At the Robert Treat

From the Robert Treat Hotel in Newark, N. J., where Bethlehem Steel Corp. stages stockholders' meetings, last week came echoes of the two wars, one foreign and one civil, which Bethlehem fought last year. The foreign war, the effort to merge Bethlehem with Youngstown Sheet & Tube, was rumored about to begin again. The civil war, over Bethlehem's bonus-plus-salary system, was arbitrated and ended, with victory for the enemies of Bonus.

Cyrus Stephen Eaton of Cleveland, the man who blocked the Youngstown merger, was the man who caused the bonus war. What justification was there, he had asked to know, for paying as high as $1,623,753 in one year (1929) to President Eugene Gifford Grace? Minority shareholders echoed Mr. Eaton in surprise and indignation. Chairman Charles Michael Schwab, who had issued the bonuses in his discretion (but never taken one himself), pleaded with tears in his eyes and a catch in his voice for the shareholders to "drop it, drop it" (TIME, April 27). Last week, having altered the bonus system, he explained: "It is not necessary for me to say that the statements I have made . . . have been made with all sincerity. I believe today . . . that the system is sound. ... At the same time I must recognize that criticisms . . . have been made by a substantial number of stockholders and that such criticisms require careful consideration. . . ."

Such consideration led to these modifications: i) Bonuses will be determined by Chairman Schwab and a committee of bonusless directors; 2) Bonuses will be computed after depreciation, must never exceed 8% of net income; 3) Officers hitherto on a "small salary," such as President Grace who last year received $12,000, will henceforth receive "normal salaries"; 4) Full publicity will be given all awards.

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