Evening journal., 1903-06-13
NIXON DENIES s
PROMOTING TRUST
Shipbuilder Says He Sold
His Plant-Did Not AS
sist in Combine
100000 IN SECURITIES A GIFT
Proceeding Against United States
shipbuilding Company Important to
Financial Men on Account Of the
Standing of the Plaintiff.

New York, June 13.-The charges OF
fraud against Lewis Nixon, Charles M.
Schwab, and others, in connection with
the organization OF the United States
Shipbuildlng Company. OF which the
Harlan and Hollingsworth Company, Of
Wilmington, is member, which ap-
pear in the complaint and petition FOR Il
receiver filed on Thursday. in Trenton.
created a great deal OF talk In financial
circles yesterday. Much Importance
was attached TO the proceedings IN
view of the high standing which r. r.
Conklin, Max Nathan, Jacob w. Mack
and James ID. Mcguire occupy In the
estimation Of financial men.
There were many stories ahoat IN
the streets about profits made by The
owners OF some of the plants that went
into the shipbullding combination. and
the opinion was expressed that all the
affairs of the company had not yet
been brought TO light. So for instance,
the case was cited Of a certain company
in New Jersey the plant OF which was
actually worth 100000 on a liberal
basis. Nevertheless, the owners of this
company are said to have received
S20O,0 600 In cash, 100000 In bonds,
$500, 900 In preferred stock and $780,
GOO In common stock, a total of S1,l00.-
600, Of which 100000, paid In securi-
ties, was practically a gift.
Sohwab Not Accepted Until Next Week
OF the persons specifically mentioned
i'm the complaint as having been con-
cerned IN the fraudulent organization
of the company only Lewis Nixon was
In the city, Charles M. Schwab being
stlll out of town and not expected back
until next week. Mr.. Nixon who a
few weeks ago gave out interviews
about the golden opportunities which
the securities Of his company would Of
fer TO investors, made the following
statement about his connection with
the company yesterday:
Il am not the promoter of this COM
pany and l did not assist in the prep
aration Of the financial plan Of the
company. / sold my plant and business
as going concern and l did not re-
ceive an exorbitant price for my plant.
Further than this / have nothing TO
say Others affected by the allegations
In the complaint can answer for them
selves"
The legal representatives of the Re-
organization Committee declined to
make any comment, except to say that
the allegations In the complaint did NOT
affect them. one of the representatives.
of the committee said, however that he
did not believe that Mr.. Schwab had
been guilty of any wrongdoins and
that he was the victim of bad advisers.
This representative added other plain
/ tins would. after further investigation.
come to an agreement with the Reor-
ganization Committee.
George II. Sheldon, chairman OF the
Reorganization Committee, made the
! following statement:
we have no fight with vendors or
promoters, and have nothing TO say
concerning the action. We took the
matter as we found IL. and put forth a
plan which we thought was for the best
interests Of al.
1T is a fact that every bondholder
who has come here and learned the ex-
act situation has had no objections TO
offer to the plan.
ITO talk of separating the Bethlehem
Steel from the United States Snip
building Company is as absurd as
would be divorcing the Carnegie Com
pany from the United States Steel Cor
poration. The Bethlehem Steel Com
pany earns So TO 81 of the other COM
panies, and Mr.. Schwab stands ready
TO take II over at any time, but he
agreed to put up the S2,000,O00 cash
capital i'm the interests Of all con-
cerned.'
During the day protracted meeting
Of the Reorganization Committee was
held. At its conclusion William Nell
son Cromwell. the counsel. declined to
make a statement except to say that
the reorganization plan would be put
through.