Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-10-22
TIE BIAN[ On 2|jHNID
Lewis Nixon Charges Him With
Causing Ruin of the Ship
building Trust
scHwAB RULED THE DIRECTORS
Instructed Them to Remain Away
From Meetns-Prospectus of June
IA, 1902. Not True-Max Pam, coun-
sci for sehwab, Responsible for EIec
ton of Number of Directors.

quily. being first asked about his in
/ ability 70 obtain meeting of the di-
rectorate in june last, because Of al
legged Interference Of Charles NJ
/ Sehwab. He said he called the las
meeting with the idea OF rcsigning. be
Icause he SAW that re- organiza don OF
the company was necessary. II was his
plan to Withdraw and return to the
sideration for his agreement to refrain
from engaging in competitive business
In HIS letter TO the directors lie wrote
he was not in accord with the policy
of the re- organization committee Nix
LON WAS asked II the reorganization
committee was then running the COM
| pany and renned it represented a large
and influential portion of the company
| Only Mr. Pam, witness testified, CAV
him any information about What Was
being done. Witness said 1t wns Well
known then the company would need
some financial assistance. and he had
rs early as April urged the directors
10 take measures To safe guard the
finances of the COMPANY Witness could
not recall that his fellow directors said
anything IN answer to- his remon
STRANGE. except To approve the Bethel
hem expenditure OF 81 So2 600 The con-
stituent companies We're asking for az
sistance ana the company met their re-
quisitions whenever possible. Various
efforts We're made To raise the money
and some of the treasury bonds were
used for collateral security. but the
embarrassment of the Trust Company
of the Republic prevented their full
use.
New York, Oct 22-Lewis Nixon,
who WAS president of the shipbuildine
trust during It's early life, in his testi-
lnony YESTERDAY charged Charles NJ.
Schwab with causing the wreck of the
concern.
Mr.. Nixon was q witness in the ex-
animation into the shipyard trusts af-
fairs. before Examiner oliphant He
declared that the proposed expenditure
of $500. 000 for the Improvement of the
Bethlehem steel works had been ap-
proved by the shipyard trust directors
over his own protest and warming that
the action WAS likely to leave the main
corporation without funds and wreck
it.
After this expenditure was approved,
MIR. Nixon said that he made several
attempts u secure A meeting OF the
directors, and that Schwab finally told
him tina, he (schwabD had instructed
the directors TO remain away from q
meeting.
Mr Nixon confirmed the claim of the
bondholders that Max Pam, counsel fof
Schwah. had suggested a number Of
directors for the trust. An effort was
made to show that the directors elect
ed at the suggestion OF Mr. Pam had
not been stockholders. but like the
young men of the Corporation Trus;
Company OF New Jersey. who served
IN the early days OF the combination.
had been given shares enough 70 quail
ify, but Mr.. Nixon had 10 personal
knowledge of the transaction
Regarding the purchase of the con-
stituent plants, MIR. Nixon discloimed
all responsibility for the negotiations
and financial part of the combination
plan He said that the reports and
figures Of John w. Young, the pro-
moter were accepted, and that no In
appraisement or investiga-
ton had been made. He said that he
received 100000 cash, S667.o00 in bonds
and $250,0O0 in stock for the Crescent
property, his own yard, and besides he
was given 100000 In each kind of
stock for agreeing not to engage In
competitive business for a period OF
five years He said that he paid s4oo,-
GEO for the Moore property, and turned
it over 10 the corporation for just
what II cost him. He declared that the
Crescent Company was a valuable
plant, with many large contracts OF
hand.
1t was brought out in the testimony
that Young had taken the options in
Nixon's name. According to Mr.. Nixon.
secrecy was observed In paying the
vendors only because Promoter Young
did not want them to know what was
being paid for each plant. There has
beeh much mystery over the cutting of
the checks given to the vendors and
it is possible that the explanation of
Mr.. Nixon Will clear 1t away.
Prospectus Not True.
The witness said that neither he nor
any of the men named in the prospect
us of June IA 1902, as directors We're
at that time actually directors, and
some Of them never did become direc-
tors Mr. Untermyer read from the
prospectus the claims of the promoters
that the years profits on work then
under way in the shipyards would be
S226 ,000. and that the combination
would have a working capital of So,
100000 Mr. Nixon disclaimed re-
sponsibil,y for the Two statements.
although he said that he believed them
to be true at the time. He said It was
possible that stock had been sold to
the public on the strength of the first
statement. but thought all the under
writing had been secured before it
was made He said that in the end the
combination only had about $4,000, 600
working capital including the bonds
in the treasury.
Big Salary for Pam.
MIR Nixon testified that. by resolu
ton of the directors passed in las; De-
cember, Max Pam WAS given a salary
of 5000 a year. which was dated back
10 the proceeding september. He also
testified that, besides his bonus as all
underwater, and the sums paid for the
Bethlehem property. Mr.. Schwab re-
ceived d share of the promotion money,
pare of which he caves TO Charles
Gates, of the brokerage firm of Harris,
Gates s; Co.