The Birmingham age-herald., 1912-06-02
Charges Cancellation of Bonds by Trust Company
 Was Illegal
DEMAND MADE
 FOR RESTITUTION
Trust Company Refuses to Give Out Information in Regard to Charges. Will Probably Satisfy the
 Demand of Company

Baltimore. June .-tspecial)-A sensa- tion was sprung in the local district to- day when Joseph II. Hoadley, chairman of the board of directors of the Alabama Consolidated Coal and Iron company. for warded a communication to all of the old directors of that corporation, the Inter national Trust company and the Balti- more Trust company. both of which cor porations have been consolidated charg- ing Illegal acts on the part of the diref- tors and the trust companies named in caneening $1,25o.ooO of 5 per cent bonds of the Alabama company, and issuing a similar amount of bonds in exchange for preferred stock
 Demands Restitution | Demand is made on the directors and | the two trust companies to pay into the treasury of the Alabama Consolidated | Coal and Iron company the sum of a,7ls,- 750, representing the principal and interest of the bonds, which, it is claimed, were issued contrary to law. The letter was mailed to the Baltimore Trust company, the International Trust company, Dous | las H Gordon, ]. William Middendort, summerfeld Baldwin. Samuel c. Row | land, and William c. Seddon of Baltimore l and Erskine Hewitt of New York, the | men named being the old directors or the | company. The action of MT. Hoadley created the greatest surprise among those who are interested in the affairs of the Alabama Consolidated which have been In the limelight for some weeks. At the meet ings yesterday 1t was thought that the en- largement of the protective committee of the preferred stockholders would bring order out of chaos by the committee en- dea.oring to make satisfactory arrange ments to take care of the loan due at the Baltimore Trust company, so as to pre- vent the sale of Sl ,2500 GOO of improvement and development bonds. deposited as coi- lateral behind the bonds.
 1 At the Baltimore Trust company 1t was | stated that no information would be given | out regarding the charges made by MT. Hoadley From certain sources, however, | information was obtained to the erect
 that the gentlemen to whom the com rnunications were addressed do not take Itho action of Nr. Hoadley seriously. IL is pointed out that tSe then directors Of
 the Alabama Consolidated Coal and Iron l company made no move while directors l without first consulting counsel and get ting advice on any step that they eonsid- | cred taking.
 1 HOadleyS Letter
 The letter mailed by MT Hoadley fol- | lows:
 "counse advises that upon December | s. 1901, that the cancellation of $l,2o0,- 1 GOO par value of the $35o0,0OO first consoli- dated 30 year per cent gold bonds was not within the law; and furthermore, "That the issuance from the treasury of tho company of S1,25000O par value Of the bonds in exchange for l,S0,0OO of pre- 1 ferred stock was not within the law fur- | thermore,
 1 That the directors and trustees author izing and issuing such bonds, without value. created liability to this company l for said bonds and interest from date of issuance until paid in full Into the treas ury Of this company
 1t, therefore, is my duty to demand from the directors so liable the sum of st. ,75O or thereabouts, representing the pril cipal and interest; also demand of the Baltimore Trust company an amount l representing principal and interest. Also | to demand of the Baltimore Trust com pany. as successor and guarantor Of the 1 international Trust company, the resttu- tion of the amount specified to cover said l liability.
 "Therefore, have called upon the Ball | timore Trust company to credit the amount of the Alabama Consolidated Coal | and Iron eompany's notes to the amount l of $33O, GOO and interest to date on account of said liability to this company and de- mand return of collateral now held and given as security of said notes"
 Interest Defaulted on Bonds It was explained that the bonds re- ferred to by Mir Hoadley as being ille- gally issued are those on which the
 Interest was defaulted May l at the offices of the Baltimore Trust com .f..1.. ....I nfl Ia g.r4nf was s3,500,000. and one half of this amount was actually issued in exchange for s1,250,00O of the preferred stock of the company. The directors. it is said before the control of the com pany was sold to MT. Hoadley, were contemplating a move to exchange the remainder of the bonds for the balance of the preferred stock. but that the sale caused them to abandon this plan and that the bonds in the treasury were cancelled Tn taking this action the directors, it is said, followed the ad- vice of counsel
 The protective committee of the pre- ferred stockholders of the Alabama company will, in all probability, satisfy the demand of the Baltimore Trust company relative to notes held by II against the coal company. amounting tc
 ss30, ,00O.
 Threatens to Sell Bonds
 The Baltimore Trust company threaten, to sell by Monday noon the bonds oi the Alabama company unless the note, are met. The protective committee, al a meeting this afternoon. 1t Is understood arranged to meet the demands.
 This morning q meeting of the pre-
 ferred stockholders had been called fo
 F o'clock by MT. Hoadley. IL was thel
 intended that the protective :ommittee
 augmented by two stockholders appointed
 at general meeting on Friday afternoon I should report whether or not they haC
 secured enough funds from each share
 holder 10 pay the amount demanded b,
 the Baltimore Trust company. However
 when 1t was learned what action Mr
 Hoadley had taken this meeting wa called of.
 Later in the afternoon the protective
 committee met and while it Is believed this committee has enough funds to mee
 the Baltimore Trust eompanys notes
 there Is n possibility that in the even
 E Hoadley files suit, as he threatened .lthe money will not be paid the Baltimore Fl Trust company But if he does not. tn,
 notes will. it is said. be met
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