New-York tribune., 1903-09-23
STOCKHOLDERS SUE COLER
IT'S POLITICS. HE SAYS.
Gross Mismandgement Of Guardian
Trust Company Charged.

IN action was begun in the United States Cir
cult Court yesterday by David b. Simpson.
lawyer. Of No. 90 Nassau-st.. in behalf of sew
eraI stockholders Of the Guardian Trust Com
pany. against Bird s. Coler and "A number OF
the board of directors Of the Guardian Trust
Company. who charged with having grossly
mismanaged the affairs OF the corporation. Mr..
Coler says the action is brought for political
reasons.
Allegations are made that Mr.. Coler and his
associates instead of putting up S1.000Ooo in
cash. as they agreed. to increase the capital
stock and surplus of the Guardian Company,
hypothecated his certificates of stock I'm num-
Der of banks. and thus secured the cash to meet
the payments. securing the banks i'm addition
by depositing with them sums Of money belong
ing 10 the Guardian Trust Company in amounts
corresponding TO- his personal loans. and agree
ing that the money should remain with the
banks at - per cent interest until the loans
We're paid. When forced to take M the loans.
the complaint charges. Mr. Coler formed
an underwriting syndicate. which. under a So
called "gentIemen's agreement" practically did
the same thing over again. to the great loss
and detriment Of the company. its credit and
financial standing. The complaints further
charge that Mr.. Coler agreed I'm September. 1902.
that he ould devote his entire time 10 the man
aCeIneut Of the company and keep out of poll
tics. which he failed 10 de- The Companants
ask that Mr. Ccler and his associates he COM
PEELED to pay into the treasury of the trust
company what it lost through his mismanage-
meut. and even that the money paid him as
compensation for services as president be re
funded The complaint charges that l1r. CoIer
never rend ared any services 10 the trust COM
Iany as president 'or Otherwise
THE GoNPLAINANTS AND DEFENDANTS.
The complainants are Levi r. Waller. Of
WHkeebarre. Bradley W Lewis. Of Tunkhan-
mock. Penn. and George p. Roper. Of Boone.
H.. and such other stockholders Of the COM
pany as viii come i'm as complainants and
contribute 10 the expenses Of the action The
defendants named are Bird s. Coler. Of Brook
lyn. r. Ross Appleton. of New-York. William
F. Balkan. OF Rochester: Richard W. Jones
ir. of New-York; William A Barber. Of New
York, George W. Fairchild. of Oneonta. y Y;
Joseph y. Francoiiui. Of New York. George z.
Green. of Binghamton y. l.; Edgar J. Levy.
Of New-York; Charles y. Levy. Of New-York;
Bernhard Mayer. Of York. Herman \.
Metz of Brooklyn; Thomas VI. Mulry. Of New
York. Ludwig Nissen. Of Brooklyn, Leopold
Stern. of New-York. and the Guardian Trust
Company. of No. f1O Broadway.
The complaint states that the Guardian Trust
company was organized i'm June. 1907 with "A
plus Of the same amount. The plaintiffs charge
that they together with their friends. at the
time Of Incorporation. owned 40 per cent Of the
apital stock Of the company. paying $500
share for the same. the additional 500 being
10 provide for the surplus 1t is also stated that
the capital stock was Cver-suhscribed. and that
the plaintiffs were unable to secure the number
OF shares asked for.
The complaint charges that Mr. Coler and his
associates agreed that they would take and pay
for all Of the increase Of stock i'm cash at the
rate Of $500 2 share. II is ther alleged that
Mr. Coler took and agreed to pay for the stock
al the prices named on September II. t!p2. The
complaint charges that Appleton and Balkan at
the time knew that Mr.. Coler's representations
were untrue in fact and that on September 1
Mr. Coler failed To take and pay for the stock
but instead made his notes as trustee of Ger
tain bonds Of the city Of New York and at
tached thereto his certificates Of the increased
stock Of the trust company. and obtained loans
aggregating SSOOOOO from certain banks in the
city. .
The complaint asserts that these funds We're
not available for the legitimate business uses Of
the trust company from September Il. 1902. to
December - 1892: that under the secret agree
ment the banks paid the trust company = per
cent for the money. and that during all Of this
time the trust company was loaning money ON
Continued second page.