Evening journal., 1911-06-13
NEW NEWS OF YESTERDAY
The Loan That John Jacob
ASter Made Without
Security

By "HoIIand.s

which have ever had knowledge was
the lending of some three hundred
thousand dollars to Gerrit Smith by
John Jacob Astor simply upon Mr.
Smiths promise that he would as soon
as practicable execute a mortgage
bond as security for the loan" SO said
TO me a few years before his death in
1902 Judge Noah Davis. who presided
over the Tweed trial, was chief Justice
of New York State from 1874 until
1887, when he resigned. and in 1867
was beaten by Roscoe Conkling for the
United States Senate by only two
votes in the Republican caucus
Il knew Gerrit Smith we'll. not only
by reputation as one Of the gerat abo-
litionists, but personally" continued
Judge Davis. "He was a man OF very
great ability and very large wealth,
and he had some very peculiar ideas
about the ownership of wealth which
We're almost those Of socialist He
lived up to his ideas. too for he gave
away much the greater part Of his in
come and many thousand acres of land
which he inherited from his father
! suppose that the land which came to
Gerrit Smith would. II il were in the
possession Of the family at this time
tahout 1S95) probably be worth from
fifteen to twenty million dollars. 1t
was situated in central New York
State. and before he began to give it
away Smith was one of the country's
largest land owners. And for all he
was a radical on the slavery question
he was one of the three men-all New
Workers, Horace Greeley and Commo-
dore Vanderbilt being the othe0 two
who signed the bail bond by means of
which Jefferson Davis was released
from Fortress Monroe pending a trial
for treason.
Well Mr.. Smith was very sudden
ly brought into grave financial peril
at the time of the first great national
panic, that of 1897; he was then 40
years of age. He had assets enough,
for he was the owner of many thous-
ands of acres Of land, but he, like
many other men Of wealth, was in des-
perate need of ready money. In his ex-
tremity he bethought himself of John
Jacob Astor with whom his
father had been associated in
the fur trade, and with whom
Gerrit Smith had had some bus
mess dealings. Therefore he went tol
New York and saw Mr. Astor, saying
that he needed a large amount of
money. read cash, in order to prevent
bankruptcy
Mr.. Astor, who was a very careful !
man in all his business engagements |
and always looked with especial scru-
tiny at security which was offered to
him for a loan asked Mr. Smith how
much money he needed, and was told
that about three hundred thousand
dollars which was a large sum for that
time would be required Mr Astor
then asked what security could be7
given for so large a loan as that, and
Mr.. Smith replied that be would give
the security of bonds and mortgage
upon several thousand acres of land
which he owned i'm the vicinity Of
PeterborO. N. Y, his home.
Now, usually, Mr.. Astor would have
required a search of title to be made /
so that Il could be known whether or
not the borrower had good title to the /
real estate which he offered as secur- /
ity. In addition, Mr.. Astor would have
insisted on a good many other legal |
formalities; il was unprecedented for /
him to make a loan and deliver over
the money until he had the security in /
hand. But he simply said to Mr.. Smith |
that he would lend him the money and
that Mr.. Smith upon his return to
Peterboro could have mortgage bonds
made out and executed. recorded and
sent to Mr.. Astor A little while later
Gerrit Smith started home with the
three hundred thousand dollars and Mr.
Astor had no other security for Il than
Gerrit Smiths word. But he knew Ger
ritt Smith and realized that his word
was as good as his bond.
"As soon as possible after Smith re-
turned to his home he had the mort
cages made out and executed and in.
structed clerk to send them to Mr.
Astor. But through some accident the
mortgages were not sent to Mr.. Astor
They were overlooked and then for
gotten Nor did Mr. Astor ever re-
mind Mr.. Smith by letter that he had
not fulfilled his promise to execute and
deliver mortgage bond securities for
the loans.
Nearly year passed and Mr..
Smith was again in New York when.
meeting Mr. Astor. he spoke of the
loan, saying that he hoped to repay
it I'm the course Of a year or two.
Then Mr.. Astor said to him that he
had not as yet received the mortgage
bonds AS soon as Mr. Smith heard that
he returned to Peterhoro, made search.
discovered the mislaid mortgages. and
then instantly went back to New York
with the mortgages in his pocket and
delivered them personally 10 John
Jacob Astor.
81 don't believe" concluded Judge
Davis. "that John Jacob Astor at any
other time I'm his career made busl-
ness loan to anyone without having
first received the securities. either in
the form of mortgages, collateral or
well endorsed notes.
Copyright, 1911. by E. ]. Edwards. All
rights reserved)
Tomorrow Mr.. Edwards will tell Of
- Test Of the Minds Ability to Count