The Savannah morning news., 1903-10-22
NIXON TELLS OF IT
SOME INSIDE VIEWS OF THE SHIP
BUILDING COMPANY.
FROM CONCERNS PRESIDENT.
SCHWAB'S COUNSEL HAD SUG-
GESTED DIRECTORS.

Nixon Says He Had Protested
Against $2.SO2,OO for Improve
ments mt the Bethlehem Steel
WOrks-Schwnbs Counsel Had a
Retroactive salary of $4,000 n
Year-Schwab Was in the Audi
ence Gathered for the Hearing.
New York, Oct. 21.-Lewis Nixon, who
from naval constructor became builder
of warships and the President of the
United States Shipbuilding Company
was the principal witness to-day at
the continuation of the hearing before
Examiner Henry D. Oliphant as to
the affairs of the corporation named.
He did not finish his recital, but in
the three hours he was on the stand
he went over much of the history of
the corporation and the acts of the
men prominent in it's history. He con-
firmed the claim of the bondhOlders
that Max Pam, counsel for Charles
NJ. Schwab, had suggested a number
of the directors for the shipbuilding
combination, and said that the pro-
posed expenditure of $2,SO2.OOO for i'm
provements at the Bethlehem Steel
Works had been approved by the di-
rectors over his protest and warning
that the action might, in the end, leave
the main corporation without funds
and wreck it.
Mr.. Nixon swore that after this ex-
penditure was approved he made sew
eral attempts to secure a meeting of
the directors, and that Mr.. Schwab
had finally told him that he had in
structed the directors to remain away
from a meeting.
May Have Had stock.
An effort was made to show that the
directors elected at the suggestion of
Mr.. Pam had not been stockholders.
but like the young men of the Cor
poration Trust Company of New .Ier-
sey, who served in the early days of the
combination, had been given shares
enough to qualify, but Mr.. Nixon had
no personal knowledge of the transac-
ton.
Mr.. Nixon testified that by resolution
of the directors passed in December
last, Mr.. Pam was given salary of
SIS, 900 a year, which was dated back
to the preceding September. He also
testified that. besides his bonus as an
underwater and the sums paid for the
Bethlehem property, Mr.. Schwab re-
ceived a share of the promotion money,
part of which he gave'-to Charles Gates
of the brokerage firm of Harris, Gates
& Co.
Samuel Untermyer for the bond
holders, endeavored to prove by the
witness that during the negotiations
for the purchase of the constituent
plants, no one looked after the inter
ests of the shipbuilding company, but
that the figures and reports of John
w. Young, the promoter, were accept
ed Mr.. Nixon said that no independ-
ent appraisement or investigation had
been made, and disclaimed all person
al responsibility for the negotiations
and financial part of the combination
plan.
Had Misled as to Directors.
1t was brought out in the testimony
of Mr.. Nixon that misleading state
ments as to the personnel of the di-
rectorate had been made in the pros
pectus issued in June, 1902, and that
Young had taken the options in his
name. According to Mr.. Nixon, secrecy
was observed in paying the vendors
only because Promoter Young did not
want them to know what was being
paid for each plant. There has been
much mystery over the cutting of the
checks given to the vendors, and it
is possible that the explanation of Mr..
Nixon will clear it away.
Charles Canda was the only other
witness of the day, taking the stand
before Nixon was called He testi-
fled that the Canda Manufacturing
Company. for which $1,1OO,O0O in cash
and securities was paid, had a plant
at Carteret, N. J., built for the manu-
facture of car wheels, but that at the
time of its purchase it was turning
out some experimental work in the
manufacture of carriages. 1t had made
about 100 machines and employed
forty men. He said the plant would be
useful in connection with some of the
operations of the shipbuilding combi-
nation.
Charles NJ. Schwab and Max Pam
attended the hearing to-day. They
came to be sworn, but remained in
terested listeners to all the testimony.
They will testify later in the week.