Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-10-15
WHAT A MESS!
Further Complications in the
ShipbuiIding Trust Case.
New Jersey Director Cannot Locate
Bath lion Works Plant.
just Think Of Placing Business in
His Hands! -

New York, Oct. 1.-THE inquiry be-
fore a referee into the affairs OF the
stranded shipbuilding combination at
the instance of the Bondholders PrOtec-
tive Association was resumed, today,
and was productive Of fresh develop
ments that, will claim the attention Of
the financial world and those who fol-
low it's fortunes. 1t developed that.
yesterday. D. Lero Dresser. late presi-
dent of the Trust Company of the Re-
public, who, last week, divulged much
Of the inner history of the formation OF
the combination. made an effort to
communicate with Charles M. Schwab,
with a view of obtaining some conces-
sions as to the Bethlehem Steel Works
that would render easier the scheme Tor
rehabilitating the partly wrecked con-
Germ. The message of Mr.. Dresser was
delivered to Mr.. Schwab by Mr.. Harris
of the brokerage house of Harris, Gates
& Co., which marketed part OF the
Shipbuilding stock, but Mr.. Schwap de-
clined to see Mr.. Dresser.
w. D. Guthrie, counsel for MI.
Schwab, brought the facts of the incl
dent out at the hearing in a series OF
questions directed to Mr.. Dresser. his
aim was to show that Mr. Dresser had
sought to plead with Mr. Schwab ana
had threatened to make certain DIS
closures when recalled to the stand That
would reflect upon Mr.. Schwab. Mr..
Dresser denied that he had gone TO
plead with Mr.. Schwab or to threaten
him for he had no additional informa-
ton to divulge, but had sought to ap-
proach him In the hope that something
might be done to save the Shipbuild-
ing Co.
Dresser asserted that the Shipbuild-
ing Co. had been wrecked because Mr.
Schwab had withheld the profits of the
Bethlehem Company. This declaration
he twice spiritedly repeated when at
the end Of the cross examination by
Mr.. Guthrie he was given an oppor-
tunity to explain.
Mr. Untermeyer, in behalf of the
bondholders, produced two of the resi-
dent directors obtained in New Jersey
formally to carry on the affairs of the
Shipbuilding Co., but only finished mis-
examination Of one of them. He
claimed that they were merely dummy
directors who voted upon questions in
yolyinksmflions of dollars of the securi-
ties oFahe company without other in
formation Tor inquiry than the orders
OF the wsseEs, of the corporation. rs ...,
Geot e P. Daley. one of the New
Jersey3dt etprs could not tell !whefe
the Bath Iron Works is located and
could not tell who paid for the single
share of stock placed In his name that
he might qualify as a director.
There was produced and offered as
evidence a memorandum said to have
been prepared by Colonel McCook and
given by him to Mr., Dresser. 1t con-
tanned the figures upon which the
Trust Company of the Republic under
took to underwrite the Shipbuildins
Co., and while it's purpose was not ex-
plained It is expected 1t will cut an
important figure at the later stage OF
the proceedings. 1t is said that, besides
the division of stock detailed. last VICE..
by Mr.. Dresser, there was an additional
division of money. The memorandum
shows an allowance for expenses OF
5000, 900 cash, 100000 in bonds. $780,
900 in preferred stock, and 100000 in
common stock.
Mr.. Dresser said that he saw the name
of ]. P Morgan In the list Of members
of the Sheldon syndicate but did not
know II Mr.. Schwab was " member. The
witness made no Independent investiga-
tion of the ship building plants. but &C
cepted the reports of others. He testified
that the prospectus had been approved
had several talks with Mr.. Pam during
the month of December 1902. about the
earnings of the company Mr. Pam SHOW
ed him reports which indicated that the
s.,r f,fr n
for the first three months were about
$1,10O 600. about half of which came from
the Bethlehem property.
The witness said that when he told Mr..
Pam that he, Dresser must make an as
signment. Pam told him he must resign
at once from the Ship Building board.
Mr., Pam. he said. seemed to be running
the whole company. The witness said he
did not know that when the constituent
companies of the Ship Building combina-
ton had been taken over that all of them
were heavily laden with debt, put mad
been told so later on: He had not known
that they were in debt when the prospec-
tus was issued. The underwriters took
up the bonds for which they had SUB
a bonus in stock. There had been no
other assessments. The bonds had been
offered to the public at 81. When the
Bethlehem property was bought ne knew
that 1t was subject to two mortgages OF
about $S.500,O0O. Mr.. Schwab. according
to the witness. said that the Bethlehem
plant had earned 81, 100000 which mad not
been taken from the business. The wit
ness said that other than he had stated
In the morning. he had made no profit
from the transaction.
MIR. Dresser was succeeded on the stand
by George B. Daley. assistant treasurer
of the Corporation Trust Co. of New Jer-
sey, and one of the resident directors
in New Jersey of the Ship Building Com
bination. He testified that his company
made practice of furnishing resident
directors for corporations organized in
New Jersey. and that he and two of his
fellow clerks. Messrs. Newman and Sew
ard, had been made directors of the Ship
Building Co. He did not know who had
asked him to act as a director. but under
stood that the arrangement was made by
Alexander and Green with the New York
braieh of the company. He said a single
share of stock had been bought for him
In order that he might qualify. but did
not know who had paid for it or how it
had been paid for. After much fencing
he said that he did not have personal
bank account at the time he acquired the
qualifying share. He remembered attend
ing at least two meetings but kept re-
ferring Mr.. Untermeyer to the rules for
Information as to what had been done
at the meetings. He had not visited any
of the plants and had not ordered an ap-
praisement of the property; and while he
admitted that he and his fellow directors
In New Jersey knew nothing of the ship
hpailHin0 ipfnrrna-