The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-10-16


that the wreck of the company was due tc
Mr. Schwab withholding the profits of
Bethlehem instead of letting them flow
into the Shipbuildng Company where they
belonged. / asked Mr. Harris to telephone
to Mr.. Schwab and he did so. Ii out of
the mess and mire, the United States
Shipbuilding Company can be rehabilita-
ted that is what l want to see done. [
have no financial interest but feel that
it will help YOU"
| Mr.. Dresser said that when he u.
dertook the shipbuilding project for the
Trust Company of the republic, he be-
lieved that 100000, had been under
written in France.
Mr.. Dresser said that he saw the name
of j. P. Morgan in the list of members
of the Sheldon syndicate, but did not
know if Mr.. Schwab was a member. The
witness made no independent investigation
/ of the shipbuilding plants, but accepted
the reports of others. He testified that
| the prospectus had been approved by the
Mercantile Trust Company. He said that
he had several talks with Mr.. Pam dur
ing the month of 1902 about the earnings
of the company. Mr.. Pam showed him
reports which indicated that the earnings
of the shipbuilding corporation for the
first three months were about 81 100, 000
about half of which came from the Beth
lehem property. The witness said that
when he told Mr.. Pam that he. Dresser,
must make an assignment. Pam told him
he must resign at once from the ship
building board. Mr.. PAM he said seesl-
ed to be running the whole company
The witness had moot known that they
were in debt when the prospectus was is
sued. The underwriters took up the bonds
which they had subscribed, paying ninety
for them and getting bonus in stock.
There had been no other assessment
The bonds had been offered to the public
at ninety-seven. When the Bethlehem
property was bought he knew that it was
subject to two mortgages of about $780,
900. Mr.. Schwab, according to the WIT
ness said that the Bethlehem had earned
81, 400, 000 which had not been taken from
the business. The witness said that other
than he had stated in the morning he had
made no profit from the transactions.
Mr.. Dresser was succeeded on the stand
by George r. Dayley, assistant treasurer
of the Corporation Trust Company of New
Jersey and one of the resident directors
in New Jersey of the shipbuilding COM
bnation. He testified that his company
made practice of furnishing resident di-
rectors for the corporation organized in
New Jersey, and that he and two of his
fellow clerks. Messrs. Newman and Sew
ard had been made directors of the Ship
building Company, He did not know who
had asked him to act as director, hut
understood that the arrangement was
made by Alexander & Green, with the
New York branch of his. company. He
said a single share of stock had been
bought for him in order that he might
qualify, but did not know who had paid
for it or how it had been paid for.
After much fencing, he said that he
did not have personal oank account
at the time he acquired the qualifying
share. He remembered attending at least
two meetings, but kept referring Mr.. I'm
termyer to the minutes for information
as to what had been done at the meetings.
He had not visited any of the plants, and
had not ordered an appralsement OF prop
erty and while he admitted that he and
his fellow directors in New Jersey knew
nothing of the shipbuilding business, ex-
cept such information as reached them in
the documents laid before him, he would
not admit he was merely dummy direc-
tor. He finally said, however, that he
and Ol0cTS dcIeu III the QTecliOH VI lHe
attorneys for the company. He knew III
the Union Pacific Works through the press
but did not know where the Bath Iron
Works IS.
Mr.. Untermeyer produced the meeting
records, showing the increase of the CAPT
tai stock from SO 900 to $4,000, 900
and the proposal from John w. Young
for tile sale of the Bethlehem property,
but the witness could give no details as
to the meeting. Mr.. Untermeyer reminded
him that he and his fellow directors had
voted to issue nearly $4,000, 10000 worth
of securities and the witness said that he
knew nothing of the plan to buy the
Bethlehem Works until he came to the
meeting. He said that the directors had
exercised no discretion or judgment In
the matter, but had followed the direction
of counsel.
Frederick u. Ward, lawyer and the
second of the New Jersey directors, was
also called as witness. but the examl-
nation had only proceeded short distance
when the hearing was adjourned until
tomorrow.