in transportation, except in New Jersey. (i) Obtaining and using patents, etc., — ^to secure in any legal way, use, sell, and assign any patent, trade-mark, or trade name, invention, license, or process either in United States or elsewhere. (g) And, generally, "to engage in any other manufactur- 02 These po-wers stated In the language of the charter Itself are more impressive than they appear to be in this shorter form. See appendix. 52 THE UNITED STATES STEEL CORPORATION. ing, 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 etery kind, but not to engage in any business hereunder which shall require the exercise of the right of eminent domain within the State of Ne-W^ JetaefJ' (2) The trust powers may be summarized as giving authority : (a) To acquire by ftiifchasd, subscription, of otherwise, stocks, bonds, and other obligations of any corporation formed for or engaged in any of the lines of business above set forth ; or of any corporation holding stocks or bonds in such corpora- tions. (b) To hold for investment, or to use, sell, or dispose of any such stocks, etc. (c) To exercise, while owner, "all the rights, powers, and privileges of Ownership tbereof, and to exercise all voting power thereon." (d) To issue bonds and other obligations in payment ioT property acquired by it; mortgage or pledge any stock or bonds acquired ; and to guarantee the same. (e) Additional. — ^In addition to the above the power is Con- ferred to do any one or more of these things in any State, terri- tory, or foreign country ; to acquire ifeal and personal property anywhere therefor; ^'io make and perform contracts of any description ; and in carrying on its business, or furthering any of its objects to do any and all acts alid things, and to exercise any and all other powers which a co-partnership or natural jperson could do and esercise, knd whicb now or hereafter day be authorized by law.*' ^ 2. As TO THE MACHINEET OF MANAGEMENT. This, as is usual, includes the stockholders, directors, and general officers, and in addition, an executive and a finance committee are provided for. (1) Shareholders. — The minimum of power is left witH 1 Art. Ill, of the Charter. THE UNITED STATES STEEL CORPORATION. 53 the shareliolders ; they are to told annual meetings on the 3d Monday in February (or special meetings wheu called by ma- jority of JBoard of Directors), upon notice published once a week for four weeks in Jersey City, New York, Chicago, and Pittsbujcg papers ; but failure to so publish notice shall not affect the validity of such meeting or any action taken.^ One- third of the shares constitutes a quorum; each shareholder shall haye one vote, in person or by proxy, for each share standing registered in his name at the time of closing the trans- fer books,' which time shall be fixed by the board of directors or executive committee ;* voting for directors, and on demand of aay stockholder, upon any question, shall be by ballot;" "the qualificfttioa of voters, and the validity of proxies, and the ac^ qeptance or rejection of votes shall be decj;ded by three in- spectors," appointed by the directors;' besides the power to vote for directors, the shareholders have but little power except, that the charter provides the board of directors shall not mort- gage or pledge any of its real property, or any shares of the capital stock of any other corporation (unless as a purchase- money pledge or mortgage), without consent of the holders of two-thirds the stock, at a meeting, or upon filing such consent in writing^ As to by-laws, the charter says, "Subject always to by-l^ws, made by the stockholders, the board of directors may make by-laws, and from time to time, may alter, amend, or repeal any by-laws," * and the by-laws thenaselveis vest the full power to make or change by-laws at any time by a vote of two- thirds of the directors.^ The charter also says that "the board of directors from time to time shall determine whether and to what extent, and at what tinaes ^nd places, and under what conditions and regulations, the accounts and books of the cor- poration, or any of theni, shall be open to the inspection of the stockholders; and no stockholder shall have any right to in- spect any account or book or document of the corporation except 2 Art. I, By-laws, §§ 1 and 2. o By-laws, Art. 1, S 6. 3 By-laws, Art. I, §§ 3-5. ' Charter, Art. VH. * By-laws, Art. V, § 4. s Charter, Art. VIL B By-laws, Art. I, § 5. » By-laws, Art. VI, § 1. 54 THE UNITED STATES STEEL CORPORATION. as conferred by statute or authorized by the board of directors, or by a resolution of the stockholders."^" (2) Directors. — The directors are twenty-four in number, divided in three groups, elected for three years, but so arranged that the term of one-third of them shall expire every year; they are each required to hold at least one share of stock; regular meetings are to be held monthly, without notice, and special meetings upon call with one or two days' notice ; the majority constitutes a quorum, and any resolution requires an affirma- tive two-fifths vote ; no contract between the new company and any other corporation shall be affected by the fact that directors of this company are interested in or are directors of such other corporation, if at the meeting authorizing such contract there shall be a quorum present not so interested ; and any contract between a director and the corporation shall be valid if ap- proved by the affirmative vote of ten disinterested directors. They shall receive 10 cents per mile for traveling to such meet- ings and $20 per day for attendance.^^ They may hold meet- ings either in or out of New Jersey; may elect and remove officers ; may create and select from their number, by majority vote of all, an executive committee, and a finance committee; provide for inspecting books ; fix the working capital from time to time; declare dividends out of the surplus or net profits; and use any of the same in purchasing and retiring the shares of stock of the company itself,^ ^ and make or amend the by- laws.^' (3) Executive Committee. — The executive committee shall consist of six members in addition to the President of the Com- pany and the Chairman of the finance committee, who are ex- officio members ; all are selected by the board of directors ; and "so far as possible each of the six elected members of the ex- ecutive committee shall be a person having, or having had per- sonal experience in the conduct of one or the other of the branches of manufacture or mining, or of transportation, in which the company is interested. This committee must report 10 Art. VII, Charter. 12 Art. VII, Charter. 11 By-laws, Art. II. is By-laws, Art III, §§ t and 2. THE UNITED STATES STEEL CORPORATION. 55 all of its actions to the board at every regular meeting ; it may fix its own rules of proceeding; an affirmative vote of a ma- jority of all shall be necessary to any action by it; members may receive compensation to be fixed by finance committee and approved by the board, and during the interval between board meetings it "shall possess and may exercise all the powers of the board of directors, in the management and direction of the manufacturing, mining, and transportation operations of the company, and of all other business and affairs" (except such as are assigned to the finance committee) ;^* during intervals be- tween meetings of the executive committee its chairman is vested with its powers.*' (4) Finance Committee. — The finance committee shall con- sist of four members selected in the same way, and the Presi- dent and Chairman of the executive committee as ex-officio members. So far as practicable, each of the four shall be a per- son of experience in matters of finance; this committee "shall have special and general charge and control of all financial affairs of the company," and have supervision over the general counsel, treasurer, auditor, and secretary ; in intervals between board meetings, it shall exercise. all the financial powers of the board, including purchase of property, and execution of legal instruments ; its chairman is clothed with its power between its meetings; subject to supervision by by-law provision or resolu- tion of the board, it shall fix all salaries, etc." *® The general officers provided for are a President, "one or more Vice-Presidents," a general counsel, a treasurer, a secre- tary, and an auditor, all to be elected by the board, and such other officers as it shall deem necessary. The board, by majority vote of all, may remove any officer or agent; the finance committee may suspend the counsel, treasurer, secretary or auditor, or remove any one in their de- partments ; and the executive committee can remove any of the other officers, agents, or employes not appointed by the board." (5) Officers. — The president shall have general charge of 1* By-laws, Art. Ill, §S 1 and 2. " By-laws. Art. Ill, § 3. 15 Ibid. " By-laws, Art. IV, § 1. 56 THE UNITED STATES STEEL COKPORATION. the business, includiHg manufactiiring, minmg, and ttanspot* tation, and sign all contracts, and certificates of stock.*® Tbe treasurer shall have custody of the funds, endorse lor <;ollection all instruments so requiring, «ign receipts, deposit funds as board shall direct; jointly with some one to be designated by the board, sign all checks of the compiEny; jointly with the president sign bills and notes, and certificates of stock; Tender an account of cash whenever finance committee or board requests ; keep full and accurate accounts of funds; and exhibit his books to any director upon request during business hours; give such bond as board fixes.*® The secretary shall keep minutes of all iueetinga df stock- holders, board, exeeutii^e, finance, or other committees ; give and serve all notices of meetings; together i^ilii the president sign contracts; affix the seal; have charge of stock and transfer books ; and exhibit them at any time during business hours to any director on request.'''' The auditor shall have general charge of the accounts of the company. The functions of other officers need no further es^ planation. (6) Voting stock held. — The trust power to 'vote stocks held in other corporations is thus provided for: — "Unless otherwise ordered by the board of directors or the finance committee, the chairman of the finance committee or the chaiwnan of the ex- ecutive committee shall have full power and authority in be- half of the company to attend and to act and to vote at any meeting of the stockholders of any corporation in which the company may hold stock and at any such meeting shall possess and may exercise any and all ri^ts and powers incident to the ownership of such stock and which, as the owner thereof, the company might have possessed and exercised if present. The board of directors or the finance committee, by resolution from time to time, may confer like power upon any other person or persons."** "Ibid., §2. 2oIMd.,.f7. "Art, IV, §5, By-laws. 21 Art IV, § 10, By^ws. THE UNITED STATES STEEL CORPORATION. 57 3. Method of managemeitt. (1) General plan. — "The plan is to have each of the mills or companies maintain a separate organization such as it has now, but over all of these mills will be one official who will have general charge and oversight of each of the branches. The policy will be directed from the general headquarters in 'New York and the plants will have to abide by the mandates of the superiors. There will also be a division of the territory among the mills absorbed with a compact agreement which would pre- vent price wars or a demoralization through the ambition of the local managers."*^ "The individual interests retain their identity, — in other words, the United States Steel Corporation will bear the same relation to the constituent concerns as does the Federal Steel Company to the Illinois Steel Company." "* President Gary of the Federal Steel Company, thus explained this relation to the Industrial Commission : "* — "Question : What. control and what power of direction has the Federal Steel over the several boards of directors of the companies forming the Federal Steel Company^ "Answer: It has no control whatever directly. It has the same control indirectly that any stockholder of any company has. If, for instance, you were the holder of all the stock or a majority of the capital stock of any corporation, you would ultimately have control of the company. If your directors were elected for a term, you could not get control until the term ex- pired, and if their action was not satisfactory to you, naturally w'hen the time of election came, you would place in position a power, a directory, that was satisfactory to y^ou, so that in- directly or ultimately, you would have control over all these constituent eompanies." * * * Q. "In other words, the preamble of your articles of incor- poration ought to have read something like this :" — ^"In order to form a more complete or better union of the interests of these 22 Age of Steel, April 13, 1901, p. 21. See also note, infra, p. 102. 23 Iron Age, Feb'y 28, 1901. 2< Report of Indus. Com. (Testimony), Vol. I. p. 994, et seq. 58 THE UNITED STATES STEEL CORPORATION. several companies, we hereby agree to form the Federal Steel Company. Would that cover about the requirement ?" "Answer : That is a very happy way of expressing the idea, at least. The Federal Steel Company * * I think, is in no sense a trustee. * * It is the abs61ute owner, and controls that stock just as much as you would if you, as an individual, owned it, no difference, no secret arrangement about it, no private understanding about it, no pool or any division in any way of business, business interests, or profits." * * "Q. You have direct control over the earnings of all these companies, have you not ? Ans. No, except in the same way, we have no control whatever." (2) Dividends: "Q. You declare the dividends? Ans. ISTo. They declare their own dividends. The Federal Steel Company gets its dividends on this stock just as you get dividends on your stock in the company. If the Illinois Steel Company has money which is available to pay dividends, the directory of that com- pany will declare dividends to the stockholders of the company, and the Federal Steel Company, being a stockholder, will get that dividend; and the same is true of the other companies." (3) Failure to obey. — "Q. Suppose one of these independ- ent companies refuses to obey any action of the Federal board of directors, what recourse have you? Ans. Not any, until next election. * * * Suppose you owned the majority of the capital stock of a corporation ; the presiding officer of this commission owns a minority. Now you get together at your annual election, and you elect Professor Jenks, Mr. Harris, and myself directors of that company. We are in absolute control of that company for a time, although we do not own more than one share of stock each. You own a majority of the company and you cannot do anything. We do as we please. You sit by, and at the end of the year you put in a directory that is satis- factory to you ; but it is not really a practical question, because Mr. Harris and Professor Jenks and myself have only one share, and if we are men of any sense or any honesty, we are not going to disregard the wishes that you and the presiding THE UNITED STATES STEEL CORPORATION. 59 oiBcer of this commission, who are real stockholders, express." These answers by Mr. Gary, now chairman of the executive committee of the new steel corporation, clearly and exactly ex- press the relation the new company will bear to its constitu- ent companies. 4. The peesonnel of the management : (1) Of the directorate. — ^As stated in the circular of J. P. Morgan & Co., of March 2, 1901, "the entire plan of organiza- tion and management of the United States Steel Corporation shall be determined by J. P. Morgan & Co." In the circular of April 8, the personnel of the management was set forth as fol- lows : — ^Directors for three years : — J. P. Morgan, J. D. Rocke- feller, H. H. Eogers, C. M. Schwab, E. H. Gary, Eobert Bacon, E. C. Converse, Percival Roberts, — five of these eight, aside from Mr. Morgan, being those that were, or had been, closely associated with him, in the Federal Steel, — (Rogers, Gary, Bacon) ; — ^in IsTational Tube, — (Bacon and Converse) ; — or American Bridge, — (Roberts and Bacon), Mr. Rockefeller is president of the Standard Oil Company, and represents the Lake Superior Consolidated Mines' interest. Mr, Schwab is from the Carnegie Company. Those selected for two years were, F. H, Peabody ; Charles Steele, and N", B. Ream (of the Federal Steel) ; P. A. B. Widener and Wm. Edenbom (of the American Steel and Wire) ; Jas. H. Reed, and H. C, Frick (of the Carnegie) ; and W, H, Moore, a director of the National Steel, American Steel Hoop, American Tin Plate, and American Sheet Steel Companies. Those selected for one year are Marshall Field andlfathaniel Thayer of the Federal Steel; A. S. Hewitt of the American Bridge; J. D. Rockefeller, Jr., Standard Oil and Lake Superior Mines ; D. G. Reid, representing the Moore companies ; Alfred Clifford, of the American Steel and Wire ; and W. E. Dodge and C. A. Griscom, that do not seem to have been members of the directorate of either of the constituent com- panics. Mr. Griscom is connected with the Pennsylvania rail- road, and the International Navigation Company; Mr. Dodge is prominent in the copper industry ; and Mr. J. H. Reed is a partner of Mr. Knox, the present Attorney-General of the United 60 THE UNITED STATES STEEL CORPOEATION. States.. Of the wkole twenty-four, at least half, if not more, are those who have been closely associated with Mr. Morgan in other ventures, — ^Mr. Bacon and Mr. Steele being his partners in the banMng firm. (2) Of the Executive Committee. — The Executive Com- mittee are E. H. Gary, chairman, President of the Federal Steel; D. G. Eeid, President of American Tin Plate, and director and member of the executive committees of National Steel, American Steel Hoop, and American Sheet Steel Com- panies ; W. Edenborn, a director, and member of executive com- mittee of American Steel and Wire Company ; E. C. Converse, President of National Tube Company; Percival Roberts, President of the American Bridge Company; and Charles Steele, a member of the Morgan firm, and a director in the, Na- tional Tube Company, — this makes four of the six, close associ- ates of Mr, Morgan. (3) Of the Finance Committee. — The Finance Committee has Mr. Bacon, banking partner of Mr. Morgan for chairman; he is also a director in Federal Steel, National Tube, and American Bridge companies ; H. H. Rogers, and N. B. Ream, both directors in the Federal Steel Company ; P. A. B. Widener, a director of the American Steel and Wire. (4) Officers. — The president is C. M. Schwab, of the Carnegie Company; Chairman of Executive Committee, E. H. Gary, of the Federal Steel; Chairman of Finance Com- mittee, Robert Bacon, of the banking firm; General Counsel, F. L. Stetson, attorney iom the banking firm ; Treasurer, A. F. Luke, director and treasurer of the National Tube Company; Secretary, R. Trimble, and Auditor, Edw. Shearson. In all Knes and sources of power, either in the directorate, the ex- ecutive, or the finance eonmiittees, or officers, Mr. Morgan's close friends are in the majority. (5) Mr. Schwab, president.- — Some of these men deserve a fuller notice, for they have had interesting careers. The presi- dent, Mr, Schwab,^ is the youngest of any of them upon whom great responsibility is placed. He is a discovery of the Cai^ 1 The items as to Mr. Schwab, are from Iron Age, April 11, 1901; Age or Steel, April 13, 1901; and World's Work, May, 1901, THE UNITED STATES STEEL CORPORATION. 61 iiegie Company, and only thirty-Bine years old. He was born at Williamsbrtrg, Blair county, Pennsylvania, Pebrnary IS, 1862. When he wais ten years old his parents removed to Lor- etto. At fifteen years of age he was a freckled-faced hoy driv- ing a rickety old mail wagon from Loretto, Pennsylvania, to Cfessoii. St. Xavier's Catholic College was located at Loretto, and this he entered, and graduated at the age, of eighteen, in 1880. He had here "learned something of engineering, which he liked better than anything else they taught" As soon as he graduated, finding nothing to his likii^, and his parents being poor, he took the first thing at hand — a clerkship in a country grocery store at Braddoek, Pennsylvania, at $2,50 per week. One day Cs^ain Jones, sxtperintendent of the Edgar Thomp- son Steel Works, entered th© store, and Mr. Schwab a^ed him for a place. "Can you drive spikes ?" was a^ed. "I can drive anything," was the answer. "At a dollar a day?" "At any price," and so he began at $6 a week, and now, twenty years after, is reported to have a salary of from $800,000 to $1,000,- 000 per year as president of the greatest corporation in the world. In six months after he eommenced to drive spikes, he was chief of the engineering corps vnth which he had began work. From here he went to the drafting office^ where he made like rapid progress. He studied diemisftry at nights in an ira- ptovised laboratory in his own house, and tho^h he never had a technical education, he made himself master of every detail. In 1887 the Homestead Works needed a new superintendent, and Mr. Schwab took the place. Reconstruction here was needed, and he made the plant the largest in the world. In 1889 Cap- tain Jones, of the Edgar Thompson Works, was killed, and Mr. Schwab was sent there to take charge, and in 1892, after the strike, the Homestead Works wore also placed under his general superintendence. A "metal mixer" to reduce cost had been needed, and he and Mr, Jones had developed one. The rail mill must be enlarged, and Mr. Schwab gave it the largest capacity of any in the world. Armor plate was wanted by the Government and Mr. Schwab gave it to them. Mr. Carnegie said he had found a "young genius," and soon made him a partner, and in 63 THE UNITED STATES STEEL CORPORATION. 1897 he became, by preference of Mr. Carnegie, the president of the Carnegie Steel Company, and in 1900 of the reorganized New Jersey Carnegie Company, and in 1901 president of the United States Steel Corporation. Early every morning, as pres- ident of the Carnegie Company, he inspects some portions of the works, and at ten is in his office, where with a stenographer his mail is quickly disposed of— for he comprehends, decides and acts quickly. Conferences with heads of departments are then held, and other parts of the works are visited, once a week the whole great plant being once inspected by him. On Saturday the heads of each department lunch with him. Absolutely no busi- ness conversation is allowed at the meal. The conference be- gins afterward, every important Word of which is taken down by stenographers. On Monday the heads of departments hold like lunches, with their associates, where results and plans are made known. He is a common man among all the others — a fellow- associate with all, with no one under him. So far as he is master, it is only through greater knowledge, capacity and experience. Physically, he is short, full face, keen brown eyes, quick step, frank speech, courteous, but firm. He plays the violin and piano, and loves music — and has quietly given much in the way of charity. He masters details, decides, and acts promptly, assured of success. (6) Other members of Executive Committee.^ — Mr. Gary, chairman of the Executive Committee, was bom at Wheaton, Illinois, in 1846, and is a graduate of Wheaton public schools, "Wheaton College, and the Chicago Law School. For twenty- five years he practiced law in Chicago, after having been mayor of Wheaton and county judge for two years each. He was, while in practice, closely associated with those who built up the iron and steel interests of Illinois. He was prominent in organizing the Illinois Federal Steel. W. H. Moore, formerly of Chicago, now of New York, was bom in 1848, at Utica, New York — a graduate of Cortland Academy, and Amherst College ; afterward studied law in Wis- consin ; then opened an office on the Pacific Coast, but in 1872 1 These Items are from Iron Age, April 11. 1901. THE UNITED STATES STEEL CORPORATION. 63 opened an office in Chicago, making a specialty of corporation law. He has been one of the most successful promoters of the big corporations of recent years. He organized the National Biscuit Company, the American Tin Plate, the American Steel Hoop, the National Steel, and the American Sheet Steel. Mr. Beid and Mr. Luke, both, were bankers before being con- nected with the corporations — the Tin Plate and National Tube Companies — ^which they represent in the new corporation. Mr. Edenborn is a practical wire drawer, born in Prussia. Mr. Converse was practically educated as an apprentice in the manufacture of tubes, while his father was president of the original National Tube Company. Mr. Eoberts, a graduate of Haverf ord College, served on the Pennsylvania Geological Survey, is a civil and mining engineer, and became president of the American Bridge Company when it was formed. Nearly all of these men have widely diversified interests in mining, manufacturing and transportation companies, as well as in banks, in various parts of the country.* As has been said, "the character of the men in the directory is a prophecy of the success of the company. The members are men of rare strength in both money and experience. They have never been in the habit of connecting their names with unsuccessful concerns."* 5. Policy of the new company. (1) As to prices. — ^It is too soon to speak with any degree of certainty as to its policy. It has so commanding a position both from what it owns and the capital at its command, as to enable it to dictate prices in nearly every line it represents, if it so determines. The Keview of Eeviews says, editorially,* it disavows "all intention of increasing prices or aiming to gain a monopoly power to the disadvantage of consumers. On the con- trary, it seems to be the sincere opinion of men connected im- portantly with this great corporation that the consumer will be decidedly benefited in the end. This, of course, remains to be 1 These Items are from Iron Age, April 11, 1901. 2 Cosmopolitan, May, 1901, p. 32. s April, 1901, p. 387. 64 THE UNITED STATES STEEL CORPORATION. seen* Nobody supposes tliat the United States Steel Corpora- tion will decline to make as muck money as it reasonably can. It will be in a position, however, to study carefully the demands not only of this country, but of the whole world, and so to regulate supply and prices as to diminish the danger of those sharp fluctuations in iron and steel that have always been so closely associated with alternating periods of depression and expansion in business that have long been the bane of trade." It has been stated that they do not intend to close or abandon any of their manufacturing plants, but rather intend to con- tinue improvements started or contemplated by the constituent companies. Their fixed charges will be over $45,000,000 an- nually, and this requires a net profit of $4 per ton upon the output of finished products, and to pay four per cent upon the common stock in addition requires $2 per ton increase. As we have seen, they have already dictated the pi-ice of ore. It has also been reported that they demanded that the price of steel rails should be raised $2 per ton — from $26 to $28.. (2) As to labor.*' — ^The policy toward labor is also a mat- * Since the foregoing was ■written, a protracted strike has been In progress. Mr. Schwab's testimony before the Industrial Commission, in May, showed a distrust (if not hostility to the fundamental principle) of labor unions upon his part. When the time arrived in June for re- newal of the labor contracts In the Am. Sheet Steel Co.'s mills, that company was represented by Persifor Smith, of Pittsburg (asserted to be a bitter enemy of organized labor). The Amal. Assoc, of I. S. and T. Workers asked that the old scale of wages should be renewed for a year. This was readily agreed to; but a further demand (it is said) was made that the company should sign the scale for all the mills of the Sheet Steel Co., both union and non-union; this was refused and the strike was ordered July 15, in the mills of tbe Sheet Steel, Steel Hoop, and Tin Plate companies; the order affected about 75,000 men, about two-thirds being union men or dependent on them. It is stated that the union insisted that all the mills should be "unionized," and the union should have access to the mills for the purpose of persuading non-union men to Join. This was refused by the company for the rea- son (as reported) that if acceded to it would practically compel un- willing non-union men to join the union, or be persecuted by it; on the other hand it Is claimed by the union (as reported) that the company insists upon the men in many of the non-union mills signing contracts agreeing not to join the union. This does not seem to be denied, and THE UNITED STATES STEEL CORPORATION. 65 ter of speculation. Mr. Schwab undoubtedly, if left to him- self, would follow Mr. Carnegie's policy of fairness for honest service, and quick recognition of excellence. Nearly every one of those in responsible places in the Carnegie Company were those who had worked their way up to partnership with him by excellence of service. The policy of making a careful estimate of the cost of any product or machine or improvement was adopted, and that would be the price paid for it. If any work- man could save from that cost, he got the amount saved.'' He was encouraged to invest his savings in the stock of the com- pany. A similar policy has lately been adopted in the National Biscuit Company, with the knowledge and encouragement of many of the men active in formation and management of the Steel Corporation.® Although it has been said that "Mr. Schwab's recognized qualifications lie in his well-known friendliness toward organized labor, and his very loyal sym- pathy for the men who work in the mills, and for their wives and children,"^ it is known that since the great strike of 1892 the Carnegie policy has been against recognizing the labor organizations. He has, however, been through all their trials and hardships, and has their full respect and esteem.^ One of the companies absorbed had made an arbitration agreement with its workmen, and it is said the workmen in the iron and steel workers* organization favor such a plan.* The general policy of most of the iron and steel managers has been to do well by their employees, and reap their own rewards the union claims that the strike Is to establish the right of, and to pro- tect, those who choose to become members of the union, from annoy- ance or dismissal for joining. A basis of settlement is said to have been agreed upon by conference in New York, July 27, but the strike is not yet (Aug. 3) ended. It is said the cost to the company is ?210,- 000, and to the employees, $156,000, daily. See New York Independent, July 4, p. 1518; July 11, p. 1583; July 18, p. 1642; July 25, pp. 1703, 1711 (Mr. Shaffer's article), Aug. 1, p. 1767. Rev. of Rev., Aug., 1901, p. 146. B World's Work, April, 1901, p. 617. « Rev. of Rev., April. 1901, p. 390. T Ibid. 8 World's Work, April, 1901, p. 617. 9 Rev. of Rev., editorial, April, 1901, p. 391. 66 THE UNITED STATES STEEL CORPORATION. through increased skill of their workers, careful organization and perfect machinery.**' (3) As to the public generally. — It is reported that Mr. Morgan refused to personally confer with President Mitchell of the Mine "Workers' Association in regard to the conditions in the anthracite coal regions. It is said that Mr. Carnegie and Mr. Morgan declined (because they were ahout to go abroad) to testify before the Industrial Commission. Mr. Schwab has been a witness before the Commission within the last few days, and very frankly testified as to the industrial side of the new organization^ He disclaimed having accurate knowledge of the details of the financial side of the formation of the new com- pany. As to making reports to public authorities, Mr. Stetson, attorney for the new company, gave his views in his testimony** before the Industrial Commission as follows, when asked "how far should the laws of a state lend publicity to the whole opera- tions of every company chartered under it?" "I think that with reference to companies that are organized for public work,, like insurance companies and railway companiesj that should be done. I think that to put that obligation upon companies engaged in trade, who have rivals that do not have to make such publications, would be an unjust discrimination, and there is no reason for it whatever, if you are going to permit corpora- tions to engage in trade. That is a Avay of throttling the infant that has been bom at the request of the state,"— the theory being that every state that grants a corporate charter does it for the benefit of the state, and having invited it to come into existence, should give it a chance to live. Upon the other hand, Mr. Gary, chairman of the Executive Committee of the new company, says:** "I do not quite agree 10 Rev. of Rev., April, 1901, p. 391. 11 Rept. Indus. Com., Testimony, Yol. 1, p. 975. 12 Testimony, Indus. Com., Vol. 1, p. 996. [The new company has recently made public a statement of its monthly net earnings for the past six months, — ^thus following Mr. Gary's idea of giving to the public information usually -withheld. See p. 33, supra.1 THE UNITED STATES STEEL CORPOHATION. 67 ivith some of the gentlemen that the affairs of a large corpora- ;ion should he kept secret. I think the great henefit * * * jf the action of this Commission is in ascertaining fully all the facts which are so much in the public mind, and distributing the knowledge and information which they receive. That is what is needed — that is what the public should know. "There are always two sides to these great queadons. Very frequently the laboring man is abused, and very frequently the corporation is abused, and very frequently the public is abused, and very frequently the public laws abuse the corpora- tion. They ara sometimes too liberal in favor of corporations, and at other times they are too harsh against corporations. N'ow, when you bring all these people together, * * * and the people ascertain what the facts are, * * * so that everybody has an opportunity of knowing what they are doing, ■ — ^all classes of people are not so dishonest that they are not going to do the fair thing. * * *People should be brought together. * * * Laboring men and capital should be brought together, and we should all know all the facts, and on that evidence all of us will properly consider and decide these c[uestions." 68 THE UNITED STATES STEEL CORPORATION. IV. LEGALITY. 1. In general,. The legal details are very complex, involving the laws of eighteen different states, and also those of the United States. Many questions involved have received but little discussion hy legal writers, or in the decisions of the courts; and a great variety of views has emerged from such discussion as has taken place. It is impossible now for us to discuss these in detail — ■- only the general problems and their legal meaning can be pointed out. The points to which our attention will be directed are the following: Why was the new company incorporated in "New Jersey ? Is it a trust ? What, in general, is the extent of the power of the national and state governments over such institutions? Wha,t do the laws now authorize to be done? What further might, or ought to, be done ? 2. Why was it incoepokated in New Jeesey ? The reasons are based upon provisions of the New Jersey law relating mainly to five things, viz.: (1) initial cost; (2) uni- formity of policy; (3) taxation; (4) powers possible; (5) shareholders' and directors' liability. (1) Initial cost of incorporation.^^ — Confining ourselves to the nine principal states involved, the incorporation fee in New Jersey was $220,000, — 20 cents on each $1,000.; in Mich- igan or Minnesota, the fee would have been $550,000, or a little over; in Ohio, Indiana, Illinois, or Wisconsin, it would have been $l,100,000,or slightly more ; in New Yory*or Penn- sylvania, it would have been $1,375,000 — ^more than six times the New Jersey fee ; the Delaware fee would have been $165,- 13 See Vol. II, Rept. Indus. Com., p. 273, et seq. 14 Since the Steel Corporation was incorporated. New York has ma- terially modified her corporation law, reducing fees, lessening liability of directors, allowing voting trusts, etc. THE UNITED STATES STEEL CORPORATION. 69 000 — $55,000 less than in New Jersey, but the Delaware law is new, and its meaning not yet settled by the courts. (2) UniformUy of policy. — For more than fifty years — since 1846 — the laws of New Jersey in regard to corporations have been practically uniform — no sudden and radical changes, although some provisions have been made of a restrictive char- acter, they have been frequently enacted at the suggestion of corporations themselves. There has been no hostile policy, either among the people or in the decisions of the courts, and the provisions of the laws are easy to comply with; (or. easy to evade under friendly official inaction).*' The laws of nearly all the other states involved have been, either not nearly so uniform or not so liberal as those of New Jersey. (3) Taxation. — A New York banker is reported to have said at a banquet that the reasons why he took his corporations to New Jersey for organization was because New Jersey had a full treasury, and consequently will not be driven to squeeze his corporation to make up any deficiency. "The state of New York has a deficiency, and, its officials sit up at night to see how they can squeeze more money out of my corporation."** But this is not the whole reason. Ohio, Indiana, Illinois, Michigan, Wisconsin and Minnesota impose a general property tax upon corporations in such a way as to require considerable detail to be given as to their property and business, and this also involves the difficult question of valuation, by three or four boards (including sometimes, as someone has wittily said, several slabs) and several individuals, many of whom, as Mr. Dill says, would much rather see you about the taxes at your private office than at a board meeting. Pennsylvania taxes corporations 5 mills upon every dollar valuation of the corpo- rate property, including tangible and intangible, capital stock, franchise, good will, and earning capacity,, and requires elabo- rate and detailed reports of all matters necessary to determine these values. The report is required to be made to a public officer. New York taxes corporations one-fourth of a mill per 15 Testimony of J. B. Dill, before Indus. Com. Kept, Vol. 1, p. 1079. 18 Dills' testimony, Kept. Indus. Com., p. 1081. 70 THE UNITED STATES STEEL CORPORATION. dollar upon the par value of the authorized capital stock em- ployed in the state. This necessitates an investigation of the business done in and out of the state, and is a source of annoy- ance to the corporation. New Jersey, upon the other hand, has the very simple system of requiring a tax of one-tenth of one per cent on the par value of the paid-up capital stock outstanding, up to $3,000,000; one-twentieth of one pfer cent on the next $2,000,000, and after that one-two-hundredth of one per cent on the balance. This tax is a franchise tax, whether the business, or any of it, is done in New Jersey or not. The United States Steel Corporation's annual state tax in New Jersey will be (if all the stock is issued) $55,250; and it could be no more if all its business was done in New Jersey. If all of its capital was employed in New York the annual state tax would be $275,000, and if it was located in Pennsyl- vania, and if its property was valued at the face value of its stock, its tax would be $5,500,000 annually. There, however, would be no local property tax in addition, as there would be in addition to the state tax, as above given^ in New Jersey and New York. (4) Powers available. — ^In the states outside of New Jer- sey, Delaware and perhaps West Virginia, the states do not allow any corporate powers to a corporation, except such as are expressly given, or necessarily implied from those given, in the general law, to be obtained by inserting them in the articles of incorporation. The New Jersey law is just the reverse of this — any power that the corporators wish may be obtained by inserting it in the articles of incorporation, unless it is ex- pressly or impliedly forbidden by the general law. In other Avords, the New Jersey law enables three private persons, seeking their own interests, to legislate into existence — to create — any corporate powers they please, and confer the same upon themselves, unless there is something in the law forbidding the exercise of such powers — and very few things are in fact forbidden by the New Jersey law. The provision reJads : "The certificate of incorporation may also contain any provision which the incorporation may choose to insert * * * creat- THE UNITED STATES STEEL CORPORATION. 71 ing * * * the powers of the corporation, the directors and the stockholders, ^ * * not inconsistent with this act."^^ The United States Steel Corporation proposes to en- gage in miningi manufachiring, transportation, trading, as well as owning the stock of, and controlling other corporations. In Pennsylvania, Ohio and Illinois, and probably in New York, Indiana, Michigan, Wisconsin and Minnesota, although cor- porations can be formed for most of these purposes, not more than two of these purposes can be joined. In Illinois one cor- poration cannot acquire the stock of other corporations (except a manufacturing company in a railroad to its own works), so such a corporation as the steel corporation could not be organ* ized ther^ with these powers. So in Pennsylvania, a foreign corporation cannot own more than 100 acres of land, and in Wisconsin not more than 320 acres, and since it was necessary to control land in these, states^ it was necessary to organize in some state allowing the ownership of shares of stock in a Pennsylvania or Wisconsin company which could own the necessary land in those states, and also allow engaging in more than one line of business- , Michigan and Minnesota having a 30-year, Indiana a 50-year, and Illinois a 99-year limit to corporate life (unless renewed) would be excluded for these reasons. There is no limit, of indebtedness in proportion to the capital stock in the 'New Jersey law, as there is in New York. From these considerations it seems that New. Jersey is the only one of the nine states named where a corporation could be organized with the requisite powers- — all of these pow- ers and an unlimited duration being allowed in that state. (5) Shareholders' and directors' liability.— In New Jersey there is no shareholders' liability other than the common law liability for unpaid subscriptions, or a return of any distribu- tion of the corporate capital, upon failure of the corporation and its inability to pay its debts. In New_ York by statute there is an individual and joint liability of all shareholders to the amount of their shares, -in favor of the corporate creditors, in case of insolvency, until all shares are fully paid. For ex- iT Sec. 8, of the N. J. Act, 1896, as amended 1898. ■rS THE UNITED STATES STEEL CORPORATION. 'ample: If A has not paid up, and B has, B can be held by creditors for A's delinquency. In New York, Pennsylvania, Indiana, Michigan and Wisconsin there is a statutory individual liability for debts due to laborers, over or in addition to, the common law liability; and in Ohio aiid Minnesota there is a double shareholders' liability ; in Illinois only the common law liability exists. The directors are made individually liable for any amount of dividends which they have paid out of the capital of the com- pany when there are no profits out of which to make payment, in New Jersey, New York, Illinois, Michigan (if corporation is insolvent), Wisconsin and Minnesota. Such performance is a misdemeanor in New York, and subjects the offender to a stiff penalty. In New York and Illinois the directors are made individually liable if they borrow money without security in excess of the capital stock. In New Jersey they are made liable for debts, for failure to file certain reports as to payment or reduction of stock; but these provisions are very easy to comply with. In New York there is an elaborate list of duties imposed upon directors in regard to management and filing re- ports, which, if neglected, subjects the directors to a liability for the corporate debts, in addition to a fine or imprisonment. If they give any preference to any creditors they also become individually liable. In Illinois, for false reports, they become liable to the extent of the damage resulting, and in New York and Minnesota they becoine liable for the debts, and subject to severe penalties, or imprisonment. In New Jersey if an officer makes a false return of the amount of capital stock to the board of assessors he is guilty of perjury. (6) Special powers. — ^In New Jersey the power to create corporate powers allows the directors to be clothed with all sorts of authority, that those who organized the corporation wish to confer upon them. We have already seen how the whole organization of the United States Steel Corporation was left in the hands of, and determined by, Mr. Morgan and his advisers. Mr. F. L. Stetson is general counsel of the new THE UNITED STATES STEEL CORPORATION. 73 corporation, and he seems to have, according to his testimony* before the Industrial Commission, two or three special theories, which are provided for in the organization of this company. These are (a) that the directors should be allowed to increase their number when they wish to do so ; (b) ought to have the power to prevent shareholders from inspecting boots, except by their permission ; and (c) be allowed to purchase and retire the shares of the corporation itself. The provision as to in- spection of books has already been given. The charter provides that the number of directors may be increased as may be pro- vided by the by-laws,* and the by-laws provide that the number may be altered by the alteration of the by-laws,® and that the directors may alter the by-laws.* The charter also provides that the directors may, in their discretion, use the svirplus funds in purchasing and retiring the stock of the company.*. In this way, by these provisions, the directors become the closest of close corporations — or perhaps may become the whole corporation without any outstanding stock, except qualifying director's shares. Mr. Stetson's theory is that nothing in the way of organizing a corporation is undue or unfair if assented to, and also that the directors as a rule own a large majority of the stock of corporations which they control.* But this view seems to be incorrect according to the investigations of the Industrial Commission.'' 3. Is IT AN ILLEGAL TETTST ? This depends upon two things, (1) its substance and (2) its form. (1) As to substance. — A recent definition of a trust is "any combination, whether of producers or vendors of a commodity, for the purpose of controlling prices and suppressing competi- tion. All contracts, agreements and schemes, whereby those 1 Rept. Indus. Com., p. 971, et seq. » By-Laws, Art. II. a Charter, Art. VIL * By-laws, Art. VL li Charter, Art. VII. Testimony, Indus. Com., Vol. I, pp. 972-4. 7 Bulletin of Labor, July, 1900, p. 668. ^i THE- UNITED STATES STEEL CORPORATION. who are competitors combine to regulate prices, are 'trusts'."® A somewhat fuller definition is the one given by Mr. S. 0. T. Dodd, the attorney for the Standard Oil Company (and if any- body ought to know from experience, he should). He says it "embraces every act, agreement or combination of persons or capital believed to be done, made or formed with the intent, effect, power, or tendency to monopolize business, restrain or interfere with competitive tradcj or to fix, influence, or increase the price of commodities."* It will be noted that neither of these definitions says anything as to form. So far as the form is concerned, that is immaterial. It is the purpose and tendency that are emphasized. It is not necessary that prices be actually increased, or that competition in fact is prevented. It is the purpose and the power that are the essential elements. "The test is whether the contract or combination in its apparent purpose and natural consequence places such restriction upon competition as tends to create a monopoly."*" From the re- view we have taken of the industrial side of the United States Steel Corporation, and waiving all questions of form, it is rea- sonably certain that it is a combination made with the intent^ effect, power and tendency to restrain competition in the iron and steel business. (2) Form: (a) In general. — ^Does the form of organization — ^the cor- porate form — ^prevent it from being illegal ? As we have just said, the form is not made part of the approved definitions, and by the decisions of many of the courts it is held that the form will be looked through and the substance considered. And al- though the form is corporate, and apparently legal, that this will not purge the illegality of the purpose. In Illinois, where corporations can be formed for any lawful purpose, it was held that a gas company, formed for manufacturing gas and acquir- 8 Note 74, Am. St. R., 236. "Harv. L. R. (Oct., 1893), p. 157. 10 Note 74 Am. St. R. 240; Addyston Pipe Co. Vi U. S., 175 U. S. 211, 2 Indus. Com. R. 41; Texas Oil Co. v. Adoue, 83 Tex. 650, 29 Am. St. R. 690; Fishburn v. Chicago, 171 111. 338, 63 Am. St. R. 236. THE UNITED STATES STEEL CORPORATION. 7S ing the shares and property of other gas companies, was illegal, when the shares were, acquired for the purpose of GoatroUing these other companies, in order to prevent competition, and cre- ate a monopoly in the business — and this, too, when the express power to acquire such shares was contained in the articles of incorporation.^^ Substantially the same view has been taken in several of the states,'^ ^ and by the Supreme Court of the United States, which says "it is not within the general powers of a corporation to purchase the stock of corporations for the purpose of controlling their management, unless express per- mission be given them so to do."** There are, however, de- cisions somewhat at variance with this view, by strong courts,** and ^eyv Jersey has hold that when the state legislation allows a corporation to exercise a certain power the courts cannot say that a combination resulting therefrom is illegal The United States Steel Corporiation is expressly given the power to acquire and hold shares of stock in other corporations, and vote upon them as any other owner is. It is, therefore, undoubtedly legal in all particulars, in New Jersey, and would be so declared by the courts of that. state, and of some of the other states having a like policy. But we must remember that "every power, which a corporation exercises in another 11 People v. Chicago Gas Trust, 130 111. 268, 2 Indus. Com. R. 94. 12 Richardson v. Buhl, 77 Mich. 632, 27 Am. & Eng. C. C. 256, 2 Indus. Com. R. 133; Western Wooden ware Assoc, v. Starkey, 84 Mich. 76, 11 L. R. A. 503, 22 Am. St. R. 686; Distilling and Cattle Feeding Go. v. People, 156 111. 188, 47 Am. St. R. 200; State v. Nebraska Distilling Co., 29 Neb. 700, 29 Am. & Eng. C. C. 656; People v. Milk Ex- change, 145 N. Y. 267, 2 Indus. Com. R. 191; Harding v. Am. Glucose Co., 182 111. 551, 74 Am. St. R. 189; American Handle Co. v. Standard Handle Co. CTenn.), 59 S. W. 709; People v. Nussbaum, 67 N. Y. S. 492; Trust Co. v. State, 109 Ga. 736. 48 L. R. A. 520; National Lead Co. v. Grote Paint Stove Co., 80 Mo. App. 247; State v. Portland Nat. Gas Co., 153 Ind. 483, 74 Am. St. R. 314. 13 De La Vergne Ref rig. Co. v. German Ins., 175 U. S. 40. i*Oakdale Mfg. Co. v. Garst, 18 R. I. 484, 49 Am. St. R. 784, 2 Indus. Com. R. 210; Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 78 Am. St. R. 612; Anchor, etc., Co. v. Hawkes; 171 Mass. 101, 68 Am. St. R. 403; Gloucester Glue Co. v. Russian Cement Co., 154 Mass. 92, 26 Am. St. R. 214, 2 Indus. Com. R. 125. 15 Trenton Potteries Co. v. Oliphant, 58 N. J.Eq. 507, 78 Am. St. R. 612. 76 THE UNITED STATES STEEL CORPORATION. state, depends for its validity upon the laws of the sovereignty in which it is exercised,"^" and "subject to the laws and Consti- tution of the United States, full power and control over its terri- tories, its citizens, and its business belong to the state. "^^ In order to get a better view as to what is likely to be held in other states having a different policy, it is necessary to go a little further into the organization and purpose of the new corpora- tion, and compare these with the form of trust organization — like the Sugar and Standard Oil trusts — ^that have been declared illegal.*^ By placing these in parallel columns, the similarity is apparent and striking: (b) Comparison with the Standard Oil Trust: 10 UlflTED STATES STEEL COEPO- STAlfDAKD OIL.l» EATION.^« 1. There are in existence, 1. There are in existence, in various states of the United in various states of the United States, X, y, Z, etc., corpora- States, X, Y, Z, etc., corpora- tions, engaged in producing tions, engaged in mining, man- refining, transporting, and ufacturing, transporting and marketing petroleum, etc., marketing iron, etc., compet- competing to a large extent ing to a large extent with one ■with one another. another. 2. A, B, C, D, E, etc., 2. A, B, C, D, E, etc., shareholders and officers in shareholders and officers in X, 'Y, Z, etc., companies, pro- X, Y, Z, etc., companies, pro- pose and agree to form, or pose and agree to form, or have formed, a trust for the have formed, a corporation purpose of controlling, under for the purpose of controlling, one policy of management, by under one policy of manage- means of trustees of the trust, ment, by means of directors all of these X, Y, Z, etc., com- of the corporation, all of these peting companies. X, Y, Z, etc., competing com- panies. 18 Bank of Augusta v. Earle, 13 Pet. (U. S.) 519. IT Doyle V. Insurance Co., 94 U. S. 535. 3 8 People V. N. Riv. Sugar Ref. Co., 121 N. Y. 582, 18 Am. St. R. 843; State V. Standard Oil Co., 49 0. S. 137, 34 Am. St. R. 541. 19 See Deed of Trust. 49 0. S. 137, 34 Am. St. R. 541; Rept Indus. Com., Vol. I, p. 1221, et seq., and Appendix, infra, p. 177. 20 See references given in preceding pages, where these powers have been given. Also, Charter and Bylaws, infra. Appendix, pp. 132, 13S. THE UNITED STATES STEEL CORPORATION. n 3. In order to do this A, B, C, D, E, etc. (being share- holders and officers in X, Y, Z, etc., companies), but acting ing as individuals under their common law power to con- tract, execute a deed of trvLst to organize a trust, to be called "The Standard Oil Trust," to be composed of those persons who shall become members ac- cording to the terms of the deed of trust, and to be man- aged by T, U, etc. (nine per- sons named in the deed), as trustees, who should after- ward be selected by the mem- bers in the way provided in the deed of trust. 4, The deed of trust di- rected T, U, etc., trustees, to provide trv^t certificates say- ing: "This is to certify that B is entitled to . . shares in the equity to the property held by the trustees of the Standard Oil Trust, transferable only on the books of said trustees on surrender of this certificate. This certificate is issued upon condition that the holder or any transferee thereof shall take it subject to all the pro- visions of the agreement creat- ing said trust, and of the by- 3. In order to do this A, B, C, D, E, etc. (being share- holders and officers in X, Y, Z, etc., companies), but acting as individuals, direct a, b, c, their dummy representatives, under their statutory power in New Jersey, to execute "a cer- tificate of incorporation," to organize a corporation to be called the "United States Steel Corporation," to be com- posed of those who should be- come members according to the terms of the certificate of incorporation, and to be man- aged by T, U, etc, (24 per- sons named, or to be named, by J. P. Morgan & Co., as agents of A, B, C, etc.,) as di- rectors, who should afterwards be selected by the members in the way provided in the cer- tificate of incorporation. 4. The certificate of incor- poration and the law under which it was executed, author- ized and directed the directors ai the United States Steel Cor- poration to provide certificates of stock, saying substantially : "This is to certify that B is entitled to . . shares of the capital stock of the United States Steel Corporation, transferable only on the books of said corporation, on sur- render of this certificate.,"^ and the law itself adds, under the circumstances, that the cer- 1 This Is the general form of the certificate of stock of any corpora- tion. I have seen no copy of the form used by the U. S. Steel Corp. 78 THE UNITED STATES STEEL. CORPORATION. laws adopted in pursuance of said agreement as fiiUy as if he had signed the said trust agreement."^ "The trustees shall prepare certificates which shall show the interest of each beneficiary in said trust, and deliver them to the persons properly entitled thereto." S. By the deed of the trust the trustees were authorized and directed to acquire, and all the shareholders were directed to deliver to the trustees and their successors, shares of stock of the X, Y, Z, etc., companies "the consideration for any stock delivered to said trustees shall be the delivery by said trustees to the persons entitled thereto, of trust certificates, equal at par value to the par value of the stocks of said com- panies so received by said trustees." The exc|^ange of all the certificates in X, Y, Z, etc., companies for trust cer- tificates was promptly com- pleted by causing new certifi- tificate is issued upon the con- dition that the holder or any transferee thereof takes it sub- ject to all the provisions of the certificate of incorporation, and by-laws of the United States Steel Corporation, as fully as if he had signed the certificate of incorporation: "The forms of the new bonds and of the indenture securing the same, and of the certifi- cates for the new preferred and common stock and the en- tire plan of organization and management of the United States Steel Corporation, shall be determined by J. P. Mor- gan & Co." 5. By the certificate of in- corporation the United States Steel Corporation was author- ized to acquire shares of stock in X, Y, Z, etc., companies, and by agreement with J. P. Morgan & Co., through them, it offered to the shareholders of X, Y, Z, etc., companies "to issue and deliver its pre- ferred stock, and its common stock and its five per cent gold bonds in consideration for stocks" of X, Y, Z, etc., com- panies, upon the basis of ex- change stated, viz.: for $100 of Federal Steel preferred, $110 of preferred United States Steel, etc., as above set forth. The exchange of cer- 2 This the way the Trust Certificate reads; see form given, Record of the Standard Oil Case in Ohio (the case recently decided), p. 330. See also Rice v. Rockefeller, 134 N. Y. 174, 30 Am. St. R. 658. THE UNITED "STATES STEEL CORPORATION. 79 cates of stock in X, Y, Z, etc., companies to. be issued to the trustees of the Standard Oil Trust, in the place of the old certificates surrendered and canceled. 6i Ey the deed of trust "it shall be the duty of said trus- tees to exercise general super- vision over the affairs of said'' X, Y, Z, etc., Standard Oil Companies, any portion of whose stock is held in said trust. "It shall be their duty as stockholders of said com- panies to elect as directors and officers thereof faithful and competent men. They' may elect themselves to such posi- tions when they see fit so to do, and shallhave the affairs of said companies managed and directed in the manner they deem most conducive to the best interests of the holders of said trust certificates." tificates of stock in X, Y, Z, etc., companies for certificates of stock in the United States Steel Corporation was prompt- ly completed, by deposit of over ninety-eight per cent of shares in sueh companies, with certain designated banks and trust companies, "with suit- able assignments and powers of attorney in blank," and the receipt therefor of transferable redeemable receipts, or certifi- cates of shares in the United States Steel Corporation. 6. By the certificate of in- corporation, the United States Steel Corporation is empow- ered "while owner of any such stock, bonds, or qther obliga- tions" of X, Y, Z, etc., com- panies, "to exercise all the rights, powers and privileges of ownership thereof, and ex- ercise any and all voting power thereon." The by-laws pro- vide that this power shall be exercised by the chairman of the finance committee, unless otherwise ordered by the board of directors. In this way as majority stockholder, the United States Steel Corpora- tion has the power and it is made its duty to exercise gen- eral supervision over the af- fairs of the X, Y, Z, etc., com- panies, to elect directors of said companies and to have the affairs of said companies man- aged and directed in the man- ner deemed most conducive to the best interests of the holders 80 THE UNITED STATES STEEL CORPORATION. 7. By the deed of trust the stocks of the various X, Y, Z, etc., companies, "held in trust by said trustees, shall not be sold, assigned or transferred by said trustees, or by the bene- ficiaries, or by both combined, so long as the trust endures." of the stock certificates of the United States Steel Corpora- tion. 7. By the certificate of incorporation, "unless author^ ized by votes given in persou or by proxy by stockholders holding at least two-thirds of the capital stock of the corpo- ration, vfhich is represented and voted upon in person or by proxy, at a meeting speci- ally called for that purpose or at an annual meeting, the board of directors shall not mortgage or pledge any shares of the capital stock of any other corporation." 8. By the deed of trust "trustees shall be elected by ballot by the owners of trust certificates or their proxies. jit all meetings the owners of the trust certificates who may be registered as such on the books of the trustees, may vote in person or by proxy, and shall have one vote for each and every share of trust cer- tificates standing in their names." 8. By the by-laws of the TJnited States Steel Corpora- tion "the business and the property of the company shall be managed and controlled by the board of directors." "At each meeting of the stockhold- ers every stockholder shall be entitled to vote in person, or by proxy appointed by instru- ment in writing, subscribed by such stockholder or his duly authorized attorney; and he shall have one vote for each share of stock standing regist- ered in his name at the time of closing the transfer books for said meeting." The votes for directors shall be by ballot. 9. The trust shall con- 9. The duration of the cor- tinue during the lives of the poration shall be perpetual. THE UNITED STATES STEEL CORPORATION, 81 survivors and survivor of the trustees in this agreement named, and for twenty-one years thereafter — ^unless dis- solved by agreement of parties, etc. The holding of the court by the official syllabus in the Stan- dard Oil Case^ is: "Where all, or a majority, of the stock- holders comprising a corporation, do an act which is designed to affect the property and business of the company, and which through the control their numbers give them over the selection and control of the corporate agencies, does affect the property and business of the company, in the same manner as if it had been a formal resolution of the board of directors ; and the act BO done is ultra vires of the corporation and against public policy, and was done by them in their individual capacity, for the purpose of concealing their real purpose and object, the act should be regarded as the act of the corporation, and to pre- vent the abuse of corporate power, may be challenged as such by the state in a proceeding in quo warranto." "An agreement by which a majority of the stockholders in several companies transfer to trustees who are required to hold the stock in trust for the transferers, and to exercise the power of controlling the affairs of the companies which the legal ownership of the majority of the stock confers, in such a man- ner as will be most conducive to the interests of all parties to the agreement, tends to establish a virtual monopoly of the busi- ness for which the companies were organized, and is therefore contrary to public policy and void."^ Substantially the same holding was made by the New York courts in the Sugar Trust cases.' The Steel Corporation was organized by persons that were shareholders or officers of the constituent companies, and by them, or as a result of their conference, clothed with the power to purchase shares of other companies. This express power to 1 State V. Standard Oil Co., 49 O. S. 137, 34 Am. St. R. 541. 2 49 O. S. 137, 34 Am. St. R. 541. 3 People V. N. Riv. Sugar Ref. Co., 121 N. Y. 582. 18 Am. St. R. 843. 82 THE UNITED STATES STEEL CORPORATION. purchase is no greater than the common law powers of T & TJ (natural persona) to accept a trust — ^both merely as a power are legaL The Steel Corporation makes a putlic offer to the shareholders of the Federal Steel, Ifational Steel, etc., com- panies to purchase upon the terms named, and for the purpose^ set forth, from them (not the companies), their shares of stock. This is legal also^ — ^but not more so than for the proposed trustees (either self-c6nstituted or selected) of the Standard Oil Trust, to offer to take the legal title to the shares, and hold it in trust for the shareholders of the constituent companies of the Stand- ard Oil Trust. The shareholders of the Federal Steel, Na- tional Steel, etc., companies accepted the terms of purchase made hy the United States Steel Corporation. The share- holders of th^ various oil companies accepted the offer of the trustees — and one is no more legal, or illegal, than the other. Any shareholder has the common law right to sell his shares or put them in trust, as he may choose. The United States Steel Corporation, in payment for the shares obtained from the share- holders of the Federal, National, etc., companies, paid therefor by issuing its own shares, carrying alottg with th6m th^ power to vote, and the usual incidents of stock ownership. This Was legal, because expressly authorized, bttt not more so than it is for a trustee at common law to accept a trust by giving a trust cer- tificate setting forth the particular points of the trust, and prom- ising to perform them for a lawful consideration. The share- holders of the United States Steel Corporation, by virtue of their ownership of shares have the right to vote the shares in the selec- tion of its directors, and, thereby, direct the general policy of that company. This is legal — ^but not more so ttian the power expressed in a trust certificate, that the real oWner shall select the trustee in case of a vacancy, and direct the general policy of performing the trust. All this is legal, in the latter case, aa well as the former. The United States Steel Corporation, be- cause it owns the stock of the Federal Steel, National, etc., com- panies, has the right to vote the shares for directors of those companies, and to the extent of its holding control the policy of such corporations. But this is no more lawful than it is for THE UNITED STATES STEEL CORPORATION. 83 A to put his shares in X company, in the hands of T as his trustee to vote the same as he shall direct. This is a valid com- mon law or statutory right. How, then, did it happen that the Standard Oil Trust was unlawful, when every single step taken in its formation was legal ? The reason was clear — that the pur- pose was to form a monopoly, and suppress competition; that th« trustees understood this, and that the shareholders did also, and that it was the same as any other contract for creating a monopoly, that 1S3 hmenforceable. But no statute then pro- vided for punishing either the shareholders or the trustees. Can the courts come to any other conclusion as to the United States Steel Corporation? It understands why it was formed — for the purpose of preventing competition. Those who sold their shares to it understood this also — ^they knew it was for the same purpose. There are therefore no innocent parties here any more than in the other case, and if either party was trying to enforce this contract ior the purchase of shares the courts certainly would Tie hound to hold them unenforceable if the question was properly raised.* HoWj then, does this case differ from the Standard Oil case ? The answer is — that it is in the remedy. In the sugar and oil cases the companies X, Y & Z had no express righd tb sell out their property and manage- ment to any person, or place it in tlie. iands of trustees other than those selected in the ordinary way, and the court held that although each shareholder had the imdouhted right to put his shares in trust or sell them outright, the concerted action of all the shareholders in placing their shares in the hands of others than real shareholders was just the same as if the corpor- ation itself had abdicated its own powers of self-management, and that this is a corporate siri, for which the state could take the corporate life of X, Y &; Z companies, and could enjoin the further carrying out of the trust.' In order to establish a corporate sin, the courts said much about the fiction of the corporate personality, but very little about the individual sins of the shareholders and trustees in * Richardson v. Buhl, 77 Mich. 632, 27 Am. & Eng. C. C. 256, 2 Indus. Com. R. 133. s 49 0. S. 137, S4 Am. St. R. 54L 84 THE UNITED STATES STEEL CORPORATION. attempting to create an illegal monopoly. This may have been because the remedy sought was against the corporations and not against the individuals. The Court of Appeals in New York took away the corporate life of the offending corporation whose shareholders put it in the sugar trust because it entered into an ultra vires contract of partnership, — a purely technical doctrine that appeals to no one but a lawyer. The decisions in the lower courts in this case, and of the Supreme Court of Ohio in the oil case, however, did not evade the real question in this technical way. It has, however, always seemed to me the courts could have reached the same result in a much more direct way by apply- ing some very simple doctrines of corporation law. These are : The franchise to be a corporation belongs to the corporate mem- bers, and not to the corporation;' every franchise is granted primarily upon the condition that it will be used to promote the public welfare, and not to invade it f for any abv,se of such franchise that injuriously affects the public, the state may take it away as for a condition broken ;* the creation of mon- opolies is against public policy, and all efforts to create such having the power and tendency to do so, menace the public welfare f hence when shareholders use their franchise to be a corporation to create a monopoly, they abuse such franchise and violate the condition upon which it is held ; for such abuse the state may take it away; and a suit for this purpose may be brought against the corporation in its corporate name, for it is the legal representative of the shareholders in the use or abuse of the franchise granted.^" eFietsam v. Hay, 122 111. 293, 3 Am. St. R. 492; Memphis, etc., R. R. Co. V. Commrs.. 112 U. S. 609. 7 Holt, J., in King v. Mayor, etc., 1 Show. 280; Higgins v. Downward, 8 Houst. (Del.), 227, 40 Am. St. R. 141; California v. Cent. Pac. R. R., 127 U. S. 1, 40; People v. Dashaway Assoc, 84 Cal. 114. 8 State V. Neb. Dist. Co., 29 Neb. 700; People v. Milk Exchange, 145 N. Y. 267, 45 Am. St. R. 609; Independent Med. Col. v. People, 182 111. 274; State v. Standard L. Assn., 38 O. S. 281. oDarcy v. AHein, 11 Coke, 84; People v. Gas Trust, 130 111. 268; State V. Gas Co., 153 Ind. 483. 10 People V. Rensselaer, etc., Co., 15 Wend. 113, 30 Am. Dec. 33; State v. Debenture Co.. 51 La. Ann. 1874. THE UNITED STATES STEEL CORPORATION. 85 If such had been the basis of the decisions, it would have been clear that the real offense was the agreement between the shareholders and the trustees, whereby the monopoly was created. The shareholders had the right to put their shares in trust, and the trustees to accept a trust, but neither had such rights for the purpose of creating a monopoly. (c) Power of the steel companies to sell and the new com- pany to purchase their stock. — But it will be said in the case of the United States Steel Corporation the corporate sin of abdicating the power of self-management by the constituent steel companies is not present, because all of them have ex- press authority to sell and dispose of all their shares at one time to any other corporation, which wishes to become a real shareholder, and therefore such a sale and purchase is sinless — whatever the purpose may he. Such a claim cannot be sus- tained. Even in the state that grants such power, if it is exer- cised for a purpose that is unlawful — i.e., to create a monopoly — its exercise will be, or ought to be, held unlawful. 'Nevr Jersey, where these corporations are created, has, apparently, refused to take this -viewj and has sustained such a power, though the purpose to create a monopoly seemed clear enough.^ ^ But other states having a different policy are not obliged, and are not likely, to follow this New Jersey view. The remedy applied in the Sugar case was to dissolve the offending corpor- ation — it being a corporation created in New York where the case arose.*^ No other state could have taken away the corporate life. In the Standard Oil case the corporations were enjoined from carrying out the trust agreement within the state.*^ This remedy is available in any state where the offending corpora- tion maybe doing business, and this remedy^^ is available against any one, trustee, shareholder, corporation, ov/ner or any one else, that is a party to the offense ; and, further, no state can confer any power, by whatever form it legalizes it, upon any group of persons, or any individual that will legally authorize " Trenton Potteries Co. v. Oliphant, 58 N. J. Eq. 507, 78 Am. St. R. 612. "121 N. Y. 582, 18 Am. St. R. 843. 13 49 0. S. 137, 34 Am. St. R. 541. 14 Harding v. Am. Glucose Co., 182 111. 551; State v. Sohlitz Brewing Co., 104 Tenn. 45, 59 S. W. 1033. State v. Buckeye Pipe Line Co., 61 O. S. 520; State V. Fireman's Ins. Co., Mo. — 52 S. W. 595; Waters-Pierce Oil Co. v. State, Tex. — 44 S. W. 936, 177 U. S. 28. 86 THE UNITED STATES STBEl, CORPORATION. it or him to do or continue doing in any state, what the laws of that state forbid — and the forms will be swept away, and the substance looked at. If these views are correct, it is not unlikely that in the states having a policy forbidding the cr^a^ tion of trusts and monopolies, the courts will hold it to be au illegal trust within even the strict meaning of that term. (d) Ownership of shares hy the new corporation. — It of course may be contended that its ownership, and not the mere control, will prevent it from being illegal, an,d plausible (but I think fallacious) argument can be made in support of that view. To put a case that has been suggested : "Suppose there are five manufacturing plants iu a single industry. The owner of one of them starts out as buyer to purchase the other plants so as to establish a monopoly in the industry. He has a right to pur- chase, and the owners of the other plants have an equaj right to sell. It is clear that if the purchase of the four plants is but one scheme to form a single combination, known to all the jjarties, and entered into for that purpose by them, the contraet is illegal as establishing a monopoly, and the combination formed is a trust and the agreement cannot be enforced. But if the purchase of each plant is a separate arrangement, unknown to any of the others, entered into honestly and in good faith, by the vendors, * * * and their effect is to create a vir- tual monopoly, * * * their validity cannot be attacked on the ground that their effect, taken toge&er, will result m the formation of a monopoly."** But this- latter is not the case of the TTnited States Steel Corporation, Its purpose is^ clear upon the face of it, — and not disavowed. But suppose it- was, — sup- pose the purpose to prevent competition existed alone in the minds of those who created it, and not those who sold shares to it. The statement above is correct only as to the innocent parties, — ^they only can enforce the contract ^ th& wrong doer could not do so, even if the other party is innocent. The court will require A to pay for a revolver he buys of B, even though he buys it to shoot C, if B is wholly innocent; but it will hardly require B to deliver the revolver to A after he has agreed to, 1* Note 74 Am. St R. 242; Carter-Crume Co. v. Peurrung, 86 Fed. R. 439. THK UNITED STATES STEEL CORPORATION. 87 when it is clear that A wants only for the purpose of murder- ing C So, too, when it is clear that A is about to use the revolver for such a purpose, the law does not inquire, before preventing such act by A, whether B had been innocent in selling it to him or not. It makes no difference whether corporation B innocently or wrongfully sells its property to corporation A, who proposes and proceeds to make an un- lawful use of it, as to the states's power to call A to account. It may be said, further, that there is a difference between pur- chasing property of a tangible kind, having a definite location and situs which subjects its owner to the jurisdiction of the state where it is located, so far as its management there is concerned, and owning mere intangible rights to vote shares, and thereby in effect control large property interests located anywhere, with- out the ordinary incidents of jurisdiction over property arising. It may be asked why does one person, or corporation, own shares in any corporation ? Is it merely as an investment ? That may be so to some extent, — ^but a iond secured by a mortgage is bet- ter and safer ; there is an additional and a main reason in the case of one business corporation owning shares in another of like kind, — and that is its power of control over the latter; that is why the United States Steel Corporation owns the shares of the constituent companies instead of their property ; if it owned all of their property or that of the sub companies, it would thereby be brought within the jurisdictionx)f all the states where such property was located, operated, or used. This brings us to the question of jurisdiction. 4. What aee the Ge]?eeal Powees of the iKTAXioiTAL AND State Goveenments ? (1.) General theory: A. Power of Congress. — Congress can regulate everything directly connected with the sale or transportation of goods that are sold to cross state lines. As said by Mr. Justice Peckham, in the Addyston Case, Congress "may enact such legislation as shall declare void and prohibit the performance of any contract 88 THE UNITED STATES STEEL CORPORATION. between individuals or corporations where the natural and direct effect of such a contract will be, when carried out, to directly and not as a mere incident to other and innocent purposes regu- late to any extent interstate commerce,"^' and the present Anti- Trust Act reaches such cases. But on the other hand Congress cannot regulate the maldng of goods at all, nor the sale of them except when sold to cross state lines ; all preceding that is in the exclusive jurisdiction of the states. A monopoly, created to make things, even though the necessary result of the monopoly of making is also a mo- nopoly of controlling and selling, and it is certain much of the selling will be across state lines, cannot be reached by the Na- tional arm.-** In other words, the National Government cannot prevent a New Jersey corporation from combining with a Mich- igan corporation, to mahe in either state, or elsewhere, a product of prime necessity which will be sold all over the United States. So, too, a corporation is the creature of the state that creates it ; it alone can take its life for violating the laws of its being ; no other state, nor the National Government can inflict the penalty of corporate death upon it.^'' Neither can the National Government prescribe terms or con- ditions upon which a corporation organized in one state may be allowed by that state to enter and do business in another, nor the terms and conditions upon which the latter may receive or exclude it, — unless the business done is interstate or foreign commerce. Neither can the National Government create, nor license, a corporation to operate within any state contrary to the wishes of that state, unless such corporation is a necessary or con- venient instrument of carrying out some one of the express pow- ers of the National Government- Such in general are the powers and limits of the National Government.^ ^ 15 U. S. V. Addyston Pipe Co., 175 TJ. S. 211, 2 Indus. Com. R. 41. 16 U. S. V. E. C. Knight Co., 156 U. S. 1, 2 Indus. Com. R. 39. IT State V. Curtis, 35 Conn. 374, 95 Am. Dec. 263. 18 Upon the general powers of the National Governitient see article by Prof. E. W. Huffcut, in Indus. Com. R., Vol. I, p. 1211, et seq. THE UNITED STATES STEEL CORPORATION. 89 (B) Power of the states. — ^What, then, can states do ? (1.) Domestic corporations. As to the regulation of their own corporations, — it is settled that under the reserved power to repeal or amend charters now contained in nearly every state constitution, they can mold or modify any domestic corporation as they may see fit, short of confiscating its property without due process of law; they can impose any limit as to the amount and kind of property a do- mestic corporation can acquire or hold, the amount of its stock, the method of paying for it, the method of its transfer, the indi- vidual liability of members, they deem desirable; so, too, can they provide that such corporation can do business only within the state, or only without it, if at all. (2.) Foreign corporations. As to corporations created in other states this involves two points, viz. : (a) The prevention of the foreign corporation from doing business within its territory ; and (b) the prevention of foreign corporations, or their members, from obtaining and exer- cising control of the domestic corporations. (a) Doing btisiness in the state. As to the first, it is settled that any state can regulate, even to excluding, with or without good reason, any corporation or- ganized anywhere else from entering and doing business within its territory, unless such corporation is organized by the ITa- tional Government for national purposes, or unless the business it is doing is interstate or foreign commerce.^* The difficulty here is not as to the power, but to determine what is doing busi- ness in a state; coming into a state and establishing an office to carry on regularly any part of the ordinary corporate busi- ness there is doing business within the state ; so, too, owning property within any state, and devoting it to the ordinary uses 10 Doyle v. Insurance Co., 94 U. S. 535. 90 THE UNITED STATES STEEL CORPORATION. of the corporation,^" is doing "business in the state, and subjects it to the state's control or exclusion. But on the other hand making a single purchase of goods or materials, or selling or contracting to sell in one state to be shipped to another state, or even invading such state by travel- ling salesmen, and selling therein, is not doing busine$s within the state, so as to bring it within its power to regulate or exclude. But all of these latter are "interstate or foreign commerce," and subject to regulation by the National Government Here, then, where the State's arm is too short, the National arnj can reach, and between the two hj concert of action they can span the difficulty. (%) Control j)f domestic T}y foreign corporation. But there remains to consider the power of the state to pre' vent the control of xiomestic corporations or their property by corporations formed in another state. Here is a point of great difficulty, yet unsolved, only partially touched by the courts, and deemed uncertain Jby lawyer and layman alike. Upon one side, and in the belief of many, it is thought that, as our government is now organized, both the State and National pow^r must fail, and confess its inability to grapple witt and sueceasfuUy solve it. He argument upon this side is as follows ; The National iconstitution guarantees a Michigan citizen the same civil rights in New Jersey liiat its ovra citizens have there; therefore, if stock in a New Jersey corporation can be bought and sold there, a citizen of Michigan can buy it ; tbe reverse is jtrue, i< e., a citizen of New Jersey can buy stock in a Hiehigan corporation. Hence, there is nothing to prevent the shareholders oi a Michigan corporation trading their shares to A, B, and C, for shares in a New Jersey corporation ; a»d if soRunyan v. Coster, 39 U. S. (14 Pet) 1?2; Carroll v. East St. I*., 67 III. 568, 16 Am. R. 632; tJ. S. Trust Co. v. Lee, 73 111. 142, 24 Am. R. 286. Wooden Ware Assoc, v. Starkey, 84 Mich. 76, 11 L. B. A. 503. See Croy v. Peterson, Wi Tenn. 525, 51 L. R. A. 254. Hol- bert v. St. L. K. C. & N. R. Co., 45 la. 23; Chapman v. Pittsburg & S. R. Co., 18 W. Va. 184; Isle Royal L. Corp. v. Osmun, 76 Mich. 162, Compare Com. v. N. Y. L. E. & W. R'y Co., 132 Pa. St. 591, 7 L. R. A. 634. THE UNITED STATES STEEL CORPORATION, 91 the members of one Michigan company can do this, those of any mimher of other Michigan companies can do the same. In this way A, B, and C may become the controllers of all the Michigan corporations of which they own the stock. The same thing could be done by purchasing property instead, and holding it in trust for the STew Jersey corporation, '^o state can prevent this, for these are rights which under the XIV Amendment the states cannot deny. This is the bulwark behind which mogt of the trusts are, or soon will be, entrenched. It is said no legal rem- edy can reach and dislodge them, except an amendment to the United States Constitution, giving Copgresg power to pass uni- form laws regulating monopolies throughout the United States. Such is the outline of the argument suggested, and although it has great force, yet it is believed to be fallacious and can and wiU^ when a case directly involving it arises, be satisfactorily and completely answered by the Supreme Court of the United States, which alone can finally pass upon it. I may perhaps be permitted to suggest what to my mind is, and will be used as, an outliae of the answer. It is this : If Michigan can say to Corporation A and Corporation B, within its territory, that they shall not buy or sell their stock or property, in such away as to create, or for the purpose of creating, a monopoly within the state, as it undoubte.dly can, it can also say to domestic Corpora- tion A, that it shall not sell its stock or property to foreigi). Corporation B in such a way as to enable B to obtain a monop- oly; and it can decree such a sale void, punish or dissolve Corporation A for so selling, and enjoin Corporation B withip" the state from using the property in furtherance of the monopr oly. This much has been already held by the Illinois Supreme Court, in the Gfkicose Company Case.^ The next step has not yet been passed upon, viz., sales of shares of stock in a domestic corporation, outright to members of a foreign corporation ; but when it doea arise I believe the same holding will be made. Already in the Standard Oil and Sugar Trust Cases it has been held that what cannot be directly done by the corporations them- 1 Harding v. Am. Glucose Co., 182 111. 551, 74 Am. St. R. 183; Wooden Waye Assoc, v. StarUey, 84 Mich. 76, 11 L. R. A. 503. 92 THE UNITED STATES STEEL CORPORATION. selves cannot be indirectly accomplished by the members them- selves.^ But in addition to this, since the right to issue corporate stock at all is a franchise^ from the state creating the corpora- ,tion, the state can say whether any part of it can be owned by any person, either in or out of the state, and prescribe the condi- tions and terms upon which it may be held. If I am correct in this, then without Constitutional Amendments the State and Nation together can control the trusts so far as the power to do so is concerned ; and the present anti-trust acts are sufficient. (2) Undee Auti-Teust Acts. What are these ? The states of ITew York, Ohio, Indiana, Michigan, Wisconsin, Minnesota and the National Government have acts of this kind;* New Jersey and Pennsylvania have none. They are all quite similar. I shall call attention only to the Michigan and the National acts: (a) The Michigan act says:* A trust is a combination of capital, skill or arts by two or more persons, firms,, partnerships, corporations or associations of persons, or of any two or more of them for either, any or all of the following purposes : 1. To create or carry out restrictions in trade or commerce. 2. To limit or reduce the production, or increase or reduce the price of merchandise or any commodity. 3. To prevent competition in manufacturing, making, trans- portation, sale or purchase of merchandise, produce or any com- modity. 4. To fi^ at any standard or figure, whereby its price to the public or consumer shall be in any manner controlled or estab- lished, any article or commodity of merchandise, produce or commerce, intended for sale, barter, use, or consumption in this state. 5. It shall be unlawful for two or more persons, firms, part- 2 49 O. S. 137, 34 Am. St. R. 541; 121 N. Y. 582, 18 Am. St. R. 843. 3 Cooke V. Marshall, 191 Pa. St. 315; Railway Co. v. Allerton, 18 Wall. (U. S.) 233; Droltwich Salt Co. v. Curzon, L. R. 3 Exch. 35. 4 2 Rept. Indus. Com. oibid., p. 129; Comp. L. g 11,377, et seg.; Bingham v. Brands, 119 Mich. 255; Clark v. Needham (Mich.), 51 L, R. A. 785; McMuUen T, Hoffman, 174 U. S. 639. See Appendix, xvli, p. 189, 191. THE UNITED STATES STEEL CORPORATION. 93 nerships, corporations, or associations of persons, * * to make, enter into, execute, or carry out any contracts * * of any kind or description * * by which they shall agree to pool, combine or directly or indirectly unite any inter- ests that they may have connected with the sale or transportation of any such article or commodity, that its price might in any manner be affected. Every such trust * * is declared to be unlawful, against public policy, and void. The attorney general is directed to bring quo warranto pro- ceedings against any offending corporation organized in the state, for the forfeiture of its charter ; he shall also bring proper proceedings, either quo warranto or injunction, against any offending foreign corporation "exercising any of the powers, franchises or functions of a corporation in this state." Any violation of the law is declared to be a conspiracy against trade, and any person who may become engaged in any such conspiracy or take part therein, or aid or advise in its commis- sion, or who shall as principal, manager, director, agent, servant or employer, or in any other capacity knowingly carry out any of the stipulations, purposes, prices, rates, * * shall be punished by a fine of not less than $50 nor more than $5,000, or be imprisoned not less than six months nor more than one year, * * or both * *. In the indictment it shall be sufficient to state the purpose or effects of the trust or combination, and that the accused is a member of, acted with, or in pursuance of it, or aided or assisted in carrying out its purposes, without giving its name or description, or how, when and where it was created. Its char- acter may be established by proof of its general reputation; every, person, firm, partnership, corporation or association, who shall in any manner violate this act, after notice given by the attorney general or any prosecuting attorney, shall forfeit $50 per day, — ^to be recovered by suit by attorney general or prose- cuting attorney ; any contract violating this law shall be void and unenforceable. It shall not be lawful for any person, corpora- ation, etc., or any agent thereof, to issue or to own trust certifi- cates, or for any person, * * corporation, agent, officer or 94 THE UNITED STATES STEEL CORPORATION. employee, or the directors or stockholders of any corporation to enter into any combination, contract or agreement With any person, or corporation, or with any stockholder or director theteof, the purpose and effect of which * * shall be to place. the maiiagement or control of such combination, or the manufactured product thereof, in the hands of any trustee ot trustees with the intent to limit or fix the price or lessen the production, * * and any person or corporation so offending shall be guilty of a misdemeanor, with from $50 to $1,000 fine ; a person injured in his business can recover two-'fold damages,-" and suit may be brought in any county where toy agent may be found. (b) The National Act^ of 1890 created seven different crimes relating to interstate, foreign, or territorial trade or com^ merce, punishable by a penalty not exceeding $5,000, or one year's imprisonment, or both, by providing that every person who shall make (1) a contract in restraint of such trade, or (2) engage in a combination in form of a trust or otherwise, or (3) in a conspiracy in restraint of such trade, or (4) monopolize, ot (5) attempt to mon6polizi6, or (6) coinbine, or (Y) conspire to monopolize sUch tfade shall be guilty of a misdemeanor^ to be punished as stated. An injured party can sue for damages, and the combination bko. be enjoined at the Suit of the United States district attorneys. Thfe courts give the common l^w meanings to the terms Used, but the statute converts the things designated into crimes. From what has been said it seettls to be a reasonable inference that Somebody, somewhere, has violated several provisions of these acts, — ^the one or the other, or the acts of the other states where the persons who haVe formed this corporation lite, or do business. (3) AppLiCAtldN TO The N"ew CbBPOEAtldlr. Let us see what we can do in locating them and ascertaining,, so far as possible, the questions of jurisdiction. It Is necessary to remember (a) the powers and organization of the United States Steel Corporation in order to determine this. 1 2 Kept. Indus. Com., p. 29. 26 Stat at L. 209. THE UNITED STATES STEEL CORPORATION. 95 It i? a N"ew Jersey corporation -witli five classes of powers, — to engage in (1) mining, (2) manufacturing, (3) trans- portation, (4) trading, anywhere in the world, and (5) owning and controlling the shares of any corporation in the world. At present it seems to otvn mining property, purchased in its own name in Michigan, and possibly in Minnesota, and also possibly some vessels engaged in lake or ocean traffic. It owns substantially 98 per cent of the capital stock of ten other corporations; all of these are New Jersey corporations, each of which, so far as I have been able to examine their charters (including the Carnegie, the Federal Steel, the National Steel, the American Steel & Wire, and the American Tin Plate Com- panies), are clotlied with the power to engage in the same five things that the United States Steel Corporation is; each of these o^vn property located in various states, and also own a majority of the shares of stock of other corporations (usually organized under various state laws, with more restricted pow- ers), but which in turn own property and do business of a special and restricted kind under their own charters, but some of which are the holders of shares of stock in still other corporations, so that (b) a diagram of the sources and powers of management of three of the constituent companies of the United States Steel Corporation is as follows : (See next page.) pt 1^ W M tL ^ O ^ o •-i -a sag S. B 2 £ .* w -^ ^i^ ?| 2 o O B O 5" O «Z 7 B na >r CO m -H o m CO or over of the stock of the following ten companies: iili - gfl-s " ■ «■ o o all the shares of stock in ff og, "f OS Bg, I? »f §■£= S • B" B-B-M _^ 9 T -«=w Q P a*? » .So « oO P SW et- 9 S §9 I P m s !°S 0P' ^ I I J-^t — S S o |: SSg. g I?: SSS " Is « Sg. S o o. • . .g . S 3 B -^LE S n 5 I - 2 £.kBo o p 6 I JL o w^ Shi cs g.Q g s-; P B * d n I I 5 Q- 50; «■ ? P £-1 gs &; Owns &3g ^S"" Succeeded I?" Hi' e CO S CO _ O O D 2 a MO OD n )ri £•»,' 1^ Fb- bo » B B w to >s3 PB s ooP B Qoe» P STtj* I? "9 O V » >< ?i l§ , as eta S BM O K P » Sp «! o2 -1. ^B g-l ?l a- g? 3b p ao o e*S B" SS o ^B - 23 o 3g F o" S ^? § "3 p gg & B w ^ it m 3 m CO O m B B bB BO Is ill if Hi I KaPB-pB.OMP2.PQ o o B m f

, itHikbi its ferritarji, h^ an^ garaoiSi of wrci^ prefef^, in any i/ia^, if sKoM dedecm is imparvw^ to ff&e pu&tw tmtfare. WhsCt it hasr so (faelared & a; BjatEer of the positive law of the state; whsct Affiirltf be so decFared ir a iMtter ttf feliay, — ^wBfct we are not ^scisrfng, a "forefen corporsttcm, owning ail && stcBk Of ft (Wmestlc cbrjioratlto •vrhere- ststutar alia\ir Its stack ta Bet heiit by otHer' adipoiatifysiB/ does not thereby acquire or hcaak& real estate of the dbmestlc c&tpAi&tlon" so as to violate the Penn. Act of Aur; 2J6i IgSB^agatftst aeqiilrfag ot holi- ing real estate, "directly In 6ie cotgavaitif name of By or ihr&digh aajr trustee, or other device wbaSsoeVer, unless especially i^hOttzcd," under penalty of escheat Mttaugh, this seems to be i piece 6t judicial sophistry that orwruled the better view shortly bef&fe takeitt in Com, v. Nt YT L. E. & W., 114 Pa. St. 3*0, it ddes Bot lit t&Ht bo^ flict with the view expressed aboVe; tfie qtfestloii of Control in fixct, and not of title in the corporate nd;me, is InVoIvM^ it is fiUltiinltted that most courts can see: through such devie«» to e*aff6 tie W». THE tINITBD STATES STESL COKPDEATION. 101 Of course it may be contended that yoting stock Joj the United States Steel Corporation, at the office of the I'ed- eral Steel dorporation in New York City, electing the di- rectors fliere, and then one or more of the directors with authority to do so, proceeding to Chicago, and electing di- rectors there of the Illinois Steel Company, and these in turn at Chicago electing directors of the Elgin, Joliet & East- ern E. E., "who managie its property in that state, are in no sense doing "business by any of these corporations except the railroad company in that state ; perhaps all of that may be conceded ; yet if it can be established that through all this elaborate ma- chinery, legal in form, but designed to have, and in fact having, the effect of placing the control of the railroad in the hands of fbe "trust, — then tlie operation pf the road by parties so se- lected -certainly can be enjoined, and the parties so undertaking to operate it, that are in fact within the state, can be punished for so doing. But this particular railroad is an interstate rail- road, — ^notone wholly subject to the law of Illinois ; so far as it is interstate, or ratter, so far as it carries on interstate commerce, if it is managed by the agents of a trust, or so far at least as its interstate traffic is managed by the agents of a trust, it comes Tinder the ira1;iQnal Act. So f al* as the United States Steel Cor- poration hujs and sella ^oods of any kind that are to cross state lines it is then, so far as these transactions are concerned, be- yond &e jurisdiction of the states, and v/ithin the exclusive jurisdlc^on of ths Xaiional Grovemment. It is proposed by the Tiew corpomtion to leave the -constituent Companies in existence, and allow them to deal with the public and jsith one another in tlieir own names j the Illinois Steel Oompany (controlled by the Federal Sfeel Gompasiy) will sell Jts^roducts in its own name, — so will tlie Xorain, so will -tlie 'Carnegie, so will the Rational Steel ; there islsut little if lanj doubt that the Execu- tive C«fflmi4tfie, OT President Schwab, or the officers or sales agents SBl^cted by the United States Steel Corporation, will be reqidred, as a part of iheir duty, to see to it that so far as these various ^tots make the same products that would naturally cojiffi intojcompetition, thej will not bid against one another ia 102 THE UNITED STATES STESh CORPORATION. any way very effective in l&wering prices f they may keep tip the semblance of competition by putting, in sham bids, as in the Ad- dyston Pipe Case, — ^but even if this is done, the courts will be able to see through the matter^. The probabiKty is that there will be one general sales agent for- the products that would oth- erwise be competitive, and all orefors, from whatever source, and given to either constituent company, will be referred to this Bales agent before it is £lled. I£ such a scheme is adopted, it will be a direct "^interf ^ence with interstate commerce," withiu the decision of the Addyston 6ase. It p^haps may be said that the goods bougM and soM wiH be bought and sold by the constituent companira^ of caie another; this may b© true, but if it is, it will not bcj according to the theory of the new corpora- tion, a sale by itself to itself. Hence if the^ goods are to cross state lines, this fa-ansaction will be within the province of the Ifational Government also. But the corporation proposes to engage in transportation also, between states j this brings it within the jurisdiction of the National €bvemment, at least so far as those persons are concerned who actually carry on this business for it. {4) OtHEB SFGGESTEB EEMimiES. There is another remedy that is available, and could be made effective, but has not yet been applied. This is the. National power of taxation; this is not limited as th& interstate commerce pokier is limited, but- extends to all persons within the states ; any tax' by the Irrational Gfovemment would have to be of the indirect cfiaraefer, — ^for the apportionment rule of direct taxes « Since the foregoing was -written K is said, "In, keeping wltlr the recent decision of the management of the V. S. Steel Corp. to reduce the number of constituent companies, by merging: those whose pro- ductions are similar, and were formerly eoiBpetitlve, the Carnegie Steel Co. has leased the properties of the National Steel Co., and the. Am. Steel Hoop Co., and from July 1st, will operate the same and conduct the sales departments of those companies under tts own name. • • » The Carnegie Steel Co., through the combining of the sales offices aqd the placing of its own agents in general charge, now also directs the selling of the products of both Its own and the Illinois Steel Com- pany's plants, although all the business of the latter organization con- tinues to be done in Its own name." 8S_Age of Steel, June 29, 1901, p. l&. THE UNITED STATES STBEL CORPORATION. 103 would make it impossible to apply. Any person, natural or arti- ficial, who engages in any interstate or foreign commexeial hmi- ness certainly can be subjected to a National tax upon such business, under the general welfare clause of the National con- stitution, — ^to lay and collect taxes, duties, and imposts, to pay the debts and provide for the common defense and general wel- fare. As held in the case of Bank v. Fenno (8 Wall. 533), the National Government can practically tax a state corporatiou out of existence even in the very state that creates it. If so, it would seem to have as great power when such corporation is engaged in interstate commerce (which is a power or privilege derived from the National Government) as it has over a state bank that is authorized to issue bills and notes. Many other remedies suggested, including Kr. Bryan's (if I understand it correctly), either involve or require the National Constitution to be amended, in order to give Congress entire xjontrol. If it is possible to avoid this, I think it should be avoided, for such an amendment would seriously disturb the balance of power between the Nation and the States, and would be a tremfindous, untried, and unknown power in the National hands. It should be resorted to only when all others fail. StiJl other ways proposed are: (1) Punish discrimination; (2) Repeal the tariff; (3) Require corporations to make uniform prices to all, and (4) Publicity. As to punishing discrimination, this certainly would be effective but harsh and hard to apply. The last Interstate Commerce Commission report says : "Tjhegs is probably no one thing today which does so much to force out the small operator and build up trusts and monopolies as dis- crimination in freight rates." And "Men, reputable citizens in all other respects, are guilty of acts which, if the statute law was enforced, would subject them to fine and imprisonment" * * The difficulties in the way of securing legal evidence necessary to a conviction are such as to be in most cases insur- mountable." The Commission, justly I think, urges the legal- izing of railway associations and traffic agreements as the most promising plan of preventing discrimination. (2) Repeal the tariff. — The effect of the tariff is uncertain. 134 THE UNITED STATES STEEL CORPORATION.' (Jreat monopolies Rave been built lip without its help; others have been fostered and sustained by it. Since a protective tariff- is juatlffable^ only to promote the general tvelfare, it should be withheld or withdrawn whenever it can be used to subvert that end. (3) Reqidre corporations to make one price for all. — This is- the favorite remedy of Professor John B. Clark of Columbia Unwersity. Ifc-seems to me that it has not yet been given the consi^ration due it. I think it can be made fairly effective. It is objected that it could not be applied to individuals or part- nerships having no franchise from the state. This may be true (though I do not think so) ; but in any event the danger from these is not so great as from great combinations in corporate form. As- ta these, a state certainly can provide that those hold- ing its franchise, if they make a low price in one locality, either in or out of the state, they must make the same price to all, under penalty of forfeiture. So, too, the !N"ational Government probably can say to a corporation that if it sells at a certain price in one state it must not make a higher price upon like goods to go into another state, otherwise it may not engage in interstate or foreign commerce. If I am correct here, then the State and Kation together can preserve the permanent value of low prices established by large combinations, and at the same time preserve and make vastly more effective the constant menace of potential competition. (4) Publicity. — The one single remedy that all members of both the trust conferences would have agreed to, and the one advised by the Industrial Commission, is to adequatDly provide for publicity of the details of trust operations. I believe thor- oughly in the value of this. If a great searchlight could be thrown over and through the trusts, the evil they are doing or contemplating, if any, would remain undone, — or if none, the dread- (d danger would be gone. I have thus far in this hurried way considered the legal diffi- culties involved, and suggested, with reasons, such remedies as now seem possible. Present laws (if enforced) are in the main sufficient for- present purposes, except in the way of providing THE UNITED STATEIS STEEL CORPORATION. li)5 for publicity.. Methods for securing tnis in an adequate, elu- cient and contrnuous way should be vigorously pushed forward both by Kational and State governments; by the time results in this direction are obtained and made available, the courts will have made certain the power of the state, and demonstrated the de^rability or absurdity of the present anti-trust laws; and tiSese together will show whether destruction or regulation, froiq a business point of view, is most desirable. If the latter is found best, there will then remain for consideration the social question, — 4he effect upon individual effort, initiative, and welfare. Eor the fair solution of this, vastly more information than we now have, and much more careful study, are necessary. Is it not possible for the state to say to those who hold its franchises, granted to them for public reasons, that they must give those whose labor makes their wealth a share in its direction and creation, to such an extent as to preserve and develop their manhood ? It seems to me that the state owes it to all her citizens, to say to those who seek, and to whom are granted, her franchises, that the grantees must render a full and complete account of their stewardship ; that they must bear in mind that the public wel- fare is the absolute and unqualified condition of their tenure. Eemembering that the state itself exists for the common weal of all its citizens, and not for any part of them^ and therefore, that from him unto whom much is given, much shall be required, let us investigate the truth in soberness, and with malice toward none, but with charity for all, solve justly and fairly the indus- trial problem the niijeteenth century has bequeathed to us. TABLE I. Comparison ot Capitnlfzsilon of If. 8. various other things. Steel Corporation witli V nlted States St^eel Oorporation, to- tal autbortzed atocK and bonds, Wealth ot the United States, iiKX), estimated Wealth of the United States, 1650, estimated Total gold and silver production ot the world, 1493-18911 Total value ot manuts., fisheries, minerals, and farm products, U.S., 1900 Total value of manufactures, fish- eries, and minerals, U. 8., ISSO. . Ballroads,— mileage, ISSg " total stock and debt, 1830 " gross recoipts, 1899 net earnings, 1899 Besources of 3871 National Bankn, Sept. 6, 1900, Deposits in Savings Banks, 1899- 1900 Deposits in Savings Banks, 189?. . . . rarm FiMscti,— corn, farm value, 1900, wheat, " '■ rye, " " oaita, " barley, " buokwh't, " " potatoes, " Deo. 1, " Total Ot foregoing . . cotton, value 1899 wopl. " Jan. 1900. Total Imports and exports, U.S..1900 '• exports, U. B., 1900. " imports, U. S., 1900 Public debt. U. S., less cash in treas- ury Jan. 1,1901 Totol ;recelpts, U. S. (^ovetn't, 1900, ■^ ejtpeiises, " " 1900. Money in cltculatlon In U. 8., Apr. 1,1901 Money in circulte^on in D^ S., July 1, Goldand silver production of the world, 189^ Total expenditures, public schools of the U.S., 1899 Population of the United States, estimated, Aprll.1. 1901 Population of the world, estimated, 1890 Miles of silver dollars, edge toedge, in |l,4QtOOO,000 Miles nf silver dollar certl^cates, end to end. In $1^404,000^000 Miles of silver dollars, oneon top of another, in gl,4O4.000,0(« Oar loads of 20 tons each in $1,404,- 000,000 8 1,404,000,000 94.000,000,000 7,155,780.228 21,005,49l!,600 18.222.570.039 1.029,106.798 187,781 11,692,817.063 l,3;i6,(©8,3(0 447,7^1,014 5,048,100,CCO 2,449,547,885 1,524,844,500 7.'il,220,0»4 823,525.177 12,295,417 20«,669.233 24.075,271 5.341.413 90.811,167 1,415,937,712 834,847.868 105,352,377 2.244,424,2r.6 1,394,483,082 849.941,184 711,392,433 ee9,59u,431 690,068.871 2,187.243.580 1,380.361,649 622,794,000 197,881,603 77,427.000 1,487,600.000 32,043 163^23 2.218 2,064 Carroll D. Wright, Oent. Maga Jan., 1901. Carroll B. Wright, Cent. Mag., Jan., 1901. Stat. Abs.. 1900, p. 40. Carroll n. Wright, Oent. Mag., Jan., 1901. CarroU b. WrlEht, Oent. Mag., Jan., 1901. Stat. Abs.,19GU, p. 377. Stat. Aba., 1800, p. 377. Stat. Abs., 1900, p. 377. Stat. Abs.. 1900, p. 377. Stat. Abs., 1900, p. 47. Stat. Abs., 1900, p. 60. N. Y. Ind., Nov. 8, 1900. Stat. Abs., 1900, p. 3.'>6. Stat. Abs.. 190P. p. 357. Stat. Abs., 1900, p. 358. fcitat. Abs., 1900, p. 359. Stat. Abs., 1900, p. 360. Stat. Abs., 1900. p. 361. Btat. Abs., lOiO, p. 371. Stat. Abs., 1900, p. 367. Statist. Abstract, 1900, pp. 373. 427. Stat. Abs., 1900. p. 82. Stat. Abs., 1900, p. H2. Stat. Abs., 1900, p. 82. Stat. Abs., 1900, p.' 22. Stat. AbB., 1900, p. 27. Com. & Fin. Chr., Apr. 27,1901, Vol, 78. p. 805. Stat. Abs., 1900, p. 39. Stat. Abs., 1900, p. 40. Stat. Aba., 1903, p. 407. 106 I o n a < a i w E e a; 1 o e I OS- P4 I t. n a I o t; to ^Si-* S ^ B e (O ■« sa ^o oc 00 «S ft? tH (M r> 5\a -o • i^l 3^21; tigs Cktf?0 (aOjrlOM*-^ :9 Q a e3 N eo40 00 1> wi ^ S ^ U9 a SS CO e4i-( w ■*•»« to ■* t- s^ 0^2S^ »3 lOT I5& li " S u s >; 1 ft * ■ 3 81 I. oBoS ^1 if is 5 - «1S - a I J" li O a * ^ o a. S § o o H o s i^^ d" 73b< tr 73b< t* ^ 4a flj r fli « „ » o ■§ *! !» ^ t» S b fl oa o =^ as I>-*0 CO O t ^ s il 1 S S3S3S3 9 S 1 1 • X. 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S ■5 s b £ ^ E M s .?? 1 ii 03 o i S ■if n •IISOM; r^ '■ ■i«o 1^ *-l ■saBjj M c< •OK e« 04 ■sTii, +-" f-i • M •noTK ++ -'+ : •H •qoiK ++ + •III ■«*< M ; a& »-l « •pni + - : ei t-M M omo ^*H«rt ■; C»««OM n •BA-J4. •fr M : 1 ^ CO •■Bd g«J,« i «t.«g« § •PK M A ■lacl ^TH ^ ^ •fH M • tH AH 5 : a* '^ a •nnoo " ; « •SBCK n m 2 •oMimoi S'-SS 1 en s » 1 <3 1 s 9 i e i il <>4 2 §"5 si •««e i J * S ' 1 55 ■S2 ^ o e I' s ■go It II oS £a ♦■Oi no a*. 25 i° ^i ►>" fti §•5 |3 ^^ II oa 5^ so ss Sfl og og •20 & - ja - s8 on ^ P ^■■a og |S 5s a . So" -»& *S S3 "^ A •j so *5 U • ,- 3 in a I % a ta •sno} noinia 'spoa ■sno} Don •saxOq noirotn'nji •ON 'smta nii .^ IS •BU93I ttOJt •sacn nottijca'aijAi 'OH 'sltira499tig ■Oil 'Bllltn poH ■sno) nojiITin '^onpoid paqsioia 'sao? noji •sno? noniltn 'tsaifB : -.g : CtVH •sno» •ON 'SBOcn •oji ■snoi Qoint^ '*Jio5 •bN 'BttsAb Ssjob ■soo!> tzotttltl^ '^ib •oil '^atttife •OS •■josaod s^ti*!^ •4Q ■ • 't- s?i • • ••^ ■Si: S : i O40 tSvH net ■ • ■(»»-< • 5 <1 lis : : : ,:S2 :£Se^ foo S * 5 9.S TABLE VIM.— Employees and Vessels. Whole Number. Number in Pittsburgh District. (A) VESSELS 7 No. Tonnage Millions. 50,0001 21,859= B 18,500 11,000 13 22 1.58 Federal 2 National Tube American Bridge^ 7,600 5fl 12 9 6.310 American Steel & Wire 36,000' 8,0006 B B B 2.0 National Steel 1.0 7,000 3,300 2,400 Totals 115.869 23,700 49,800 112 12.8 Add those In Pittsburgh, not Included here Total Tonnage of ore vessels Total IB) 139,569 Estimated total^^ 250,000 17.89 (A). Does not include ofBce employees; the figures are from Age of Steel, April 13, 1901. (B). No other data obtained except as to those employees In the Pittsburgh field. (1). World's Work, April 1901, p. 818. (2). Testimony Indus. Com., Vol. 1, p. 991. (3). Noflgnres obtained. <»). Testimony Indus. Com.. Vol. 1, p. 1012. (6). Does not Include employees at mine; Indus. Com., Vol. 1, p. 951. (6). This is the number given in Cosmopolitan, May, 1901. (7). Does not include Leyland Co. steamers. (8). Com. & Fin. Chr., Vol. 71, p. 586, March 24, 190O. (9). Com. & Fin. Chr., Vol. 69, p. 938, Oct. 28, 1899, (10). Ibid. 118 LE IX.— Capital and Producl ol Compelitors' TABLE X.— Summary ol References. KAUE. Stock (Authorized) * Bond! Millions Total Prod- uct Annually Thousand Tons IN eENSBAL: Supplement Iron Age, Dec. 27 1900. Century Mag. (Jan.-May, 1901). World's Work, April, 1901. Review of Eevlews (Feb,- May, 1901). CARNEOIE CO.: Com. & Flu. Chr. Vol. 68, pp. 925, 975, 1022, ma ConsoLIr. Co iS.O 60.0 20. 15.0 16 18.0 31.0 SO.O 3.0 10.0 4.0 3.8 (A) 30.6 .5 6.3 650 (A) 13.0 21.8 l.S 32.0 2.5 30.0 20.0 1.5 150. 230. 150. 230. 5C0. 2S0. 870. 300. 195. 300. 300. 350. (A) 90. 20. 1440. 1700. (A) (B) 350. 50. 650. 250. 450. 633. 185. 1074. Vol. 69; 81, 387, 542, 592. 745, 853, 870, 908, 10«6, 1103. Vol. 70; 330 533,580,633,638. Vol.71; 86, 603,1014. Vol. 72; 139. ron& S.U. Co fia Iron Age, 1900, Feh. IS, p. 23: March 1, p. 21; March 15, p. 14; March 29, p. 17, 1901; April 18, p. 44. VmTimTlAT, STIRIST.' iIF.&I Oo A X Co )le Steel Co >nd State Steel Co •Pi RtAAl & I Co Com. & Fin. Chr. Vol. 67; 483, 630, 578, 633. Vol. 70; 634, 790. Vol. 71; 545. wanna Steel Oo Je NATIONAL TUBE: Com. & Fin. Chr. Vol. 68; 332, 380, 429, 619 672, 928. Vol. 70; 384, 744, 746. Vol.71; 235,240,392.545,866 Vol. 72: 91. AMBRIOAN SniDOE: Enam. &S. Oo laven I. i S. Oo Steel Com. & Fin. Chr. Vol. 70; 1150. Vol.71; 86.1014,1121. AMEBIGAN STEEL 4 WISE CO.: ^ Steel Tube (c) ^hnffield ehanna O.&X.&K. Oo Com. & Fin. Chr. Vol. 66; 615. Vol.67; 72,632. Vol 68; 83, 128, 185, 377, 623, 668,1131. liaT & Co Vol.69;25,a86, 493,543, 646, 744, 1013, 1249. Vol. 70; 228, 383, 896, 947, 1046. ick Vol. 71; 545, 1014, 1122, 1168, Age of Steel, Vol. 8S, p. 16. Indus. Com. Bep. Test. 1005 ot seg. AMERICAN TIN PLATE: Potal 454.5 0,663. Com. & Fin. Chr. Vol. 67; 1065, 1162. 1281. Vol.68; 329. Vol.69; 1347. zie 320. 300. 80. 70. 90. SO. 69. 33. 52. 2500. 1800. 1131. 6C0. 2500. 4C0. 1800. 700. (A) Vol. 70; 843, Vol. 71; 135. 545 Vol. 72' 89 138 »1 Indus. Com. Test. pp. 174, 856, 883, Iridge teel & W Com. & Fin. Chr. Vol. 68; 272, 283, 3S0, 928. Vol. 69; 230, 1848. Vol. 70; 384, 897. Steel Indus. Com. Bcp. Test. p. 944. AM. SHEET STEEL: Com. A Fin. Ohr. Vol. 70; 332, 634. Vol.71; 183,1188. Vol. 72; 80. AM. STEEL BOOP: Cotal 954. 11,431. Com. & Fin. Chr. Vol. 68; 721, 870. Vol. 69; 852. Vol. 70; 77, 1098. Vol. 71; 545. Indus. Com. Bep. Test. 953. LAKE SUP. CONSOL. MINES: Com. & Fin. Ohr. Vol. 60; 811. Vol. 78; 678, 77a Fotalof all 24C8.S 21.094. [3 table Is compiled from data given In Sunn, to Iron Age Dec. 27, 1900. See also Com. & Flu. Chr., y 13, 1899, Vol. 63, p. 899; also 89 Age of SteeC May 18, 1901, p. 22, and Iron Age, Feb. 14, 1901. odata. roduct 100,000,000 feet of tubes. eported to have since been absorbed by the U. S. Steel Corp. APPENDIX OF DOCUMENTS/ CIKCULAR OYFEk TO STOCKHOLDERS OF VARIOUS COMPANIES.^* Office of J. P. MOBGAN & Co., 23 Wall Street, New York, March 2, 1901. To the stockholders of Federal Steel Company, National Steel Com- pany, National Tube Company, American Steel and Wire Com- pany of New Jersey, American Tin Plate Company, American Steel Hoop Company, American Sheet Steel Company. The United States Steel Corporation has heen organized under the laws of the State of New Jersey, with power, among other things, to acquire the outstandibg preferred stocks and common stocks of the companies above named and the outstanding bonds and stock of the Carnegie Company. A Syndicate, comprising leading financial Interests throughout the United States and Europe, of which the undersigned are managers, has been formed by subscribers to the amount of $200,000,000 (includ- ing among such subscribers the undersigned and many large stock- holders of the several companies), to carry out the arrangement here- inafter stated and to provide the sum in cash and the financial support required for that purpose. Such Syndicate, through the undersigned, has made a contract with the United States Steel Corporation, under which the latter is to issue and deliver its preferred stock and its common stock and Its five per cent gold bonds in consideration for stocks of the above-bamed companies and bonds and stock of the Carnegie Company and the sum of 125,000,000 in cash. The Syndicate has already arranged for the acquisition of substan- tially all the bonds and stock of the Carnegie Company, including Mr. Carnegie's holdings. The bonds of the United States Steel Corporation 1 Only such documents are here given as seem necessary to a full understanding of the questions discussed In previous pages. The charters and by-laws of the National Steel, the American Steel & Wire, and the American Tin Plate Companies, are given in full in Vol. I. of the Report of the Industrial Commission, and are quite similar to those of the U. S. Steel, The Carnegie, and Federal Steel here given. The Sugar Trust Deed Is given in full in 121 N. Y. Report, p. 582, and 18 Am. St. Report, p. 843. 2 Printed from circular sent ty J. P. Morgan & Co. See 72 Com- mercial and Financial Chronicle, March 9, 1901, pp. ix-xi; also same, March 16, 1901, pp. vii-ix. lis IIG APPENDIX. are to be used only to acquire bonds and 60 per cent of the stock of tbe Carnegie Company. The undersigned, in behalf of the Syndicate, and on the terms and conditions hereinafter stated, offer, in exchange for the preferred stocks and common stocks of the companies above named, respectively, certificates for preferred stock and common stock of the United States Steel Corporation, upon the basis stated in the following table, viz.: For each ?100 par value of stock of the class mentioned below, the amount set opposite thereto in preferred stock or common stock of United States Steel Corporation at par: AMOUNT OP NEW STOCK TO BE DELIVEKED IN PAB VALUE. NAME OF COMPANY AND CLASS OF STOCK. Preferred Common Stock. Btook. Federal Steel Co., preferred stock , ?110.00 Federal Steel Co., common stock 4.00 $107.60 American Steel & Wire Co. of N. J., preferred stock.. 117.50 American Steel & Wire Co. of N. J., common stock . . . 102.50 National Tube Co., preferred stock 125.00 National Tube Co., common stock 8.80 125.00 National Steel Co., preferred stock 125.00 National Steel Co., common stock 125.00 American Tin Plate Co., preferred stock 125.00 American Tin Plate Co., common stock 20.00 125.00 American Steel Hoop Co., preferred stock 100.00 American Steel Hoop Co., common stock 100.00 American Sheet Steel Co., preferred stock 100.00 American Sheet Steel Co., common stock 100.00 With reference to the last four companies the aggregate amount of stocks so to be offered was arranged with the principal stocliholders of those companies, who have requested the distribution of such amount among the four companies to be made in the percentages above stated. Proper adjustment will be made in respect of dividends upon all the deposited preferred stocks, so that the registered holders of receipts for such preferred stocks will receive the equivalent of dividends thereon, at the rates therein provided, from the last dividend period up to April 1, 1901, from which date dividends on the preferred stock of the United States Steel Corporation are to begin to accrue. Deposited common stocks must carry all dividends or rights to dividends declared or payable on or after March 1, 1901, and no adjustment or allowance will be made in respect thereof. For the purpose of avoiding the necessity of interruption in the di^claration and payment of dividends, when earned, upon the com- mon stock, concurrently with the payment of dividends upon the preferred stock, there has been inserted in the charter of the United States Steel Corporation a provision to the effect that whenever all APPENDIX. 117 quarterly dividends accrued upon the preferred stock for previous quarters shall have been paid, the Board of Directors may declare dividends on the common stock out of any remaining surplus or net profits. Statements furnished to us by officers of the several companies above named, and of the Carnegie Company, show that the aggregate of the net earnings of all the companies for the calendar year 1900 was amply sufficient to pay dividends on both classes of the new stocks, besides making provision for sinking funds and maintenance of properties. It is expected that by the consummation of the proposed arrangement the necessity of large deductions heretofore made on account of expendi- tures for improvements will be avoided, the amount of earnings applicable to dividends will be substantially increased and greater stability of investment will be assured, without necessarily Increasing the prices of manufactured products. The certificates for stocks of the companies above named must be deposited as stated below, in exchange for transferable receipts issued by the respective depositaries, for which application will be made for listing on the New York Stock Exchange. The deposited certificates must be accompanied by suitable assignments and powers of attorney in blank, duly executed and having attached thereto the proper war revenue stamps, and also, if required, suitable assignments or trans- fers of all dividends or rights to dividends upon deposited common stocks declared or payable on or after March 1, 1901. Every deposit shall be upon the following further terms and conditions: 1. The undersigned, acting in behalf of the Syndicate, shall have full control over the deposited certificates, including power to deliver the same under said contract to the United States Steel Corporation in consideration of the issue of preferred stock and common stock of said Corporation. 2. The certificates for shares of the United States Steel Corporation, deliverable to depositors, shall be delivered at an office or at offices in the City of New York to be designated by the undersigned by adver- tisement in at least two newspapers in the City of New York. Such certificates may be issued in the names of the respective holders of the receipts entitled thereto or may be issued in such other names as the undersigned may select, in which event they shall be endorsed for transfer in blank at the time of delivery. The undersigned at their option may deliver temporary certificates for such shares pending the preparation and delivery of engraved certificates. 3. At any time prior to the deposit hereunder of two-thirds in amount of all outstanding shares of the capital stock of any one or more of the above-named companies (which two-thirds in each instance shall include two-thirds of the outstanding preferred stock of such company), the undersigned in their discretion may withdraw the offer herein made to depositors of shares of any such company of whose capital stock two-thirds shall Jiot have been deposited; and, in such 118 APPENDIX. case, no act or notice of withdrawal shall be required other than advertisement thereof at least once In each of two daily newspapers in the City of New York. Upon any such withdrawal, the deposited shares of such company shall be returned without charge, upon sur- render of the respective receipts issued therefor. The undersigned, in their discretion, may consummate the proposed transaction as to the stocks of any companies herein named, irrespective of the deposit of the stocks of any other company or of any withdrawal as to any other company. 4. The undersigned are authorized to proceed with the proposed transaction whenever in their sole judgment a sufficient amount of the stocks of said companies, or of any of them, shall have been deposited. They reserve the right, at any time, in their discretion, to wholly abandon the transaction and to withdraw their offer herein contained, as to all the depositors, by publication of notice of such withdrawal in two daily newspapers in the City of New York; and In that event all the deposited shares shall be returned without charge upon surrender of the respective receipts therefor. In case of any such withdrawal of the offer hereunder as to ail or to any depositors, such depositors shall have no claim against the undersfgned, and shall only be entitled to receive their deposited securities upon surrender of the respective re- ceipts therefor. 5. The authorized issue of capital stock of the United States Steel Corporation presently provided for in said contract is $850,000,000, of which one-half is to be seven per cent cumulative preferred stock and one-half Is to be common stock. The company will also Issue its five per cent, gold bonds to an aggregate amount not exceeding $304,000,000. In case less than all of the bonds and stock of the Carnegie Company or less than all of the stocks of the other companies above referred to shall be acquired, the amounts of bonds and stocks to be issued will be reduced as provided in said contract. The forms of the new bonds and of the indenture securing the same, and of the certificates for the new preferred and common shares, and the entire plan of organization and management of the United States Steel Corporation, shall be determined by J^ P. Morgan & Co. Every depositor shall accept in full payment and exchange for his deposited stock the shares of the capital stock of the United States Steel Corpora- tion, to be delivered at the rates above specified. In respect of the stock by him so deposited; and no depositor or holder of any receipt issued hereunder shall have any interest in the disposition of any other of the shares of stock, or of the bonds of the United States Steel Corporation, by it to be issued and delivered to or for account of the Syndicate or of any proceeds thereof. All shares of the United States Steel Corporation deliverable to or for account of the Syndicate, which shall not be required for the acquisition of the stock of the Carnegie Company or for delivery to depositors under the terms of this circular, are to be retained by and to belong to the Syndicate. 6. The respective depositaries may make all such rules as shall be APPENDIX. 119 approved by the undersigned, governing the transfer and registration of receipts for deposited shares, and for the closing of the transfer books for such receipts for any purpose. The undersigned shall not be responsible for any default of any depositary. 7. Each deposit hereunder shall be irrevocable, and shall operate as a separate and independent agreement, and as a transfer of the interest of the depositors to the undersigned on the terms hereof. 8. Deposits must be made with the following depositaries respect- ively: Federal Steel preferred and common stock with Colonial Trust Co., N. Y., or with Old Colony Trust Co., Boston. National Tube preferred and common stock with Morton Trust Co., N. Y., or with Kidder, Peabody & Co., Boston. American Steel & Wire preferred stock with Standard Trust Co., N. Y. American Steel & Wire common stock with Guaranty Trust Co., N. Y. National Steel preferred and common stock with Central Trust Co. N. Y. American Tin Plate preferred and common stock with Mercantile Trust Co., N. Y. American Sheet Steel preferred and common stock with Farmers' Loan & Trust Co., N. Y. American Steel Hoop preferred and common stock with New Yortc Security & Trust Co., N. Y. Deposits must be made on or before the 20th day of March, 1901. After that date no deposit will be received except in the discretion of the undersigned, and on such terms as the undersigned may pre- scribe. The undersigned reserve the right in their discretion to terminate the privilege of deposit hereunder at an earlier date upon two days' notice to be given by publication at least once in two daily news- papers in New York City. It is proper to state that J. P. Morgan & Co. are to receive no com- pensation for their services as syndicate managers beyond a share in any sum which ultimately may be realized by the Syndicate. J. P. Morgan & Co., Syndicate Managers. 130 APPENDIX, 11. LETTEES ACCEPTING OEFEE OF TEANSFEE OF SHAEES.i FEDERAL STEEL COMPANY, New York, March 2, 1901. Dear Sir: The undersigned shareholders of the Fedekal Steel Company have carefully considered the circular notice of Messrs. J. P. Morgan & Co., dated March 2, 1901, wherein Messrs. J. P. Morgan & Co., acting in behalf of a syndicate in which some of the undersigned are included, offer to the shareholders of the Federai Steel Company, and of certain other companies, to cause to he delivered to them, in payment and exchange for their shares, the preferred and common stocks of the United States Steel Corporation, upon the terms and conditions stated in such circular notice, and have decided to accept the shares of the United States Steel Coeporation. We believe that the consummation of the proposed arrangement will result in decreased expenses, in lower and more stable cost of manufac- ture, and without advance of prices of manufactured products, in larger net earnings applicable to dividends. (Signed) H. H. Porter, H. H. Rogers, J. PiEEPONT Morgan, Marshall Field, D. 0. Mills, N. B. Ream, Nathaniel Thayeb, Samuel Mather, Samuel Spenceb, Robert Bacon, C. C. Ctjyleb, A. R. Floweb, Charles MacVeaoh, James Sim, E. H. Gakt. (The signatures were followed by notice of the place to make deposit of stock.) Precisely similar letters were signed by the following persons, on behalf of the National Tube Co.: E. C. CONVEESE, F. J. Hearnb, Francis L. Potts, Wm. H. Latshaw, Joshua Rhodes, Arthur F. Luke, A. S. Matheson, Robert Bacon, Wm. N. Crowell, John D. Culbertson, Daniel O'Day, John Don, Wm. S. Eaton, John Eaton, Wm. p. Hamilton, J. R. DeLamar, Wm. B. Rhodes, Wm. B. Schiller, Charles Steele, J. R. Tobey, J. N. Vance. 1 See 72 Commercial and Financial Chronicle, March 9, 1901, p. xl; also same, March 16, 1901, p. ix. APPENDIX. ISl The American Steel & Wiee Co.; J. W. Gates, WM. EiDENBOBN, Alfred Clifford, Wm. p. Palmer, James Hopkins, L. D. Ward, National Steel Co., American Tin Plate Co., American Steel Hoop Co., American Sheet Steel Co. Tkomas Dolan, Charles Douglass, F. M. Drake, P. A. B. Widener, H. C. Pierce, John Lambert, Thomas F. Ryan, Randal Morgan, John A. Drake, S. H. Chisholm, J. J. Mitchell. Wm. H. & J. H. Moore. (Their letter adds: "As it is important that the transaction should be completed without delay, you •will please deposit your stock promptly with," etc.) XS3 APPENDIX. m. CIRCULAK LETTEE ANNOUNCING PLAN HAS BE- COME OPERATIVE.! Office of J. P. MOBQAK & Co., 23 Wall Street, New York, March 21, 1901. To the Btockhold*s of Federal Steel Company, National Steel Com- pany, National Tube Company, American Steel and Wire Com- pany of New Jersey, American Tin Plate Company, American Steel Hoop Company, American Sheet Steel Company. Referring to our circular dated March 2, 1901, we announce that holders of the following percentages of the entire outstanding amounts of the preferred and common stocks of the above-named companies bare accepted the offer made by us in said oircular, viz.: Percentage of Percentage of Preferred Stock. Common Stock. Federal Steel Company 97 96 National Steel Company 97 98 National Tube Company 98 93 American Steel and Wire Co. of New Jersey 97 92 American Tin Plate Company 94 99 American Steel Hoop Company 97 98 American Sheet Steel Company 97 94 The plan proposed in our circular has therefore become operative. In view of the fact that there are stockholders who desire to par- ticipate in the plan, but who have been una,ble to deposit the certificate for their stock within the time limited In our circular, we have extended the time for deposit of stocks under the terms and conditions of our said circular of March 2, 1901, until and including Monday, April Ist, 1901, after which date no deposits of stock will be received except in our discretion and on such terms as we may prescribe. The common stock of any company offered for deposit after the date of closing the transfer books of such company for the payment of dividends upon the common stock, must be accompanied by an order for such dividend. Deposits must be made with the following depositaries respectively: 1 Printed from circular sent by J. P. Morgan & Co. See 78 Commer- cial & Financial Chronicle. March 23, 1901, p. x; also same, March 30, 1901, p. vili. APPENDIX. 123 Federal Steel preferred and common stock with Colonial Trust Co., N. Y., or with Old Colony Trust Co., Boston. National Tube preferred and common stock with Morton Trust Co., N. y., or with Kidder, Peabody & Co., Boston. American Steel & Wire preferred stock with Standard Trust Co., N. Y. American Steel & Wire common stock with Guaranty Trust Co., N. Y. National Steel preferred and common stock with Central Trust Co., N. Y. American Tin Flat« preferred and common stock with Mercantile Trust Co., N. Y. American Sheet Steel preferred and common stock with Fanners' Loan & Trust Co., N. Y. American Steel Hoop preferred and common stock with New York Security & Trust Co., N. Y. J. P. Morgan & Co., Syndicate Managers. 134 APPENDIX. IV. CIECULAK OFEEE TO BRIDGE AJS^D MINES COM- PANIES.i Office of J. P. Morgan & Co., 23 Wall Street, New York, April 2. 1901. To the stockholders of American Bridge Company, Lake Superior Con- solidated Iron Mines. The offer made in our circular of March 2, 1901, in behalf of the Syndicate, having been accepted by more than 98 per cent of the holders of stock in the several companies therein mentioned, the plan proposed in said circular has become operative. We now offer, by authority and for account of the United States Steel Corporation, in exchange for the preferred and common stock of the American Bridge Company and for the stock of the Lake Superior Consolidated Iron Mines, respectively, certificates for preferred stock and common stock of the United States Steel Corporation upon the following basis: For each $100, par value, of preferred stock of the American Bridge Company, $110, par value, in the preferred stock of United States Steel Corporation. For each $100, par value, of common stock of the American Bridge Company, $105 in the common stock of United States Steel Corpora- tion. For each $100, par value, of stock of the Lake Superior Consolidated Iron Mines, $135, par value, in the preferred stock and $135, par value. In the common stock of United States Steel Corporation. Such preferred stock of the American Bridge! Company will be received ex dividend payable April 24, 1901, but must carry all other dividends and rights to dividends declared or payable after that date. Such common stock of the American Bridge Company and such stock of the Lake Superior Consolidated Iron Mines must carry all dividends and rights to dividends declared or payable after March 15, 1901. Dividends on the preferred stock of United States Steel Corporation to be delivered to depositors are to begin to accrue from April 1,''1901. Arrangements have already been made for the acquisition upon the above basis of more than eighty-five per cent of the stock of the Lake Superior Consolidated Iron Mines, embracing therein the interests of Mr. John D. Rockefeller. Arrangements have also been made for the acquisition by the United States Steel Corporation of all the outstanding interest in the Oliver Iron Mining Company and the Pittsburgh Steam- 1 Printed from circular sent by J. P. Morgan & Co. See 72 Commer- cial and Financial Chronicle, April 6, 1901, p. viii; also same. Anril 13, 1901, p. viii. APPENDIX. 125 ship Compaay, not owned by the Carnegie Company. The offer herein made for stock of the American Bridge Company is conditional upon the deposit and sale hereunder of at least two-thirds in amount of all outstanding shares of the capital stock of said Company, which two- thirds shall include two-thirds of the outstanding preferred stock. Certificates for stocks of the American Bridge Company and of the Lake Superior Consolidated Iron Mines must be deposited with us as stated below in exchange for our transferable receipts. The deposited certificates must be accompanied by suitable assignments and powers of attorney in blank, duly executed, and having attached thereto the proper war revenue stamps and also, if required, suitable assignments or transfers of all dividends and rights to dividends as above stated. Every deposit must be made upon the following further terms and conditions: 1. The undersigned shall have power to deliver the deposited cer- tificates to United States Steel Corporation, but until so delivered the undersigned shall have full control over such certificates. The transfer and delivery to the Steel Company of the deposited shares of any com- pany may be completed whenever the undersigned deem that a suflJcient amount of the stocks of said company shall have been deposited. 2. The certificates for shares of the United States Steel Corporation, deliverable to depositors, shall be delivered at an office or at offices in the City of New York, to be designated by the undersigned by adver- tisement in at least two newspapers in the City of New York. Such certificates may be issued in the names of the respective holders of the receipts entitled thereto, or may be issued in such other names as the undersigned may select, in which event they shall be endorsed for transfer in blank at the time of delivery. Every depositor agrees to accept in full payment and exchange for his deposited stock, certificates for shares in the capital stock of the United States Steel Corporation, to be delivered at the rates above specified in respect of the stock by him so deposited. The undersigned, at their option, may deliver tem- porary certificates for such shares pending the preparation and time to time may be assigned to him by the Board of Directors. Sec. 3. Vice-Presidents. The Board of Directors may appoint a Vice-President or more than one Vice-President. Each Vice-President shall have such powers, and shall perform such duties as may be assigned to him by the Board of Directors^ Sec. 4. The General Counsel. The General Counsel shall be the chief consulting officer of the company in all legal matters, and, sub- ject to the Board of Directors and the Finance Committee, shall have general control of all matters of legal import concerning the company. Sec. 5, Powers and Duties af Treasurer. The Treasurer shall have custody of all the funds and securities of the company which may have come into his hands; when necessary or proper he shall endorse on behalf of the company for collection, checks, notes and other obli- gations and shall deposit the same to the credit of the company in such bank or banks or depositary as the Board of Directors or the Finance Committee may designate; he shall sign all receipts and vouchers for payments made to the company; jointly with such other officer as may be designated by the Finance Committee he shall sign all checks made by the company, and shall pay out and dispose of the same under the direction of the Board or of the Finance Committee; he shall sign, with the President, or such other person or persons as may be desig- nated for the purpose by the Board of Directors or the Finance Com- mittee, all bills of exchange and promissory notes of the company; he may sign, with the President or a Vice-Presidenti all certificates of shares in the capital stock; whenever required by the Board of Directors or by the Finance Committee he shall render a statement of his cash account; he shall enter rfegularly, in books of the company to be kept by him for the purpose, full and accurate account of all moneys received and paid by him on account of the company; he shall, at all reasonable times, exhibit bis books and accounts to any Director of the company upon application at the office of the company during business hours; and he shall perform all acts incident to the position of Treasurer, subject to the control of the Board of Directors 10 14G APPENDIX. or of the Finance Committee. By virtue of his office the Treasurer shall be Assistant Secretary. He shall give a bond for the faithful discharge of his duties in such sum as the Board of Directors or the Finance Committee may require. Sec. 6. Assistant Treasurers. The Board of Directors or the Finance Committee may appoint an Assistant Treasurer or more than one Assistant Treasurer. Each Assistant Treasurer shall have such powers and shall perform such duties as may be assigned to him by the Board of Directors, or by the Finance Committee. Sec. 7. Powers and Duties of Secretary. The Secretary shall keep the minutes of all meetings of the Board of Directors, and the minutea of all meetings of the stockholders, and also (unless otherwise directed by the Finance Committee) the minutes of all committees in books provided for that purpose; he shall attend to the giving and serving of all notices of the company; he may sign with the President in the name of the company all contracts authorized by the Board of Directors, or by the Finance Committee, and, when so ordered by the Board of Directors or the Finance Committee, he shall alBx the seal of the com- pany thereto; he shall have charge of the certificate books, transfer books and stock ledgers, and such other books and papers as the Board of Directors or the Finance Committee may direct, all of which shall, at all reasonable times, be open to the examination of any Director, upon application at the office of the company during business hours; and he shall in general perform all the duties Incident to the office Of Secretary, subject to the control of the Board of Directors, and of the Finance Committee. By virtue of his office the Secretary shall be Assistant Treasurer. Sec. 8. Assistant Becretaries. The Board of Directors or the Finance Committee may appoint one Assistant Secretary or more than one Assistant Secretary. Each Assistant Secretary shall have such powers and shall perform such duties as may be assigned to him by the Board of Directors, or by the Finance Committee. Sec. 9. Auditor. The Auditor shall be the principal officer In charge of the accounts of the company; and shall perform such duties as from time to time may be assigned to him by the Board of Directors or the Finance Committee. Sec. 10. Voting upon Stoclcs. Unless otherwise ordered by the Board of Directors, or by the Finance Committee, the Chairman of the Finance Committee or the Chairman of the Executive Committee shall have full power and authority In behalf of the company to attend and to act and to vote at any meetings of stockholders of any corporation In which the company may hold stock, and at any such meeting shall possess and may exercise any and all the rights and powers Incident to the ownership of such stock and which, as the owner thereof, the company might have possessed and exercised if present. The Board of Directors or the Finance Committee, by resolution, from time to time, may confer like powers upon any other person or persons. APPENDIX 147 ARTICLE V- CAPITAL STOCK — SEAT.. Section 1. Certiflcatea of Shares. The certificates for shares of the capital stock of the company shall be ia such form, not inconsistent with the certificate of incorporation, as shall be prepared or be approved by the Board of Directors. The certificates shall be signed by the President or a Vice-President, and also by the Treasurer or an Assistant Treasurer. All certificates shall be consecutively numbered. The name of the person owning the shares represented thereby, with the number of such shares and the date of issue, shall be entered on the company's books. No certificate shall be valid unless it be signed by the President or a Vice-President, and by the Treasurer or an Assistant Treasurer. All certificates surrendered to the company shall be canceled, and no new certificate shall be issued until the former certificate for the same number of shares of the same class shall have been surrendered and canceled. Sec. 2. Transfer of Shares. Shares in the capital stock of the com- pany shall be transferred only on the books of the company by the holder thereof in person, or by his attorney, upon surrender and can- cellation of certificates for a like number of shares. Sec. 3. Regulations. The Board of Directors, and the Finance Com- mittee also, shall have power and authority to make all such rules and regulations as respectively they may deem expedient concerning the issue, transfer and registration of certificates for shares of the capital stock of the company. The Board of Directors or the Finance Committee may appoint a Transfer Agent and a Registrar of Transfers, and may require all stock certificates to bear the signature of such Transfer Agent and of such Registrar of Transfers. Sec. 4. Closing of Transfer Books. The stock transfer books shall be closed for the meetings of the stockholders, and for the payment of dividends, during such periods as from time to time may be fixed by the Board of Directors or by the Finance Committee, and during such periods no stock shall be transferable. Sec. 5. Dividends. The Board of Directors may declare dividends from the surplus or net profits of the company over and above the amount which from time to time may be fixed by the Board as the amount to be reserved as working capital. The dates for the declaration of dividends upon the preferred stock, and upon the common stock of the company shall be the days by these by-laws fixed for the regular monthly meetings of the Board of Directors In the months of April, July, October and January in each year, on which days the Board of Directors, In Its discretion, shall 148 APPENDIX. declare what, if any, dividends shall be declared upon the preferred stock, and the common stock, or either of such stocks. The dividends on the preferred stock shall be payable quarterly on the fourth Wednesday next after the several dates of the declaration thereof. Sec. 6. Working Capital. The Directors shall not be required in January in each year, after reserving over and above its capital stock paid in as a working capital for said Corporation, such sum. If any, as shall have been fixed by the stockholders to declare a dividend among its stockholders of the whole of its accumulated profits exceeding the amount so reserved, and pay the same to such stockholders on demand; but the Board of Directors may fix a sum which may be set aside or reserved, over and above the company's capital paid in, as a working capital for the company, and from time to time they may increase, diminish and vary the same in their absolute judgment and discretion. Sec. 7. Corporate Seal. The Board of Directors shall provide a suitable seal, containing the name of the company, which seal shall be in charge of the Secretary, if and when so directed by the Board of Directors or by the Finance Committee. A duplicate of the seal may be kept and used by the Treasurer or by any Assistant Secretary or Assistant Treasurer. ARTICLE. VI. AMENDMENTS. Section 1. The Board of Directors shall have power to make, amend and repeal the by-laws of the company, by vote of a majority of all of the Directors, at any regular or special meeting of the Board, pro- vided, that notice of intention to make, amend or repeal the by-laws in whole or in part shall have been given at the next preceding meeting; or without any such notice, by a vote of two-thirds of all of the Directors. APPENDIX. 149 CHAKTEK or THE CARNEGIE COMPANY.* ARTICLE I. The corporate name is The Caenegie Company. ARTICLE II. The objects for which the corporation is established are: To mine, prepare for market, market and transport coal, iron, steel and all mineral substances. To manufacture, buy, sell, deal in and deal with iron, steel, and all other metals and metallic compounds, coke and coal, and all the prod- ucts and by-products thereof. To promote, construct, provide, acquire, carry out, maintain, improve, manage, develop, control, take on lease or agreement, sell, lease, let, license to use, work, use and dispose of any roads, sidings, railways (outside of New Jersey), pipe lines, quays, wharves, docks, bridges, reservoirs, canals, watercourses, hydraulic works, gas works, gas wells, electrical works, mills, factories, furnaces, warehouses, shops, buildings, dwellings for employees and others, and all other works and conven- iences. To construct, lease, own, operate or sell transportation line or lines, by land or water, in any state or country, subject to the laws of such state or country, either directly or through the ownership of stock of any corporation. The company shall have express power to hold, purchase, or other- wise acquire, to sell, assign, transfer, mortgage, pledge or otherwise dispose of shares of the capital stock, bonds, debentures or other evi- dences of indebtedness created by any other corporation or corporations, and while the owner thereof to exercise all the rights and privileges of ownership, including the right to vote thereon. As subsidiary objects and powers the company may: Manufacture, purchase or otherwise acquire goods, v/ares, merchan- dise and personal property of every class and description, and hold, own, sell or otherwise dispose of, trade, deal in and deal with the same. Acquire and undertake the goodwill, property, rights, franchises and assets of every kind, and the liabilities of any person, firm, association or corporation, either wholly or partly, and pay for the same in cash, stock or bonds of the company, or otherwise. Enter into, make, perform and carry out contracts of every sort and kind, with any person, firm, association, corporation, private, public or municipal, or body politic, and with the government of the United States, or any state, territory, or colony thereof, or any foreign gov- ernment; purchase, lease, or otherwise acquire any and all rights, privileges, permits or franchises suitable or convenient in the judgment of the Directors for any of the purposes of its business. Issue warrants, bonds, debentures and other negotiable or transfer- 1 Printed from copy sent by James B. Dill. For Analysis and Con- tents see Charter in the index. 150 APPENDIX. able instruments, and secured by mortgage, or otherwise, for such amounts as shall from time to time seem advisable. Guarantee the payment of dividends, or interest, on any shares or stocks, bonds, debentures or other securities or obligations of this, or any other company, whenever, in the judgment of the Board of Direct- ors, proper or necessary for the business of the company. Apply for, obtain, register, purchase, or otherwise acquire and hold, own, use, operate, introduce and sell, assign or otherwise dispose of any and all trade marks, formulae, secret processes, trade names and distinctive marks, and all inventions, improvements and processes used in connection with or secured under letters patent or otherwise, of the United States or of any other country, and any governmental grants or concessions; and use, exercise, develop, grant licenses in respect of, or otherwise turn to account any and all such trade marks, patents, licenses, concessions, processes and the like, or any such property, rights and information so acquired. If, and to the extent permitted by the local laws of each state and foreign country where the property may be situated, and subject always to such local laws, the company may cause or allow the legal title, estate and interest in any property or business acquired, established or carried on by the company to remain or be vested, or registered in the name of or carried on by an individual, or by any other company or companies, foreign or domestic, formed or to be formed, and either ' upon trust for, or as agents or nominees of this company, or upon any other terms or conditions which the Board of Directors may consider for the benefit of this company, and manage the affairs, or take over and carry on the business of such company or companies so formed or to be formed, either by acquiring the shares, stocks or other securities thereof, or otherwise howsoever, and exercise all or any of the powers of holders of shares, stocks or securities thereof, and receive and distribute as profits the dividends and Interests on such shares, stocks or securities. Conduct business, have one or more ofiices, and purchase, mortgage, lease and convey real and personal property, or any estate or interest therein, in any part of the world, but always subject to the local laws. Subject to the provisions of law, the company may purchase or otherwise acquire, hold and re-issue the shares of its capital stock. In Geneeai., but in connection with the foregoing, the company may carry on any other business, whether manufacturing or mining, or otherwise, and have and exercise all the powers conferred by the laws of New Jersey upon corporations formed under the Act herein- after referred to; it being hereby expressly provided that the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the general powers of the company. ARTICLE III. The company shall be authorized to issue capital stock to the extent of one hundred and sixty million dollars (?160,- 000,000), divided into shares of the par value of one thousand dollars each. APPENDIX. 151 ARTICLE IV. In furtherance, and not in limitation of the powers conferred by statute, the Board of Directors are expressly authorized: (1) To hold their meetings, to have one or more offices, and to keep the books of the company within or without the State of New Jersey, at such places as may be from time to time designated by them; but the company shall always keep at its principal and registered office in New Jersey a transfer book in which the transfers of stock can be made, entered and registered, and also a stock book containing the names and addresses of the stockholders, and the number of shares held by them respectively, which said transfer book and stock book shall be at all times during business hours open to the inspection of the stockholders in person. (2) To determine from time to time whether, and, if allowed, when and under what conditions and regulations the accounts and books of the company (other than the stock and transfer books), or any of them, shall be open to the inspection of the stockholders, and the stockholders' rights in this respect are and shall be restricted or limited accordingly. (3) To make, alter, amend and rescind the By-Laws of this com- pany, to fix the amount to be reserved as working capital, to authorize and cause to be executed mortgages and liens upon the real and per- sonal property of the company, provided always, that a majority of the whole Board concur therein. (4) With the consent in writing and pursuant also to the affirma- tive vote of the holders of a majority of the stock issued and out- standing, at a stockholders' meeting duly called for that purpose, to sell, assign, transfer, or otherwise dispose of the property of the company as an entirety, provided always, that a majority of the whole Board concur therein. (5) By a resolution passed by a majority vote of the whole Board, under suitable provision of the By-Laws, to designate two or more of their number to constitute an Executive Committee, which Com- mittee shall, for the time being, as provided in said resolution, or in the By-Laws, have and exercise all the powers of the Board of Directors which may be lawfully delegated in the management of the business and affairs of the company, and shall have power to authorize the seal of the company to be affixed to all papers which may require it. The company may use and apply its surplus earnings or accumu- lated profits authorized by law to be reserved to the purchase or acquisition of property, and to the purchase or acquisition of its own capital stock from time to time, to such extent and in such manner, and upon such terms as its Board of Directors shall determine; and neither the property nor the capital stock so purchased and acquired, nor any of its capital stock taken in payment or satisfaction of any debt due to the company, shall be regarded as profits tor the purpose of declaration or payment of dividends, unless otherwise determined by a majority of the Board of Directors, or a majority of the stock- holders. ARTICLE V. The principal and registered office of the company is 152 APPENDIX, at No. 525 Main Street, East Orange, New Jersey; and the New Jersey Registration & Trust Company is designated as the agent therein, in charge thereof, and upon whom process against this Company may be served. In Accobdance with an Act of the Legislature of the State of New Jersey entitled "An Act Concerning Corporations" (Revision of 1896), and the Acts amendatory thereof and supplemental thereto, for the purpose of forming a corporatiou of unlimited duration to do business both within and without the State of New Jersey, the undersigned do respectively subscribe for the capital stock with which the company will begin business, amounting to one hundred and sixty million dol- lars ($160,000,000), and do agree to take the number of shares set opposite our respective names and have accordingly signed this cer- tificate and afiixed our seals hereto: NO. OF SHAKES POST OFFICE ADDRESS TAKEN BY EACS OF THE SUBSCBIBERS. 8UB3CBIBEB. NAME Andrew Carnegie, Henry Phipps, Henry C. Fkick, Charles M. Schwab, William H. Singer, Lawrence C. Phipps, Francis T. F. Lovejoy, Thos. Morrison, D. M. Clemson, James Gayley, Andrew M. Moreland, John Walker, Wm. W. Blackburn, Geo. E. McCagxje, James Scott, William E. Corey, Joseph B. Schwab, Thos. Lynch, Henry P. Bope, Lewis T. Brown, G. B. Bosworth, David G. Kerb, Homer J. Lindsay, Hampden B. Tener, Jr., George Meorew, Gibson D. Packer, Wm. B. Dickson, Albert C. Case, Sylvanus L. Schoonmaker, AzoR R. Hunt, P. ToESTEN Berg, Alva C. Dinkey, Charles McCreery, Charles W. Baker, JosiAH Ogden Hoffman, 10 cent internal revenue stamp cancelled. Witness, as to the foregoing signatures, James B. Dill, Solicitor. 27 Pine Street, New York City. Dated, March 22d. 1900. (l.s. ) 5 W. 51st St., N. Y. City, 86,379 (l.s. 1 Pittsburg, Pa., 17,226 (l.s. ) Pittsburg, Pa., 15,484 (l.s. 1 Braddock, Pa., 18,929 (l.s. t Alleghany, Pa., 2,829 (l.s. ) Pittsburg, Pa., 2,653 (l.s. 1 Pittsburg, Pa., 7,024 (l.s. 1 Braddock, Pa., 8S4 (l.s. ) Pittsburg, Pa., 884 (l.s. 1 Pittsburg, Pa., 884 (l.s. 1 Pittsburg, Pa., 810 (l.s. 1 Alleghany, Pa., 703 (l.s. 1 Pittsburg, Pa., 442 (l.s. 1 Pittsburg, Pa., 442 (l.s. 1 Pittsburg, Pa., 442 (l.s. 1 Munhall, Pa., 442 (l.s. Duquesne, Pa., 442 (l.s. 1 ■ Greensburg, Pa., 326 (l.s. Pittsburg, Pa, 295 (l.s. » Pittsburg, Pa., 295 (l.s. Pittsburg, Pa., 176 (l.s. Pittsburg, Pa., 147 (l.s. > Pittsburg, Pa., 147 (l.s. Pittsburg, Pa., 147 (L.S. Pittsburg, Pa., 147 (L.S.) Pittsburg, Pa., 147 (L.s.) Pittsburg, Pa., 147 (L.S.) Pittsburg, Pa., 147 (L.S.) Plainfield, N. J., 95 (L.S.] Munhall, Pa., 74 (L.S.) Munhall, Pa., 74 (L.S.] Munhall, Pa., 74 (L.S.) Duquesne, Pa., 74 (L.S.) New York, 147 (L.S.) Philadelphia, Pa., 442 APPENDIX. 153 State of New York, f County of New Yobk, \ ' Be it Remembeeed, that on this 22d day of March, A. D. nineteen hundred, hefore me personally appeared Andrew Carnegie, who I am satisfied is one of the persons named in and who executed the foregoing certificate, and I having first made known to him the contents thereof, he did acknowledge that he signed, sealed and delivered the same as his voluntary act and deed. James B. pnx. Master in Chancery of New Jersey. Commonwealth of Pennsylvania, 1 County of Aixeghany, / Be it Remembeeed, that on this twenty-third day of March, A. D. nineteen hundred, before me personally appeared Henry Phipps, Henry C. Frick, Charles M. Schwab, William H. Singer, Lawrence C. Phipps, Francis T. F. Lovejoy, Thos. Morrison, D. M. Clemson, James Gayley, Andrew M. Moreland, John Walker, Wm. W. Blackburn, Geo. E. Mc- Cague, James Scott, William E. Corey, Joseph E. Schwab, Thos. Lynch, Henry P. Bope, Lewis T, Brown, G. B. Bosworth, David G. Kerr, Homer J. Lindsay, Hampden E. Tener, Jr., Geo. Megrew, Gibson D. Packer, W^m. B. Dickson, Albert C. Case, Sylvanus L. Schoonmaker, Azor R. Hunt, P. Toesten Berg, Alva C. Dinkey, Charles McCreery, Charles W. Baker and Josiah Ogden HoSman, whom I am satisfied are all the per- sons named In and who executed the foregoing certificate, except Andrew Carnegie, and I having first made known to them the contents thereof, they did each acknowledge that they signed, sealed and de- livered the same as their voluntary act and deed. James B. Dill, Master in Chancery of New Jersey. Registered March 24th, 1900. New Jersey Registration & Trust Company, Registered Agent. „ H. D. Millee, Secretary. Received in the Clerk's Oflice of the County of Essex, on the 24th day of March, A. D. 1900, and recorded in Book 19 of Incorporated Business Companies for said County, Page 115. William O. Kuebleb, Clerk. Indorsed "Filed, Mar. 24, 1900. Geobge Wuets, Secretary of State." STATE OF NEW JERSEY. Depaetment of State. I, George Wdrts, Secretary of State of the State of New Jersey, do hereby certify that the foregoing is a true copy of the Certificate of Incorporation of The Carnegie Company and the endorsements thereon. 154 APPENDIX, as the same Is taken from and compared with the original filed in my office on the 24th day of March, A. D. 1900, and now remaining on file therein. In Testimony Whebeof, I have hereunto set my [SEAL.] hand and affixed my Official Seal, at Trenton this 24th day of March. A. D. 1900. Geoboe Wubis, Secretary of State. APPENDIX. 155 XL BY-LAWS OF THE CAKNEGIE COMPANY.^ Adopted by the Stockholders March 27, 1900. TITLE. 1. The title of the Corporation is "The Cabnegie Company." OFFICES. 2. The principal office shall be and be registered with the New Jersey Registration & Trust Company, 525 Main Street, East Orange, New Jersey. The company may also have an office in the city of Pittsburg, and also offices at such other places as the Board of Directors may appoint. SEAL. 3. The corporate seal of the company shall have inscribed thereon the name of the corporation, the year of its creation, and the words "Corporate Seal, New Jersey." DIRECTORS. 4. The property and business of the corporation shall be managed by a Board of Directors, eleven in number, chosen from the stock- holders; they shall hold office for one year and until others are elected and qualify in their stead. The number of Directors may be increased or decreased by the affirmative vote of the holders of a majority of the stock at any annual meeting of the stockholders. VACANCIES. 5. If the office of any Director, or of the President, Vice-Presidents, Secretary or Treasurer, one or more, becomes vacant by reason of death, resignation, disqualification or otherwise, the remaining Directors, if not less than a quorum, by a majority vote, may elect or appoint a successor or successors, who shall hold office for the unex- pired term. QUORUM AT STOCKHOLDERS' MEETINGS. 6. A majority in amount of the stock issued and outstanding, represented by the holders in person or by proxy, shall be requisite at any meeting of stockholders to constitute a quorum for the election of Directors or for the transaction of other business. ANNUAL MEETING. 7. The annual meeting of the stockholders, after the year 1900, shall be held on the first Monday in April of each year, at the registered 1 Printed from copy sent by James B. Dill. For Analysis and Con- tents see By-laws, in the index. 156 APPENDIX. office of the company in New Jersey, at 10 o'clock a. m., when they shall elect by a plurality vote, by ballot, the aforesaid Directors to serve for one year and until their successors are elected or chosen and qualify. Each stockholder shall be entitled to one vote, and no more, in person or by proxy, for each share of stock standing registered in his or her name, on the twentieth day preceding the election, exclusive of the day of such election, and not otherwise. No share of stock shall be voted at any election which shall have been transferred on the books of the company or issued within twienty days next preceding such election. Notice of the annual meeting shall be published in a newspaper in the city of Pittsburg, and in the county of Essex, New Jersey, once a week for two weeks during the month of March next preceding the meeting. INSPECTORS OF ELECTION. 8. Such election shall be conducted by two inspectors, who may or may not be - stockholders, appointed by the presiding oflScer of the meeting, which inspectors shall be duly sworn and shall in writing certify to the returns; but no person who is a candidate for the ofBce of Director shall act as Inspector or Judge at such election. SPECIAL MEETINGS OF STOCKHOLDERS. 9. Special meetings of the stockholders may be called by the Presi- dent, and shall be called at the request in writing to the President of or by vote of a majority of the Board of Directors, or at the request in v/riting by stockholders of record owning a majority in amount of the entire capital stock of the company. Notice of the time, place and object of meeting shall be sent to each stockholder of record at least two days, exclusive of the day of mail- ing, before the date of meeting, at such address as appears on the stock book of the company, or if no address be given therein, to the last address of such stockholder known to the Registered Agent. CHAIRMAN OF STOCKHOLDERS' MEJETINGS. 10. All meetings of the stockholders shall be called to order and presided over by the President, or, in his absence, by one of the Vice- Presidents in their relative order of appointment, or in their absence, by the Secretary, or if he be absent by the Treasurer, and if none of them be present, by a chairman appointed by the stockholders. VOTING AT STOCKHOLDERS' MEETINGS. 11. Voting upon all questions at all meetings of the stockholders shall be by shares of stock, and not per capita. ORDER OF BUSINESS AT STOCKHOLDERS' MEETINGS. 12. As far as consistent with the purpose of the meeting, the follow- ing order of business shall be observed at all meetings of the stock- holders: APPENDIX. 157 Roll call; • A quorum being present: Reading of minutes of preceding meeting and action thereon; Reports of o&icers and committees as called for by the presiding officer; Election of Directors; Unfinished business; New business. FIRST MEETING OP DIRECTORS AFTER ELECTION. 13. After the election of the Directors, the newly elected Board shall meet at such place and time as shall be fixed by the rote of the stock- holders at the annual meeting, for the purpose of organization and otherwise, and no notice of such meeting shall be necessary to the newly elected Directors in order to legally constitute the meeting; pro- vided a majority of the whole Board shall be present. At the said meeting the Board shall elect, by ballot, a President and one or more Vice-Presidents, in their respective orders, from their own number. The Board of Directors shall also annually appoint at such meeting a Secretary and a Treasurer, and may appoint one or more Assistant Secretaries and Assistant Treasurers, who need not be members of the Board, who shall hold office during the pleasure of the Board, but who shall not be appointed for a longer period than a term of one year. Excepting always the President and the Vice-Presidents, all such appointed officers shall be subject to removal by the Board at any time, and with or without cause, provided a majority of the Board shall agree thereon. REGULAR MEETINGS OF BOARD. 14. Regular meetings of the Board shall be held without notice on the first Tuesday of each month in the year at the office of the com- pany in Pittsburg, Pennsylvania, at 12:30 p. m., or, by order of the Board of Directors, elsewhere on a day and at an hour to be fixed by the Board. QUORUM AT MEETINGS OF BOARD. 15. A majority of the whole Board of Directors shall be necessary at all meetings to constitute a quorum for the transaction of any busi- ness, except to adjourn. SPECIAL MEETINGS OF BOARD. 16. Special meetings of the Board may be called by the President on one day's notice to each Director, either personally or by wire; special meetings may be called in like manner and on like notice, on the written request of three members of the Board. DIRECTORS MAY MEET OUT OF NEW JERSEY. 17. The Directors may hold their meetings and have one or more offices, and keep the books of the company, as provided in the Certifi- 158 APPENDIX. cate of Incorporation, outside of the State of New Jersey, at tie city of Pittsburg, or at such other places as they may from time to time determine. GENERAL POWERS OP DIRECTORS. 18. The Board of Directors shall have the management of the busi- ness of the company, and, in addition to the powers and authorities by these by-laws expressly conferred upon them, may exercise all such powers and do all such acts and things as may be exercised and done by the corporation, but subject, nevertheless, to the provisions of the statute, of the charter and of these by-laws, and to any regulations from time to time made by the stockholders; provided that no regu- lations so made shall invalidate any prior act of the Directors which would have been valid If such regulations had not been made, SPECIFIC POWERS OF DIRECTORS. 19. Without prejudice to the general powers conferred by the last preceding clause, and the other powers conferred by the charter and by these by-laws. It Is hereby expressly declared that the Board of Directors shall have the following powers, that is to say: From time to time to make and change rules and regulations not inconsistent with these by-laws for the management of the company's business and affairs. To purchase or otherwise acquire for the company, any property, rights or privileges which the company is authorized to acquire, at such price and on such terms and conditions and for such considera- tion as they shall from time to time see fit. At their discretion to pay for any property or rights acquired by the company, either wholly or partly, in money or in stocks, bonds, deben- tures or other securities of the company. To create, make and issue mortgages, bonds, deeds of trust, trust agreements and negotiable or transferable instruments and securities, secured by mortgage or otherwise, and to do every other act and thing necessary to effectuate the same. To appoint and at their discretion to remove or suspend such subordinate officers, agents or servants, permanently or temporarily, as they may from time to time think fit, and to determine their duties, and fix, and from time to time change, their salary or emolu- ments, and to require security in such Instances and In such amounts as they think fit. To confer by resolution upon any appointed officer of the company the right to choose, remove or suspend such subordinate officers, agents or servants. To appoint any person or persons to accept and hold in trust for the company any property belonging to the company, or in which It is interested, or for any other purpose, and to execute and do all such duties and things as may be requisite in relation to any such trust. To determine who shall be authorized on the company's behalf to APPENDIX. 159" sign bills, notes, receipts, acceptances, endorsements, checks, releases, contracts and documents. From time to time to provide for tlie management of tlie affairs of tlie company, at home or abroad, in such manner as they see fit, and, in particular, from time to time, to delegate any of the powers of the Board in the course of the current business of the company to any committee, officer or agent, and to appoint any persons to be the agents of the company, with such powers (Including the power to sub-dele- gate), and upon such terms as may be thought fit. COMPENSATION OP DIRECTORS. 20. Directors, as such, shall not receive any stated salary for their services as Directors, but, by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, that nothing herein contained shall be construed to preclude any Director from serving the company in any other capacity and receiving compensation aierefor. Members of special or standing committees may be allowed like com- pensation for attending committee meetings. THE PRESIDENT. 21. It shall be the duty of the President to preside at all meetings of the Board of Directors and stockholders; to have general and active management of the business of the company; to see that all orders and resolutions of the Board are carried into effect; to execute all its stocks, bonds, mortgages and other contracts requiring a seal, under the seal of the company; to keep in safe custody the seal of the company, and, when authorized by the Board, to affix the seal to any instrument requiring the same, which seal shall always be attested by the signa- ture of the President, and of the Secretary or the Treasurer. He may sign certificates of stock. He shall have general superintendence and direction of all the other officers of the company, and shall see that their duties are properly performed. He shall submit a report of the operations of the company for the year, and a statement of its affairs on the 31st day of December to the Directors at their regular meeting in February, and to the stockholders at the annual meeting in April of each year, and from time to time shall report to the Board all matters within his knowledge, which the interests of the company may require to be brought to their notice. He shall be ex officio a member of all standing committees, and shall have the general^ powers and duties of supervision and management usually vested in the office of the President of a corporation. He shall, in a general way, be familiar with and exercise supervision over the affairs of the other corporations in which this corporation may be interested. He shall freely consult and advise with the chairman of the various 160 APPENDIX. committees, and with the various committees, in relation to the busi- ness and interests of the corporation. THE VICE-PRESIDENTS. 22. The Vice-Presidents shall be vested with the powers and re- quired to perform the duties of the President in his absence as herein- after provided. The Vice-Presidents may sign certificates of stock, and shall perform such other duties as may be prescribed by the Board of Directors. SECRETAPwY. 23. The Secretary shall keep full minutes of all meetings of the stockholders and the Directors; he shall be ex officio Secretary of the Board of Directors; he shall attend all sessions of the Board, shall act as clerk thereof, and record all votes and the minutes of all pro- ceedings in a book to be kept for that purpose; and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders of the company and of the Board of Directors, and shall perform such other duties as may be pi'escribed by the Board of Directors or President, under whose supervision he shall be. He shall be sworn to the faithful discharge of his duty, and shall give such bond as may be required by the Board of Directors. He shall have general supervision over the accounting department and shall be assisted by an Auditor. TREASURER. 24. The Treasurer shall give a bond in such sum and with such security and in such form as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office, and the restoration to the company, in case of his death, resignation, or ■ removal from office, of all books, papers, vouchers, money or other property of whatsoever kind, in his possession belonging to the corpora- tion, and containing such other provision as the Directors shall see fit. Certificates of stock, when signed by the President or one of the Vice-Presidents, shall be countersigned by the Treasurer or one of the Assistant Treasurers. He shall perform such other duties as shall be determined by the Board of Directors. AUDITOR. 25. The powers and duties of the Auditor shall be such as may be designated by the Board. COUNSEL. 26. The Board may appoint general counsel, who shall be the legal advisers of the company. DUTIES OF OFFICERS MAY BE DELEGATED. 27. In case of the absence of any officer of the company, excepting the President, the Board of Directors may delegate the powers or duties APPENDIX. 161 of such officer to any other officer, or to any Director, for the time being; provided, a majority of the entire Board concur therein. TERM OF OFFICE. 28. Each appointed officer shall hold his office during the pleasure of the Board, unless otherwise specified in the by-laws. TRANSFERS OF STOCK. 29. All transfers of the stock of the corporation shall be made upon the books of the company by the holder of the shares in person, or by his legal representatives. No transfer of stock shall be made within ten days next preceding the day appointed for paying a dividend. The company shall be entitled to treat the registered holder of any share as the absolute owner thereof, and accordingly shall not be bound to recognize any equitable or other claim to, or interest in, such share, on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by statute of New Jersey. CERTIFICATES TO BE CANCELLED. 30. Certificates of stock shall be surrendered and cancelled at the time of transfer. LOSS OF CERTIFICATE. 31. Any person claiming a certificate or evidence of stock to be issued in place of one lost or destroyed, shall make an affidavit or affirmation of that fact and advertise the same in such newspaper, and for such space of time as the Board of Directors may require, describ- ing the certificate, and shall furnish the company with proof of the publication by the affidavit of the publisher of the newspaper, and shall give the company a bond of indemnity in form approved by the Board, with one or more sureties satisfactory to the Board, in double the par value of such certificate, whereupon the President and Treasurer may, one month after the termination of the advertisement, issue a new certificate of the same tenor with the one alleged to be lost or destroyed, but always subject to the approval of the Board of Directors. INSPECTION OF BOOKS. AND ACCOUNTS. 32. The books, accounts and records of the company shall be open to inspection by any member of the Board of Directors at all times; stockholders may, in the discretion of the Board, inspect the books of the company at such reasonable times as the Board of Directors may by resolution designate. HOLDINGS OF STOCK IN OTHER COMPANIES. 33. No shares of stock held by this company in any company whose property or stock may at any time have been purchased or acquired by this company, shall be sold or transferred, except in aid or in pur- U 1G3 APPENDIX. suance of collateral deeds of truSt, executed as security for a portion of the purchase price of any such stocks, without the assent of a majority in interest of the holders of all the capital stock issued and outstand- ing, expressed in writing or by vote at a stockholders' meeting; nor shall this company, without such assent, vote or authorize the voting of any such stock of another company in favor of the creation ol any bonded or mortgage indebtedness of such other company, but a sufScient number of shares of each company may be assigned to any persons satisfactory to the Board of Directors, in order to qualify such persons to be Directors of such other companies; and the capital stock of any such company shall not be increased or decreased, nor the stock held by this company be voted for such increase or decrease, nor be surrendered or exchanged for new stock Of such company without the assent of a majority in interest of the holders of the capital stock of this company issued and outstanding, expressed in writing or by vote at a stockholders' meeting. The Board may appoint any person or corporation to act as proxy or attorney in fact of this company at any meeting of the Stockholders or election of Directors of any such company whose stock shall be held by this company. DiyiDE^DS. 34. Dividends on the capital stock of the company, when earned, may be declared quarterly at the regular meetings of the Board of Directors in March, June, September and December of each year. NOTICE. 35. Wherever notice is required by statute or by these by-laws to be given to the stockholders, or the Directors, or to any officer of the company, personal notice is not meant unless expressly so stated; and any notice so required shall be deemed to be sufficient if given by depositing the game in a post-office box in a sealed, post-paid wrapper, addressed to such stockholder. Director or officer; and such notice shall be deemed to have been given at the time of such mailing, exclud- ing only those provisions of the by-laws where personal notice is required, or where notice is required to be given by wire, in which latter case notice shall be deemed to be given from the time the same is delivered to the telegraph company. Any stockholder. Director or officer may waive any notice required to be given by these by-laws. INTERPRETATION. 36. The headings of any of the foregoing sections shall not affect the construction thereof, and in these by-laws, unless there be something in the subject or context inconsistent therewith: "The company" and "this company" mean the "The Carnegie Com- pany." APPENDIX. 153 "In writing" and "written" mean written or printed or partly printed and partly written. "Registered office" and "principal office" mean the principal office in New Jersey, designated aa such pursuant to law. "Absence," as applied to the provision that the Vice-Presidents shall be vested with the powers of the President In his absence, means absence from Ijie United States, or absehce, temporary or permanent, from the office of the company in Pittsburg, and in such cases only as the President shall In writing specifically delegate his powers and duties to such other officer, and not otherwise. AMENDMENTS. 37. The foregoing by-laws shall not be altered, amended or added to except by the affirmative vote of a majority in interest of all the stockholders of the company at a duly convened meeting. The pro- posed alteration, amendment or addition shall first be submitted to the Board of Directors at a regular or special meeting; and thereupon the Board of Directors shall call a special meeting of the stockholders, giving not less than two weeks' written notice to each' stockholder, to take action upon such alteration, amendment or addition, which notice shall contain the recommendation of the Board with respect thereto. The Board of Directors shall have no power to amend, alter or repeal these by-laws. 164 APPENDIX. xn. CHAETEK OF FEDEEAL STEEL COMPANY.^ CEKTIFICATE OF INCOKPOEATION OF FEDERAL STEEL COMPANY. [Internal revenue stamp, 10 cents, canceled.] [Registered oflSce with the Corporation Trust Company of New Jersey, 60 Grand Street, Jersey City, N. J.] First. The name of the corporation is Federal Steel Company. Second. The location of its principal office in the State of New Jersey is at No. 60 Grand Street, in the city of Jersey City, county of Hudson. Said office is to be registered with the Corporation Trust Company of New Jersey. The name of the agent therein and in charge thereof, and upon whom process against this corporation may be served, is the Corporation Trust Company of New Jersey. Third. The objects for which, and for any of which, the corporation is formed, are to do any or all of the things herein set forth, to the same extent as natural persons might or could do, and in any part of the world, viz.: Mining of all kinds; manufacturing of all kinds; transportation of goods, merchandise, or passengers, upon land or water; building houses, structures, vessels, ships, boats, railroads, engines, cars, or other equipment, wharves or docks; constructing, maintaining, and operating railroads (other than railroads within the State of New Jersey), steamship lines, vessel lines, or other lines for transportation; the purchase, improvement, or sale of lands; To manufacture, purchase, or otherwise acquire, to hold, own, mort- gage, pledge, sell, assign and transfer, or otherwise dispose of, to invest, trade, deal in and deal with goods, wares, and merchandise, and property of every class and description; To acquire and undertalie all or any part of the business, assets, and liabilities of any person, firm, association, or corporation; To apply for, purchase, or otherwise acquire, and to hold, own, use, operate, and to sell, assign, or to otherwise dispose of, to grant licenses in respect of or otherwise turn to account any and all inventions, improvements, and processes used In connection with, or secured under letters patent of the United States or elsewhere, or otherwise; and, with a view to the working and development of the same, to carry on any business, whether manufacturing or otherwise, which the corporation may think calculated directly or indirectly to effectuate these objects; 1 Reprinted from Vol. I, Report of Industrial Commission. For Analysis and Contents see Charter in the index. APPENDIX. 163 To enter Into, make, perform, and carry out contracts of every kind with any person. Arm, association or corporation; To have one or more offices; to carry on all or any of its Operations and business; and unlimitedly and without restriction to hold, pur' chase, mortgage, lease, and convey real and personal property In any State or territory of the United States, and in any foreign country or place. In general, to carry on any other business in connection therewith, whether manufacturing or otherwise, with all the powers conferred by the laws of New Jersey upon corporations under the act hereinafter referred to. Fourth. The total authorized capital stock of the corporation is two hundred million dollars (|200,000,000), divided into two million (2,000,000) shares of the par value of one hundred dollars ($100) each. Of such total authorized capital stock, one million shares, amounting to $100,000,000, shall be preferred stock, and one million shares, amounting to $100,000,000, shall be common stock. From time to time the preferred stock and the common stock shall be issued in such amounts and proportion as shall be determined by the Board of Directors, and as may be permitted by law. The preferred stock shall be entitled, out of any and all surplus net profits, whenever declared by the Board of Directors, to noncumulative dividends at the rate of, but not exceeding, six per cent per annum for the fiscal year beginning on the first day of January, 1899, and 'for each and every fiscal year thereafter, payable in preference and pri- ority to any payment of any dividend on the common stock for such fiscal year. In addition thereto, in the event of the dissolution of the corporation, the holders of the preferred stock shall be entitled to receive the par value of their preferred shares out of the surplus funds of the corporation before anything shall be paid therefrom to the holders of the common stock. The common stock shall be subject to the prior rights of the holders of the preferred stock, as herein declared. If, after providing for the payment of full dividends for any fiscal year on the preferred stock, there shall remain any surplus net profits of such year, any aid all such surplus net profits of such year, and of any other fiscal year for which full dividends shall have been paid on the preferred stock, shall be applicable to dividends upon the common stock, when and as from time to time the same shall be declared by the Board of Directors and out of any such surplus net profits, after the close of any fiscal year, the Board of Directors may pay dividends upon the common stock of the corporation for such fiscal year, but not until after the dividends upon the preferred stock for such fiscal year shall have been actually paid or provided and set apart. Fifth. The names of the incorporators (the post-office address of each is No. 60 Grand Street, Jersey City, N. J.) and the number of shares of common stock (ten) subscribed for by each, the aggregate of which 1C6 APPENDIX. being three thousand dollars (f 3,000), Is the amount of capital stock with which the corporation will commence business, are as follows: NAME. Charles C. Cluff Ten shares common stock. Chaeles MacVeagh Ten shares common stock. Benjamin C. VanDtkb Ten shares common stock. Sixth. The duration of the corporation shall be unlimited. Seventh. The corporation may use and apply its surplus earnings, or accumulated profits authorized by law to be reserved, to the purchase or acquisition of property, and to the purchase or acquisition of its own capital stock from time to time, to such extent and in such manner and upon such terms as its Board of Directors shall determine; and neither the property nor the capital stock so purchased and acquired, nor any of its capital stock taken in payment or satisfaction of any debt due to the corporation', shall be regarded as promts for the pur- poses of declaration or payment of dividends, unless otherwise deter- mined by a majority of the Board of Directors or a majority of the stockholders. The corporation in its by-laws may prescribe the number necessary to constitute a quorum of the Board of Directors, which number may be less than a majority of the whole number. The number of Directors at any time may be increased by a vote of the Board of Directors, and in case of any such increase the Board of Directors shall have power to elect such additional Directors, to hold office until the next meeting of stockholders, or until their successors shall be elected. The Board of Directors shall have power without the assent or vote of the stockholders to make, alter, amend, and rescind the by-laws of the corporation, to fix the amount to be reserved as working capital, to authorize and to cause to be executed mortgages and liens upon the real and personal property of the corporation ; and from time to time to sell, assign, transfer, or otherwise dispose of any or all of the property of the corporation, but no such sale of all of the property shall be made except pursuant to the vote of at least two-thirds of the Board of Directors. The Board of Directors, by resolution passed by a majority of the whole Board, may designate three or more directors to constitute an Executive Committee, which committee to the extent provided in said resolution or in the by-laws of the corporation, shall have, and may exercise, the power of the Board of Directors in the management of the business and affairs of the corporation, and shall have power to authorize the seal of the corporation to be affixed to all papers which may require it. The Board of Directors from time to time shall determine whether and to what extent, and at what times and places, and under what conditions and regulations, the accounts and books of the corporation, or any of them, shall be open to the inspection of the stockholders; APPENDIX. 167 and no stockholder shall have any right of inspecting any account or book or document of the corporation, except as conferred by statute or authorized by the Board of Directors, or by a resolution of the stock- holders. The Board of Directors shall have power to hold its meetings, to have one or more offices, and to keep the books of the corporation (except the stock and transfer books) outside of this State at such places as may be from time to time designated by them. It is the intention that the objects above specified in Article Third, except where otherwise expressed in said article, shall be nowise limited or restricted by reference to or inference from the terms of any other article, clause, or paragraph in this certificate. The undersigned, for the purpose of forming a corporation in pur- suance of an act of the Legislature of the State of New Jersey, entitled "An act concerning corporations" (Revision of 1896). and the various acts amendatory thereof and supplemental thereto, do make, record, and file this certificate, and do respectively agree to take the number of shares of stock hereinbefore set forth, and accordingly hereunto have set our hands and seals. Dated, Jersey City, N. J., September 9, 1898. CHAS. C. CLTJFF, [6EAI..] Chables MacVeagh, [seal.] Benjamin C. VanDyke. [seal.] In presence of James B. Dill, E. H. Gabt, FaANcis Lynde Stetson. State of New Jebsey, \ County of Hudson, j Be it remembered that on this ninth day of September, A. D. eighteen hundred and ninety-eight, before the undersigned personally appeared Charles C. Cluff, Charles MacVeagh, and Benjamin C. VanDyke, who, I am satisfied, are the persons named in and who executed the foregoing certificate, and I, having first made known to them, and each of them, the contents thereof, they did each acknowledge that they signed, sealed, and delivered the same as their voluntary act and deed. James B. Dill, Master in Chancery of New Jersey. [10 cent internal revenue stamp cancelled.] Received in the Hudson Countyi N. J., Clerk's office September 9th, 1898, and recorded in Clerk's Record No. — , on page — . John G. Fisheb, Clerk. (Endorsed:) "Filed September 9, 1898. Geobge Wuets, Secretary of State." 168 APPENDIX. XIII. BY-LAWS, FEDEKAL STEEL COMPANY.* Federal Steel Company — By-Laws, September 9, 1898. I. 1. The title of the corporation is Fbdeeal Steel Company. 2. The principal office is at 60 Grand Street, Jersey City, New Jersey. 3. The corporate seal of the company shall have inscribed thereon the name of the corporation, the State (New Jersey), and the month and year of its creation (September, 1898). II. DIRECTORS. 4. The property and business of the corporation shall be managed and controlled by a Board of Directors, who shall at all times be stockholders. They shall hold office for one year, and until others are elected and qualified in their stead. The number of the first Board of Directors shall be three; but at any time the number may be increased by vote of the Board of Directors, and, in case of any such increase, the Board of Directors shall have power to elect such additional Directors to hold office until the next meeting of stockholders, or until their successors shall be elected. If the office of any Director becomes or is vacant by reason of death, resignation, disqualification, increase in number, or otherwise, the remaining Directors, by a majority vote, may elect a successor, who shall hold office for the unexpired term or until his successor is elected. III. MEETINGS OP STOCKHOLDERS. 5. The annual meeting of stockholders shall be held on the first Monday of April in each year if not a legal holiday, and, if a legal holiday, then on the day following, at the registered office of the com- pany in the State of New Jersey, commencing at 11 o'clock a. m., when they shall elect by a plurality vote by ballot the full Board of Directors to serve for one year, and until their successors are elected or chosen and qualified, each stockholder being entitled to one vote in person or by proxy for each share of stock standing registered in his name on the 10th day of the month preceding the election; provided, no stock shall be voted which has been transferred within twenty days of the time of the election. A majority in amount of the stock outstanding shall be requisite to 1 Reprinted from Vol. I, Report of Industrial Commission. For Analysis and Contents see By-laws In the index. APPENDIX. 1G9 constitute a quorum for an election of Directors or the transaction of other business. The polls for such election shall be open at twelve o'clock noon and closed at one o'clock in the afternoon. Notice of the annual meeting may be published in a newspaper in the city of New York once each week during the calendar month next preceding the meeting; but a failure to publish such notice or any irregularity in the publication or notice shall not affect the validity of the said meeting or the proceedings therein. Special meetings of stockholders shall be called by the Secretary by mailing a notice at least five days prior to the date of meeting to each stockholder of record at his last known post-ofiSce address, on the request in writing, or by vote, of a majority of the Board of Directors, or Executive Committee, or on demand in writing by stockholders of record owning a majority in amount of the entire issued capital stock of the company. IV. MEETINGS OF DIRECTORS. 6. The Board of Directors shall meet at the office of the company in New York immediately after the adjournment of the annual meet- ing of stockholders and elect the officers of the corporation for the ensuing year. ' Regular meetings of the Directors shall be held at the office of the company in New York, or by order of the Directors elsewhere, on a day and at an hour to be fixed by resolution of the Board. Notice of regular meetings shall be mailed to each Director at his last known post-office address by the Secretary at least three days previous to the time fixed for the meeting. While the number of Directors remains at three, a majority shall be necessary to constitute a quorum for the transaction of business; but if the number of Directors shall be increased to fifteen, then six shall constitute a quorum for the transaction of business. Special meetings of the Board may be called by the President on one day's notice to each Director, delivered to him personally or left at his residence or usual place of business; or such special meetings may be called in like manner on the written request of three members. V. COMPENSATION OF DIRECTORS AND EXECUTIVE COMMITTEE. 7. Directors and members of the Executive Committee as such shall not receive any stated salary for their services, but may be allowed $10 each for attendance at each regular or special meeting if present at roll call, and until adjournment, unless excused. VI. INSPECTORS OF ELECTION. 9. The Board of Directors, at a meeting held prior to the annual Meeting of the stockholders, shall appoint two stockholders to act as inspectors and conduct the election of Directors at the ensuing annual irO APPENDIX. meeting of stockholders. Inspectors of election shall not be eligible to the office of Director. If any inspector of election fails to attend the election, a succecsor may be appointed by the stockholders in attend- ance. VII. ORDER OF BUSINESS. 10. The order of business at the meetings of the Board of Directors shall be as follows: (IJ A quorum being present, the Chairman shall call the Board to order. (2) The minutes of the last meeting shall be read and considered as approved if there be no amendments. (3) Reports of officers of the company. (4) Reports of committees. (5) Unfinished business. (6) Miscellaneous business. (7) New business. VIII. OFFICERS OF THE COMPANY. 11. The officers of the company shall consist of a Chairman of the Board, President, First Vice-President, Second Vice-President, Secre- tary, General Counsel, Treasurer, Auditor, and such other officers as may from time to time be elected or appointed by the Board of Directors. One person may hold more than one office. IX. OFFICERS. 12. The Directors shall elect from among their own number a Chair- man of the Board, a President, a First Vice-President, and a Second Vice-President; and shall also appoint a Secretary, Treasurer, Auditor, and General Counsel. X. DUTIES OF THE CHAIRMAN. 13. It shall be the duty of the Chairman to preside at all meetings of the Board of Directors and to give such counsel and advice as from time to time may by him be deemed essential to the best interests of the corporation to the Executive Committee or to the President. XI. DUTIES OF THE PRESIDENT. 14. It shall be the duty of the President, In the absence of the Chairman of the Board, to preside at all meetings of the Board of Directors; to have general and active management of the business of the company; to see that all orders and resolutions of the Board are carried into effect; to execute all contracts and agreements authorized by the Board; to keep in safe custody the seal of the company, and, •when authorized by the Board or Executive Committee, to affix the seal to any instrument requiring the same, which seal shall always be APPENDIX. 171 attested by the signature of the President and of the Secretary or the Treasurer. He may sign certificates of stock. He shall have the general superintendence and direction of all the other officers of the company, except the Chairman of the Board, and shall see that their duties are properly performed. He shall submit a complete report of the operations of the company for the year and the state of its affairs on the 31st day of December to the Directors at their regular meeting in April, and to the stock- holders at their annual meeting in April of each year, and from time to time shall report to the Directors all matters within his knowledge which the interests of the company may require to be brought to their notice. He shall be ex officio a member of all standing committees, and shall have the general powers and duties of supervision and management usually vested in the office of the President of a corporation. He shall in a general way be familiar with and exercise supervision over the affairs of the other corporations in which this corporation may be interested. He shall freely consult and advise with the Chairman of the Board and also the Executive Committee in relation to the business and interests of the corporation. XII. FIRST VICE-PRESIDENT. 15. The First Vice-President shall be vested with all the powers and required to perform all the duties of the President in his absence. He may sign certificates of stock; and he shall perform such other duties as may be prescribed by the Board of Directors. XIII. 16. The Second Vice-President shall be vested with all the powers and required to perform all the duties of the President in the absence of both the President and the First Vice-President; he may sign certificates of stock, and he shall perform such other duties as may be prescribed by the Board of Directors. XIV. PRESIDENT PRO TEM. 17. In the absence of the President and First Vice-President and Second Vice-President, the Board may appoint a President pro tern. XV. SECRETARY. 18. The Secretary shall be ex officio Secretary of the Board of Directors and of the standing committees; he shall attend all sessions of the Board; shall act as clerk thereof, and record all votes and the minutes of all proceedings in a book to be kept for that purpose. He shall perform like duties for the standing committees when required. He shall give notice of all calls for Installments to be paid by the stockholders, and shall see that proper notice is given of all meetings 172 APPENDIX. of the stockholders of the company and of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President. He shall be sworn to the faithful discharge of his duty, and shall give such bond as may be required by the Board of Directors. The Assistant Secretary, if one is appointed, shall be vested with all the powers and required to perform all the duties of the Secretary in his absence, inability, refusal, or neglect to act. XVI. TREASURER. 19. The Treasurer shall keep full and accurate accounts of receipts and disbursements in books belonging to the company, and shall deposit all moneys and other valuable effects in the name and to the credit of the company in such depositories as may be designated by the Board of Directors or Executive Committee. He shall disburse the funds of the company as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and Directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial conditions of the company, and at the regular meeting of the Board in April annually a like report for the preceding year. He shall give the company a bond in form and in a sum and with security satisfactory to the Board of Directors or the Executive Com- mittee for the faithful performance of the duties of his office and the restoration to the company, in case of his death, resignation, or removal from office, of all books, papers, vouchers, money, or other property of whatever kind in his possession belonging to the corporation, and containing such other provisions as the Board of Directors or Executive Committee may require. Certificates of stock, when signed by the President or First Vice- President or Second Vice-President, shall be countersigned by the Treasurer. He shall keep the accounts of stock registered and trans- ferred in such form and manner and under such regulations as the Board of Directors may prescribe. The Assistant Treasurer, if one is appointed, shall be vested with all the powers and required to perform all the duties of the Treasurer in his absence, inability, refusal or neglect to act. XVII. AUDITOR. 20. The Auditor shall have supervision over all the accounts and account books of the company, and see that the system of keeping the same is enforced and maintained. He shall direct as to forms and blanks relating to books and accounts in all departments, and no change shall be made without his consent or the consent of the Presi- dent or Executive Committee. He shall see that there is kept in the bookkeeping department a set APPENDIX. 173 of books containing a complete record of all business transactions of the company pertaining to accounts. He shall, when requested, furnish the Executive Committee, or President, a statement of the earnings and expenses of the corporation or any other company in which this corporation may be interested for any given time, and shall keep books and records for the purpose of furnishing such statistics. He shall verify the assets reported by the Treasurer or his assistant at least twice a year, and make report of the same to the Executive Committee. He shall cause the books and accounts of all ofBcers and agents charged with the receipt or disbursement of money to be examined as often as practicable, or when requested by the President or Executive Committee, and shall ascertain whether or not the cash and vouchers covering the balance are actually on hand. He shall render such assistance and advice as the President or Executive Committee may desire concerning the books and accounts and system of financial transactions of all other corporations in which this corporation is interested, and furnish to the President or Executive Committee such statements concerning the same as may be requested by them. In case of a default within his information at any time he shall at once notify the President and Chairman. XVIII. GENERAL COUNSEL. 21. The General Counsel shall be the legal adviser of the company, and shall perform such services and receive such compensation as may be determined by the Board of Directors or the Executive Committee. XIX. DUTIES OP OFFICERS MAY BE DELEGATED. 22. In case of the absence of any officer of the company, the Board of Directors or the Executive Committee may delegate his powers or duties to any other officer or to any Director for the time being. XX. STANDING COMMITTEE. 23. There shall be an Executive Committee of five Directors, selected by the Board, who shall meet at regular periods, or on notice to all or any of their own number. They shall advise with and aid the officers of the company in all matters concerning its interests and the manage- ment of its business; and when the Board of Directors is not in session the Executive Committee shall have and may exercise all the powers of the Board of Directors. The Executive Committee, unless otherwise provided py the Board of Directors, shall fix the salaries or compensation of all officers. The Executive Committee shall keep regular minutes and cause them to be recorded in a book kept in the office of the company for that pur- pose, and report the same to the Board of Directors whenever required by them. 174 APPENDIX. XXI. TERM OF OFFICE. 24. Each officer shall hold his office only during the pleasure of the Board of Directors, unless otherwise provided by special agreement in ■writing, signed by a majority of the Executive Cominlttee. XXII. TRANSFER OF STOCK. 25. All transfers of the stock of the corporation shall be made upon the books of the company by the holder of the shares in person or by his legal representative; but no transfer of stock shall be made within 10 days next preceding the day appointed for paying a dividend. XXIII. CERTIFICATES TO BE CANCELED. 26. Certificates of stock surrendered shall be canceled by the transfer agent at the time of transfer. XXIV. LOSS OF CERTIFICATE. 27. Any person claiming a certificate or evidence- of stock to be issued in place of one lost or destroyed shall make an affidavit or affirmation of that fact, and advertise the same in such newspaper and for such space of time as the Board of Directors may require, describ- ing the certificate, and shall furnish the company with proof of publica- tion by the affidavit of the publisher of the newspaper, and shall give the Board a bond of indemnity in form approved by the Board with one or more sureties, if required, in double the par value of such certificate, whereupon the President and Treasurer may, one month after the termination of the advertisement, issue a new certificate of the same tenor with the one alleged to be lost or destroyed, but always subject to the approval of the Board of Directors. XXV. CONTRACTS AND AGREEMENTS. 28. No agreement, contract, or obligation (other than a cheque) Involving the payment of money or the credit or liability of the com- pany for more than f 5,000, shall be made without the approval of the Board of Directors or of the Executive Committee. XXVI. CHEQUES FOR MONEY. 29. All cheques, drafts, or orders for the payment of money shall be signed by the Treasurer and countersigned by the Chairman of the Board or President or First or Second Vice-President. No cheque shall be signed by both the Treasurer and Chairman or President or a Vice-Presidisnt in blank. XXVII. 30. The books, accounts, and records of the company shall be open to Inspection by any member of the Board of Directors at all times; APPENDI2C 175 the stockholders may inspect the books of the company at such times only as the Executive Committee or Board of Directors may by resolu- tion designate. XXVIII. ALTERATION OP BY-LAWS. 31. The Board of Directors, by a vote of a majority of the members present at any meeting, may alter or amend these by-laws, but no alteration shall be made unless proposed at a meeting of the Board and considered at subsequent meetings. XXIX. None of the shares of the capital stock of the Minnesota Iron Com- pany, the Illinois Steel Company, the Lorain Steel Company, or the Elgin, Joliet and Eastern Railway Company shall hereafter at any time or times, be sold, assigned, transferred, pledged, mortgaged, or incum- bered by the Directors of the Federal Steel Company without making at least sixty days' previous publication in two prominent dally news- papers published in the city of New York, of the intention to make such sale, transfer, assignment, pledge, mortgage, or incumbrance; and, also, at the date of the first publication, filing a similar written notice with the Chairman and Secretary, respectively, of the said Com- mittee on Stock Lists; and also obtaining the consent of those holding a majority in amount of the shares of stock of the Federal Steel Com- pany, by vote at a meeting regularly called and notice mailed to each stockholder at his usual or last known place of business or residence at least thirty days before the time of meeting. The shares of the capital stock of the said Minnesota Iron Company, the Illinois Steel Company, Lorain Steel Company, and Elgin. Joliet and Eastern Railway Company shall be placed and held in the name of some person or persons designated by vote of the Directors of the Federal Steel Company to act as trustee therefor, and the certificates for said shares shall provide by indorsement thereon that they are issued and can be transferred only in pursuance of the provisions of this by-law. This by-law shall never be repealed, amended, or modified except by consent of a majority of the stockholders of the Federal Steel Com- pany obtained by vote at a meeting held pursuant to notice, stating the time, place, and object of the meeting, and mailed to each stogk- holder at his usual or last known place of business or residence at least thirty days before the time of meeting. This first Board of Directors of the Federal Steel Company hereby distinctly waives, abrogates, and relinquishes; both for themselves ajid their successors, all rights and powers conferred by the Articles of Incorporation of Federal Steel Company which may not be in accord- ance herewith, either as to amendment of by-laws or disposition of above named property. 176 APPENDIX. XXX. The following specific days are hereby fixed for declaring dividends upon the common and preferred stocls of the Federal Steel Company, namely: The second Tuesdays in January, February, March, April, May, June, July, August, September, October, November and December In each and every year, providing, however, that no dividends shall be declared except as permitted by law and by the provisions of the certificate of incorporation of the company; and provided further, that no dividends shall be declared or paid except from accumulated profits excluding the sum or sums reserved as working capital. APPENDIX. 177 XIV. STANDAKD OIL TETJST AaEEEMElTT.i ■ "This agreement, made and entered upon this second day of January, A. D. 1882, by and between all the persons who shall now or may hereafter execute the same as parties thereto, witnesseth: "I. It is intended that the parties to this agreement shall embrace three classes, to-wit: "(1.) All the stockholders and members of the following corpora- tions and limited partnerships, to-wit: "Acme Oil Company (New York) ; Acme Oil Company (Pennsylva- nia) ; Atlantic Refining Company, of Philadelphia; Bush & Co., limited; Camden Consolidated Oil Company; Elizabethport Acid Works; Im- perial Refining Company, limited; Chas. Pratt & Co.; Paine, Ablett & Co., limited; Standard Oil Company (Ohio); Standard Oil Company (Pittsburg) ; Smith's Ferry Oil Trans. Company; Solar Oil Company, limited; Sone & Fleming Manufacturing Company, limited. "Also, all the stockholders and members of such other corporations and limited partnerships as may hereafter join in this agreement at the request of the trustees herein provided for. "(2.) The following Individuals, to-wit: . "W. C. Andrews, Jno. D. Archbold, Lide K. Arter, J. A. Bostwick, Benj. Brewster, D. Bushnell, Thos. C. Bushnell, J. N. Camden, Henry L. Davis, H. M. Flagler, Mrs. H. M. Flagler, H. M. Harma, and Geo. W. Chapin, D. M. Harkness, D. H. Harkness. trustee; S. V. Harkness, John Huntington, H. A. Hutchins, Chas. F. G. Heye, O. B. Jennings, Chas. Lockhart, A. M. McGregor, Wm. H. Macy, Wm. H. Macy, Jr., estate of Josiah Macy, Jr., Wm. H. Macy, Jr., executor; 0. H. Payne, 0. H. Payne, trustee; Chas. Pratt, Horace A. Pratt, C. M. Pratt, A. J. Pouch, John D. Rockefeller, Wm. Rockefeller, Henry H. Rogers, W. P. Thompson, J. J. Vandegrift, William T. Wardwell, W. G. Warden, Jos. L. Warden, Warden, Frew & Co., Louise C. Wheaton, Julia H. York, Geo. H. Vilas, M. R, Keith, Geo. F. Chester, trustees. "Also, all such individuals as may hereafter join in this agreement at the request of the trustees herein provided for. "(3.) A portion of the stockholders and members of the following corporations and limited partnerships, to-wit: "American Lubricating Oil Co., Baltimore United Oil Co., Beacon Oil Co., Bush & Denslow Manufacturing Co., Central Refining Co., of Pittsburg; Cbesebrough Manufacturing Co., Chess-Carley Co., Con- solidated Tank Line Co., Inland Oil Co., Keystone Refining Co., Maver- J For Analysis and Contents see Standard Oil Agreement in the in- dex. 178 APPENDIX. ick Oil Co., National Transit Co., Portland Kerosene Oil Co., Producers' Consolidated Land and Petroleum Co., Signal Oil Works, limited; Thompson & Bedford Co., limited; Devoe Manufacturing Co., Eclipse Lubricating Oil Co., limited; Empire Refining Co., limited; Franklin Pipe Co., limited; Galena Oil Works, limited; Galena Farm Oil Co., limited; Germania Mining Co., Vacuum Oil Co., H. C. Van Tine & Co., limited; Waters-Pierce Oil Co. "Also, stockholders and members (not being all thereof) of other corporations and limited partnerships who may hereafter join in this agreement at the request of the trustees herein provided for. "IL The parties hereto do covenant and agree to and with each other, each in consideration of the mutual covenants and agreements of the others, as follows: "(1.) As soon as practicable, a corporation shall be formed in each of the following states, under the laws thereof to-wit: Ohio, New Tork, Pennsylvania and New Jersey; provided, however, that instead of organizing a new corporation, any existing charter and organization may be used for the purpose when it can advantageously be done. "(2.) The purposes and powers of said corporation shall be to mine for, produce, manufacture, refine and deal in petroleum and all its products and all the materials used in such businesses, and transact other business collateral thereto. But other purposes and powers shall be embraced in the several charters, such as shall seem expedient to the parties procuring the charter, or, if necessary to comply with the law, the powers aforesaid may be restricted and reduced. "(3.) At any time hereafter, when it may seem advisable to the trustees herein provided for, similar corporations may be formed in other states and territories. "(4.) Each of said corporations shall be known as the Standard Oil Company of (and here shall follow the name of the state or territory by virtue of the laws of which said corporation is organized.) "(5.) The capital stock of each of said corporations shall be fixed at such an amount as may seem necessary and advisable to the parties organizing the same, in view of the purpose to be accomplished. "(6.) The shares of stock of each of said corporations shall be issued only for money, property or assets equal at a fair valuation to the par value of the stock delivered therefor. "(7.) All of the property, real and personal, assets and business of each and all of the corporations and limited partnerships mentioned or embraced in class first shall be transferred to and vested in the said several Standard Oil Companies. All of the property, ass'ets and business in or of each particular state shall be transferred to and vested in the Standard Oil Company of that particular state, and in order to accomplish such purpose the directors and managers of each and all of the several corporations and limited partnerships mentioned In class first, are hereby authorized and directed by the stockholders and members thereof (all of them being parties to this agreement), to sell, assign, transfer, convey and make over, for the consideration APPENDIX. 179 hereinafter mentioned, to tlie Standard Oil Company or companies of tlie proper state or states, as soon as said corporations are organized and ready to receive the same, all the property, real and personal, assets and business of said corporations and limited partnerships. Correct schedules of such property, assets and business shall accompany each transfer. "(8.) The individuals embraced in class second of this agreement do each for himself agree, for the consideration hereinafter mentioned, to sell, assign, transfer, convey and set over all the property, real and personal, assets and business mentioned and embraced in schedules accompanying such sale and transfer to the Standard Oil Company or companies, of the proper state or states, as soon as the said corpora- tions are organized and ready to receive the same. "(9.) The parties embraced in class third of this agreement do coven- ant and agree to assign and transfer all of the stock held by ihem in the corporations or limited partnerships herein named, to the trustees herein provided for, for the consideration and upon the terms herein- after set forth. It is understood and agreed that the said trustees and their successors may hereafter take the assignment of stocks in the same or similar companies upon the terms herein provided, and that whenever and as often as all the stocks of any corporation or limited partnership are vested in said trustees, the proper steps may then be taken to have all the money, property, real and personal, of such cor- poration or partnership assigned and conveyed to the Standard Oil Company of the proper state, on the terms and in the mode herein set forth, in which event the trustees shall receive stocks of the Stand- ard Oil Companies equal to the value of the money, property and busi- ness assigned, to be held in place of the stocks of the company or companies assigning such property. "(10.) The consideration for the transfer and conveyance of the money, property and business aforesaid to each or any of the Standard Oil Companies shall be stock of the respective Standard Oil Company to which said transfer or conveyance is made, equal at par value to the appraised value of the money, property and business so transferred. Said stock shall be delivered to the trustees hereinafter provided for, and their successors, and no stock of any of said companies shall ever be issued except for money, property or business equal at least to the par value of the stock so issued, nor shall any stock be issued by any of said companies for any purpose, except to the trustees herein pro- vided for, to be held subject to the trusts hereinafter specified. It is understood, however, that this provision is not intended to restrict the purchase, sale and exchange of property by said Standard Oil Com- panies as fully as they may be authorized to do by their respective charters, provided only that no stock be issued therefor except to said trustees. "(11.) The consideration for any stocks delivered to said trustees as above provided for, as well as for stocks delivered to said trustees by persons mentioned or included in class third of this agreement, shall 180 APPENDIX. be the delivery by said trustees to the persons entitled thereto, of tri certificates hereinafter provided for, equal at par value to the par va! of the stocks of the said Standard Oil Companies so received by si trustees, and equal to the appraised value of the stocks of other co panies or partnerships delivered to said trustees. (The said apprais value shall be determined in a manner agreed upon by the parties interest and the said trustees.) It is understood and agreed, howev that the said trustees may, with any trust funds in their hands, addition to the mode above provided, purchase the bonds and stoc of other companies engaged in business similar or collateral to t business of said Standard Oil Companies, on such terms and in su mode as they may deem advisable, and shall hold the same for t benefit of the owners of said trust certificates, and may sell; assij transfer and pledge such bonds and stocks whenever they may dei it advantageous to said trust so to do. ■ "III. The trusts upon which said stocks shall be held, and the nu: ber, powers and duties of said trustees, shall be as follows: "(1.) The number of trustees shall be nine. "(2.) J. D. Rockefeller, O. H. Payne and Wm. Rockefeller are here appointed trustees, to hold their oflSce until the first Wednesday April, A. D. 1885. "(3.) J. A. Bostwick, H. M. Flagler and W. G. Warden are here appointed trustees, to hold their office until the first Wedfiesday April, A. D. 1884. "(4.) Chas. Pratt, Benj. Brewster and Jno. D. Archbold are here appointed trustees, to hold their ofilce until the first Wednesday April, A. D. 1883. "(5.) Elections for trustees to succeed those herein appointed shi be held annually, at which election a sufileient number of trustees sh; be elected to fill all vacancies occurring either from expiration of t term of the office of trustee or from any other cause. All trustees shi be elected to hold their office for three years, except those elected fill a vacancy arising from any cause, except expiration of term, w shall be elected for the balance of the term of the trustee whose pla they are elected to fill. Every trustee shall bold his office until I successor is elected. "(6.) Trustees shall be elected by ballot by the owners of tri certificates or their proxies. At all meetings the owners of trust certi cates, who may be registered as such on the books of the trustees, m vote in person or by proxy, and shall have one vote for each and eve share of trust certificates standing in their names, but no such owr shall be entitled to vote upon any share which has not stood In 1 name thirty days prior to the day appointed for the election. T transfer books may be closed for thirty days immediately preceding t annual election. A majority of the shares represented at such electi shall elect. "(7.) The annual meeting of the owners of said trust certlflcal for the election of trustees, and for other business^ shall be held at t APPENDIX. 181 office of the trustees, in the city of New York, on the first Wednesday of April of each year, unless the place of meeting be changed by the trustees, and said meeting may be adjourned from day to' day until its business is completed. Special meetings of the owners of said trust certificates may be called by the majority of the trustees at such times and places as they may appoint. It shall also be the duty of the trustees to call a special meeting of holders of trust certificates whenever requested to do so by a petition signed . by the holders of ten per cent in value of such certificates. The business of such special meetings shall be confined to the object specified in the notice given therefor. Notice of the time and place of all meetings of the owners of trust certificates shall be given, by personal notice as far as possible, and by public notice in one of the principal newspapers of each state, in which a Standard Oil Company exists, at least ten days before such meeting. At any meeting a majority in value of the holders of trust certificates represented consenting thereto, by-laws may be made, amended and repealed, relative to the mode of election of trustees and other business of the holders of trust certificates, provided, however, that said by-laws shall be in conformity with this agreement. By-laws may also be made, amended and repealed at any meeting, by and with the consent of a majority in value of the holders of trust certificates, which alter this agreement relative to the number, powers and duties of the trustees, and to other matters tending to the more e£5cient accom- plishment of the objects for which the trust is created, provided only that the essential intents and purposes of this agreement be not thereby changed. "(8.) Whenever a vacancy occurs in the board of trustees more than sixty days prior to the annual meeting for the election of trustees, it shall be the duty of the remaining trustees to call a meeting of the owners of Standard Oil Trust Certificates for the purpose of electing a trustee or trustees to fill the vacancy or vacancies. If any vacancy occurs in the board of trustees, from any cause, within sixty days of the date of the annual meeting for the election of trustees, the vacancy may be filled by a majority of the remaining trustees, or, at their option, may remain vacant until ' the annual election. "(9.) If, for any reason, at any time, a trustee or trustees shall be appointed by any court to fill any vacancy or vacancies in said board of trustees, the trustee or trustees so appointed shall hold his. or the respective office or offices only until a successor or successors shall be elected in the manner above provided for. "(10.) Whenever any change shall occur in the board of trustees, the legal title to the stock and other property held in trust shall pass to and vest in the successors of said trustees without any formal transfer thereof. But if at any time such formal transfer shall be deemed necessary or advisable, it shall be the duty of the board of trustees to obtain the same, and it shall be the duty of any retiring trustee or the administrator or executor of any deceased trustee to make said transfer. "(11.) The trustees shall prepare certificates which shall show the 182 APPENDIX. interest of each beneficiary in said trust, and deliver them to the ] sons properly entitled thereto. They shall be divided into share: the par value of one hundred dollars each, and shall be known Standard Oil Trust Certificates, and shall be issued subject to all terms and conditions of this agreement. The trustees shall have po to agree upon and direct the form and contents of said certificates, the mode in which they shall be signed, attested and transferred. ' certificates shall contain an express stipulation that the holders the; shall be bound by the terms of this agreement and by the by-1 herein provided for. "(12.) No certificates shall be issued except for stocks and bo held in trust, as herein provided for, and the par value of certifies issued by said trustees shall be equal to the par value of the stock said Standard Oil Companies, and the appraised value of other bo and stocks held in trust. The various bonds, stocks and monies I under said trust shall be held for all parties in interest jointly, the trust certificates so issued shall be the evidence of the interest I by the several parties in this trust. No duplicate certificates shall issued by the trustee, except upon surrender of the original certific or certificates for cancellation, or upon satisfactory proof of the '. thereof, and in the latter case they shall require a suflicient bone indemnity. "(13.) The stacks of the various Standard Oil Companies held trust by said trustees, shall not be sold, assigned or transferred by i trustees, or by the beneficiaries, or by both combined, so long as 1 trust endures. The stocks and bonds of other corporations, held said trustees, may be by them exchanged or sold and the proce thereof distributed pro rata to the holders of trust certificates, or i proceeds may be held and re-invested by said trustees for the purpc and uses of the trust; provided, however, that said trustees may, fi time to time, assign such shares of stock of said Standard Oil C( panies as may be necessary .to qualify any person or persons cho or to be chosen as directors and officers of any of said Standard Companies. "(14.) It shall be the duty of said trustees to receive and safelj keep all interests and dividends declared and paid upon any of the e bonds, stocks and monies held by them in trust, and to distribute monies received from such sources or from sales of trust property otherwise, by declaring and paying dividends upon the Standard Ti certificates as funds accumulate, which, in their judgment, are needed for the uses and expenses of said trust. The trustees sh however, keep separate accounts of receipts from interest and d dends, and of receipts from sales or transfers of trust property, anc making any distribution of trust funds, in which monies derived fi sales or transfers shall be included, shall render the holders of ti certificates a statement showing what amount of the fund distribt has been derived from such sales or transfers. The said trustees r be also authorized and empowered by a vote of a majority in ve APPENDIX. 183 of holders of trust certificates, whenever stocks or bonds have accumu- lated in their hands from money purchases thereof, or the stocks or bonds held by them have increased in value, or stock dividends shall have been declared by any of the companies whose stocks are held by said trustees, or whenever, from any such cause, it is deemed advisable so to do, to increase the amount of trust certificates to the extent of such increase or accumulation of values, and to divide the same among the persons then owning trust certificates pro rata.. "(15.) It shall be the duty of said trustees to. exercise general super- vision over the affairs of said several Standard Oil Companies, and as far as practicable, over the other companies or partnerships, any portion of whose stock is held in said trust. It shall be their duty as stockholders of said companies to elect as directors and officers thereof, faithful and competent men. They may elect themselves to such positions when they see fit so to do, and shall endeavor to have the affairs of said companies managed and directed in the manner they may deem most conducive to the best interests of the holders of said trust certificates. "(16.) All the powers of the trustees may be exercised by a majority of their number. They may appoint from their own number an execu- tive and other committees. A majority of each committee shall exer- cise all the powers which the trustees may confer upon such committee. "(17.) The trustees may employ and pay all such agents and attor- neys as they deem necessary in the managements of said trust. "(18.) Each trustee shall be entitled to a salary for his services not exceeding twenty-five thousand dollars per annum, except the president of the board, who may be voted a salary not exceeding thirty thousand dollars per annum, which salaries shall be fixed by said board of trus- tees. All salaries and expenses connected with, or growing out of the trust, shall be paid by the trustees from the trust fund. "(19.) The board of trustees shall have its principal office in the city of New York, unless changed by vote of the trustees, at which office or in some place of safe deposit in said city, the bonds and stocks shall be kept. The trustees shall have power to adopt rules and regulations pertaining to the meetings of the board, the election of officers and the management of the trust. "(20.) The trustees shall render at each annual meeting a statement of the affairs of the trust. If a termination of the trust be agreed upon as hereinafter provided, or within a reasonable time prior to its termination by lapse of time, the trustees shall furnish to the holders of the trust certificates a true and perfect inventory and appraisement of all stocks and other property held in trust, and a statement of the financial affairs of the various companies whose stocks, are held in trust. "(21.) This trust shall continue during the lives of the survivors and survivor of the trustees in this agreement named, and for twenty-one years thereafter; provided, however, that if at any time after the expiration of ten years two-thirds of all the holders in value, or if after 184 APPENDIX. the expiration of one year, ninety per cent of all the holders in vs of trust certificates shall, at a meeting of holders of trust certificE called for that purpose, vote to terminate this trust at some time to hy them then and there fixed, the said trust shall terminate at the d so fixed. If the holders of trust certificates shall vote to terminate trust as aforesaid, they may, at the same meeting or at a subsequ meeting for that purpose, decide by a vote of two-thirds in value their number the mode in which the affairs of the trust shall be woi up, and whether the trust property shall be distributed or whethei shall be sold and the values thereof distributed, or whether part, am so, what part, shall be divided and what part shall be sold, and whet such sales shall be public or private: The trustees, who shall contii to hold their offices for that purpose, shall make the distribution in mode directed, or, if no mode be agreed upon by two-thirds in value aforesaid, the trustees shall make distribution of the trust prope according to law. But said distribution, however made, and whetl it be of property, or values, or of both, shall be just and equitable, a such as to insure to each owner of a trust certificate his due proporti of the trust property or the value thereof. "(22.) If the trust shall be terminated by expiration of the time i which it is created, the distribution of the trust property shall directed and made in the mode above provided. "(23.) This agreement, together with the registry of certificat books of accounts, and other books and papers connected with the bu ness of said trust, shall be safely kept at the principal office of si trustees." "(Signattires omitted.] APPENDIX. 185 XV. SUPPLEMENTAL AGEEEMENT. "Whereas, in and by an agreement dated January 2, 1882, and known as the Standard Trust Agreement, the parties thereto did mutually covenant and agree, inter alia, as follows, to- wit: That corporations to be known as Standard Oil Companies, of various states, should be formed, and that all of the property, real and personal, assets and business of each and all of the corporations and limited partnerships mentioned or embraced in class first of said agreement should be trans- ferred to and vested in the said several Standard Oil Companies; that all of the property, assets and business in or of each particular state should be transferred to and vested in the Standard Oil Company of that particular state, and the directors and managers of each and all of the several corporations and associations mentioned in class first were authorized and directed to sell, assign, transfer and convey and make over to the Standard Oil Company or compa- nies of the proper state or states, as soon as said corporations were organized and ready to receive the same, all the property, real and personal, assets and business of said corporations or associations; and, whereas, it is not deemed expedient that all of the companies and associations mentioned should transfer their iprop- erty to the said Standard Oil Companies at the present time, and in case of some companies and associations it may never be deemed expedient that the said transfer should be made, and said companies and associations go out of existence; and, whereas, it is deemed advis- able that a discretional-y power should be vested in the trustees as to when such transfer or transfers should take place, if at alh "Now, it is hereby mutually ag;reed between the parties to the said trust agreement, and as supplementary thereto, that the trustees named in the said agreement and their successors shall have the power and authority to decide what companies shall convey their said property as in said agreement contemplated, and when the said sales and trans- fers shall take place, if at all, and until said trustees shall so decide, each of said companies shall remain in existence and retain its prop- erty and business, and the trustees shall hold the stocks thereof in trust, as in said agreement provided. In the exercise of said discretion the trustees shall act by a majority of their number, as -provided in said trust agreement. All portions of said trust agreement relating to this subject shall be considered so changed as to be in harmony with this supplemental agreements "In witness whereof, the said parties have subscribed this agreement, this 4th day of January, 1882." "(Signatures omitted.)" 186 APPENDIX. XVI. "THE SHEKMAF ANTI-TKUST ACT." (26 XJ. S. Stat. 209.) AN ACT to protect trade and commerce against unlawful restra and monopolies. Be it enacted by the senate and house of representatives of United States of America in congress assembled: Section 1. Every contract, combination in the form of trusi otherwise, or conspiracy, in restraint of trade or commerce am the several states, or with foreign nations, is hereby declared t( illegal. Every person who shall make any such contract or engag any such combination or conspiracy shall be deemed guilty o misdemeanor, and, on conviction thereof, shall be punished by not exceeding five thousand dollars, or by imprisonment not exceec one year, or by both said punishments, in the discretion of the co Sec. 2. Every person who shall monopolize, or attempt to mon lize or combine or conspire with any other person or persons monopolize any part of the trade or commerce among the sev states, or with foreign nations, shall be deemed guilty of a mi meaner, and on conviction thereof shall be punished by fine not exc ing five thousand dollars, or by imprisonment not exceeding one y or by both said punishments, in the discretion of the court. Sec. 3. Every contract, combination in form of trust or others or conspiracy, in restraint of trade or commerce in any territor: the United States or of the District of Columbia, or in restrain' trade or commerce between any such territory and another, or tween any such territory or territories and any state or states or District of Columbia, or with foreign nations, or between the Dist of Columbia and any state or states or foreign nations, is hei declared illegal. Every person who shall make any such contract engage in any such combination or conspiracy shall be deemed gv of a misdemeanor, and, on conviction thereof, shall be punished fine not exceeding five thousand dollars or by imprisonment exceeding one year, or by both said punishments, in the discretioi the court. Sec. 4. The several circuit courts of the United States are hei Invested with jurisdiction to prevent and restrain violations of act; and it shall be the duty of the several district attorneys of United States, in their respective districts, under the direction of attorney-general, to Institute proceedings in equity to prevent APPENDIX. 187 restrain sucb violations. Such proceedings may be by way of petition setting forth the case and praying that such violation shall be enjoined or otherwise prohibited. When the parties complained of shall have been duly notified of such petition the court shall proceed, as soon as may be, to the hearing and determination of the case; and pending such petition and before final decree the court may at any time make such temporary restraining order or prohibition as shall be deemed just in the premises. Sec. 5. "Whenever it shall appear to the court before which any proceeding under section four of this act may be pending, that the ends of justice require that other parties should be brought before the court, the court may cause them to be summoned, whether they reside in the district in which the court is held or not; and subpcenas to that end may be served in any district by the marshal thereof. Sec. 6. Any property owned under any contract or by any combi- nation, or pursuant to any conspiracy (and being the subject thereof) mentioned in section one of this act, and being in the course of transportation from one state to another, or to a foreign country, shall be forfeited to the United States, and may be seized and condemned by like proceedings as those provided by law for the forfeiture, seizure and condemnation of property imported into the United States con- trary to law. Sec. 7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee. Sec. 8. That the word "person" or "persons" wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the territories, the laws of any state, or the laws of any foreign country. Approved July 2, 1890.1 iFor decisions construing the above act see the following: U. S. v. Jellico M. C. & C. Co., 46 Fed. R., 432, 43 Fed. R., 898, 2 Indus. Com. R., 34; Bishop v. American Preservers' Co., 51 Fed. R., 272, 2 Indus. Com. R., 35; U. S. v. Greenhut, 51 Fed. R., 205, 213, 2 Indus. Com. R., 35-6; U. S. V. Nelson, 52 Fed. R., 646, 2 Indus. Com. R., 36; Blindell v. Hagan, 54 Fed. R., 40, 2 Indus. Com. R., 37; U. S. v. Patterson, 55 Fed. R., 605, 2 Indus. Com. R., 37; U. S. v. Workingmen's Amal. Council, 54 Fed. R., 994, 2 Indus. Com. R., 38; Waterhouse v. Comer, 55 Fed. R., 149, 2 Indus. Com. R., 38; Dueber Watch C. Mfg. Co. v. Howard etc. Co., 55 Fed. R., 851, 2 Indus. Com. R., 39; U. S. v. Debs, 64 Fed. R., 724, 158 U. S., 564, 2 Indus. Com. R., 39; U. S. v. E. C. Knight Co., 156 U. S., 1, 2 Indus. Com. R., 39; Pidcock v. Harrington, 64 Fed. R., 821; American Soda Fountain Co. v. Green, 69 Fed. R., 333, 2 Indus. Com. R., 40; Greer Mills & Co. v. StoUer, 77 Fed. R., 1; 188 APPENDIX. U. S. V. Addyston Pipe C&., 78 Fed. R., 712, 85 Fed. R.; 271, 17B U. 211, 2 Indus. Com. R., 41; In re Grice, 79 Fed. R., 627, 2 Indus. Com. 47; U. S. V. Trans-Mo. Fi-t. Ass'n, 166 U. S., 290, 2 Indus. Com. R;, U. S. V. Hopkins, 82 Fed. R., 529, 171 U. S., 578, 2 Indus. Com. R:, U. S. V. Ceal Dealers' Ass'n, 85 Fed. R., 252, 2 Indus. Cbm. R., Anderson v. U. S., 171 U. S., 604, 2 Indus. Com. R., 51; U. S. v. Jo Traffic Ass'n, 76 Fed. R., 895, 89 Fed. R., 1020, 171 U. S., 505, 2 Ind Com. R., 51; Gulf C. & S. F. Ry. v. Miami S. S. Co., 86 Fed. R., 4' Southern Ind. Exp. Co. v. V. S. Exp. Cd., 88 Fed. R., 659, 92 Fed. 1022; Dickerman v. Northern Trust Co., 176 U. S., 181, 2 Indus. C( R., 52; Liverpool & L. & G. Ins. Co. v. Clunie, 88 Fed. R., 160; Crav( V. Carter-Grume Co., 92 Fed. R., 479; Lowry v. Tile, Mantel & Ass'n, 98 Fed. R., 817, 106 Fed. R., 38; Gibbs v. McNeeley, 102 Fed. 594, 107 Fed. R., 210; City of Atlanta v. Chattanooga Foundry & P. ( 101 Fed. R., 900; Bishop v. Am. Preservers' Co., 105 Fed. R., 845; U. T. Ches. & Ohio Fuel Co., 105 Fed. R., 93. APPENDIX. 189 XVII. MICHIGAN Ai^TI-TKUST ACTS. LAWS OF 1889, ACT 225. AN ACT declaring certain contracts, agreements, understandings, and combinations unlawful, and to provide punishment for those who shall enter into the same or do any act in performance thereof. Section 1. That all contracts, agreements, understandings and com- binations made, entered into, or knowingly assented to, by and be- tween any parties capable of making a contract or agreement which would be valid at law or in equity, the purpose or object or intent of which shall be to limit, control, or in any manner to restrict or regu- late the amount of production or the quantity of any article or com- modity to be raised or produced by mining, manufacture, agriculture or any other branch of business or labor, or to enhance, control or regulate the market price thereof, or In any manner to prevent or restrict free competition in the production or sale of any such article or commodity, shall be utterly illegal and void, and every such con- tract, agreement, understanding and combination shall constitute a criminal conspiracy. And every person who, for himself personally, or as a member or in the name of a partnership, or as a member, agent, or officer of a corporation or of any association for business purposes of any kind, who shall enter into or knowingly consent to any such void and illegal contract, agreement, understanding or com- bination, shall be deemed a party to such conspiracy. And all parties so offending shall, on conviction thereof, be punished by fine of not less than fifty dollars, nor more than three hundred dollars, or by imprisonment in the county jail not more than six months or by both such fine and imprisonment, at the discretion of the court And the prosecution for offenses under this section may be instituted and the trial had in any county where any of the conspirators became parties to such conspiracy, or in which any of the conspirators shall reside. Provided, however, that this section shall in no manner in- validate or affect contracts for what is known and recognized at common law and in equity as contracts for the "Good will of a Trade or Business;" but that such contracts shall be left to stand upon the same terms and within the same limitations recognized at common law and in equity. Sec. 2. Every contract, agreement, understanding, and combination declared void and illegal by the first section of this act shall be equally 190 APPENDIX. void and illegal within this state, whether made and entered into within or without this state. Sec. 3. The carrying into effect, in whole or in part, of any such illegal contract, agreement, understanding or combination as men- tioned in the first section of this act and every act which shall be dona for that purpose by any of the parties or through their agency or the agency of any one of them, shall constitute a misdemeanor, and on conviction the offenders shall be punished by imprisonment in the state prison not more than one year, or in the county jail not more than six months, or by fine not less than one hundred nor more than five hundred dollars, or by- both such fine and imprisonment in the discretion of the court. Sec. 4. Any corporation now or hereafter organized under the laws of this state, which shall enter into any contract, agreement, under- standing or combination declared illegal and criminal by the first section of this act, or shall do any act towards or for the purpose of carrying the same into effect in whole or in part, and who shall not within thirty days from the time when this act shall take effect, with- draw its assent thereto and repudiate the same and file in the office cf the secretary of state such refusal and repudiation under its corporate seal, shall forfeit its charter and all its rights and franchises there- under. Sec. 5. It shall be the duty of the attorney-general upon his own relation, or upon the relation of any private person, whenever he shall have good reasons to believe that the same can be established by proofs, to file an information in the nature of a quo warranto against any corporation offending against any of the provisions of this act; and thereupon the same proceedings shall be had as provided by chapter 298 of Howell's Annotated Statutes, relating to proceedings of information in the nature of quo warranto, against corporations offending against any of the provisions of the act or acts creating, altering or renewing such corporations, and in other cases. Sec. 6. The provisions of this act shall not apply to agricultural products or live stock while in the hands of the producer or raiser, nor to the services of laborers or artisans who are formed into socie- ties or organizations for the benefit and protection of their members. Sec. 7. It shall be the duty of the secretary of state to cause this act to be published for four successive weeks in some daily paper in each of the cities of Lansing, Detroit, Grand Rapids and Marquette, commencing within ten days after this act shall take effect, and he shall also within the same time cause to be mailed to the corporations, whose articles of association are on file in his office, a printed copy of this act, with a notice calling special attention thereto. Approved July 1, 1889. APPENDIX. 191 LAWS OP 1899, ACT 49. AN ACT to prevent trusts, monopolies and combinations of capital, skill or arts, to create or carry out restriction in trade or commerce; to limit or reduce the production, or increase or reduce the price, of merchandise or any commodity; to prevent competition in manufacturing, making, transportation, sale or purchase of merchandise, produce or any commodity; to fix at any standard or figure, whereby its price to the public or consumer shall be in any manner controlled or established, any article or commodity of merchandise, produce or commerce intended for sale, barter, use or consumption. The People of the State of Michigan enact: Section 1. That a trust is a combination of capital, skill or arts by two or more persons, firms, partnerships, corporations or associa- tions of persons, or of any two or more of them, for either, any or all of the following purposes: 1. To create or carry out restrictions in trade or commerce; 2. To limit or reduce the production, or increase, or reduce the price of, merchandise or any commodity; 3. To prevent competition in manufacturing, making, transporta- tion, sale or purchase of merchandise, produce or any commodity; 4. To fix at any standard or figure, whereby its price to the public or consumer shall be in any manner controlled or established, any article or commodity of merchandise, produce or commerce intended for sale, barter, use or consumption in this state; 5. It shall hereafter be unlawful for two or more persons, firms, partnerships, corporations or associations of persons, or of any two or more of them, to make or enter into or execute or carry out any contracts, obligations or agreements of any kind or description, by which they shall bind or have bound themselves not to sell, dispose of or transport any article or any commodity or any article of trade, use, merchandise, commerce or consumption below a common standard figure or fixed value, or by which they shall agree in any manner to keep the price of such article, commodity or transportation at a fixed or graduated figure, or by which they shall in any manner establish or settle the price of any article, commodity or transportation between them or themselves and others, so as to directly or indirectly preclude a free and unrestricted competition among themselves, or any pur- chasers or consumers, in the sale or transportation of any such article or commodity, or by which they shall agree to pool, combine or directly or Indirectly unite any interests that they may have connected with the sale or transportation of any such article or commodity, that its price might in any manner be affected. Every such trust as is defined herein is declared to be unlawful, against public policy and void. Sec. 2. For a violation of any of the provisions of this act by any 193 APPENDIX. corporatiop or association mentioned herein, it shall be the duty of the attorney general, or the prosecuting attorney of the proper county, to institute proper suits or quo warranto proceedings in the court of competent jurisdiction in any of the county seats in the state where such corporation or association exists or does business, or may have a domicile. And when such suit is Instituted by the attorney general ia quo warranto, he may also begin any such suit in the supreme court of the state, or the circuit court of Ingham; Kent or Wayne counties, for the forfeiture of its charter rights, franchises or privileges and powers exercised by such corporation or association, and for the dis- solution of the same under the general statutes of the state. Sec. 3. Every foreign corporation, as well as any foreign associa- tion, exercising any of the / powers, franchises or functions of a cor- poration in this state, violating any of the provisions of this act, is hereby denied the right and prohibited from doing any business in this state, and it shall be the duty of the attorney general to enforce this provision by bringing proper proceedings in quo warranto in the supreme court, or the circuit court of the county in which defendant resides or does business, or other proper proceedings by injunction or otherwise. The secretary of state shall be authorized to revoke the certificate of any such corporation or association, heretofore authorized by him to do business in this state. Sec. 4. Any violation of either or all of the provisions of this act shall be and is hereby declared a conspiracy against trade, and any person who may become engaged in any such conspiracy or take part therein, or aid or advise in its commission, or who shall as principal, manager, director, agent, servant or employer, or in any other capacity, knowingly carry out any of the stipulations, purposes, prices, rates, or furnish any information to assist in carrying out such purposes, or orders thereunder or in pursuance thereof, shall be punished by a fine of not less than fifty dollars nor more than five thousand dollars, or be imprisoned not less than six months nor more than one year, or by both such fine and imprisonment. Each day's violation of this provision shall constitute a separate offense. Sec. 5. In any indictment for any offense named in this act, it is sufllcient to state the purpose or effects of the trust or combination, and that the accused is a member of, acted with or in pursuance of it, or aided or assisted in carrying out its purposes, without giving its name or description, or how, when and where it was created. Sec. 6. In prosecutions under this act, it shall be sufficient to prove that a trust or combination, as defined herein, exists, and that the defendant belonged to It, or acted for or in connection with it, without proving all the members belonging to it, or proving or producing any article of agreement, or any written instrument on which it may have been based; or that it was evidenced by any written instrument at all. The character of the trust or combination alleged may be established by proof of its general reputation as such. APPENDIX. 193 Sec. 7. Each and every firm, person, partnership, corporation or association of persons, who shall in any manner violate any of the provisions of this act, shall for each and every day that such viola- tions shall be committed or continued, after due notice given hy the attorney general or any prosecuting attorney, forfeit and pay the sum of fifty dollars, which may be recovered in the name of the state, in any county where the ofCense is committed, or where either of the offenders reside. And it shall be the duty of the attorney general, or the prosecuting attorney of any county on the order of the attorney general, to prosecute for the recovery of the same. When the action Is prosecuted by the attorney general against a corporation or associa- tion of persons, he may begin the action in the circuit court of the county in which defendant resides or does business. Sec. 8. That any contract or agreement in violation of the pro- visions of this act shall be absolutely void and not enforceable either in law or equity. Sec. 9. That the provisions hereof shall be held cumulative of each other and of all other laws in any way affecting them now in force in this state. Sec. 10. It shall not be lawful for any person, partnership, associa- tion or corporation, or any agent thereof, to Issue or to own trust certificates, or for any person, partnership, association or corporation, agent, ofScer or employe, or the directors or stockholders of any corporation, to enter into any combination, contract or agreement with any person or persons, corporation or corporations, or with any stock- holder or director thereof, the purpose and effect of which combina- tion, contract or agreement shaU be to place the management or con- trol of such combination or combinations, or the manufactured product thereof, in the hands of any trustee or trustees with the Intent to limit or fix the price or lessen the production and sale of any article of commerce, use or consumption, or to prevent, restrict or diminish the manufacture or output of any such article, and any person, partner- ship, association or corporation that shall enter into any such combi- nation, contract or agreement for the purpose aforesaid shall be deemed guilty of a misdemeanor, and on conviction thereof, shall be punished by a fine not less than fifty dollars, nor more than one thou- sand dollars. Sec. 11. In addition to the criminal and civil penalties herein pro- vided, any person who shall be injured in his business or property by any other person or corporation or association or partnership, by reason of anything forbidden or decleired tO' be unlawful by this act, may sue therefor in any court having jurisdiction thereof in the county where the defendant resides or is found, or any agent resides or is found, or where service may be obtained, without respect to the amount in controversy, and to recover two-fold the damages by him sustained, and the costs of suit. Whenever it shall appear to the court before which any proceedings under this act may be pending, 13 194 APPENDIX. that the ends of justice require that other parties -sha.!! be- Isefore the court, the court may cause them to be mad€- parties ant and summoned, whether they reside In-tbe county -whe action is pending, or not. Sec. 12. The word "person" or "persons" Whenever used act, shall be deemed to include corporations, partnerships and tlons existing under or authorized by the laws of the state of M or any other state, or any foreign country. Sec. 13. All acts or parts^ of acts contraveningrthe provisions act are hereby repealed. - -. [Took effect September 22, 1899.]i'- *? 1 See David M. Richardson v. Christian H. Buhl and Rui Alger, 77 Mich., 632; Western Wooden ware Ass'n v. Starkey, 8' 76; Daniel Lovejoy and E. W. Lovejoy v. Jacob Miehels, S8 Mi Bingham v. Brands, 119 Mich., 255; 'Clark' v.' Needham — ^1 51 L. R. A., 785. INDEX. [THB REFERENCES ARE TO THE PAOES.] A. Acceptance, of offer to exchange shares for shares of United States Steel Corporation, 2, 120, 122, 124, 130, Acts, anti-trust, 92, 94, 186, 189, 191. Agreement, Standard Oil trust, 76, 177, 185. forming United States Steel Corporation, 27, 76, 116-131. Allied interests, with U. S. Steel Corporation, 5-8. 47n. AlUs-Chalmers Co., alliance with U. S. Steel Corporation, 7. Amendments of by-laws, 73, 148, 163, 175. American Bridge Company, exchange of shares for those of U. S. Steel Corporation, 2. 30, 108, 124, 130. American Sheet Steel Co., exchange of shares for those of U. S. Steel Corporation, 1, 30, 108, ll6, 120, 122. American Shipbuilding Co., alliance with U. S. Steel Corporation, 8. retained by Carnegie Co., 25. American Steel Hoop Co., exchange of shares for those of U. S. Steel Corporation, 1, 30, 108, 116, 120, 122. American Steel and. Wire Co., cash required in organization, 22. exchange of shares for those of U. S. Steel Corporation, 1, 30, 108, 116, 120, 122. threatened competition from Carnegie Co., 25. American Tin Can Co., alliance with U. S. Steel Corporation, 6. American Tin Plate Co., exchange of shares for those of U. S. Steel Corporation, 1, 30, 108, 116, 120, 122. Anthracite Coal, projluct of United States, 5. AnU-trust acts, 92, 94, 186, 189, 191. and the U. S. Steel Corporation, 92, 94. Michigan, 92, 189, 191. National, 94, 186. Appendix, 115. Articles of incorporation, see Charter. . - - -, Ashland, Wis., harbor for transporting ore, 38. - » ^ - Atlantic Transport Line, 6. . - Auditor, powers of, 56, 144^ 146, 160, 172. Authorities, summary of references to, 114. Automatic ore loaders, 36. unloaders, 40. 105 196 INDEX. [THE REFEBGNCES ARE TO THE PAOES.] B. Banks, clearings of in 1900, 21. National, loans in 1900, 21. New York City, financial position of, 21-22. Barbed wire, control by U. S. Steel Corporation, 5, 46, 50, 112. Bessemer steel ore, control by U. S. Steel Corporation, 36. Bethlehem Steel & Iron Co., acquired by TJ. S. Steel Corp., 4n., 47n. Bicycle tubing, control by TJ. S. Steel Corporation, 4n, 47n. Bituminous coal, reported control by J. P. Morgan, 7. Blast furnaces, capacity of, 42. capital required to operate, 42-3. cost of, 42. raw material required daily, 42. time required to build, 42. U. S. Steel Corporation, 5, 42, 49, 112. Board of directors, see Directors; By-laws. Books, inspection of corporate, Carnegie Co., 151, 161. Federal Steel Co., 166, 174. U. S. Steel Corporation, 53, 73, 136, 145, 146. Bonds, Carnegie Co., 2, 25, 28, 110, 115. U. S. Steel Corporation, 2, 25, 28-9, 110, 115, 118. Bridges, building of, control by U. S. Steel Corporation, 5, 46, 50, 112. product of United States and XT. S. Steel Corporation, 60, 112. Building powers, U. S. Steel Corporation, 51, 132. Business powers, U. S. Steel Corporation, 51, 132. By-laws, Carnegie Co., 155. Federal Steel Co., 168. V. S. Steel Corporation, 138. Provisions of: 1. Amendments, C.i 158, 163; F.2 175; V. S.s 148. unrepealable provisions, F. 175. 2. Board of Directors, see Directors, C. 155, 158; F. 168; U. S. 140. 3. Books, inspection of, see Inspection of Books (see Charter), C. 161; F. 174. 4. Capital, see Capital Stock; Charter, C. 161; F. 174; U. S. 147. working see Working Capital, U. S. 148. 5. Capital stock, 1. Certificates of, C. 159, 160-1; F. 174; U. S. 145, 7. cancellation, C. 161; F. 174; V. S. 147. lost, C. 161; F. 174. surrender, C. 161; F. 174; U. S. 147. 2. Dividends, C. 162; F. 176; V. S. 147. 3. Held in other companies, C. 161; F. 175; TJ. S. 147. 4. Transfer of, C. 161; F. 174; U. S. 147. closing books, C. 156; F. 168; U. S. 147. regulation, C. 161; F. 174; TJ. S. 147. 'C— Carnegie Co. 'F.— Federal Steel Co. »tr. S.— U. S. Steel Corporation. INDEX. 197 tTHE REFERENCES ARE TO THE PAGES.] S. Voting stock held in other companies, C. 162; F. 175; V. S. 146. 6. Certificates, see Capital Stock, No. 5, supra, C. 169, 160-1; P. 174; U. S. 145, 7. 7. Checks, drawing, C. 159; P. 174; U. S. 145. 8. Closing books, see Capital Stock, No. 5, 4, supra, C. 156; F. 168; U. S. 147. 9. Committees, executive, see Executive Committee, No. 15, infra, P. 173; U. S. 143. finance, see Finance Committee, No. 16, infra, U. S. 143. standing, C. 159; P. 173. 10. Counsel, see Officers, No. 24, infra, C. 160; P. 173; U. S. 145. 11. Delegation of powers, see Directors and Officers, Nos. 13, 24, infra, C. 159, 160; F. 173; U. S. 143. 12. Dividends, see Capital Stock, Nos. 5, 2, supra, C. 162; F. 176; U. S. 147. 13. Directors, C. 155, 158; P. 168; V. S. 140. 1. Classes, U. S. 140. 2. Contracts, C. 158; P. 174; TJ. S. 141. 3. Compensation, C. 159; F. 169; 17. S. 142. 4. Delegation of powers, C. 159, 160; P. 173; U. S. 143. 5. Election of, C. 155, 156; P. 168; U. S. 140. 6. Meetings of, C. 157; F. 169; U. S. 141. first, C. 157; P. 169. notice, C. 157; P. 169; U. S. 141. order of business, C. 156; P. 170; V. S. 141. place, C. 157; P. 169; U. S. 141. quorum, C. 157; P. 169; U. S. 141. regular, C. 157; F. 169; U. S. 141. special, C. 157; P. 169; U. S. 14L 7. Number, C. 155; P. 168; U. S. 140. 8. Powers, general, C. 158; F. 168; U. S. 140. special, C. 158; P. 170, 3, 4, 5; U. S. 142, 6, 7, 8. 9. Qualification, C. 155; F. 168; U. S. 140. 10. RemovaL IL Term, C. 155; P. 168, 174; U. S. 140. 12. Vacancies, C. 155; P. 168; U. S. 140. 14. Elections, see Directors, No. 13, 5 supra, C. 155, 6; P. 168, 170; U. S. 140. inspectors of, C. 156; P. 169; V. S. 139. 15. Executive Committee, C. 159; P. 173; U. S. 142. 1. Compensation, P. 169; U. S. 143. 2. Duties, F. 173; U. S. 143. 3. Number, P. 173; U. S. 143. 4. Powers, P. 173; U. S. 142, 8. 5. Selection, P. 173; U. S. 142. 6. Vacancies, P. 173; U. S. 142. 198 INDEX. [THE REPBRENCBS ABE TO THE PAGES-l 16. Finance Committee, V. S. 142, 3. 1. Compensation. 2. Duties, U. S. 143, 4. 3. Number. XT. S. 143. 4. Powers, V. S. 143, 4. 5. Selection, -U. S. 142, 3. 17. General counsel, see Ofllcers No. 24, infra, C. 160; F. 173; V. S. 145. 18. Inspection of books (see Charter), C. 161; F. 174; U. S. 145. 6. 18a. Inspectors of election, C. 156; F. 169; TJ. S. 139. 19. Interpretation of words, C. 162. 20. Lost certificates, C. 161; F. 174. 21. Meetings, see Directors 13, 6 supra. Stockholders 35 infra, and Notices 22 infra, C, 155-7; F. 168, 9; U. S. 138, 141. 21a. Name of Corporation, see Title infra, C. 165; F. 168. 22. Notices,. meetings, directors, C. 157; F. 169; TJ. S. 141. regular, C. 156, 157; F. 169; U. S. 138. special, C. 156, 157; F. 169; U. S. 138. stockholders, C. 155-6; F. 169; U. S. 138. 23. Officers, principal (see Charter), C. 155; F. 168; U. S. 138. registered (see Charter), C. 155; F. 168. other (see Charter), C. 155; U. S. 141. 24. Officers, C. 158-9; F. 170; U. S. 144. 1. Appointment, C. 155, 7, 8, 9; F. 170; U. S. 144. 2. Auditor, C. 160; F. 172; U. S. 146. 3. Assistant Secretary, C. 157; F. 172; U. S. 146. 4. Treasurer, C. 157; F. 172; U. S. 146. 5. Chairman, C. 156; F. 170; U. S. 139. 6. Counsel, C. 160; F. 173; U. S. 145. 7. Delegation of powers, C. 159-160; F. 173; U. S. 143. 8. Election of, C. 155, 7, 8, 9; F. 168, 170; tJ. S. 144. 9. Inspectors of elections, C. 156; F. 169; U. S. 139. 10. Number. C. 157; F. 170; U. S. 144. 11. President. C. 157. 159; F. 170; U. S. 145. 12. President pro tempore, F. 171. 13. Removal, C. 157-8. 161; F. 174; U. S. 144. 14. Salaries. C. 168. 159; F. 173; U, S. 142. 3. 4, 15. Secretary. C. 157, 160; F. 171; U. S. 138. 146. 16. Selection, C. 165, 7, 8, 9; F. 168, 170; U. S. 144. 17. Term, C. 156. 7, 8, 161; F. 174; U. S. 144. 18. Treasurer, C. 167. 160; F. 172; U. S. 145. 19. Vice-President, C. 157, 160; F. 171; U. S. 145. 20. Voting shares held In other companies, C. 162; F. 175; U. S. 146. 25. Order of business, see Directors, Shareholders, C. 156; F. 170; U. S. 141. INDEX. 199 (TBS SETERENCEB ARE TO THE PAOES.] 26. Powers, see Directors, Officers, Shareholders, C. 158, 161 P. 168. 27. President, see Officers No. 24, 10 supra, C. 157, 159; P. 170 V. S. 145. 28. Qualification, see Directors No. 13, 9 supra, C. 155, 7 F, 168, 170; U, S. 140. 29. Quorum, see Directors No. 13 supra, and Stockholders, No. 35 infra. C. 155, 157; F. 168, 9; U, S. 138, 141. 30. Removal of officers, see Directors No. 13, supra. Officers No. 24, 10 supra, C. 157, 8, 161; F, 174; U. S. 144. 30a. Reports, C. 159; F. 171; U. S. 145, 146. 31. Seal, C. 159; F. 168, 170; V. S. 146. 148. 32. Secretary, see Officers No. 24, 14 supra, C. 157, 160; P. 170, 171; U. S. 138. 139. 146. 33. Shareholders, see Inspection of books; Meetings; Stock- holders, C. 155; F. 168, 174; U. S. 138. 34. Shares, see Capital Stock; Certificates, C. 161; F. 174; U. S. 147. 35. Stockholders, C. 155, 161; P. 168; U. S. 138. 1. Inspection of books by. (see Charter) C. 161; P. 174. 2t Inspection of election. C. 156; P. 169; V. S. 139. 3. Meetings, annual, C. 155; F. 168; U. S. 138. notice, C. 156; F. 168; U. S. 138. order of business. C. 156; F. 170. organization of. C. 156; U. S. 139. place, C. 157; F. 168. quorum, C. 155; F. 168; V. S. 138. regular, C. 155; P. 168; V. S. 138. special, C. 156; P. 169; U. S. 138. 4. Transfer of shares. C. 161; P. 174; U. S. 147. 5. Voting, G. 156; F. 168; U. S. 139. 37. Term of office, see Directors, Officers. C. 155, 161; P. 168, 174; U. S. 140, 144. 38. Title of corporation, C. 155; P. 168. 39. Transfer of shares, see Capital Stock, C. 161; P. 174; U. S. 147. 40. Treasurer, see Officers, No. 24, 17 supra, C, 157, 160; P. 172; U. S. 145. 41. Voting, C. 156; P. 168; U. S. 139. 141. stock held in other companies. C. 162; P. 175; TJ. S. 146. 42. Working capital, U. S. 148. C. Cambria Co., control by Conemaugh Steel Co., 47n. Canal, "Soo," traffic of, 39. Suez, traffic of, 40. 200 INDEX. [TBS REFERENCES ARE TO TBE PAQES.] Capitalization, companies, competing with U. S. Steel Corporation, 114. composing U. S. Steel Corporation, 28, 33, 108. recent consolidations, 114. U. S. Steel Corporation, comparison with various things, 2, 106. water in stock, 34, 110. Capital stock, companies composing U. S. Steel Corporation, exchange of, 2, 28, 108, 116, 122, 124. outstanding, 28, 108. railroads, controlled by J. P. Morgan, 6. Standard Oil Co., 8. U. S. Steel Corporation, 1, 2, 4, 118, 125, 134, 147. amount, authorized, 1, 118, 134. begin business, 134. common, 1, 118, 134. preferred, 1, 118, 134. by-law regulations of, 147. comparisons, average per family in United States, 4. person in United States, 4, 106. in the world, 4, 106. banks, National, resources, 3, 106. savings United States, deposits, 3, 106. commerce, United States, 3, 106. imports, 3, 106. exports, 3, 106. farm, animals United States, 3, 106. crops United States, 3, 106. gold and silver product of world, 2, 3, 106. government. United States, debt, 3, 106. expenses, 3, 106. receipts, 3, 106. length of, if in silver certificates, 3, 4, 106. and weight, if in silver dollars, 4, 106. manufactures of United States, 2. of world, 2. money, in circulation in U. S., 3, 106. products, of U. S. in 1850, 1900, 3, 106. railroads 18S9, capital, 3, 106. earnings, 3, 106. schools, U. S., cost of, 4, 106. wealth, U. S., 18&0, 1900, 2, 106. Carnegie, Andrew, amusements of, 19. connection with Keystone Bridge Co., 15. Pennsylvania railroad, 14. desire to retire from business, 23. gifts to libraries, etc., 17. literarj' achievements, 17. master-manufacturer, 13. INDEX. 201 [THE heferences are to the paoes.] option to sell his steel interests, 23. sketch of life, 13-20. "Steel King," 16. Carnegie Company, by-laws, 155. charter, 149. exchange of stock and bonds for those of U. S. Steel Corporation, 28, 115. formation of, 8, 25, 149. incorporation of, 8, ^5, 149. incorporators, 152. member of U. S. Steel Corporation, 1, 108, 115. preparation to compete with other companies, 24-7. Carnegie Steel Co., incorporation of, 8. preparation to compete with other companies, 24-T. Causes that led to formation of IT. S. Steel Corporation, 20. Certificate of incorporation (see Charter). Charter, Carnegie Co., 149. Federal Steel Co., 164. U. S. Steel Corporation, 132. Charter provisions: 1. Amendments of by-laws, C.i 151; F.« 166; U. S.s 137. 2. Bonds, authorized, C. 149; F. 166; U. S. 133. 3. Books, inspection of, C. 151; F. 165-6; U. S. 136. 4. Books, where to be kept, C. 151; F. 167; U. S. 133. 6. Capital, working, C. 151; F. 166; U. S. 136. 6. Capital stock, amount, authorized, C. 150; F. 165; U. S. 134. begin business, C. 152; F. 166; IT. S. 134. common, F. 165; U. S. 134. preferred, F. 165; U. S. 134. Increase of, XT. S. 134. other companies, power to hold, C. 149; F. 164; U. S. 133. power to vote, C. 149; XT. S. 133. preferred, amount, F. 165; XT. S. 134. nature of preference, assets, F. 165; XT. S. 134. dividends, F. 165; U. S. 134. reduction or retiring, C. 150, 1; F. 166; XT. S. 136. 7. Directors, classes, XT. S. 135. election, XT. S. 135. meetings, C. 151; XT. S. 135. number, F. 166; XT. S. 135. fixed by by-laws, F. 166; XT. S. 135. Increase of, F. 166; XT. S. 135. powers, C. 151; F. 166; U. S. 135. amend by-laws, C. 151; F. 166; XT. S. 137. appoint executive committee, C. 151; F. 166; XT. S. 136. finance committee, XT. S. 136. appoint officers, XT. S. 136. •C— Carnegie Co. 'P.— Federal Steel Co. »U. S.—U. S. Steel Corporation. 302 INDEX. [THE REFERENCES ARE TO THE PAOES.] declare dividends,- U. S. 1^6. determine time, place and right, to inspect books, C. 151; F. 166; U. S. 136. dispose of surplus, C. 151; F. 166; U. S. 136. fix location of offices, C. 151; U. S. 135. fix working capital^ C. 151; F. 166; U. S. 136. meet out of State of New Jersey, C. 151; F. 167; U. S. 135. mortgage property, C. 151; F. 166; U. S. 135. shares held (see By-Laws), C. 161; U. S. 135. purchase company's bonds or shares, C. 151; F. 166; U. S. 136. , remove officers, U.- S. 136. resell company's shares, C; 151; U. S. 136. retire company's shares, C. 150, 1;: U. S. 136. quorum, F. 166; U. S. 135. vacancy, F. 166; U. S. 135. 8. Duration, C. 152; F. 166; U. S. 135. 9. Executive committee, appointment, C. 151; F. 166 ;U. S. 136. powers, C. 151; F. 166; U. S. 136. 10. Finance committee, appointment, U. S. 136. powers, U. S. 136. 11. Incorporators, names of, C. 152; F. 166; U. S. 135. 12. Name of corporation, C. 149; F. 164; U. S, 132. 13. Objects (see Powers), C. 149; F. 164; U. S. 132. acquire lands, C. 149; F. 165; U. S. 132; hold and' dispose of stock of other companies, C. 149; U. S. 133. aid any corporation whose obligations it holds, C. 150; V. S. 133. buy and sell products, C. 149; F. 164; U. S. 132. contract in any way, O. 149; F. 165; TJ, S. 133. construct buildings, machinery and ways, C. 149; F. 164; U. S. 132. do business anywhere, C. 149, 150; F. 164; U. S. 133. exereise> all the powers of natural person, F. 164; U. S. 134. guarantee obligations, C. 150; U. S. 133. hold, own, sell and vote shares held iij other corporations, C. 149, 150; U. S. 133. Issue bonds or other obligations, C. 149; F. 164; TJ. S. 133. manufacture, C. 149; F. 164; U. S. 132. mine, C. 149; F. 164; U. S. 132. mortgage property, C. 149, 150; F. 164, 6; U. S. 133. obtain patents, trade-marks and trade names, C. 150; F. 164; U. S. 133. sell all of assets, property or stock, C. 151; F. 166. transportation, C. 149; F. 164; U. S. 132. INDEX.. 203 [THE} BEFEREKCES ABE TO THE PAGES.] 14. Office, principal, C. 151; F. 164; U, S. 132. registered, C. 151; F. 164; U. S. 132. other, C. 151; F. 167; U. S. 133. 15. Officers, U. S. 135, 6. 16. Powers (see Objects), C. 149; F. 164; U. S. 132. business, C. 149, 150; F. 164; U. S. 132. building and construction, C. 149; F. 164; U. S. 132. contract in any way, C. 149; F. 165; U. S. 133. do business anywhere as a natural person, F. 164; U. S. 133, 4. general, C. 149; F. 165; U. S. 133. manufacturing, C. 149; F. 164; U. S. 132. mining, C. 14fl; F. 164; U. S. 132. obtaining patents, etc., C. 150; F. 164; U. S. 133. trading, C. 149; F. 164; U. S. 132. transportatioUj C. 143; F. 164; U. S. 132. trust, acquire stock in other corporations, C. 149; U. S. 133. generally, U. S. 133. guarantee obligations of other companies, C. 150; U. S. 133. hold, own, use, sell and vote stock in other corpora- tions, C. 149; U. S. 133. issue obligations, C. 149; F. 165; TJ. S. 133. mortgage or pledge stock and bonds held, C. 149; U. S. 133. 17. Shareholders, power to authorize mortgage of property or shares held, C. 149; F. 165; U. S. 135. preferred, F. 165; TJ. S. 134. right to inspect books, 0. 151; F. 165, 6; tJ. S. 136. 18. Standing committees, C. 151; F. 166; U. S. 136. 19. Stock of other corporations, C. 149; U. S. 133, 135. 20. Working capital, C. 151; F. 166; U. S. 136. Chicago, Burlington •& Quincy R. R., controlled by J. P. Morgan and J. J. Hill, 6, 107. Cincinnati, Hamilton & Dayton R. R., controlled by J. P. Morgan, 6, 107. Circulars, accepting offer of U. S. Steel Corporation, 120. announcing officers, 125. plan has become operative, 122, 130. offers to various companies, 115, 124. Claflin, H. B., Dry Goods Co.; formed by J. P. Morgan, 7. Clark, Prof. J. B., remedy for trusts, 104. Clearing houses, transactions^ London, 21. New York, 21. United States, 21. Cluft, Chas. C, incorporator Federal Steel Co., 166. U. S. Steel Corporation, 1, 135. 204 INDEX. [THE RRFERENCES ARE TO THE PAGES.] Coal, anthracite, control by J. P. Morgan, 5. product of United States, 5. bituminous, reported control by J. P. Morgan, 7. buBiness, "community of ownership" in, 5. Coke, amount required to make one ton of pig iron, 41. competition in production, 41. control by U. S. Steel Corporation, 41, 112. ovens, 41, 49, 112. product of United States, and U. S. Steel Corporation, 6, 41, 49, 112. Colorado Fuel and Iron Co., as competitor of U. S. Steel Corporation, 4, 48, 114. Combinations, industrial, recent, ^0, 114. Commerce, interstate, powers of Congress over, 87. what is, 89, 90. United States, recent Increase of, 21, 106. "Community of ownership," in coal business, 6. railroad business, 5, 107. Companies competing with U. S. Steel Corporation, S5-48, 49n, 114. bars and hoops, 45. bridges, buildings, etc., 46. coke, 41. cotton ties, 45. iron production, 42, 46. ore, 35. steel billets, 43. plates, 44. rails, 43. sheets, 45. structural forms, 44. tin plates, 45. tubes, 45, 47. wire, 46. controlled by U. S. Steel Corporation, capital stock of, 28, 33, 1G8. fixed charges of, 33, 109. method of management, 57, 96, 97. names of, 1, 106. net earnings, 33, 110. power to sell shares to U. S. Steel Corporation, 85. properties, value of, 33, 34, 110. Comparison of capitalization of U. S. Steel Corporation with various things, 2, 106. Competition, threatened war between Carnegie Steel Company and others, 24. in transportation, 25, 38. with U. S. Steel Corporation (see Companies Competing with), 24, 85, 49, 114. INDEX. 205 [TnZ REFEBBNCCa ARE TO THE PAGES.] capital and products of companies, 114. potential, 48. productions (see Companies Competing with). Congress, powers of to regulate corporations, 87. Conemaugh Steel Co., Incorporation of, 47n. Conneaut, O., harbor, unloading ore, etc., 40. ConnelsTille, Pa., coke product, 41, 49. Consolidations, recent, tendency to, 20. Constituent companies of U. S. Steel Corporation (see Companies), 1, 108, 115, 124. Control of domestic corporations by foreign, 89. of other companies by U. S. Steel Corporation, method of, 56, 57. Copperas, product of tTnited States, and U. S. Steel Corporation, 5, 50. Corporations, control of domestic by foreign, 89. domestic, power of states over, 89. foreign, power of states over, 89. powers of national government over, 87. powers of state governments over, 89. regulations of (see Trusts), 87, 92, 98. by national taxation, 102. by repeal of tariff, 103. Cost, blast furnaces, 42. Incorporation in New Jersey and other states, 68. transporting ore, 39. Curtis, W. J., incorporator of U. S. Steel Corporation, 1. 135. D. Delaware, Lackawanna & "Western R. R., controlled by J. P. Morgan, 5, 107. Docks, ore, at Two Harbors, Duluth, etc., 38. "Doing business" in a state, what is, 89. Diagram of sources and means of management of various companies by tJ. S. Steel Corporation, 96, 97. Directors (see By-laws, Charter, Powers, etc.), 54, 135, 140. liability of under various laws, 71. U. S. Steel Corporation, compensation, 54, 142. names and interests, 7, 59. powers of, 54, 73, 135, 140. to increase their number, 73, 135, 140. Dividends, Federal Steel Co., how declared, 58. Standard Oil Co., 8. United States Steel Corporation, amounts, 33. how declared, 58, 147. Duluth, Minn., ore docks, 38. 206 INDEX. tTBE REFEBENeEB AKE TO THE PAQES.] E. Earnings, IT. S. Steel Corporation (see Financial Details), 33, 110. Employees, U. S. Steel Corporation, 49,^ 64, 113. policy toward, 64. strilie of. 64 Engine-making companies, combination of, 7. Erie R. R., control by J. P. Morgan, 5, 107. Escanaba, Mich, ^harbor for transporting ore, 38; Executive Committee (see By-laws, Charter), 54, 60, 128, 142. U. S. Steel Corporation, names, 60i 128. powers, 54, 142. Exports, United States, increase of 1896-1900, 20, 106. iron and steel, increase, 21. manufactures, increase, 20. P. Federal Steel Co., by-laws of, 168. charter of, 164. dividends, how declared, 58. exchange of shares for shares U. S. Steel Corporation, 1, 30, 108, 116, 120, 122. method of controlling other companies, 57. Fees, incorporation in various states, 68. Fence, wire, product. United States and U. S. Steel Corporation, 5, 60. control by U. S. Steel Corporation, 5, 46, 50. Finance committee, U. S. Steel Corporation/ 55, 60; 128, 142-3. names, 60, 128. powers, 55, 142-3. Financial details, U. S. Steel Corporation, capital stock, etc., 33, 106, 107, 108. earnings and property, 33, 108. summary of, '33, 106-8. Finishing plants, U. S. Steel Corporation, 5, 49. Foreign corporations, control by, of domestic corporations, 89, power of states over, 89. Foreign government loans, 11, 22. Formation of V. S. Steel Corporation, 1, 8, 27, 28,- 68, 115, in New Jersey, why, 68. parties and interests represented, 8. prospects of profits, 27. steps in, 28, 115-131. "Friendly understandings," railroad combinations, 7. U. S. Steel Corporation and Pennsylvania Steel Company, 47n. INDEX. 207 ;[THE< BErBRBNCES ABB TO THS PASESO G. Gas lands, U. S. Steel Corporation, 49. Gary, E. H., chairman Executive committee U. S. Steel Corporation, 60, 62. connection with Allis-Chalmers Co., 7. director Federal Steel Co. and U. S. Steel Corporation, 59. sketch of life, 62. views as to publicity of corporate business, 66. Gladstone, Mich., harbor for transporting ore, 38. Gogebic range," ore product, 37. Gould, Geo. J., and railroad combinations, 7, 107. Government, loans to foreign, 11, 22. national, power to regulate corporations, 87. state, power to regulate corporations, 89. Great Northern R. R., control by J. P. Morgan and J. J. Hill, 6. H. Harbors, ore, on the Great Lakes, 38-40^ Harriman, E. H., and railroad combinations, 7, 107. Hill, J. J., and railroad combinations, 6, 7, 107. I. Illinois, incorporation laws of, 68 et seq. - Imports, United States, increase 1896-1900, 20, 106. Incorporation, articles of (see Charter). Carnegie Co., 8, 25, 149. Fees for, 68. Federal Steel Co., 164. laws of various states, 68 et seq. - TJ. S. Steel Corporation, 1, 68, 115, 132. Incorporators, Carnegie Co., 152. Federal Steel Co., 166. U. S. Steel Corporation, 1, 135. Indiana,. Incorporation laws of, 68 et seq. - ■«:,.-- Industrial details, position of U. S. Steel Corporation, 35, 49, 111-113. plants, mines, and products, 113. summary of, 49. Iron (see Pig iron. Steel). Iron ore (see Ore). Iron, pig, coke required to make one ton, 41. Iron and steel, exports of United States, increase of, 21. inspection of. books, by shareholders (see By-laws, Charter), 73, 136, 151, 165-6. International Navigation Co., 6. Interstate Commerce, powers of Congress over, 87.' what is, 89, 90. 208 INDEX. [THE KEPBKBNCES ABB TO THE PAQBSj K. Keystone Bridge Co., part of Carnegie Co., 15. Labor, policy of U. S. Steel Corporation, 64. Lake Superior Consol. Iron Mines, exchange of shares tor U. S. Ste( Corporation shares, 30, 124, 130. Lake Superior Co., to compete with U. S. Steel Corporation, 49n. Lake Superior Iron Region, 35, 36 et seq. Lands, of U. S. Steel Corporation, 49. Laws relating to incorporation, 68 et seq. Legality of U. S. Steel Corporation (see Legality, in Contents, for oul line). anti trust acts, 92, 94, 186, 189, 191. general theory of state and national powers, 87. Incorporation In New Jersey, 68. Is it a "trust," 73. methods and means of management of other corporations, 56, 5' 96, 97, 102. problems involved, 98. remedies, 92, 98-105, 186-191. Lehigh Valley R. R., control by J. P. Morgan, 5. Leyland Steamship line, alliance with U. S. Steel Corporation, 6. number of vessels, 6n. purchase by J. P. Morgan, 6. tonnage of, 6n. Limestone, product U. S. Steel Corporation, 41. Loans, to foreign governments, 11, 22. Location of plants controlled by U. S. Steel Corporation, 4, 111. M. Machinery for transporting ore, 38, 39, 40. MacVeagh, Chas., incorporator U. S. Steel Corporation, 1, 135. Management, U. S. Steel Corporation, 51. diagram showing, 96, 97. machinery, directors, 54, 135, 140. Executive committee, 54, 136, 142. Finance committee, 55, 136, 142. officers, 55, 135, 144. shareholders, 52, 135, 138. voting shares of other companies. 56, 133, 146. methods, dividends, 58. failure to obey, 58. generally, 57. objects, (see Powers) 51, 132. INDEX. 209 [THB BEFSBSNCES ABB TO THE PAOES.] personnel, directorate, 59, 128. Executive committee, 60, 62, 128. Finance committee, 60, 128. officers, 60, 128. C. M. Scliwab, president, 60, 128. policy, labor, 64. prices, 63. public generally, 66, and note, reports, 66, and note, powers, business, 51, 132. building, 51, 132. generally, 51, 133. manufacturing, 51, 132. mining, 51, 132. patents, 51, 133. trading, 51, 132. transportation, 51, 132. . trust, acquire sbares in other companies, 52, 133. exercise ownership over same, 52, 133. generally, 52, 133. Issue bonds, etc., 52, 133. vote stock held, 52, 133, 148. Manufacturing, powers of National Government to i^egulate, 88. powers of U. S. Steel Corporation, 51, 132. Marquette, Mich., harbor for transporting ore, 38. Marquette range, ore product, 37. Meetings, shareholders (see By-laws, Charter) 138, 155, 168. Menominee range, ore product, .36, 37. Mesabl range, ore product, 35, 37. Method of control of other companies by U. S. Steel Corporation, 57-9 (see Management). Michigan, anti-trust acts, 92, 189, 191. Incorporation laws of, 68 et seq. Mines, coal, anthracite, control by J. P. Morgan, 5. bituminous, reported control by U. S. Steel Corporation, 7. iron, control by U. S. Steel Corporation, 4, 49, 112. ainc, reported control by J. P. Morgan, 7. Miding powers of U. S. Steel Corporation, 51, 132. Minnesota, incorporation laws of, 68 et seq. Mobile and Ohio R. R., control by J. P. Morgan, 6, 107. Money, circulation increase of recently, 20, 106. Money market, condition of, 20. in New York City, 21. Moore, Wm. H., participation in formation of Carnegie Steel Co., 9. sketch of life, 62. Morgan, J. P. amusements, 19. Claflin Dry Goods Co., 7. 14 210 INDEX. [THE REFEKENCEB ASS TO THE PAGES.] "community ownership," 5. compensation for financing U. S. Steel Corporation, 32. control of railroads, 5, 6, 107. determines plan of organization U. S.. Steel Corporation, 31, 115, 127. financial achievements, 10. foreign government loans, 11. gifts to charity, 13. master-financier of U. S. Steel Corporation, 10, purchase of Leyland Steamship line, 6. purchase of Missouri zinc mines, 7. railroad combinations, 7, 11, 107. reorganizations, 11. Rothschilds, bankers, 8. sketch of life, 10-13. N. Nails, wire, control of U. S. Steel Corporation, 5, 46, 50. National Government (see Congress, United States), 87, 94, 102, 186. anti-trust act of, 94, 186. power to regulate corporations, 87, 102. taxation of corporations, 102. National Steel Co., exchange of shares for shares of U. S. Steel Cor- poration, 1, 30, 108, 116, 120, 122. National Tube Co., exchange of shares for shares of U. S. Steel Cor- poration, 1, 30, 108, 116, 120, 122. threatened competition from Carnegie Steel Co., 24, 26. Net earnings (see Earnings, Financial Details), 33, 110. New Jersey Central R. R., control by J. P. Morgan, 5, 107. New Jersey, fees for incorporation, 68. incorporation laws, 68. laws, corporation, taxation, 69. uniformity of, 69. New York City, financial position of, 21. New York, Incorporation laws of, 68 et seq. New York Stock Exchange, price of seat on 1883-1901, 22. shares transferred, 1896-1900, 22. "high water marjcs," 22. Northern Pacific R. R., control by J. P. Morgan and J. J. Hill, 6, 107. Number of plants controlled by U. S. Steel Corporation, 4, 111, 112. Offer of U. S. Steel Corporation to 'exchange its shares for those of other companies, 1, 28, 76, 115, 120, 124. Office U. S. Steel Corporation, 132-3. Officers, U. S. Steel Corporation (see Charter, By-laws), 55, 59, 127, 135, 144. INDEX. 211 [TUB REFERENCES ABE TO TBI! FA0E8.] circnlar announcing, 127. names, 59, 12S. powers, f5, 135, 144. sketcbes of lives, 59-63. Ohio, incorporation laws, 68 et seq. Oil lands of U. S. Steel Corporation, 49. Oil wells, of U. S. Steel Corporation, 49. Oliver Iron Mining Co., interests transferred to TJ. S. Steel Corporation, 2, 124. Option, given by Mr. Carnegie, upon his steel interests, 23. Ore, Bessemer steel, control by U. S. Steel Corporation, 36. competition in production, 35-40, 48, 49n. docks at Duluth and Two Harbors, 38. harbors for transportation of, 38-40. iron, control by U. S. Steel Corporation, 84n, 36, 3Sn. product of Lake Superior region, 36. of United States, 5, 36, 49. value in the ground, 34n. ranges, Lake Superior, 36. tons available by U. S. Steel Corporation, 35, 35n. transportation of, 38. control by U. S. Steel Corporation. 38. cost, 39. steel cars for, 38. unloading at Conneaut, O., 40. Organization of U. S. Steel Corporation, 1, 8, 27, 52. 57, 59, 76, 96, 97, 115, 132, 138. determined by J. P. Morgan & Ca. 31, 118. Ovens, coke, 41, 49, 112. Parties, who formed U. S. Steel Corporation, 8. Patents, powers of U. S. Steel Corporation, 51, 133. Pennsylvania, incorporation law of, 68 et seq. Pennsylvania Steel Co., control by Pennsylvania R. R., 47n. Personnel of management U. S. Steel Corporation, 59, 128. Fig iron, coke required to make one ton of, 41. competition in production, 43. control by U. S. Steel Corporation, 42. product of Germany, 6. Great Britain, 5. United States, and U. S. Steel Corporation, 5, 42, 49. Pipe lines, U. S. Steel Corporation, 49. Pittsburg Steamship Co., formation of, 25. interests transferred to U. S. Steel Corporation, 2. Plants controlled by U. S. Steel Corporation, finishing, 5. 313 INDEX. [TBB REFERENCES ARE TO THE PAGES.] location, 4, 109. number, 4, 109, 110. Policy of U. S. Steel Corporation, labor, 64, prices, 63. public generally, 66. reports, 66 and note. Potential competition with TJ. S. Steel Corporation, 48. Powers; corporate under New Jersey laws, 68, 70, 72. directors', U. S. Steel Corporation, 54, 135, 140. National Government over corporations, 87, 94, 102, 186. taxation, 102. trusts, 94, 186. shareholders', U. S. Steel Corporation, B2, 132, 138. special, under New Jersey laws, 70, 72. state government, over corporations, 89. trust of U. S. Steel Corporation, 52, 56, 57, 73, 75, 76, 85, 86, 96, 97, 100, 133, 146. U. S. Steel Corporation (see Charter, By-laws), 51, 132, Preferred stock. Federal Steel Co., 165. U. S. Steel Corporation, 1, 31, 34, 108, 118, 125; 134. President, Carnegie Co., 157, 159. Federal Steel Co., 170. TJ. S. Steel Corporation, 55, 145. Prices, policy of U. S. Steel Corporation, 63. requiring uniformity of, by corporations, 104. Problems, legal. Involved in connection with U. S. Steel Corpora- tion, 98. Products of U. S. Steel Corporation, 5, 35, 41, 49, 112. bars and hoops, 45. bridges and buildings, 5, 50, 112. coal, 5. coke, 5, 41, 49, 112. copperas, 5, 60. cotton ties, 45. iron (see Pig iron), 5, 42, 112. limestone, 5, 41. nails, 5, 46, 112. ore, 5, 35, 49, 112. pig iron, 5, 42, 49, 112. steel, 5, 43-5, 49, 112-4. tin, 5, 45, 50, 112, tubes, iron and steel, S, 45, 47n, 50. wire, 5, 46, 50. fence, 5, 46, 50. nails, 5, 46, 50, 112. rods, 5, 46, 50, 112. INDEX. 213 [THE REFEREKCKS ARB TO THE PAOE9.] Profits, of financing U. S. Steel Corporation, 32, 108. prospects of as cause for forming U. S. Steel Corporation, 27. Property, U. S. Steel Corporation, 33, 49. 110. summary of, 49, 110. value of, 33, 110. Public, the, policy of U. S. Steel Corporation toward, 66. Publicity, requiring of corporations, 66, 104. Q. Quorum, Carnegie Co., 155. Federal Steel Co., 168. XJ. S. Steel Corporation, 53, 138. -: Railroads, anthracite coal, control by J. P. Morgan, 5, 107, Carnegie, Conneaut to Pittsburg, 25. "community of ownership," 5, 107. controlled by Gould, 5, 107. Harriman, 5, 107. J. J. Hill, 6, 107. J. P. Morgan, 56, 107. Pennsylvania Co., 5, 107. Vanderbilt, 5, 107. mileage of United States 1899, 3, 106. proposed by Carnegie, Pittsburg to tide water, 25. to transport ore, 25. recent combinations in, 7, 107. reorganizations by J. P. Morgan & Co., 11. systems of United States, 7, 8, 107. Ranges, iron, Lake Superior region, 36. Reading R. R., control by J. P. Morgan, 5, 107. Regulation of corporations, by national and state governments, 87-104. national taxation, 102. repeal of tariff, 103. requiring publicity, 66, 104. uniform prices, 104. trusts (see Remedies). Remedies for trusts, anti-trust acts, national, 94, 186, state, 92, 189, 191. injunction, 83, 85, 93, 94. powers of National Government, 87, 104. state government, 89. punish discrimination, 103. repeal tariff, 103. require publicity, 66, 104, uniform prices, 104. taxation by national government, 102, 214 INDEX. [THE REFERENCES ARE TO THE PAGES.] Reports, public by U. S. Steel Corporation, 66, and note. Rockefeller, J. D., connection with U. S. Steel Corporation, 8, 9, 124, 128. director of U. S. Steel Corporation, 8, 128. Interest In Lake Superior Consol. Mines, 2, 124. railroad combinations, 7. stock in Standard Oil Co., 8. Rod mills of XJ. S. Steel Corporation, 49, 112. Rods, wire, product of United States and U. S. Steel Corporation, 5, 50, 112. Rogers, H. H., director of TI. S. Steel Corp. and Standard Oil Co., 8. Rothschilds, bankers, and J. P. Morgan & Co., 8. S. Schwab, C. M., president U. S. Steel Corporation, 60, 128. purchase of Bethlehem Steel & Iron Co., 4n, 47n. salary, 61. sketch of life, 60. Schipp, Jas. H., and railroad combinations, 7. Seal, Carnegie Co., 155. Federal Steel Co., 168. XJ. S. Steel Corporation, 148. Seamless tubing, control by U. S. Steel Corporation, 4n, 47n. Secretary, Carnegie Co., 157, 160. Federal Steel Co., 171. U. S. Steel Corporation, 56, 60, 128, 138, 146. Shareholders (see By-laws, Charter, Stockholders), 52, 138, 155, 161, 168. liability under various laws, 71. powers of XJ. S. Steel Corporation, 52, 135, 136, 138. right to inspect books, 53, 73, 136, 151, 161, 165, 166, 174. Shares (see Capital Stock, Shareholders, Stock). Sheet mills of XJ. S. Steel Corporation, 49, 112. Shelby Steel Tube Cq,, acquired by XJ. S. Steel Corporation, 4n, 47n. Sherman anti-trust act, 94, 186. "Soo" Company to compete with XJ. S. Steel Corporation, 48. "Soo" Canal, traffic of, 39. Southern R. R., control by J. P. Morgan, 6, 107. Special powers, under New Jersey laws, 70, 72. Standard Oil Co., adv. State of Ohio, discussion of, 76 81. alliance with XJ. S. Steel Corporation, 8. capital stock of, 8. dividends, 8. Standard Oil Trust, agreement, 76, 177, 185. by-laws of, 181. board of trustees (see Trustees), 180. certificates, amount, 182. loss of, 182. prepared by trustees, 181-2. INDEX 215 [THE JtEFEBENCBS AKE TO THE PACES.] transferable, 180. transferred for shares of various companies, 179. comparison with U. S. Steel Corporation, 76. consideration for forming^ 178. for property transferred to Standard Oil Companies, 179. for shares of Standard Oil Companies, 179. corporations to be formed in various states, 178. capital stock of, 178. names, 178. powers, deal In petroleum, 178. manufacture petroleum, 178. mine for petroleum, 178. refine petroleum, 178. other, 178. shares to be issued, amount, 178. to trustees, 179. dividends, 182. duration, 183. Executive committee, 183. legality of, 76, 81, 84. meetings (see Trustees, Trust Certificate Holders) 180, 181. members, shareholders of various companies (see Parties), 177-179. trust certificate holders, 180. meetings of, 180. ' annual, 180. notice of, 181. special, 181. powers, elect trustees, 180. malce by-laws, 181. sell shares held, 182. terminate trust, 183-4. name of new corporations, 178. trust, 181. trustees, 180. office, 183. officers of, 180, 183. parties, class 1 all shareholders of various corporations, 177. 2 individuals named, 177. 3 part of shareholders of various corporations, 177. powers and purposes, of corporations to be formed (see Corpo- rations). of trust (see Trustees), stock of various corporations to be transferred to, 179. stockholders, of various companies to transfer shares to, 179. transfer of property, class 1 to Standard Oil Companies, 178. 2 to Standard Oil Companies, 179. 3 to trustees, 179. 216 INDEX. [THE REFERENCES ABE TO THE PA(}BS;J transfer of shares, consideration for, 179. of shares of Standard Oil Companies to trustees, 179. of trust certificates, closing books, 180. power to, 180. surrender and cancellation, 182. to shareholders in consideration of property transferred to Standard Oil Companies, 179-80. trustees, board of, 180. creation, 180. election, 180. names, 180. number, 180. meetings, 183. powers, control Standard Oil Companies, 183. declare dividends, 182. determine when Standard Oil Companies are to be formed, 185. elect Executive committee, 183. fill vacancies, 181. increase trust certificates, 183. issue trust certificates for Standard Oil Company shares, 179. make by-laws, 181. prepare trust certificates, 181. transfer property to successors, 181. trusts imposed on, 180. quorum, 183. reports by, 183. salary, 183. term of office, 180. vacancies, 181. reports by trustees, 183. supplemental agreement, 185. States, anti-trust acts, 92. "doing business in," what is, 89. power over domestic corporations, 89. foreign corporations, 89. State V. Standard Oil Co., discuiSSion of, 76, 81, 84. Steamships, lake vessels of U. S. Steel Corporation, 5, 38, 49, 113. ocean vessels, Leyland line, 6. used in ore transportation, 38, 49, 113. Steel, bars and hoops, control by U. S. Steel Corporation, 45, 49. billets, control by U. S. Steel Corporation, 43, 49. cotton ties, control by U. S. Steel Corporation, 45, 49. ore (see Ore), 35, 49. plate, control by U. S. Steel Corporation, 44, 49. product of United States and U. S. Steel Corporation, 5, 49, 112, 114. rails, control by U. S. Steel Corporation, 43, 49. INDEX. 217 tTBB JtEFSHENCES AKE TO THE PAGES.] sheets, control by XJ. S. Steel Corporation, 45, 49. structural, control by U. S. Steel Corporation, 44, 49. tubes (see Tubes), 45, 47n, 50. works of U. S. Steel Corporation, 5, 49, 112. Stetson, P. L., views as to publicity of corporate business, 66. Stillman, James, and railroad combinations, 7. Stock (see Capital Stock, Capitalization). exchange shares of various companies for shares of IT. S. Steel Cor- poration, 2, 28, 30, 108, 116, 120, 122. ownership of shares of other companies by U. S. Steel Corp., 86. power of constituent companies to sell shares, 85. power of U. S. Steel corporation to purchase shares, 85. preferred. Federal Steel Co., 165. U. S. Steel Corporation, 1, 31, 34, 108, 118, 125, 134. tr. S. steel Corporation, power to -purchase and retire its own shares, 73, 136. Stock Exchange, New York, shares transferred 1896-1900, 22. Stockholders (see Shareholders), 52, 138, 155, 161, 168. annual meeting of U. S. Steel Corporation, 53, 138. powers of (see Charter, By-laws), 52, 135, 136, 138. quorum of U. S. Steel Corporation, 53, 138. special meetings of U. S. Steel Corporation, 53, 138. Strike of Employees of U. S. Steel Corporation, 64. Suez Canal, traffic of, 40. Summary, financial details V. S. Steel Corporation, 33, 108-110. industrial details U. S. Steel Corporation, 49, 111-113. Syndicate, formation to finance TJ. S. Steel Corporation, 28, 115. profits of financing TJ. S. Steel Corporation, 32, 108. Superior, Wis., harbor for transporting ore, 38. Tables, authorities, 106, 114. capital and product of competitors U. S. Steel Corporation, 114. capital stock constituent companies, 108. comparison of capitalization of U. S. Steel Corporation with various things, 106. diagram of sources of powers of management, 96, 97. employees, 113. financial details, 33, 108-110. industrial details, 49, 111-113. net earnings, 49, 110. plants, number and location. 111, 112. products, 49, 112. railroad systems of United States, 107. sources of power, U. S. Steel Corporation, 96, 97. vessels, 113. 218 INDEX. [THE REFERENCSS ABE TO THE PAGBS.] Tariff, repeal of, to regulate trusts, 103. Taxation, of corporations, 69. National, of state corporations, 102. Tin can companies, combination of, 7. Tin plate, control by V. S. Steel Corporation, 5, 45, 50. mills of U. S. Steel Corporation, 49, 112. product of United States and U. S. Steel Corporation, 5, 50. Tonnage, vessels of northern lakes, 5, 49, 113. U. S. Steel Corporation, 5, 49, 113. Trading powers, TJ. S. Steel Corporation, 51, 132. Transportation of ore, 38 et seq. cost of, 39. steel cars for, 38. vessels, 5, 38, 113. Transportation powers of U. S. Steel Corporation, 51, 132. Treasurer, Carnegie Co., 157, 160. Federal Steel Co., 172. U. S. Steel Corporation, 56, 60, 145. Trusts, anti-trust acts, 92, 94, 186, 189, 191. definitions of, 73, 92, 94, 186, 191. form, 74. powers of National and state governments, 87. regulation of (see Corporations), by National taxation, 102. repealing tariff, 103. requiring publicity, 104. uniform prices, 104. remedies suggested, 102. substance of, 73. Standard Oil (see Standard Oil Trust), agreement forming, 76, 177, 185. legality of, 81. U. S. Steel Corporation as, 52, 56, 57, 73, 75, 76, 85, 86, 96, 97, 100, 133, 146. Tubes, control by U. S. Steel Corporation, 5, 45, 50. seamless, control by U. S. Steel Corporation, 4n, 47n. product of United States, 5, 50. Two Harbors, Minn., ore docks, 38. U. "Uniform prices," requiring, as a remedy for trusts, 102. Union Steel Co., to compete with U. S. Steel Corporation, 48n. United States (see Congress, National Government), 87, 94, 186. anti-trust acts, 94, 186. United States Steel Corporation: acceptance of offer of, 2, 120, 122, 124, 130. INDEX. 219 [THE BE7EKENCES ARE TO THE PAQEa.] acquisition capital stock constituent companies, 1, 30, 108, 116, 120, 122, 124, 130. Bethleliem Steel and Iron Companies, 4n, 47n. Oliver Iron Mining Co., 2, 124. Pittsburg Steamship Co., 2. Shelby Steel Tube Co., 4n, 47n. allied interests, 5. Allls-Chalmers Co., 7. >? American Shipbuilding Co., 8. ^ American Tin Can Co., 6. anti-trust acts, 92, 94, 186, 189, 191. blast furnaces, 5, 42, 49, 112. bonds, 2, 25, 28-9, 110, 115, 118. business powers, 51, 132. by-laws, 138. by-law regulation of stock, 147. capital, working, 136. capital stock, amount, authorized, 2, 31, 34, 108, 118, 125, 134. begin business with, 2, 31, 134. common, 1, 31, 108, 118, 125, 134. comparisons with various things, 2, 4, 106. exchanged for shares of other companies, 2, 28, 30, 108, 116, 120, 122, 124, 130. preferred, 1, 31, 108, 118, 125, 134. cash required In organizing, 22, 32, 115. causes that led to its formation, 20. charter (see Charter), 132. circulars used in organizing, 115-131. Claflin Dry Goods Co., 7. comparison with Standard Oil Trust, 76. competitors of, 35, 48, 49n, 114. composed of American Bridge Co., 1, 124. American Sheet SteelvCo., 1, 116, 120-2, American Steel Hoop Go,, 1, 116, 120-2. American Steel and Wire Co., 1, 116, 120-2. American Tin Plate Co., 1, 116, 120-2. Carnegie Co., 1, 115. Federal Steel Co., 1, 116, 120-2. Lake Superior Consol. Iron Mines, 1, 124, National Steel Co., 1, 116, 120-2. National Tube Co., 1, 116, 120-2. control of Bethlehem Steel Co., 4n, 47n. products, 35, 36, 47n, 49, 112. Shelby Steel Co., 4n, 47n. description of, 1. diagram, showing means of controlling other companies, 96, 97. 220 INDEX, [THE EEPKREIMCES ARE TO THE PAGBS.] directors (see By-laws, Charter, Directors), 54, 135; 140* also directors of American Tin Can Co., 7. Standard Oil Co., 8. dividends, how declared, 58, 147. paid, 33. earnings, S3, 110. exchange of shares for shares of other companies, 1, 30, 108, 116, 120, 122. conditions Imposed, 30, 117. Executive committee, 54, 60, 128, 142. Finance committee, 55, 60, 128, 142-3. financial details, 33, 106-8. summary of, 33, 106-8. financing of, 10, 20, 28, 32, 115. finishing plants, 5, 49. formation, 1, 8, 27, 28, 68, 116, 132. in New Jersey, why, 68. parties and interests represented, 8. formed, why, 20. incorporation in New Jersey, why, 68. incorporators, 1, 135. industrial details, 35, 49, 111-113. lands, 49. legality of (see Legality), 56, 57, 68, 73, 87, 92, 94, 96, 186, 189, 191. location of plants, 4, 111. management (see Management), 51, 54, 96, 97, 135, 140. method of controlling other companies, 57-9. mines, 4, 49, 112. net earnings, 33, 110. number and location of mines, plants, etc., 4, 111; 112. offer to purchase shares of various companies, 1, 28, 76, 115, 120, 124. offices, 132-3. officers, 55, 59, 127, 135, 144. ownership of shares in other corporation, 86. Pennsylvania Steel Co., friendly understanding with, 47n. pipe lines, 49. plan of organization determined by J. P. Morgan & Co., 31, 118. plants, 4, 49, 109, 110. location, 4, 109. number, 4, 109, 110. policy of, labor, 64. prices, 63. public generally, 66. powers (see By-laws, Charter, Management, Powers), 54, 135, 140. acquire and hold stock of other companies, 51, 52, 56, 85, 133. directors (see Directors), 54, 135, 140. purchase Its own stock, 73, 136. INDEX. 221 [TBI! HEFERIiNCES ABE TO THE FAQES.] prices, 63. products, 4, 38-49, 112. bars and hoops, 45. bridges and buildings, S. 50. 112. coal, 5. coke, 5, 41, 49, 112. ,: 4 copperas, 5, 50. c i /vi cotton ties, 45. fence, wire, 5, 46, 50. iron, 5, 42. 112. limestone, 5, 41. nails, wire, 5, 46, 112. ore, 5,- 35, 49. 112. pig iron, 5, 42, 49. 112. steel, 5, 43-5, 49. 112, 114^ tin plate, 5, 45. 50. 112. tubes. 5, 45. 47n, 50. wire, 5, 46, 50, 112. profits, from formation, 27. of promoters, 32. 108. property of. 33, 49, 110. railroads. 5. 25, 38, 49. Standard Oil Tmst, comparison with, 76. steel works, 5, 49. 112. stock, amount. 1. 31. 34. 108. 118. 125, 134. water in, 34. stockholders' powers (see By-laws, Charter), 52, 135, 136, 138. transportation of ore. control of. 38 et seQ. "trust?" 52. 56. 57, T5. 76. 85, 86, 96. 97. 100, 133. 146. does corporate form prevent? 74, 76. powers of, 52, 96, 97. diagram showing, 96, 97. vessels of, 5, 38, 113. water in stock, 34. working capital, 14S. V. Value of property of companies forming TJ. S. Steel Corp., 33, 110. Vanderbilt, W. K., and railroad combinations. 7, 107. Vermillion range, ore product. 37. Vessels, of the northern lakes, 5. TJ. S. Steel Corporation, 5, 38, 49, 113. capacity of, 38, 49, 113. Voting shares held in other corporations, 52, 56, 57, 146. 222 INDEX. [THB SEFSRIENCES ARE TO THE PAQES.] w. "Water" In stock of U. S. Steel Corporation, 34. "Whaleback" steamers used in ore transportation, 30. Wire, barbed, control by U. S. Steel Corporation, 46, 50. fence, product of United States and U. S. Steel Corp., 5, 46, 50, 112. nails, product of United States and U. S. Steel Corp., 5, 46, 50, 112. rods, product of United States and U. S. Steel Corp., 6, 46, 50, 112. Working capital, U. S. Steel Corporation, 148. Z. Zinc mines, reported control by J. P. Morgan & Co., 7. Cornell University Library HD2769.S72W67 A study of the United States s'««;' Jj^'P" 3 1924 002 365 579