New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-10-08
D. [. DRESSER ON STAND.
THE SHFPBUILDING DEAL.
Story Of Negotiations scith Schscab
and J. p. Morgan s Co.

regarding the formation OF the ill fated United
States Shiphui lding Company excited much in
terest in Wall Street particularly that relating
20 the pool Of the conlpany's stock with Harris.
Gates A co. The witness declared that there
were placed in the pool 100000 shares OF the
preferred stock and 10000 shares OF the COM
mon stock. and counsel who was examining Mr..
Dresser produced agreement that Harris.
Gates g. Co. not to sell any Of the stock.
save $1,000 shares held by those who would not
go into the agreement. until the $1,000 preferred
and 25.o00 common to be delivered to J. p.
Morgan & Co, and the 10000 preferred and
7dO00 common to be delivered TO Charles NJ.
Schwab shall have been marketed. sold and
disposed Of"
Mr. Dresser testified in the action begun by
Roland r. ConI1lin and other bondhoIders of the
United States Shpbuildng Company. The hear
ing before Henry ID. Oliphant. special
examiner in the Office of Guggerrhe elmer, Inter
myer & Marshall. at No. 30 Broad-st. Samuel
Untermyer and Henry WOlman represented the
complaining bOndholoers. while W. ID. Guthrie
and Charles c. Deming appeared for the COM
pany and for Charles NJ Schwab. in whose in
terest. it is charged. fraud and mis1nanagement
were perpetrated.
To Mr.. Tnternyer's questioning the witness
said he lived at oyster Bay and that he was an
involuntary bankrupt When the Trust Com
pany OF the Republic was organized March
81, 1902. he became president he said. and held
that Office until he resigned. on March f. 1903.
The company had been capitalized at 100000.
Mr.. Dresser gave the names of the directors of
This company, and said he was visited in April,
1902. by Colonel John J.. McCook who had
spoken of the underwriting of the United States
Shipbuilding Company.
what did he say2" asked Mr.. Untermyer.
He said he came from John W. Young and
the Mercantile Trust Company: that 100000
Of the underwriting had been secured, and he
suggested that the Trust Company of the Re-
public take the other s.. 100000. making 50 0o0-
600 in all. I laid the matter before my direct
ors"
Did Colonel McCook present any creden-
tials?"
He showed ne the underwriting agreement.
which said that 100000 Of the 100000 had
beer taken in London and 100000 in Paris"
ASKED TO GET a.75o.OoO MORE.
o.-How long was 1t before you got the under
writing after you spoke to Colonel McCook2 Al
don't think it took more than ten days af 756 od
more because there had been Z hitch in securing
men would provide the balance Of the English
o-Did You set it? Al did. I got $4,000 in all:
GLOW were you induced 70 interest yourself
Aexander. Of Alexander & Green told me OF the
report Of the expert accountants and OF the plants
that to be taken into the scheme.
Q.-Dd you receive any written statement? A
/
and Of The accountants report? AR Young and
sP was s 2t2 at ,.s ss s sttsr y5 obtained
Q-Where did you meet Mr.. Nixon? Al think
Il was in Colonel McCooks Office
lea s. c S 5 { fSe SS a5ieT ySp f
company? A--The Mercantile Trust Company Sc
o.-How DO you knowe A.--Colonel McCook told
me A list OF The people and institutions in France
subscribing 10 IL was given 10 US
The money OF the American underwriting MI
Dresser said. was collected by his company. 1t
did not collect It all Il think when I had TO
resign from the Trust Company OF the Repub
lie" the witness went on, "all had been collect
ed that was due up TO that time"
Mr. Untermyer then read from the published
prospectus the list Of proposed directors in the
advertised shipbuilding company.
o.-who furnished that list? A-Alexander &
o.-who asked you to be of the directors?
o.Is ii not fact that none OF those advertised
as directors was ever really a director! A.-Oh. 1
think they all erNeG as directors.
Mr.. Untermyer read some OF the financial
statements in the prospectus. and Mr. Dresser
said he got them from Mr. Deming. Mr.. Krech
and Mr.. Alexander.
Q.-You believed all the statements made to you?
Q-And The French underwriting never material
Jed Al think not Ii had not up 10 the time
left the Trust Company Of the Republic.
Q-You found the money for that underwriting?
o-And that is how the Trust Company Of the
Republic got into its troubles? A--some OF it's
troubles.
MEETS Mr.. SCHWAB
ION June IL" the witness said replying TO
e direct question from MI Untermyer. Il was
lunchng with Lewis Nixon at the Lawyers
Club. when Mr.. Schwab Joined us. 1 had never
seen Mr.. Schwab before that day. He asked
us why we did not buy the Bethlehem company.
] replied that ] did not suppose the company
was for sale: that I understood il was part
OF the Steel Corporation. Mr.. Schwab said he
owned all the stock OF the Bethlehem Steel
Company except few shares. and he thought
he could control them. He said because Of its
armor making capacity he believed the COM
pany would DO better with the shipbuilding
than with the Steel Corporation We talked
the matter over, and Mr.. Schwab arranged for
us 10 meet at his Office next day. He said he
would have 10 cable 10 J. Pierpont Morgan, who
was then in Europe"
o.-what did Mr. Schwab say when you next
met hin2 Ale said he wanted 100000 cash for
his stock and submitted reports which showed that
u cost him more than 100000 and was earning
Q.-Did Mr. Schwab ask 100000 in cash for his
property Ave told him we could not trade
c<-Sh PASS because we had no cash, and he said
ne would take 100000 IA bonds at 30 for the
Q.-whst did you understand by that Al I'M
0..hou told him the underwriters got the stock
e. ~ A-Fhe underwriters got the bonds at 80.
,e.-The public got no . per cent advance7 A
No the price 20 the public was g7Js
TO co TO J. P. MORGAN & co.
Mr.. Dresser told Of the preliminary arrange
rneurs after the deal WIS a1raas ,,,o, .,,s -a,s