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                         INLAND STEEL INDUSTRIES INC.
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Notes:



 
[LOGO]
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INLAND STEEL INDUSTRIES
30 WEST MONROE
CHICAGO, ILLINOIS 60603
 
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                                                                   MAY 16, 1997
 
               SUPPORT YOUR BOARD'S COMMITMENT TO BUILD VALUE--
                      VOTE AGAINST THE GREENWAY PROPOSAL
 
Dear Fellow Inland Shareholder:
 
  The Inland Steel Industries annual meeting will take place on May 28, just a
few days from now. We are writing to let you know about two important recent
developments and to urge you to vote your proxy in support of your Company,
and AGAINST an ill-advised proposal by Greenway Partners that Inland "spin
off" its Ryerson Tull subsidiary to shareholders now.
 
  Yesterday, Institutional Shareholder Services (ISS), an independent advisor
to numerous major institutional investors, recommended that its clients vote
against the Greenway proposal. In its report, ISS said:
 
  "...we believe management and the Board are evaluating all of
  the Company's options with regard to enhancing shareholder
  value. We also believe management has made significant strides
  in improving Inland's performance over the past two years. The
  recapitalization process has improved the Company's balance
  sheet, and the capital investments made have structurally
  positioned the Company to further improve performance in the
  future."
 
  In fact, Greenway itself now apparently recognizes the deficiencies in its
proposal and the correctness of our position, and has come up with another
idea--"letter stock." The Company has evaluated this idea, in consultation
with its investment banker, and concluded that, among several factors, having
Inland issue letter stock linked to Ryerson Tull's earnings, on top of the
stock issued by Ryerson Tull itself that is already publicly traded, would
cause substantial confusion in the market. SO WE HAVE DECIDED NOT TO PURSUE
IT. IN FACT, PRIOR TO EMBARKING UPON OUR PRESENT STRATEGIC COURSE, THE COMPANY
AND ITS INVESTMENT BANKERS HAD EVALUATED THE POSSIBILITY OF A LETTER STOCK
OFFERING AND CONCLUDED THAT IT WOULD NOT BE IN SHAREHOLDERS' BEST INTEREST.
 
  As the ISS report notes, your Board of Directors has carefully considered
Greenway's proposal and other options for creating value for Company
shareholders. The Board is unanimous in its view that shareholders will not
benefit from the proposal and, accordingly, recommends that you VOTE AGAINST
PROPOSAL #3. We again emphasize that the key reasons are:
 
  .  Our strategic program to foster Operational Excellence is working.
     Inland has achieved three consecutive quarters of increased earnings.
     FURTHERMORE, WE NOW EXPECT RESULTS IN THE 1997 SECOND QUARTER TO EXCEED
     BOTH LAST YEAR'S SECOND QUARTER AND OUR STRONG FIRST QUARTER PERFORMANCE
     THIS YEAR.
 
  .  Operational Excellence is being translated into increased shareholder
     value. Since March 31 of this year Inland's share price has risen over
     30%--more than double the increase in the S&P 500 Index and triple that
     of the S&P Steel Index.

 
  .  A spin-off of Ryerson Tull would severely limit the Company's ability to
     pursue other, better, options for creating value. YOUR BOARD REMAINS
     COMMITTED TO EXPLORING ALL VALUE-ENHANCING OPTIONS--PROVING THIS
     WILLINGNESS THROUGH THE STRATEGIC PROGRAM IMPLEMENTED LAST YEAR TO SPIN
     OFF 13% OF RYERSON TULL, PAY DOWN DEBT, FOCUS ON OPERATIONAL EXCELLENCE,
     AND ENGAGE IN TALKS WITH U.S. STEEL.
  .  FINALLY, A RYERSON TULL SPIN-OFF AT THIS TIME WOULD BE COSTLY TO THE
     COMPANY. We would lose beneficial commercial synergies that exist
     between both companies, and, most importantly, the tax advantages we
     enjoy by consolidating results.
 
  Spin-off proposals by Greenway at other companies have been rejected by a
clear majority of shareholders in every case. In fact, in its report, ISS
concluded: "As with Greenway's spin-off proposals at other companies, the
problem at Inland is timing. Given the fact that the Board is constantly
reviewing the Company's strategic options, is open to taking action when
appropriate, and has been strategically improving the operations of the
Company, WE BELIEVE MANAGEMENT IS IN A BETTER POSITION TO DETERMINE THE TIMING
OF ITS ACTIONS THAN IS GREENWAY. Further, we believe management has already
heard the message that Greenway is hoping shareholders will send them by
supporting this proposal. WE RECOMMEND A VOTE AGAINST ITEM 3."
 
              THE INLAND ANNUAL MEETING IS JUST AROUND THE CORNER
                  PLEASE VOTE AGAINST GREENWAY'S PROPOSAL #3
                       ON THE ENCLOSED WHITE PROXY CARD
 
  If you have any questions or need information on how to vote your shares
properly, please call MacKenzie Partners, Inc. toll free at (800) 322-2885 or
(212) 929-5500.
 
  Your support of Inland Steel and our plan to increase the value of your
investment is appreciated. PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD EVEN
IF YOU HAVE PREVIOUSLY SENT A CARD TO BE SURE YOUR SHARES ARE COUNTED AS
VOTING "AGAINST" PROPOSAL #3.
 
  Thank you on behalf of the Board and Management,
 
                                       Sincerely,
                                       LOGO
                                       Robert J. Darnall
                                       Chairman, President and
                                       Chief Executive Officer

 
                                                                           DRAFT
                    [LETTERHEAD OF INLAND STEEL INDUSTRIES]
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                                                    May 16, 1997

Via Facsimile and 
 Overnight Courier

Dear Institutional Investor:

     You may have recently received a letter from Greenway Partners arguing
that Inland should issue "letter stock" linked to the earnings of Ryerson Tull,
Inc. instead of spin off Ryerson Tull as Greenway proposed in Inland's proxy
statement for the 1997 Annual Meeting of Stockholders. You should know that,
prior to embarking upon its present strategic course, Inland and its investment
bankers evaluated the possibility of a letter stock offering and concluded it
would not be in the best interest of shareholders.

     Reflecting the importance placed on shareholders' views, Inland and its
investment bankers studied Greenway's idea and decided not to pursue it because,
among other factors, having Ryerson Tull's earnings tracked by a letter stock
issued by Inland at the same time as Ryerson Tull's own common stock is publicly
traded would cause substantial confusion in the market. The Company does not
believe that either Greenway's spin-off proposal or its letter stock proposal
are the right steps at this time. Notably, Institutional Shareholder Services
has just issued a report sharing this view and recommending a VOTE AGAINST ITEM
3 on Inland's proxy.

     A copy of my letter to Greenway and a recent press release are enclosed for
your consideration. Please feel free to contact me at (312) 899-3923, or Bob
Weidner at (312) 899-3607, if you have any questions.


                                Yours very truly,


                                Jay M. Gratz

cc:  Robert J. Darnall