The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-01-08
CONTROLLED BETHLEHEM
COMPANY SINCE 1901
Maintains That There Was Mo compe
tltion Between the Two Companies
for Making Armor Plate and
Government Knew 1t.

New York, January 7-Charles M.
Schwab. former president of the unlteu
States Steel corporation, took the stano
today in the hearing to make permanent
the receivership over the United states
Shipbuilding company to tell of his con-
nection with the sale of the Bethlenem
Steel company to the ship yard concern
The attendance at the hearing, which
had fallen off during the taking of testi-
mony, was greatly increased today In
teresting testimony being taken from the
man who arranged the sale of the Beth
lehem plant from ]. P Morgan Il Co..
to whom he had transferred 1t as syndi-
cate managers to the United States Snip
building company, the arrangement be-
ing such, Receiver Smith alleges, that the
shipbuilding company has been unable
to control the Bethlehem company or
gain possession of it's earnings to keep
the shipbuilding company from insol-
vency
Continuing his testimony after recess.
Mr.. Schwab said he did not know whether
any of his shipbulding stock was reg
istered in his own name. large part or
it he had no doubt was registered in the
name of oliver Wrenn of his office, but
he refused to answer when asked II, in
the case of the shipbuilding company,
and other industrial enterprises, large
parts of this stock was not carried in the
name of his employees He said that the
actual beneficial ownership, so far as
stock liability was concerned, was his.
Had Talked Over Plans.
Mr. Nixon had frequently talked over
with witnesses his plans for shipbuild-
| ing consolidation Mr.. Schwab had no
recollection of having been an UNDER
writer in the so-called poor plan for a
shpbuilding consolidation his testimony
on this point being at variance with that
| of Mr. Nixon.
| Mr. Schwab professed lack Of recollec-
| tion of details of the poor shipbuilding
project, but said his confident purchase
of Bethlehem was not In any way con-
nected with this effort to arrange con-
solidation.
Mr.. Untermeyer's next line of intero-
cation took up the competition between
| the Carnegie and Bethlehem companies
| for government armor plate contracts,
and the understanding between the two
and the government for a division of the
business at the maximum price.
| did you not know that the govern
ment, when it asked the Carnegie COM
pany to build an armor plant, expected
| the two to compete for contracts In good
| faith2" was asked.
NO, the government did not" Mr..
| Schwab answered, stating that the un-
| derstandng with the government was
| that the two concerns were to share in
the work and the price at which the con-
| tract was to be awarded was always un-
derstood by the government before the
bids were submitted.
Mr.. Schwab admitted that he had a con-
trolling interest in the United States Ship
building company and through 1t of the
Bethlehem Steel company, saying in reply
to an inquiry If he considered himself the
| controlling factor in Bethlehem's policy:
Takes Credit of Giving Advice.
| "If you mean that l own the controlling
stock of Bethlehem and the Shipbuilding
| company, | do, and l take the credit of
those properties"
| HAS the receiver of the United States
Shipbuilding company anything to do
with the management of the Bethlehem"
Il don't know"
Your interest in the Bethlehem compa-
ny Is through the Shipbuilding company p
| "Tt is."
Has anybody an interest in the profits
| of the Bethlehem company"
| II made an arrangement with the man.
ayers of the Bethlehem company when ]
bought the property, but | do not know
whether legally or Illegally, that arrange
ment is continued still"
| Mr.. Schwab said he had controlled the
| Bethlehem company through the director
| ate from the time he purchased 1t In 1901
when he and representatives of ]. p. Nor
gan e. Co. reorganized the directorate
until 1t was sold to the shipbuldlng com
| pany In August, 1903.
Nixon Was Friendly.
OF the present directorate six of the
| seven were suggested by him, Lewis Nix
on being the only one who was not zone
of my people" Nixon had been VERY
| friendly" Mr. Nixon, too, Is the only
member of the board who now has pecu-
mary interest In the shipbuildng COM
pany, Mr. Schwab having taken off the
hands of Joseph Schwab, his brother. and
Charles Baker, the bonds they formerly
owned.
Mr.. Untermeyer then asked long Sc
ries of questions about the directorate
of the shipbuilding company and the ex-
| tent of Mr.. Schwabs control thereof Mr..
| Schwab admitted that either he or his
employees for him, owned the controlling
interest of the company and that the d.
rectorate 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 represent himself in the
company. He admitted. however, that
Mr.. Pam was on the board Of directors
at his suggestion. and that other members
of the board We're nominated by Messrs
Nixon, Dresser and Pam
Evoked General Laugh.
IF they did not select members who
represented my interest, they made a
great mistake" he added, eyoking a gen.
eral laugh.
Mr.. Schwab then being asked II his
brother, Joseph Schwab. had not beer
| placed on the board to represent Mr.
| Schwab's interest. replied emphatically
| that hef efconsidered It an insult to a direc.
| tor PLACED on directorate to represent a
| company to say that he represented an In.
dividuaa stockholder. Later. under ques-
tioningl as to individual directors. Mr.
Continued on Third Page.)