The evening world., 1903-12-17
HOW ORGAN GOT
INTO SHIP DEAL
CONTINUED from First Page.)

advantage to the Steel Company when
you bought 1t? A. Yes.
Q. Did you have N purchaser for
1 felt we would have NO trouble in
disposing of 1t mt n profit.
Mr.. Steel thought he had seer a state
| plant when he purchased 1t for the Stee
Corporation. He did not remember thu
details OF this statement.
Q. DO You mea to say that you
bought q plant burdened with
%, OOO, 1000 of encumbrances and
paid for 1t s7,OOO,OOO In casl, with
out investigating particularly Its
status. A. There was NO further
investigation than the general In
formation we got from MIR. schwnb.
We considered Mr.. schwab the best
expert I'm h steel business.
Mr.. Steel was asked to state the time
when the major part Of the interest In
tho bethlehem Company wus acquired
by tine Stoel Company.
Called Him Impertinent.
Mr.. Guthrie said publicity should not
be given to the matter without a rul-
tng from the. Court. There followed a
long argument between counsel. Mr..
Guthrie called Mr.. Untermyer imperti.
nent. and Mr.. Untermyer said MI.
Guthrie was out of order. Finally Mr..
steel refused to answer.
Then Mr.. untermyer took up the sale
e .se Be,hieheT plant to the Ship
the Bethlehem plant could be soli TO
the United States Shlpbuildihg Com
pany for the cost cas- price and
10, 800, 900 of each kind of stock.
. Before you made this deal or
sale did you cable to MIR. MorEanp
4. Yes.
|. @. Did you tell Mr.. schwab what you
Intended to cable to Mr.. Morgan7 A.
"a. Did Mr.. schwab tell you what he
Company, A. He said ne was going
to get. $40. 900. 900 in bonds and so, 900, 900 in
each kind OF stock.
Sold II Back TO schwab.
O. He paid o 81, aso.ooo for the plant7
q. Did j. P. Morgan q Co. finance Mr..
9. Dc you know how he go, the
I :: IL. Then you 50, :7;ass;eo0 AND .s,Soo,ooo
Q. Did you know who was seT runnins
the company? A. Yes. / understood
Mr.. Nixon was running II. under
stood he was an expert shipbuilder.
toned Mr.. Steele smiled across the
table to Mr.. schwab. who laughed
Q, You really thought the stock of
the Shlp5uilding Company was q good
o. And without investigating the earn
ings OF the different companies? A. We
relied on the prospectus.
Q. II Mr.; schwab had no interest ir
thu pAthInhann Tnrn a N Z. NJ thA k..,A a.
was sold to the Shipytrds Company
why should he have received such AN
enormous profit? A. Because Mr..
for us.
Mr.. Untermyer exhibited to tho wilt
n"sses the agreement between Nixon
and Dresser. Charles NJ. schwab and
4larris. Gates n Co, This was the
was to be sold first. Mr., Steele had
seen a copy of this agreeruent.
Talked with Gates About Il.
Q. Did Charles NJ. Gates discuss this
's 3. Yon had Sit dls SSss A WITH fss sMr scbwab
the sale OF your stock. the preferred
q. Did not MIR, seRwab tteihl You that
and ]. r. Morsan stock was To to be- SnS soiS
first? A.. No. I eve discussed the
matter after Mr.. Gates had talked to
Mr.. Steele denied hatiy that J. p.
Morgan & Co. had anything ITO do
with the "aSre cement" characterized by
Receiver Smith as an artistic swindle."
Mr.. Steele was excused. and Charles
B. Alexander, of the law Arm OF Alex
AndeT & Green, counsel for the original
promoters of the TRUST, was called.
Mr.. Untermyer called upon Mr.. Alex
nader to produce the cable dispatches
referring to the French underwriting
and the 100000 o loan by Morgan & Co..
which Mr.. Guthrie declared II would be
an outrage to max public as they
were of a ~confidetial character.
Mr.. Alexander refused to produce the
letters without an order from the
Court.
An adjournment was taken until Ii
O'Clock tomorrow.