The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-09-01
DEPBW EQUITABLE LOAN PAID.

SENATOR PRODDED REORGANIZ.
ERS INTO GETTING THE CASH.
Defends His Course NJ Length and Presi.
dent Morton Absolves Hlm-Had Al.
.. ways Worked to Square Things. but
II Took Ttme-Society Gets S9B Q $50.
The $2s0, 900 loan made by the Equitable
Life Assurance Society to the Depew I'm
provement Company, In which Senator
Chauncey M. Depew Is a large stockho)der,
was repaid yesterday with back interest. the
total amount being S2oa 5000. Announce
ment Of the recovery was made by Presi-
dent Paul Morton Of the Equitable, who
gave out part Of the correspondence which
had passed between Senator Depew and
himself relative to the loan. In a letter to
the Senator President Morton says that an
impression Of the situation which was
erroneous and unjust had prevailed.
Tho transaction has been the basis Of
sharp criticism Of Senator Depew ever since
It was disclosed Unexpectedly in the Hem
bricks testimony, and 1t was chiefly on
account Of 1t that the Senator fastened
home from Europe to prepare a defense.
His letter to President Morton Ia regarded
"a his long promised statement.
Just who put up the money to wipe out
the obligation has not been disclosed, but
It was reported that the amount had been
raised by the Improvement company's
committee OF reorganization, consisting Of
Senator Depew, DR.. w. Seward Webb. H.
McK, Twombly and John Jacob Aston.
Anderson 4 Anderson, Senator Depews
lawyers, and counsel also for the real estate
company bearing his name, refused to give
any information on this point. The an
nouncement Is made by them, however in
! letter to President Morton, that the re-
organization committee has perfected the
title 70 certain property not covered by
the Equitable mortgage and that the COM
mittee can now 60 forward with its reorgani-
zation OF the company. 1t was this difficulty
In perfecting tho title to outside property
that according to Senator Depew's defense.
prevented the obligation to the Equitable
from being cancelled sooner. He knew.
he says, that the reorganization was pro-
gressing steadily, but whom he returned
home he urged greater haste, and as a result
the reorganization committee within the
last week succeeded In clearing up claims
and obligations to the extent Of over $500 600
which stood tn the way OF carrying into
effect the plan which was to relieve the
Equitable.
It was In 1903 that this reorganization
plan was first proposed. That was shortly
after the Equitable had been obliged to
foreclose its mortgage, the property having
been bid In for the society at $50, 900. Tho
officers OF the society understood whom they
took the property that they wore to DO re-
lieved Of it in q short time through the pro-
posed plan. Senator Depew and DR.. Webb
entered into q contract with the society
by which they guaranteed to form a new
company and issue bonds for $50, 900, which
were to b delivered to the Equitable In
payment.
Tbs Equitable society entered into IN
agreement also With the Equitable Trust
Company by which the trust company
was to pay 1t the amount Of the claim against
the Improvement company for the bonds
which the society was to turn over to the
trust company. In addition to this. the
kruat company had an agreement with
Nessrs. Dspew, Webb, Twombly and Aston
TO put up the money to take these bonds
OF the trust company's hands.
The agreement between the reorganiza-
ton committee and the trust company
expired before the reorganization was
accomplished, and some OF the members
of the committee refused to assume the
responsibility again. Since then the re-
organization plan has been largely In. the
air until Senator Depew arrived from
Europe. Both the Senator and DR.. Webb
declared that their agreement with the
Equitable society did not involve any
responsibility other than the recognizing
of the company and the issuing OF the
bonds
Here 10 Senator Depew's letter Of defense
10 President Morton:
Depew's Defense.
.DsAR SIR: With respect to the loan by
The Equitable Life Assurance Society to
the improvement company In january,
1853, desire 10 state the situation ~ un-
derstand 1t and it Is AZ follows:
chad nothing to do with the organization
of the Depew improvement Company. not
even authorizing the use of my name, nor
was In any way connected with 1t until,
five years after its Incorporation. l pur-
chased for 500 900 In cash one-ffteenth
interest in the stock OF the company. The
company at that time had q tract Of land
consisting of about 2,7Oo subdivided lots
and 205 acres not subdivided
During the fall Of 1897 the Improve
n,ent company had negotiated loan from
Q prominent trust company In the city
under which II was proposed that the I'M
provement company issue 100000 first
mortgage bonds secured upon It's real
estate, tho trust company to become tr,is-
tee under the mortgage and to loan upon
these bonds as collateral and on the COM
pany's notes up to $500 600
when this proposition was referred to
the company's counsel, he thought 1t diff
Acult with block Of coupon bonds to ar
range for the sale Of the property in small
lots and their release-the business Of the