The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-08-02
LOAN CO.'S TANGLED AFFAIRS
TNWORSE SHAPETHAN REPORTED
SAYS JUSTICE HERRICK.
He Confirms Referees Report. which Said
That Company Is InsOlvent to Extent
or $4,000. and Discusses CUnncen's
Order Making Change or Venue.


Order Making Change OF Venue.
ALBANY, Aug. l.--Worse than was re-
ported by Referee James j. Farren il the
condition of tho New York Buckingham
Banking Company. in the opinion of Su-
preme Court Justice ID. Cady Herrick.
This condo mnation OF the company was
made from the Supreme Court bench by
Justice Herrick this morning when he con-
frmcd Referee Farrcn's report and ordered
it printed as an advertisement.
Referee Farren said that the company
was insolvent to the extent of s3l7. 900 and
that the management OF the company was
extravagant and unsafe and he recon-
niended that a receiver be appointed Rep
resentatives OF the Attorney Ger eral and
OF the company appeared before Justice
Herrick at 10 o'clock to-day. to which hour
he had adjourned from last Tuesday the
consideration of Referee Farrens report
after it was learned that the question OF
appointing a receiver for the company
had been removed from the jurisdiction
of Justice Herrick TO that of a New
York Supreme Court Justice
In confirming Referee Earren's report JUS
tice Herrick spoke at length on the circum-
! stances which led up to the present situa-
ton, and, 90 far AZ the digI ity Of the bench
permitted. criticised the action OF Attorney
General CunLeen III removing the case from
his jurisdiction.
Last Tuesday" said Justice Herrick.
Il adjourned until to-day the matter Of
the report Of the referee in the case Of the
, New York Building Loan Banking Com
pany. In December last the former Attor-
ney- General. at special term held by me,
made motion for the appointment Of
temporary receiver Of this company, and
! at the same time the attorney for that
| company applied, under the b. hiking law,
for the appointment of a referee to exam
inc into the company's affairs. ard | APP
pointed gentleman who WAS in no sense
during my professional career ever con-
nected with me in business. l appointed
him because OF his peculiar fitness for work
Of this kind. | held the motion for the
appointment Of receiver i'll allegiance
until the coming in of the referees report.
He made his report, l think. on the 18th
day Of July and | fixed the 2Sth for the
hearing
-In the meantime prepared myself for
thorough understanding Of the matter
and the arguments that might be made
, before me took the evidence briefs of
counsel and oral arguments that had been
! made before the referee and taken down
, by the stenographer and spent my days
and evenings in the examination OF the
matter also procured the services Of an
| expert accountant that I might make no
F.! errors In mathematics. and on the 2Sth day of
, July. when II was to be heard before me,
, the venue was changed to the city OF New
! York and the motion for the appointment
. of temporary receiver withdrawn before
me. and the special proceedings separated
! from the action asking for the appointment
! of temporary receiver, so that the only
| thing left before me TO act upon is this
| special referee proceeding under the Bank
ing l,w.
what the referee had reported, and not to
act upon the matter until the final hear
ing Of motion for the appointment Of tenn
! porary receiver in New York. but without
any procurement on my part, without
I receiving any information from me. the
substance of the referees report seems to
I have been made known and published in
, the papers, so that any injury that could he
inflicted on this company or its shareholders
by knowledge of this report has taken
place already. 30 that there ia no longer any
reason for withholding the report.
-Since last Tuesday l have further ex-
amined this matter and. from my investiga-
! ton Of the evidence. and an independent
| investigation separate from the narrative
! portion of the referees report. have come
| 10 the conclusion that the company's affairs
! are in a worse condition than the referee
has found In his report. and without writing
! any opinion have concluded to confirm
| the referees report An order Co that effect
, will be entered II being a statutory re-
uurement that II shall be published, shall
| drct it's publication in The Sun and in the
! BROOKLYN Ed1ie that il. that portion that
contains a statement Of its affairs, but the
schedules are 40 volumnous and would re-
qure so much space that withhold the
publication Of these
One Of the disclosures in Referee Farren's
report regarding the operations OF this
! cornpanv which has heretofore failed of
public ro'ice was the apparent intention
of the company to issue an additional Gloss
of stock, to be known as income maturity
stock, for which applications had been made
TO the extent Of s5,OO0,Oo0.
This stock, it is allie ged. was to be utilized
by oil, copper and mining compa mics as a
guaranty OF the safety of investments in
Upon this point Referee Farren, in his
report, says:
There are among the papers of tho New
York Building Loan Banking Company
various industrial corporations such az oil.
copper mining and manufacturing COM
panies, amounting in the aggregate 70 IS 900
mittee Of the Building Loan Banking Com
pany show that portion Of such applications
. mad been accepted anu HlenoIhnhh upon
: the other applications would indicate the
acceptance OF the remainder.
Among such companies is the New England
/ Consolidated Oil Company Treasurer Wiede-
| man OF the loan company, upon the trial.
said he had never heard OF any negotiations
/ between 1t and his company II seems rather
! strange that the financial officer of this cor
poration should never have heard OF the New
7 England Consolidated Oil Company. nor Of
any transactions. with it when written appli-
! cation OF the oil company had been made
: to the building loan company for the issue
! of $780, 900 par value. full-paid, thirty-year
| 3 per cent. income maturity gold coupon
J certificates, which application dated
| Dec Is last and memorandum made thereon
as follows: Accepted Dec. TO-
On the subject OF class W stock the ref
! cree says:
| A prospectus issued by the company which
! was circulated to induce the public to invest
! in the guaranty stock OF the association con-
! tains statement which purports to be the
| twelfth annual report Of the association, in
which the item liability to shareholders,
mort gage account does not appear. In the
! prospectus referred TO the amount of that
, item is included in the first item on the La
| bily side, viz: Liability 10 shareholders,
| 81. 32N. sos.
! above mentioned In the manner in which il
! was inserted in the annual report published
! and circulated among its members shows
| COnclusively that the company was attempt
| ing to sell class of stock TO the public under
| the most gross Misrepresentation.
! 1t appears from the referees report
| that this large corporation whose reported
assets were more than $4,000, 900. owed its
! president on Jan. 1, 1908, Stj,5 500, an that