The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1903-11-02
"ST0P, THEFT"
SAYS RECEIVER
ROttenness Of ShipbuiIding Deal
Fully Exposed.
JOHN ". YOUNG, PROMOTER
sCHWAB WILL HAVE TO GIVE
UP ILL-GoTTEN GAINS.
JOHN ". YOUNG, PROMOTER

New York, Nov. Sensational allie
cations Of wilful misstatements, falsid-
cations. swindling and fraud I'm the or
ganization and Rotation Of the United
States Shipbuilding company. Of at
tempt TO mislead and deceive the in
vesting public by erroneous prospectus
statements and of & deliberate plan to
wreck the company by Withholding the
earnings of the Bethlehem steel com
pany, are contained IN the report of
Receiver James Smith. jr., OF the United
states ShipbuildinE company. made
public here today. The report concludes
with the recommendation that suit be
brought against all persons who re-
ceiVed stock Of the company without
paying fun value therefor including
the promoters OF the consolidation. the
vendors of the constituent plants and
Charles NJ SchWab TO recover from
them such amount as necessary to pay
the debts Of the company in fun.
An Artistic Swindle.
Receiver Smith also recommends the
sale Of the Crescent Shipyard plant IN
llngswOrth plant at Wilmington. DEL
subsidiary plants now I'm partial Oper-
alton. 10 avoid further loss by deprecia-
ton, and the enforcement of a receiver
ship for the Bethlehem Steel company
TO ensure the payment of dividends on
the Bethlehem stock held by the United
states Shipbuilding company. IN the
words Of the report. the organization OF
the company is characterized as an Ear
tistic swindle," Receiver Smith stating
that the value of the plants. their earn
ings and working capital given in al
legged thorough reports Of expert ac-
countauts, vary so much from actual
figures cas- 20 impel the belief that the
figures were wilfully misstated;" that
It is extremely doubtful if such ac-
couutants' reports were submitted at
the organization OF the company: that
the organization was effected by
dummy stockholders. directors and Of
hcers; that statements in the prospectus
issued on June H. 1902, were incorrect;
that for property worth $12441516 the
shipbuilding company paid I'm stock and
bonds SCI 997 900: that the accomOdat-
ing directors OF the United States Ship
building company, in acquiring these
companies. deliberately gave away
many million dollars IN the stock and
bonds Of their company" wholesale
plumber the receiver terms IL. TO q
few persons, and that, so far as the
bethlehem Steel company Is concerned,
Its earnings have been withheld IN a
deliberate attempt TO wreck the United
States Shipbuilding company"
What Schwab Said.
The report deals fully with the name
Of Charles NJ. Schwab. and the nature
of the Bethlehem transaction. says Mr..
Smith, is such as Ito justify him (Mr
Schwab) in saying that he did not sell
the Bethlehem Steel company, but took
over the United States Shipbunding
company. the directors Of that company
giving him $50. 900. 900 in stock and bonds
Tor taking it or their hands"
The report first deals with the incor-
porauon Of the original United States
Shipbuilding company. with $4,000 cap
itM and dummy" directors and Of
hcers ia June, 1902; the offer of Pro
moter John w. Young 10 sell to it the
Union Iron Works Of San Francisco,
the Harlan & Hollingsworth company
Of Wilmington, Del. the Ecastern Ship
building company the Canada Manu-
featuring company. the Crescent Ship
yard company and the Samuel J.. Moore
d Sons company of New Jersey. the
Bath Iron Works and the Hyde Wind
lass company of Maine and the Beth
lehem Steel company of Pennsylvania
and the action in this offer by the COM
Dany. The incorpOra tors Of the company,
Wood. Howard s. Gould and Kenneth
McLaren Of Jersey City. holding col
lcctively the fifteen shares of preferred
and fifteen shares Of common stock OF
the company
Dummy Directors.
on June "a 1902. Frederick K. Seward.
Raymond Newman and Louis =. Daley
were elected directors. the minutes re-
citing that Howard X. Wood. one OF
the incOrpOratOTs and subscribers to the
stock. had assigned his right TO one
share OF common stock TO each Of the
persons above named TO qualify them as
directors. No stock of the United States
Shipbulding company. however. was is
sued 20 or placed in the name Of these
directors. SO far as the records Of the
COMPANY disclose. Newman was elected
president. Daley. vice president and
seward, secretary and treasurer. Wood.
Gould and McLaren were. at the date of
Incorporation all connected with the
Corporation Trust company of New
Jersey. and the directors were employees
81 said company. AT this meeting the
Jffer of Promoter John w. Young TO
urn over the United States Shipbuild-
nE company the several constituent
plants was submitted, the terms for the
sale of the stock OF the companies be-
ng as follows.
The Scott Contract.
In connection with the purchase Of
The stock of the Union Iron Works OF
san Francisco, Henry #. Scott and I-v-
nE M. Scott were to agree 60 enter into
a contract with the shipbuilding COM
3any not 20 compete with it i'm its bust
ness, and not 90 employ their capital OF
Io personally engage I'm any Shipyards
Or shipbuilding business for the period
IF ten wears, and the company was to
contract to engage O.. W.. Diclie r
Torsythe and John r. Scott as Offices
N1fnGn