The Birmingham age-herald., 1903-12-23
Files Answer to Cross BHI of
 J. s ShipbuiIding co
WAS NOT ONEOF PROMOTERS
Never Concerned in Any Scheme of Transferring to That Company Cap ltaI Stock of the Bethlehem
 Steel Co.,, as Charged.

New York, December 22.-Charles NJ. Schwab today filed his answer to the cross bill of the United states Shipbuild- ing company and James Smith, Jr., it's receiver, in the United States circuit court for the southern district of New York The case is that of the company and it's receivers against the New York Security and Trust company, and Mir. Schwab after denying some of the fund.- amental facts. which have hitherto been established, takes Up the various allega- tions and charges of the cross bill. He says:
 T deny that l ever was or became one of the promoters of the shipbuiding com- pany or that l and a number of persons associated with me acquired the capital stock of the Bethlehem Steel company as averred in said cross bill
 Emphatic deniel is made that he ever conceived any scheme of transferring to the shipbuilding company any stock of the above companies at all excessive rate or upon conditions permitting him or his associates to control the shipbuilding company or to absorb for his benefit all of it's property and assets to the injury of it's creditors and it's bona fide bond holders and stockholders, or otherwise"
 No Connection With Young.
 MT. schwab repudiated any connection with John W. Young and says he never caused the latter to propose to the ship building directors to transfer SO000O shares of Bethlehem stock, sl0O0O,OOO each of bonds, preferred and common stock, of tho shlpbuildng company.
 The defendant ayers that if the first mortgage bonds be declared null and void, and be repudiated is obligations of the shipbuilding company, the assets of the company including the shares or the steel company, will "gres tly exceed the total amount of is re1btrins dehts and obligations, and will be ample not only to pay the bonds secured by the mort gage to the New York Security and Trust company, but all other claims whatsoever. besides a substantial dividend upon the stock of said shipbulding company
 He ayers that neither he nor his associ- ates conspired with the dummy direc- tors'' of the Shipbuilding company to have inserted in the mortgage to the se- curity and trust company, and in the CHdIIeI Ol JUG OllpDulihiub NOhpthhSf PhV visions which would give him or them ab- solute control of the shipbuilding and steel companies with the power to manipulate the corporations as to cause default in the payment of interest thereby defraud- ing creditors, stockholders and bondhold- CTS of the shipbuilding company.
 Voting Power Enlarged.
 MT. Schwab denies that the amendment to the shipbuilding company's charter gave him or his associates voting power equivalent to 0,0OO0O0 out of total Of $55, ,Ooo,OOO MT. Schwab and his associates had nothing to do with the withholding by the Bethlehem company of the divi- dend payments on the 300000 shares of It's stock owned by the shipbuilding com pany for the purpose of wrecking the lat ter concern.
 After specifically denying any and every charge of fraud, unlawful combin- ation, conspiracy or wrongful act in his connection with the affairs or the Beth- lehem Steel and United States Shlpbulld- ing companies, MT. Schwab details the history of his relations with the two con- cerns He says that after making a con tract for the purchase Of the entire capi- tai stock of the Bethlehem company, ne communicated with J. F. Morgan 6 O., stating that he was willing to turn over inc contract to the United States Steel corporation without any profit what ever" Morgan & Go. assumed the con tract as syndicate managers with author- flies to turn it over to the steel corpora tion If however, the Morgan firm dis noaed of if to other parties, MT. Schwao was to receive the greater part of the tast Anrll George R. Sheldon and fsharles W Wetmore of New York, rep resenting a syndicate which had pur- chased GOO of the bonds and stock of the shipbuilding company conferred with Mr. Schwab looking to reorgan- ization of the company
 Want Bethlehem Stock Back.
 MT schwab said he desired to take hack the Bethlehem stock returning to the shipbulding company the bonds and stocls he had received Subsequently for that purpose he purchased from J. r. Morgan & Go. $50O0OO0 of stock which had been delivered to them for the limited States Steel syndicate and ar ranged to acquire all the remaining bonds and stock MT Schwab adds:
 q was then, and have ever since been, and am now able and willing to return all the securities received by me or by Messrs Morgan &s Co.,, and to reseind the whole transaction, and | hereby tender the same for that purpose"
 Messrs. Sheldon and Wetmore declined to consider such a proposition as they stated the principal value of the whole enterprise consisted in the Bethlehem company. He says:
 q was then willing and have ever since been willing as I have repeatedly stated, to agree to different plan of reorgani- zation if the first mortgage bond holders would provide the assessments necessary, and furnish working capital for the ship building plants, the bond holders retain ing a first mortgage lien upon the ship building plants
 Absolutely False.
 "As to the charges in the cross-bill that I acted in collision with the reorganlza- ton committee of the shipbuilding com pany. Is an attempt to force the insolv- ency of said company and to wreck it. 1 aver that that such charges are not only false and malicious but were made with out Justification. and In disregard of facts well known to the cross-complanants aver that James Smith, Jr.. receiver of the shipbuilding company, knows that such charges are untrue.
 .I am informed and believe that upon such an examination and appraisal. 1t will appear that the net working capital of the