The sun., 1905-09-05
SENATOR DEPEW.
Mr.. LII. Cuggenhcimet discusses His case
and Examines His Defense.

| 10 IhB hDIIOH " ! HB Dun As wSA'.
be Z great pity II Senator Depews belated
act Of restitution and labored explanation
should serve TO cloud the real point of bis
ofense: for any 0oodnatured condouatton
thereof. based on the final redemption OF his
obligation and invited by the many lovable
traits Of the man. would bo sadly blind TO tho
necessity OF maintaining the now aroused
public conscenee, painfully alive TO tho prov
Alent moral obllquity In high places,
When q lawyer desires. absolutely. OF for
the sake Of tho argument. TO admit tho truth
OF allegations OF fact. but 10 dispute their
suiilcIency TO establish the point for which
they are adduced he ehters 9 pleading termed
a demurrer. " ls that style OF pleading that
desire To lnterpose TO Senator Dspews de-
fense.
Ills own asse rtions not only abundAntly
establish tho worst that has been said Of him
but moro, for they expose. naked 70 the world.
In bis eatucus supposlt!on that thie defense
can be accepted. that blIntsd moral senss Ii
high places % 1ecessary for socisty now
thoroughly to understand.
Senator Depew admits that while he wAs
director OF the Equitable. al we'll ~ tts highly
paid counsel. that instltut ton loaned to the
Depew improvement Company. bearing his
name owned BY his friends and In which he
himself was large stockholder. the sum Of
S2S0. .000. secuT red by mortgage on Unimproved
building lots In the town Of Depsw. and that
he was 'cognisant- Of the transaction. Tho
only defence to this amazing confession 10
that the property bad been Appraised BY
various experts" at much moro than the
face OF the loan.
Would Mr.. Depew or any mo derately hon
est man who had been made. By friend 3
will. trustee over his Widows and children's
patrimony. invest any portion of II In Q mort
gage on property Of this character7 Law and
morality alike. on the contrary. confne
trustee TO gilt edso investments. He may
take no undue risks even for larger interest
return; and under no circumstances may
the Individual. even honestly. profit By his
trust. nor may he deal with himself a. trustee
except under the rarest clrcu instances. What.
then. ls to be thought OF the trustee who loans
TO himself his ward . funds on . security 70
doubtful as Depew building lotss
The Equitable is. OF course, . hduciary
insttu ton Of the most sacred character. and
most prudent kind. The Depew loan was
hardly an ordinary business risk. much less
the kind for the Investment Of trust funds.
II any one doubts this, let him Try TO place
such loan with the Equitable OF any other
institut ton, provided he be not director or
otherwise influential. Yet Mr.. Depew %
director was "coRrlzant. Of ths III consid-
cred investment OF Equitable funds for the
benefit OF the Depew company.
Granted that there are circumstances u nder
which q corporation may deal With one or
moro of its directors as individuals: grAnted
that the failure OF opportunities elsewhere
or pressing business exigency or other less
creditabls reason causes corporation to In
vest or otherwise deal with director or
a directors firm or company II the result.
In such q case, Unexpectedly turn out dlsas-
trously. what would be the course OF any high
minded man who had thus. In beneAtins him
self. even unwttingly caused loss to his trustf
Ii bank director desire loan for his amply
solvent and highly credited firm from his
own bank. a tender conscience might sl ggest
that credit 30 high might as well be accom-
modated elsewhere. But II his setise OF honor
were reconcled to q course which appeared
profitable for both concerns and with risk TO
neither. and Unforeseen loss should neverthe-
less ensue. what would be this man b conduct
II he were highminded7 Such . director
would, without moments delay. drain every
resource. to the fullest extent Of his ability.
10 make good his trust. even II he impover-
ished himself In doing 1t. q.
But what hos Senator Depew done? After
permitting and voting-not to say contrivlnE.
since this Is only demurrer-after permit
ting and voting that the great hduolary
institution OF which he was director aud
counsel should lend large sum 10 his own
company on ridiculous security. when the
bubble burst and foreclosure proceedings
were threatened. he temporixed; when fore
closure was begun he allowed It to be COM
pleted and the Equitable to be burdened with
the property. and then he continued TO tenn
porlze in all for four years. before he finally
and then only under q scathing nro-made
good.
And what is the explanation There was
TO be a reorganization Of the Improvement
company which was to issue new bonds to
the Equitable. from whom they were TO be
%akno for oa.h hv thu Hu,, ital l~lA 1t.ssk Cn,y,-
pany. which In turn was guaranteed from loss
by Senator Depew and others. But mind
you. all that he had guaranteed was that GER
tain legal formalities we're to Be taken by
which q new company was to be formed and
that the printing presses were TO do certain
work whereby certain papers to be called
bonds were to be turned out and delivered to
the Equitable Only the trust company had
agreed with the Equitable to transform these
bonds into cash. and Mr.. Depews guaranty.
30 far as cash was concerned. had TO do only
with the trust company. There wore delays
due TO the lawyers. and then the trust COM
pany. owing TO the delays and the time limit
Of its agreement. declined 10 purchase the
bonds because the people who were behind IL
had withdrawn their guaranty. Among the
people was Senator Depew-and he OF course
would not carry the burden alonsl In fact, he
was very doubtful whether his guaranty was
legally binding except to deliver unmark etable
pieces OF paper. called bonds, and he ID now
very sure that he never had -the Obligation
to pay the Equitable loan himself In cash.
And thus for years he allowed the matter TO
lie. the Equitable In possession OF tho rela.
lively worthless property and an absolutely
worthless deficiency Judgment. and 6ena.
tor Depew getting along with fair comfort
under q never absent and never acting con.
sciousness that ahead Of him. somewhere
In the future. was the task -of working out
tho situation % - to save the Equitable
from loss"
Since this Is only . demurrer to the state.
rt,ents Of Senator Depew. say nothing OF
the testimony Of oficlals and employees Of
the Equitable that he flrst brought about the
loan and then guaranteed its payment.
I shall also merely refer to the rather ab-
surd reason given for tho withdrawal Of the
agreement Of the Equitable Trust Company
and the guaranty on which that agreement
was based. This the Senator sAys was caused
through the lapse Of the time limit owine to
the legal technicallties incident to tho per.
feotins OF the title In the new company and
the wiplng out Of all the old oblisations" and
the ref,sal Of the guArantors to extend the
time. / think few lawyers will be able to un-
derstand the nature OF these cumbrous "isSal
technicalities" and few honest men the type