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The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, July 26, 1913, Image 5

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Judge Morrow Orders the
"Borax King" to Appear
to Answer Tevis and
Hanford Suit
Move Only Last Resort to
Make Properties Pay Out,
Asserts Promoter
••Nobody is clnirut anything to nave
tl»"««» properties.
"The Interest on bond* ha* not been
paid hy the it IllltiWl Is in default, and
l""-«'ltnhly, the properties mast be ut
terly mined.
"1 have offered my best efforts on
behalf of the creditors and the owners j
el I am asking; is an opportunity to
cet everybody his money, and to pay
*very creditor In full. This Is xvhat
(hey have denied mo.'*
This declaration was made yesterday
by R. G. Hanford of Tevis & Hanford
*nd the directing force In the petition
to have F. M. Smith declared a bank
While the Smith trustees barricaded
'bemselvcs behind a dignified policy of
silence Mr. Hanford prepared a state
ment purporting to be an inside his
tory of the relations between Smith,
Tev is & Hanford and the United Prop
erties company and its subsidiaries
rontrolled hy the "Borax King."
This statement accuses the trustees
of both the United Properties company
snd of the Smith properties as a whole
of having refused to act themselves
and of having refused to permit others
to act in an effort to save those prop
ert i eg.
"This attitude.'* said Mr. Hanford.
U made it necessary to appeal to a
higher power, where some authority
may ho established that will give fair
treatment to some investors other than
F. |C Smith and to the general
The appeal referred to was the
petition filed at the behest of Tevis &
Hanford in the United States district
<-o U rt Thursday. Acting on that peti
tion. Judge Morrow set August 5 as the
oate for Smith to appear in court to
show cauf why he should not be ad
ndged a bankrupt.
"I am not reflecting on the character
of the United Properties trustees," con
tinued Mr. Hanford, "but they forget
st times that they have no right to be
"Tclusirely concerned In the rehabili
tation of Mr. Smith. They also forget
that something more Is expected of
• hem to preserve these properties for
'he owners and creditors than to weep
Brer their misfortunes like women.
These can be saved only by the bold
action of courageous men."
M* - . Hanford said he had inspired the
bankruptcy proceedings in the hope of
two results:
"First—That some authority may be
• stablished that will bring order out
af chaos.
"Second —That the appointment of a
trustee in bankruptcy, under the juris
diction of the federal court, will re
move the atmosphere of suspicion on
the part of tbe investors and creditors
outside of the personal Smith inter-
Mr. Hanford qualified the last state
ment by saying he made no charges
epainst any person. But he intimated
that there is a suggestion that the de
sire of large corporate Interests closely
allied with some of the San Francisco
hanks can prevent any assistance being
riven to the L'nlted Properties company,
in the hope that they may acquire the
Oakland Traction system and other
holdings at a nominal price.
The statement prepared hy Mr. Han
ford and which his partner, W. S. Tevis.
concurred in. consisted of about 2.000
words. It recited that when the United
Properties company and its subsidiaries
were organized they rested on actual
property, or contracts, one of which was
Smith's written agreement to furnish
not less than 75 per cent of the shares
«f the traction companies.
For this agreement he received the
• tocks. bonds, certificates and de
bentures of the United Properties com
pany of California, constituting his
technical control of the corporation, or
fiit per cent.
Of preferred shares called for by con
tract. Recording: to the statement. 30,940
v pre never delivered by Mr. Smith. The
statement, in part, then follows:
Based on the delivered and con
tra', ted for properties, originally con
templated, the properties company,
through me. had made arrangements
abroad for sufficient financial assist
ance to carry all its affairs to pros
"On Mr. Smith's failure to deliver
the preferred shares, the corporation
was without the assets or securities
promised the financiers, and they re
fused to furnish the money.
"T then obtained a loan on four year
rotes from K. H. Rollins & Sons for
*2.500.000, all of which money was
put into the Oakland Traction com
pe nies.
"Mr. Smith ordered the loan to be
taken with N". TV. Halsey & Co.. short
ening it from four years to ten months,
giving all the collateral of the Rollins
loan and additional security.
"The cost of changing from Rollins
to Halsey was $37,500 over and above
the interest.
"At the time that Mr. Smith did this
I c had no means In sight of repaying
♦' f Halsey loan at the end of 10
Mr. Texls and myself, as minority
stock holders, filed a written protest
against this transaction, as we be
lieved it threatened the ruin of the
properties. As Mr. Smith controlled
the board of directors, our protests
were In vain.
"It is this loan that the Traction com
panies have been unable to refund.
"About the same Mine Mr. Smith suc
,-«r-ried In withdrawing the tide lands
o' the traction companies from under
their respective bond mortgages,
greatly depreciating the bond securi
ties and the credit of the roads, and,
on these tide lands, borrowed, at the
rate of 6 per cent $1,000,000, a t a cost
of approximately $75,000 premium.
Against this transaction Mr. Tevis
and 1 protested, without result.
"The money, thus obtained, lay Idle
in a trust company for a year.
"I made an effort In London and New
York to obtain financial assistance.
This was promised, but the financiers
would not deal with Mr. Smith di
"To advance matters. It was arranged
that Smith's. Tevis' and Hanford's hold
ings in the United Properties company
should be placed in the hands of three
trustees to be used for financing the
"The trustees verbally accepted the
London offer. The people came here
with a staff of engineers and book
keepers and incurred great exper.se.
When the London people were ready to
conclude the transaction, the consum
mation was denied them. This situa
tion was brought about through in
formation, inspired by some influence
here, having been sent to the trustees
and to Mr. Smith from New York that
Rollins & Sons would do better than
the London people and transact the
Wedding Ends Long Suit
Groom Waits for Years
Mrs. Nat Shanklin Jr., bride after
seven years of waiting
business immediately; In fact, the time
set was a little over a week.
"Notwithstanding the absurdity of
this suggestion, the then trustees, un
der the influence, and at the persua
sion of, Mr. .Smith, refused to conclude
with the London people, and caused
them to withdraw from the field.
"The written proposition of the Lon
don people involved the payment of the
Halsev loan, the payment of the tide
lands loan and the rapid supplying of
enough more money for the rehabili
tating of the properties to bring the
sum advanced to more than 512,000,000,
"Rollins & Sons then abandoned the
whole project and the bankruptcy of
F. M. Smith became inevitable."
The statement charges that Tevis
and Hanford advanced the Properties
company more than $1,000,000. Con
cerning the Halsey loan the state
ment says:
• .V YV. Halsey & Co. made a prop
osition to the Smith trustees that they
would renew their loan or refund the
same, provided that they were given,
as a bom:-, of a new company to be
formed which was to become the owner
of the Traction companies. enough
stock, which, added to the holdings of
Smith and the Smith trustees would
constitute a majority ownership of
these companies, and thus reduce the
United Properties company, on its
principal security, to a minority holder,
thus depriving the United Properties
company of one of its principal assets.
•"This astonishing proposition met
with the approval of the Smith trus
tees, but was, fortunately, thwarted
by the firmness of the trusr.es for the
United Properties company.
"I proposed to the United Properties
trustees that, if they would give me.an
option on Mr. Smith's holdings in the
trust, or on ail the holdings, I would
proceed to London and attempt a
financial rehabilitation of the com
"They verbally promised me an op
tion ■at a price, based on Mr. Smith's
contributions to the company, of dou
ble the present market price.
"I accepted the proposition, as I
felt that Mr. Tevis and myself had,
such large interests at stake, and so'
many of our friends had their for
tunes involved, that It was not a tima
to haggle over prices.
"The trustees then changed the sfjtg
gestion and imposed another condition
—that I should agree, if I found a pur
chaser, to take care of all of Mr-
Smith's traction holdings which had
been hypothecated in the banks, an/fl
are in the hands of the Smith trustee/8,
at a price twice the present markiet
value. '
"After deliberating on this several
days to see if I could possibly m»»et
the condition by any sacrifice that Mr.
Tevis and myself might make of our
holdings, I accepted this burdenswme
"The trustees then again amended
by insisting that, besides taking care
of all of Mr. Smith's holdings in the
banks, and his personal holding??, I
should enter Into a contract, on behalf
of myself and any buyer I might pro
duce, that we should assume the bur
dens to the United Properties company
of Mr. Smith's unfulfilled contract for
the delivery of stock.
"I finally accepted this frlghtfkil bur
"Then. Mr. Smith's attorney In an
effort to prevent anything whatever
being- done for the benefit of anybody.
Insisted that a portion of the prop
erty, held by the trustees, belonged to
the Realty Syndicate and that the
trustees had no right to give me an
option on this property.
"T-> avoid delay T proposed to the
trustees that If T found a purchaser,
and any part of this property was found
to belong to the Realty Syndicate, or
any other person. I would accept what
was left after the claims should be
proved, allowing a proportional reduc
tion from the price for tbe property
they were unable to deliver.
"On this suggestion the trustees have
never acted.
"The Smith trustees proposed to the
property trustees that If I were given
any option whatever it should not ex
ceed 30 days. Every sane man knows
that I could not go to London and
transact business within that time. This
was merely an effort to block the situa
The Smith trustees held'a late meet
ing in the Kohl building yesterday. At
Its conclusion John S. Drum, spokesman
for the committee, said:
"We are preparing a statement for
the creditors and the public, which will
be ready probably by the first of the
week. We do not care to make any
comment on the situation before then.
"We are actually acting for the cred
itors in an effort to save the Smith
properties, and the action of Tevis and
Hanford to have Smith declared a bank
rupt does not afreet us or our work."
There was a report that the bankers
interested in straightening out the
Smith affairs would apply to the United
States court for the appointment of
Frank B. Anderson, Mr, Drum. Mortimer
Flelshhacker. W. W. Garthwaite and C.
O. G. Miller as receivers for the Smith
properties. These are the bankers act
ing as the Smith trustees. There were
other rumors, and Mr. Drum asked to
be excused from commenting upon any
of them.
Puilman Sleeping Car via Southern
Pacific. Leave Ferry Stations 9:40
p. ni.; Oakland, Sixteenth Street Sta
tion, 10:17 p. m., arriving El Portal 7
a. m. Round trip from San Francisco,
including stage between Hotel Del Por
tal and Sentinel Hotel, in center of
park, 14 miles, 122.35. Stage thence to
Wawona (Mariposa Big Trees), 26
miles, and return. $15. Comfortable
camps in addition to first class hotels.
Twice Parted From
Maid, He Wins Her
After a struggle against odds for
more than seven years. Dan Cupid last
night disentangled tike last of a se
ries of knots which have held him
bound, since Miss Vira Storrs. daughter
of George A. Storrs. prominently men
tioned as President "Wilson's choice for
United States marshal of Utah, met
and was wooed by Nat Shanklin Jr..
a formier Stanford student. The last
knot was untied yesterday when
George Storrs wired his blessings to
the young couple, who were married
one week ago.
Seven ago at an amateur the
atrical performance in Provo, Utah.
Shanklin met Miss Storrs, and shortly
afterward they became, engaged. On
account of their youth, the parents
of both forbade a marriage. and
Shanklin was sent to Stanford univer
sity to "recover." Miss Storrs was
sent to the University of Utah for a
similar purpose.
Three years later Miss Storrs was
married to O. P. Adkins, a young civil
engineer then with the Southern Pa
cific. Shanklin plunged deeper than
ever into Blackstone in an attempt to
Less than a year ago Mrs. Adkins
secured a divorce in a Utah court
from her engineer hxisband. Three
months ago Shanklin heard of It and
hastened to Utah to press his suit
again, but Mr. Storrs again raised ob
jections. Shanklin returned to San
Francisco, but kept up a correspond
ence with Miss Storrs.
This correspondence was so lively
that one evening Miss Storrs boarded
a train for San Francisco, and they
were married here a week ago. After
tlue ceremony they wired to Mrs. Ad
kims' father, and he forgave them.
Shanklin is now connected with an
Oakland manufacturing firm.
Murphy Asks Board to Pro
vide Additional Help for
Fire Protection
Acting upon an urgent appeal made
by Chief Engineer Murphy, the board
of fire commissioners yesterday called
the attention of Mayor Rolph to the
necessity of the enactment of a city
ordinance which will permit the em
ployment of help to care for the auxil
iary water system for fire protection.
After an examination of the system
Chief Murphy reported that the leak
age has increased from 145,000 to 225,
--000 gallons daily, thus weakening the
effectiveness of the system. He rec-
ommended the employment of a super
intendent and an assistant, two addi
tional gatemen and four laborers to
properly care for the city's water sys
Tlae fire commissioners approved
ChlAf Murphy's recommendation that
|92«,250 be appropriated for additional
Theodore Kytka Wants *250 Which
Was Allowed Long Ago—But
Flckert Holds Demand
Theodore Kytka, handwriting expert,
appeared before the finance committee
of the board of supervisors yesterday
to inquire why & demand for $250 for
services rendered the city had not been
paid. Kytka says he turned the de
mand over to Flckert two months ago.
The committee informed Kytka that
the demand had been allowed not long
ago and that it was up to Flckert to
return the demand to him so that he
could receive payment on it.
IlKlwllSMli I fcl/ ■ lA4IC ■
Californian, Taking Up the
Tariff Debate, Devotes
His Attention to the
Sugar Schedule
WASHINGTON', D. C, July 25. —
Senator Galiinger, leader of the sen
ate republicans, could find no republi
can senator ready to speak on the tariff
today except Senator Works, who re
sumed his address begun yesterday.
Several republicans have tariff
speeches in preparation. Senator Works
today devoted his attention chiefly to
the sugar schedule, defending the beet
sugar Industry of the west, and assail
ing free sugar in 1316 as ruinous to
that Industry.
"I do not advocate a high tariff or
a prohibitive tariff," said Senator
Works, "to build up monopoly, but I
do believe that the sugar Industry ?s
widely misunderstood in this country.
The insistent demand for legislation
against trusts and agitation against
the high cost of living have led to
many erroneous conclusions and will
lead to great harm to the beet sugar
industry. As soon as the finishing
touches have been put to the beet
sugar people, the cane sugar trust will
have an absolute monopoly."
Senator Williams of Mississippi said
In the tariff debate today that the dem
ocrats had found it difficult to deal
logically with the tariff because It had
been placed on stilts by years of re
publican protection.
This prompted Senator Cummins to
ask why the democrats had not cut off
a little of both stilted legs.
Senator Williams replied that they
were "afraid it would kill the poor
thing" to walk straight all at once.
"You have put the country on stilts."
said Senator Williams, addressing the
republicans: "we can't reduce the du
ties In one bill all that we would like
to on account of the chaotic artificial
condition you have created. We can
not run a thread of logic through this
bill for that very reason."
"I agree with the senator from Mis
sissippi that the Payne-Aldrlch law
gave the American legs stilts that
were too high, but I think the way
to correct the trouble Is to saw off a
fair length from both legs. But the
senator from Mississippi would saw
off one leg entirely and leave the
other where it was. He should leave
the agricultural leg no shorter than
the manufacturing leg."
"Well." said Senator Williams, "we
found the poor thing with one leg al
ready longer than the other and we
took off proportionately from the long
leg. but still tiie poor, crippled tiling
will have to go stumbling along."
"But you should equalize the legs,"
said Senator Cummins.
"Oh, we struck a fellow so in the
habit of walking with one leg longer
than the other that we were afraid
It would kill him if both legs were
made exactly even," Senator Williams
retorted, arousing laughter of the
When the senate adjourned hours of
argument had delayed progress In the
chemical schedule, so that less than
10 paragraphs had been approved dur
ing the day.
Three »w Government Craft Are
Open to Bidder* ost
Thl» Const
According to an announcement made
hy the San Francisco Chamber of Com
merce yesterday, three of ten latest
model lifeboats, recently authorized by
the treasury department, may be con
structed by local builders.
Seven of the lifeboats are to be de
livered at New York. The remainder
are to be delivered on this coast.
According to the Washington dis
patch. Pacific coast builders may bid
on the construction of three of the
Henry Lane Wilson De
nounces Plan for Partici
pation by South Amer
ica in Mediation
Continued From Pace 1
it was pointed out. would not allow
interference in internal politics.
If it develops that overtures of the
United States toward peace are not
favorably received it is expected that
the Washington government will there
upon pronounce itself on the question
of arms and ammunition, in all proba
bility lifting the embargo so that all
sides can buy munitions of war.
Such a development, it is believed In
many quarters here, would so strength
en the constitutionalist cause as to
bring matters to a crisis speedily and
possibly a quick overthrow of the
Huerta government, a contingency
which many Washington officials be
lieve is inevitable, though reports of a
strengthening of the federal armies
are being advanced constantly by of
ficials of the Huerta administration.
Admiral Cowles, at Guaymas. in
formed the navy department today that
Thomas Hind, the American railroad
man reported held at Guaymas, Mex.,
for a ransom, was not a prisoner. He
said that Hind went out of the fed
eral lines near Guaymas and that the
Insurgents would not allow him to
cross back.
American and British oil camps at
Juan Casiano and Potrero Del Liana
have been robbed, according to a re
port from Tampico.
Manuel Garcia of San Antonio, Tex.,
an American citizen who was held in
Tampico on political suspicion, has
been released through the efforts of
Consul General Miller.
L. H. Morrison, who was held under
suspicion by federal authorities at
Guaymas, is to be delivered Into the
custody of Admiral Cowles on the
cruiser Pittsburg for transportation out
of Mexico.
The Mexican embassy In an official
statement founded on advices from its
consul general at San Antonio, denies
today that Torreon has been taken by
the constitutionalists.
Aviator Gives Gunboat Scare
HERMOSILLO. July 25.—Dedler Mas
son succeeded yesterday in making a
bomb dropping flight over Guaymas
harbor, according to advices received
here today.
It was reported here that the French
aviator dropped bombs near the Guer
ro, forcing the federal gunboat to
change Its anchorage.
Many of the crew were reported as
fleeing to the shore in fear of another
visit of the aeroplane.
Rebels Seek Recognition
EL PASO, July 25.—Eduardo Hay,
special envoy from the Sonora consti
tutionalists to the American govern
ment, passed through here today en
route to Washington to plead for
recognition of the rebels. Concerning
his mission he said:
"We have fullest confidence in Pres
ident Wilson. I am going to urge him
to let both sides in Mexico have all the
ammunition they can take into Mex
ico and let it be a fair flghL
"This Japanese scare from Mexico
City is only a bluff made by Huerta to
l>rovoke bad feeling against the Amer
Hay was president of the Mexican
chamber of deputies under former
President Madero.
Information reached here today that
Charles Blefel, manager of the Mines
Company of America, Is held a prisoner
by the Mexican federals at Chihuahua.
He was arrested by Orozco at Santa
Rosalia. He is a New York man and
the home offices of his compa/iy are
in New York.
NEW YORK, July 25.—Pausing here
for a half day on his hurried Mexico
to Washington trip in response to a
summons from President Wilson, Henry
Broker and Physician Are Both
"Game" and Will Ride
In Rodeo
One of the most prominent real es
tate men of San Francisco and one of
the most prominent physicians of the
city each lays claim to being the cham
pion amateur bronco buster of the
state, and each backs up his contention
with a wager of $1,000.
The result is that Walter Magee and
Dr. Julian Waller, house physician at
the Palace, will constitute one of the
attractions at the Salinas rodeo next
week and a large crowd of their
friends will Journey down to Salinas to
see the two men attempt to "ride any
thing that wears hair." The wager is
the outcome of a conversation at the
Palace last night.
Judge Watt, manager of the Nevada
Realty and Livestock company, was
made stake holder.
Lane Wilson, American ambassador to
Mexico, announced his emphatic op
position to several plans under con
sideration by the state department for
bringing about peace in the troubled
Mexican republic.
Supplementing statements he made
earlier in the day, disapproving the
suggestions of American mediation or
the appointment of a tripartite com
mission, Mr. Wilson gave his reasons
tonight why he considered the plan for
a tripartite commission not a feasible
"If we are to consider such a plan,
we may as well abandon the Monroe
doctrine entirely." he said. "The Mon
roe doctrine pledges the United States
to take care of the interests of Ameri
can governments without the aid of any
foreign country. Consequently, under
the Monroe doctrine we can not at
tempt to settle Mexico's affairs through
the services of such a body as the pro
posed tripartite commission, since it
involves caliing in outside governments
to help."
Mr. Wilson was reticent when ques
tioned as to his policies on American
intervention and recognition of Mexico
by the United States. These views, he
said, he felt he must reserve for his
conference with President Wilson and
Secretary Bryan.
"I have been blamed for a great
deal," the ambassador commented as
he discussed his administration In
Mexico City.
On everything he has done he "stands
pat," however, he said as he hurried
on to Washington, taking a train late
tonight; and he added that he believed
he would be retained In his position
and sent back to Mexico.
Fur Sale
I %aw U WW jLf mt¥s\ ,h<i
A Special Lot of Black Hare and Coney flre man . T
Neckpieces and Muffs siST"'"'
Just I/2 Price flfj'^jt
$3.75 Neckpieces $1.90 "W jBP
$6.00 Neckpieces $3.00 ; ■ 1/
$9.00 Neckpieces $4.50 I m ft
$13.00 Neckpieces $6.50 Wfl
$17.50 Neckpieces $8.75 , *$F P *
"I'm Just About Broken
Down," He Admits Upon
Displaying Confusion
in Answers
WASHINGTON. July 25.—With only
about 1,000 mora of Martin M. Mulhalls
letters to read into the record, the
senate lobby investigating committee
adjourned today until Monday, expect
ing to wind up the correspondence of
th* "lobbyist."
Toward the close of the day's ses
sion Mulhall showed signs of the strain
he has been under. He became con
fused during the reading of one letter,
and when Senator Walsh suggested
that he needed a rest, he exclaimed:
"I'm Just about broken down. For
God's sake, do have mercy If you can.
I don't want to say I'm breaking down,
but I don't want to answer questions
if you'll let me go."
Senator Overman announced today
that the attorneys for the National As
sociation of Manufacturers and the
American Federation of Labor would
be allowed to question the witness
through the committee, provided they
submit questions 24 hours beforehand
and receive the committee's approraJL
.Senator Nelson had a talk with the
democratic members before the de
cision was announced and it Is known
that he protested vigorously against
allowing Mulhall's story to stand
without examination by the lawyers
for the organizations involved.
At the hearing today a sharp debate
occurred among members of the com
mittee about whether foreign manu
facturers and Importers had Influenced
tariff reductions in the present bill.
Mulhall caused a mild sensation by
swearing that a list of repeaters from
New York had been offered him in the
sixth New Jersey campaign against
William Hughes in 1910 by a Mr.
Conk;in, who, he said, was a republi
can county chairman in that district.
"I refused them," Mulhall said. "He
told me both sides used them."
Several of Mulhall's experts* ac
counts about the tlma of the 1910
elections showed large amounts paid
for work at the polls. He swore he
had not paid any of the money di
rectly to voters. He said It had gone
to party workers.

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