The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1904-01-07
.SCHWAB REPLIES
TO HIS ACCUSERS

NEW YORK, December 22.-Charles
NJ. Schwab today filed his answer to
the cross bill of the United States Ship
building Company and James Smith,
Jr., its receiver, in the United States
Circuit Court. The case is that of the
company and its receiver against the
New York Security and Trust Com
pany and Mr.. Schwab.
Schwab takes up the various allega-
tons and charges of the cross bill and
says: Il deny that I was ever or be-
came one Of the promoters of the ship
building Company, or that l and a
number of persons associated with me
acquired the capital stock of the Beth
lehem Steel Company, as ayerred H.
said cross bill"
Emphatic denial is made that he ever
conceived any scheme of transferring 20
the Shipbulding Company the stock Of
the Bethlehem Company at an excess
sive rate or upon conditions permitting
him or his associates to control the
Shipbuilding Company or to absorb fer
his benefit "all of its property and as
sets, to the injury of its creditors and
of its bona fide bondholders, or other
wise"
Schwab denies that he ever made any
false representations regarding the
Bethlehem Steel Company, and denies
that his stock on July 81, 1902, was not
worth to exceed $75OOOOO. Schwab re-
pudiates any connection with John w.
Young, and says he never caused the
latter to propose to the shipbuildng
directors to transfer 100000 shares of
Bethlehem stock, $1O,OOO,OOO each Of
bonds, preferred and common Stock Of
the Shipbuilding Company.
He says: IT admit that I am the
owner and holder of upward of $4,000, %
900 of the $10,0O00OO of bonds and up
ward of 100000 of the $4,000 900 Of
the preferred and upward of $4,000, 600
of the $10,0O000O of the common stock
of the Shipbuilding 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
for the stock of the Bethlehem Steel
Company, except that l sold and trans
ferred some of said bonds and stocks TO
third parties.
Schwab says the shipbuildng com
pany is not entitled to enforce any al
legged Indebtedness against him. He
ayers that neither he nor his associates
conspired with the dummy directors
of the shipbuilding company" to have
inserted in the mortgage to the secu-
rity and trust company and in the char
ter of the shipbuilding company pro-
visions which would give him or them
absolute control of the shipbuilding and
steel companies, with the power to so
manipulate the corporations as to cause
default in the payment of interest,
thereby defrauding creditors, stock
holders and bondholders Of the ship
building company.
Schwab says that he and his assoc
ciates had nothing to do with the with
holding by the Bethlehem Company of
the dividend payments on the 10000
shares of its stock owned by the ship
building company for the purpose of
wrecking the latter concern.
The defendant continues: "I DENY
that l or the Security and Trust Com
pany or the directors of the Shin
building company or of the steel com
pany or any associates of mine, or
the reorganization committee, or of any
of them, acted frauduIently or in bad
faith in the premises or for the purpose
| of destroying and wrecking the prop
erty of the shipbuilding company in
the interests Of myself or any associates
Of mine, and I deny that this suit is
brought at the instance of the reorgan-
ization committee and myself, or any
associates of them, for the purpose of
carrying out the aforesaid or any other
wrongful plan, or of prohting ana TAX
ink advantage of the alleged defaults
occasioned by any wrongful or fraudu-
lent acts, to the injury Of the shipbuild-
ing company or the bona fide creditors.
bondholders Of the shipbqilding COM
pany."
After specifically denying any and
every charge Of fraud unlawful COM
bination, conspiracy or wrongful act in