Meaningless Meeting

Early one morning last week about 400 stockholders of Bethlehem Steel Corp. were en route to Newark, N. J., where the annual meeting was scheduled. Few would have thought of going had not it been known that at this meeting the management would ask for approval of a resolution upholding the much-argued Bethlehem bonus plan, that a minority interest might protest, ask pertinent questions. Yet that very morning Vice-Chancellor John H. Backes had signed an order which made much of the meeting meaningless. He ruled that while the stockholders might vote, the result of the vote might not be written into the corporate records. Approval of the majority, he said, "cannot force a complaining minority into suppression of their rights nor find in it immunity." In the Law's redundant language he stated: "It will be a battle of proxies, not of wits. . . . Explanation will be idle, frivolous, falling upon ears not allowed to hear and minds not permitted to judge; upon automatons whose principals are uninformed of their own injury. . . ."

But while the fate of the bonus system is in the hands of the Law, not of the stockholders, genial Chairman Charles Michael Schwab last week had the satisfaction of knowing that the meeting was a personal victory for him. When questions were hurled at him he shot answers back. When the end of the meeting drew near he delivered himself of an emotional speech which brought cheers from the shareholders. And meaningless as the vote may turn out to be, it was indicated that the management won the proxy battle by an overwhelming majority.

Highlights of the meeting included:

Heckle. Chairman Schwab (offering his chair to a woman stockholder): Lady, haven't you a chair?

Woman: I prefer to stand and get a good look at you.

Schwab (arising and bowing) : Then I'll stand so you may see me better.

Woman: Don't trouble. I saw your picture in the paper playing golf at White Sulphur Springs and spending the stockholders' money.

Schwab: I'm better looking than that picture.

Woman: You may think so but I don't.

President Grace: That's open to question.

Highest Paid Man, No bonus-getter is Chairman Schwab and at the meeting he admitted that a frequent question is: "What does C. M. get out of it?" His answer was: "I have been the highest paid man in the United States for a good many years. Some years my compensation was in figures that would stagger you. Now I want you to remember that I risked my money on this enterprise upon every occasion as late as 1918. Since 1908 I have received an average from this corporation of $86,000 a year. ... In 1930 the board of directors without my presence or knowledge voted me $250,000. Now I'm damned if I ain't going to get a salary commensurate with my services."

"The Old Man/" "For the first time in my 51 years in the steel business I have been requested to make an explanation of my conduct. Forgive my agitation, but it is the work of a lifetime." Saying this, Mr. Schwab's voice began to quaver. Few stockholders did not share his emotion when he concluded the meeting by a triumphant appeal: "The crowning star in the diadem of long steel management is the approval that people give to what you've done. The old man won't be with you many more years--and I'm not appealing on the ground of personality--but he would like to add to his diadem that one last star of your approval of what he has done. Thank you for your patience and God bless and prosper you all."

"Now Drop It." Mr. Schwab winked away his incipient tears and a broad smile spread over his face once more when he heard the shareholders cheer his finish. Suddenly he arose and rushed to the table where the counsel for the minority faction sat. He grasped their hands vigorously.

"You've heard me," he exclaimed. "You see how they feel. Now drop it."

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