New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-12-23

bs had n29 RfR qRPqss6 ag bs6 Sr] y ] @ ]P appraisers that
and. that IN their opinion after a careful in
vestgaucn, the figures mentioned in the pros
Mr.. Nixon for several years. and believed him to
be competent and successful shipbuilder; knew
him 70 be of high repute expert shipbuilder,
and believed him to he man upon whose word
pend. Mr. Dresser among other things said that
his company had carefully investigated the mat
c0nservativG investment In vievE of those state
mepts and on subsequent date I said I would be
willing 10 UnderwritC the proposed offer of 5000,
900 of bonds to the public TO the extent of S5ooO0
upon the same terms other underwriters. pro
n ng oM3 T3a v pTePe5e s9 S 10 b e na
States Steel Corporation IN the purchase of its
and Mr.. Dresser that had been allotted partici-
patton in such underwriting and that as the under
only be given $4,000 instead of the COO of
derwriting above mentioned,
Mr. Schwabs answer adds that on June 13,
1909. Nixon and Dresser went to his Office again.
told him the underwriting of the issue of
Ss,0OoO00 of bonds had been completed. and
handed to him the prospectus of June IA. 1902.
The answer goes on TO tell the main statements
in the prospectus. which have been told at
length at the shipbuilding hearing
SALE OF BETHLEHEM COMPANY.
Then the answer continues:
In the transactions hereafter alleged and the sale
eved and relied upon the truth of such representa-
tcns and showed such prospectus TO J. P. Morgan
q Co, ana they likewise believed and relied UpOn
the truth thereof Said Nixon and Dresser. June
Is, l%3. stated to me that they were DESTROYS Of
acquLlhG the bethlsheTn steel company in order 10
transfer il 90 the United States Shiphuding Com
PaHy that such a combination would add enormous
~ 20 me Sepsttate NaiueS OF the concerns ana
would enable the new company 10 undertake and
United States could then undertake and do. namely
ne entire construction and armament of warshiPs
OF eEcrN type, Among other things during the
course of the conversation. they stated that they
that If they pure chased the Bethlehem stock pay
nent would have 10 be made in bonds and stock
discussion and examination by them q written
statements showing the earnings OF the Bethlehem
company which had in my possession and which
/ handed TO them for peTusal, they stated that
stock aG00006 in s per cent bonds secured BY a
m'rsss tE on 1ha{ stock elk and Py eo m second @ mortga
building company and that the capialzation Of the
creased
Mr.. Schwab then tells what Charles Steele
told recently at the shipbuilding hearing about
the consultation with J. P. Morgan & Co. and
the firms decision to accept the offer of Mr..
Schwab to pay S7.250OG0 in cash and s. 600 900
in shipbuilding stock for the Bethlehem shares
Later on the same day he says. he accepted the
offer of Nixon and Dresser 10 pay $1OOOOOOO
in bonds and S10O0O,00O in each kind of ship
building stock for the Bethlehem. Shortly after
ward he says, he was obliged to drop business
and go to Europe on account of Illness on his
return about March II. 1903 he says. he first
learned that the shipbuilding company was In
difficulties account of insufficient working
capital and because the assets and profits had
been greatly overvaued. He continues
I also then ascertained that although the business
of the Bethlehem Steel Company prosperous
and would probably exceed my original estimate for
that year nevertheless the plant was in need OF
betterments in order TO enable its business to be
properly conducted and 10 keep up with the i'm
provement I'm methods of manufacturing which IL
Indispensable for aDy manufacturing concern
ascertained that the government Of the United
States had notified the Bethlehem Steel Company
that II would require a greater output OF arm0r
plate. and I informed by the officers OF the
Bethlehem company that if it 10 retain its
position and business 70 essential that il should
Increase the capacity Of its plants.
DECLINED BY SHELDON AND WETMORE
In April Mr.. Schwab says. he conferred With
George r. Sheldon and Charles ". Wetmore
about reorganization of the shiphudng com
pany. they representing a syndicate which had
purchased S550OGOO of the company's first
mortgage bonds and $s25oOO0 OF it's stock. and
he adds:
stated TO them that the shiphuildIng prop
critics did rot have the assets and earnings which
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