Evening journal., 1917-04-13

"O iSVtS anu kepJ IN ignorance by PlerrS,
Dased their charge of bad faith and
preach OF trust on Pierre's part upon tho
fact, which they believed, that he as an
official of the Company had used tbs
Company's credit TO buy the stock ana
had used information obtained bv virtue
OF his office of the value of the stock. and
OF the fact that the stock was for sals.
Tor his own advantage when he should
have acted for the advantage of the
Company.
Pierre, having declined to turn the
stock over TO the ompany, consulted Mr..
Latfey, counsel for the Company. who
informed him that, in his opinion. the
Company could not lawfully purchase
the stock, because under its charter and
under the laws Of New Jersey, it could
not purchase its own stock except out of
its surplus.
The purchase price of the stool,
amounted 10 Sl3,0O3,7lj, which was in
excess of its surplus, as shown in the
statements of the financial condition of
the Company as of February 2s, 1915.
under the item profit and loss" S5.3O3.,
J99.S2, at that time, over and above all
OF its liabilities, including in that term
those fixed, current and contingent. and
the amount of capital stock paid in
Pierre then addressed to each of the
, Board of Directors of the Powder Com
pany a letter dated March >, 1918. stat
ing that he together with others. had
arranged to purchase Coleman's stock;
that Coleman had written to him before
/ Christmas Offering 10000 shares of COM
mon stock to the Company at $3.50 per
share with the suggestion that the stock
/ be resold TO the important employees.
He then cited the resolution from the
minutes of the Finance Committee meet
| ing of December %, 1914, and stated
/ that this information was transmitted
to Coleman, who withdrew his offer very
shortly afterwards; that about the mid.
die of February, Alfred brought ND with
the Finance Committee the subject Of
purchase of this stock and expressed the
opinion that Coleman had not understood
the position of himself and William on
the question and suggested that both he
and William should write to Coleman
outlining their position; that this was
done by Alfred in his letter of Febrii-
airy 10th. of which he attached a copv.
He stated that this letter most clearly
outlined the position of the majority
of the Finance Committe at the time Of
the meeting and amplified the minute
of the meeting; that on the same dav.
February 10th, he learned from Coleman's
confidential representative that Coleman
was planning to sell a large block of his
stock. and as the Company was not in
tercsted, he felt at liberty to sell else
where; that this resulted in negotia-
ton on February 18th and the offer to
purchase was made and accepted on
February Goth; that the final details
/ finished III
, recited the telegram from William of
March 2nd stating that Alfred had ex-
: pressed to him a similar opinion. He
stated that in taking exception to the
, accusation of bad faith. the meaning at
tached to these words is as follows:
II could not have made the purchase
OF this block of stock unaided by the
Company; that, therefore. the Comapnv
e. is entitled to the stock. There seems to
d be no contention that my position in tho
Company enabled me to receive an offer
from Mr.. II. c. DUPONT the point being
= that l could not have financed the pur-
Z chase of the stock without using Com
pany credit. l haven reason to think
p that I am accused of any improper use
r of credit, but of having used my posi-
1 ton to enable me to obtain credit in
New York that as an individual could
S not have obtained. Messrs. Alfred J.
and William DUPONT, who have expressed
this opinion most strOnly, admit that
they know neither the amount Of tho
t loa, the nature of the collateral used, no.
the terms of the transaction. I have
/ given them the following information:
That loan was placed through J.,
i p. Morgan & Company with whom our
Company first had relations by opening
E a nacOcunt on December 9th, 1919.
D Messrs. }. p. Morgan & Company under
J. toB TO place this loan in their usual
manner, namely, for a commission: they
selected a number of banks and distribut-
. ed the loan among them. After the trans
= action was completed, we were made
!. acquainted with the names Of the banks,
\ who took the loan; the latter was about
: 80 per cent. oversubscribed and it was so
far distributed that Morgan & Company
: had not retained more than 10 per cent.
= l. e., the allotments TO banks amounted
:. to more than 90 per cent.
81 declare that neither l. nor any Of
: my associates, have used or attempted
y to use the Companys name in this trans
:. action. I have been greatly surprised
that Messrs. Alfred and William dupont
r consider that the Company has in any
a. otlct tlt Il-ub 10 take lulS bIOcks and
- still more surprised that some others OF
J.. our directors have at least entertained
o such telling if they do not now pos.
10 sess 1t. The object of this letter is Ia
z endeavor to settle satisfactorily IN
It everybody's mind the question OF pro
It priety by inquiring whether the D.rec
v tors wish to purchase the stock for ac
n count of the Company"
& He then gave the Cumnanv fba onnor
D. tunity to make an offer to him and hi,
.e associates, withdrew the statement mad,
,r on the evening of March Attn that b,
n would not sell the stock, and stated il
f. was now open to consider a proposition
te He stated that the purchase, which hc,
rt been finally closed beyond any power d,
n change was such that the whole OF tn
SO 63,3l4 shares of common ard 1857
H. shares of preferred stock purchased f,on
he I. {. DUPONT was open TO the Companv'
I'd offer of purchases that the p-.cs pa,
III was 5000 per share for the common. a.,
l $50 pc share for the preferred. an,
r lany offer made for the purchase O
common stock must be subject I,
d, an outstanding option TO purche :
=, 1924 shares of common stock for 81.
VI 10000, or approximately SI3s lie
Oh share, and that in order to undo via
ne had been done, an expenditure OF az
40 proximately $250,OO0 would ben ecss
al sary.
on The matter was brought before re sh
ne Board of Directors at a netting O
~ March 9, 1915. Those present wer