The San Francisco call., 1913-07-26
SMITH BANKRUPT
MOVE IS SET BY
COURT FOR AUG. 5
Judge Morrow Orders the
"Borax King" to Appear
70 Answer Tevis and
Hanford Suit
TRUSTEES IDLE.
SAYS CAPITALIST
Move Only Last Resort to
Make Properties Pay Out,
Asserts Promoter

Nobody is doing anything to save
those properties.
"Ihe interest on bonds has not been
paid by the trustees; Is in default. and
inevitably, the properties must he ut
teriy ruined.
"I have offered my hest efforts on
behalf of the creditors and the owners
all I am asking is an opportunity tc
get everybody his money. and to pay
every creditor In full. This Is vhnt
they have denied me-
This declaration was made yesterday
by II. G. Hanford of Tevis & Hanford
and the directing force in the petition
TO have +. NJ. Smith declared bank
rupt
While the Smith trustees barricaded
themselves behind dignifed policy of
silence Mr.. Hanford prepared a state
nent purporting to be an inside his
tory of the relations between Smith.
fevis & Hanford and the United Prop
critics company and its subsidiaries
controlled by the "Borax King"
NO EFFORT TO SAVE LINES
This statement accuses the trustees
Of both the United Properties company
and of the Smith properties as a whole
Of having refused to act themselves
and of having refused to permit others
To act in an effort to save those prop
critics.
This attitude said Mr. Hanford.
has ma0e it necessary to appeal TO a
higher power. where some authority
may be established that will give fair
treatment TO some investors other than
f. NJ. Smith and to the general
creditors
The appeal referred to was the
petition fled at the behest of Tevis e.
Hauford in the United States district
court Thursday. Acting on that petit
tion, Judge Morrow set August as the
date for Smith to appear in court to
show cause why he should not be ad-
judged a bankrupt.
WEEP LIKE WOMEN
Il am not rejecting on the character
of the United Properties trustees" con-
tinued Mr.. Hanford, but they forget
at times that they have no right to be
exclusively. concerned in the. rehabili-
that something more is expected OF
them to preserve these properties for
the owners and creditors than to weep
over their misfortunes like women
These can be saved only by the bold
action of coura geous men,.
Mr.. Hanford said he had inspired the
bankruptcy proceedings IN the hope of
two results:
established that will bring order out
"second-That the appointment of
trustee in bankruptcy. under the juris-
diction of the federal court. viii re-
move the atmosphere of suspicion on
the part of the investors and creditors
outside of the personal Smith inter
eEts.
No CHARGES. But SEES PLOT
Mr. Hanford qualified the last state
hz inc ha do on a
against any person. But he. intimated
that there Is a suggestion that the de-
sire of large corporate interests closely
allied with some of the San Francisco
banks can prevent any assistance being
given to the United Properties company
in the hope that they may acquire the
Oakland Traction system and other
holdings a a nominal price.
The statement prepared by Mr.. Han
ford and which his partner. W. s. Tevis,
concurred in, consisted of about 1000
words. 1t recited that when the United
Properties company and it's subsidiaries
were organized they rested on actual
property, or contracts, one of which was
Smiths written agreement to furnish
not less than 70 per cent of the shares
of the traction companies.
For this agreement he received the
stocks bonds, certificates and de-
bentures of the United Properties COM
pany of California, constituting his
technical control of the corporation, or
so per cent.
THE HANFORD STATEMENT
OF preferred shares called for by con-
tract, according to the statement. 30.940
were never delivered by Mr.. Smith. The
statement in part, then follows
Based on the delivered and con-
tracted for properties, originally con-
templated. the properties COMPANY
through me,~ had made arrangements
abroad for sufficient financial assist
ance TO carry all its affairs to pros
perity e.,. k.o ;, aa,;,
the preferred shares the corporation
was without the assets or securities
promised the fnanciers and they re-
fused to furnish the money
Il then obtained loan on four year
notes from e. Fl. Rollins Sons for
s2.50o,0O0, all of which money was
put into the Oakland Traction COM
panies.
taken with N w. Halsey & Co. short
ening 1T from four years to ten months
giving all the collateral Of the Rollins
loan and additional security
HALsEY LOAN UNSUPPORTED
The cost Of changing from Rollins
10 Halsey was s37,5oo over and above
at the time that Mr.. Smith did this
ne had no means in sight of repaying
the F1dlSey loan dl tbe Gnu VI ~
months
Mr. Texis and myself as minority
atock holders filed written protest
against this transaction, as we be-
1ieyed it threatened the ruin of the
properties AS Mr.. Smith controlled
the board of directors, our protests
were in vain.
.It is this loan that the Traction COM
NAMES have been unable to refund.
About the same time Mr.. Smith sue
ceeded in withdrawing the tide lands
OF the traction companies from under
their respective bond mortgages.
greatly depreciating the bond securl-
fies and the credit of the roads. and,
on these tide lands, borrowed, a the
rate of per cent 81 100000 at a cost
OF approximately $4,000 premium
PROTESTS IN VAIN
Against this transaction Mr. TeNls
and 7 protested. without result
"The money. thus obtained. lay ldle
IN q trust company for a year.
II made an effort in London and New
work 10 obtain financial assistance.
Thia was promised, but the fnaneiers
would not deal with Mr.. Smith dl-
ITO advance matters. il was arranged
4bat Smiths Tevfs' and Hanford's mold
ings in the United Properties company
rhonId he placed In the hands of three
trustees TO be used for financing the
companies. .as +ha
ondon offer The people came mere