The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-10-15
HOW SCHWAB
WRECKED IT
Dresser Testifles Further in
Case Of Shipbullding Co.
WAS KEPT IN THE DARK
Did Not Know Constituent Companies
Were Laden With Debt. and Found
Out Only When Prospectus Was
ssued-Cause Of Disaster.
WAS KEPT IN THE DARK
nv Associated Press.)

= = ! 81 Y y u
NEW YORK. Oct. 14.-rne inquiry be-
stranded ship-bulld.ng combination, at the
instance of the Bondholders Protective
Association, was resumed to-day. ana
productive Of fresh DEVELOPMENTS that
will claim the attention OIL the financial
world, and those who follow Its fortunes.
1t developed that yesterday, D. Leroy
Dresser. late president OF the Trust Com
.pany Of the Republic. who last week
dsyulged much Of the inner history OF
the formation of the combine. made an
effort to communicate with Charles M.
Schwab with n view to obtaining some
concessions as to the Bethlchem steer
WORKS, that. would render easier the
scheme for rehabiliating the partly wreck
ed concern The message OF Mr.. Dresser
was delivered to Mr.. Schwab by Mr..
Harris, of the brokerage house OF Har-
ris, Gates & Co., which marketed part
of the ship-building stock, but Mr..
Schwab declined to SEQ Mr.. Dresser,
w. d. Guthrie counsel for Mr.. schwab.
brought the facts of the Incident out
at the hearing In series OF questions
directed to Mr.. Dresser His aim was
to show that Mr.. Dresser had sought to
plead with Mr. Schwab and had threat
ened 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 MIR.
Schwab or to threaten him. for. he had
no additional information to dlvulge, but
had sought to approach him In the hope
that something might be done to save
the ship-buiding company.
How it Was Wrecked.
Mr. Dresser asserted that the ship-build-
ing company had been wrecked beca'lse
Mr.. Schwab had withheld the profits OF
the Bethlehem Steel Company.
This declaration he twice spirtedly re-
peated when at the end of the cross-ex-
animation by Mr.. Guthrie he was given
an opportunity to explain
Mr.. Untermyer. In behalf Of the bond
holders, produced two Of the resident d.
rectors obtained In New Jersey formal
ly to carry OH the affairs of the ship
building company, but only finished his
examination of one of them. He claimed
that they were merely dummy directors,
who voted upon questions Involving mil
lions OF dollars Of the securities OF tho
company without other information or
inquiry than the orders OF the lawyers Of
tho corporation.
George P. Dayley, one OF the Now Jcr-
sey directors, could not tell where the
Bath Iron Works ,is located. and could
not tell who paid for single share ~
stock placed In his name that he might
qualify as a director,
Some In eresting Figures.
There was produced as evidence mem-
orandum said to have been prepared by
Colonel McCook and given by him to
Mr., Dresser. 1t contained the figuras
upon which the Trust Company OF the
Republic undertook the underwriting Of
the ship-buildng company, and while It's
purpose was not explained, 1t Is said that
it will cut an important figure at later
stage of the proceedings, 1t Is said that
besides the division OF stock detailed last
week by Mr., Dresser, there was an
additional division of money. The memo
randum shows All allowance for "eS-
penses'' of 100000 cash, 100000 In bonds.
sJO0,OCO in preferred stock and s5Q0,0O0 IN
common stock.
Replying to question by Mr.. IN
termyer. the witness said that six weeks
ago he saw MIR, Gates and told him that
! IL Mr., Schwab would take his grip or
Bethlehem. the ship-bulldng company
| would be all right, II went to the office
| OF Harris, Gates & Co.. he said, I'm tho
| interests of tho ship-building company.
| Mi. Schwab has taken this means OF
putting It before the public to show that
was there to plead with him, went
| there not to plead with him. but to ask
him to take his grip off Bethlehem, and
that II he did SO it would make the ship
| building company all right sald that
II he would give us any decent plan OF
reorganization and not the confIscation
plan that had been proposed. the COM
Continued on Third PaGeD