St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-02-14
APPEARS TO Be SHAKY.
ATTORNEY GENERALS REPORT OF
DEBENTURE COMPANY
rs NOT VERY FLATTERING.

Says That It Could Not Realize on
Its Assets Without luminous
Loss-He Makes a Complete
Showing of All It's Resources
and Expresses Much Doubt as
to Its Stability.
Attorney General Chllds yesterday !
submitted to Gov. Nelson his opinion in !
the ease of the Union Debenture CONF
pany of Minneapolis. 1t was incorpo-a
rated in 1878, and has been dealing in
and Improving real estate, building
dwellings, dealing in commercial paper, !,
etc. The capital stock was 100000
having been Increased from 100000
when organized. The original ipcor-
porators were Julius L.. Clarke, of
Newton, Mass; B. L. Arbecam. of
Boston; j. Clark Taylor. /. r. Berry
and A. S. Burt, of Minneapolis. The
present board of directors are: F. IL.
BOardman. w. 81. Batelle. E. L. Staples,
l. r. Berry, c. III. Gilman. w. ..
Phillips, j. G. Wing, j. Clark Tracy, W.
Oswald and S. ID. Levitt.
The present officers of the company
| are, l. Il. Berry, president, and E. L.
| Staples. treasurer and secretary. The
other offices have not been filed
The company has issued S250,000 OF
its authorized stock, and is now the
| owner of the same to the amount of
$4,000. A small part only of the stock
was sold for cash. The great bulk of
| the stock issued was exchanged for
| other property. Thus far the bust
ness of the company has been mainly
restricted to selling debenture bonds
and dealing III mortgages and
| other securities, and loaning money to
| a Slight extent. Debenture bonds have
been issaed by the company in NUM-
ber' of series. OF the several classes of
bonds so issued, the following amounts
| appear TO be now outstanding: A series,
900; B series, $500; c series, $3.50; D
series, $1,000; E series. SIS. 759; series,
S23. $50; e series, $500; Auburn series,
S25. $50; Maine series. SIG, 750-total.
| SIG, 750. In the issuance of any bonds
belonging to most of the above-named
series, the company thereby acknowI-
edges its indebtedness to the holder
thereof for its face value, together with
interest thereon.
The company acquired some years
ago mortgages aggregating about $685.
600. secured by real estate situate with
in the village of Wazata, in the county
of Hennepin. My advlces as to the
value of the Wazata property convince
me that the company is not thereby ad-
eQuately secured. 1t is my judgment
that the property by which the Waza ia
claims are secured is not at present, if
It ever was, equivalent in value to the
face OF the claims of the company. The
company owns bonds issued by the FL
deity company to the amount of 22.00e.
The company also owns bonds issued by
the Fidelity company to the amount of
$4,000, being part of an issuance of
bonds 10 the amount of 100000. ON ac.
count of the construction of Hotel Berk-
ley, located i'll said city at the corner of
First avenue and Thirteenth street.
This building. like the Berry block, is
located on leased ground. 1 do not
deem this loan adequately secured. The
teompany3 has quite "a number of 1smau
leans scattered over a.numbrr Of other
states. Among the assets reportedsby
the company are bonds issued by the
Idaho & Oregon Irrigation company to
the am9unt of $500, 600. These bonds
do not really constitute AN asset
in the hands of, the Union Debenture
company. It appears from the testi-
mony of Mr.. Beery that his company
has assumed tosact as a sort of financial
agent for the irrigation company in
| Hoo re
company's books show these bonds to
be an asset to the amount of S500,000,
and | also find that they have profit
and loss credit item of S134, 1915 as
undivided profits growing out OF these
| bonds. How this last credit arises | am
unable to state.
The above transaction between the
two companies is quite exceptional In
character aud may involve. il it has not
already done so, the debenture coul-
pany in heavy liability to the irriga-
ton company.
l find that the company has guaran-
! teed loans not appearing upon its books
as liabilities to the amount in the
aggregate of S71.53O. At the time of my
| Investigation the company had no ready
money on baud nor credit to any con-
siderable extent in any banking institu-
ton. It had bills payable TO the amount
OF S11, $50, and was owing other Sundry
creditors S6,730.
The Intimate relationship existing be-
tween the Union Debenture company
OH the one hand and the Fidelity com
pany and the Idaho & Oregon Irrigation
company on the other conipels me te
believe that the three corporations are
inspired by the same management.
Notwithstanding Mr.. Beery's explain
atory language. the fact appears thai
the books OF the Union Debenture COM
pany show debit of 100000 on account
of said bonds. and likewise the follow.
ing credits, which. in their aggregate,
correspond Herewith, and must, in my
opinion, be deemed counterbalance:
! Idaho 81 Oregon Irrigation
Stock 4 bonds, Fidelity Co.. $4,000 0f
Stock 81 bonds. c. r. company 28.9O0 Ot
Custer Trust company. 6.105 A
Undivided profits. ........... 134, 494 81
lOtal S0uUUUU VI
The president of the company asserts
that tits able to handle its business ano
fully discharge all its obligations; thai
it has not any pressing debts or obliga-