The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1903-12-18
M0RGAN'S MAN
ON THE STAND
Hearing in the Ship Building Re-
ceivership Case.
SCHWAB'S THIRTY MILLIONS
GIVEN THAT AMOUNT WITHOUT
ANY CONSIDERATION.
SCHWAB'S THIRTY MILLIONS

New York Dec. 17.-The hearing on
the application TO make permanent the
receivership Of the United States Ship
building company was resumed today
Charles Steele. member Of the firm
Of J. p Morgan & Co. being on the
witness stand for a short examination
as to the connection of that firm with
the promotion Of the ship-buiiding
company and the sale 70 it of the
Bethlehem steel plant
Mr.. Steele eaid the purchase Of the
Bethlehem plant was made in order
that the steel corporation m ght be
able TO control the disposal of the Beth
lehem plant its permanent ownership
being considered disadvantageOUs 70
the steel corporation and the desire be-
ing 20 resell it to owners favorable TO
the steel company, though no special
purchaser was in view at this time.
He protested himself ignorant of the
competitive or non-cOmpetitive status
of the Bethlehem or Carnegie ar1nor
plants. the latter of which was owned
by the steel syndicate. Mr. Steele tes-
titled that he accepted Mr.. Schwab's
opinion of the value Of the plant and
had taken the contract for the pur-
chase of the stock at the price Schwab
had agreed to pay the original owners,
the understanding being that Schwab
should share any profits at the resale
of the plant.
Thought the Plan Good.
Mr.. Steele said that at the time he
considered the ship yard proposition
good one and it's stock a good in
vestment, expecting the common stock
TO earn dividends from the start. and
for that reason he believed that the
$5,O000O0 i'm stock embraced in the
purchase price was an adequate return
for the interest and profits on the
Morgan investment of $7,246,0 900 for the
year.
After the recess Mr.. Steele continued
his testimony about the sale of Beth
lehem to Nixon and Dresser. Mr.. I'm
termyer asked what reason there was
that Mr.. Sthwab, owning no Bethle-
hem stock al the time. should receive
S30,000,0G0 in sh!p-building bonds and
stock at the time of its sale. to which
Mr.. Steele replied that it was in con-
sideratiOn for the risk Mr.. Schwab as
sumed in making the contract for the
purchase of Bethlehem stock. which
was Immediately assigned TO Morgan
& Co.
Morgan's Share.
Schwab had not told him that these
securities would give him a control Of
& Co. had received the $5.OOO.0OO in
stock, part Of the purchase price. the
stock being assigned in blank. Coming
TO the Harris, Gates & Co. agreement,
which provided for the sale of the
Morgan and Schwab stock before all
other ship building stock Mr. Steele
said that he knew Of II at the time
having seen a copy of st and discussed
IN with Charles Gates Of Harris. Gates
& Co, but not with Mr.. Schwab.
Mr. Steele had previously been in
formed by some party to the agree
ment the could not remember whether
IL was Schwab or PAM that there was
an orran cement for the sale of the
Schwab stock. and had declined to
have the Morgan stock included. Sub
seduently Mr. Gates left with him a
copy of the agreement covering both
the Morgan and SChwab stock. to
which Mr.. Steele. after consulting Mr..
Perkins, had informally acceded.
His Firm Guiltless.
His firm, ne said, was not formal
party 70 the agreement; had not signed
it, and had not taken advantage of il.
The S5,00O,00 in stock, he said, had re-
NAMED in the Morgan vaults until sold
TO Mr.. Schwab. He had not thought Of
the agreement after his conversation
with Mr.. Gates. until mention was
made of it during the pending suit
The agre ment, he thought. was in the
nature of an offer 20 include the Nor
gan stock in the early sale, if the firm
so desired, not a hard and fast con-
tract that the stock must be sold first.
Mr. Steele made an explanation of
the statement issued by Morgan g. co.
at the time when mention was first
made Of this agreement in the suit.
the statement denying that Morgan &
Co. were parties" To any such agree
ment. Charles Gates replied at the
time insisting that there was an
agreement FOR the sale Of the Morgan
stock. and Mr.. Steele paid tribute to
Mr.. Gates good faith" in issuing his
statement.