The record-union., 1898-01-20

Inc original loan t0getner with uI-
paid interest and expenses have in
creased the cost to S21, ,723 45-the net
income from this property during the
past two years has not exceeded S3OO
per year, which is equal to but 5 per
cent. on the valuation of $4,000 made
in the annexed appraisement.
/ As an illustration of the reckless
manag cement of the officers the case is
cited. of the Brown property in Berk-
| eley. The records show that the loan
was made by the association to one W.
E. Brown on certain properties in Ell
| Dorado County. In some mysterious
manner w. 0. Brown became substitut-
ed for w. f. Brown and certain Berke-
! ley property for the Ell Dorado prop
erty. Subsequently an additional loan
of 81, I13 was made to w. o. Brown on
part of the same property with some
additions thereto, in the same tract.
An examination of the title would
have revealed the fact that a prior loan
of Sc, 800 was made by the association
to the said w. o. Brown which was in
existence as a first lien against the
property when the second loan was
made.
| This loan of 81, 713 as matter of
fact, was made in the month of June,
1893. No record of this loan having
been made appears upon the minutes of
the association until one month after
the transaction had been closed and
the money paid by the association.
| In addition to this most idiotic meth
cd of business, it has been further
found that the note of Sc. 500 7"sss per-
mitted to outlaw Another strange
feature in connection With the trans
action is, that the mortgage is dated
1893 and the note given Herewith is
| dated 1891. This note was originally
dated 1893 and altered to read 1891.
! An effort is being made to obtain q
| deed from w. o. Brown for the Berke-
| ley property, which If obtained will di-
minish the estimate of shrinkage by
$4 $50.
| The records show that this thorough
| ly reckless and unbusinesslike method
of making loans was the rule, in other
words, loans were made and not re-
ported to or acted upon by the Board
of Directors until some time after the
transaction was closed and the money
| paid out.
The only suggestion that the commit
tee sees its way clear to make at this
time. is that committee of three 90
be nominated by the stockholders and
that said committee be instructed to
call a meeting of the creditors of the
association to confer with them for
the purpose of devising, if possible, some
plan for the adjustment of existing diff
ficulties and to report the plan SO de-
vised to an adjourned meeting of the
,fzJ0 01S lato 10
| fixed at this time.
Grove L. Johnson asked if the loan
of w. o. Brown was reported on the
books Of the association as an asset,
and Mr.. Weinstock said he believed it
| was.
| Mr. Johnson said that he had not
'much stock, but he wanted his money,
and was willing to spend more in or
| der to get it. He believed the direct
ors Were liable for their acts, both
criminally and civilly. He thought the
men who have wasted the association s
money would be made to make il
good to the stockholders. He thought
| the meeting should request the old
directors to resign and should elect a
new board: that they should also COM
| mence suit against the officers of the
company who had so neglected the
| business of the association and had
made so many bad loans; that they
should repudiate the old drafts at the
bank and refuse to pay them, and
they should repudiate also the sixth Sc
ries of the stock.
STEINMAN EXPLAINS.
After Mr.. Johnson had spoken Mr..
cir c1f1 hot Io .rricI n efa +o
| to the stockholders that the Bigelow
loan was made. twenty years ago, and
that the directors had considered the
land not worth reclaiming. The Briggs
loan was made before he came in as III
rector. He held himself responsible for
anything he had done, and did not
| propose to be turned out. If he was
| to be sued he would not be sued as an
oputsider but would stay right in the
| board. He had managed the affairs of
the association, as far as he was con-
cerned, to the best of his judgment. and
as he wonld manage hisown business. He
| had had perfect confidence in the asso-
| citation, so much so that, when a short
| time ago a series matured of which he
held stock to the amount of $4,000, in
stead of taking cash, he took a note OF
| the association, with no other. security
| His wife. he said, had $1,000 worth
| Of stock in the same series, and TOOK
| the note of the association for 81, COZ
That showed the confidence they had In
| the association. The association had
always borrowed and always must
HAD MADE BAD LOANS HIMSELF.
| AS to the amount of the loans on
property which had deprecated, he
had he said, been unfortunate in his
private loans as we'll He had been
| forced to take the Cardwell property
and would be glad to sell it for little
more than half of his loan. He named
| several other loans that he had made
| on which the present value of the
property was much less than the loans
| If his judgment had been at fault IL
| was a mistake of the head and not OF
| the heart, but he would not go out un-
less he was put out legally He had
| lived in this town nearly all his life
and built UP good reputation, and he
| did not propose now to shirk any re-
| sponsihslity, but would pay any just
demands against him. as he always had
NEVER KNEW OF IT.
| He was never aware of the w. O.
Brown note till May 49, 1897, and then
he accused Alsip before several of those
| present. and moved that an expert be
appointed to examine the securities. Of
the association, which was done, and
Mr.. Beard was appointed to expert
them He would ask that his report
be read. The Secretary had the custody
of all the books, and had been enpow-
cred by a resolution to pay off all mort
cages. He had always had the utmost
confidence in Alsip, and the discovery