The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-07-12
EQUITABLE LOAN TO DEPEWCO.
SENATOR TOLD or DEALINGS AT
THE HENDRICKS QUIZ.
Admits . Verbal Agreement to Mako Good
the sOciety's Loss. but Doubts II IT'S
Legally binding Schirs story OF
F3Ond Sales Little Of Hartman.

Much OF the testimony taken by Supe.
Hendricks In his investigation OF the Equi-
table became known yesterday and the
statements Of Senator Depew, Jacob a.
Sohln and James H. Hyde added to the
knowledge OF conditions in the society
before the reorganization.
Senator Depew admitted that he was
financially interested In the Depew Inn
provement Company. to which the Equi-
table loaned $3.50, 600 on property worth
only $4,000. He admitted that the mort
gage had been foreclosed and declared
that he did not advise the loan In his ca
paaity AZ counsel for the society. He ad-
United, however, that he voted In favor
OF making the loan and also told OF verbal
agreement that the society should not lose
through It. He declared. however that
this promise was not legally binding.
He explained that he received his Soo, 600
a year salary for giving advice to Messrs,
Alexander or Hyde whenever they wanted
outside counsel.
Mr.. Schiff testified that his firm, Kuhn,
Loeb Co., had sold bonds to the Equita-
bic while he was on the finance committee
Of the society, and later bou ght them back
at a loes to the society. In spite OF the
records Of the society, however, he denied
that he or his firm had sold to the Equl-
table any Union Pacific preferred stock,
or, In fact any stock whatever When oon-
fronted with the records he declared that
they were false.
Mr.. Hyde declared that the Union Pacific
syndicate was really Mr.. Harriman's idea.
and II was on Harrimans advice that the
EQUITABLE came In,
It was believed at the time the investiga-
ton was going on that F.. II. Hartman
would have to take his turn In the witness
chair and tel! what he knew about the
Equitable's purchase OF so-called Hartman
securities, but when Mr. Hendrioks's drst
report came out there was nothing said
about Hartman. In the testimony made
public yesterday there Ia no mention OF
Mr.. Hartman being called by Mr.. Hen
bricks and. In fact, very few illusions to him
are contained In the testimony,
DEPBw EXPLAINS HIS SALARY.
Senator Depew was asked to explain
how he had earned the 5000 salary that
he had received from the Equitable since
1880. He said that about thirty years ago
he was retained as one OF the general coun-
eel Of the company by the elder Hyde
and that In 1877 he bought his stock and
was elected director In the company.
Mr.. Depew said. that the elder Hyde
often called upon him for advice, especially
In regard to investments. Mr.. Depew
said that every little while Mr.. Hyde
sent him q check In payment for his SER
vices. Some time in the sos. Mr.. Depew
testified. the company became involved
In some bad Investments. He brought
the company out Of the difficulty and Mr..
Hyde wanted him to join the staff of the
society at a large salary Mr. Depew
declined.
Mr.. Depew declared that Mr.. Hyde then
sent for him, told him that he wanted to
have the privilege of calling for advice at
any time, and asked him to accept a
retainer OF $50, 900 a year. Mr.. Alexander
advised him to accept, he said. and he did
NO. Since then. he declared. he had been
consulted by Alexander and the Hydes
when they wanted advice outside OF their
regular counsel.
THE pEpEw IMPROVEMENT COMPANY loan.
Mr.. Depew was next asked about the
loans OF S25OOOO made by the Equitable
company to the Depew Improvement Com
panv. He said that the company was or
eanized by a number OF prominent people
in Buffalo and the late Walter Webb. His
name was adopted without his knowledge.
he declared. and for several years he had
no interest in the company and knew little
about it until Walter Webb told him that
he had formed a syndicate to buy ma
iority of the stock and that he had assigned
$4,000 Of it to Mr.. Depew.
Il told him. said Mr.. Depew, that I
wasn't In the habit Of taking 100000 in
terests, and I didn't know anything about
it, and would rather not do it, but he said:
Very we'll; knew what you would say,
and 30 I have opened an account In my
bank. have put up the stock as COL
lateral; have borrowed 500, 900 for you.
40 you need have no trouble, and here Is a
check and note, and you sign these two.
You have got your stock, and in three months
1t will be sold out and we will make hand
some profit
And did what many a man has done
before-I signed a note and that check,
The prospects Of the company seemed I'M
usually good, and, OF course. ] was too
busy man to pay any attention TO II,
and 1t was run by Mr. Webb and by very
expensive Sl5 900 year general manager,
Coming down to the loan, he said:
Il never had anything to do with it.
never applied for It or advised it or asked
for it. II was done, as understand. by an
application from the managers Of the com
pany and upon appraisal by the officers
who are appointed for that purpose by the
company itself
AND THE dTARANTEE or REPAYMENT.
q You voted IN favor of this loan on the
executive committee? A l think I did but
/ want to say that didn't advise the loan
and was not consulted about 1t at all
q | suppos" you are aware that In 1901
there was an appraisement made by the In.
surance Department OF that property and
their appraisal was $3.50 900 No. ! didn
know about that Didn't write letter p
Q. You wrote a letter to the Insurance
Department ask king us TO reappraise. A.
Yes that was because the manager asked
me to write the letter on the ground that the
appraisers didn't understand their bust
ness and that the appraisal was rIdiculously
below the real value, ! have no kind OF
doubt, from investigations | have made.
that under Il proper management of people
on the ground. with capital sufficient to in
wife and help the new enterprises that might
come there, and to build houses. DC. that not
only the Equitable mortgage. but every
body Is amply secured.
Z. You said the mortgage was foreclosad
and you understood that the property WAS
bid in by the society? A. Yes, sir
q. And that the society has been waiting to
ma We some hing done about II? A. Yes, some
arrangement that | am not familiar with
q I show You an exhibit here II is no;
hp or Vinal but IL Ia claimed TO bs u Copv