The sun., 1903-11-25
OFFERED TO LET NIXON CUT,
LAWYER TRIES TO MAKE SCHWAB
OUT A BRIBER.
Nixon Tells About a Deal on His Behalf
Between Schwab and j. II. HOadlley.
which He Didn't understand-Syndi-
cate Ownership OF Bethlehem Steel,

Letters written by Charles NJ. Schwat
10 Joseph II, Hoadley and to Lewis Nixon
in wtIcl, Mr.. Schwab agreed to take of
Mr. HoadIey's hands lot of United States
Shiptuildng bonds and stock given to
hr Hoadley by Mr.. Nixon and also 10 take
ar a subscription of 500 900 made by Mr..
Nixon to the Sheldon syndicate, provided
the Sheldon plan of reorganization of the
Shiphu'lding company was put through,
were produced at the hearing in the Ship
building case yesterday by Samuel Inter
myer, counsel for the complaining bond
holders Mr.. Schwab offered to take the
bonds at 90 The market price was then 25.
Mr. Intermyer said. in answer to ques-
,ion of Mr. Guthrie for tho other side, that
bis purpose in producing the letters was to
show that Mr.. Schwab had made an attempt
10 "bribe" Mr. Nixon through Mr. H1adley
into approving of the Sheldon plan The
sheldon plan proposed that Mr.. Schwab g
mortgage bonds, which he got for the Beth
lehem company, should go ahead of all
other bonds. such as those held by Mr..
Iutermyer's clients.
Mr. Guthrie objected to the letters, but
they went into the record, subject to re-
lection by the Court.
Mr. Nixon, who was on the stand again
all day Yesterday, said that he knew Mr..
Hoadley as financial expert and hal gone
10 him for advice in regard to the quest ion
Of getting aid for the Shipbuilding COM
pany Mr.. Hoadley is the promoter and
president of the International Power Com
pany whose stock had remarkable slump
some time ago.
His name had not hitherto appeared in
the Shipbuilding case, and it was first
brought in Yesterday by Mr. Nixon himself,
when Mr.. Cntermyers questions turned on
his approval OF the Sheldon plan last May
Mr. Nixon said that on May II Max Pam
had written him letter asking for his ap-
proval, as president of the company, of
the Sheldon plan and that he had refused
to give such approval. Several of his
friends had advised him to do this
He then went to see Mr. Hoadley, to
whom he said he was then obligated to
turn over $4,000 Of bonds and $50 shares
each Of the common and preferred stock,
the amount he had taken of the under
writing. Mr. Hoadey, Mr.. Nixon said,
suggested an assessment of s., 900 900 on
The stock
He offered, said the witness, "to under
write sl,OUo,000 of this and suggested that
Mr. Schwab provide the other million
| then took MIR. Hoadley with me to see
Mr.. Schwab, as Mr.. Hoadley understood
better than did this method of handling
companies"
Mr. Nixon said this was on May 20. He
left Hoadley alone with Mr.. Schwab.
Mr., Hoadley," continued the witness,
fret hp l. kipn
Later. he said that Mr.. Schwab didn't pro-
pose to change the crossing of a t or the
dotting of an T. and told me that, so far
as my plan was concerned. there was nothing
to be done. He said there was nothing to
do but approve of the Sheldon plan, unless
! wanted to fight it myself
Mr.. Nixon testified that that was all he
ever knew of the negotiations carried on be-
tween Schwab and Hoadley and it was here
that Untermyer produced. the cores
pondence. Mr. Guthrie objeotad to the
letters as inc ompetent and improper.
We offer Them" said Mr.. Untermyer.
as crucial to this case and as showing
what Mr.. SchwaD did to get the approval
of his plan from the president of the COM
pany. We want to show that Mr.. Schwab
attempted to brbe Mr.. Nixon through
hT IlOduiey
'You are irving to impeach your own
witness said Mr.. Guthrie.
"On the contrary, we are attempting to
impeach Mr.. Schwab," Mr.. Untermyer
retored
There were two letters from Mr. Schwab
TO Mr.. Hoadley, both under date of May
20, the day Mr.. Nixon took Mr.. Hoadley
to Mr. Schwabs office They follow:
Ar, Joseph II. Hoad!ep. New York. NJ. Y.
DEAR. SIR: Providing the United States
Shipbuilding Company REORGANIZATION is per-
orer of Pay to
been made to the Sheldon syndicate on a sub
scription of 500 900. made by Lewis Nixon.
TO my account, and guarantee to have a COM
plete release issued to said NIXON by said
DEAR, SIR: Providing the United States
Sbipbuilding reorganization is perfected, |
s to Of 1a nped iSi
building Company, s25. 900 shares OF pre-
ferred and s2j, 900 shares OF, common stock
bonds. on or before Dec L. 1903. Said bonds Sn
and stock to be dPeposteRd P With Messrs Meln-
and to be e1chang ged for the securities of the
reorganized company as designated by agree
ment issued by the Reorganization committee
GSIs Msrksa in issd pencil .orsnsif returned
10 Mr.. Schwab)
Mr.. Untermyer wanted to know why Mr.
Schwab had made such propositio but
Mr. Nixon replied that Mr.. Schwab or Mr.
Hoadey would have to be asked about that
After Mr. Hoadley told him of the nego-
tiations with Mr. Schwab, without making
known fully the proposals in the letters.
the witness said he finally gave his approval
10 the Sheldon plan. In explanation he
said:
In carrying out certain arrangements
between Mr.. Hoadley and myself, Mr.. Hoad-
ley had made certain advances to me, and |
The securitie les he held were affected by the !
plan going through. AT far as my getting |
anything out of it, that is absurd. ! never
got anything"
Mr. Nixon said that after he had ac-
ouiesoed in the plan Max Pam had submitted |
through Mr.. Hoadley the draft of the letter .
he was to write, giving his approval as presi-
dent. He refused to sign it, and Mr.. Hoad-
ley wrote to Mr. Schwab so informing him
Il consulted afterward with Mr.. Hoad-
lev said Mr.. Nixon. "and signed another
letter which was dictated to Mr.. Hoadey's
stenographer. This letter Mr.. Hoadley
took to Mr.. Schwab."
letter was produced which Mr. Hoadley
wrote to Mr. Schwab on June 49, In it
Mr. Hoadley said he returned Mr.. Schwab's
proposal regarding the bonds to he held
hlasmnch as Mr. Nixon has arranged to
avail himself Of these bonds personally,
and am no longer concerned in their dis
Dosal' Mr., Nixon said he had asked Mr..