The Atlanta constitution. [volume] (Atlanta, Ga.) 1885-19??, 1903-10-12
THEY FIRST STUFFED
THEIR POCKETS
And Then Allowed the Combine To
Go to the Wall-Dresser Gives
the Inside History in
Regard to the
Deal.

New York, October I.-One OF the most
interesting statements in connection with
the formation of the Inflated United
States Ship Building Company, told by
Leroy Dresser, in legal proceedings to-
day, was that after n pool of 100000 pre-
felred and 25oo 900 common stock had
been placed in the hands of Harris, Gates
& Co., it was agreed that none of this
stock should be marketed until $4,000
preferred and $4,000 common. owned by
J. F. Morgan & Co., and $4,000, each
kind owned by c. NJ Schwab. had hrst
been sold
Mr.. Dresser told also of his original
agreement as president of the Trust
Company of the Republic, to obtain the
underwriting of S3.ooo,ooo of United
States Ship Building Company stock; how
this was increased to S4,75o.ooo by the
failure of the French subscribers TO pay
up; how Mr.. Schwab came to offer him
Bethlehem works to the ship building
company and how j =. Morgan & Co.
then came into the transaction.
Mr.. Dresser, who took the stand at the
opening of the hearing testified that he
had no written statement as to the
values Of the plants in the company OF
which he undertook the underwriting,
but that Lewis Nixon and John W.
Young had made oral representations.
Took 1t All on Faith.
The Mercantile Trust Company. he was
told by Colonel McCook, secured the UNI
derwriting principally in France. the
Trust Company of the Republic, Mr..
Dresser said, FAD framed the prospectus
Of June. 1902, Offering the bonds to the
public. the trust company taking the
information contained i'll it from the firm
of Alexander & Green, counsel, and rid
die & Common, accountants, without in
yesttgating any of the statements made
BY them.
The purchase of the Bethlehem Steer
works for the ship building company was
then discussed Mr.. Dresser stating that
the overtures for the sale of the steel
company had been made by Charles III.
Schwab, who said he owned nearly aN
the stock OF the Bethlehem Steel Com
p&ny and that because of its armor-mak-
mug capacity, he believed the company
would DO better with the snip bu!ldlng
com pany than with the United states
Steel corporation
Mr. SchWab. according to Mr.. Dresser,
said he wanted 50 ,o0o.o 900 cash for his
stock ANA submitted reports which show
ed that it cost him more than $1,000 900
and was earning ST .45Oo 600 a year.
we told him we could not trade On
a cash basis" said Alr. Dresser, DO
cause we had no cash and he said rs
would take $40 ,o0o, 600 in bonds at 90 for
the SO 900 600.
Rake-Off for Magnates.
This was agreed to, the arrangement
also providing that he was to receive
with tho bonds a stock bonus Of $1,000
coo each Of the common and pre-
feired sock of the United States Snip
Building Company, Mr. Schwab stating
tkat So 100000 Of the stock was to 80
to J. r. Morgan & Co
For the stock of the bethlehem com
pary, MI Dresser SAID there was really
given $4,000 900 in bonds, SO 900 900 in
common stock and So 100000 In prefer
red There was some talk OF pooling the
stock OF the ship building company, h@
said, Mt Schwab Insisting that all the
stock he held until his and Mr. Morgan's
2.ad been puJ on the market.
After recess. MT Dresser said Mr..
schwab told him he believed the ship
building company had a great future ana
that he would be willing TO put $4,000 600
moro cash into the business if necessa-
Mr.. Dresser said he believed until after
the purchase of the Bethlehem stock was
rade that Nj schwab owned ali the
Mr.. schwab. he said obtained control
ol the snip yards company by getting
men on the board friendly to tho Schwab
interests. ana getting rid Of those OPP
posed to his interests
Mr.. Dresser said he had heard that an
important envelope containing matter
needed in this suit has been missed from
the dlos Of the Trust Company of the
Repnblle. but declared he had nothing to
do with the abstraction Of those papers.
Didn't Know 1t Was Criminal
In croes-examinatlon witness said he
understood that he was given authority
In borrow s40oo,ooo on the credit OF
The Trust Company Of the Republic and
that he had not been advised that it was
a criminal oMense or did he know it,
stocks ana bonds Of the ship building
company. he beloved We're accepted as
security for the loans he made to put
the deal through The 81 10000 bor-
rowcd from the banks in which it had
bren deposited by Mr.. Perkins Of J. p.
Morgan & Co. was credited to the ship
building company.