The Middleburgh post. [volume] (Middleburgh, Snyder Co., Pa.) 1883-1916, 1903-11-05
SHIPYARD TRUST AN
ARTISTIC SWINDLE
Report of Receiver Contains Charges
Against Sehwab and Others.
MANY SUITS MAY BE BROUGHT

New York, Nov. 2.-Sensational al
legations of wilful misstatement. fal-
siication. swindling and fraud in the
organization and fotation Of the Unit.
ed States Shipbuilding Company, of
attempts to mislead and deceive the
tnvesting public by erroneous pros.
Dectus statements and Of a deliberate
plan to wreck the company by with.
holding the earnings OF the Bethlehem
Steel Company, are contained In the
report of Receiver James Smith. JS.
OF the United States Shipbuilding
Company. made public here.
The report concludes with the rec.
ommendation that suit should be
brought against all persons who re-
ceaved stock Of the company without
paying full value therefor, including
the promoters of the consolidation, the
venders of the constituent companies
and c. M. Schwab. to recover from
them such amount as necessary to
pay the debts of the company in full.
Receiver Smith also recommends the
sale of the Crescent ship yard plant
in New Jersey and the Harlan & Hol-
lingsworth plant at Wilmington. Del,
subsidiary plants not now in operation,
to avoid further loss by depreciation.
and the enforcement of a receiver for
the Bethlehem Steel Company to en-
sure the payment of dividends in 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
artistic swindle," Receiver Smith
stating that the value of the plants,
their earnings and working capital,
given in alleged thorough reports Of
expert accountants. vary so much from
actual figures 'as to impel the belief
that the figures were wilfully mis-.
stated" that 1t is extremely doubtful
II such accountants reports were sub
mitted at the organization of the com.
pany; that the organization was ef.
fected by dummy" stockholders, d..
rectors and officers; THAT statements
in the prospectus issued Sp June II,
1902, were incorrect; that for prop.
erty worth $12,+41,516 the Shipbuild.
ing Company paid in stock and bonds
S67,997.0O0; that "the accommodating
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 wholesale
plunder" the receiver terms ito a
few persons, and that, so far as the
Bethlehem Steel Company is con.
cerned, Its earnings have been with.
held in a deliberate attempt to wreck
the United States Shipbulding Com.
pany."
The report deals fully with the name
of Charles NJ. Schwab, and the nature
of the transaction, says Mr. Smith. is
such as ito justify him (Mr. Schwab)
in saying that he did not sell the Beth.
lehem Steel Company. but took over
the United States Shipbuiding Com
pany, the directors of that company
giving him $50 100000 in stocl and
bonds for taking it off their hands.
The recommendation of the re-
ceiver in full are as follows:
"1-That in order to avoid depre-
citation by disuse, and because of the
existence of controversies as to the
validity of the encumbrances upon
the premises, the Crescent ship yard
be sold free and clear of all such en-.
cumbrances as soon as the work now
dn contemplation is completed.
"2-That similar action be taken
with reference to the plant OF the Har.
Ian & Hollingsworth Company, vii.
mington. Del.
"3-That as soon as the debts OF
The company shall have been ascer.
tained suit shall be instituted against
all persons who received the stock of
fhis company without paying full