Suits

To be noted among last week's lawsuits were two of the first water, one of lesser import:

Youngstown: "What'll you pay us for our property?" said grizzled old James Anson Campbell, founder-president of Youngstown Sheet & Tube Co. to suave, cool-headed Eugene Gifford Grace, president of Bethlehem Steel Corp., one day last February. Thus informally, according to Mr. Grace's testimony last week, was negotiated the Bethlehem-youngstown merger, to prevent which Cyrus Stephen Eaton of Cleveland, big Youngstown stockholder, has had his lawyers at work for 16 weeks in an epochal fight (TIME, March 24 et seq.). Mr. Grace's testimony supplied many another lively item last week. He told the court that Bethlehem officers last year received $3,425,000 (6.54% of net earnings before depreciation) in bonuses, that he himself received a bonus of $1,623,000 figured on a mysterious "factor" that increases in good years, dwindles in less good years. Mr. Grace also put in a few words on the merger's economic justification, claimed Bethlehem's distribution facilities would take care of Youngstown's overproduction of pipe, that the two companies combined would have an "ideal" 65-35 ratio of light and heavy products, the ratio which U. S. Steel would well like.

Two trunks full of documents waited outside the courtroom doors during later sessions. They were evidences in the challenging of proxies, which the Eaton lawyers went about with great vim & vigor. After challenging proxies for a total of 128,400 shares in one day, the Eaton forces declared that they were ready to challenge "thousands more" even hinted at attacking the constitutionality of the Ohio corporation code under which the merger was ratified. The $800,000 loan by Bethlehem to Cleveland's Pickands, Mather & Co. for the purpose of buying Youngstown stock, which has been the King Charles's head of the suit, inevitably came up. R. E. McMath, Bethlehem secretary, when asked whether Partner Elton Hoyt II of Pickands, Mather had told him the money was needed to buy Youngstown stock, replied: "No, but I think he knew that I knew what he thought and for that purpose he needed the money. . . ."

Standard. The hearings in the Government's suit to restrain Standard Oil Co. of New York from merging with Vacuum Oil Co. (TIME, March 3 et seq.) reached an end last week in Manhattan. Vacuum Director Harold F. Sheets, the last witness, analyzed world petroleum production in 1929. According to his figures. Royal Dutch Shell was far in the lead with 175,992,000 bbl., with Standard of New Jersey second (101,100,000 bbl.). Socony and Vacuum combined were down in sixth place (57,986.000 bbl.). In daily refinery capacity he put Standard of New Jersey first (718,000 bbl.), Dutch Shell second (704,000 bbl.), and Socony-Vacuum fourth (263,000 bbl.). Thus, concluded Mr. Sheets triumphantly, tne Socony-Vacuum merger would produce no world-bestriding Colossus of Oil, but, en the contrary, a corporation of comparatively modest size. To this conclusion Special Assistant Attorney General John H. Amen objected on the grounds that Mr. Sheets had said much about oil resources, little about financial resources. After further hearings in other cities, the final argument will take place at Omaha, Neb., which is in the same judicial district as St. Louis, where the original suit was instituted in 1906. Because the case comes under the Sherman Anti-Trust Law it must be tried with judges from the U. S. Circuit Court of Appeals.

Cigar Bands. George Schlegel. Inc., and Harry Prochaska, Inc. started suit for $858.000 damages against Consolidated Lithographing Co. and International Banding Machine Co. who together make most of the seven billion bands used each year on the country's seven billion cigars. Invoking the mighty aid of the Sherman Anti-Trust Law and the Clayton Act, Messrs. Schlegel and Prochaska allege no less than 20 "overt acts" in restraint of the cigar band trade.

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