The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-02-23
Bis Stock Operations and the Simultaneous
Leans.
One Firm BOrrOwS Four Hun
dred Thousand Dollars.
Irwin and the Subsidy Bill
at Washington.
Vice-Prsaident BsIlowe on the Wit.
neee Stand.

OF l.. c. Challis q stockholder In the Pacific
Mail steamship Company. before Judge Gilbert, In
the Supreme Court OF Kings county, for an In
junction to restrain A. Il. Stockwell, the Presi-
dent, and the other directors OF the Pacific Mail
steamship Company from using or applying the
funds OF that corporation In any other manner
than authorized by the law and their cnarter. 1t
was charged in the complaint that the defendants
had been in the habit Of loaning their reserve and
other FUNDS upon their own stock. dscounting
bills and conducting other banking business
Tor their own ends ana to the detriment OF the
welfare of the stockholders and their right in the
property Of The company. An order to show
cause was granted and testimony ordered to be
taken before Mr.. j. S. Lawrence, the referee APP
pointed for the purpose. The following Is the
testimony taken before that gentleman on March
16, Is, 10 and 20. ls72:-
MR.. sroCgwELL on THE STAND.
Mr.. A. b. StocKwen testified as follows:-I am
President OF the Pacific Mali steamship Company;
was elected TO ONCE on November Is, 1871 about
the time OF my election made examination OF
the financial a1dirs o. the company and found
them TO be In ABOUT the same condition as men,
TONED in the statement furnished by the old Board
On their retiring from Office; in this statement
mention Is made or s242 100 time loans. which are
itiil running; this item means q mortgage upon
certain real estate, but l have never examined
On II, but 1t grew out OF some other transac-
lion; the assets arc represented by bonds and
mortgages upon real estate bu: l DO not know
upon what real estate; loans nave been made OF
the company's money since that date; l cannot
tell the exact amount, neither can approximate
It; they are made generally every day. as near as
can tell they are about $l,5O0000; they vary
every day. sometimes more and sometimes
less; this amount Is exclusive OF perma
nent loans; the securities on which the loans
are made are stocks In good standing, but this
business is generally done by the Vice President
OF the company under my direction, but 1t is left
very much TO him; the time for which such loans
are made is mostly on cal, and they generally
from sixty 10 ninety days; we always take mar
gin OF from ten to twenty per cent; the borrower
gives no obligation In writing but memorandum
Is made on the outside OK the envelope containing
the collaterals; the surplus at the time went
Into ONCE was about s., 900. 600; 1 never made .
loan personally; have directed Mr.. Bellows, the
Vice President, to loan such house much
money; the surplus has increased since became
President from 100000 to $780, O00-that ia taking
into consideration the money paid on ships now
building and for coal on hand the surplus now
10 from s3,O0o,OOo to $4,000 900; cannot tell how
much has been paid on ships nor how much on
coal, but think about $500, 900 on ships; cannot
approximate on coal.
ACCUMULATION OF SURPLUS.
The surplus has accumulated from the legitimate
business Of the company, the earnings OF the
steamers; II, however. in part IL derived from
interest on these loans; should have said that 1t
comes from the earnings OF the steamships, the
interest on the loans and the coupons on the
bonds; never knew Of the company getting more
than seven per cent interest on The money loaned:
In the report made by the old Board, just previous
TO my election, 1t Is stated that there was on hand
among the assets $ss5.0oO United States Hve-
twenty bonds, which cost $9s1,O67 IS; / cannot
tell whether the same bonds are still on hand, for
we have sold some bonds since then there are
other bonds among the assets; 90 not know
which were sold; II the five-twenty bonds were
sold 1t was undoubtedly under my direction, but
90 not remember how often or tor what amount;
gave instructions for bonds to be sold, but l
think IT would amo mt to about one half VI what
was on hand on my election"
mr.. stocSweil, on BENG pressed, admitted that
OF the nve-twenties, s775,oOo OF ten-iOrties
and 10000 OF the 1--WE per cent new.
lie was asAed In his Judgment whether he had not
ordered 10 be sold, and II more than one-hAf had
not been sol1. He replied that he thought so. but
could lot tel how mucD more. Mr. Stockwell,
continuing. said:-I cannot tell what the least
surplus IN cash Is tnat the company has had on hand
since became president irrespective OF the pro.
ceeds OF the sales, put think IL has been less
than sG95.4l0 30. The earnings OF the company
have not at all times been equal to the emergen.
cies Tor the ayment OF money In the transaction
o. the business OF the company, but cannot state
10 what extent the assets or the company were
called upon over and ABOVE the current earnings.
wEY BONDS WE'RE SOLD
The bonds were sold because 1 thought 1t good
time 10 SELL and because the contracts authorized
20 be flied by the old Board or Directors specified
nat the money should be paid at ststea PERIODS
LINE to sell the bonds and raise the money
20 meet these claims. I have bought no
iod. but have contracted Tor steamship.
,ave bought no stocks on account OF the company
ne company been Increased directly or indirectly
~ the purchase and sale OF stocks. The funds OF
.he company have never been loaned to any per.
son or persons with che understanding that the
STOCK OF the company should De purchased with
H.. am positive or this. although did not make
which mentioned as being from $4,000 10
$500 ooo grew out OF the revenue OF the ships and
TIRE WAY MONEY WAS LENT AND WHY.
Loans nave been made TO Osgood Co.. KENYON
and others I did not know that the money loaned
70 these ar!es was 70 be used IN tue stock OF
ss s raeias aa Ina, Gsmpany neaer
OF that stock and It Vas brought to me
lnat | would loan money belonging TO the CON.
against loss. Among others were Colonel
SroesoeeS, A. A: selover, James seloyer, Joseph
These were individual Transactions / agreed 70
loans to these people contemporaneous with these
contracts guaranteeing them against loss, but the
person the same day made one OF these
tracts. but do not know whether they did or not.
IL was hot part OF the agreement. believe there
10 record OF the loans made oy the company, out
I have never seen 10. Mr.. Beilowes has
told me what money he mas on loan,
and | have seen loans made myself. but
nave never seen the book In which these
loans are entered. osborn and Camock nave
bought stock OF the Pacific Maj steamship Com.
pany Tor me- This was aoout January, 1871.
LITTLE SPECULATION.
I do not know the amount, but IL was something
less tnan 100000 shares 90 not remember re-
eevipR the notice OIL tue purchase. 90 NOT recoi.
loct al instance wien notice was served on ne Or
ang one connected with me that certain amount
OF stock had Oeen bought lor tue comyany, anu
that | or any one else went 10 osborn CanDcK's
once and nad II tuIn ned over 10 an individual &C.
count; neither DO ! recoliect purchasing 1900
SHARES or hem before January. 1872, or any special
case. J nave loaned money 10 them PRIOR 10 Jams.
tey !, 1872 bat 40 not remember she amour 81
the time for when ~ vas loaned, nor can isn
yeu Ne oloessnes In TIVE ums saapsinS SstVssn