Show BILLION DOLLAR STEEL MERGER BLOCKED k I a. 4 Eaton Eaton Wins Long Fight To T 0 Prevent Formation Of Monster Company V. V Fight F at Climax 44 v q 5 5 4 S. S a k CYRUS S 'S S. S EATON His Victory 4 i M H-M ci m JUDGE D. D G JENKINS 5 His Decision Judge RuI Rules Rules- Shareholders Shareholders' ers' ers Approval of Con Con- Consolidation Invalid S ISSUES INJUNCTION Appeal of Pe Decision ision t to V Higher Court Looms Loo a YOUNGSTOWN VO 0 D. Dec De 29 29 United Press The The billi dollar billion n Vo Youngstown Sheet and Tube company com corn pany- pany pany Bethlehem St Steel 1 c corporation r oratio merger which W was I ratified by Sheet Sh t and Tube sh shareholders last rast April was waa held Invalid by Common Pleas Pie Judge Judg David G. G Jenkins today when ho lie d. d ar blocking granted grant an injunction an the consolidation 5 The The de decision n was was' a no victory for or Cyrus S. S SEato Eaton ori dynamic Cleveland financier and end largest individual Sheet a and Tube st stockholder r who wh i I fought the tho consolidation on th tho ground tb that t it was tinged d with sud f-sud Md and would result t in lo losses o to fellow v stockholders E Eaton's tons ton's original opposition to th consolidation was was based b d on charges that th tho n negotiations were co con conducted duct ducted sec secretly by James James' M. M Camp Cam b bOll bell chairman of at Jt ho board an and nd andr Frank S Purn r nt t pf- pf the t 4 tn ie i. i Gf Grace Graces pr president f nr janoT nd Cb Charles ChanCe rles MS M MI S Schwab chairman ot r tho b board ard ot pf Bethlehem 5 H He n. n and db his associates maSsed massed mil lions lions' of dollars and thrOw threw them into a. a a spectacular proxy b but t th they met defeat when Sheet and Tube T be shareholders met and ratified the tho amalgamation by a a. majority majOr oC ot Votes totes S IM IMMEDIATELY IMMEDIATELY- M ED FILED S SUITS iTS Eaton cb charged more than shares of of stock alock were voted illegally and and Immediately filed tiled Injunction suits to block the consolidation Th The Tho suits were filed tiled I last ast st spring op ring Hearings began gan in Juno June and th tho trial was was concluded in September Final inaI arguments were ere heard beard in October and the courts court's decision today to to today day was was tho climax The forces are rO ex expected expected e to to file fUe an immediate appeal They Intimated tho the decision be tie carried carrl d to the tho United States su supreme aw U pr prOmo preme mo court if it necessary Tho courts court's url's de decision was wholly unexpected There Ther was no fanfare fantaro or r pr preliminaries Judge Jenkins into the courtroom at u 1 m. m iU H He had bad prepared but three copies oples of ot his decision a decision that hat holds holds' In abeyance a dation that would have created la a steel giant gl nt second only to tho United U States Steel corporation 5 Not oven the battery of attorney r who vho for tor months waged the legal Continued on page Pago 7 y t t E Eaton ton Wins Long Fight to Prevent Formation of Monster Company Continued from page paso 1 phases of ot tho tim battle battlo of or steel elect giants was informed d in n advance that the decision was re ready dY Tho The ruling leaves Sheet and Tube an independent steel company the thC goal for tor which Eaton and his associates asso asso- dittos fought It also 1150 Is believed ved to top p paVo paIo o the tho V way y t for Or r a a. consolidation with the Republic St Steel el corporation controlled oiled by Eaton This Title is known to be bo one ono of oC Eaton's fondest desires desired although ho deniM denied ho harbored such Euch plans during the tho long Jong arduous trial of or tho the Injunction suits Under terms of at tho the proposed merger would have been astock a astock stock exchange in which Sheet and TUb Tubo shareholders rs w WoUld have havo ro- ro coWed d ono one and third otto shares of Bethlehem for tor ono one of ot Sh Shoot Sheet ct and Tube Tubo Eaton fought this on en tho ground th that l th tho thia truo true basis ot of ex exchange cx ex- ex ch change ngo should bo be for tor one eric claiming approval of oC tho the tor former ncr would result rosult in losses to Sheet and Tube rube shareholders Tho The claim that directors ot of Sheet anti and Tube rube acted without necessary Information when they voted last March 12 lZ to approve the consolidation consolida consolida- tion was ono one of oC Eaton's major con toll lions rile Tho assertion that the rights of Sheet and Tubo Tube minority stockholders stock stock- holders Ivero violated because vital Information was as withheld from rota th them m also was ono one of ot Eaton's con con- An attack on th the t secrecy S cr with which the tIle preliminary negotiations were conducted also was made Eaton charged that deSpite th tho fact tact ho het was ono of or Sheet Rhett and Tubes Tube's largest stockholders ho he was not in In formed of the merger until the negotiations ne no had completed been Tho The decision criticized the part port played in the tho negotiations negotiations' by Henry G. G Dalton Cleveland eland director of both boU Sheet and ana Tube Tub arts Bethle Bethle- hem Dalton was not mentioned by byname name me b but t was termed a a. common director DaltOn was prominently Identified d with tho forces and was yas charged with conniving with Furnell Fur Fur- nell nelt Campbell Grace and others to td withhold news of or tho the c consolidation from coin Eaton and his associates Judge Jenkins also held that the tact fact received a a. bOl bonus us of oC in 1929 BIlO should ld have been revealed to Sheet and Tube share sharo holders During the tho trial the bonus issue was one of ot the hardest fought Existence of or the system m. m under which lt h even minor D Bethlehem executives three tives became millionaires s almost over night was not revealed rc until the trial Was vas at its Us height Eaton's counsel bitterly assailed It It contending this tho information had been withhold not only from the r forces torce but from Camp bell and other Sheet and Tube cx executives who favored the tha merger Both Campbell and nd Furnell Purnell Pur Fur nell neU admitted d und under r examination that Grace had not Informed them therm of the tho SyStem but said aid ild th they y saw Raw no t reason tebon son why wity it It should at attn atter r th the I I m merger negotiations Tho The court severely criticized the em employment lo of or private accounting firms to check the financial status of ot the two companies He lie p pointed out that audits reported by by- bythe the lithe firms were wera computed on widely di divergent dl- dl t l systems and arid w fa nil mis mu- leading heading The tock toek exchange baals orIs- orIs was fixed by Price Waterhouse Waterhouse Water- Water hou house e Co New Now York account account- ants Eaton subsequently employed m loy d Ernst Ernst Cleveland arid and the latter after its audit fix fixed d the tho true basis of or e exchange chano at for tor one nc Tho The d decision against th the Sheet ham-Sheet and Tut Tube Tub merger b by J Judge David G G. Jenkins brings to toa toa a a e. climax ono ana of ot tho the mb most t bitter r and end endmost most cio costly fights in tn American in in t history According to reliable Information the atOn interests h have spent nearly in blo blocking the tIle merger and the tho Bethlehem Interests have spent largo sums to refute Eaton's allegations Not since the tho antitrust st days of at tho the lato Jato nineteenth century has there been bean such a battle battlo ot of industrial Industrial Indus Indus- trial giants Extensive audits were made mUdo of or accounts of ot the tho Bethlehem hem Steel corporation and of ot the tho Youngstown wn She Sheet t Tube Tuba con com 1 pany in iii Eaton's tons effort to block k the gigantic consolidation Brokerage ho house o accounts were examined and various ll industrial l l leaders ad r wera were questioned Officials l lis' lis of ot tho the Eaton interests in InN N New w York when wIen qUe questioned this I morning regarding their victory Would make no stat statement ment o other oher her tian to say th that t the tho decision speaks for itself Bethlehem of of- of could hot bo be ft rescued reached ehe at an early hour born toda today and it js is a a. matter of conjecture as ns to what whitt thIr fu fu- futuro tore turo plans will bo ho in their efforts t to merge B Bethlehem m with Youngs Youngs- Youngstown town Sheet and Tube |