The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-06-14
Vol. LXX.-NO. 2S7.
NIXON OUT; SCHWAB'S REPLY.
PRESIDENT or u. s. SHIPBUILD-
ING COMPANY RESIGNS.
MFR. Schwab Says That n the First Mort.
gage BOndholders Prefer II He VIII
Return His Securities. Take Rack
His Bethlehem Plant and Quit.

return HIS SECURITIES, take HACK
His Bethlehem Plant and Quit.
Lewis Nixon has resigned as president Of
the United States Shipbuiding Company
In a statement issued yesterday he said
have spent my life in practical shipbuild-
ing and, not being a financler. have had but
little to do with handling that branch Of the
company's business. but have felt to the full
the harassing and discouraging effects OF
lack of working capital in my attempts to
bring the plants and organization UP to the
efficiency they should have, and which they
are gradually acquiring.
! am not personally in accord with the
policy of the organizers. my advice in re-
gard to taking new work and making bids
having been dsregarded. In matters per-
tanning to the practical distinguished
from the financial character OF the business,
! must have certain liberty OF action and.
as it is inevitable that no such liberty can be
assured me during the process OF reorganiza-
ton from the circumstances of the situation.
am not satisfied to remain longer at the
head of the company and have resigned. to
take effect the LIST of July.
None of the original vendors had any
part Mr.. Nixon said, in making up the
financial plan of the company which has
been so much criticised.
Charles NJ. schwab said yesterday, IN ref
erence to allegations made il the New
Jersey suit against the COMPANY that he
went into the company at the beginning
only at the earnest solicitation OF Mr.. Nixon
and D. Leroy Dresser and to further the
interests of the United States Steel Corpora
ton, the organizers of the shipbmilding com,
pany agreeing to purchase all their steel
requirements from that corporation. He
then subscribed for $500 600 stock.
After publication of the prospectus Of
the Shipbuilding company; and after its
financial requirements had been under
written as Mr.. Schwnb was informed.
Messrs Dresser and Nixon asked him
If they could secure control Of the Bethe-
hem Steel Company for the Shipbuilding
company, MIR. Schwab continued
ton o OF FEN rt sns ca and asDS %a
with j. p. Morgan 4 Co, but t,aat would
on orss MIA Could o and nd d9 LITER
several conferences they decided that they
would be wiling to sell and and dispose Of the
vided payment therefor be made, n cash,
COMMUNICATED to Mess, S, Nixon and
and tie former p then wanted to Know would
BE- willing to assist them IN securing the
for the Shpbuilding company.
entered into negotiations with them look
ing to my furnishing tie Necessary cash
the value of the Bet'lchcm steel Company
property, its unique business position. its
$500. 900. which HAD been .affeumulating
nss and lad he
therafrom and which properly enhanced the
iny,estment therein to that extent:
for them " 9se Stock Of the bethlehem Sf stssl
Company and furnish the money necessary
4 co and ii consideration thereof, Should
have the benefit of tle accumulatons since
rs soq S bonds Te nna ass in sa
kind OF fully paid stock Of the shipouilding
Who nssted that they ml% nave
IN addition to the cash invested. IS per cent.
Messrs Nixon and Dresser deduct from the
agreed Hd to give me. $50" SO that Morgan i Co Co.
might receive it as additional payment for
'As nv Se drecs n saSk interest in this trans
action. including the cash advanced for the
purchase Of the stock Of the Bethlehem Steel
earnin as invested in the ompany. aggregated
over ,s9,oooOoo. instead Of ,s3,ooooOo, Ms is
ton OF 100000 70 the two frst mortgage
bond svndicates, Morgan 4 Co. had acquired
hs sses % the 6sni.
the winding, up of the syndicate ! purchased
from J 7. Morgan 4 Co. the $500 goo OF each
Mr. Schwab said that it was among the
to insure the payment of the interest and
sinking fund on the bonds to be issued to
him, there should be specific obligation
On the part Of the Shipbuilding company
assuring dividends sufficient to meet these
requirements; that the bonds issued on
recount of the shipbuilding plants should
not be- lien in any way on the Bethlehem
Steel Company stock or property, and that
the first mortgage bondhoclers should
haze no interest therein in any sense
whichever
While in Europe hn subscribed to the
Sheldon syndicate in he amount of $3.50 900.
On his return here. after conversation with
Mess-s. Sheldon and Wet more he told them
that he would prefer TO have nothing more
to do with the shpbuildng concerns and
would like some arrangement whereby he
could restore to the Shipb,cing company
to J. p Morgan & Co. and take back the
Bethlehem stock But after considerable
discussion. he was persuaded, he said,
to icin them in reorganization. He added:
I, the first mortgage bondholders cannot
appreciate the sacrifices which ] am making
IN this situation. they cannot too Quickly
accept from Inc all the securities which the
Shiubulding company issued To j, y. Morgan
4 Co and to me- or arrange that | proceed to
fpreclose and retakc the bethlehem property.
] am assuming in this reorganization plan
large cash burdens trotl which | should be
glad to be relieved IT the first mortgage
bondholders sympathizr with the complain
ants in this suit | shall withdraw from the
reorganization and seek recovery OF the
Bethlehem Steel Company stock