Waterbury evening Democrat., 1903-11-02
A GIGANTIC swINDLE.
Receivers Report of Shipyard Trust
 Sensational.

Sensational.
 New York, Nov. 2.--After repeated delays, due to inability to obtain com plete schedules of the subsidiary plants, the report of former Senator James Smith, Jr., receiver of the United States Shipbuilding company. has been made public. sss x
 All the prophecies of biting criticisms by the receiver are fulfilled. He ad- vises the institution of a suit against the Bethlehem Steel company, Mir. Echwab's chief possession, to procure the appointment of receiver and to compel the appropriation of the earn ings of that company by way of divi- dends upon the stock.
 He recommends that suit be institut- ed against all persons who received stock of the United States Shipbuilds ing company without paying full value therefor in order to recover from them such an amount as may be necessary to pay the debts of the concern in full in accordance with the New Jersey stat utes MT. Schwab holds $20,000,O00 of stock.
 He urges that the Crescent Shipyard and the Harlan & Hollingsworth plant be disposed of as soon as the work now in hand Is finished.
 throughout the financial world the observations of the receiver are certain to receive the keenest scrutiny. The effect of his recommendations may be very far reaching, and every industrial concern in the country, from the billion dollar Steel corporation to the smallest of trusts, will await the judicial inter pretation of the receivers strictures with feelings akin to anxiety.
 Concerns like the asphalt trust, col lapsed like the shipyard combination, will find bearing upon the comments about paying nnearned dividends, and even great solvent concerns whose stock has been increased from mere nominal amounts, as the United States Shipbuilding company's was boosted from $3,0oo to $45, 900 900 by temporary or, as they are usually denominated, dummy" directors and blanket mort gages for millions upon millions ratified by the same financially irresponsible young clerks, acting as the agents of promoters and principals not yet dis closed, will find food for reflection in the statements made by this receiver.
 It is the first time this ulterior phase of modern American high finance has been considered by servant of feda eral court, and If his recommends tons are followed as to suing stockholders for their alleged full stock liability where they have received bonuses of securities without having paid full val ue for them the result Is matter of the grayest concern to thousands of pro- motors, investors and manipulators.
 Bethlehem Matter Discounted.
 The suggestion that the great armol making plant at Bethlehem be placed in the hands of receiver has been dis counted by forecasts to that effect, but the insistence of the receiver of the parent concern that subsidiary compa- nies should be thwarted from 1iyerting their surplus earnings is another phase Of this disclosure that is regarded as significant by fnanciers.
 The report, which would fllls about twenty newspaper columns, is filled with such references as these: "An ar tistic sswindle," false valuations" .il- legal acts of the tempotary tor dummy directors" plans to throttle the com. pany," worthless reports" of earnings and assets, the deliberate giving away of millions of dollars in stocks and bonds by these accommodating direct ors" and similar terms of reproach.