New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-10-01
UPHOLDS LORD & TAYLOR
STOCK SALE TO CLAFL|N
Referee Says S27 a Share for
Common Was the Best
Price 0btainabIe.
TWO YEARS INVESTIGATION
Report Tells of Financial Diff
culties of Edward P. Hatch,
as President, in the
Panic of 1907.

IdHlC OF ~ {.
Robert f. Deyo who was appointed as
referee by Surrogate Fowler to take
testimony on the objections filed by Ed
ward Hatch. jr., and others in the &C
counting OF the executors of the estate Of
his father. Edward p. Hatch. who was
the president of Lord q Taylor. on the
ground that the executors sold certain
I shares held by the testator in the dry
goods corporation 10 John Clailin for less
than their actual value completed his re-
port yesterday. He found against the
contentious of the Hatch and the other
benefciaries under the will who brought
the proceeding.
The referee upheld the action Of the
executors and said they were diligent in
/ trying TO find another customer for the
stock before selling 1t to Mr.. Clahin who
in turn turned it over to the United Dry
goods Company, which now controls the
Lord q Taylor corporation.
The executors were Edward H. Titus,
manager of the retail department and
treasurer Of Lord & Taylor; Wilson
Hatch Tucker. grandson Of Mr.. Hatch
and Samuel II. Ordwsy. an attorney.
The executors accounting was filed in
the Surrogates' Court in 1911, and Mr.
Deyo took testimony for two years. The
executors sold 1863 shares Of the common
stock OF Lord & Taylor for ST share.
although 1t was contended that Mr.. Hatch
fixed selling price OF $40 I'm his will.
The heirs asked that the executors should
be charged with S6l .i27. the difference
between the selling price and the value
placed on the stock by the testator.
Mr.. Hatch died on September 20. 1909.
Besides the common stock, he left lo,OS5
shares of preferred stock OF Lord < ray
lor. which paid per cent dividends. This
stock soon will be divided among his
heirs.
The report OF Mr. Deyo covered more
than 400 typewriter pages. lie said
that before his death Mr. Hatch attended
20 all the financial arrangements OF Lord
& Taylor. the business being done large
Is on credit Between 1894 and 1910 he
Increased the sales from 100000 10 Ni.-
10000 without increasing the capital.
There was no need OF additional capita!
because of the high standing Of MIR.
Hatch with those who advanced money
on commercial paper. Also he lent
5000" out OF his own funds.
yet he had great trouble" the report
said. and resortcd to unusual methods
TO carry the corporation through the
panic Of 1901"
Mr.. Deyo saiC that on the advice Of
the heads OF banks with which Mr. Hatch
had negotiated loans the per cent diyi-
dend on the common stock Of Lord a
Taylor was suspended I'm November. 1919.
following the death OF Mr.. Hatch In
the same month accountants prepared
report which showed an estimated
shrinkagc Of 81 .0Q3 l76 and a reduction OF
tho surplus on the last balance sheet
from N.es2.os3 TO N7o.66J. This caused
much anxiety on the part OF the eNecu-
tors because OF the amount Of the es-
tate's investment I'm the corporation.
They sought buyer for the common
stock. In March 1910 Mr.. Clahin offered
$4,000 OF new capital. for which he was
10 receive second preferred stock and 80
n share for not less than 600 shares OK
the common. There was n crisis. a firm
OF note brokers who sold the paper If
the corporation held S2.Shooo OF short
term notes.
The corporation needed money. but the
note brokers refused TO advance 5000 on
the paper that remained unsold MT
Clafl!n was the only person IN this situa-
ton. Mr. Deyo said. who was willing 10
advance money and buy the stock. Mr.
Claim acreed in May 1910. to advanc"
y.ro0 go and pay ST share for the COM
mon stock. The executors accepted the
offcr.
Mr.. Deyo said the executors had TO sell
IN Mr. Clanin. because he was the only
source left from which the capital need
cd 10 meet the pressing obligations could
to derived" II the executors refused
said N1r D.yo. the common stock might
have been wiped out and the preferred
stock greatly impaired, In which case 'he
cvccutors might have been held respon-
sible.
The referee held that ST was an abe
ouate price. and said Il think there j.
no testimony tending 10 show mat el'ner
Executor Ordway or Executor Tucker CO.
onerated. either wrongfully or otherWlse'
with any person to acquire the controi oi
rord G. Taylor for Mr.. Clafiin or his
rominees."
c,ate Controller Sohmer recently
brought an action In the supreme court
for a reaupraisal Of the Hatch estate on
tho ground that the valuation OF I'D on
tho common stock in the report or the
transfer tax appraiser was grossly III
,aoo,,ate,, and that the assessment was
"fraudulcntly. collusively and erroneouSlS
made" II the report of Mr. Deyo is CON
ormed by the Surrogate. probably t"iS
action will be withdrawn or dismissed