Evening journal., 1916-07-11


represented AZ all the sessions.
Fine reversing electrical fans helped
to keep certain portions of the room cool
during the session.
Pierre S. DUPONT, head Of the syndi.
cate that purchased 7. Coleman duPonts
stock took the stand as soon as court
opened this morning. He was question
ed about the bonus plan of the company
relative 10 distribution of stock among
employees. Counsel squabbled at some
length over this bonus PLAN but the
plan as adopted by the board Of direc-
tors, in 1911, was finally put in evidence
and modified since. The plan has been
amended.
The witness said in answer to Mr.
Graham's questions that in addition 70
the agreement with the Bankers Trust
Company, testified 20 yesterday, there
were also notes given by the purchasers
Of the stock 10 4. c. DUPONT. These
notes, he said, amounted 10 5000 900
There were twelve Of the notes and they
were placed in evidence The notes
were made out by the dupont Securi-
ties Company. They are for seven
years, but the principal can be paid at
any time. One Of the notes was read
before being placed in evidence. Az the
suggestion Of Mr.. Glasgow, the amount
Of each note was read. Four Of the
notes were for 81 ,0O0.OO each, three for
S500000 one for 100000, one for $50,
0O0 two for $4,000, an one for
$4,000
The witness testified that $4,000
shares Of the common stock was de-
posted as collateral with the T. c.
DUPONT notes and $4,000 shares Of the
preferred stock and $4,000 shares OF
the common stock deposited as col
lateral with the ss5O0.00 note Of the
Bankers Trust Company The aggre-
gate OF this collateral deposited. he
said, was larger than the amount pur-
chased from T. c. DUPONT. p. S. du-
Pont said this was due 10 the fact that
the individuals interested in this pur-
chase had sold 2s.177 shares Of the
common stock TO the DUPONT Securi-
ties Company. He said the deposit OF
this extra stock. although they paid
5000 a share for what was bought,
made its value only s13S a share TO
cover the loans.
Mr. DUPONT testified that the T. C.
DUPONT notes, amounting to s5,900,000.
had been paid and cancelled He was
asked II any of the dividend of De-
cember. 1915, was used in paying
these notes and he replied that about
S2.000,000 was used In anticipation Of
payment Of some OF the T. G. DUPONT
notes.
The witness also stated that the
larger note of the Bankers Trust
Company, Ss,500.00O, had been paid.
This was paid about November Is,
1915.
TN what manner we're they paid"
Mr.. Graham asked the witness.
Mr. DUPONT replied that the funds
for the payment Of these loans came
from a fund Of SO 1000, 600. secured by
the Securities Company on hve year
notes.
The trust agreement OF the Securi
ties Company for the Issuing OF the
/ $4,000 600 notes was read II was
shown that S5.000,000 is to be paid II
installments starting November, 1915
and the other S5.000,000 In 1920. All
the notes are now outstanding the
witness said
The witness was questioned about
the 80 per cent. dividend of Decem-
Der Is. 1915 and said he was pres
ent at the directors meeting when
this dividend was declared and that
the surplus OF the company was suf-
fcient at that time to warrant the
dividend. The policy of the company,
he said. was TO use about two-thirds
of the earnings for dividends. Mr..
dupont said the dividend or Decem-
Der 15, 1915, had nothing to do with
the purchase Of the stock, He said
the total amount Of dividends used
in the purchase OF the stock was
about s2,00O000.
Mr.. dupont testified that at the
time the Morgan & Co. loan was ar
ranged. he did not know what banks
would participate In the loan. He
said there was no agreement Of any
kind with banks that did not take
part in the loan as to deposits. Any
Increase in bank deposits, he said
was due 10 increased business and no
other cause and the increased depos
It's we're made in all the banks the
COMPANY did business with, and not
the banks alone that participated In
the loan. The witness declared there
was no discrimination in favor ol
hanks that participated in the loar
relative 70 deposits
Mr. dupont said the amount OF stock
held by the Securities Company was
about 81 600 common shares and l5,-
600 preferred shares. and the total
issue OF the company was about SOO'.
o0O common and 100000 preferred
shares He said the total amount that
Morgan could possibly control in con
nection with the loan was $4,000 pre-.
ferred and $4,000 common shares
This would not be near controlling
interest
The witness said as he recalled. the
fact that he and associates had pur-
chased the stock was first made public
in the newspapers OF February 2s
1915. He told Of an interview that he
had with Alfred l. DUPONT, the next
day. March !. al the latter's office.
He said Alfred was opposed 70 the
purchase and claimed Il would be
necessary 70 use the company's credit
for such a largo purchase The wit
ness said he took the opposite view
and assured Alfred that he did not
use the company's credit At this
conference. he said. Alfred remarked
Il am glad you have purchased the
stock" The witness said he did not
know what was meant by this re-
mark
/ Mr.. dupont told Of receiving the
telegram from William DUPONT. in
which the latter said he would con-
slider IL bad faith If the stock was
purchased for anyone except the COM
pany. He said he went 10 Alfred about