New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-08-12
ASSAILS THE REFEREE.
Counsel for Loan Company Says lie
Is Dishonest.

u summing nm in the hearing before Justice
Dugro of the Supreme Court. on the applica-
tim for the appointment of receiver Tor the
Nev-Yorlx BuiIding-Loan Banking company
Joseph P Eustace, OF counsel Tor the cOliipe'n9'
smoke of the referee who made the report which
declared the company insolvent as incompetent
and dishonest. He declared that the apphca-
! ton for the receivership had been maze Dy
malignant. dishonest people.
Attorney General Cunneen is representing the
state in the argument for the appointment of
receiver. and has as associate counsel ex-As-
sistant ATTORNEY General Conan and Deputy
Attorney General Grain. The company is rep
resented by Colonel David G. Robinson, Joseph
Fustace and A. C. Eustace, all of Elmlra
The courtroom was filed with stockholders OF
the company, who listened with close attention
to the proceedings in the case, a great many
stockholders having all their savings tied up IN
the company.
Colonel Robinson who did not finish his
gument on Monday, was the first to speak. He
declared that the item of guarantee stock which
in the referees report is classed as liability,
was regarded by the present Superintendent of
the Banking Department as a surplus, and said
that the action against the company could not
have been brought in good faith when it was
based upon a liability which the Banking De-
partment knew not liability.
He also declared that there had been under
valuation to the extent of 100000 in the real
estate of the company. He asserted that the
appraiser for the State, Mr.. Lovett. had ap-
praised certain parcels of ground in 1902, and
that in 1903 "nagged on by the prosecution,
had cut every one, all but five OF his Valuations
from 10 to % per cent"
Judge Dugro asked Mr. Robinson how the
credit of the company would be affected by the
appointment of a temporary receiver.
Colonel Robinson declared that the COM
panys property was covered by $oUoOOoV Oh
prior mortgages, and that it needed credit to
protect its mortgages.
I'VE are behind those mortgages, he said.
with contracts to protect the stockholders. and
the appointment of temporary receiver would
cause the foreclosure of many OF these prior
mortgages. The company would suffer great
loss in consequence
J. P. Eustace summed up for the company
He said, in part:
There is not one good allegation In this complaint
especially the allegation of insolvency; there IS
appointment of a temporary receiver. The question
is one of sovency or insolvency. % the Iacts SCI
forth sustain the referees contention? The referee
critcises the company. its officers and its manage
There are other ways Of correcting such abuses. if
they do exist, than by dissolvlng the corporation:
of the officers of this company One OF the officers
is my own brother; SO the attack upon MIN Is ,a an
your honor to take full cognizance OF what | say
of the charges made by this incompetent dlshoh-
The referee delves into the realm Of dirty. sHs-
picon and brings up untrue charges against the
officers of this company The application for the
pie
Mr.. Eustace eulogized Mr.. Cunneen, and then
expressed a desire to know what motive the
Attorney General had in prosecuting the action.
Mr.. Cunneen sprang up.
Because" he declared. "I believe that the
creduIous poor are being deprived Of their just
earnings by this association. My sole purpose is
to prevent wrong. I believe the savings Of the
poor are being perverted, and I will stop it If I
can"
Mr.. Eustace replied: THE learned Attorney
General was never more misled or mistaken in
his life than when he took up this action at
the behest Of a gang of corporation wreckers."
In arguing for the State ex-Assistant Attor-
ney General Conan said:
The company has been in existence for thir-
teen years, and in all that time it has not ma
tured a single share for any of its stockholders.
need not tell you that building and loan as
ISOLATION cannot pay IS per cent dividend from
its earnings. The company that advertises to
pay such dividend is different only in degree
from the companies that advertise per cent
month.
In explaining the methods of the company,
Mr. Conan said it was the practice for the COM
pany to- buy piece of property at a given price,
and to take a mortgage from the shareholder
for an amount in excess Of the amount paid for
the property, whereupon the excess would be
entered in the profit and loss account
And it was out of such profits" he added,
that the dividends of the company were de-
clared'
THE company is $4,000 in arrears on taxes
and assessments on its property he said. "A
large part of it's property in Yonkers was sold
in 1902 for taxes and assessments. And these
are accommodating at the rate of $4,000 a year.
In the thirteen years of its existence the
company has accumulated S943OOO for it's share
holders at a cost of 81, OPTION say that COM
| pany with that record has no mission TO per-
| form for its stockholders; that 1t accumulates
| its funds for distribution among its officers and
! EMPLOYEES"