The Providence news. (Providence [R.I.]) 1891-1906, 1903-10-24
SCHWAB'S
DEFENSE
SHOWN
Denies 100000 Would Have
Served ShIphuiIdIng Company.
Nixon on Stand still.


defence which Charles NJ. schwab VIII
make 10 the charges which have been
made against him IN connection with nm
ancial affairs OF the wrecked United
States Shipbulding company was Sharply
outlined during the latter part or the
hearing before Examiner olyphant ia'e
yesterday. Lewis Nixon was still on the
stand and under cross-examination py w.
ID. Guthrie, counsel for Mr.. Sch"aD'
There was an effort to show that lno
corporation would not have succeeded IL
the ~ 600 900 promised. under the Sheldon
plap OF REORGANIZATION had been made
available and that II could not have con-
timed It's existence even if it had re-
ceived the much-sought-for ssoooo whlch,
Il ia alleged was wrongfully withheld by
the Bethlehem company. -
Guthrie showed by Nixon that the .9oO'-
600 would have been absorbed without re-
lieving the company of all OF the nhahcia,
emba rrassment which II suffered, ana
then asked II Il would have been honest
10 the other creditors II the interest
charges on account of bonds had been
Maid on July 1, the date OF the crisis In
the affairs OF the concern. The examlna-
ton of Mr.. Nixon was not concluded, and
will be resumed at the next nearing
which is set for a week from Monday
UNDERWRITING AGREEMENT.
Mr. NIXON took the stand promptly,
and being shown the circular or prospec-
tus. published in May. 1901. at the ume
the first shipbullding combination mao
been proposed. was asked what informa-
tlon he had in regard 10 the gentlemen
named as prospective directors haVlhs
con sented 10 the use OF their names.
Mr. Nixon replied that all the informa-
HA haA w.
ed from Mr. Young and Edwin G. Haw-
ley. IL was Mr. Hawley, he believed, VINO
had told him that Messrs. Stllman and
Hartman had consented TO serve as d.
| rectors. -
II. therefore, assumed" said he, that
! they had consented.
| Q-At the time OF publication or tins
prospectus did any one, as far as you
know then or since. question or challenst
the truth OF the various statements con
cerning this prospectus? A.-No one' AZ
far as I know
O-Are YOU able 10 state upon which
prospectus the underwriting agreements
were procured In the plan OF June. 1907
At this point Mr.. Guthrie handed to the
witness a prospectus marked "Private
and CONFIDENTIAL" and dated April, 1902.
and asked, WAS II on this paperg"
MIR. Nixon replied that he thought IL
was.
A second paper was handed 10 the wit
ness which he identified as the under
writing agreement used In the procuring
of underwriting for the actual shipbuild-
Ing company.
Q-was Il on this agreement that you
secured Mr.. Schwab's subscription? Alt
was.
The original subscription OF Mr.. Schwab
was here produced, Mr.. Nixon identifying
Mr.. Schwab's signature TO II.
Q.--Was II signed I'm your presence? A.
II was.
PLANT NOT INCLUDED.
The witness said that the original APP
praisal OF $500 made by himself and
Admiral Bowles did not include the
Bethlehem plant and two OF the proper
ties In the present combination, but did
take I'm the Newport News plant. Ad-
miral Bowles had examined the proper
ties and written report on them after
obtaining the written permission OF the
| secretary OF the navy.
The REORGANIZATION then brought
out more about the property OF the Can
| da Manufacturing company, for which
| Il IL claimed an excessive price was paid.
| Mr.. Nixon testified that when IL was first
! planned TO include Canda that the New
port News property was I'm, and it was
| thought Canda could be used 10 standard
ize certain ship fittings. Later the wit
ness objected 10 including Canda, but
found that it's exclusion might cause
trouble. as some OF the underwriting had
been obtained.
Mr.. Guthrie then took UP the question
OF the schedule OF commissions and
brought from the witness statement
that tho one for Alexander and Green
was for legal services entirely. The
witness repeated the statement OF yester-
day that none OF the commissions had
been paid The witness was then led
again over the circumstances under which
no had Joined Mr.. Dresser In notes ag-
grogsting about 81 900. He said that
the securities OF the shipbHlding COM
pany were pledged TO secure the loans
At that time about s5. 100000 was available
for the purpose Nixon said that at the
time part OF the underwriting had been
secured and he felt confident OF the sue
cess OF the enterprise.
EARNED OVER $4,000 600.
The witness was asked a number oi
questions. showing the worth and general
characteristics Of the Bethlehem plant
lie said that 10 was one Of the greatest
properties Of the kind In tho country and
that n was 81 great value 10 the
shlpbuilding combination. over objections
from Mr.. Untermeyer Nixon testified that
during the first year that Bethlehem was
In the combination. N earned upward of
$4,000 900. He believed It's earnings would
increase. but said any estimate by him
IN figures Of the expected Increase would
be surmise AZ the request OF Mr.
Guthrie the witness told Of the adverse
conditions In the shipbuilding business
hat IN the last year or two had put
many of the shpyards IN bankruptcy.
He gave increased cost of labor and labor
troubles.
The witness testified that his talk over
,ne telephone with Mr. schwab when the
atter said that he had advised the d.
rectors 10 refrain from attending meet
lnss had occurred after the plan OF reor-
ksnzauon had been published The
wi'ness identified n letter he had written
20 'hatIes Wetmore. giving some esti-
mates. and swore that before ne wrote
~ "lier ne DID not know that there
| were errors In the hooks ~ arcou,t. "a,