The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-10-22
SCHNAB A DICTATOR
Lewis Nixon Tells How He
Ruled Shipbuilding
Company.
(By The Associated Press.)

New York, Oct. 21.-Lewis Nixon, who
warships and the president of the United
States Shipbuilding Company, was the
principal witness today at the continual
ton of the hearing before Examiner Hen
ry d. Oliphant as to the affairs of the
defunct corporation named. He did not
finish his recital, but in the three hours
that he was on the stand he went over
much of the history of the corporation
and the acts of the men prominent IN its
history. He confirmed the claim OF the
bondholders that Max Pam, counsel for
Charles NJ. Schwab, had suggested mum
Der Of the directors for the shipbuilding
combination and said that the proposed
expenditure of $2,S02,000 for improvements
at the Bethlehem Steel Works had been
approved by the directors over his pro
test and warning that the action might,
in the end. leave the main corporation
without funds and wreck it. Mr.. Nixon
swore that after his expenditure was APP
proved he made several attempts to secure
meeting of the directors and that Mr..
Schwab had finally told him that he had
instructed the directors to remain away
from meeting.
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 corporation who
served in the early days of the combina-
ton, had been given shares enough to
qualify, but Mr.. Nixon had no personal
knowledge of the transaction.
Mr. Nixon testified that, by resolution
of the directors passed in December last,
Mr. Pam was given a salary OF $4,000
year which was dated back to the preced-
ing September. He also testified that be
sides his bonus as an underwater and the
sums paid for the Bethlehem property
Mr. Schwab received share of the pro
motion money, part of which he gave to
Charles Gates, of the brokerage firm OF
Harris, Gates & Company.
Samuel Untermeyer for the bondholders
endeavored to prove by the witness that
during the negotiations for the purchase
Of the constituent plants no one looked
after the interests of the shipbullding
company, but that the figures and re-
ports of John w. Young, the promoter,
were accepted Mr.. Nixon said that no
independent appralsement or investigation
had been made and disclaimed all persona
responsibility for the negotiations and fl
nancial part of the combination plam
1t was brought out in the testimony
of Mr. Nixon that misleading statements
as to the personnel of the directorate had
been made in the prospectus issued in
June, 1902 and that Young had taken the
| N tn Tn
Nixon, secrecy was observed in paying the
vendors only because Promoter Young
did not want them to know what was be-
ing paid for each plant There had been
much mystery over the cutting of the
checks given to the vendors, and it is pos
sible that the explanation of Mr.. Nixon
will clear 1t away.
Charles Canada was the only other wit
ness of the day, taking the stand before
Nixon was called He testified that the
Canada Manufacturing Company, for
| which 100000 in cash and securities was
paid, had plant at Carteret, N j., built
for the manufacture of car wheels, but
that at the time of its purchase It was:
turning out some experimental work III
motor carriages. 1t had made about 100
machines and employed about forty men
He said the plant would have been built
in connection with some of the operations
of the shipbuilding combination.
Charles M. Schwab and Max Pam at
tended the hearing today. ley came to
| be sworn but remained interested listen
ers to all the testimony They will testify
later in the week