Deals & Developments

Formality. A long awaited formality took place last week: Bethlehem Steel Corp. cancelled its contract to purchase Youngstown Sheet & Tube Co. The first suggestion for a definite program was begun in February 1930. There followed a long legal battle which was still being fought last week. The struggle marked the deflation of Cyrus Stephen Eaton who opposed the deal, tied up his resources in so doing. It ruined the health of big 77-year-old James Anson Campbell who two years ago resigned Youngstown's presidency, became chairman. It caused the suicide of Leroy A. Manchester, counsel for Youngstown, who shot himself a half an hour before he was to testify. It was marked by the sudden deaths of Myron Arms Wick, a leading Youngstown steel man and a participant in the struggle, and of Elmer Theodore McCleary, an Eaton man who had just been named president of Republic Steel Corp.

While the struggle was going on, Depression came and markets broke. Bethlehem Steel last week sold at $27 against $105 when the deal was proposed, Youngstown sold at $21 against $150. Bethlehem's $6 dividend was reduced to $2 while Youngstown's $5 payment was passed. The exchange ratio was to have been one and one-third shares of Bethlehem for one of Youngstown.

Sale. Burly, aggressive Patrick H. Joyce, president of Chicago Great Western Railroad has made a good job of his 1,495,-mi. line. Last year its net operating revenue was better than in 1929. For the first eight months of this year it has done 14% better than in the same period of 1930. Railroad men were excited by another aggressive Joycian move last week. From Allegheny Corp. (Van Sweringen holding company), C. G. W. bought a 20% interest in Kansas City Southern, indicating another possible Chicago-Gulf route. At last week's market prices the K. C. S. stock had a value of about $1,500,000 against the $10,000,000 paid for it in 1929 by the brothers Van Sweringen.

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