The sun., 1905-09-01
DEPEW EQUITABLE LOAN PAID.
Continu usd from First Pc;c.

OF course, cognizant Of the negotiations
for this loan. i considered then that the
loan was good one and have never doubted
that the Equitable would realize the amount
Of their loan with interest.
THE DEPRESSION OF 1901.
'In the summer and fall of 1901 a real
estate depression set In In and about Buffalo
which proved DISASTROUS to many youn 6
industries and lowered values and checked
the growth in the town Of Depew. 1t was
at this time, Oct. 7, 1901, and not when
the loan was made, in January, 1903, that
the Insurance Department appraised the
part OF the property covered by the Equi-
tables mortgage At $4,000.
AS ! understand the accusations made
against me In the public press they are as
follows;
"Fst-That I. through my influence or
position as a director OF the Equitable,
secured the making Of this loan, which
make and which would not have been made
except for the influence which was able
to exert.
4Second--That the value OF the property
at the time the loan was made was mani
testify inadequate and that there was in
existence an appraisal by the Insurance
Department placing it's value at $4,000,
or, at any rate, that such appraisal was
made soon after.
"Third-That I had, as an inducement
to secure this loan, guaranteed or given
my personal assurance to the Equitable
society or It's officers that l would see that
the loan was paid.
1Fourh-That at the time OF the fore
closure entered into written guaranty
which have since declared to be not bind
ing and that I did not intend to live up
to 1t.
"Fifth-That also personally guar
anteed at the time Of the foreclosure that
I would take up the loan or see it paid.
What have just stated Is in explana-
tion Of these first two charges-that / had
through my influence secured loan on
inadequate security.
DIDN'T GUARANTEE THE LOAN.
As to the third charge-my guaranteeing
the loan at the time II was made, or assum-
ing any personal obligations in connection
with it-such a statement Is absolutely
without foundation. did nothing Of the
kind.
Passing on to the fourth and fifth
charges, which relate to transactions re-
sulting from the default Of the company
and the foreclosure of the loan by the
Equitable, the situation was as follows:
As a result of the business depression
the company became embarrassed and the
payment of interest was stopped. An in
vcstigation OF the company's affairs was
instituted by a committee Of stockholders.
OF which there were about 200, and formal
report was made and a reorganization COM
mittee was appointed. A plan of reorgani-
zation was undertaken under which new
company was to be Incorporated, and it was
to issue bonds for $3.50 900 to supply funds
to take up the Equitable mort gage. prin-
cipal and interest, and to pay the other
indebtedness OF the company.
Il may say that there never has been a
discussion OF any plan to reorganize this
company or to handle 1t which did not in
volve on the part of all concerned recog-
milton Of the Equitable debt, principal and
The reorganization committee proposed
TO the Equitable to foreclose the mortgage.
turn over the property TO the new company
and take bonds In payment of the loan.
This the Equitable agreed TO do, provided
they could be assured, first. that the new
company would be Incorporated. bonds
issued and delivered to it. and. second, that
the bonds would be taken of their hands
without loss.
WHAT THE GUARANTY WAS.
-The first requirement was met by writ
ten guaranty which Or. Webb and l signed.
This document was in terms simply a guar
anty that the new company would be in
corporated and the bonds issued and de-
iivered to the Equitable. The second re-
quirement was met by an agreement Sc
cured from the Equitable Trust Company
that when the Equitable Life got the bonds
the Equitable Trust Company would take
them of their hands. In order to get this
it was necessary to secure the Equitable
Trust Company against loss and a guaranty
was secured satisfactory TO it, to which l
was party. guaranteeing that if the Equita-
BILE Trust Company should so take the bonds
time It would be protected from loss.
-The legal technicalities incident to the
perfecting OF the title in the new company
and the wiping out Of all the old obligations
made the process tedious and 1t was inn
possible to carry 1t through within the time
Trust Company to take the bonds from the
Equitable Life. and 1t was not possible to-
get the guarantors TO unite in renewing
their guaranty.
sThe guaranty on the part of DR.. Webb
and myself that the company would be in
and probably exists to-day. The company
was Incorporated and is In existence and
the bonds could perhaps have been ready
to issue some time ago. but, OF course, there
was no point In offering them to the Equi-
table without offering also to the Equitable
an opportunity to get rid Of them without
loss.
aThere has been from time to time q
discussion between the attorneys for the
Equitable and the attorneys for the I'm
provement company and the. reorganiza-
ton committee as to the legal status of
the situation and the reason for delay,
but II had never reached a formal state
ment Of their legal rights either on behalf
Of the Equitable or on behalf Of the re-
organization committee beyond the point
that DR.. Webb and have always under
stood that our only obligation under that
company and deliver the bonds; in other
words, that this guaranty of ours did not
carry with 1t the further obligation to re-
place the lapeed offer Of the Equitable
Trust Company to take the bonds from the
Equitable Life when they received them,
KEPT THE EQUITABLE IN MIND.
MATTERS never came to the point where
this question needed to be determined as
between the parties, because had always
assumed the task OF working out the sitia-
ton 80 as to save the Equitable from loss,
and, as say. the matter had never been
discussed In any other spirit by the parties
{,,t oroaf od in fhe JmprOyement companv