The Butte inter mountain., 1903-12-23
SCHWAB ANSWERS
CHARGES AS MADE
DENIES THAT HE EVER ENTERED
INTO CONSPIRACY TO DEFRAUD
IN BETHLEHEM DEAL.
HE CAN MAKE IT ALL COOP
Hints That il Injustice Has Been Done
Anyone, He Is Able and Willing
to Refund All Money.
ny ASSOCIATED PRESS.

New York, Dec. 23-Charles NJ. Schwab
yesterday flied his answer to the cross
bill Of the United States Shipbuildidg
company and James Smith, Jr., its re-
ceivcr. in the United States court. The
case is that OF the company and its re-
ccivcr against the New York Security
Trust company and Mr. Schwab.
Mr.. Schwabb takes up the various al
legations and charges OF the crossbill and
says
II deny that I ever became one Of
the promoters OF the shipbulding company
or that | and number of persons associ-
a,cl with me acquired the capital stock
OF the Bethlehem Steel company, as averrcd
in said cross-bll."
Emphatic Denel.
Emphatic denial is made that he ever
conceived any scheme OF transferring to
the shipbuilding company the stock OF the
Bethlehem company at an excessive rate
or upon conditions permitting him Of his
associates to control the shipbuding com
pany or to absorb for his benefit "all Of
it's property and assets TO the injury of
its creditors and OF its bona fde bond
holders and stockholders or otherwise.
Mr.. Schwab denies that he ever made
any false representations regarding the
Bethlehem Steel company.
He said IL admit that am the owner
and holder upward OF $o,ooo,ooo OF the
$io.ooo,ooo OF bonds and upward Of So,-
900, 900 OF the $40, 900, 900 OF the preferred
and upward OF Sp,ooo,ooo of the $io,ooo,-
900 OF the common stock Of the ship
building company. issued for the stock
OF the steel company; but deny that any
associates OF mine are the owners of the
remainder OF the preferred and common
stock so issued Tor the stock OF the Beth
lchcm Steel company, except sold and
transferred some of said bonds to third
parties.
Did Not Conspire.
Mr. Schwab says the shipbuilding com
pauy is not entitled 10 enforce any alleged
Indebtedness against him. He ayers that
neither he nor his associates conspircd
with the dummy" directors of the ship
building company to have inserted in the
mortgage to the Security and Trust COM
pany and in the charter OF the ship
building company provisions whicl, would
give him or them absolute control Of the
shipbuilding company and steel company
with the powers so to manipulate the cor
porations so as to cause default in pay
mcnts OF interest, thereby defrauding credi-
tors, stockholders and bondholdcrs OF the
shipbuilding company.
After specifically denying any and every
charge OF unlawful combination, conspr-
acy or wrongful act in his connection
with his dealings with the Bethlehem Steel
company and the United States Ship
building companies, MIR. Schwab details
the history OF his relations with the two
concerns.
He says that after making a contract
for the purchase OF the entire capital
stock OF the Bethlehem company, he COM
municated with !. F. Morgan Co., saying
he was willing to turn over the contract
to the United States Steel corporation
without any profit whatever
Morgan K Co. assumed the contract as
syndicate managers, with authority TO turn
il over to the Steel corporation. II, how
ever. Morgan & Co. disposed OF it TO other
parties, Mr.. Schwab was to receive the
greater part OF the profit.
He says that on June o. 1902, Messrs
Lewis Nixon and ID. Leroy Dresser asked
him 10 undcrwritc $o.ooo,ooo first
mortgage bonds OF the United States
Shipbuilding company. Prior to that he
had no connection with any such combina
ton.
George r. Sheldon anw William Wet
more oil New York representing a syn
dcate which had purchased $I3,75o,o ,ooe
OF the bonds and stock Of the Shipbuildins
company conferred with Mr.. Schwab las
autumn looking to organization OF tAt
| company.
Mr.. Schwab said he desired to take batl
| the Bethlehem stock, returning to the ship
| building company the bonds and stock HI
| had received. Subsequently for tina
purpose, he purchased from J. P. Morgan
| & Co. $a5 900 900 of stock, which has beer
delivered to them for the United State
| Steel syndicate and arranged to acquire
all the remaining bonds and stocks.
Can Make Good.
Mr. Schwab adds: Il was then ant
have ever since been and am now able tn
willing to return all the securities re
ceived by me or by Messrs Morgan & Co
and to rescind the whole transaction, am
! hereby tender the same for that purpose
Messrs. Sheldon and Wetmore decline
TO consider such a proposition, stating tina
the principal value of the whole compan
consisted of the Bethlehem Steel company
Mr.. Schwab then agreed on a rcorganza
ton plan with them, suggesting an as
scssment of the first mortgage holders.
1T was stated that acted in coluso
with the reorganization of the shpbuildin
company in order to force the insolven&
| of said company, | aver that said charpt