The sun., 1903-07-29

mortgages being in some cases as many
as three, and has at present very few proper
ties which are not now incumbered with
prior mortgages; that the officers OF the
company, except one, hold very little stock,
the treasurer and secretary both having
borrowed money on theirs; that the president
of the company recently turned IN about
| 81, 500 OF his stock on the purchase Of certain
property, although he had not filed his stock
| FOR withdrawal, and there we're many I'M
paid Withdrawals then fled.
The referee finds that In its relations
, with the Metropolitan Building Company
! lin which the president, first vice-president,
! secretary and treasurer were Interested,
| and under an agreement with. whlch ID
, made large payments to the building com
| pany) the banking company's onicers must
have acted for the purpose OF securing tne
banking company's money for their own
! private use and the referee cannot ma worus
sufficiently strong TO condemn these prac-
| tces. The referee finds that IN some cases
| the alleged loans were in reality sales OF tho
property, and characterizes this as pecu-
| liar IL not suspicious, condition of analrs.
The referee finds that the company ere.
| ated a so-called real estate sinking fund,
| with 81, 900 profits on sales OF real estate
| and si5O. 900 or 818O 600 by appraisal OF GER
| thin real estate in Yonkers. and has unlaw-
! fully used rortions Of this fund In the decla-
| ration Of dividends; that the company had
! filed false reports to the Banking DapHrt-
| Inent In 1900, 1901 and 1902; that In 100? such
report was false by failing to include in the
| real estate of tho company the amount OF
| $3.50 OOO i'm reality real estate, but carried as
| mort cages so bv reporting az interest due
and accrued SIS 600. when it only had Sie, 600,
| and in reporting taves, insurance and re-
| pairs advanced at s5i 900. while it only had
| $4,000,
He also finds that the company failed to
report due and unpaid taxes in 1902 Of over
| Sa3.DO0.
The referee finds that part Of the property
| of the company has already been sold for
| unpaid taxes. and critic!ses the company
| for such a condition of affairs. He frds
! that the company kept TO permanent record
| Of Withdrawals. and that this failure is
! sublectnoto orlyfor criticism but Of suspicion
, that the Withdrawals have beer tr lawfully
| paid out Of order: that tho expenses for
| 1902 amounted TO about SI2s,00O and were
| not justified by the amount of bustr ess
| done: that the company reported curing
| 1909 that il received Ss43.Oo0 for dues ard
| invested s544 OOO hut its actual lcars
were on,y s45.OOO: thar the salaries Of the
| treasurer and secretary have increased
| from 1902. when hey We're $lOOa mort each.
! 10 salaries of 500 weel, for the treasurer,
| and $i3T.50 week for the secretary. and
| InfC eAt'n 20" mas All aSriStiGV
| The salaries Of the other officers per week
, are: Paul Worms. president sl25 VI. S
! EIstace, first vice-presidert, sil2,5o; Horny
| A Taylor. second vicp-president. $40: Carl
! Fischer. assistant treasurer, $50: j. A.
| Trapreil, assistant secretary. s6o
The referee finds that tho company has
| been at a large expense in footing its stock,
| il having cost it s64 900 to float the class
| "W' stock; that the company is now the
owner Of over s3OOOOO0 Of real estate.
| and that in the wears 1901 and 1902 il was
| carried at a loss of $50 ,0On. with some taxes
| yet unpaid.
The referee criticises the company for the
] failure of the treasurer to keep "A separate
! record Of the income and outgo on each
! separate parcel nf real estate and critcists
the company for permitting Henry W.
! Allen, a former officer. Ia resign IN the
! spring of 1907. and AT the same time pay
! ing him six months salary of $1,000 in ad-
vance.
The referee finds that the company failed
to report to the r mixing Department in 1902
loss OF .S45 IN its real estate sales
that if the company hTd charged of the
premium on the sgG3OO Of real estate
(wrongfu'ly carried AZ mortga gesl, II would
have been unable 20 pay any dividend on
any stock in 1902, unless ont of It's alleged
surplus: that the company wrongfuIly
decln red dividends on it's prepaid stocks
in 1902, it having failed to credit any divi-
dend 10 inStallment stocks, thar II has made
false reports 10 it's members by including
the item Of mortgn ges on its own real estate
among its other mort ages; that the retere"
personally examined all the properties
in dispute, Dnd. after careful considerf-
tion OF all The facts, finds that the COM
penv is insolvert by s3i1.4G7,3i He con-
cludes with this statement
II am of the opinion. upon all of th"
facts produced before me rpNn the hear
"a 4 sxlnw, ..Nf
that n large part Of the investments of said
/ company are excessive and that its manage
ment has been neither prudent nor con-
servative, hut has been, in fact, extrava-
| giant and reckless; and that for the pro-
lection of its shareholders, as well as the
become shareholders, the company should
| not be allowed longer TO continue it's
business
Attorney General Cunneen has gone
| back to Albany, Justice Dugro said yes--
terdav afternoon that he remembered
telling Mr.. Cunneen that he would probably
he in the city until Arg II. on which date
| the Justice expects to sail for Europe.
| just ice Dugro added that he knew nothing
about the proceedings or the motion for a
receiver.
Justice Dugro is now sitting in Special
| Term Part l.. where litigated motions
are argued, but his term there will expire
| on FRIDAY Next week Justice Freedman
will be sitting in tha. court and on Aug. 10.
| Justice Mccall will take week at hearing
| the motions. 1t would be unusual for
F., Justice Dugro to hear motion OF the kind
referred 10 in Mr.. Cunneen's letter when
another Justice is sitting, unless special
| arrar cement to that end were made 1t il
probable that Mr.. Cunneen was under the
| impression that Justice Drgro would still
! be sitting next month when he said in his
| letter that the motion for receiver would
! be presented before him.
| OCONNEEL TO FIGHT HOPPER