Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-10-24
SCHWAB'S DEFENCE
May or May Not Be Effective
at the Hearing.
Says Shipbui|ding Trust Would Have
Failed Anyway.
Lewis Nixon Still on Stand Under a
Sharp Fire.

New York, Oct. 23-The nature Of
the defence which Charles M. Schwab
will make to the charges that have
been made against him in connection
with financial affairs Of the wrecked
United States Shipbuilding Co. was
sharply outlined during the latter part
of the hearing before Examiner Oil
plant, late today. Lewis Nixon was
still on the stand and under cross
examination by w. D. Guthrie, counsel!
for Mr.. Schwab, there was an effort tC
show that the corporation would not
have succeeded if the 100000 prom
ised under the Sheldon plan of reorgan-
ization had been made available and
that it could not have continued it's
existence even if it had received the
much sought for 100000 which it is
alleged was wrongfully withheld by the
Bethlehem Co.
Guthrie showed by Mr.. Nixon that
the 100000 would have been absorbed
without relieving the company of all
of the financial embarrassment which
it suffered and then asked if it would
have been honest to the other creditors
if the interest charges on account of
DOi1uS Iit DccIf paul, uiy j, liC ttttC
of the crisis in the affairs of the con-
Germ.
The examination of Mr.. Nixon was
not concluded and will be resumed at
the next hearing, which is set for q
week from Monday.
Charles NJ. Schwab and Attorney
Max Pam We're in attendance. The wit
ness was again on the stand as to the
representations made in the early ship
building combination prospectuses and
the correctness of the statement that
Edwin Hawley, f. H. Hartman, James
Stillman and other financiers We're to
serve as directors. Mr.. Nixon said he
understood the statements We're correct.
The underwriting agreement which
Charles M. Schwab signed was pro-
Guced by the representatives Of the
Trust Company OF the Republic at the
request of Attorney Guthrie, identified
by Mr. Nixon and offered in evidence.
Other underwriting agreements signed
by Roland r. Conklin. Max Nathan,
James d. Mcguire and Jacob w. Mack,
compliments. We're produced but Mr..
Nixon did not know the individuals nor
their signatures.
Mr.. Nixon testified that vendors be-
came underwriters to the extent of sew
eral thousand dollars. He, Henry T.
Scott and Mr.. Hyde all vendors. be-
came underwriters. The witness iden-
titled the agreements signed by himself
and Mr.. Scott and they We're offered in
evidence. 1t is said that the purpose
of this evidence is to show that the
complainants are holders of but small
amounts of the bonds.
E. w. Hyde and Henry T. Scott I'M
derwrote for s15O,O0O and $25O,OOO re-
spectively. The underwriting agree
ment of Samuel Jarvis, who took $780,
600 of the bonds, was also shown to the
witness, but he could not identify Jar
Wis signature. The witness said that
the original appraisal of s45,000.000
made by himself and Admiral Bowlcs
did not include the Bethlehem plant
and two of the properties of the present
combination, but did take in the New
port News plant.
The cross-examination then brought
out more about the property of the
Canda Mfg. Co. for which it is claimed
an excessive price was paid. Mr.. Nixon
testified that when it was first planned
to include Canda that the Newport
News property was in and it was
thought Canda could be used to stand
ardize certain ship fittings. Later the
witness objected to including Canda,
but found that it's exclusion might
cause trouble, as some of the UNDER
writing had been obtained.
Mr.. Guthrie then took up the question
of the schedule of commitments and
brought from the witness a statement
that the one for Alexander and Green
was for legal services entirely. The wit
ness repeated the statement of ',ns+c~-
day that none of the commitments had
been paid. The witness was then led
again over the circumstances under
which he had Joined Mr.. Dresser in
notes aggregatlng about $4OVU,vVv. He
said that the securities of the Ship
building Co. were pledged to secure
the loans. At that time about S.. 900
We're available for the purpose. Nixon
said that at the time part of the UNDER
writing had been secured and he felt
confident of the success of the enter
prise.
The witness was asked a number of
CONTINUED on page %