The Savannah morning news. (Savannah, Ga.) 1900-current, 1903-10-24
SCHWAB NOW SAYS
THAT PROMISED $2,O0O,OOO WOULD
HAVE BEEN roo LATE
TO SAVE DOOMED CONCERN.
NOR WOULD THAT $9OO.OOO HAVE
SERVED THE PURPOSE.

Nixon Admitted Ihat the TSOO,OVU
Could Have Been Used without
Relieving the COmpnny-Schwab
Granted Leave to Intervene as a
Complainant.
New York. Oct. 23.-The nature of
the defense which Charles NJ. Schwab
will make to the charges that have
been made against him in connection
with the financial affairs of the wreck
ed United States Shipbuilding Compa-
ny. was sharply outlined during the
latter part of the hearing before Elk
aminer Oliphant late to-day.
Lewis Nixon was still on the stand
and, under cross-examination by w.
D. Guthrie. counsel for Mr.. Schwab.
there was an effort to show that the
corporation would not have succeeded
if the $2,O000OO promised under the
Sheldon plan of reorganization had been
made available, and that it could not
have continued it's existence even if it
had received the much sought for $780,,
900, which, it is alleged. was wrong
fully withheld by the Bethlehem Com
pany.
Mr.. Guthrie showed by Mr.. Nixon
that the $500, 900 would have been alb
sorbed without relieving the company
of all of the financial embarrassment
which it suffered. and then asked if it
would have been honest to the other
creditors if the interest charges on ac-
count of bonds had been paid on July
1, the date of the crisis in the affairs
of the concern.
Needed the Money.
Mr.. Nixon objected to the word
honest and Mr.. Guthrie changed his
question to, do you not think that
there is an honest difference of opin-
ion as to the justice of paying the in
terest charges, and do you not admit
in your letters that to continue BUSH
ness would precipitate immediate
bankruptcy"
II wanted money" said Mr.. Nixon,
land was prepared to make almost any
sacrifice"
lis it not a fact that the board of
directors thought that because of the
want of accord, the accumulation of
debts, the pressing need for money, the
proper course was to publish to the
world that reorganization was neces-
sary in order that people would no
longer deal in securities on which in
terest could not be paid on July 1?'
Most decidedly" said Mr.. Nixon.
"I did not want the people to continue
dealing in the securities"
The examination of Mr.. Nixon was
not concluded, and will be resumed at
the next hearing, which is set for
week from Monday.
Schwab a Complainant.
Through an order granted late to-day
Charles M. Schwab was granted leave
to intervene as a complainant in the
action recently commenced in the fed
eral courts by the New York Security
and Trust Company against the Unit
ed States Shipbuilding Company and
James Smith, Jr., as receiver. The de-
PENDANTS at the same time were allow
ed to file an amended answer and cross
bill, and Roland B. Conklin, Max Ma
than, Jacob w. Mack and James D.
Mcguire, as creditors and stockholders,
were given leave to intervene as de-
PENDANTS.
Lawyer Defere, representing Mr..
Schwab, explained to Judge Lacombe
that the issues of the action were such
that Mr. Schwab should properly be a
complainant, the answer of the de-
PENDANTS containing allegations of such
a character that Mr.. Schwab should in
all fairness be given the opportunity to
come in and show his position.
After hearing the arguments of
counsel, Judge Lacombe granted the
order for Mr.. Schwab to intervene as a
accompaniment, without prejudice to
the proceedings already had, and that
the title to the bill of complaint and
other papers should be deemed amend
ed as fully to all intents and purposes
as if Mr.. Schwab had been a party
complainant at the time of the fling
of the bill.
Thirty Days to Answer.
The order also gives Mr.. Schwab
permission to litigate all of the issues
presented in the case UPON the condf-
ton that the defendants are granted
leave to file within thirty days an
amended answer and cross bill, or
either with leave to the New York Sc
curity and Trust Company and Mr..
Schwab to file pleadings to any such
amended answer or cross bill as they
may be advised.
The order also stayed further pro-
ceedings until the expiration of the
time for the filing of the answer and
cross bill.
The four shareholders of the ship
building company granted leave to in
tervene as defendants were also allow
ed to serve an answer to the bill of
complainant within thirty days from
the entry of the order, also without
prejudice to all previous proceedings.
None of the lawyers could be in
duced to discuss the order, nor would
Mr.. Schwab's counsel give any further
reasons why he should intervene. other
than stated before Judge Lacombe.
That Check for $25O,OOO.
The mystery surrounding the purpose
and destination of the check for $685.
600. which has figured in the investi-
cation of the affairs of the Ullited
States Shipbuilding Company, was par
tally explained to-day by former
official of the Trust Company of the
Republic. He said that the check was
drawn to cover a payment on one of
the ship yard properties, and that after
necessary to cut the sum into a couple
of smaller checks. It was one Of a
series of numbered checks and rather
than destroy it. it was put through
the bank by the trust company itself.
The money called for by the check was
not withdrawn from the bank.
What subsequently became of any
money that remained after the plants
were paid for has not been shown at
any point in the inquiry, but ii is as
serted that this particular check was
not cashed, and is. therefore. of no