Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1903-11-30
A CLEAR SWINDLE
CAPTAINS OF INDUSTRY ARE
CHARGED WITH SWINDLlNG.
The Morgan Syndicate Was painfully Sur.
prised" When Receiver Smith Recommend.
ed That They be Compelled to Disgorse
Like Any Other Swindlers.

Receiver James Smith, Jr., recently
made his report on the United States
Shipbuilding Company. Referring &c
this report, the New York American
says: members of the Morgan steel
underwriting syndicate were painfully
surprised at the recommendation of the
receiver that suit be instituted against
all persons who received the stock OF this
company without paying full value
therefor"
These captains OF industry" were
painfully surprised" because if the rec
concentrations made by the receiver are
carried out, it means that the J. p. Nor
gan Company must be sued for the $5,.
100000 OF bonus stock issued to them as
managers for the steel syndicate in con-
nection with the Bethlehem deal.
1t will occur to great many people
that these captains of industry" are
painfully surprised" on very slight
provocation. In his report, Receiver
Smith refers to this scheme as "an artistic
swindle," and Wholesale plumber"
Why should men who devise and carry
out can artistic swindle" and who engage
in wholesale plumber" be "painfully
surprised" when, after their dishonest
work has been exposed, it is recommended
that an effort re made to require them to
disgorge their ill.gotten gains? Every
day men are arrested on the charge OF
petty larceny. Every day men are called
to account for stealing few hundred
dollars. Why should men who steal
several million dollars be permitted to
escape the penalty for their wrong.doing I?
Why should they. be painfully sur
prised" because it is suggested that they
be called to account?
The explanation is that as captains
OF industry" men have done things on
large scale which, II done on smaller
scale. would very quickly relegate them
to the class Of common rogues. The ex.
PLANTATION is that While We are very quick
to call to account the minor offender.
when mans populations reach into the
millions, his influence and his power
operate to discourage investigation and
prosecution and serve, also, in the minds
OF many who are regarded as good citi.
zens as ample justification.
In his report, Receiver Smith charges
Schwab and his associates with the de-
liberate purpose of wrecking the ship.
building company. He rec mmends
that "as soon as the debts Of the company
shall have been ascertained, suit be in
stituted against all persons who received
the stock of this company without pay.
ing full value therefor, to recover from
them such an amount as shall be neces-
sary to pay said debts in full"
The receiver does not hesitate to use
the word "fraud" and he charges that
earnings, prospective profits, working
capital and assets we're all falsely stated.
He charges that the enormous sum OF
500 800, 900 over and above their actual
worth was paid for the different COM
panies constituting the trust. He asks:
"Who participated in this wholesale
plunder?" And then he says he will
leave that for the proceedings in court to
disclose. He adds, however,
"Blocks Of the stock went to the ven.
doris OF the constituent plants and to the
purchasers OF bonds as bonus, absolutely
without benefit to the company; $50, O00,.
O0O of it admittedly went to Mr.. Charles
M. Schwab, in addition to the agreed
price for Bethlehem. Some OF it went to
the promoters OF this artistic swind:e;
and when all had been provided for, what
was left OF the bonds, amounting to ST..
100000, was handed back to the company
ostenslbly to supply it with working
capital"
The receiver refers to the guliblity OF
the dummy directors who authorized the
issue of millions of the shipbuilding
bonds and stock, saying that they should
be held accountable; but he points out
that they were not alone responsible,
that they were not bona fde holders of
the stock, that they were used by pro-
motors OF this scheme, that they were. in
fact, mere figureheads placed in this
position in order that the schemes Of
others might be carried into effect Then
he says:
"Your receiver charges that the prop
critics OF the various constituent COM
panies were sold to the United States
shipbuilding Company for an amount
which the vendors Of such properties, at
the time of such sale, knew to be far in
excess OF the fair value of said plants
and that the plan to combine such prop.
critics was received by certain promoters
and was consummated by them with full
knowledge Of its injustice to the United