Deals & Developments

Steel Dividends. While newshawks who had been waiting about an hour held a mock directors' meeting, irreverent & bawdy, the solemn directors of United States Steel Corp. pondered the worst quarterly earnings statements in the company's history. They finally decided to vote the regular preferred dividend, but in explaining the action to the Press Chairman Myron C. Taylor made it abundantly clear that "improvement in business and net earnings must in future determine dividend action on the preferred stock." Because a very similar statement had presaged omission of the common dividend, because Steel operations last week were but 16.5% of capacity whereas they must be 35% to 40% to earn the preferred dividend, Wall Street assumed that when the Board meets Oct. 25, two weeks before Election Day, the preferred dividend will be passed for the first time in the company's history. In a soft voice, hard-faced Mr. Taylor said that payments of dividends plus losses have resulted in reducing Steel's surplus $73,000,000 in a year. "It is apparent." he said, "that we are at the mercy of business just like any other corporation." From operations alone. Steel lost $3,362,000 in the quarter against a $13,817,000 profit a year ago.

Two days after U. S. Steel's directorate had met at No. 71 Broadway, Bethlehem Steel's board met at No. 25 Broadway. In a unanimous decision they voted to omit the preferred dividend for the first time since 1913 although some people had hoped for a small payment. After charges, Bethlehem's second quarter resulted in a $4,671,000 loss against a $1,452,000 profit in the second quarter of 1931. President Eugene Grace said that improved sentiment had not yet been reflected in the steel business.

The sixth biggest Steel corporation also made its report last week. National Steel earned $560,999 in the second quarter against $1,533,000 a year ago, maintaining its enviable record of being the only major steel company to keep out of the red.

Beaverbrook Blocked. The difficulties of Price Bros. & Co., Ltd., Canada's old newsprint firm, seemed ended when Lord Beaverbrook had a new directorate elected, his brother AllarrAnderson Aitken made president, and then suggested a plan of reorganization (TIME, June 13). Last week Lord Beaverbrook abruptly announced that his plan had not been acceptable to "several security holders and some of the creditors," had therefore been withdrawn. Chief features of the plan were to postpone sinking fund payments for five years, stop preferred dividends for five years, pay off creditors with income debentures (interest dependent upon earnings).

The renewed difficulties of Price Bros. complicated Canada's newsprint problems. A combine of companies seems essential to the industry but when a concern cannot reorganize itself the difficulties of merging it become tremendous. Last week Lake St. John Power & Paper Co., subsidiary of St. Lawrence Corp., and Abitibi Power & Paper both defaulted their interest.

Trophy v. Gillette. During recent years the unharmonious razor industry has become a lawyers' paradise. Last week another suit sprang up. Trophy Towers Sales Corp. has engaged in the business of selling double-edged blades in slot machines. It used to buy its blades from Trophy Blade Co., half interest in which was held by AutoStrop Safety Razor Co. When AutoStrop and Gillette merged the remaining half interest was acquired. Trophy Blade Co. dissolved. Last week Trophy Towers Sales Corp. brought a $30,000,000 damage suit against Gillette and 19 of its officers and directors. It charged that the AutoStrop-Gillette merger was a conspiracy in restraint of trade, that the dissolution of Trophy Blade Co. was a conspiracy to ruin the business of Trophy Towers Sales Corp.

Sea-born Tax. Can customs be collected on articles produced on the high seas? Last week the Supreme Court was asked to consider a case in which this question was the chief issue. Procter & Gamble Manufacturing Co. bought whale oil from several Norwegian whaling firms. It protested the tax of 6-c- a gallon levied in New York, sued to recover the money. The U. S. Court of Customs Appeals held that ships at sea and the property in them belong to the land of registry, that the whale oil was taxable as coming from Norway. P. & G. appealed.

Music Merger. A sharp, small Manhattan lawyer named Jacob Scholer was given a difficult task in 1929 by Irving Trust Co. He was to handle the run-down affairs of American Piano Co., petitioned into receivership. So well did he do it that within a year the creditors were paid and plans for a reorganization perfected. A new company, American Piano Corp.. bought the assets of the old company, entered the manufacture of such famed instruments as the Knabe (Metropolitan Opera's favorite). Chickering (family use). Mason & Hamlin (artists) and the Ampico Player Piano.

A big investor in the new company was Aeolian-Weber Piano & Pianola Co. which controls companies making pianos (Weber, George Steck). Last week plans were almost completed for a merger of Aeolian-Weber's subsidiary, Aeolian Co.. and American Piano Corp. under the name Aeolian American Corp. Both companies and the 20-odd concerns they control will remain intact.

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