The record-union., 1898-12-17
BUILDING AND LOAN RULES.
HOW THE UNION ASSOCIATION
MADE LOANS.
II FL. Haw1ey and Others Testify
Concerning the Value Of
Securities, Etc.

When the case of Receiver O'Neil of
the Union Building and Loan Associa-
tion against the National Bank of D.
-. Mills & Co., was called in Depart
ment Two Of the Superior Court yester-
day, Judge Buckles presiding, the de-
tense applied for permission to file a
supplemental answer, and long argu-
ments followed. Judge Buckles final
ly denied the motion.
r. H. Hawley was then called as a
witness by the plaintiff Mr.. Hawley
testified that he was in the employ of
h. K. Alsip when the latter was Sec
retary of the Union Building and Loan
Association. He Identified a book con-
tanning the bylaws of the association
as one used in the office. He was fair
ly familiar with the affairs of the as
sociatiOn. He knew the w. 3. Grif-
nth property in Placer County, on which
the association held a mortgage for
$2,S6505-
Asked what the property was worth
in February, 1896 the witness replied,
81 per acre At that date land on
Sherman Island was worth about 81
an acre, and is worth no more now.
On DISCRIMINATION witness said
land there had been sold by the receiv-
er for So per acre. The property down
there is being improved.
Witness admitted that for several
years past there has been a general i'm
provement in properties on the islands
in the lower end of the county. Sher-
man Island was at one time very pro-
ductive. In 1890 the property was
not, in witness opinion, worth more
Than NJ q tirna cinna
it was flooded. He knew of no sales OF
unreclaimed lands on the islands for
81 per acre, nor 50. 80 per acre Be
fore Brannan Island was reclaimed
witness did not know of any sales of
its land for 81 per acre.
Witness said his estimate of 81 per
acre was based on the Government
price for unreclaimed swamp land.
There are several pieces of land now
for sale on these islands, but the wit
ness objected to naming them as some
of the property is in his hands for sale
One piece of improved land on Grand
Island, however, is for sale at $50 an
acre
Witness had no idea of the size of
Sherman Island, but thought it was
smaller than Grand Island. He had no
idea what it would cost to reclaim it,
nor what the land would be worth after
1t had been reclaimed. He knew of no
sales of Sherman Island land in the last
fifteen years He did not think the
lower end of it could be reclaimed. It
was floating land.
The defense then asked that all of the
witness testimony on the subject of
swamp lands be stricken out on the
ground that he had not shown himself
TO be familiar Herewith
The motion was denied Mr.. Seymour
cross the witness on matters
connected with the method Of procedure
in the conduct of the Union Association.
He could not recall exactly how the
third, fourth and fifth series of stock
We're redeemed, whether by order of the
stockholders or the Directors
Witness was asked if he could name
an instance in which the association
had paid off or redeemed any series Of
stock strictly in accordance with the
rule laid down in the bylaws
He replied that one series was not
paid off at the regular annual meet
ing Of the stockholders. 1t was done
by the Directors at another time. The
value of shares was based on the re-
ports made by Secretary Alsip. When
the fifth series was issued no allowance
was made for supposed shrinkage IN
value.
Witness said that loans were made
by the Directors, but the Secretary had
made loans and they We're subsequent
1y reported by him to the Directors lie
could not say it was a frequent occur
renee. Loans on stock were, however,
usually made by the Secretary. Since
1891 he knew of no instance in which
the rule laid down in the bylaws had
been followed strictly. The withdrawal
value of stock was always fixed by the
Directors. He could not recall an in
stance in which rule 13 had been strict
1y followed.
The witness testified that each Di-
rector was always allowed one vote for
each share of stock held by him.
(Mr. Seymour here read from the by
laws to show that each Director should
be allowed but one vote, irrespective
of the number of shares he held)
Since 1891 witness said, the five per
cent. fines on delinquents had not been
enforced.
At the afternoon session the testimo-
ny Of Mr.. Hawley was resumed. Fe
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