Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-03-15
Answers the Suit Brought by
Letter to F0recIose on
s26O,O Note.
CLAIMS PRICE DECLINE
WAS PART OF PROGRAM
Big Loan Urged Upon Him, He De-
clares, So That Letter Might
Secure Control.

Joseph Letter. president of the Wash
ington Gas Light Company, Is charged
with failure to keep an alleged promise
| with Thomas L. Hume, stockholder
of the company, to make the stock of
the company more valuable than before
his selection as president. A loss. of
$4,000 on 1900 shares Of the stock is
| alleged to have followed the election of
Mr.. Letter.
Mr.. Hume makes this charge in an
answer fled today to the suit brought
against him in the District Supreme
Court some weeks ago by Mr.. Letter to
foreclose note for 100000 held by Mr..
Letter and secured by 5000 shares of
gas stock transferred by Mr.. Hume to
Mr.. Letter and Howard S. Reeside, vice
president of the company. Mr.. Hume
denies the right of Mr.. Letter to subject
the stock to the lien of the note, unless
the defendant is first paid the difference
between the stock quotation of January.
1912, and the present market value of
the stock in addition to the difference
between the former quotation and the
present real value OF the stock Through
Attorneys BrandenbeEg & Brandenberg,
the defendant suggests that an examina-
ton OF the books of the company be
made by Louis A. Dent, auditor OF the
court, for the purpose OF ascerta1ning
the present actual value of the stock.
Denies Soliciting Loan.
Mr.. Hume denied that he solicited the
loan from Mr.. Letter. and charges that
the initiative came from the president
of the gas company and was made for
the sole purpose of securing the stock
owned by Mr.. Hume in order to make a
showing of ownership sufficient to insure
the election of Er. Letter as president OF
the company and Of Mr. Reeside as vice
president. Mr.. Hume declares the prime
moving cause for the transfer of his
stock was the alleged verbal promise
that gas quotations would be maintained
or increased by Mr.. Letter, 50 that Mr..
Hume might realize enough from the
increment to his holdings to satisfy his
Indebtedness to the creditors of his
brokerage business
The broker says he made this necessity
known to Mr.. Letter and to Mr.. Reeside,
both verbally and in letters written to
them in which ID explained that ali his
activity in the management Of ths affairs
of the gas company was intended to I'm
crease the value oss his gas holdings, upon
which depended his chance to settle ali
his obtgationss
+ Stock Needed to Control.
F.. 4
Mr.. Hume tells the court that he is
advised that Mr. Letter was given to
understand by certain parties in Phila-
delphia and New York having large in
terests in gas stock that in order to
secure sufficient proxies 1t was advisable
Tor Mr.. Letter to obtain the support and
cooperation of Hume in his compaign
to be elected president at the regular
meeting Of the company in january 1912
Overtures were made to him by Mr..
Letter. he says, and in consequence after
a conference with Mr.. Letter. he accept
ed the proffered loan, transferred the
stock and effected the election of Mr..
Letter and his associates to the director
ate of the company.
Mr. Letter had only ten shares of stock
standing in his name and Mr.. Reeside
only twenty-five shares, says Mr. Hume,
before the transfer of his stock.
The defendant asserts he never con-
sidered the transfer as sale and AYERS
Mr. Letter understood it was not an
actual transfer of title. The use of his
stock. he states. secured the election OF
Mr.. Letter as president with a salary of
vice president at $1,000 annually.
The alleged agreement to maintain the
stock quotation was never kept, Mr.
Hume charges, but 1t was not until last
May that he appreciated that he "haG
been a victim OF some bad faith Then
he says he wrote Mr.. Reside who rep
resented Mr.. Letter, he claims. at certain
conferences regarding the stock, and
called attention to the continued down.
ward trend Of gas stock. He states he
reminded the recipient of the letter of
the alleged promise to maintain or
boost the stock.
After Mr.. Letter had allowed the stock
quotation to fall SO low as to wipe out
any equity Mr.. Hume had over and above
the $26O,OOO represented by the note, he
asserts, he was advised that the loan
must be paid at IT'S maturity in Janu-
airy. 1913. This was in August last. it is
| stated, and Mr.. Letter was then COM
municated with and had his attention
called to the, alleged failure to keep up
the price, and to the fact that there had
Pee been shrinkage of approximately $2O.-
says ne then advised Mr.. Letter OF his
inability to refinance the loan unless Mr..
Letter would abide his alleged agree
nma mena 20 20 advance adv the stocks quotation
time OF transfer Of the stock.
Makes Charge Of Plot.
Mr.. Hume expresses to the court his
conviction that the alleged failure to
maintain the price Of the stock was inten-
tional and that the quotation was allowed
to decline with the deliberate purpose OF
purchasing the stock at foreclosure
sale. to his serious loss"
In the letter to Mr.. Reeside. referred to
and made an exhibit to his answer filed
in court, Mr.. Hume says: 80 these are
my shares. although they appear In other
names. and any benefit or enhancement
in value which accrue to them would
likewise be mne.'
He then proceeds to outline the hold
in2s of stock by the members of the
| board of directors OF the company. and
figures out that. excluding the 1850
shares claimed by him, the seven di-
rectors have standing In their names
only 2.31O shares out Of total OF
10000 shares. or less than per cent
of the total issue OF stock.
Attached to the answer IL also let
ter from Mr.. Hume to Mr.. Letter, dated
October Is, 1912. in which the former
calls attention to the $3.50 shares OF
Georgetown Gas Company stock stand
ing in the name Of the Washington
company, and claims a proportionate
share OF $4,000 worth, or about eighty
one shares The request was not COM
piled with, and shortly afterward Mr..
Hume had recourse to the court to de-
| termine the ownership OF this stock
The suit is still pending.
| Raw nr Cowlea Edncafnr DAod