Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1897-11-19

excuse.
In 1891 the upper falls property
comprised the falls and ten acres OF
land adjacent thereto, and was owned
by Daniel Gaby and James P. Allison,
each an undivided half interest. Ali.
sons interest was subject to a mortgage
to Gaby for $500.
The company bought Gaby's hall
interest for $4,000. Being unable to
buy Allison's interest for an equal
sum, the company exchanged its hall
interest in the land for Allison's hal.
interest in the falls and water-power,
Allison agreeing to pay the mortgage
to Gaby. Thus the company became
sole owner of the falls with seven hum
dred lineal feet of the river and both
banks, and Allison became sole owner
of the land-about seven acres. But
an undivided half interest in both re.
manned subject to Gaby's mortgage.
To secure the performance OF Alli-
sons agreement to pay this mortgage,
his son, Myron P. Allison, to whom he
conveyed his property, mortgaged the
seven acres of land to the company,
Allison became unable to pay the
mortgage. The managers of the COM
pany never paid cent OF interest, and
in the beginning OF '94 suffered Gaby
to foreclose and bid in the mortgaged
half interest without the least effort to
save it, nor had they taken any steps
to enforce the indemnity secured by
Allison's mortgage OF the land, but let
everything 60 by default.
After ascertaining the actual state
OF things, l assembled the directors
and proposed to them to make an as
sessment of ten dollars a share, or of
one-half the stock held by each stock
holder who might be unable to pay a
cash assessment; that then the credi-
tors be called together and compost
ton of fifty cents on the dollar be eff
fected with them, and that the debts
thus reduced be paid by the proceeds
of the cash and stock assessment
After full discussion, all heartily ap-
proved of and agreed to this plan ex-
cept Mr.. Young. AS he was the larg-
est stockholder, having four hundred
and seventy.nine shares, his refusal
necessarily frustrated it.
Further consultation was then had
with the other directors and with
Messrs. Phillips and Convey, of the
First National Bank, who strenuously
urged that no action be taken against
the company, that with the revival of
prosperity it would assuredly pay Its
interest and debts. / stated to them
that I would take no action if the
bank would guarantee the payment
of the bonds interest coming due
January l. Mr.. Chambers declared
the company could earn $500 net in
the ensuing four months. The bank
was ready to give the guarantee if Mr..
Chambers would agree to indemnify
them, but after several days hesita-
ton, he refused to do this, and the
bank declined to guarantee. There
upon I applied 10 the United States
Circuit Court for redress, and Mr..
Phillips and myself were appointed re-
ceivers, and took charge, on the last OF
August.
As receiver / had the deficiency
judgment against the company an
nulled, set aside the assignment of
the income for city lighting, and OBJ
tanned for the company the warrant
for September and subsequent months,
and foreclosed the Allison indemnity
mortgage and made contract with
Mr.. Gaby to redeem the half interest
in the upper falls.
Mr.. Young at last concluded to join
the other stockholders in making q
voluntary contribution of stock, and
in December the principal stockholders
signed an agreement to each pay SIC
share, or to contribute half his stock
to Mr.. Phillips, as trustee, with full
power to realize and pay off with the
proceeds the company's liabilities
provided a composition of ten pei
cent. could be made with the credi.
tors.
I signed the agreement, contribut.
ing half my stock (half of 476 shares,
I also agreed to accept the compost
ton on my claim of $1,10O, and te
waive entirely my claim for paying
Mr.. Freeman's bill, l offered to raist
the money to pay the composition
provided the creditors accepted it
from the bondholders, assigning the
stock to them, if Mr.. Chambers and
his associates could do no better.
But the stock was placed in Mr.
Phillips hands with full power tt
transfer it to anyone who would pay
the composition.
Most of the creditors were very will
ing to sign the composition and &C
cept so per cent, but the larges
creditor, Judge Allen, who held th'
company's note for$S, 600 indorsed b!
Mr.. Chambers and the other directors
refused to do so, because such a com
promise by him with the principa
debtor would release the indorsers b.
the rule of law, and he thought the.
were responsible, having large prop
erty interests. This refusal necessaril