The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1903-10-22
POOR MEMORY
OF LEWIS NIXON
Facts Eiltsring Out Regarding
Ship-buiIding Trust.
GREAT GREED Of SCHWAB
WANTED PROFITS AT EVERY
TURN.
GREAT GREED Of ScHWAB

New York Oct. N.-LeW1s Nixon
president OF the United States ship
building company. was not called TO
The stand 20 testify al the opening Of
today's session Of the inquiry into the
affairs of that corporation. but in
stead Charles Canda, who was presi-
dent Of the Canda Manufacturing
company. was the first witness. Be
fore he gave any testimony, Charles
M. Schwab and Max Pam We're sworn
rs Witnesses
mr.. Canda testified that the company
which bore his name and which was
u ken over by the shlpbuilding COM
pany had a plant at Carter, n. J., de-
signed for the construction Of car
wheels. At the time the option on IL
was given it was engaged, he said, IN
an experimental way making some mo
tor vehicles" He said thirty or forty
men were employed at the time, ana
that he thought 100 or more machines
had ocet made.
The witness produced a copy Of the
oBtton The agreement for the sale or
the 1Glanf for Si.100,O00 was made with
j. w. EotRug. but the option was given
20 Mr.. NiZe.n.
How 1'ayment Was Made.
The witness, said the plant did no
shipbuilding. l'ut the sites and Duila-
fnre could be used for certain Of the
com bination's " orl6. The Canda COM
nenv received SAO0, 900 in cash, 100000
ia bonds $500. 0Qo Ia preferred stock
and $500 900 IN common stock, and paid
no commission 20 anyone The Wit
ness said the CanGa company hao
never shown any earnings.
Under crOsE-eK examination the witness
testified that TIE CandB company mao
seventy-fivs stockholders. The $zOV'OVV
received In cash was used to pay Ger
tain inde5tednesa. The sum was palo
in three check3-
lor the Trust Company Of the Repuo-
JIG. produced the checks. One was lot
500 900. another for $4,000 and the
third for $4,000
These checks were made payable to
Il Lewis Nixon. endorsed by MIN anu
then handed to Mr.. Canda.
Lewis Nixon succeeded Mr.. Canda
on the stand. He told Of the first at
tennis to consolidate the shipyards IN
1901 Andrew Freedman was the uaH
WIN FIRST proposed the combination. ne
eaid. and through him the witness met
i w. Young. The witness said the
first plan Of consolidation was handled
rv II. w. POore & Co, but was brought
= out or a bad day and failed. Tne VII
ness said NJ knew G. NJ. SchWab. VINO
told Of his purchase Of the Bethlehem
ronnanv The first direct proposal
that the Bethlehem company be pIr-
chased By the United states Shipbullu-
fur company was made In June. lsv2-
The witness then told OF the meeting
ri the Lawyers club In June. 1902. al
rladv detailed by d. Leroy Dresser.
49, tintermeyer wanted 60 know X
alr- Schtab had represented that the
Bethlehem splant had earned Sl.40O.OO9
after payinguhe interest on underlying
mortgages. NE question was objected
ic by Mr. GuShrle. The witness sara
he understood fhe above sum 70 be net
g1rIBig@ - SchWah told the witness
r-f had paid s7,40O00O for the plant
IS sum with the earnings which had
leeu taken from the business. amount
~ TO s9O0o,oO0 the sum for which AR
Sehwab said be would sell. Mr.. Dress
er said 100000 was a large sum To
raise at that time. The question or
securities Chen came I'D and Mr.
echWab agreed to take SlO.OOo.Ooo IN
bonds az co.
when we asked NIr. Schwab again"
continued FIR. Nixon. "he said ne would
have to give him $4,000 600 Of each kind
of stock besides the bonds. Mr.. Schwab
said he had to give S2.J00.0O0 of each
kind Of stock TO J. P. Morgan & Co"
Nothing was said as to why Morgan
q Co. were to receive the stock. Mr..
Dresser said he was willing to pay the
Scr Nixon could not remember where
d. had signed an agreement with J. p.
Morgan e. Co. for the sale I'm cash of
The Eethlehem company. he had signed
many papers at Dresser's Office. The
agreement had never been explained to
hlm and he could not understand why
he had been a party to IL.
Could Not Explain.
The witness said he had acted to the
best interests of the ship building COM
many and with no idea of any gain for
himself He could not explain why,
af.ar the agreement to purchase Beth
lehem from 0Ir Schwab for 600
in bonds Sl0.000.000 I'm preferred stock
ana $4,000 .000 i'm common stock had
been made. an agreement was made
with Morgan & co. 20 buy the plant Tor
81 300 GOO in cash and $1,000 600 i'm stock.
mr. nixon told Of the passing Of the
check for 81 200 600 az the Office Of Nor
gan g co.
II did not have the check long enough
ro See who signed it, said Alr. Nixon.
~ fo not even know who received the
7g,e original check was produced by
ar Guthrie and after identification by
The witness and a wransle between
counsel was offered m evidence the
check was FOR $Il9l s9l4S. and was
.ta+yn I'm favor Of ID. Leroy Dresser
ard Eesis Nixon, by g. NJ. Schwab by
sis attorney. oliver Wren
Tna witness could not explain why,
while the agreement called for Si.246.00O,
rfn cnnrE was Lol pt-Aal-i1l NJ
1-..trrrneyer asked If there was any one
b the meeting at the Office OF J. p.
r5orean e. co. 90 protect the interests
- fhe ship building company. and the
-ttIi-ess said he and Afr. Dresser were
5ht,ro reDresenting the company. The
witness said he had read the agree
-rrnf and seen the stock. He did not
osamina the stock and understood il
1sss later taken to one OF the trust
companies.
sfr. Nixon testified that Mr.. Schwab
had said that he wanted some of the
promotion profits. if there were any.
IN order that he might give some of
frem o. AR Gates OF Harris. Gates &
ra ATr gchwab said that those who
had aided in the underwriting should
have some of The promotion profits. The
witness said Die talked the matter over
fith Nr. Y0ung who said he would
arianea 60 eive AIr. Schwab 100000 I'm
bonds aud either 100000 or 5000. 900 in
stools This commitment must have
f.n i1 addition 70 the stock bonus
which SIR. Schnab received as an un-
ds i-fffler- The witness took TO AR.
F.hn-ab "a paper on the subject Has
recollection uas that Dir. Gates was 90
ra $4,000 in bonds from AR. Schwab.
Th. witness tEen related the circum-
scs under which he had FIRST iu-
ft.leI 1Ir. Schwab 10 become an under
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