The sun. [volume] (New York [N.Y.]) 1833-1916, 1908-04-23
METROPOLITAN SUGAR FUND
POLITICIANS MAD TO BE SEEN,
LOCAL AND ALBANIAN.
Few Hostile Bills Get through at the Caph
tai-Few Permits We're Held Up Forever
by City Dcpartments-HAnds Reach out
on All Sides for AeeeierRtiOn Money.

by City observation-disclosures Reach Out
on All Sides for AeeelerRtiOn Money.
Politicians we're an expensive luxury for
the Metropolitan Street Railway Company.
according to the testimony Of Herbert H.
Yreeland before the special county Grand
Jury The money that went for political
purposes" was paid out by the late William
G. Whitney without any accounting BY
him, and it was found that city depart
ments having control over the running Of
street railways and legislative bodies with
the power to pass troublesome legislation
had to be "sugared
The Grand Jury testimony, Of which
there is 1000 pages, also shows that .
threatened suit against the individual d.
rectors Of the Metropolitan Securities Com
pany for the repayment Of the dividends
paid out Of capital was settled by the de
reotors, for the benefit OF the company.
with the company's money. 1t was often
better to settle a suit than to fight II. Wss
the legal advice the company got.
Why $685. 900 was paid to ex-Judge William
n. Cohen b.. the Metropolitan Securities
Company has not been disclosed before.
Mr.. Cohen was a witness before the Grand
Jury and he gave his side Of II. Paul d.
Cravath, who was counsel for the company.
told what he knew Of It Both Of their
stories we're TO the same effect.
Judge Cohen said that he had a client,
who was also a friend. who had bought
200 shares Of Metropolitan Street Railway
stock at SleO and it had dropped 70 or 80
points. His client wanted his money back.
Following the theory Of the Wormser suit
Judge Cohen threatened to sue the directors
Of the Metropolitan individually TO make
them repay TO the company dividends
that had been paid out OF capital. Question:
ing Judge Cohen about the company's
buying In his clients stock at 80 points or
30 above the then market value Mr.. Jerome
said.
"You have been q Justice Of the Supreme
Court and a practising lawyer for many
years was there anything In that transao-
ton in any shape or manner criminal or
wrongI'
There was nothing. said Judge Cohen.
4 told Mr.. Cravath ] had a client who
had been after me for two years TO prosecute
q claim against the Metropolitan Street
Railway Company. | told him l had been
negligent and | wal going to turn II over
to an attorney and | would be adviser In
the matter. said I had been examining
the Wormser record and l was satisfied
that the directors Of the company had
| paid dividends out OF capital instead Of
out Of earnings, and | was going 10 make
them repay to the corporation all the
dividends so unlawfulY paid. He said. Il
will look into the matter and will let you
hear from me- / think l ~telephoned TO
him in two or three days, and he said, Can't
you do anything betterl' meaning the
amount Of the settlementy and l said, No.
there isn't any desire to make any profit,
but my client waited to get his money
back or else he would pursue the courss
advised Mr.. Crayath said he would
send a check so the company bought
the stock back at l6J.
Mr.. Jerome suggested hat litigation Of
that character was expensive and Mr., Cohen
said il had proved to be.
Re il unusual, > asked Mr.. jerome, for =
corporation Of that kind to buy stock, even
when Of the opinion that there was no
valid cause for action. on the basis thAt
it was more economical to take 1t than to
stand suit?"
Depends on the whole situation said
Judge Cohen. IF the thing To- small claim
ii would cost more to fight than to settle.
and corporations generally settle unless
they regard Il az a holdup or q strike
Your character would show IL wasn't
that, > said Mr.. jerome.
you we're asking me about what the
corporations did, continued the witness.
Would your client have recovered his
money In such a suitS' asked a juror.
WELL said Judge Cohen, 'he would
not have recovered his money. Mr.. Juror,
but he would have had some Of the directors
who had declared the dividends pay them
back to the corporation and the corpora
| ton would have been 80 much richer by
the big amount recovered. His judgment
! might not have been satisfied
Mr. Cravath testified that after beoom-
ing satisfied that unless the stock was
bought back there would be troublesome
litigation, he advised the company TO buy
back the stock. Especially because
added Mr.. Cravath, Judge Cohen said
that II that stock was bought back he would
not enter into any other litigation OF that
character against the Metropolitan Mr..
Cravath's reason for advising a settle
ment, he said, was that the Metropolitan
Securities Company had a large floating
debt for which ~ hoped TO issue securities.
II the Judge Cohen suit was started itWould
start other suits,
1T was bad policy said Mr.. CrsvGth.
to have litigation when ne other lawsuits
were in sight and thought ii was oheaper
to buy the stock at $50 a share than TO have
a lawsuit
"Mr. Cravath, wasn't that blackmaili'
askeda juror
mo, / don't think it was bASkmAl >
said Mr.. Cravath, and Judge Cohen h q
very reputable lawyer
'was there any good ground for the
suit9' said the iniquisitive juror.
mo, / think not. said Mr.. CPsvath.
but we corporation lawyers many times
have TO advise the sacrifice Of q few thou
sand dollars 10 avoid q lawsuit at q critical
and dangerous time
In Mr., Vreeand's testimony there 10
constant reference to an electric storags
hnAAnru .Annh nnnI in whinh Tnmmnnu