The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1903-06-24
COUNSEL USED
STRONG WORDS
Argument in the United States
Shipbuilding Case.
PETITION FOR A RECEIVER
CLAIM MADE THAT THE COM
PANX Is INSOLVENT.

Newark, n. J.. June 23.-Argument
Of counsel in the suit for the appoint
ment Of a receiver for the United
states Shipbulding company was
heard today before United States Cir
cult Judge Kirkpatrick. The hearing
in Trenton yesterday disposed of all
the afidavits and formal papers in the
case and each side was allotted three
hours for nnal argument. Samuel Tn
termeyer Of New York opened for the
com plainaut and Charles L. Corbin fol-
lowed for the defense r. V Linda
bury concluded the case this afternoon
after Attorney General AcCarter had
presented argument for the defense
Mr.. Untermeyer had barely risen when
Mr. McCarter asked leave TO present
the affidavits Of holders of S200, 600 Of
the reorganization bonds, all of whom,
he said, desired to join IN the defense
under the reorganization plan Both Mr..
Untermeyer and Mr.. Lindabury object
ed to the introduction Of the affidavitS-
Judge Kirkpa trick. however, held that
the addition of 500. 900 of bonds to the
S2o.000.000 already represented by Mr..
sheldon as chairman of the reOrgan-
izatiOn committee would make no es-
pecial difference and admitted the new
documents
Strong Language.
Mr.. Untermeyer declared that he
would show the court that the cor
pOratiOn was insOlvent.
1t was conceived in iniquity, main
tanned by fraud and is ending in
crime" he said. The facts, counsel
said, made out an overwhelming case,
warranting the appointment of a re-
celVer. As an alternative plan Mr..
Untermeyer declared that if the in
solyency was not shown to the salts
faction Of the court the compliments
Il.
lzation was definite plan to wreck
the corporation and that the COM
plainants had the equitable right TO
have the court interfere to preserve
their holdings. Mr.. Untermeyer main
tanned that the directors purpOsely mis-
informed the listing committee of the
New York stock exchange by prevent
ing the official statement Of the cor
poratiOn's affairs so that the bonds
could be sold to the public.
The Schwab Sale.
Taking up the purchase by Charles
NJ. SchWab of the Bethlehem Steel
company and the subsequent execution
Of the $40. 900. 900 mortgage, as col
lateral guaranty on his sale and trans
fer Of that property to the defendant
corporation. Mr.. Untermeyer declared
That IL was as picturesque a proceed
Ing. as any Of those made by the di-
rectOrs Of the Sixth National bank who
bought and sold the stock Of their own
corporation.
Concluding, Mr.. Untermeyer declared
a year ago the company asserted It had
cash assets Of 1000. 900. but on ac-
count of a series Of brilliant exploits,
without parallel in the realms of higher
finance. the treasurer was forced to
state that by reason Of the use Of this
money for the purchase Of plants and
subsidiary corporations the company
was now unable to pay maturing fixed
charges due Aug. 1 of S941 600, and
S421.OOO additional liabilities due on out
standing notes and accounts.
By its own admission Mr.. Inter
meyer declared. the defendant had
proved the insolvency charges.
Charles I. Corbin of the defendants
argued that the cOmDlainants had not
shown the company to be InsOivent and
that there was no proof Of fraud
No Proof of Contention.
Mr.. Corbin added that but one of the
compliments, Mr.. Conklin. had shown
any interest in the company. and even
that was small There was no proof of
Z the contention that Mr.. Nixon organized
the company with the intent to defraud
the pubic, nor that the officials were
responsible for newspaper publications by
which the compliments claimed TO have
l been induced to purchase stock
The prospectus to which the complaint
referred was not issued BY the company.
Z
Nor was there any proof as to the terms
Of the agreement made with Mr.. SchWab
as set forth by the compliments. nor
that the assets were not worth so. 900. 00O
nor that the directors were controlled
by Mr. Schwab.
Unfortunate Contracts.
Mr.. Corbin held that the statements
Of the committee on reorganization could
not be considered proof Of insolvency,
and these were the only things in the
shape OF such proof offered by the com
plSinants. The steel company, he said
had been held to be a highly respectabl
property, worth more than its estimated
value. Some of the subordinate giants
had been unfortunate in contracts. ac-
cOrdinE to the Letter of the committee
and the company needed working capt
I tai. That was the gist he said of the
treasurer's report. He did not say there
vas any debt due which the concern
was unable to meet. He claimed further
that in the figures the insolvency Of the
company was not proven