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

and Farquhar seconded my efforts.
Mr.. Chambers claimed that lie was
not responsible for former action on
account of his sickness.
Before leaving Olympia in '92, in
order to secure an honest and prudent
management of the company, | made
personal agreement with Messrs'
Chambers and Frost. |. To retire Mr.
Young from the Board. 2. Mr.. Cham
bers to act as manager for $3.50 a
a month. 3. was to have the De-
schutes water pcTer studied by a COM
petent hydraulic engineer, and plan
made for its permanent improvement,
the expense thereof not exceeding $500
to be paid by the company. 4. To OBJ
tain the issue of some additional bonds
for the purchase of the lower falls and
needed improvements. 5, The lower
falls to be purchased by the company.
In pursuance of this arrangement
Mr.. Young was dropped as director
at the next election, January, 1893.
Mr.. Chambers acted as manager, but
took 5000 a month for his services
from that time until ousted by the re-
ceivers, instead of $50 as he agreed.
Mr.. John r. Freeman, c. E., OF Boston
made an exhaustive study of the
Deschutes Water Falls, verified his
conclusions by visiting the ground,
and furnished complete and salts
factory report and plans for its perma-
nent improvement showing that four
thousand horse power can be developed.
But Messrs. Chambers and Frost re-
pudiated their agreement and left me
to pay his bill.
The issue of additional bonds was
not obtained, because Mr.. Henry d.
Hyde, counsel OF the American Loan
& Trust Company, advised against it,
on the ground that the earnings of the
company would not warrant it, 80
that company declined to assent, and
by the terms of the mortgage its assent
is necessary to authorize such issue.
During the first half of 1894, Mr..
Chambers sent me frequent favorable
statements of the company's earnings
and condition, and urged the issue of
some more bonds in order to make
certain improvements of the water
power, and also to construct some
branches to the street railway, and
purchase some additional equipment
in order to secure the transportation
of building material to the new capitol
about to be erected.
Impressed by these representations,
l strongly urged them upon the Trust
Company, who at length assent to the
issue of so more bonds, for the above
purposes, provided that on visiting
Olympia, and examining the affairs Of
the Company, l should be satisfied
that its earnings and condition would
warrant the issue.
Just before leaving l received letters
and kilograms from Mr.. Chambers
stating that he was unable to raise
the full amount of the July interest,
and asking me for aid, and in response
l advanced 81 100, which is still owing
me.
l reached Olympia the latter part
of July, 1894. On investigating af-
fairs more closely, / found that the
directors had caused decree to be
entered in the Superior Court in favor
of A. A. Phillips, Trustee, for $4,000
being the amount OF the $4,000 Of
debts aforesaid with interest and costs,
and the decree directed the sale of the
trust property in its hands, and gave
judgment against the company for
any deficiency. AS, owing to the
times, there was no possibility that
the property at Sheriff's sale would
bring even half the amount of the
judgment, the company was thus
made subject to judgment lien OF
over $25 900, by the contrivance of its
own directors, and in violation OF their
solemn agreement. I found, more
over, that the floating debts aggre-
gated $4,000, instead of $4,000 as
had been represented; that all the
bills receivable and available assets Of
the company had been realized or as
signed to pay creditors holding paper
indorsed by the directors individually
that the taxes for 1893 had not been
paid; that the wages of the employees
were $1,870 in arrears, and finally
that the income from the city for
lighting the streets, nearly $500 a
month, g had been assigned to the
First National Bank until it should
pay note of $2,7O0, held by it and
endorsed by Chambers. In brief, it
was but too evident that the directors,
pressed by the creditors holding the
company's notes endorsed by them,
were taking every dollar Of the earn.
ings and available assets to satisfy, OF
hold off these claims, and thus escape
personal liability rs endorsers, making
no provision whatever to meet the
bond interest, and trusting that a
speedy revival Of prosperity would
occur in time to tide over the deficit
or that at the worst they could make
terms with the bondholders.
Moreover, they had suffered an un.
divided half interest in the upper fall.