New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-01-14
CONFESSES INSOLVENCY.
RECEIVER Is PERMANENT.
ShipbuiIding Company Has Schzeab
as Co-defendant.


shipbundtng Company yesterday when the op-
posing counsel in the shipbuilding litigation ap-
peared before Judge Kirkpatrick in the United
States Circuit Court in Newark. w. D. Guthrie.
Of counsel for the shipbuileing company and
Charles NJ. Schwab. presented two motions to
the court that the defence be permitted 10
nle a supplemental answer admitting the IN
solvency OF the company and the other that the
hearing which has been going on before MI
Oliphant. the special examiner, in this CITY, be
transferred TO open court. in order that W.T.
nesses may be protected.
Samuel Unterrnyer of counsel for the minority
bondholders who brought the suit for q per1na-
nent receiver agreed to the first motion because
Il attains one object OF the suit and makes
James Smith, jr.. the permanent receiver Of the
company. M. Smith having been the temporary
receiver. Mr. Untermyer, however opposed the
second motion. and will argue on Monday
against the transfer Of the hearing 10 the court
Three applications 10 the court were made by
Mr. Untermyer-one that Charles NJ SchWao pe
made a party defendant in the receivership suit;
another that Mr.. Schwab be compelled 10 an
swer certain questions certified to the court by
the special examiner. and stin another that all
the shipbuilding litigation. including the suit Tor
the foreclosure OF the Bethlehem mortgage be
consolidated in q single suit. Mr.. Guthrie agreed
PENDANT ami he win argue against the other two
motions OF Mr.. Untermyer on Monday.
PLAN TO PROTECT sCHwAB.
Mr. Guthrie appeared TO think that in admit
ting the insolvency OF the shipbuilding company
and permitting the receivership TO be made per-
rnsnent he had stopped the hearing before the
special examiner and prevented further exam
ination Of Mr.. Schwab. bat Mr.. UnterTnyer made
clear his view that the hearing is TO go on
and that Mt schwab will be compelled to an
swer questions at which ne baked at the last
session Of the hearing.
Mr. Unter7nyer had started in yesterday when
Mr.. Guthrie interrupted him. saying: Your
honor, We come before you with motion which
is OF prime Importance in this case. one which
VIII do way with all the Others. We concede
the hopeless insolvency of the United States
Shipbuilding organization. 1t has defaulted IN
its obligations for current debts, in it's CONNER
ciaI obligations and in the payment OF interest
upon It's securities
do you mean 20 maintain that the granting
OF your motion VIII put end to the taking Of
testimony in this case?' Mr.. Untermyer asked.
Eyes. contend that it WILL" Mr.. Guthrie an
swered- "An that the prayer asks is that the
company be declared insolvent and permanent
receiver appointed in order to prevent the dis
meInberrnent OF this company. and 10 harbor it's
6 motion for permission to file supplemental
answer setting forth the insolvency as have
stated"
Mr. Guthrie said he wanted time to answer
Mr. Untermyer's motion to compel Mr. Schwab
TO answer questions about his private financial
affairs and questions affecting his personal rep
utation. and the motion to consolidate all the
shipbuilding litigation into one suit
STILL ALLEGES CONSPIRACY
mr.. Untermyer went on with his argument for
his motions and read from the original bill Of
complaint IN the receivership suit, TO show that
charges had been made OF fraudulent conspiracy
between Mr.. Schwab and certain directors of the
shipbuilding company 70 place the Bethlehem
Steel Company IN the shipyard organization at
an exorbitant price. and that there was after
ward abundant evidence of determination to
wreck the shipbuilding company by Withholding
from 1t the earnings Of the Steel company.
MIR. Unter7nyer said that the new supplemental
sswer Mr.. Guthrie desired to put IN was not
-cceptable 20 the compissnants. He said that
while IT satisfies the original bill OF complaint as
TO the insolvency OF the shipbutlding COMPANY
and the Justice OF the appointment Of a perra-
nent receiver, It makes answer whatever TO
the charges Of fraud and gross announcement
set forth so clearly in the bill of complaint Mr.
Cnermyer sought TO prove TO the court its tur;s
oicton IN the case and its power to consolidate
the actions.
II suppose" he continued, that upon the f1linz
OF an application OF the defence for the anno,nt
naent OF a permanent receiver your honor will
grant the application but It VIII be only an in
terlocutory decree. But the Conklin bill of COM
plant Is not only asking for the appointment n,
a receiver. II charges fraud and rnisrranaee-
naent. and these in such a way as to make out
cause or action against Mr. Schwab or he
would have demurred. He has stated on the
witness stand that he IS defending this action
that he has retained Mr. Guthrie as his personal
counsel TO safeguard his interests Now vonr
honor, we know we must accept a decree OF in
soivsncy, but ask that this ehall not mt :,
end TO the actions involved, and we prav thai
you VIII consolidate the two foreclosure sp,ts
and,the Coul1lin suits"
SAYS MOTION GUSTS THE, COURT
AS 20 the motion to amend the bill NJ co,,-
PLANT by making Mr.. Schwab party defendant
and 20 issue subpoena against him." said Mr.
Guthrie, so far the defendant is conce,naa
We concece that that molten be granted. and
that an order be entered now making Mr.
schwab a party defendant; but, in all cando.
and nanluaess. we say TO the court that the
entry OF such order would GUST this court Of
jurisdiction"
I'VE think not" said Mr.. Unter-nyer
But Mr.. Schwab has been guilty of any
wrongful act" Mt Guthrie added he must