The Savannah morning news. (Savannah, Ga.) 1900-current, 1903-10-15

Mere Dummies-VOted as Told
without Even knowing Where
Properties in Question Were LO-
cated-$I ,5OO,GOO in Cash, stock
and Bonds Charged to ''Expenses."
Dresser Asked Schwab to Take
Grip on Bethlehem Property and
Allow ShipbuiIding Company to
BE RehabiIltated.
New York, Oct 1.-THE inquiry be-
fore a referee into the affairs of the
stranded shipbuilding combination at
the instance of the Bondholders Pro-
tective Association. was resumed to-
day and was productive of fresh devel-
opments that will claim the attention
of the financial world and those who
follow its fortunes.
1t developed that yesterday D. Leroy
Dresser. late president of the Trust
Company of the Republic, who last
week divulged much of the inner his
tory of the formation of the combina-
ton, made an effort to communicate
with Charles NJ. Schwab, with a view
to obtaining some concessions as to
the Bethlehem Steel Works that would
render possible the scheme for re-
facilitating the partially wrecked cor
poration.
The message of Mr.. Dresser was de-
livered to Mr.. Schwab by Mr.. Harris
by the brokerage house of Harris,
Gates & Co, which marketed part of
the shipbuilding stock, but Mr.. Schwab
| declined to see Mr. Dresser
w. D. Guthrie, counsel for Mr..
| Schwab, brought the facts of the in
cident out at the hearing in a series
of questions directed to Mr.. Dresser.
His aim was to show that Mr.. Dresser
had sought to plead with Mr.. Schwab
and had threatened to make certain
| disclosures when recalled to the stand
that would reflect upon Mr.. Schwab
Mr.. Dresser denied that he had gone
to plead with Mr.. Schwab or to threat
en- him, for he had not additional in
formation to divulge, but had sought
! to approach him in the hope that some-
thing might be done to save the ship
building company.
Why Company Failed.
He asserted that the shipbuilding
| company had been wrecked because
| Mr.. Schwartz had withheld the profits
of the Bethlehem Company. This dec
| lara ton he twice spiritedly repeated
| when at the end of the cross-examina-
| tion by Mr.. Guthrie, he was given an
| opportunity to explain.
Mr.. Unternyer, in behalf of the
bondholders, produced two Of the resi-
dent directors obtained in New Jer-
sey formally to carry on the affairs
of the shipbuilding company, but only
finished his examination Of one of
them He claimed that they were
merely dummy directors who voted up
on questions involving millions of
dollars of the securities of the COM
pany without other information or
inquiry than the orders of the law
yers of the corporation.
George P. Dayly, one of the New
Jersey directors, could not tell where
the Bath Iron Works is located, and
could not tell who paid for the sin
gle share of stock placed in his name
that he might qualify as a director.
There was produced and offered as
evidence a memorandum, said to have
been prepared by Col. McCook and
given by him to Mr. Dresser. 1t con-
tanned the figures upon which the
Trust Company of the Republic under
took the underwriting of the ship
buildinb company.
II is said that besides the division
of stock detailed last week by Mr..
vision of money The memorandum
shows an allowance for "expenses" of
$20O,O cash, 100000 in bonds, $780,
900 in preferred stock, and 100000 in
common stock.
Went to See Schwab.
Replying to a question by Mr.. Utter
myer, the witness said that six weeks
ago he saw Mr.. Gates, and told him
that if Mr.. Schwab would take his
- lit @t...N1 III
company would be all right. Il went
to the Office of Harris, Gates e. Co.."
he said, lin the interests of the ship
building company. Mr.. Schwab has
taken this means of putting it be-
fore the public to show that l was
there to plead with him. l went there
not to plead with him, but to ask him
to take his grip off the Bethlehem.
1 said that if he would give us any
decent plan of reorganization, and not
to the confiscation plan that has been.
proposed, the company would be all
right.
Il went over all this shipbullding
matter with Charley. Harris six weeks
ago. told him that the Wrecklng
of the shipbulding company was due
TO Mr.. SchWab's withholding of the
profits of Bethlehem, instead of letting
them flow into the shipbuilding COM
pany where they belonged. asked
Mr.. Harris to telephone to Mr.. Schwab
and he did so. If out of the mess
and mire the United states Shipbuild-
ing Company can be rehabiliated that
is what l. want to see done. have
no financial interest, but l feel that
it will help me.
Mr.. Dresser said that when he UNI
dertook the shipbuilding project Tor
the Trust Company of the Republic, ne
believed that $6,0O0,000 had been un-
daruyrittan in France.
Mr.. Dresser said that ne saw the
name of ]. P. Morgan in the list of
members of the Sheldon syndicate, out
aid not know II Mr. Schwab was a
member. The witness made no indt-
nendent investigation of the shipbuild-
INC nlants. but accepted the reports OF
others. He testified that the prospectus
had been approved by the Mercantile
Trust Company.
Pam Ran Company.
He said that he had several talks
with Mr.. Pam during the month OF De.
cember, 1902, about the earnings Oh
the company. Mr.. Pam showed MIN
reports which indicated that the earn
ings of the shipbuilding corporation for
the first three months were about $l,-
100 600. about half of which came from
the. Bethlehem property. The witness
said that when he told Mr.. Pam that
he. Dresser, must make an assignment,
pam told him he must resign at once
from the shipbuilding board. Mr..
Pam. he said. seemed to be running the
whole company.
The witness said that he did not
rontinued on Fifth Pare