New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-05
Where sl.s70.000 Went

cry told the District Attorney, ven, :,
pay 100000 for the Dare Lanbs,
Company. 100000 for his share in III
lumber deal. $4,000 70 pay the se
ond instalment on the majority sea
Of the Pittsburgh Life and Trust Css
any and $4,000 20 repay the tl2l,M
loaned by the Commercial Trust Css-
pany, with which Montgomery ~
Birdseye made the first payment ot :,
insurance company stock. This leave
about $3.50 900 TO be accounted for
Montgomery went to the Dsrc
Attorneys Office accompanied By u
counsel. Herbert Noble, Of ll5 Bra
way. He told how he came to ~
York from Jacksonville. Fla. ~
ago. leaving behind him many irf
ments. Here also there were ~
ments against him, some growing q
OF another insurance deal Of yesng'.
He came, he said, to float bonds :
Georgia railroad. He failed ia ~
enterprise. Then he engaged viii y
Birdseyes, with whom he had bstar
acquainted, in a hunt for small (,
surance company with cash or g.
assets that also possessed directors =,
too particular as 10 the standing
those willing TO pay more than -
market price for control.
New York Companies Wary
Two New York companies met d
requirement in every way but ore
the directors were above temptatioh
Meantime Montgomery had interss
ed himself in the affairs Of the ~,
Lumber Company, controlled BY J. !
and ]. c. Cuttings. of Baltimore. u,
company for six years had been opsns
ing on lands owned by the East "a
Lumber Company, in North Csrollr.
but had failed to pay anything 70 y
latter concern. with the result thar
had been enjoined from cutting g
more timber. While this inJencnss
was in force he arranged TO pay siw,
GOO for both properties, Clarence
Birdseye being a witness to tne wi
tract.
Birdseye, Montgomery asserted p
previously agreed 20 finance the y,
through a New York life insuise'
company, one of the two which an eHs
was made TO buy. Later Birdseys
formed him of the deal by WING,
was TO take over the Pittsburgh y
and agreed to finance the LUMBER "
with its funds. :.
In consequence Of this agreens1,
Montgomery said that on Msreh - 20,
secured enough stock in the Dare L''
Der Company TO qualify hlmssn =. :
twelve dummies as directors. Inc p.
day he was elected president anu
issuance of 100000 in bonds =
authorized. This meeting was new
Birdseye's office. ~.
One day later all OF these %. p.
and the stock of the company ~
placed in escrow with the Comh''''
Trust Company. :,
Something better than properly :
ing at 100000 was needed =,
foundation for these bonds, ana al
Montgomery explained, was suppnss..
yet another company. This was y y
concern, organized with S2,OOO' hosi
which was paid in, which contracts,
take 10000 cords Of pulp wood . \,
for nlnety-nine years at not less y.
S. a cord. This. he explained. q,
the value OF the Dare Lumber ~ ~
peny's assets S20.000.000, mueho a M
than enough 10 justify $6'OOe'v~
bonds. -
He did not see the Birdseyes -. ~
until March 81. In the meantime y,
had secured control OF the Pltiss''|
Life and obtained authorization
dummy directors of the deals neee'',,
to get the money with which J.
through the lumber deal. On ths' J.
Brdseye paid him sl,l00.00O; o. .
sum 81 100000 went 10 the Gituns',
Baltimore, for division among ~.
stockholders Of the Dare and hs "a
companies. The remaining siVV'v"