The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-01-03

suspicious were confirmed or disproved' A. have no
that duty; the party 10 whom inc loan
made wing failed aai having been t Now
! York road the matter was allowed TO remain so until
some sol 70 Ds ss
Board Trustees suspicious a. 20 the New YORK Cen
port ther than ad not consider that loan worth
anything until the reconsruction OF The New Jersey roao
effected
| Ills needless to say that Mr.. wangam's opinion as
to the value OF that loan Is In full accord win the
| single question and answer from this testi-
mony will suffice TO show tho wortnlessness OF tho
| Jones loan.
10 Mr. Jones other the bond. pedred by him as col
lateral A. think 40 not think he isa wealthy man.
THIS answer should DO read IN connection with the
fact previously stated that the New Jersey and New
YORK Railroad Company claim tho ownership OF these
bonds ana that the National Trust company mas peen
enjoined touching their sale.
| THE SECURITY WATERFOWL.
Passing many MINOR points OF interest In Mr. Man.
CAMS testimony, desire briefly 70 aiiuue 10 trans
! aoion with the Security y ink OF Watertown. loan
was made 10 this oank IN 1878. Soon aitorward the
bank Jailed and was p iced In the hands Of receiver.
The loan referred was not pad, and no enor, mas
made TO realzo upon colaefals which were nsuh
security, ana there exists no recourse WHEREBY
the deficiency may be made good the ooaterais
embrace $4,000 of the mortgage bonds OF the pavIs
! Sewing Mach ne Company, oil Watertown. which that
company claims us IT'S property. 1t is also worthy OF
mention that seven OF these bonds, Ia par Naiue
81 600 never received tho sgna OF the president
OF the COMPANY Issuing them, who, ut The time the
loan was Negotiated, was trustee Oh tue Na'ionai
Trust Company. Whatever the col,atcrals may DC
worm. they must according TO MI Mahsans tes'i-
mony, be placed among tho assets oil INC company
The Doughty loan Is pertinent Illustration "i the
presidents methods and requires iuness OF treat
incu, This loun grew out OF series OF loans made
to Theodore Berdel, between November 10, 1871 ana
November l. 1872, inclusive. MI Berdcil lniiea IN
1873 and the coaerals which the company held were
found TO be inadequate AS tho company had no
other recourse 1t should have realized upon
The colaterals ana charged the deficiency 10 profit
ana loss. ThIs plap however, was not followed. lne
securities were neid untIl June 1919, wnsn .ney
were nomnally sold to Mr. Doughty at iuiiy twiee
their market value. Al the date named Bcrdei owed
the company Slll 0S5 49, TO when was nudeu arrears
OF interest increasing tho amount 10 xlolo"o ms
sum was then osensiDly loaned TO Doughty on Der
dcs securities In further illustration oil this trans
action and order that you may luiy understand ts
character, append the following testimony Oh Mr..
Mangam:-
O. Who is Mr. A. H. Doughty A. He is a brother'inaw
O. Was the loan Of s. ooo which appears to have been
purchase OF those bonds transferred to him u that
DO you recognize him liable this company for tho
balance due up that loan win ,he = nose 'f of
convenience tor carrying that loan along than Tor any oher
{, since the date of the reorganization of which
have spoken you received second mogase bonds
o. rue ' h"nsy Yes sir :"
lad Mr. Doughty thing to do With the ss otes clio S
taking bonds in exchange for those
by me repressniirg nm in foreclosure.
n either Of pnepa or the
sum loaned him in june, ls74s 4. 10, sir
person in behalf Of this company tor tine eynep" or
O. You not to.day consider thus company tho owner
q The eoaIeras appeaing on is books in .hs name OF
him from any loss upon A. anu II any prt arises rom
certainty Sraaeed hn fro m loss in TIC inter because
il done for the benefit oil the company thah ior
q, From all the light have upon this transaction do
aer"s ng of aoe When the present replaced A. In
thai light | consider IT, :,
Doughty loan At all Out mere matter of conven-
fence 70 me rust Joaps"y yns Of n second
mortgage DS s0S bonus OF H. Waikiki Valley railroad
come when these bonds viii bring their face ,.
wSuld now sell orE A. 40. sir They are the
board aud aware that there is any market value
for any OF these stocks at present
THE HuIDgKoPER LOAN.
The last of the called loans Is that In the name OF
gam testhes TO the following effect Like those al
ready noted Will be seen, TINS loan IL purely ncti
tious. and Is remarkable chiefly on account OF the
large amount involved s354 41O2o, aud the widespread
receptions Which IL revcas:-
c. In regard to the loan standing in the name Of f. W.
the rule applied to the Doughty loan? A. The bonds
pearng conaeras were bought by liudesoper at the
OF acquiring Title preparatory to tue trecioure. -
tonai rust Company for any deficiency that MAJ be-
found exist in the loan standing in his nnme a. do
& Were the $4,000 Of the Chicago Danylle and YIN
the reorganization oil that road recently completely A.
O. Have the assessments made by the Committee OF
organization those bonds been pa'd BY the company
O. AND included suppose. part of the loan in the
O. DID not the loan to r. W Iuidekoper have its origin
in the purchase of the first mortgage bonds OF The Chcsgo
o. BY whom were those sold tho National Trust
Company A Thew sold by W. Is. shattuck. he
was tho agent OF that company.
The bonds referred to were purchased In 1872 Tho
amount $500 600, and tho price paid SIS. Mr..
Shatiuck was then a trustee OF the National Trust
Company and IA MEMBER OF the Executive Committee.
The prices which he pau to The railroad company for
the bonds delivered to the Trust Company
nd m a per Tha mi
dent OF the has testified 10 this iact Default
was made by the railroad company IN 1878. In Feb
ruary, 1874, 1t agreed to purchase the bonds then
owned by the Trust Company aud pay therefor all
they bad COST including interest, provided the pro-
ceeds would be lent tho railroad company upon tho
same bonds as collateral AS an Involvement the
Bloomfield mortgage was offered as additional Sc
curity. Tho railroad company also agreed that such
OF the OF the Trust Company owned any OF
the railroad bonds individually need not fund their
coupons, but that the railroad company would under
take 10 pay such coupons as soon as practicable" TINS
scheme was carried out but the railroad company
failing make It's pay ments agreed the coaterals
sold and became the property OF the Trust Com
pany. Afterward followed the nominal sale TO Jude
keeper ExPresident Judson aiso states tnat in pur
suance OF the agreement respecting the interest OF
trustees of the National Trust Company in
the Chicago, Dsnvillc and Vincennes Railroad pay.
mcnt OF coupons we're made TO two gentlemen whose
names he has furnished. The Hudekoper loan
amounted December to $500. 470 rs. Charges
have been made SINCE which increase IT S556020 20.
Against this the company holds cola toras WORTH prob
ably, Sl5S $3.50 23 showing loss Of sl97,O64 O5, OF
which Mr.. Mangam was well informed. for he had
made sales Of Inc came class Oh securities only allow
weeks before
FICTITIOUS LOANS
The foregoing lctCns, classified under the head of
loans, make up chapter OF financial history which,
II IS 10 be hoped, rs without parallel The culpablc
nature OF the acts, taken II connection Win The dc.
captions which they mprcfendcd, apparent, ana
IL Is unnecessary that should write one word either
In condoDcment or IN condemnation.
next cali your attention to several transactions
which may he legitmatey called loans, yet III their
character and bearing they are ncbrIy as repre-
Eensible those before mentioned. la 1871 loans
aggregatiug ST. 900 wero made 10 two individuals. In
July, 1874, the balance OF principal unpaid was
S6,535 20; the arrears OF interest amounting 10
sl,355 23-making all $3.50 As. Inc only COL
lateral hold 10y the pany for the last named
l25 OF the stock OF tho Jefferson Iron Com
pauy. AT the time this stock taken by the Trust
Company 1t had no market value aud had not been
pay lug divylends These loans were closed July 3
1874 the stock Of tho Iron Company appearing to
have been sold Tor $1,000. On the Same day this den-
teal stock made 10 do duty the sum OF 81, 900
as collateral for new loan in the name OF another
party, who was dcbitcd win the full amount due upon
the other loansvz, 81, $50 A.. 1t should be borne
s,.lg. hat fhA tive aftAs