The Birmingham age-herald., 1903-10-15
CREATES BIG SENSATION
 AMONG THE FINANClERS
Friends of schwab Intimate That Dresser Scheme Was One or in- limitation and Steel Magnate
 Wouldn't Be Bluffed.

New York October l.-Ihe lhqupy " fore A referee into the affairs or the stranded shipbuilding combination Ae 'ne instance of the bondholders protective as sociation. was resumed today and was productive of fresh developments that will claim the attention of the hnanciai world and those who follow it's fortunes It developed that yesterday LeHoy Dresser, late president of the Trust com pany of the Republic, who last week ui- vulged much of the inner history or the formation of the combination, maoe an effort to communicate with Charies M' Schwab. with a view to obtaining some concessions as to the Bethlehem steel works that would render easier the scheme for rehabilitating the partly wrecked concern. Mir Schwab declined to see MT. Dresser.
 Dresser asserted that the shlpouiloins company had been wrecked because NIT. Schwab had withheld the profits or the Bethlehem company. This declaration ne twice spiritedly repeated, when' at .ne end of the cross examination py MT. Guthrie, he was given an oppor.uiiiey 'o explain.
 Dummy Directors.
 MT TTntermeyer, in behalf of the bond holders, produced two or the resluene u,- ,,'. rectors obtained in New Jersey formally fin carry on the affairs of the shipbulld- ine company, but only finished hls ex- animation of them. He claimed that they were merely dummy directors, who Voteu mon questions involving millions or ool- lars of the securities of the company without other information or inqnlry' than the orders of the lawyers or the corporation.
 D. af,.s .,sasser. whose testimony as to the ,ircumsta nces under which the commits sion came into being and particularly the terms by which it acquired the Betnle- hem steel works, took the stand and MT. Gutherie counsel for MT. Schwab, cross examined him.
 MT. Guthrie first questioned the witness as to the reports he had recelVeo or seen on the value of the plants included In the Shin building company. MT. Dresser said he had seen the reports of Alexander, Green, Riddle and commission, the ac- counts but denied that he had ever seen report on the plants made by Admiral Bowles. From the time the prospectus was f1rst nrepared until the transaction was hnaliy consummated had there been anything
  ness of the company"
 q suspected nothing until l came back from Europe" said MT. Dresser. ''Trou- he occurred during January and FeDru- arv and believe 1t was due to the con- tro1 by Mr. Schwab of the Bethlehem company"
 Had Not Talked to Schwab.
 Witness then explained that he had appealed to MT. Bam for as- sistance from the Bethlehem com many. and said that even after the Shel- don reorganization the earnings of the several ship building properties and the Bethlehem company were lnsufnclent to pay prefixed charges.
 Mir Dresser said that all the informa- tion contained from the prospectus came either from Riddle and commission or Col. Cook.
 Witness said he had not talked to Mir. Schwab about taking a part in the under writing MT. Nixon did that. he said and brought MT. Schwab's of S500,000. MT. Schwab later paid the full amount of the allotment against him. He said there were a series of assessment and that he believed MT. Schwab paid in full
 The witness was then led over the cir cumstances attending the call which he and MT Nixon made at the office of Mir Schwab on June IA, 1902. He testified that MT. Schwab has showed his reports of the operations and earnings of the Bethle- hem company. MT Schwab said it would earn $2,OO0, 900 a year" witness said, and as matter of fact it did" Asked if 8, GOO was not the prophecy witness said:
 MT. Guthrie, I do not wish to over state the figure Two millions would have satisfied us that 1t was a good purchase. The witness swore that he had not re- ceived any surplus cash or first mort gage bonds as promoter When I was in Paris he said. 'I received some stock in the company from Mir. Young When I left here I owned 1450 shares of the Trust Company of the Republic which was worth S5O0000, but that had been pretty well wiped out. MT. Young gave me either 40OO or 5000 shares of each kind of stock and I sold it for s1OO,0oo"
 Witness denied knowledge of the exis- tence of ,O00 worth of first mortgage bonds which MT. Guthrie said had neith- CT gone to the vendors, the underwriters, nor the subscribers. Witness said he never knew of any such surplus
 Tried to See Schwab.
 If then developed that Mir Dresser had endeavored yesterday to get into commu- nication with Mir. Scbwab and the testi- mony upon the point brought from the witness the declaration that the Ship
 
 building company had been wrecked through the withholding of the Bethlehem profits. The effort of the witness to reach Schwab had been made through Charles Harris of the brokerage firm of Harris. Gates & Co.,, and was brought put by Guthrie for the purpose of show Ing that Dresser had thought to plead with Schwab and had held over him the threat of exposure of other facts in con- nection with the Shipbuilding failure.
 MT. Guthrie introduced the sensational incident and testified by dropping his questions as to the stock MT. Dresser mad received. and saying: Do you remember what you did yesterday?'
 My memory is good enough for that" answered witness.
 Did ycu pay two visits yesterday to the office of MT. Charles Harris?
 T did," said witness.
 Did you not seek a private inter view with MT. Schwab?" asked MT. Guthrie.