The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1903-10-23
New York Grand Jury to Probe
the Morgan-Schwab Ship
yards Deal.
JEROME is ON THE TRAIL
Kings of "High" Finance Who Worked
the "Get- Rich Quicl<' Swindle
Are in Danger of Indict-
ment and Prison.

| L
law is likely to be invoked before the
revelations in the get-rich-quick Ship
building trust collapse are concluded.
| District Attorney Jerome will not
| wait for a complaint, but will take the
| initiative in proceedings looking to in
| dictment and imprisonment of prom
| inent eXponents of high finance in
| Wall street SO soon as he satisfies HIM
self that any of the men concerned are
| technically guilty of obtaining money
under false preteTSes.
! The bona fide purchasers of the thr-
| ty-year mortgage bonds who have sue
ceeded in having a receiver appointed
made such charges in effect. Since
then more astounding admissions have
| been made on the witness stand than
the bondholders had dared allege. The
district attorney has been watching the
| hearings before Referee Olyphant very
closely.
Mr.. Jerome has seen the application
| of the Shipyard trust made to the New
| York Stock exchange to have the $45,
100000 stock and $26,000,000 bond is
sues listed. 1t is signed by A. c. Gary
as treasurer. The financial condition
of the corporation is represented in it
as most prosperous. Later statements
of the corporation, made over the sig
natures of all the officers, have shown
| that at the time, instead of there being
|
| the Company's treasury.
Made Victims of Public.
Men in the confidence of the district
| attorney say he feels that no better
public service could be performed than
| the administering of q salutary lesson
| to certain Wall street nanpulators
who are held responsible for the recent
| decentralization of the market. These
+ promoters unloaded Watered capitaliZA-
ton on the market and sold stocks and
| bonds for five and ten and twenty
times their actual value to investors.
The same energy of brain and legal
machinery will be directed against
Wall street men as was shown in the
conviction of that prince of common
! swindlers, "Colonel' Bob Ammon, now
a Sing Sing convict
Not all the irregularities in connec-
ton with the Shipbuilding Trust have
been brought out yet. Lewis Nixon,
president of the corporation, will be the
first witness before the referee next
| Wednesday, and it is understood that
! he will corroborate D. Leroy Dresser s
story about how the Bethlehem Steel
plant was unloaded upon the trust by
| Charles NJ. Schwab and J. P. Morgan,
| with such a string to the property
that its annual profits could not be used
to offset the deficit of any single ship
yard which might show a loss.
Dresser Has More Facts.
Mr.. Dresser, who was forced out Of
the presidency of the Trust Company
of the Republic and into bankruptcy, is
not through with his revelations yet
and he will take the stand again. Mr..
Dresser yesterday outlined some of his
new testimony. He charged that he
was duped by some Of his own directors
when the Wetmore- Sheldon syndica te
was formed at the suggestion of J. P.
Morgan to reorganize the financing of
the Shipbuilding trust.
After my return from Europe" said
Mr.. Dresser Il realized Max Pam S
true object. He had, by great appear
ance of friendship with Mr. Nixon and
for the company, been able to gradual
ly get men favorable to his interests
on the board of both the Shipbuilding
company and the Bethlehem company,
to procure his own appointment as
chairman of the executive committee
and to have his nominee-Mr. Garry, a
nephew of ex-Judge Elbert H. Garry,
of the United States Steel corpora tion
made treasurer Of the Shipbuilding
company
II twice warned Mr.. Nixon of Pams
plans. 1t was about February when
Pam came out openly.
when it became apparent that
was opposed to PANS getting control
and that did not approve of the Shell
don syndicate trade, a strenuous effort
was made to get me out of the presi-
Republic, which position I declined to
resign. I was reelected. This, ap-
parently, interfered with their plans
and I was threatened in indirect ways
and given to understand that I would
yet have to resign.
Was Finally Forced Out.
Some quite questionable methods
were resorted to, which finally resulted
in affecting the credit Of my private
business to such an extent that
deemed it wise to make an assignment
and then resigned. With me out Of the
way the Sheldon reorganization plar
was brought out, which if carried
through places Mr.. Schwab's second
mortgage Of $10,000,000 ahead Of the
first mortgage and gives him not only
absolute control, but the first ler
in good faith.
"The principal reason for the grea
break in the market for the shipbuild.
ing securities was brought about by
the pressure put upon the Trust Com.
pany of the Republic by the bank:
which had made loans, collateraled b!
Shipbuilding securities and, more es
pecially, by reason of the price a
which the Sheldon syndicate purchased
the bonds by taking up these loans ant
the large bonuses of stock which the.
were to receive.
1.-The earnings Of the shipbuildint
properties for the last year We're So,
100000, as per the report of the Shel
don reorganization committee: That i
J almost the exact amount given in orig
| inal statements as to what they Woul'
{ | be.
Mr.. Schwab's Si"actc-'s kept out O
T the treasury of tie Sh'pbuilding com
, pany any of t,n- Fea nlehem earnings
although they We're $2.5ee,eoe-