1903-10-25-New York Times-Shipbuilding Trust Case
New York Times
25 October 1903, page 9
SHIPBUILDING TRUST CASE
Suit to Foreclose on the Union Iron Works of San Francisco Elicits Charges of Fraud.
SAN FRANCISCO, Oct. 24 -- The United States Shipbuilding Company has filed an answer in the Circuit Court in this city to the suit to foreclose a mortgage on the Union Iron Works for $15,000,000, brought by the Mercantile Trust Company of New York.
In brief the Shipbuilding Company admits that it issued first mortgage bonds, and that the company is a corporation organized under the laws of New Jersey. It denies, however, that the mortgage was certified by the company and that a portion of the said bonds has been lawfully issued or is lawfully outstanding.
The Shipbuilding Company charges that on June 14, 1902, Henry T. Scott, Lewis Nixon, John S. Hyde, E. W. Hyde, Charles S. Hanscom, Irving M. Scott, Charles J. Canda, and Horace W. Ganse, the alleged promoters of the corporation, with Daniel Leroy Dresser, President of the Trust Company of the Reupblic, combined and confederated to transfer the trust property for a consideration which they knew to be largely in advance of the market value for the purpose of defrauding the public; that the property was of but $10,000,000 value,but that they formed a fradulent combination to capitalize the company for $41,000,000, and that at that time the company was running on a profitable basis, with work enough ahead to guarantee a profit of $5,000,000; that a number of persons under their control acted as "dummies," and that John W. Young was one of the "dummies."
