The Birmingham age-herald., 1903-12-24
MR. ROSE GIVES
 HIS TESTIMONY Tells of Deals Involving the Shipbui|ding Company ROOT ALSO ON TIE STAND Says That So Far As He Knows Loan Of $35,ooo Was the Only One
 Made to the Nixon and Dres-
 ser Company.
ROOT ALSO ON THE STAND


 ton of the Alexander correspondence, declaring that so far as he knew, neither himself, his associate counsel, nor any one connected with his office had any thing to do with giving the correspond ence to the press. However" he contin- ued, 'I do not see how the question of contempt of court in the publication of Piekwickian sense."
 He said that he had learned that no less than fifteen copies of the corres- pondence had been made and distributed broadcast in New York; that he himself Lad his copy during the examination. He said that copies of the correspond ence had been offered for sale in news paper offices in New York. Under such circumstances he continued, 'it is ab surd to claim that such correspondence is privileged"
 During MT. Untermyers extended re- marks on the subject he referred to the lack of courtesy shown by opposing coun- sel "and efforts to sidetrack the real is- sues In the case"
 "At another tIme," he added, I've shall be very glad to go into this matter"
 MT. Guthrie, replying, declared that he had sumoned three witnesses from the paper (The World which published the correspondence yesterday and asked per- mission to go into the matter but Coun- sel Untermyer objected to a hearing on this subject being interjected into the ship building hearing. Referee Oliphant sustained the objection and directed that the complainant's next witness, Alfred Rose, an accountant, be called.
 Rose Testifles.
 Mr. Rose testified as to the financial status of the Bethlehem company from July 31 1899, to October, 1903, his informa- ton proG to July 31, 1902, being derived from reports from the officers of the firm. For this year and three months since then he had made a personal direct investiga- tion.
 MT. Rose testified to a certain deduction of $25,000 in inventory value of the Beth lehem property. made In November 1902, but charges this to the balance sheet of April 30 1902 He declared that had he been preparing the April balance sheet he would have deducted this amount at the time and said that the change made in November was to bring the inventory down to manufacturing cost"
 This change in policy, he said, he had heard was due to the advice of account ants In the stock exchange statement current assets of July 31, 1902 were over stated to the extent of over $30O,00O The over statement was brought about largely by the inclusion in live assets, he said of bad accounts, one item of over S5O,OOO be- ing due from an ordinary account, all though the company had gone into the hands of receiver during the year. T. C. Root, third vice president of the New York Security and Trust company which loaned $350000 to Messrs. Nixon and Dresser on their note on August 12 was put on the stand. Mir Root testified that so far as he knew this loan of S3o0'- GOO was the only one made to Nixon and Dresser, and that no loan had been made to the Trust company of the Republic.
 Loan is Repaid. If had been understood before that that the amount of the loan was $1OO,OW and that J. P. Morgan X Co., deposited this amount with the trust company to provide funds for the loan. The loan or $350, 900, which was repaid in less than month, had for security United States SltpDliilulnR SlOckS anu d poitioh oL ehS underwriting agreements
 Ii was upon the New York Security and Trust company that the $7,2i6o0O check was drawn by MT Schwab to provide Nixon and Dresser with funds for the purchase of the Bethlehem plant, and MT. Root was questioned about Mr. Schwabs balances at that time.
 It was shown that MT. Schwabs bal ance was rapidly increased prior to Au- gust 19, 1902, to an amount sufficient to cover the amount of the check.
 Inquiry about other loans brought out the fact that on August ,, 1902 the Trust company loaned to Oliver Wren MT. Schwabs secretary, s2.O00000, taking as security United States Steel corpora ton preferred stock. the loan being re- paid December 9, 1902. MT. Rose was then recalled and testified that the Beth lehem earnings of the year ending July 31 1902 had been $,26iS9 but that no dividends had been paid.
 MT. Rose gave a technical descrip- tion of the effect of the charging off of S250. GOO from the Bethlehem assets in Nc- vembere, 1902 declarng that the Ship building company had bought on repre- sentations in the books $25O,000 in current assets, which the facts did not bear out and that this same had appeared as current assets in the statement to the New York Exchange.
 As to the Dividends. Taking up their alleged withholding of Bethlehem dividends, which, so it is charged was instrumental in wreckng the shpbuilding company, which owned the Bethlehem stock, Mr. Untermeyer ob- tained from MT. Rose the statement that the Bethlehem company, which on April 1902, had debts amounting to s7I2 2,000 had, by September 1, 1908, emerged entirely from debt. having paid off $325,0O0 since April 1, 1903. and $750,0OO during the month of August In addition to applying this sum to debt reduction, Mir Rose stated that the Bethlehem company had since July 21, 1gO3, invested S313,625 in the Uru- quay Iron company. Upon Mir Guthrie's objection to this, as concerning transac- tions subsequent to the issue in this suit, MT. Untermeyer rejoined that 'one of the most significant phases in our case is the matters arising since the joining of action"
 Tn regard to net earnings Mir. Roses figures showed that the earnings, $390 176 in 1901, had increased to $l ,26l S91 in 1902, and s1,662.59o in 1908; dividends of $525,0O0 being paid in 1901, none in 1902 and $250 900 in 1908
 These last dividends. MT. Rose said. went to the shipbuilding company to be applied on the s1000.000 issue of bonds held by c. M. Schwab.
 At this point the hearing closed for the day.