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

those securities A. Well. objection might have been
e asss y sh ,ss1 Subject C. IN i tie Sar1
% Was a resolution introduced in the Executive Com
rtee calling portion OF that loans A. think very
o Instead of calling in portion the loan It not
divided and placed the of J. J. Gray aud James
Brady trustee A. part OF that loan was called In anu
O. Was that call obedience to the resolution
VIC is + A. Pesemsni A. believe he is brother
may o o' b Ss Is 1876 there Mr. Gray
of 292 so The check representing nas as NJ
RS sssn"ns 4 rsaon his losp .a S.qc
deSi,ed to egeman which the date is credited
fray are You anne hv 70 the purchase and sails secur
O. Did not Mr. Gray and Mr.. Brady, trustee. and Mr.
Hereman represent Mr.. shannon In these trahsac'ons
Did not Sir shannon the securities pledged as
collateral Tor az or nearly al s n Of WIS
O. In what we're the loans OF gray anu Di""s pau
IN re- ard 70 urays did obtain from him
snS a ws As
panys Lam pared 10 answer tnn. ~ "a NV
state wf oss sss tue n name 1s y he
~ Mas he in YORK the cate OF the settlement loan
made 10 him by National Trust Company a. 10
Had you any else authority i.om him 10 sell or
dispose Of the eoasr' 20 the
TO the National Trust oompanys A. considered 'n"'
% Won know that Mr. Gray had TO have any
interest in either coatsrals? a. decline TO
Upon Wat decline to answer the quos;
A. because the o,n mas Dssn ps," anu '"o
o. Regarding the loans made james Brady trustee,
lar que stiors for the same reason A. Yes sir
The duplicty Of Mr.. Mangam in these transactions
IS made painfully promipent by MS own testimony.
He loaned sl44, 900 ON coaterals OF me nominal
value OF 5000 900 OF which s33 900 was represented
by old stock OF the Missouri Pacc ha,iroaa, w"a,n
hllic more than waste paper OF The remainder mere
were Sl75 900 OF the tird mortgage bonus o e san'
road which, Mr. Mangam admits, were no. pay,hg 10,
tcrest Indeed all the securities oniy S33uOO weIo
interest pay ing and the market value d tue whole
fell SNORT OF the loans not less than Sio,o am
not prepared TO say that the loans 10 Mr. cray were
entiy placed III his name, but the examination
OF his account all us ramlhoalioGs, IN connection
with The evidence OF Mr.. Mangam leaves no DOUBT
mon nv mind that Gray had ceased TO BIO interested
In it, am equally certain that trustees OF ms co a
pany parties 10 1t, ana thAt the oaanoc was PAL"
December H. 1871 by Mr.. Mangam
PRESIDENT MANGAM ACCUSED.
Another phase Of Mr. Maneam's dishonesty IN tne
manar emeut OF this found In The purchase OF
the Missouri Pacific Railroad boads TINS transuo'!""
had its origin IN loan OF 500 ooo made Apra 20
1879 TO tho A,Iuntic aud Pacific Railroad Company,
the coIatorals being 5000 600 in the Improvement
bonds OF the NJ ssourl Pacific Railroad company.
named, MIR. Mangam replied :-'l am not prepared 70
say to-day what they worth; they were interest,"
noaa ny psa nvo7ea and was unable
10 pay Trust Company's ioan mo lat'ora.o4uoe
from MI Mansams tes, oy ' Tne rest OF this
transaction is best told by Mr. Aangam himself
O. At what price did you purchase those bondss AT
q Did you pay the railroad company the difference
OF S3O0)6s a. No. sir. r. GOO 900
was nj ICED to profit and loss
of The purchase by this company than fifty cents on
the doars A. heard OF any being sold less than
BIZ You take those 100000 bonds in full payment
Of The loan them by National Trust Company
Gcnd you have sold them at that time for more than
but Should be surprised i could. ,,n.
at that time A. nlermed myself so lar as I'm ,' si n"s
ma" was all the otter
Missouri Pacific bought them ~ that .o ,o.,,oo
A. did from poops VINO prossed know all about them
as s9s so to ys ki consulted cd WITH NJ Fierce
president OF the road, ana with Mr. seiism"h anu "'
O. We're not all Of those gentlemen directly interessSd
II inc oads A. Not AIR Shannon; Mr. seiiSm An ana Mr.
You exchanged the improveme bonds for the third
mortgage bonds the present Missouri Railway Com
w IN, Ise sam aS we these bonds appear to have Gust
the company We considered that To be lair price
for them placed them upon our BOOKS ana credited
tn, difference to profit and loss account.
This pur chase was consummated October ~, 1915
The price paid Tor the bonds by tho Trust Company
nily presumably all they were worth; yet. as Mr.
Maugani says they were placed upon the books at
sixty live. difference being credited ITO profit and
loss account" In hs way the assets OF the company
were ucticousIy increased $50. 600 This KIND Of
uuanclerlns never ials TO bring disaster all who
PRACTISE H. and tho National Irusl Company Is no cx-
cepton the rule Fortunately, the methods oil Mr.
Mangum are followed IN well managed financial in
shall refer To Dut Vi the deccptons
practlsJd Mr. Mangam. On December statement
appeared tho newspapers over his signature, pur-
porting TO give tho condition OF the company on inc
3lst One OF tue Assets Was AN item OF interest,"
amounting to sS3 0lS. OF this sum 1000 proves To
have the part of the booKKceper, aud
nearly $54 900 moro estimated upon the fictitious
loans and loan 0 $40, 0U0 winch no interest had
been paid June 1876 The collateral for this loao IS
second mortgage real estate at Long Branch, n
J. out of which the company may realize SIC, 900
Sis 900 1t therefore follows that The interest IL not
likely be paid. Subtracling SOL 900 from Mr.
Mangams Ss3, 0ls the remainder Is sle,OS, which rs
tina. Af hN IN
have earned this date mad It's loans and invest
ments remained intact. DO not doubt that Mr. Nam
gam FULLY measured the magn udc OF this deception.
THE CHARTER VIOLATED
Section 16 OF the companys charter provides that
no shall be made directly or Indirectly 10 any
trustee or officer or empoye Of said corporation"
have believe that this provision has been re-
served as trustees freely borrowed unds OF the
company IN the names OF other parties also think
that the same thing mas been done by few members
OF the present Board OF trustees, the securities
pledged by them not beng In all cases such as the
company's.. charter authorized section Is, as
amended May IA. 1872, Iorbds the investment OF
moneys received by the company in other
than interest Paying bonds hang, ana dv vS
mortgages on unencumbered real estate WITHIN
the State OF New York" IL also provides that
I'm making loans secured by dividend pay
ing Of any corporation or company such stock
shall not be taken as collateral ut less margin than
twenty per cent of the market value thereof at the
time OF making such loans." IL would be difficult to
enumcrate tho violations Of this law. Loans have
been made upon securities that were not interest or
dividend paying ana %ncn a'a n MOT I,0ra maine ,nS
cases they mad market value in the
scnso IN which interpret the law. THIS
sustained by the schedule OF loans, as
glance ut the coateras viii satisfy you. In fact,
| President Mapgam admits, in his testimony, having
loaned the funds Of the company on coatcras OF the
market value OF which at the time he had no know-
edge, which, to quote his Own language 'tcmpo-
| Tarily" were not paying interest or DIVIDENDS.
" regard to majority OF the trustees deem II my
duty state that tney were not parties to tue viola
OF the company's charter, To when your atten-
has
Mungams transactions were unknown to them.
Their fault lies IN having rcposed too
much faith IN his management and representations
| They are honorable and wealthy men, who have had
| no occasion TO use the company their own inter-
ests their connection with an insoivent nsitu-
ton they iccl more kceny than the pccuniary loss
wnicn they sustain Expressive OF tho feeling OF
these genicnch, incorporate with this report The
following letter. which received soon utter my IN.
vestgali ION began. Tho writer reside this
city, and, al his request, ms name IS withhold:
referring to the special examiu alton of National