Evening journal., 1917-04-13

uioNisbhtNu dnoAB lhe bdih0 NhiNh POS
ticipated in the loan, so that the de-
posits in participating banks were in
creased on the following day over those
ON February 29rd, in round figures as
follows:
Mechanics and Metals National Bank,
New York, from Sl9l 900 to $369,00O.
American Exchange National Bank,
New York, from $4,000 to S59l 900.
Bankers Trust Company, New York,
J from Sl0l 900 to S70l 600.
! First National Bank, New York, from
| 100000 TO 100000.
! National City Bank, New York, from
$4,000 to S950,OOO.
! Chase National Bank, New York, from
$4,000 to S503,OOO.
Hanover National Bank, New York,
from $4,000 to $685. 600
National Park Bank, New York, from
100000 to $590,OO0.
Empire Trust Company, New York,
from Sl2l,00O to 1921 900,
Chatham and Phoenix National Bank,
n. Y, not increased at that time but on
February 23rd the balance was $4,000
and within ten days had become Si02,
600
Equitable Trust Co., n y, from Sl9l,-
600 TO $49l 900.
National Bank of Commerce, y. y,
from $4,000 to $596.O0O.
The deposit in the Philadelphia Ma
tional Bank was decreased on the oath,
but on the 25th was increased by over
100000 and j. p. Morgan & Company's
account which, on February H. stood at
1927 900 had ben increased on the 18th
by over S2.4OOOOO
IL is alleged i'm the bill that Pierre
and his associates used the credit Of the
Company TO obtain the loan of S. $1,000
upon which to finance the transaction.
Whether the loan could have been OBJ
tanned from other banks not repositories
OF the Powder Company, upon the secur-
lty OF the stock deposited as collateral
together with the individual guarantees
OF Pierre, lrenee, Lammot, Raskob Car
pcnter and Felix cannot be determined
10 would be mere conjecture. What they
did must be drawn from the evidence
The loan was negotiated by the President
and treasurer of the Powder Company
through banking house having an in.
Innate knowledge of the COmpanys bust
ness, having large sums passing through
IT'S hands to the Company and having a
large deposit of the Compauy's cash on
hand and S5,500,000 coming in on the
day of the transaction. The loan was
distributed among the repositories OF
the Powder Company and the deposit.
IN at least eleven-of the depositing bank.
were increased by enormous amounts out
OF the S5.500,000 of the Companv's casI
the day after the loan was placed through
checks drawn upon J. p. Morgan & Com
pany. That firm knew that those oh
tanning the loan included the acting pres
ident, the treasurer and directors of tn,
Powder Company. The collateral consist
ed OF very large block OF stock of tn
Company and the Securities Company
the maker of the note. was Obliged {,
meet It, If at all, out of dividends de
rived from that stock. as it had no othe
source from which to meet its obliga
tons. Those dividends would have TO b.
declared by the action of a Loard of iii
rcctors of which the parties to the SYN
dictate were officers and members. Unde
these circumstances it would be placini
/ motives, reasons and conclusions of wit
T nesses on higher plane as evidence thal
facts to conclude that those officers di,
not use the advantages derived from tn
Company's financial standing. from thei
official connection with the company am
/ from the deposit of its funds in obtain
- ing the credit upon which the loan wa
o based.
I Upon learning of the transaction AL
fred and William promptly made obiec
ton On March 2nd William duPon
p sent the following telegram to Pierre
" Paper states you have purchase
> Coleman's stock. l presume for In
Company. Any other action I shout
consider breach of faith"
Alfred !. dupont expressed to PIER
verbally similar opinion. On Marc
r. 2nd, the date of Williams Telegram
g Alfred invited Pierre 10 come TO his OF
e flee and asked him concerning the pur
IS chase of the stock. Upon being inform
If ed of the details of the arrangement
J. with j. 7. Morgan & Company and tina
70 Pierre proposed TO divide the stoc
IS among the stockholders of the holdin
l. Company, Alfred testifes:
le 81 then said TO him, Pierre duPon
Of don't do this. II is wrong lie aske
b. me why it was wrong. ! said 'Becaus
/. YOU have accomplished something h
as virtue of the power and influence vest
or ed in you as an officer of the COMPANY
or and by knowledge which you could oni
er only have acquired in your official c.
at paeity, which you could not have accom-
he plished as a private individual FL
ll that reason the stock which you ha,
!. acquired in this matter does not b.
v long to you, but belongs to the con
tv pany which you represent. therefor
he ask You to turn this stock over to Il
orr company. He said he was very sori
No that he could not agree with my poii
2 of view. In a further endeavor to q
as INN TO make some concession along nj
line of thought, I said Pierre. yol
= father and my father were brother
- Neither of those men would have a
I'm proved, / am confident, of what YOU la,
h. done. For their sake, as we'll as f
~ your own, put that stock in the cor
- pany's treasury, because YOU can't a
n ~ ford to do anything that will invi
- criticism or condemnation on the pa
nc Of any of your fellow bankers WIFI
~, would in any way injure your busine
80 reputation. / said Pierre I ask vol
Un lie said he could not do il, that t
"' thing was an accomplished fact al
:. could not be undone. ! said Then "
~ refuse TO make this concession which
Dtt ask of you?' He said q do That t.
'n' inmate dthe interview"
On the evening OF March 3rd, AlfrC
, William, Alexis, Philip. Eugene
Francis, Irenee and Pierre met at 4
~ tred's office and discussed the subject
as Pierrc's acquisition of the stock and I
Oh propriety of the manner in which il h
on been acquired and a reiteratOn was h
pr OF the position which Alfred took
lOo March lst that Pierre owed il TO {
ma company to turn the stock into the CO.
ON panV's trpaeurv william, oIeo .,ro