The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-01-30
OUR BOYS DID IT.
Two of Them Organized the
Famous Shipbuilding Trust.
Story Is Told in Current Issue
of Worlds Work.
HOW 1T WAS DONE.
Howard Wood and L. b. DALEY
Two of Three Organizers.
Glimpse of 1.-THE Transactions in
Their New Jersey Office.

A few years ago Howard K. Wood, |
son of former Probate Judge ]. G. /
Wood of Topeka, went to New York.
Soon after startling but indefinite
stories reached Topeka regarding the
important positions he held with some
of J. Pierpont Morgan colossal trusts.
After he had been there a time Mr..
Wood sent for Louis B. Daley, son of
John Daley, to come to New York and
/ engage in business with him. What
the two young men have been doing
! has been n puzzle until row when 1t
appears that they were important fac
/ tors in the organizing of the famous
| ship building trust. The story is told
in an article in the February issue of
| The WoIld's Work. The article is by
Henry Wysham Lanier and is entitled.
''Ohe Trust and What Became of 1t.
| The trust referred to is the Shipbuild-
ing trust, which has in measure dis
| credited Pierpont Morgan and dis
graced many Napoleons of finance in
! New York.
Part of the article, referring to Mr..
Wood and Mr.. Daley, is as follows:
IF an outsider had been privileged to
be present in a certain Jersey City
office on June "a, 1902, he would have
/ been profoundly impressed. For in
spite of billion dollar corporations and
the vastness of American industrial ex-
pansion, most of us are still not on
| particularly intimate terms with mil
/ lions in the flesh. and the three men
| who sat about a table in this office
on the day mentioned were making fin
ancial history on a large scale. These
magnates were the president, vice pres
I ident and the secretary and treasurer
/ of the United States Shipbuilding COM
pany (famiIiarly known as the Ship
building trust and since they COM
prised the entire board of directors,
they proceeded to consummate busl-
I 80 sr@aT1 10
The secretary Urea Surer read a long
and detailed letter from one John W.
Young. Offering to sell to their COM
pany the entire capital stock and prop
erty of seven ship building concerns
Zone of them among the three largest in
the country the Bethlehem steel
works, and sundrY trifles of real estate
and the like for about 81. 100000 IN
stocks and bonds. and this offer was
| Immediately and unanimously accepted,
! without even a discussion.
1" Clearly, the innocent beholder
would have remarked, his eyes bullying
with wonder, these men must be giants
of industry. at whose tread the world
of finance shakes. to handle thus so
yet one may look in vain in the
financial directors or the lists of
wealthiest Americans for the names of
these gentlemen: Louis B. Daley,
Frederick K. Seward, and Raymond
! Newman. Indeed, we have Mr.. Dailey's
own word for it that he did not even
! nave q bank account at the ElIie
AT least, then, they must have been
ship building experts, familiar with
| every detail of the business and OF the
plants purchased
well, the vice president testified
year later that he had never heard of
the Hyde Windlass company. one of
the concerns he bought; the secretary
| treasurer was aged twenty-five, an
eight months lawyer. an ex-1nsurance
| agent and bill collector: on the witness
| stand he expressed belief that the Beth
/ lehem steel works. also purchased, was
located at Homestead, Pa. Qt is really
at Bethlehem). and declared that he
knew the Canda Manufa curing COM
pany (another plant in the dead was in
the ship building business because he
had seen its firm name STAMPED on
piece of ironwork on a Fall river
steamer! CThe Canda plant made car
| wheels when it did anything the
best informed people are still wonder
| ing what good it was supposed to be to
the ship building concern)
1T does not take any special acute
ness to see that these three individuals
were dummies, going through the
forms Of directors duties at somebody
else's direction. In point of fact, to
leave one of the most farcieal proceed
ings on record in modern business, they
We're all irresponsible young clerks in
the office Of a trust company in New
Jersey, who voted for anything that
was put before them as part of their
regular routine duties. They were pup
was pulled. The question becomes who
pulled the string?
THE investigator gets little light on
this by a glance at the natural point of
inquiry-the beginnings of the ship
building company itself. This enter
prising concern had come into being
only a week before the events narrated.
It was capitalized at $4,000, and the
three incOrpOrators were Howard K
Wood, Horace s. Gould and Kenneth K.
McLaren, who subscribed for all the
thirty shares of preferred and common
stock. These individuals seem to figure
in no public records L have been able
to discover outside of the Jersey City
directory, but by a strange coincidence
they, too, were all employees of the same
trust company. Mr.. Gould declared on
the witness stand that he received
from somebody a share of preferred and
: a share of common stock and saw
, these paid for at the incorporators'
: meeting with a check drawn son or by
the Trust Company of the Republic
Not much in the way of responsibility
here!
Now. it was from these three incor-
porators that our three dummy directors
Z obtained a supposedly legal right to exer-
else their function Mr.. Wood cone of
the former assigning his right to one
, share of common stock to each of them
to qualify them for the office. But the
records show no stock whatever issued to
! these gentlemen or placed in their names
I which raises an exceedingly interesting
: point of law as to whether the shipbuild-
ing company ever had any legal existence
or if it was not as Mr.. Untermeyer
claims, merely theory.
IN word, therefore, during the in
corporation of the company and during
the most important acts of its career
raising its capitalization from 5000 to
81, 100000 and spending the whole thing
for a group of shipyards-no one of the
responsible people appears in any official
record Fortunately, the efforts of two
men have helped to. pry the lid off this
mysterious pot sufficiently to give the
public a sight of the devils broth inside.
James Smith, jr.. the receiver. in his ex-
, traordinary report of October31 and Sam
uel Untermeyer. the lawyer conducting
the case for the bona fide bondhOlders.
. with the help of some financial and ship
ping experts, have enabled US to come
very close to the details of one Of the
, most amazing and disgracefuI CHAPTERS in