The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-10-11
RECEIVER TO SUE SCHWAB.
NO GRIEVANCE WHATEVER
AGAINST j. =. MORGAN & co.
Shipbuilding Co. Creditors Find Nothing
Open to Just Criticism in That Firms
ActlOn--Receiyer Would Recover Al
legged Overpayment to Schwab.

Opcn 10 JuBt SrNlclem In TnAt Firm
ActIon-Receiver Would Recover Al
legged Ovcrpayment to schwab.
At the Office Of the United States Ship
building Company, where Receiver James
Smith, Jr., LIS in charge, one of his assist ants
said yesterday that in the report being pre-
| pared by the receiver, which he expects to
file next week, a recommendation will be
! be made that suit be brought for recovery
OF the shipbuilding company's stock from
the original holders who did not pay for
it in full. This was suggested in the re-
ceiver's answer put in on Oct. in the FORE
closure suit brought by Charles NJ. Schwab
under the SIC. 900 900 mortgage. Mr.. Schwab,
who put up the cash to enable the Ship
building company to buy the Bethlehem
plant. took in return si0.000, 900 in bonds
and Sl0,0Oo.00O each of the common and
preferred stocks Of the shipbuilding oom-
pany. The receivers lawyers said in the
answer, and propose, if the court approves.
| to say now in a complaint in a suit against
MIR. Schwab. that under the New Jersey
law an Original holder" OF stock who did
not give full value for it can be sued to
recover the full value. II such a suit is
brought other defendants also may be
sued
Samuel tntermyer, counsel FOR the bond
holders p effective committee. SAID yes-
ter day
The creditors OF the Shipbuilding COM
pany. whom we represent have no grievance
against j. p. Morgan 4 Co. There is nothing
IN their relations to the business which is the
subject OF just criticism, and fully re gret
all this tempest in teapot SO far as they are
concerned. The agreement with Harris,
Gates Co. to market the Schwab- Morgan
stock before other stock was marketed was
| made with Schwab. II provided for the mar
keting OF $4,000 shares of stock of Messrs
Morgan Co. with the 1901 900 shares Of
Schwab. While it thus provided we have no
reason to believe that Messrs. Morgan knew
OF the existence OF that agreement: nor does
1t in the least concern us in this case
The bondhoders claim that Schwab's
$40 600 900 mort gage is void that he is subject
to stock liability of $4,000 900 on stock
Tor which he has not paid, and that the COM
pany can be made entirely solvent by the
enforcement of the remedies against him for
his acts. II is not for moment suggested
that Messrs. Morgan 4 Co. had any knowl-
edge OF or connection with any part OF this
scheme.
1t was said at the Office of Mr.. Inter
myer that the efforts to subpoena Mr.. Schwab
Will be continued. On a United States court
action OF this sort he can be subpcenaed
anywhere within $50 miles
The text OF the agreement between j. p
Morgan Il Co., as the United States Steel
syndicate managers, and Lewis Nixon and
Daniel LIE Roy Dresser for the purchase of
the Bethlehem Steel Company was given
out by Mr.. untermyer. It's general terms
have been printed already Interesting
particulars are a stipulation that the SO, 900
paid as part of the price Of the Bethlehem
steel plant should be full paid and non
assessable" stock, and that -the certificates
therefor shall be so expressed on their face.
It is further stipulated that at the time Of
payment the Shipbuilding company
90 Shall be duly vested with the property
both, OF all the constituent companies; or "
j.. 3D. Shall be duly vested with the proper
ties and assets Of the constituent companies
managers in their absolute discretion; and
So Shall be duly vested with said stock
OF the Bethlehem Steel Company to be trans
ferred by. the syndicate managers under
the provisions of this agreement
This is another stipulation:
The purchasers shall furnish at the time
Of the contamination of this agreement, and
the syndicate I'M managers viii accept for the
OF Messrs. Alexander 4 Green, the general
counsel of the shipbuildng. company, in
such form as shall be satisfactory to the
organization OF tho Shipbuiding company:
Of the ACQUISITION BY it, Or of the extent OF
assets Of the capital stock. or both Of the
constituent companies of the acquisition
! by it OF said stock Of the Bethlehem Steel
| assessable. Of the capital stock OF the Ship
building company to be delivered to the
syndicate managers under this agreement
thorization and issue and of the extent Of
the authorization and issue of the stocks
and bonds OF the Shipbuilding company,
and of mortgage and other lien indebtedness
by the Shipbuilding company.