The sun., 1919-04-30

his retainer by tn company appear ns I,
regular transaction.
This McAdoo affair, Mr. Frost said.
was merely one of many which con-
WINGED him that Carse was not proper
person TO he entrusted with the control
Of the stock. Carse also brought about
10 much friction In the company's engine
plant at New London that the whole
technical staff. the men who stood at the
head Of their branch OF the engineering
profession In this country, threatened to
quit if Carse did not stop interfering
with them and writing them Insulting
letters"
To provide the background for this
split In the company Mr. Frost detailed
the development OF the company from
the day when John Holland, the inventor
Of the submarine, interested Frost In
1885. Frost was JuSt then out OF col
lege. His father, Calvin Frost, was one
Of the leaders OF the bar In New York
and a man Of some wealth. Frost raised
100000 TO back Holland, and the
Plunser. the first boat, was built Cal
vim Frost put UP a certified check to
guarantee the expenses OF this venture
The Holland was then built by Lewis
Nixon, and after trials which showed its
defects was found to be the first practi-
cable boat.
had Debt becomes Fortune.
1ssac L. Rice then became interested
In the company, having supplied the
storage batteries from his Philadelphia
electrical plant. and finding no way to
collect the $4,000 due him. except by
backing the company. 1t Is a curious
fact that when Mr.. Rice died the most
valuable asset he left his family was the
stock in the Electric Boat Company,
which he had taken to offset a bad debt
None Of these men knew anything about
boats, but Capt Frank T. Gable. one OF
Rice's experts. showed them the de-
fects in their design. and he was re-
tained by the company, with which he
has remained ever since
Then Frost went to Washington and
got Congress to pass an act making 1t
mandatory upon the Secretary Of the
Navy to purchase flve submarines The
Government inspector who supervised
this work was Lieut.. Commander Law
renee Y. Spear. who became converted
to the submarine. and Joined tho COM
pany as its structural expert Another
navy man. Davidson. became the head
OF the engineering department with
Spear. and In this way the company
drew to II the men who make It a sue
cess. Spear got $4,000 a year, while
Frost. who had put his fathers and his
own money into II. got but $4,000.
Rice went abroad in 1900 and got con-
tracts from the British and other Gov
ernmenta which enabled tho company to
live and pay dividends for a time, al
though when the war started this sup
port failed. Carse resigned as director
In February, 1918, according to Frost.
because he did not want to be associa ted
with falling concern. The stock was
down to 8.
When the war started. however, the
company doomed. Charles NJ. Schwab
came back from England with contracts
for fifty submarine chasers at $4,000
each and twenty submarines, ten of
which we're built in Canada. Later the
company got another contract for 500
chasers Mt 100000 each. and the great
era of prosperity set In. Carse had
been brought back into the company by
Frost. but, the latter testified, had
no sooner got settled in the presidents
chair than he began to disrupt the staff
which had worked against disadvantages
for ~ many wears
The case VIII be continued to-day