The Savannah morning news., 1904-01-08
SCHWAB A WITNESS
TOOK THE STAND IN THE SHIP
BUILDING CASE.
LIGHT UPON HIS INTERESTS
WAS THROWN BY HIS ANSWERS
TO THE ATTORNEY.

SchWaD says He Thinks He Owns
More Steel Corporation Stock
Than Anybody EIse-AIsO Owns
All the stock and Nearly All the
Bonds of the shipbuiIding Com
pnny-BOards Worked in Accord
ance With His Wish.
New York, Jan. 7.-Charles NJ.
Schwab, ex-president of the United
States Steel Corporation, took the
stand to-day in the hearing to make
permanent the receivership of the
United States Shpbulding Company to
tell of his connection with the sale of
the Bethlehem Steel Company to the
shipyards concern. Counsel Untermyer
examined the witness.
Mr.. Schwab said he had no connec-
ton, executive or advisory, with the
Bethlehem Steel Company at this time,
though he had an enormous pecuniary
interest in that company
HAS there not been a period of in
| fation in the steel business during the
last five years?"
There has been a period OF good de-
mand."
But 1 am speaking of imitation of
values of properties"
80 far as properties with which l
am connected are concerned there has
been none, except so far as is due to
a period of general prosperity"
| Mr.. Schwab declined to make any
statement regarding alleged inflated
value of the Bethlehem plant.
Mr. Schwab, against Mr.. Guthries
advice said that he had, since the for
nation of the steel corporation, sold a
considerable amount of steel securities.
but that an examination of his ac-
| count would show that mostS of the
sales were of bonds, and that, despite
his sale of some of the stock, he be-
! lieved himself to be the largest owner
of steel stock.
Mr.. Schwab testified as to the ex-
| tent of his holdings of shipbuiIding
stock The allotment of stock, he
said, was never" made, and he still re-
tanned all of the stock, $20000.000. Mr.
Schwab testified that of the bonds al
lotted. he had repurchased from his
associates all but $495000 being now
the owner of $9,5O5,0OO Of the $4,000
900 bond issue.
Mr.. Schwab testified to talks with
Lewis Nixon about the latters plan
for a shipbuilding combination. MIR.
| Schwab had no recollection of having
been an underwater in the so-called
Poor plan for shipbuilding consol-
| idation, his testimony on this point be-
| ing at variance with that of Mr. Nix
| on.
How the Government Does 1t.
Mr.. Utermyer's next line of inter-
rogation took up the competition be-
| tween the Carnegie and Bethlehem
companies for government armor plate
| contracts and the understanding be-
tween the two and the government for
a division of the business at the maxi
mum price.
did you not know that the govern
ment, when it asked the Carnegie COM
pany to build an armor plate plant
| expected the two to compete for con-
tracts in good faith?" was asked.
mo, the government did not" Mr.
Schwab answered, stating that the I'M
Outstanding with the government was
that the two companies were to share
! the work and that the price at which
the contract was to be awarded was
always understood by the government
before the bids were submitted.
Mr.. Schwab admitted that he had
controlling interest in the United
States ShlpbuildIng Company and
through it of the Bethlehem Steel
Company.
Mr.. schwab said that he had con-
trolled the Bethlehem Company
through it's directorate from the time
he purchased it, in 1901, until 1t was
sold to the shipbuilding company in
August, 1902. OF the present director
ate six of the seven members were
suggested by him, Lewis Nixon being
the only one who was not one OF my
people," Nixon had been very friend
ly"; Mr.. Nixon, too, is the only men,
4.
cuniary interest in the shipbuilding
company.
Would Do Schwab's Bidding.
Mr.. Untermyer then asked a long
series Of questions about the director
ate Of the shipbuilding company, and
the extent of Mr.. Schwab's control
thereof. Mr.. Schwab admitted that
either he, or his employees for him,
owned the controlling interest of the
company, and that the directorate was
composed of his friends.
He controlled, he said, the United
States Shipbuilding Company through
his stock, but when he went abroad
he left no one, he declared, to rep
resent himself in the company. He
admitted, however, that Mr.. Pam was
on the board of directors at his sug-
gestion and that other members of
the board were nominated by Nixon,
Dresser and Pam.
If they did not select members who
represented my interest they made a
great mistake" he added, evoking a
general laugh.
Now that we have read over the
list you will say that the entire board
was controlled by your" Mr.. Inter
myer asked.
"Well, l have not said So" answer
ed Mr.. Schwab laughing and laying
emphasis on the said"
you had control Of the shipbullding
company"
II did not"
You had the control of s25,oOo,OOO
stock?'
II did,"
"You considered yourself and Nor
gan as controlling Bethlehem, didn't
your"
Yes"
You considered you were entitled
to control it, even after you sold it?"
II did. l was not going to leave a
valuable property to go to wreck and
ruin"
Adjournment was then taken until
next Tuesday.
Nominated by President.
WashinRkon Ian THE Presfderf