Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-11-05
LAWYERS PROD NIXON
US. Shipbuilding Company
Hearing Resumed.
STORY OF SHRINKAGE
BRINGS FORTH A CLASH BE-
TWEEN THE COUNSEL.
Only Difference In the Methods Of
Bookkeeping" the Witness
Declares.
STORY OF SHRINKAGE

~,
testimony in the proceedings before United
States Examiner Oliphant for the appoint
ment of a permanent receiver for the, United
States Shipbuilding Company was resumed
today with Lewis Nixon on the witness
stand. Following Mr.. Nixon it is probable
that Charles NJ. Schwab or Max Pam, his
personal counsel, will take the stand.
Mr. Nixon said he began the Crescent
ship yard in 1885, and that he had very
little capital except his own ability.
Here Mr.. Nixon objected to the question
ing, saying:
Il don't see why you should go back five
years. If you can show that this inquiry
has any bearing on the proceedings l shall
be pleased to answer, but 1 see no reason
for going back"
Guaranteed by Cramps.
MI Nixon said that his salary was guar
anteed him by William Cramp & Son and
he regarded this as part of his capital.
Mr. Nixon said he organized the Crescent
Company with a capital of 81 200 600, Of
which 81, ,197, 800 of the stock was issued on
the property, only 1900 being paid in cash.
do you know that the books Of the
a balance of $215,2l6?'' asked Mr.. Guthrie
THE record will show. / don't remem-
Der now replied the witness.
Willing to Admit Insolvency.
do you not know that, in fact. the books
on that date should have shown deficit of
over $5OO,OOO?'
Mr.. Untermyer here interrupted.
1--WE are willing to admit that he said.
Mr. Nixon said he was willing to an
swer
Wait" exclaimed Mr.. Untermyer. I'VE
will admit that. if the purpose Of this ex-
animation is to show that the United States
Shipbuilding Company was hopelessiy insoi-
vent when 1t was started. We are willing to
admit it. and thus curtail the examination.
The insolvency of the company is one of
our allegations.
About That shrinkage.
Mr. Guthrie said that the United States
shipbuilding Company might or might not
have been insolvent but he wan not willing
to discontinue the present hnsnf question
Ing at that time. =.
Mr.. Guthrie asked when the witness dis
covered a shrinkage of 500 .0D in the cur
rent assets of the United States shipbuild-
ing Company. ?" A
II don't remember that there was such
shrinkage in the current assets, replied
Mr.. Nixon: there was a shrtnkage OF d.
100000. but 1 do not remember how 1t was
divided. /g Is
Were Not Erroneous.
Mr. Nixon declared that what Mr.. Guthrie
termed erroneous entries in the books were
rot erroneous. ia
There was difference In the methodS Oh
bookkeeping" he said.
Mr. Nixon said he learned of a shrinkage
of 100000 in the Union Company before
he went to inspect the yards.
Mr. Nixon was questioned at some length
regarding the prospectus of the company
many of the statements in which he con-
sidered inaccurate. 49,
He had signed a consent" for meeting
or August II. 1902, certifying that he was
the holder of 199, $50 shares OF the preferrei
stock of the company and of 2i9SS5 shares
of the common stock, and In explanation ne
said:
'In signing papers was led by the advice
of my legal advisers as to their being nee
essary to complete the organization of the
company"
, Endorsement Of Notes.
This and another similar paper were Of
fered in evidence
Mr.. Guthrie then went into the matter or
the witness Endorsement of notes for Mr.
Dresser to raise funds until the proceeds
of the French underwriting should be re-
ceived.
Mr. Nixon said that security was given on
the notes, dDoul S%-ooV,UV u PASAoAi e"
stock and upward of So 100000 of common
stock These notes he said were all torn
up shortly after Mr. Dressers return from
Europe.
Witness understood that his liability
would be removed soon as the money
from France was received, but said he
could not have paid them II called on to
do so. He had signed the notes, he said.
without any expectation of being called
upon to pay them and without being In
possession of sufficient property to meet the
notes if called upon to do so
Based on Eminent Experts:
Mr. Nixon admitted writing letter on
August 27 to Mr.. Livingston in which he
stated that the combined plants were
worth $40,O00,000 and that this estimate
was based on the eminent experts.
who appraised the Bath company"
asked Mr. Guthrie
THE owners.
so the owners were the eminent ex-
perts who appraised their own prop
erty?' continued Mr. Guthrie.
Not always
Some More AppFaisers.
who appraised the Hyde Windlass
Company and the Samuel L. Moore Com
pany.
Naval Constructor Hewles and the
mayor of Elizabeth"
who appraised the Union iron works
at $1O,OOO,OOO?"
the Union company.
Who appraised the Canada company"
"Mr. Young"
At this point recess was taken.