The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1903-10-08
DRESSER'S STORY
He Tells What He Knows of
the Business.
SCHNAB HAD A HAND
French Syndicate Failed to
Advance Needed Funds.


common had been placed in the hands of
Harris Gates Co., it was agreed that
none of this stock should be marketed
until after $4,000 preferred and 200 900
owned by J. P. Morgan e Co.. and 2O0,-
! 10 of each kind owned by Mr.. Schwab
/ had been marketed. How 50, 600 stock
/ was increased to $4,750, 600 by the failure
of the French subscribers; how Mr..
SchWab came 10 offer his Bethlehem
works to the shipbuilding company and
how J. z. Morgan q Co., then came into
the transaction
Nh Dresser, who took the stand at the
opening of the hearing testified that he
was president of the trust company OF
the Republic from organization March
81, 1902 until March !, 1903 He told of
the visit of him in April, 1902, of John J.
McCoOk who told him he came from
John w. Young and the Mercantile
Z rust company and asked the trust COM
pany Of the Republic to underwrite So 0Oo.-
900 OF the stock of the United States Ship
building company, showing Mr.. Dresser
the underwriting agreement which said
that 900 had been taken in London
and 100000 in France The trust COM
pany authorized him to get the under
writing, which he did. Later he increased
the underwriting to 81. 10000 at the re-
quest of the promoters because they
said London failed to take the 100000
it promised TO take Mr.. Dresser had
no written statement as to the value
of the plants in the company when he
undertook the underwriting but that
Lewis Nixon and John w. Young had
made oral representations.
The Mercantile Trust company had
made oral representations.
The Mercantile Trust company, he was
told by Col McCook. secured the rest
of the underwriting. principally in
France
The Turst Company of the Republic
had framed their prospects of June 1902
offering the bonds to the public the
trust company taking the information
collected in il from the firm of Alexa nder
and Green counsel and Riddell & Com
mon. accountants without investigating
any of the statements made BY them
Mr.. Dresser identified a copy of the pros
pectus. and it was admitted in evidence
He said all the underwriting secured by
the trust company of the Republic was
secured from Mercantile Trust company
The response to the advertisement for
subscriptions was poor he said, not more
than $500 600 of the bonds being applied
for in America The purchase of the
bethlehem Steel works for the shipbuild-
ing company was then discussed Mr.
Dresser stating that overtures had been
made by Chas NJ Schwab. who said he
owned nearly all its armor making ca
pacity ana believed the capital would do
better with the shipbuildng that with
the L. s. Steel corporation
Mr. Cchwab, according to Mr.. Dresser,
said he wanted 50 600 600 cash for this
stock and submitted reports which
showed that il cost him more than s. .oo0,-
000 and was earning 81. $4,000 a year.
we told him we could not trade on
any such basis said Mr.. Dresser. be
would take $40, 100000 in bonds at 90 for
the 50 0oo 600"
This was argeed TO the arrangement
also providing that he was to receive
with the bonds a stock bonus of So. 600. 600
each Of the common and preferred stock
Of the United States Shipbuilding com
pany, Schwab stating that 100000 of
the stock was TO 60 TO J. p. Morgan &
Co. When the contract was presented
for signatures il was found to call for
the purchase Of Messrs. Dresses and
Nixon personally of 229. 500 shares of the
Bethlehem company's stock from ]. P
Morgan & Co. for s7.246.S71 cash. $3.50
in common stock of the United States
Shipbuiding company and an equal
amount of the preferred Mr.. Dresser
said he objected to obligating himself
personally but Mr.. Schwab explained
that the deal would have to be carried
ont that way and that on the day for
payment he would provide the cash to
make the payment Then Dresser and
Nixon were TO hand the cash 10 Morgan
& Co. who would hand over the Bethle-
hem company's stock mentioned in the
contract. The deal was consumated on
August II. 1872. Mr. Schwab giving his
personal check which was endorsed over
10 J. P Morgan & Co. for the stock Of
the Bethlehem company Mr. Dresser
said there was really given 100000 in
50 cocoa in preferred There was some
talk Of pooling the stock OF the ship
building company. he said Mr. Schwab
insisting that all the stock be held until
his and Mr.. Morsan's had been put on
the market
paragraph was read from the agree
ment referring 10 the authority 10 sell
l5.ooo shares Of the comman and IKE
amount Of the preferred stock and Mr..
Dresser said he understood 80 o. shares
Of the common and 90. 90 shares Of the
preferred stock Of the shipbuilding com
pany were polled with Harris Gates &
Co
After recess Mr.. Dresser said Mr.
Schwah told him that he believed the
shipbunding company had q great fl-
ture and that he would he wiling to put
2.oeoe0 more cash into the business II
necessary When the French underwent
ins money did not materialize Mr. Dress
er appealed TO Mr. Uphsm. counsel for
Mr.. Schwab mentioning Mr. Schwah-s
promise and stating that unless $. 5oa 90
were forthcoming 70 make good the
French underwriting the Bethlehem deal
could not go through. They pledged the
security 81 the French underwriters and
Lewis Nixon and he gave the notes Mr..
Dresser believed until after the Bethle-
hem stock was made MI Schvab owned
ala the stock Mt Dresser said only
5000 was ever received from the French
underwriters out Of the s. esa.o.a he had
been assured would he forthcoming II
the French underwriters had fulfilled
their obligations there would have h4er
no trouble.
Mr. Schwsh he said. obtained control
q the shipyards company by getting