The Topeka state journal., 1905-07-28
DEPEW'S TOWN.
Where the Equitable Society
Lost 100000 of It's Money.
Attempt to Build a City ON Bor-
r0wed Capital
BOTTOM DROPPED OUT.
New York Central and the
GOuIds in 1t.
Locomotive Works and Other
Factories Established.

FACTORIES Established.
Buffalo. N. Y, July 2s.-The Depew
Improvement company, which obtained
$250,O0O from the Equitable Life Assur-
ance society upon a mortgage that has
resulted in an apparent loss to the So
ciety of over 100000, is now in the
hands of receiver. A train of victims
stretching behind it tell the story of a
gigantic real estate operation, conduct
ed on the principles of high finance.
Chauncey M. Depew, who, when ex-
amined by Superintendent of Insurance
Hendricks, said that he did not advise
the Equitable loan of $250.000 to the
improvement company, heads the list of
those who figured as stockholders the
certificate of consent to the mortgage
filed in the county clerks Office of Erie
county. on Janaury IT. 1898. Mr.. De-
pew's name appears also at the head
of the signatures to annual reports of
the Improvement company.
The history of this company is one
of financial deals arising from the over
capitalization and efforts of a. few in
siders to unload at the expense of
friends and credulous business men.
Some of the most prominent residents
of Buffalo were caught in the game.
The Depew Improvement company
$1,500006. 1t bought a large tract of
land, since called Depew, about IL miles
east of Buffalo. The prime movers in
the deal were the late Walter S. Webb,
and Charles Gould of New York, and
John A. Spoor of Chicago. They had
the controlling stock, and the remain
der of 1t was sold to leading business
men of Buffalo. Among them were
John L. William, John J. Albright, who
became president of the company, and
who was recently named by the Ryan
trustees of the Equitable as director in
that society for the policyholders; the
Box George Urban, Jr., James A. Rob-
erts, Charles E. Clark and William H.
Orcutt.
Enter Depew.
In 1897, when the Improvement COM
pany had been reduced by the hard
times OF the early nineties to severe
straits, Webb figured out plan of un-
loading the stock. New blood was in
jeeted into the concern. a thousand
shares of the stock was sold TO DepeW,
1888 to H. NICK. TWomhley, 2,o00 to
John Jacob Astor, 1,547 to w. Seward
Webb. Gould reduced his holdings to
1,050 shares, Spoor to 616 and H. Walter
Webb to lila. Hartman & Co. had 200
shares and the Depew Improvement
company 300.
No sooner had these New York
fnanciers been brought into the deal
than the Depew Improvement COM
ceeding $300,000.
The company succeeded in obtaining
loan of $250.000 from the Equitable
Life. 1t gave in return for this sum
mortgage on property valued by the
state Insurance department at $780,
900. It was understood by the Buffalo
stockholders in the Depew company
that the mortgage was guaranteed by
Mr.. Depew and other New FORK stock
holders. Both as a stockholder in the
company and as director of the Equit-
able, Mr.. Depew had passed favorably
on the mortgage.
Equitable Loses 100000.
The improvement company, instead
of improving, went from bad to worse,
and it became impossible to get enough
stockholders together to do business.
Mr.. Depew, it is said, was one of the
few men in the concern who would
even dispute its conditions. About two
or three years ago an attempt was
made to assess the stockholders 40 per
cent. on their stocks, in order to
| straighten out the company's affairs
But very few of the stockholders came
up with the money.
The Equitable Life was finally
forced to foreclose on its mortgage and
put the improvement company in the
hands of a receiver. The property was
bid in by the Equitable for $4,000,
which meant a loss of over 100000.
Henry w. Box, who in 1897 was vice
president of the company, and who
=
of the new village of Depew, in an
interview criticized the financial man
agement of the company. He said:
walter Webb, general superintend-
ent of the Wagner Palace Car COM
pany, and Charles A. Gould of the
Gould Coupling company, were the
first manipulators of the company and
the purchasers of the property. The
tract covered about 1000 acres, and
the capital was placed at $1,500, 900
far too great sum. The management
of the company was an outrage. The
trouble all the way through was really
bad management. After Walter Webb
had bought into the company Mr.. De-
pew, John Jacob Astor and other New
York financiers, high salaried men
We're employed at an aggregate ex-
pense of $4,000 a year. MinEel, the
general manager, received $4,000
year. This expense lasted during sew
era1 years, when you could not give
away anything in the form of real
estate.
t'The bottom finally dropped out of
the scheme and the company went
| into the hands of receiver. An
assessment of 40 per cent. was levied
on the stock about two years ago. to
pay off the mortgage that had been
given to the Equitable
| what became of that money? The
| mortgage wasn't paid Off.
WELL" replied Mr.. Box, most of
US refused to stand for the assessment.
Several stockholders paid, however. I
know that, for they told me so. At
the time the loan was made it was
in my opinion. a good one. The prop
| erty on which the mortgage was given
was fully worth the amount of the
mortgage. I believe it was worth
double that sum.
! Depew Had Faith.
''Afr. Depew from his first connec-
ton with the company was sincerely
desirous, I believe of making it
success. He borrowed money and
pledged his individual security. He
| was the only man 1 could ever find
willing to talk about it. The large
lness of the deal and the men inter-