U. S. Steel Common

To Myron C. Taylor was given last week credit for finishing what the late great John Pierpont Morgan began. Mr. "Taylor, brilliant chairman of the finance committee of U. S. Steel, announced that, at their annual meeting on April 15, stockholders would be asked to approve an increase in authorized common stock from some 7,500,000 to 12,500,000, thereby potentially capitalizing the company at $1,250,000,000. From new stock to be issued at terms to be fixed, cash will be received to redeem all the bonds of the parent company. Thus Steel common becomes "as good as a bond," which was the astoundingly imaginative ambition of Steel's Creator Morgan.

Steel began in 1901 with a staggering load of bonds, capitalization being (in millions) :

Bonds $303 Preferred stock 445 Common 443

Total $1,191

Most of the bonds went to Andrew Carnegie, who intended to make Mr. Morgan pay well for his dream. The stock was full of water and sold as low as $3 per share in 1904. But back, back, back into the company went the earnings. In fact, Steel's accountants even provided for sinking funds before figuring their earnings. Thus inevitably was the Morgan faith in the U. S. justified and long since has U. S. common sold steadily above par and above its preferred. The only question now is "when will it hit $200?"

Total stock to be issued will probably not greatly exceed $1,000,000,000 in par value. But the offering price of the new stock may well be $150 per share, the same U. S. common which once was water and which the late great Judge Elbert H. Gary had already expanded by a 40% stock dividend shortly before he died in 1927. The new capitalization also removes the last traces of Carnegie; for although he had provided that some of the bonds should never be retired, most of the holders of the special Carnegie bonds have agreed to cash in for $115.