The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-10-24
SCHWAB'S COUNSEL
REVEAL THEIR HAND
The Nature of the Defense is
Sharply Outlined.
NIXON UNDER HOT FIRE
An Effort to Show That the ShipbuiIding Com
pany Would Have Gone Under Even if the
Promised Help Had Been
Enytbro.oinr
NIXON UNDER HOT FlRt
Forthcoming.
(By the Associated Press.l

(By the Associated Press.)
New York, Oct 23.-The nature of the
defense which Charles NJ. Schwab will
mack to the charges that have been made
against him in connection with the finan-
cial affairs of the wrecked United States
Shipbuilding Company was sharply out
lined during the later part of the hearing
before Examiner olphant late today.
Lewis Nixon was still on the stand, and,
under cross-examination by w. d. Guth-
rie, counsel for Mr.. Schwab there was an
effort to show that the corporation would
not have succeeded if the 81, 100000 prom
ised under the Sheldon plan of re-organi-
zation had been made available, and that
it could not have continued its existence
even if it had received that much sought
for 5000, 900 which. it is alleged, was wrong
fully withheld by the Bethlehem Com
pany Mr.. Guthrie showed by Mr.. Nixon
that the $4,000 would have been absorb
ed without relieving the company of all
the financial embarrassment which it suf-
fered. and then asked if it would have
been honest to the other creditors if the
interest charges on account of bonds had
been paid on July 1st.. the date of the
crisis in the affairs of the concern.
Mr.. Nixon objected to the word "hon-
est" and Mr. Guthrie changed his ques-
tion to- ''Do you think that there is any
honest difference of opinion as to the JUS
tice of paying the interests charges, and
90 you not admit in your letters that to
continue business would precipitate imme-
date bankruptcy"
81 wanted money said Mr.. Nixon,
'and was prepared to make almost any
sacrifice"
"Was it not fact that the Board of
Directors thought that because of the
want of accord. the accumulation of debts,
and the pressing need for money the prop
er course was to publish to the world that
reorganization was necessary in order
that people would no longer deal in Sc
curities on which interest could not be
paid on uly 1st.?"
"Most decidedly said Mr.. Nixon. Il
did not want the people to continue deal
ing in the securities.
The examination OF Ir. Nixon was not
concluded and will be resumed at the next
hearing, which is set for a week from Mon
day.
Through an order granted late today
Charles M. Schwab was granted leave to
intervene as complainant in the action
recently CONNIE eaaHd in the Federal courts
by the New York Security and Trust
Company age INST the United States Ship
building Company and James Smith, Jr.
as receiver. The defendants at the same
time were allowed to file an amended an
swer and cross bill and Roland b. Conk-
lin, Max Nathan, Jacob w Mack. and
James d. Mcguire. as creditors and stock
holders were given leave to intervene as
defendants
Lawyer Defere, representing Mr.. Schwab
explained to Judge Lacombe, that the
issues of the action were such that Mr.
Schwab should properly be a complaint,
the answer of the defendants 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 al
ready had, and that the title to tht bill
of complaint and other papers should be
deemed amended as fully to all intents
ana DuTpOSeS us IL MI. oCHNdD Uetu
party complainant at the time of tue
filing of the bill
The order also gives Mr. Schwab per-
mission to litigate all of the issues pre-
sented in the case, upon the condition 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 Security and Trust Company.
and Mr.. Schwab, to file pleadngs to any
such amended answer or cross bill as they
NAV be advised The order also stayed
all further proceedings until the expira
ton of the time for the filing of the an
swer and cross bill. The four share
holders of the Shipbuiding Company
granted leave to intervene ds defendants,
were also allowed to serve an answer to
the bill of complainant within thirty days
from the entry or the order, also without
prejudice to all previous proceedings.
None OF the lawyers could be induced to
discuss the order, nor would Mr.. Schwabs
counsel give any further reasons why he
had INTERVIEWED, other than stated before
Judge Lacombe
The mystery surrounding the purpose
and destination of the check for s25o,Ooo,
which has figured in the Investigation OF
the affairs of the United States Ship
building Company was partially explained
today by former official of the Trust
Company of the Republic. He said that
the check was drawn to cover payment
on one of the ship yard properties. and
that after it had been made out it was
found necessary to cut the sum into a
couple OF smaller checks 1t was one of
a series of numbered checks and rather
than destroy it, it was put through the