The semi-weekly messenger. [volume] (Wilmington, N.C.) 1897-1908, 1903-12-25

New York, December 22.-Charles
NJ Schwab today filed his answer to
the cross bill of the United States
Shipbuilding Company and James
Smith. Jr., it's receiver in the Unit
ern district of New York. The case
is that of the company and it's re-
ceiver against the New York Security
and Trust Company, and Mr..
SchWab.
After admitting. certain Of the
fundamental facts which have here
tofore been established, Mr.. Schwab
takes up the various allegations and
charges of the cross bill. He says:
Il deny that 1 ever was or became
one of the promoters of the Ship
building Company, or that l and a
number of persons associated with
me acquired the capital stock Of the
Bethlehem Steel Company, as aver
red in said cross bill
Emphatic denial is made that he
ever conceived any scheme of trans
the stock of the above company at
an excessive rate or upon conditions
permitting him or his associates to
control the shipbuilding company.
Continuing, Mr.. Schwab says: 81
deny that with any purpose of ac-
complishing such intent and pur-
pose, or otherwise, l or any associates
of mine represented to the Shipbuild-
ing Company that the said shares of
CT ha 0f
million dollars
Mr.. Schwab denied that he ever
made any false representations re-
garding the Bethlehem Steel Com
pany.
Mr.. Schwab says the Shipbuilding
Company is not entitled to enforce
any alleged Indebtedness against
him.
He AYERS that neither he nor his
associates conspired with the dun
my directors of the Shipbuilding
Company" to have inserted in the
mortgage to the Security and Trust
Company and in the charter of the
Shipbuilding Company provisions
which would give him or them alb
solute control of the shipbuildlng
and steel companies, with the power
to so manipulate the corporations as
to cause default in the payment of
interest, thereby defrauding cred
itors, stockholders and bondholders
of the Shipbuilding Company.
Mr.. Schwab says that he and his
associates had nothing to do with
the withholding by the Bethlehem
Company of the dividend payments
on the three hundred thousand
shares of its stock owned by the
Shipbuilding Company, for the pur-
pose of wrecking the latter con-
Germ.
The defendant continues: L deny
that 1 or the Security and Trust
Company, or any associates of mine,
or the reorganization committee or
any of them, acted fraudulently or
in bad faith in the premises or for
| the purpose of destroying and wreck
| ing the property of the Shipbuilding
| Company in the interests of myself
| or any associates of mine, and
| deny that this suit is brought at the
| instance OF the reorganization com
| mittee and myself or any associates
| of mine for the purpose of carrying
| out the aforesaid or any Othei
wrongful and fraudulent plan and
| scheme, or Of prOfiting and taking
! advantage from the alleged defaults
| occasions by any wrongful or fraud
ulent acts, to the injury of the Ship
| building Company, or the bona fide
!
| ers of the Shipbuilding Company"
After specifically denying any ant
! every charge of fraud, unlawful com
| bination. conspiracy and wrongful
| act in his connection with the af'
fairs of the Bethlehem Steel anC
| United States Shipbuilding Com
| panies, Schwab details the history o
! his relations With the two concerns
| After making a contract for the pur
| chase of the entire capital stock o
| the Bethlehem Company, Lewis Nix
| on and D. Leroy Dresser asked hin
70 underwrite 100000 first mort
| gage bonds of the United State
Shipbuilding Company.
On this matter. he continues
Nixon and Dresser informed m
! that the properties were Of grea
| value, that they had been appraise,
by competent appraisers, that tn
profits had been certine1 by publ
| accountants and that in their opin
| ion, after a careful investigation, tn
figures mentioned in the prospectu
were safe and conservative L
view Of this, Mr.. Schwab tool
underwriting. upon the same term
as other underwriters providing tn
new company would give preferenc
to the steel corporation in purchas
of materials.
| On June 13, 1903 Messrs. Nixo
! and Dresser told Mr. Schwab the