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About Morning Oregonian. (Portland, Or.) 1861-1937 | View Entire Issue (Dec. 27, 1907)
I VOL. XLVI. '0.- 14,681. PORTLAND, OREGON, FRIDAY, DECEMBER 27, 1907. PRICE FIVE CENTS. r L TITLE TRUST Bill Ross and Ladd Favored Before Crash. AT EXPENSE OF DEPOSITORS Their Claims Paid During the Legal Holidays. AMOUNT TO ABOUT $50,000 Experts' Work on Accounts Reveals Amazing Juggle With State , Funds and Carnival of High Finance. Further disclosures In investigation of Title, bank affairs: President Ross and Ladd Tilton, be tween day bank closed, October 28, and day it went into receivership, November 6, credited to themselves the sum of $50,- W9. thus making themselves preferred creditors over the bank's depositors Ross for J17.433, and Ladd & Tilton for J33.154 without turning one dollar Into the coffers of the institution. Rosa owed the bank -' $31,913 when it closed, October 28. On November 2 this was reduced to $14,478 by turning balances held in the bank by himself and his two brothers-in-law, Nathan Coy and W. W. Reld, to his credit on a note for $31,913. The bank owed Ladd & Tilton on Octo ber 2S, $26,452, but on November 6 this debt had been paid to Ladd & Tilton and the Title bank had a credit with Ladd & Tilton of $6702. In this time the Title bank transferred to Ladd & Tilton $26,000 held to its credit by the United States Mortgage Trust Company, of New 'York. By these two transactions, Ross and Ladd & Tilton took advantage of their exclusive knowledge that the bank had failed and paid themselves 100 cents on the dollar out of the bank; the depositors 'will get but 30 or 40 or 50 cents, as the case may be. The defunct bank had no working cap ital out of a capitalization of $250,000. Its deposits last Summer were $2,300,000. Of the capitalization, $192,000 was carried in the Commercial building and the safe ty deposit plant. On March 1, 1907, the capital, according to a sworn statement, made by-the bank to Assessor Slgler, was $50,000, consisting of $40,000 safety deposit plant and presumably $10,000 in money. The defunct bank paid no interest on state funds from January, when Treas urer Steel went into office, until June, when the law went Into effect, requiring payment of interest to the state on all deposits, except school money. Immedi ately the bank transferred to the school fund from the "active fund" $274,000, to escape paying 1 per cent interest, and used the money as before The school money was used by the bank in complete violation of the spirit end purpose of the law, which was in tended to prohibit speculation in school money by banks in which it Is deposited. This is another aspect of the wreck which may lead to criminal' prosecution of the bank's orficers. The bank at one time was paying Ladd & Tilton 8 per cent interest on $725,000 debt, in monthly payments of $5000. When it failed It was paying S per cent on $607,000. These revelations have been made by the accountants of District Attorney Manning, who are exporting the books of the bank. One by one the high finance deals of the broken bank of the Title Guarantee & Trust Company are coming under the searchlight. The carnival of gTab and take grows more startling with each new revelation. Now comes the evidence that President J. Thorburn Ross and Ladd & Tilton used their inside knowledge of the bank's Impending fall for their own ben efit, only a few days before the col lapse, when the legal holidays barred the depositors from getting their money. When the bank closed October 2S (bank holidays began next day) Ross owed It $31,913, on a note given by Ross last Sep tember. This debt came . about in this wise : How Debt Originated. : At Mount Tabor is a 4raet of land owned by the Ladd-Ross Trust, a com pany consisting of Ross and W. M. Ladd. In August, 1901, before the Title Guaran tee & Trust Company went into the banking business, the sum of $45,000 was transferred to the Ladd-Ross Trust from the general department of the title com pany. This indebtedness was carried In this shape up to August 30. 1907, when It amounted to $58,973. Divided the Obligation. Then for some unknown reason, per- haps the shaky condition of the Title Bank, this indebtedness was divided be tween Ross and Ladd. Ross' share was $31,913.16, for which he gave his note to the Title Bank. Ladd's share was $27, 060.07, for which he gave his check. The inside workings of this deal do not ap pear In the books of the Title Bank, nor Is It clear why in August, 1901, Ladd and Ross borrowed $45,000 from the title com pany. The money came presumably from Ladd & Tilton, which acted as depository for the title company throughout Its ex istence, and to which the title company was Indebted up to about a year ago in NS1D GRAB the sum of $750,000 since reduced to $607, 000, chiefly through sale, of the Marquam Theater. Makes Shrewd 3Iove. When the Title Bank closed October 2S the Ross note was still In existence. But on November 2 the note had been reduced to $14,478, the reduction being $17,435. Ross had a . personal balanc in the bank of $2200 and carried other bal ances in the bank in the name of W. W. Reld and Nathan Coy, his brothers-in-law, to the amount of some $15,000. This" money was not In the vaults of the bank, nor could It be obtained in cash. Had it remained in the bank, Ross, Reid and Coy would have obtained, under the re ceivership that was inevitable, only their pro rata with other depositors 30 or 40 or 50 cents on the dollar, as the case may be. Took Depositors' Money. But Ross hit on the following plan of getting the money out: He credited his own . balance and those he was carrying in the names of his brothers-in-law, to himself on his note, held by ill 1 t I' , I " I I Bx-Senator Thomas M. Patterson of Denver, Who Was Bea ta by Fred G. BonfUs, Owner of Rival Paper, Yesterday. the bank. In this way he took out more than $17,000 from the 'bank, and reduced his debt to the bank by that amount. Had he waited to get his money under the receivership he would have obtained probably only $7000 or $8000. By this deal Ross gained, there fore, some $10,030 at the expense of de positors. In other words, he took money belonging to depositors to re duce his own debt. Ladd & Tilton were benefited in a similar way, at the expense of deposit ors, as follows: :... Played a Similar Game. The Oriental Investment Company owed the Title Bank $26,000 on a mort gage on some land at Second and Tay lor streets, where it is erecting a build ing. The bank sold this mortgage to John W. Boyle, of Utlca, N. T., who visited Portland last September and was satisfied with the Investment. Boyle placed the $26,000 to the credit of the Title bank, with the United States Mortgage & Trust Company, of New York, the Title bank's correspond ent in that city, and the same company which holds a $215,000 mortgage on the Marquam building. On November 2 Just four days before the Title bank (Concluded on Page 7 ) CONTENTS TODAY'S PAPER The Weather. YESTERDAY'S Maximum temperature, 62 degrees; minimum, 43 degrees. TODAY'S Occasional rain; southerly winds. Foreign. Accueed members of first Douma deny they advised rebellion. Page 2. . National. Latest developments in row between naval factions. Page 1. . Oregon delegation, except Bourne, agrees on successor to Bristol, but keeps name secret. Page 1. Officers and crew of fleet enjoying life in Trinidad. Page 3. Politic.' Hener says special privilege Is root of po litical corruption. "Page 1. . Indiana Republicans formally indorse Fair banks. Page 1.. Domestic. Mob at Lethbrldge, Alberta, smashes Chinese restaurants and assaults Chinese. Page 1. Judfre Anderson scores John R. Walsh and criticizes Controller of Currency. Page 7. Ex-Senator Patterson knocked by owner of rival paper. Page 5. Chicago ddctor dies of lockjaw according to . own prediction. Page 8. Henryetta. Okla.. armed to meet avenging army of blacks. Page 7. President of Miners' Federation says Gold field miners will Ignore Injunction. Page 4. Horrible murder of woman In New Jersey. Page B. Report of New York state banks shows re covery from money crisis. Page 4. Ship Phelps arrives leaking at San Fran cisco after strenuous voyage. Page 2. Pacific Coast. Snake River cattleman killed by brother-in-law for abusing his wife. Page 6. Defense In Pettibone trial will be same as in Haywood case. Page 6. Grants Pass young man steals money to elope, but Is foiled. Page 12. Commercial and Marine. Shortage In American grain supply shown by Government statistics. Page 15. Chicago wheat market strong' and higher. Page 15. Trade almost stagnant In ' stock market. Page 15. Three more grain cargoes cleared from Portland. Page 14. Portland and Vicinity. Ross and Ladd made preferred creditors be fore failure of Title Trust Bank; high finance revealed by expert. Page 1. oxen saloons besides Conrad's may be closed by police. Page 10. Councilman Vaughn resents supposed Insin uation that he is "grafter." Page 10. Hopgrowers now strongly favor organiza tion. Page 14. River may reach stage of 20 feet at Port land. Page 11. Board of Education votes to add cooking course in high schools. Page 10. Molders at Willamette Iron & Steel Work smite upon enforcement of open shop Page 10. CHOSEN BY THREE IS A DARK HORSE Candidate for Bristol's Place Is Selected. BUT NAME IS KEPT SECRET Bourne Stays Out and Stands by Chris Schuebel. CHOICE MAY BE CHANGED Vulton, Hawley and Ellis Make a Tentative Selection for District Attorney Fulton and Ellis Start for Oregon. OREGONIAN NEWS BUREAU, Wash ington, Dec. 26. A successor to Dis trict Attorney Bristol will probably not be appointed before the middle of Jan uary, that Is until Senator Fulton and Representative Ellis return to Wash ington. These two members of the del egation left for Oregon at 5 o'clock this afternoon to register, as required under the primary law, and as it will be impossible for them to register be fore January 6, they cannot reach Washington before January 11 or 12. At the time of their departure the dele gation had not been able to agree upon any candidate, and from present indi cations, the delegation will not be able at any time to unite. Bourne Stands by Schuebel. In the hope of reaching an, agreement a meeting of the delegation was called for 2 o'clock today, but Senator Bourne did not attend. He is absolutely com mitted to Christopher C. Schuebel, of Oregon City, though no other member of the delegation Is willing at this time to support Mr. Schuebel. A week ago It was believed he would go Into the conference unpledged to any candidate, but after certain telegraphic corre spondence which passed between -Mr. Bourne and W. S. U'Ren,'' Mr. Bourne announced to his colleagues his deter mination to support Schuebel to the end, and It Is believed that he will In dorse Mr. Schuebel, regardless of what action the rest of the delegation rrray take. Mr. Bourne's absence from the conference Is construed to mean that his mind Is finally made up. Choice Is Kept Secret. At the conference this afternoon Mr. Fulton, Mr. Hawley and Mr. Ellis are understood to have tentatively agreed upon a man for District Attorney, but they agreed among themselves to with hold the name of their candidate, and it has been impossible to discover his iden tity. In the absence of Mr. Fulton and WHO SAID A POLICEMAN'S LOT IS NOT A HAPPY ONE? I r- .UNSOLVED MURDERS 1907- ' ' 'M 1 DR.P.E. Johnson ihrown from briU&e, jam 7. (Mt- j jB$:TflRCf,$TABKD To DEPTH, FEBl Jp T C.L.NEVINb, CONDUCTOR, KILLED BY Highwrymrn TMRY 27. DT SMSBlk t . A. HUBER, killed BY HifeHwRYMBN "July n. '. ipf: 11 111 il t J.W.ClTTINC3SJKiLLtDRrQRRDLEYJ"lEt 18. WT lllllllll lW i . . . ........... Mr.- Elite, Congressman Hawley was del egated to confer with Mr. Bourne to ascertain whether, or not he would be willing to Join with his colleagues in sup porting the man selected today, or any other man than Mr. Schuebel. Mr. Haw ley saw Mr. Bourne this evening, but af ter his conference declined to talk, as did Mr. Bourne. Mr. Hawley did say that the action of the three members of the delegation this afternoon was not to be considered final or binding; that several candidates were acceptable to all three, any one of whom might later be recom mended. May Change to Another. It was learned that the delegation had not agreed upon Sanderson, Reed ' or Harrison Alien, but beyond this nothing definite could be gathered. The secrecy with which the delegation handles this matter and its agreement to make no public announcement bids fair to develop a mystery which will not be dispelled until Mr. Fulton and Mr. Ellis return. It is quite within the bounds of possibil ity that the man who is today the choice of Messrs. Fulton, Hawley and Ellis may be set aside and some other agreed upon in his stead. JUMPERS MAY GET A CHANCE Congress Not Likely to Suspend Min ing Assessment Work. OREGONIAN NEWS BUREAU, Wash ington. Dec. 26. The Bartlett mining as sessment bill has not passed. The Teller bill, which is similar, passed the Senate before the holidays, but, it is understood, will not pass the House. Failure to pass such legislation means that all mining claims upon which the re quired amour t of assessment work was not done .during the calendar year 1907 can be legally Jumped after January 1. Martin for Postmaster Again. OREGONIAN NEWS BUREAU, Wash ington, Dec 26. The Oregon delegation today agreed to recommend the reap pointment of Albert R. Martin as Post master of Junction City. NAMES THE ROOT OF GRAFT SPECIAL PRIVILEGE CAUSES CORRUPTION", SAYS HENEY. Terror of Rich Rascals Tells New York How to Remove Tempta tion From Officials. NEW YORK, Dec. 26. After a confer ence with President Roosevelt during which the coming prosecution of land frauds In Oregon was discussed, special Attorney Francis J. Heney, of the Depart ment of Justice, arrived in New York .Ot day. Mr. Heney was a guest at the City Club tonight, and in an Impromptu address said that .the causes of corrup tion' In San Francisco and other Western cities were the same which Incited cru sades in Eastern cities. "Special privileges are at- the bottom of the trouble," he said. "The condition which exists In all cities is that vice and public service corporations join hands. The remedy is to remove tempta tions, that is, do away with the special privileges. It is no solution to appoint or elect business men to the places formerly held by politicians, because the business man already is bought up in advance by his Interests." Russian Statesman Coming. ST. PETERSBURG, Dec. 26. Professor Paul Milukoff, leader of the Constitu tional Democrats in the Douma, started today for the United States, where he will speak on political matters. Nit TROUBLE IS ONE OF RANKING Different; Readings of Revised Statutes. RAISE QUESTION OF DIGNITY Line Officers Uphold Rear Ad miral's Contention. DEFINE STAFF'S POSITION Contents of Letter to President Kept Secret and May Not Be Known Until Requested by Congress. WASHINGTON, Dec. 26. Now that the legality of the President's proposed ac tion in assigning a staff officer in the person of Surgeon Stokes to command the hospital ship Relief has been called in question, it Is proper to state that the reliance of the line officers is upon a pro vision of section 7 of the naval personnel act of March 3, 1839. That section, among other things, was designed to clear up doubt that existed as to the right of staff officers to assume the title of a line of ficer of a corresponding grade in the mat ter of pay and emoluments and length of service. Up to. that, date, . staff officers had enjoyed what was called "relative rank," with which they were not at all satisfied, so in section 7 the w'ord "rela tive" was struck out, se that all sections of the Revised Statutes which, in defining the rank of officers in the Navy, con. tained the words "relative rank," were amended so as to read "the rank of," etc. To this provision the following im portant qualification was attached: "But officers whose rank is so defined shall not be entitled. In virtue of their rank, to command in the line or in other staff corps." Line Officers' Contention. Line officers understand this to mean that no surgeon or engineer (if there shall be ever again commissioned engineers) or paymaster or constructor shall be placed in a position on board vessels of the Navy where he may command the movement of and actions of any person not of his own staff corps. The staff officers for their part hold that this act - does not in any sense abridge any rank formerly enjoyed by a staff officer, and a careful perusal- of the act .appears to justify the statement that this provision is open to controversy and that there is reasonable ground for dif ference of opinion as to the meaning of the law. As this whole controversy threatens to occupy the attention of the public for some time to come,,and perhaps to figure to some extent in the proceedings of Con gress, it may be proper to state the dif ference between the line and staff, about which the public mind is more or less confused. In brief, it may be said that a line officer is one whose sole duty Is to fight for the ship, while the staff offi cer is one who either provides the means for the line officer to do so or acts under his ; direction in carrying out his general orders. Thus the engineer, when of the staff, looks closely after the machinery and starts and stops It when called upon to do so by the line officer: he has noth ing to say as to where the ship shall go or at what speed or where It shall move. Duties of Surgeons. The surgeons aboard ship look after the health of the crew in times of peace and health or wounds in times of war; but they have nothing to do with the movements of the ship t which they are attached. ' and the same rule applies to the paymaster and the constructor who builds the ship navigated by the line of ficer. It developed today that a year ago, when the Relief was put into commission. IlilllllliSii ' j lllllli j l ' "-.tw, t ! Curtis G. Sutherland, New Chief I Clerk of Harrlman Lines in Oregon, f the decision was' reached to assign a Naval 'officer to command the vessel In the event it were manned with a mer chant crew and master. But in the event that the ship was manned with a Naval crew, then a Naval officer of the line would be assigned to the command. A "Naval surgeon in command would have absolute charge, just as a physi cian would have supervision of a hospi tal on land, without, however. Interfer ing with the work of navigating the ves sel. Surgeon Stokes will be assigned to the command of the Relief If the crew and master are chosen from' the mer chant marine, which, while not finally decided, it Is understood will be the case. Secretary Metcalf Silent. Secretary Metcalf again today declined to enter into any discussion of the issues which prompted Admiral Brownson's res ignation as chief of the Navigation Bu reau, and declared he knew nothing about the statement of Surgeon-General Rixey that the internal administration of the Bureau of Medicine and Surgery had been Interfered with by the Bureau of Navigation. Admiral Brownson relinquished his po sition as Chief of the Bureau of Navi gation yesterday and the duties of that office were discharged today by Com mander Cameron McRae WInslow, As sistant Chief of the Bureau. Commander Winslow was not desig nated nor appointed Chief of the Bureau, as the result of recent events, but signed all of his mail as "Acting Chief." WAIT ACTIOX OF COXGRESS Text of Admiral Brownson's Letter Not Yet Divulged. WASHINGTON. Dee. 26 Not since the day preceding the passage of the per sonnel law, 10 years ago, has the feeling between line and staff of the Navy been so acute as it is today as the result of a refusal of Admiral Brownson to transmit orders from his superior officer, the Pres ident of the United ' States, assigning a Naval surgeon to command vessels in the Navy. In the case of the personnel act, It was Mr. Roosevelt, then Assistant Secretary of the Navy, who acted the part of paci ficator and succeeded in bringing. the two warring factions together in support of the legislation which for a decade past, though a makeshift, has served to main tain peace between the two factions in the Navy. In the present instance, how ever, the efforts of the President to recon cile the surgeons and the line officers has failed, and It Is probable that the whole controversy will be threshed out on its merits in Congress. This is much deprecated by conserva tive officers in both line and staff, as like ly to prove prejudicial to the Navy's In terest as a whole, for they believe that in order to succeed In securing from Con gress the four great battleships, the cruisers, scouts and submarines, which form a part of the year's naval estimates, in addition to securing legislation that will better the lot of Naval officers per sonally, the Navy must present a united front, which cannot be done if Just at the beginning of a session line and staff are to engage in a fierce strife. Should Give Both Sides Hearing. Through the published statement of Surgeon-General Rlxey, the merits of the doctors' side of the case in this Instance have been clearly set forth. Line officers believe that in common fairness they should also have a hearing. But they are In an embarrassed position in that respect. Brownson preceded his resignation by a cold, clear, logical pre sentation of the reasons why he ob jected to the assignment of a physician to command a Naval ship, even though that vessel were exclusively devoted to hospital use. The statement was sub mitted to the President, and, notwith standing the staff has had Its ea.y In print, applications at the White House for this letter are met with, refusal. Now (Concluded on Page 4 ) ANGRY CANADIANS TURN UN CHINESE Mob Wrecks Restau rant at Lethbridge. DUE TO FALSE MURDER STORY All Furniture and Dishes Are Smashed to Pieces. CHINESE BADLY BEATEN Baseless Rumor That AVhite Man Is Wounded Arouses f'ury of the Whites The Mounted Po. lice Arrive Too Late. ' SCENE OF THE RIOT. L.ethbrldge In the principal town of Alberta and is the center of an extensive coal mining- district, much of the product of which is shipped to the United States over the Al berta Railroad. It is also surround ed by a farming and stock-raising country. It Is on the Canadian Pacific Railroad. The latest report of population is 1279 In the year 1901, but the great flow of Immigration to the province since that date has doubtless caused a large Increase. LETHBRIDGE, Alberta, Dec. 26. (Spe cial.) Because they believed that a prom inent citizen had been murdered In a Chinese restaurant, 1500 men raided the. Oriental quarter late last night and left a wreck behind. Restaurants and laun dries were smashed, doors and windows and entire fronts of buildings being re duced to splinters. The regular police ol the town were powerless and a brigade of mounted police had to be called out tc quell the riot. It was just after 9 o'clock that the mob began to foim The story had got abroad that Harry Smith, one of the best-known ranchers of the cattle dis trict, of which this city Is the center, had been fatally wounded In a restaurant. Curiously enough, neither Smith nor any one else had been hurt, but even the po lice were misled by the tale and two Orientals were placed under arrest, charged with his murder. - Rock Starts the Smashing. An indignant mob gathered opposite the eating-house and there was talk of lynching. Suddenly someone threw a rock, which smashed a front window, and in a moment the crowd was beyond control. Bricks and stones were used and, when the doors had been broken, the tables and chairs and "dishes were smashed. The Columbia and Alberta res taurants were literally wrecked. What could not be conveniently broken by the few men who could get inside was passed out to the street to the mob in waiting, and there demolished. Dodge Police, Continue Havoc. At 10 o'clock a detachment of mounted police appeared and the crowd scattered. Hundreds of the rioters merely shifted the scene of their pillaging. Three blocks away, opposite the Arlington Hotel, they cleaned out another Chinese restaurant and badly handled two Orientals who were captured within. Mayor Galbraith, who had rushed tot the scene when the mounted police were first called, delivered a speech asking good citizens to disperse. The crowd lis tened to him and to Magistrate Town send, who spoke later. All possible dam age having been done, the crowd went home.' Five of the rioters have been arrested, but it is doubtful If they will be prose cuted. HOOSIERS F0R FAIRBANKS Beveridge Speaks for Him and He publicans Indorse Candidacy. INDIANAPOLIS, Dec. 26. Resolutions were adopted unanimously today at the biennial love feast of Indiana Repub licans, urging the nomination of Vice President Charles Warren Fairbanks for the Presidency. The resolutions were in troduced by Governor J. Frank Hanly and were adopted with a round of cheers by the 1000 or more active party workers of the state who were present. - - United States Senator Alfred J. Bev eridge of Indiana presided and made the principal address, dwelling upon the no table accomplishments of Mr. Fairbanks' public career and averring that the In diana delegation would stand solidly by him In the National convention. Others present included Senator Hemenway of Indiana, many of the Indiana representa tives in Congress, members of the Legis lature, county and city officers, and a number of candidates for places on the state ticket with their friends. The gathering was large and enthusi astic. ANOTHER CITY GOES DRY Raleigh, X. C, Votes to Close Liquor Dispensary Today. RALEIGH, N. C, Dec. 26. By a ma jority of 545, Raleigh today voted out its liquor dispensary and will become a Prohibition city, the dispensary to close at noon tomorrow. In the city there were 928 votes for Prohibition, 381 dispensary and 2 for saloons.