New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-12-24
IT'S ASSETS PADDED.
OVERSTATED BIZ $500. 900.
Expert GiCeS Damaging Testimony
About Bethlehem Steel Com pany.

shipbuilding hearing viii be Of particular utter
est to the governors OF the New-York Stock Elk
change There have been intimations that the
officials or the exchange viii take drastic action
u there is presented at the hearing proof OF the
charge repeatedly made by Samuel Untermyer
Of counsel for the bondholders bringing the suit
for q permanent receiver OF the United States
Shipbuilding Company, that there were false
and misleading statements in the application to
the exchange to have the securities OF the ship
building company listed. Mr. Untermyer tried
yesterday 70 furnish proof OF that charge by the
testimony OF Alfred Rose. chief accountant OF
the Audit Company OF New-York that in the
application to the Stock Exchange the earnings
OF the Bethlehem Steel Company for the year
ended July 81. 1902 ana the surplus current
assets OF that company az the same date had
been Overstated by some hundreds OF thousands
q dollars.
Another witness yesterday L. Carroll
Root. third vice-p-esident Of the Eep-York Sc
ourtty and Trust Company, uha gave from tho
conpany's books Information to the scacunt
81 Charles NJ SchwRb about the time Mr..
Schwab drew the check for more than 81 600 600
20 pay for the Bethlehem shares It was shown
that M schwab's daily balance was raised from
s1.635642 on August 1. 1907. TO 81. 2s5 SOC on
August u. when the check was paid and that
on August the New-york Security and Trust
Wren. Mr.. schwabs secretary. the security be-
ing 26SO0 shares Of preferred stock OF the United
States Steel Corporation.
When the hearing was resumed yesterday
morning in the rooms OF the Board OF Trade and
transportation W. D. Guthrie. OF counsel for
the shipbuilding company, wished TO call some
witnesses 70 show how the letters and messages
sent from Paris by Charles B. Alexander got
into print but Nj. Unterrnyer said he would
OF the case He declared that he and his asso-
ciates were not responsible for the publication.
and said that many copies OF the correspond
ence had been made that their procurement for
publication was not difficult Mr.. Olphant the
special examiner. said that counsel had de-
plored the publication he would proceed with the
examination OF witnesses called by the plaintiff.
John ". Gates was IN the room, having been
called as witness. but Mr.. Untermyer excused
him saying that the witness really wanted
Charles Gates. who is out Of the city. Mr.. Gates
was permitted to go TO Chicago. Later IN the
day Mr. Guthrie asked who had served the sub
pTna on Mr.. Gates. and Mr.. Untermyer said
one OF his clerks had served *.
Sfr. Guthrie-T7he reason ask Is that Mr.. Gates
informed me that the clerk used name in serv-
Mr.. Untermyer-If that is true he shall be dis
but when he was here this morning you excused
NJ Untermyer-Yes I excused him: but I'll look
into the abuse % your name.
scHwAB. PAM AND YOUNG LISTENERS.
Mr.. schwab Max Pam and John W. Young
were interested listeners TO the testimony yes
terdsy Mr.. Rose early IN his testimony gave
the information that he had investigated the az
fairs Of the Bethlehem Steel Company for Mr.,
Smith. receiver OF the shipbuilding company.
He said he had obtained much Of his information
from the corupany's officials and had verified
the Information by some examination OF the
conpany's books He declared. referring TO bal
ance sheets he had with him that the net earn
iugs Of the Bethlehem company for the year
ending July 81 1901. were 1891. 176O o..
Q-what were the net earnings during 1902? A
Q-And the gross earninss?. A-El.sl1 $50 o.
Q-Nhat was the cause OF the depreciation? A
Shortage in inventory and depreciation OF stock
Q-WAat was the depreciation3 A--ss4sSol IS.
M Untermyer showed TO the witness a copy
o; the application made 10 the Stock Exchange
on December "a 1892. In which the net earn
tngs Of the Bethlehem company as of July 81.
were given as S1441 DOS O.. The difference be-
tween this amount and the amount previously
named the ret earnings for the same period
IN the statement furnished TO him by the au-
ditor Of The Bethlehem plant might be account
ed for the witness said by the fact that the item
OF depreciation in the value Of the plant was
NOT deducted in the statement 70 the Stock
Exchange
GIr Rose said in an examination Of the Beth
lehe-r company's books he found an item show
fnE that on Noverrb her 30, 1902 there was an
adjustment of inventory amounting 10 $3.50
0G0 IS applying 70 April OF that wear. In other
words the company had charged of in NoveIn-
ber p sum that should have been charged of
n April The dedrction was charged against
accumulated earnings
Q-was there before April 20 1902, any entry
$3.50 la nee QUO pc @ 1. - ne
q understand ma. on November &C. 1902 II
charged back against the assets Of April 30? A
F5 e ts ,s Es9isory sa9 fictitious c eoun'
H. oVersra-eL 10 that extent
end in November the inventory was cor
e-It was known 10 the Bethlehem company
when the Inventory was .aken that the $4,000
of me Bethlehem company reversed their Icy IN
0-DI7 Trey rot reverse their policy when they
provided for thar reduction. bUt did not make it?
R-rrcu they made the balance fl 1913 they
versed He policy o. 1902 bug I could not say THAI
rrev reversed the policy ~ 1901.
els II rot 2 tac- tlaL n making the inventory
rrr tie company for he balance in 1902 they pro-
g-vhy. then. was not the se5O COO deducted? A
~e-.+ +elI Evidently they made up their minds
fr s-~-e-1aer That Il should be deducted The
s. was an arbitrary amount taken into the &C
Cor the purpose OF initiating the inventory
A-The Inventory hao an adei5ional F@ooooo over
-ae-e~ 7re TrIed states shiphufldfng Com
paay acquired the Bethlehern properly The balance
-. -.F---f-r 49, II not? A.-The inventory
o. April g. 1872, was corrected november o. ~