The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1903-12-23
SCHWAB DENIES
THAT he HELPED
|! PROMOTE TRUST.
Lays All the Blame for Ship
building Fiasco on Nor
gan, Dresser. Nixon and
John NJ. Young.
SAYS HE DID NOT USE FRAUD.
Narrates at Length His Relations
With Bethlehem Company and
Says 1t Was Not Wrecked.
TELLS OF HIS UNDERWRITING.
Morgan and Company, He AS
serts, Carried Out the Deal by
Which He Received $780,
100000 in Bonds and
Stocks.
Narrares at Length His Relations
With Bethlehem Company and
Says 1t Was Not Wrecked.
TELLS OF HIS UNDERWRITING.

New York. Dec 22-Charles NJ. schwab
to-day filed his answer to the crossbill
OF the United States Shipbuilding Com
pany and James Smith. Jr., its receiver,
III the United States Circuit Court for the
Southern District of New York. The case
Is that of the company and its receiver
against the New York Security and Trust
Company and Mr.. Schwab.
After admitting certain of the funda-
mental facts which have heretofore been
established, MIR. Schwab takes up the va
rious allegations and charges Of the cross
bill. He says:
Il deny that 1 ever was or became one
of the promoters of the shipbu,lding COM
pany or that 1 and number of persons
associated with me acquired the capital
stock of the Bethlehem Steel Company. as
averred in said cross bill"
EMPHATIC DENIAL.
Emphatic denial is made that he ever
conceived any scheme of transferring to
the shipbuilding company the stock of the
company at an excessive rate or upon con-
ditions permitting him or his associates
to control the shipbuilding company or to
absorb for his benefit AL Of its property
and assets, to the injury of its creditors
and of its bona fide bondholders and
stockholders or otherwise"
Mr.. Schwab denies that he ever made
any false representations regarding the
Bethlehem Steel Company. and denies that
his stock July 81, 1902, was not worth to
exceed s., 50o, eco. He believed that the net
earnings of the shipbuilding company for
the twelve months ending July 81, 1902,
exceeded sl,0OO,OO0. and that the surplus
current assets exceeded S3,5o0,0o0.
REPUDIATES YOUNG.
Mr.. Schwab repudiates any connection
with John W. Young. and says he never
caused the latter to propose to the ship
building directors to transfer $4,000 shares
of Bethlehem stock, siO,0O00O0 each of
bonds, preferred and common stock, of
the shipbuilding company.
Mr.. Schwab says the shipbuilding COM
pany is not entitled to enforce any alleged
Indebtedness against him.
He AYERS that neither he nor his as
sociates conspired with the dummy" di-
rectors of the shipbuilding company to
bave inserted in the mortgage to the Sc
curity and Trust Company and in the
charter of the shipbuilding company pro-
absolute control of the shipbuilding and
steel companies. with the power to so
manipulate the corporations as to cause
default in the payment of interest
MIR. Schwab denies that the amendment
to the shipbuilding company's charter gave
him or his associates a voting power
equivalent to sSO.000,000 out of a total of
5000, CO.,
BETHLEHEM DIVIDENDS.
Mr.. Schwab says that he and his ASSOC
ciates had nothing to do with the with
holding by the Bethlehem Company OF the
dividend payments on the 100000 shares of
its stock owned by the shipbuilding COM
pany for the purpose of wrecking the lat
ter concern. He asserts that. on the
othsr hand, although often requested so
to do. the steel company has refused to
declare such dividend"
Mr.. Schwab then details the history of
his relations with the two concerns. He