The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1903-11-02
RECEIVER ACCUSES SCHHAB
SENSATIONAL CHARGES AGAINST
HIM AND OTHERS.

Organization of shtpbufiding Trust
charaeterizsd as an sArtistic swindle"
-wiIfui Missfasement, Falsificalion,
swinaiing and Fraud-D.l,bersts
Plan 10 Wreck Compsay Charged
Suit Recommended TO Compel sehwab
aud others Accused 10 Pay All ths
Debts of the Trust.
New York, Nov. Sensational a1le-
cations of wilful misstatement, falsii-
cation, swindling and fraud in the or
ganization and fotation Of the United
States shipbuilding company; OF at
temots TO mislead and deceive the in
vesting public by erroneous prospectus
statements, and Of a deliberate plan to
wreck the company by withholding the
earnings Of the Bethlehem Steel conn
pany are contained in the report OF
Receiver James Smith, jr., Of the Unit
ed States Shipbuilding company made
public here to-day. The report cons
cludes with the recommendation that
suit be brought against all persons who
received stock of the company without
paying full value therefor, including
the promoters of the consolidation, the
vendors of the constituent plants and
Charles 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 Shipyard plant in
New Jersey and the Harlan & Hollings-
worth plant at Wilmington, Del., sub
sidiary plants not now on operation, to
avoid further loss by depreciation, and
the enforcement Of receivership for
the Bethlehem Steel company to en-
sure the payment Of dividends in the
Bethlehem stock by the United States
| Shipbuilding company. In the words
of the report, the organization of the
company is characterized as an "artis-
| tic swindle," Receiver Smith stating
that the value Of the plants, their earn
| ings and working capital, given in all
legged thorough reports of expert ac-
countants, vary SO much from actual
i figures as to impel the belief that the
4 figures were wilfully nlisstated that it
lis extremely doubtful If such account
ants reports were submitted at the or
\ ganization of the company; that the
4 organization was affected by dummy
stockholders, directors and officers;
4 that statements in the prospectu
sued on June Ia. 1902, was incof sect:
that for property worth $12,441,5 ,516 the.
il Shipbuilding company paid In stock
4 and bonds $67, 1897, 900; that "the accom-
modating directors of the United States
Shipbuilding company in acquiring
4 these companies deliberately gave away
many millions OF dollars in the stock
Z and bonds of their company; ..the
4 sale plunder,n the receiver terms it. to-
a 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. The
/ report deals fully with the name OF
j Charles M. Schwab and the nature Of
the Bethlehem transaction, says Mr..
4 Smith, is such as ito justify him (Mr.l
Schwab) in saying that he did not sell
the Bethlehem Steel company, but took
over the United States Shipbuilding
company, the directors of that COM
pany giving him S3O,0Oo,000 in stock and
bonds for taking it off their hands.
The recommendations Of the report In
full are as follows:
'1-That in order to avoid deprecia-
tion by disuse, and because of the ex-
istence of controversies as to the valid
u ity Of the encumbrances upon the prem
ises the Crescent Shipyard be sold free
and clear Of all such ircumbrances as
soon as the work now in contemplation
is completed.
That similar action be taken with
Continued on Seventh Page.)