New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-05-27

Mum. 1t was done after 7 left the Merchants
Trust Company"
Continuing, Mr.. Tuttle said
To effect greater combination in Richmond,
Petersburg and the adjacent territory, the Vir-
ginia Passenger and Power Company was or
ganized with a capital of 49, 600 600 This took
place in 1900 The Virginia company issued a
consolidated mortgage in order to get $4,000
600 bonds to provide for all underlying bonds
ofNthe consolidated and constituent companies.
OF these S15.000O00, 81, 100, 900 was reserved to
take up and pay off the underlying bonds. The
rest of the money was to be for the of the
company provided. and limited by the terms
OF the mortgage. This ultimate consolida ton
under the name Of the Virginia Passenger and
Power Company took place about July 1. 1902
Upon the purchase Of the Williams proper
ties, Frank Gould subscribed TO the syndicate
then being organized to raise money to pay
for the properties. to the extent Of SlO00Oo
This in June, 1902. Later he subscribed
nearly 100000 to the syndicate. Immediately
thereafter he took Mr.. Langdon, president of
the Merchants Trust Company. on his yacht
and went down Richmond. The manage
ment of the finances in New-York indicated
very clearly that Frank Gould had the desire
10 acquire all these properties He began 10
lay pipes TO get the property at his price,
and to squeeze out the people who had spent
twelve thirteen years in building developing
and consolidating il.
TELLS OF MERCHANTS TRUST LOANS.
The Merchants Trust Company had made
considera bic loans to the Richmond Passenger
and Power Company, and also to the Atlantic
Development Company, which in aid OF
the general plan Of consolidation and were In
nature temporary until such time as the Nir
gnia bonds could be sold to investors At that
juncture we are informed Frank Gould through
various channels. brought influence to bear on
the Superintendent of Banks with the view of
squeezing the Merchants Trust Company and
making 1t unload the loan which it had made
TO the Richmond Company and the Atlantic De
velopment Company. The Superintendent Of
Banks insisted that the loans should be taken
out of the Merchants Trust Company.
The loans were called and the Merchants
Trust Company was in Jeopardy of having its
doors closed at any hour. The result of this
tremely strenuous situation was that Frank and
Helen Gould entered into an agreement to take
the loan out Of the Merchants Trust Company
and to take up some other loans of the Rich
mond Company after all of such loans had been
margined up with collateral to twice the amount
which up to that time had been satisfactory.
They also agreed to advance to the Virginia
Company $4,000 for 81 100000 Of the Virginia
bonds. thereby compelling the sale of the said
bonds to them at 25 cents on the dollar. They
insisted also that at least 81 per cent of the
capital stock of the Virginia Company, which
had been previously increased from $1,000,
600 to Sl5,OOOOOO, should be transferred to them
a absolutely, without any consideration, and such
stock was transferred to them. They also in
sisted that certain other securities Of the At
lantic Development Company should be trans
ferred to them absolutely without consideration
and that the officers and directors Of the At
lantic Development Company resign that their
own representatives might be put in their places.
This was done.
The Goulds having the absolute ownership
of the Virginia company and the Atlantic De-
Company, and their own boards OF
officers and directors being in charge and con-
troll Of both companies, caused corporate action
TO be taken to annul and abrogate the agree
ment which had been made whereby the At
lantic Development Company purchased from
the Virginia Company S6,550 900 OF its bonds at
80. These bonds were now largely possessed by
Frank and Helen Gould, and It is charged in
several suits pending by minority bond
holders and stockholders that they have ac-
quired these bonds and stocks of the said COM
panies fraudulently, collusively without ade
quate consideration and, in some instances.
without any consideration. They defaulted upon
the interest of some of the underlying bonds,
and took steps TO convey some of the most valu
to another company which Frank Gould is
ported to have owned absolutely.
GOULD COUNSEL LITTLE TO SAY.
George Gordon Battle, of the firm of Battle
& Marshall, counsel or Frank J. Gould. said
last night;
When the hounds after the fox he is in
clined to get TO earth as best he may. The Mer-
chants Trust Company had invested in the Vir-
gtnia company before Mr.. Gould had anything
to do with IL
The facts of the case are said to be as follows:
In 1902 when Mr. Gould first became director
Of the Merchants Trust Company, the Virginia
company owed S1,4OOOOO to the Merchants
Trust Company. Mr.. Gould interested in
he latter. he had $1,00OOOO deposited with it
and held half nearly half the stock. To save
he situation, 1t is said, Mr.. Gould invested ST.,
10000 in the Virginia properties and took them
)ut of the trust company. He continued a
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