The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-07-12
EQUITABLE LOAN TO DEPEW co.
SENATOR TOLD or DEALINGS AT
TIE HENDRICKS QUIZ.
Admits . Verbal Agreement to Make Good
the SOciety's Loss, but Doubts II It's
Legally binding -schin's story OF
bond Snles--I.ittle Of Harrima an.

table became known yesterday and the
statements of Senator Depew. Jacob h.
Schif 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, 900 on property worth
only $50. 900. He admitted that the mort
gage had been foreclosed and declared
that he did not advise the loan In his ca
pacity as counsel for the society. He ad-
mitted, 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 900
year salary for giving advice to Messrs.
Alexander or Hyde whenever they wanted
outside counsel
Mr.. Schiff testified that his firm, Kuhn,
Loeb q Co., had sold bonds to the Equita-
BILE while he was on the finance committee
of the society, and later bought them back
at loss to the society. In spite OF the
records OF the society. however he denied
that he or his firm had sold to the Equi-
table any Union Pacific preferred stock,
or, in fact any stock whatever. When con-
fronted with the records he declared that
they were false.
Mr.. Hyde declared that the Union Pacific
syndicate was really Mr.. Harrimans idea.
and it was on Harriman's advice that the
Equitable came in.
1t was believed at the time the investiga-
ton was going on that f. H. Hartman
tn tol a, in tka vitDoaa
chair and tell what he knew about the
Equitable's purchase Of so-caled Hartman
securities, but when Mr.. Hendrckss hrst
report came out there was nothing said
about Hartman. In the testimony made
public yesterday there is no mention of
Mr. Hartman being called by Mr.. Hen
bricks and, in fact, very few illusions to him
are contained in the testimony.
pEpEw EXPLAINS HIS SALARY.
Senator Depew was asked to explain
how he had earned the 600 salary that
he had received from the Equitable since
1889. He said that about thirty years ago
he was retained as one OF the general coun-
sci 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 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
Ia NJ
declined.
MIR. 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 $4,000 year Mr.. Alexander
advised him to accept, he said and he did
so. Since then, he declared, no had been
consulted by Alexander and the Hydes
when they wanted advice outside OF their
regular counsel.
THE rEpEw IMPROVEMENT COMPANY 'o>N.
Mr. Depew was next asked about the
loans Of s25OOOO made by the Equitable
company to the Depew Improvement Com
pany He said that the company was or
gained 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
Sl00. 900 of il to Mr. Depew.
Il told him" said Mr.. Depew, shat I
wasn't in the habit of taking 100000 in
terests, and didn't know anything about
it. and | would rather not do it, but he said:
Very WE'LL l knew what you would say,
and so | have opened an account in my
bank. | have put up the stock as COL
lateral: | have borrowed 100000 for you,
SO YOU need have no trouble, and here is
check and note, and you sign these two.
You have got your stock, and in three months
it will be sol d out and we will make hand
some profit
And ] did W hat many man has done
before-I signed note and that check,
The prospects Of the company seemed un-
usually good. and, Of course. | was too
busy n man to pay any attention to 1t.
and it was run by Mr. Webb and by very
expensive $4,000 year genera 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. 1t 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 THEdrARhNTEE OF REPAYMENT
O You voted IN favor of this loan on the
executive committee? A. | think did. but
I want to say that | didn't advise the loan
and was not consulted about il at all
q | suppose you ar" aware that in 1901
there was an appraisemant made by the In
sriranre Department of that property and
their appraisal was $50 900 No; | didn I
linow about that Didn't J writ. l"tter--?
q You wrote a letter to the Insurance
Department asking us to rcappraise A.
Yes that was because IN" MANAGER asked
me- to write the letter on the ground that the
appraisrr. didn't understand their bust
mass and that tn" appraisa! was rldiCu!oiHlr
below Ia" real value have no kind of
doubt, from Investigations j have made.
that under n proper management OF people
on the ground, with capital sufficient to in
Wit" and help the new enterprises that might
come there, and to build houses. 6c,. that not
only the Equitable mortgage. but every
body is amply secured.
Q You said the mort gage was foreclosed
and YOU understood that the property was
bid in by the society? A Yes, sir
q And that the society has been waiting to
ha sonnet hing done about IL; 4 Yes, some
arrangement that am not familiar with
q | show YOU an exhibit here. II is not
the original but II is claimed to he copy
of the original which is on file In the society
records A ! remember that.
@ What weTo the circumstances which
caused YOU to sign that statement? A. If
| remember right. that was brought to me by
n LAWYER who told me that the Equitable
Trust 1'nmnnuy would RI 80 bonds suff1pient--