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
to Answer Tevis and
Hanford Suit
TRUSTEES IDLE,
SAYS CAPITALIST
Move Only Last Resort to
Make Properties Pay Out,
Asserts Promoter

those properties.
THE interest bonds has not been
paid by the trustees; IL In default, and
inevitably. the properties must be ut
terIy ruined.
IL have offered my best efforts on
behalf of the creditors and the owners
all l am asking is opportunity to
get everybody his money, and to pay
every creditor I'm full. This Is what
they have denied me-"
This declaration was made yesterday
by r. C. Hanford of Tevis & Hanford
and the directing force in the petition
TO have F. NJ Smith declared a bank
rupt.
While the Smith trustees barricaded
themselves behind a dignified policy of
silence Mr.. Hanford prepared a state
nent purpOrting to be an inside his
tory of the relations between Smith,
Tevis & 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 whole
of having refused to act themselves
and OF having refused to permit others
10 act in an effort to save those prop
critics.
This attitude" said Mr.. Hanford.
has made it necessary to appeal to a
higher power where some authority
may be established that will give fair
treatment to some investors other than
T. NJ Smith and to the general
creditors"
The appeal referred to was the
petition filed at the behest of Tevis &
Hanford 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 q bankrupt
WEEP LIKE WOMEN
L 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-
tation OF Mr.. Smith. They also forget
that something more is expected OF
them to preserve these properties for
over their misfortunes like women.
These can be saved only by the bold
action of courageous men"
Mr.. Hanford said he had inspired the
bankruptcy proceedings in the hope Of
two results:
"First-That some authority may be
established that will bring order out
"second-That the appointment of
trustee in bankruptcy, under the juris-
diction OF the federal court, will re-
move the atmosphere Of suspicion on
the part Of the investors and creditors
outside Of the personal Smith inter-
ests."
40 CHARGES, BUT SEES PLOT
Mr. Hanford qualified the last state
IA
against any person. But he intimated
that there is suggestion that the de-
sire OF large corporate interests closely
allied with some OF the San Francisco
hanks 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 at a nominal price
The statement prepared by Mr.. Han
ford and which his partner, W. s. Tevis.
"oncurred in. consisted OF about 1000
words. 1t recited that when the United
Properties company and its subsidiaries
were organized they rested on actual
property. or contracts, one Of which was
Smiths written agreement to furnish
not less than 75 per cent Of the shares
or the traction companies.
For this agreement he received the
stocks. bonds. certificates and de-
hentures 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, 3e,940
were never delivered by Mr.. Smith. The
statement, in part. then follows:
Based on the delivered and con-
tracted for properties, originally con-
femplated. the properties company.
through me, had made arrangements
abroad for sufficient financial assist
perity ~ Co... ~
the preferred shares, the corporation
was without the assets or securities
promised the financiers, and they re-
fused TO furnish the money.
7 then obtained loan on four year
s2,50o,oo0, all OF which money was
put into the Oakland Traction COM
psnies. e,,, .a ~.
taken with N. w. Halsey & Co., short
ening II 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 s37,500 over and above
the interest.
AT the time that Mr. Smith did this
he had no means In sight of repaying
the Halsey loan at the end of 10
months
Mr. Texts and myself, as minority
stock holders. filed a written protest
against this transaction, as we be-
lfeved it threatened the ruin of the
properties. AS Mr. Smith controlled
the board of directors, our protests
were in vain.
TT Is this loan that the Traction COM
panies have been unable to refund
About the same time Mr.. Smith sue
cecded In withdrawing the tide lands
Of the traction companies from under
their respective bond mortgages.
greatly depreciatinS the bond securi-
ties and the credit of the roads, and,
on these tide lands. borrowed, at the
rate Of per cent 81 900, 900. at a cost
of approximately $4,000 premium.
PROTESTS IN VAIN
Against this transaction Mr. Tevis
and 7 protested, without result.
THE money, thus obtained. lay idle
in a trust company for a year
u made effort in London and New
York TO obtain financial assistance.
This was promised. but the inanciers
would not deal with Mr. Smith di
rectly.
ITO advance matters. IT was arranged
that Smiths. Tevis' and Hanfords hold
ings in the United Properties company
should be placed in the hands of three
trustees to be used for financing the
companies
l,a 10