Evening journal., 1903-10-24
sCHWAB' s DEFENSE
SHARPLY OUTLINED
Holds That Sheldon =Plan
Would Not Have Saved
the Trust
100000 WAS NOT SUFFICIENT

New York. Oct. 24.-The nature OF
he defense which Charles M. Schwab
ill make to the charges that have
)sen made against him in connection
With the financial affairs of the wreck
d United States Ship Building COM
any was sharply outlined during the
earring before Examiner Oliphant.
lewis Nixon was still on the stand,
nd, under cross-examination by w. d.
luthrie, counsel for Mr.. Schwab. there
yas an effort to show that the corpora
ion would not have succeeded II the
2,OO0. 900 promised under the Sheldon
plan of reorganization had been made
available, and that it could not have
continued its existence even if it had
received the much sought for 100000,
which, it is alleged, was wrongfully
withheld by the Bethlehem company.
The witness was asked q number Of
questions showing the worth and gen.
eral characteristics of the Bethlehem
plant. He said it was one of the great
est properties of the kind in the coun-
try, and that it was of great value to
the ship building combination, for with
the Bethlehem plant the ship building
company could build, arm and armor
battleship, a distinction possessed by
no other ship building company in the
world.
After some preliminary questions
Mr.. Guthrie asked Mr.. Nixon if the 81
600. 600 promised under the plan Of re-
organization had been promptly fur
nished if he believed the company
could have met it's obligations and
the plants continued in operation. Mr..
Nixon answered afirmatively, and then
Mr.. Guthrie asked:
IF the receiver had not been ap-
pointed could all of these plants have
been kept in operation7"
"On condition the money was OBJ
tained," answered Mr.. Nixon, Il am
satisfied the plants could have been
kept running"
Mr. Guthrie then asked Mr.. Nixon
if he could have kept the company and
plants going If he got the 100000 from
Bethlehem and despite the fact that the
fixed charges amounted to approx
mately s1,7OO,O00
The witness answered grimly that he
believed he could and that he had been
willing to make the try. He wanted
more working capital, but would have
done the best he could.
Mr. Guthrie asked the witness what
he would have done with the $500, 600
If be had gotten it, and led him through
a circulation showing how quickly it
would have been absorbed without ma
terially lettering the condition of the
company He first deducted the $780,
600 paid by Bethlehem, and then took
out the S362,5OO due on July in pay
ment of interest on the first mortgage
bonds. and then showed that the in
terest charges on August ] would have
swallowed the balance.
Mr. Nixon explained that the attack
on the credit Of the company was due
to rumors that it would not be able to
meet its interest obligations.
do you think it would have been
honest to have paid the July interest
with all of the past due and rapidly ac-
crueing indebtedness?" asked Mr.
Guthrie.
81 wanted money" said Mr.. Nixon
'and was prepared to make almost any
sacrifice"
''Was it not a fact that the board Of
directors thought that because of the
want of accord. the accumulation Of
/ debts and the pressing need for money
the proper course was to publish to the
world that reorganization was neces'
sary in order that he would no Longer
deal in securities on which interest
could not be paid on July ~"
Most decidedly" said Mr.. Nixon. 81
did not want the people to continue
dealing in the securities"
The examination of Mr.. Nixon wa'
not concluded. and will be resumed al
the next hearing. which is set for {
week from Monday.