The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-04-27
HE SUES HYDE UNDERWRITERS
DRESSER WANTS TWO MILLIONS
LOST ~ "SHIPRUILDING."

underwriting syndicates has been named
@, a defendant In a suit brought by Daniel
leroy Dresser in the Supreme Court to
recover S. 600 900 which he alleges was lost
by him in the Shpbuilding venture az a
result Of fraudulent practisas by the Hyde
svndicuts and others. The other defend
6uts are the Merc8nt lie Trust Company,
Alvin W KreoA. its vioe-president and a
director OF tho Equitable Life; John j.
McCook, Charles u. Alexander, Charles
{. Dcming and william c. CULVER. CO.
partners in the law firm Of Alexander 4
Green. counsel for the Mercantile Trust
Company. and John W. Young. The COM
I laint was served yesterday.
Mr.. Dresser In st atement issued last
night say5 that in the trial Of the case he
will bring out fully by do ,umentary evil
Cence the operations Of the clique in
Guiding tho part which tho Hyde syndicate
played in the deal. He does not mention
Mr. Hyde's associates in this underwriting
syndicate by name in his complaint, but
describes the syndicate as james II. Hyde,
John Doe and Richard Roe
MI. Die ser asserts ~ his complaint,
upon information and | oiief, that the de-
PENDANTS, James II. Hyde and associates,
have been and are engaged as a syndicate
IN the promotion Of various corporations
and in tho sale OF the securities therefor,
through the Mercantile Trust Company
q I'd other corporations over which they have
controlling interests through the owner
ship Of stock or by other means, By means
OF this control tho members Of the syndi-
cate, tho complaint alleges. 'are able 70
obtain for themselves large, fraudulent
and secret gains and profits
He charges Mr.. Hyde and the other de-
PENDANTS with having Joined together In
the promotion Of fraudulent combination
Of shipbuilding concerns, in the fraudulent
forming Of a company 10 take them
over at inflated values and In the
fraudulent marketing Of the securities.
He alleges that the defendants, each Of
them, vilfllly and knowingly, with intent
to cheat and defraud the plaintiff and the
public, made and procured underwriting
which were fictitious, fraudulent and Of no
avail The underwritings which were OBJ
tanned by the defendants, Mr.. Dresser as
serts, were not good financially. OF the
100000 which Mr.. Dresser. according
to his own statements. was led 70 believe
had been subscribed on underwrltings in
France only t25 900, he says, was ever paid
In.
IAN the underwriting In excess OF that
obtained by the plaintiff he says, was
known to the defendants to be invalid
and fraudulent and was adopted and used
by the defendants in hlrtherance Of their
fraudulent scheme to obtain moneys from
the public
Among the underwritings which we're
false and fraudulent and were known
to be Isuch by the defendants was. Mr..
Dresser alleges, 10000 purporting to be
underwritten by the Mercantile Trust Com
pany. BY a secret agreement unknown
to the plaintiff, il is alleged, neither this
sum nor any sum was TO be collected from
the Mercantile Trust Company, but the
underwriting, It Il charged, was con-
oocted by the said defendants and was
by them intended as a fraud and a lure
20 induce others to undsrvrite on the faith
Of the representation and standing OF the
said defendant Mercantile Trust Com
pany.'
The Mercantile Trust Company, he says,
induced him, by falsely representing that
the French $4,000, 900 was on it's way over
10 this country. to borrow 50, 10000 on
collateral supplied by that company.
All Of the representations on which the
loans were made, he alleges, we're reiterated
TO him by John J. MoCook when Mr..
McCook stood, at his own request as co n
ell for Dresser, and when Dresser had been
induced 10 help the Mercantile Trust Com
pany syndicate out with it's -, 900 900 Of
underwriting, It was McCook who, a. his
counsel and as counsel TO the Trust Com
pany Of the Republic, OF which Dresser was
president drew up this letter addressed TO
the Mercantile Trust Company, and had
him sign Il:
Aug. 7, 1902.
GENTLEMEN: In the under ~ agree
mont dated April 10, 1907, relating 20 the bonds
Of the United states shipbuilding Company.
the name OF your company was inadvertently
used In place Of our name. Instead Of chang
Ing the agreements, which have been already
executed by the underwriters who are ready
I, act under the same, we prefer 20 ask you
10 act az our agent in the matter, and in further
Hnoe Of this suggestion we hereby request
you 70 take such action under said agreements
AZ may be requested by our counsel. Alexander
4 Green, and agree TO bold you harmless from
or on account Of any action you may 20 take,
including all liability for any money 10 DO
paid under such direction OF yours. Further
more we will procure from the United States
Shipbuildlng Company such authority as may
he necessary 20 put you IN possession OF q
sufioent amount OF the preferred and com
mon stock and bonds OF that company TO
enable you 10 meet the requirements In stocks
and bonds Of such underwriters a. may make
Payment 10 you under their aforesaid agree
mens. and when you are protected 70 your
satisfaction In this respect you are TO turn
over to us any moneys received by you from
the underwriters. Yours truly,
d. In RoY DBEssIR.
Mr. McCook, Dresser alleges, told him
that Il was unnecessary 10 enter this letter
and another Of equal importance on the
records OF the Trust Company Of the Repub-
lie, but that II would be sufficient II the
letters we're turned over TO the company's
counsel, Alexander A Green. Mr.. Dresser
fAys he turned them over. relying upon
the promises and statements Of these gen
tlemen and upon their standing a. mem
ler Of the bar.
Mr.. Dresser alleges that when the notes
lecame due which he bad signed on the
Representations Of the Mercantile Trust
Company and others the defendants re-
fused to take care Of them or to pay any
part Of them. In meeting the notes he vas