The San Francisco call., 1913-07-28
Capitalist, Answering Smith,
Ayers "Frenzied Finance"
Is Making Wage Earn
ers Suffer
WHY BE SHOCKED IF
DO GET CONTROL?"
rs 1t Conceivable That /
Could Do Worse?" Pro-
noter Asks


with his answer to the charges made
against him by F. NJ. ("Borax.) Smith.
the Oakland magnate. whom Hanford's
and ". s. Tevis' associates in the
United Properties corporation are en-
deavoring to force into bankruptcy.
Hsnford strongly answers Smiths
charges that he is endeavoring to get
control. of the United Properties and TO
ln1ure the rights OF Smiths creditors.
His statement follows in full:
T must decline TO discuss the issues
now pending in. the courts. These have
passed from the field of our contro-
versy to the domain of judicial action.
The statement OF Mr.. F. NJ. Smith
otherwise demonstrates the cause of the
misfortunes OF the United Properties
company OF California.
Mr.. Smith now, as at all times in
the past. can not distinguish between
his personal debts, obligations and
rights and the debts. rights and obli-
cations of those corporate organiza-
tons. In other words, without meaning
this extensively. he is unable TO discern
the difference between his own property
and other peoples property.
WE ALONE TRYING TO PAY OUT
Mr. Smiths personal creditors are
separate and distinct from the credit
ors of the United Properties company.
In this latter corporation, Mr.. Tevls
and myself have invested millions.
Friends OF ours have invested millions
more On our good faith credit has been
extended by business men in large
sums. Through the frenzied finance of
Mr.. Smith the creditors can not be paid,
and great sums are even owing for
salaries and wages.
While the bankers and others are
throbbing with sympa thy for Mr. Smith,
nobody but myself and Mr.. Tevis are
endeavoring to pay the creditors, sala-
ries and labor claims at all.
I'm my efforts TO relieve these mis-
fortunes. I secured the cooperation OF
Mr. Tevis in offering to subordinate our
large holdings and accepting secondary
obligations therefor. in the hope that
reorganization could be accomplished ID
that would insure every investor his
principal and interest, every creditor
and wage Garner immediate payment in
"On this basis I asked that I might
have an option with which to proceed
abroad, to obtain. II possible, a renewal
OF offers of money which have before
secured. and which. If obtained, would
have completely rehabilitated every
thing and everybody.
BANKERS PROPOSITION
Ny proposal to save the situation
and to pay the debts was met with a
proposition from the bankers:
Il That I could obtain this oppor-
tunity only by agreeing to pay Mt
NJ Smith twice the market value of his
personal holdings in the United Prop
critics Company Of California.
go. That I obtain for the bankers
Who held Mr.. Smiths collateral and
who were represented. by his trustees
twice the market value OF all his trac
tion collateral held by them.
"3. That I must execute a contract
guaranteeing protection to Mr.. r. NJ
Smith from any stock holders liability
whatever
"a That 7 execute a contract reliev-
ing him from his so per cent proportion
Of approximately s1,S00,o00 OF floating
debt.
3. That myself or any proposed pur-
chaser should also execute a contract
protecting Nir r NJ Smith and hold
ing him harmless from his written con-
tract to the United Properties com
pany to furnish 30,94o shares of the
preferred stock Of the traction com
panies. which he had failed TO deliver,
ard for which he had received stocks,
stitutinR his technical control OF the
United Properties Company of Califor-
MIA.
GOT ONLY 30 DAYS TIME
ITO add to all of these burdens. the
bs mixers suggested, proba bly, as piece
Of irony, that I. be given 80 days only
n which to do all OF this'
From this statement. the facts of
" hich are all IN writing. 1t is obvious
how anxious Mr.. Smith and his bank
ers committee must be to furnish re-
lief TO the investors creditors and un-
paid wage earners of the United Prop
critics company. I was to be compelled
to do all Of these things for Mr.. Smith
md the bankers before the poor labor
ers could get their money.
II do not wish to interfere in the
festivities in which Mr.. Smith and his
banker trustees are exchanging tokens
Of admiration and affection. but may !
suggest that these banker friends lend
10 the United Properties Company OF
California sufficient money ct least TO
pay the Ia Dor and salary claims OF the
poor people who are so much in need,
as long as Mr.. Smith and his banker
trustees are not willing to permit my
self and Mr. Tevis to secure the money
elsewhere?
WHAT If I DO CONTROLs"
There is another matter Of less i'm
portance. Mr.. Smith asserts that / am
actuated by the purpose of controlling
the United Properties company. This
Mr. Smith knows TO be untrue.
when I arranged to enlist foreign
capital TO repair the injuries caused by
Mr.. Smiths blunders, Mr.. Tevis and ]
contracted to give up to the proposed
investors so much OF our personal hold
fnEs that we must always have re-
mained in the minority.
The bankers. Mr.. Smiths trustees,
understand fully that the only possi-
biity of my inducing outside capital
TO come to the rescue. in the face OF
their self-interested Shylock bargain
ing is through Mr.. Tevis and myself
sacrificing greater portion OF our
But what il I do wish to acquire
controI7 Wherein is the shock?
rs ii conceiva BILE that ! could do
worse than Mr. Smith has done? The
result Of those two years of absolute
control is one coroner's jury in the
form of trustees holding an inquest on
Smiths personal financial remains and
another coroner's jury sitting on the
cOrnorations Smith has rnismanaged -