VOL. XXVI.-NO. 14,684.
PORTLAND, OREGON, TUESDAY, DECEMBER 31, 1907.
PRICE FIVE CENTS.
N. ft. LADD
WILL PAY
DEPOSITORS
Agrees to Meet All
Accounts in Three
Years.
TAKES OVER ALL ASSETS
Title Guarantee & Trust Co.
Creditors Will Be Paid
in Full.
TOTAL AMOUNT $2,560,000
District Attorney Manning Will
Continue Investigation.
INDICTMENTS NEXT WEEK
Active Officials and Directors of the
Defunct Bank Will Not Escape
I Prosecution Xew Deals of
President Ross Discovered.
4 DISTRICT ATTORNEY MANNING'S
ANNOUNCEMENT.
To Desosltors of ths Title Guarantee
A Trust Company:
John MmnnfitB, - -Dtatrtet Attor
ney for the Fourth Judicial District
of Oregon, do hereby notify all the
depositors and creditors of the Title
Guarantee A Trust Company, that la
my Judgment all deposits, trust ac
counts and savlnss accounts will be
paid 100 cents on the dollar and I
notify the creditors that they should
not sell their claims at a discount,
since they will receive satisfaction
of their claims In full.
JOHN MANNING,
District Attorney for the Fourth Ju
dicial District, State of Oregon.
W. M. Ladd has agreed to take over
the assets- of the Reus bank and pay all
tta deposits within three years.
Details of the plan will be arranged
today In a conference between a com
mittee of depositors, agents of Mr.
Ladd, John Manning, District Attor
ney, and W. C. Bristol, special counsel
for the state, and for the American
Surety Company.
Mr. Ladd will not be prosecuted, but
officers of the bank, Mr. Manning says,
will bs Indicted next Monday.
Investigation of the smashed bank's
accounts will be continued, in order to
gather evidence for prosecution. Offi
cers involved are J. Thorburn Ross,
George H. Hill, T. T. Burkhart, J. E.
Aitchtson and F. M. Warren.
Experts continue to dig up sensa
tions In the bank's accounts, and to
confirm the knowledge that Its deal
ings were the most scandalous Port
land has ever seen.
Committee of depositors will Insist
on payment of Interest by Mr. Ladd
until claims are fully met
Whether the receivership will be
continued has not been decided, but If
It shall be, C. E. Meara may be super
ceded by a receiver of Mr. Ladd's se
lection. Mr. Ladd will succeed to whatever
claims the bank may hold against the
$202,000 property of Ross.
The bank's liabilities are: Demand
accounts. $1, 055,000, including J288.000
school funds and $100,000 other state
money; savings accounts, $405,000, al
ready guaranteed by Mr. Ladd's pledge
of November 9; time certificates, $175,-
000; demand certificates, $315,000. In
cluding $100,000 due First National
Bank and $50,000 due Ladd & Tilton;
due other bankf . $610,000, including
$607,256 due Ladd & Tilton.
All these claims are to be paid by
Mr. Ladd In full. Including the state.
which will save loss to the American
Surety Company.
Ross' 49 Vi per cent Interest In the
Commercial building pays him $10,000
a year net. The gross earnings of the
building are $35,000 a year.
Ross pocketed .21,000 last June in
selling 152 shares in the Commercial
building to the bank, througu N. Coy
and W. W. Reid, dummies.
Safety deposit vaults which cost
$9150, Including repairs, were entered
Into the' $50,000 capital of the bank de
partment at $40,000.
The ban, continually ran behind Its
earnings, but Ross had a happy faculty
of marking up assets with "enhanced
value" to make up the deficiency, and
entered It in a mysterious account
called "suspense earnings," which is
full of puzzles for tne experts.
The original capital of the Title
Guarantee & Trust Company, when the
company was formed in 1891, was
$125,000, paid for with $62,500 debt
and an abstract plant of the Real
Estate, Title & Trust Company, which
was succeeded by the present company.
The company did a big business in
title insurance, but the policies are
worthless. A very large aggregate
sum of money was paid in premiums.
Mr. Ladd pledges himself to make good
the deposits of .the Ross bank, dollar for
dollar, if allowed three years' time. He
gave out this announcement last evening.
after an afternoon conference between W.
B. Ayer, acting as his representative;
John Manning, District Attorney, and W.
C. Bristol, special counsel for the state
and for the American Surety Company.
Complete details of the agreement will
be worked out today, at conferences in
Mr. Manning's office. The participants
District Attorney Manning, Who Has
Exerted Himself Successfully to
Serve the Interests of the Deposl-
lors or. xne xuie tiuamniee
Trust Company.
will be a committee of five members of
an organization of depositors Dr. S. J.
Barber. J. O'B. Scobey, Nathan Solomon,
C. E. Moulton and William Swope; rep
resentatives of Mr. Ladd, including .W.
B. Ayer, and W. C. Bristol and Mr. Man
ning..,.:. ... :r - .
Mr. Manning will confer with the de
positors' committee at-9 A. M. and with
Mr. Ladd's representatives at 10, after
which there will be a general parley of
all parties.
Depositors will ask that their claims be
put in such shape as to be negotiable,
preferably to be exchanged for certifi
cates of deposit on Ladd & Tilton, paya
ble in three annual installments, with in
terest. Mr. Ladd will guarantee the
trusts of the wrecked company, but not
the title insurance. The American Surety
Company and the state have secured ac
quiescence to their claim for payment of
the state's deposits. Mr. Ladd's delay in
shouldering the bank's obligations was
due largely to his desire that the surety
company assume the share of the loss
for which .it had given Indemnity bond,
but he has finally waived this objection.
Mr. Ladd's friends say that he desired,
from the first, to put the bank Into a
condition that will enable it to pay all
Its depositors . In full, and that he sup
posed he was doing this for them when
relinquishing the Marquam block to the
bank and guaranteeing savings deposits,
on November 9, three days after the bank
fell. 'He relied on the statement of Ross
at that time that the bank would pay
out and had no knowledge of the plunder
deals that subsequent Investigation has
revealed.
District Attorney's Statement.
The following statement was issued by
District Attorney Manning last night:
"W. B. Ayer called on me several times
about matters of the Title Guarantee &
Trust Company, more particularly con
cerning W. M. Ladd's connection with
the company. In conversation with me
Mr. Ayer always seemed in favor of Mr.
Ladd's taking up the assets of the com
pany and paying all the depositors 100
cents on the dollar. The only difficulty
was in determining a satisfactory time
In which to pay the depositors. This
period has not been definitely fixed, but
will probably be three years.
"I am informed that Mr. Ladd always
has been willing to pay the depositors
100 cents on the dollar, because he be
lieved his connection with the Title Guar
antee St Trust Company, while not such
as to keep him Informed closely of its
business, yet was such that he believed
himself morally bound to the public for
the adjustment of the affairs of the com
pany. "Mr. Ladd has not been threatened
with arrest by me and therefore this
settlement will be made only because Mr.
Ladd believes it his duty to the public.
Had it not been for the fact that Mr.
Ladd "was president and director of the
company so long, and . for the further
fact that the public believed him In
terested in the company to a much
greater extent, he would probably not
have come to the rescue of the depos
itors, as he has promised to do.
"Mr. Ladd's business associations, be
cause of misplaced confidence, have led
him at times Into some unprofitable in
vestments, but evidently without Inten
tion, of wrongdoing. His association with
the Title Guarantee & Trust Company
began many years ago before the com
pany resolved itself into a bank. His
confidence in the management of the
Title Guarantee & Trust Company In
duced him to own stock in the company
and to associate himself with it. I am
advised that while he does not wish pub
licly to criticise the management of the
, (Concluded on Page 8.)
! : v i
GERMAN-AMERICAN
PLANS A MERGER
To Take Over Oregon
Savings Bank.
S. G. REED FOR PRESIDENT
Court Order Granting Time to
Pay Claims Will Be Asked.
MAY OPEN IN TWO WEEKS
AVill Have Paid-Up Capital of $500,
000 Strong Directorate of Sub
stantial Citizens of Port
land 'Is Promised.
ACTION AT TAXPAYERS' MEET
ORGANIZATION. Inabilities of the bank $2,300,000
Telephone bonds signed for
bv depositors 1,000,000
Capital stock paid up SOO.OOO
Ca?h on hand UoO.OOO
Long time certificates of
deposit 400.000
Deposits applied' to indebt
edness due hank 150.000
Notes and other securities
the new hank, will receive 900.000
Bank fixtures, lease and
safety deposit vaults
which the new bank will
reecive 100.000
Name of new bank. German
American Bank. Presidency has
been offered to S. G. Reed.
In all probability the German-American
Bank will take over the defunct Oregon
Trust & Savings Bank within the next
two weeks and will pay all liabilities of
the closed Institution. The German
American Bank will move to the 4corner
occupied by the Oregon Trust and it is
the avowed purpose of the reorganizers
that a better and stronger bank shall
rise from the ruins of the old.
S. G. Reed, treasurer of the Portland
Railway, L&ht & Power Company,- has
been offered the position of president of
the bank, and has ths) matter under con
sideration. He will announce his decision
In a short time. Thomas C. Devlin, re
ceiver of the closed . bank, will remain
with the institution, probably as cashier.
At any rate" he will represent the court
until all claims against the closed bank
shall have been paid. The new bank will
bear the name of the German-American,
the present German-American Bank ab
sorbing the Oregon Trust and surrender
ing its present location at Sixth and Al
der streets.
Time to Pay Claims Asked.
The chief matter yet to be arranged is
an order from the court giving the bank
sufficient time to pay oft all the claims
against it. A petition to this effect will
be presented to the court within a few
days. ' Just how long a period will be
asked to permit the bank to meet its lia
bilities has not yet been decided, but it
is likely that not less than 12 months will
be petitioned for.
It is taken for granted that the insti
tution would wipe out the claims against
It just as fast as possible, but In order
to leave the Institution free from the em
barrassment of meeting the majority of
its liabilities at once upon reopening, a
stated period for payment of creditors
will be asked, and it is confidently ex
pected that this concession will be al
lowed. Strong Directorate Planned.
The securing of this court order and
the selection of. a directorate which will
consist of not less than nine and proba
bly of from 15 to 21 prominent and sub
stantial citizens of Portland, are the
matters remaining to be closed up before
the formal election of these directors will
be held and the closed bank taken over
by the German American. These prelim
inaries, it is expected, .will not require
more than a few days longer and it Is
quite likely that at the end of two weeks
the bank at Sixth and Washington will
be doing business as of old.
The directorate of the new bank Is to
be of the strongest possible. Men of un
questioned business ability and honesty
will be chosen, against whom no whisper
of unfair dealing or Incompetency can be
made. None of the former officials of
the Oregon Trust & Savings Bank will
be connected with the new bank, al
though a number will be heavy stock
holders, particularly W. H. Moore, who
takes a large block of stock. Those In
terested in the reopening of the bank
speak highly of the work Mr. Moore is
doing for the reorganization.
Capital to Be $500,000, .Paid Up.
The German-American Bank, of, which
Louis J. ' Wilde Is president, has many
wealthy Pacific Coast men on its stock
books, residents of cities from Portland
to San Diego, and they are among the
best-known men of finance in their re
spective territory. The capital stock of
the bank, which was started less than a
year ago, is $500,000. This will be fully
paid up when it takes over the Oregon
Trust.
S. G. Reed, who has been offered the
presidency, Is a man who would com
mand the confidence, of all as a bank
president. He is thoroughly conversant
with the business requirements of such
a position, and the fact that he is now
treasurer of i a $30,000,000 " corporation
speaks well for his ability. Mr. Reed has
been connected with the Portland electric
interests for the past five years. He was
TjHE NEW YEAR'S OREGO- !
NIAN. .'I
A composite view of Oregon's
industries and resources will be t
presented in the New Year's I
Oregonian that will be published I
tomorrow. Space will be devoted f
to a comprehensive review of the f
progress of horticulture in this
state, and dairying, mining,
grain, livestock, manufacturing,
railroad development, and many
other subjects will be dealt with.
Special attention will be paid to
the progress of Portland during
190 1. Many attractive and in-
struclive illustrations will ac- I
company the articles. Price 5 t
cents; postage 3 cents.
secretary and treasurer of the Portland
General Electric Company until the con
solidation into the Portland Railway,
Light & Power Company, almost two
years ago, when he was made treasurer
of the new company.
The plan whereby the Oregon Trust will
be taken over by the German-American
S. i. Reed, Who Has Been Offered
Presidency of Reorganized tier-
man-American Bank.
has been declared practicable by all who
have examined Into It. Liabilities' of the
bank when it closed were about $2,300,000.
Of this sum, practically $1,000,000 has been
signed off by depositors for telephone
bonds, bank stock and time certificates.
Louis J. Wilde, for the Home Telephone
Company, holds certiflcatcyj nt deposit
and other claims against the closed bank
of $475,000. Mr. Widle will subscribe $100.
000 of this sum for stock in the new bank.
A meeting was held by all those who
will participate in the reorganization last
Sunday at the Oregon Trust, when the
plan was thoroughly discussed and
turned over' from all sides. It was the
general opinion that this will be the so
lution best suited to all Interests. It was
decided, after a .thorough discussion, to
proceed along these lines, and the plan
had proceeded so far yesterday after
noon that it appears certain of success.
Hard Struggle for Reorganization.
"All who have helped In the work of
reorganization deserve great credit,"
said a man who is familiar with all de
tails of the bank. "During the Sunday
meeting Mr. Moore was more than gen-
(Concluded on Page B.)
CONTENTS TODAY'S PAPER
u Weather.
YESTERDAY'S Maximum temperature, 42
degrees; minimum, 34 degrees. . '
TODAY'S Rain or enow; high eoutheaaterly
winds.
Foreign.
Evidence in Harden case complete; Kaiser's
sister helped Harden. Page 3.
Trial of Russian Douma members near close.
Page 3.
Druce's grave opened and body found In
coffin; claimant will not give up. Page 4.
National. .
Government replies to Standard Oil's attack
on justice of big fine. Page 4.
Ambassador Aoki starts for Japan, confident
of settling immigration question. Page 4.
Politics.
Taft speaks at Boston on responsibility for
panic. Page 1. -
Domestic.
All Indictments against Colorado 'coal-land
grabbers quashed. Page 4.
Woman murdered in New Jersey posltWely
identified. Page 3.
Governor Sparks calls extra session of Ne
vada Legislature. Page 8.
Girl driven to hysterics by secret society
initiation starts crusade . by mothers.
Page 1.
Sport.
Ten "hot rounds between Hugo Kelly and
Papke end In draw. Page 4.
Multnomah and St. Louis football teams
ready for big game. Page 12.
Pacific Coast.
Cooke, his mistress and baby flee from San
Francisco. Page 5.
Grand Jury indicts Brown, Bartnett and
Treadwell for wrecking California Safe
Deposit Bank.- Page 4.
Congressman Ellis admits agreement be
tween himself, Kulton . and Hawley to
support Bingham for TTnited States Dis
trict Attorney. Page 7.
Four big Hoquiam mills reopen with, full
force. - Page 5.
Commercial and Marine.
Sale of large block of Independence hops.
Page 13.
Wheat drops 3 cents at Chicago.' Page 13.
Further gain In stock prices. Page 13.
Steamer Annie Comings sunk in collision
with French bark Europe. Page 12.
Portland and Vicinity.
W. M. Ladd will guarantee payment of all
deposits in Title Guarantee & Trust Com
pany Bank. Page l.
Gorman-American Bank probably will take
over defunct Oregon Trust ft Savings
Bank. Page 1.
Senator Fulton discusses a variety of topics.
Page 8.
Gus Lowit charged with grand larceny in
removing goods from Golden Eagle store.
Page 8.
First car run over Oregon electric from
Salem to Portland. Page 14.
School levy fixed at 3 mills and bonds for
new high school recommended. Page 9.
Council adopts tax levy of 46 mills for
municipal expenses. Page 9.
City Attorney instructed by Council to In
vestigate draymen and retail grocers' or
ganizations under anti-trust law. Page ft.
I
j ' A V,
1 1 :" w'v,,'';
t i if
1 fcajjififiMftTiiiiitii irn'miYirfY-v c-
TUFT'S RESPONSE
TO THE INTERESTS
Panic Mainly Due to
Dishonest Finance.
WHAT ROOSEVELT WARS UPON
Only Influences Which Tend
Toward Monopoly.
GUARDS HONEST BUSINESS
Secretary Tells Bostonians What
Caused Panic and Says Social
Ism Will Come If Moneyed
Oligarchy Grows Vp.
BOSTON, Dec. 30. Greeted with cheers
as "the next President of the United
States," a topic which he carefully avoid
ed In his own remarks. Secretary of War
William H. Taft tonight delivered his
first public speech since his globe-trotting
tour at the annual banquet of the Boston
Merchants' Association, at the Hott
Somerset.
The banquet closed a long and stren
uous day for the Secretary of War, dur
ing which he delivered a brief address
before 400 members in the morning and
attended a reception and spoke before a
gathering of Jews of the city at the Ely
sium Club in the afternoon. During his
visit to Boston, which ends tomorrow
morning, Mr. Taft Is the guest of Samuel
Carr,' a Boston banker and a relative of
Mrs. Taft.
Gathering of Notables.
A more notable gathering of prominent
and representative men has seldom been
seen in Boston than that which greeted
the Secretary tonight. In the banquet
hall beautiful decorations adorned the
tables, which provided for the seating of
more than 500 guestB, while behind the
speaker's table were a great many flags.
Seated on either side of the chairman
were the speakers and guests of honor,
who included Mr. Taft, Congressman
Sherley, of Kentucky; Lieutenant-Governor
Eben S. Draper, of Mossachusetts;
Mayor John Fitzgerald and Rt. Rev. Will
iam Lawrence, bishop of Massachusetts.
As the Secretary arose to speak, the
guests all stood up with him and filled
the air with long-continued cheers. Calls
for "three cheers for Secretary Taft, the
next President of the United States,"
were heartily responded to. Mr. Taft
then delivered his speech, which he read
from manuscript, making no additions or
comment relative to his own candidacy
for the Presidency or other topics:
After alluding to his New England an
cestry and education and to the lack of
public Interest In the Philippines,
Mr. Taft began a discussion, of the recent
panic. Its causes, effects and relation to
the policy of the administration. Ha at
tributed panics in general to the conver
sion of loanable capital into Investments
less and less convertible and to waste of
money In unwise enterprises, extrava
gant lfvlng, wa'.'S, etc. For eight or nine
months there were many Indications that
this loanable capital was near exhaus
tion, until the soundest railroads and
other enterprises could not borrow money.
This condition extended all over the
world. He continued:
What Destroyed Confidence.
Secondly. the conclusion cannot be
avoided that the revelation, ot irreg
ularities, breache. of trust. stock-Jobbing,
over-Issues of stock, violation of laws
and lack of rigid state or National supervision
in the management of some of our largest in
surance companies, railroad compantes, trac
tion companies and financial corporations
shocked Investors and made them withhold
what little loanable capital remained avail
able. Such disclosures had more effect prob
ably abroad than they had here, because here
we were able to make distinctions, while
there, at a remote distance, the revelations
created dlMrust In our whole business fabric.
When, therefore, two or three Institutions,
banks and trust companies, supposed to be
solid, were found to have their capital Im
paired by stock-Jobbing of their officers, the
public were easily frightened and the run
on banks began.
It would seem that our system of currency
Is not arranged so as to permit Its volume
to be increased temporarily to counteract the
sudden drain of money by the hoarding In a
panic. It is probable that the stringency,
which reached Its height on that dark day of
October 24, might in part have been alle
viated had we had a currency which could
automatically enlarge Itself to meet the tre
mendous demand of a day or a week or a
month, while public confidence was being re
stored. The National Administration, to
gether with many of the large capitalists of
New York and elsewhere, put their shoulders
under the load and by various devices of an
unusual character, have brought about the
present condition of gradually Increasing con
fidence. Effects Not as Bad as In 1893.
He predicted that the consequences of
the recent panic would not be so long-drawn-out
as those of the panics of 1873
and 1893, because we have a solid cur
rency, with no agitation against the gold
standard, and the railroads are on a
much solider foundation and the balance
of trade is with us. He described how
loss of confidence destroys credit and
renders helpless financially men who
properly count themselves millionaires.
Though reason gradually returns, the In
jury to business is more or less perma
nent. Then the sufferers begin a discus
sion of the cause. Recent history has
given certain elements in the business and
political community exceptional opportu
nities. He then continued:
Evil Deeds of Trusts.
Let me Invite your attention to more
history. - It - is that of - a giant -strug
gle between the National Adminlstra- ?
tion and certain powerful combinations
In the financial world. These combi
nations, for lack of a better name, are
called "trusts." They engaged In different
lines of manufactures and production and by
assembling large amounts of capital into one
mass In a partlular line of business, man
aged by artful and skillfully devised, but il
legal, methods of duress, to exclude competi
tion and monopolize the trade. They became
the dictators to great railroads, however pow
erful and by threatening a withdrawal of pat
ronage, secured unlawful and discriminating
rates greatly Increasing their profits and
still more completely suppressing compe
tition. Managed with conspicuous business
ability, these trusts went into legitimate
foreign trade and largely increased our
country's trade. The profits which they
realized enabled them to engage in other
enterprises, carried on by legitimate meth
ods until the hold which they acquired In
the business community gave them a posi
tion of vantage it seemed hopeless to com
bat. The basis of their original success and
the maintenance of their power was the
violation of the Sherman anti-trust law and
the Interstate commerce law, and for a
time both laws were but dead laws upon the
statute books of the United States.
rolioy of Roosevelt.
The purpose of the Administration of Mr.
Hooeevelt was to make those men, however
powerful and wealthy, to know that the
laws upon the statute books were living
laws and must be obeyed. It was not pro
posed - that the legitimate enterprises that
were carried on with the capital of those
men should be destroyed. It was not pro
posed that the foreign trade which inured
to the benefit of the whole country should
be struck down, but it was determined that
W. C. Bristol. Special Counsel for the
State and for the American Surety
Company In Matters Relating to
The Title Guarantee & Trust Com
pany. those who were making the statutes a dead
letter should be subject to restraint by In
junction processes and punishment by in
dictment not as a matter of revenge, not
to gratify the exercise of power, but to
eradicate systematic lawlessness from our
business system. In this struggle the Ad
ministration has been greatly aJrt hy the
popular sympathy awakened by revelations
as to breaches of trust by the managers of
some of the great Insurance companies; by
revelations as to mismanagement of the In
ternal affairs of great railroad companies;
by the disclosure as to the enormous amount
of rebates extorted from the railroad com
panies by those trusts, and the conscience
less stock-Jobbing and over-Issue of bonds
and stocks shown to have occurred In the
management of some of our great corpora
tions. There was a moral awakening among
the people, and the hands of the Adminis
tration were held up in the work which it
was doing.
On the other hand, the men and the in
terests which were the subject of attack
were not idle. They had their partisans
guilty and Innocent. The guilty, of course,
wished to defeat the Administration by any
means. The Innocent were those who had
become Involved with trust magnates in
legitimate business transactions and to
whom the attitude of the Administration
seemed to be general opposition to the whole
business community.
One of i the great manifestations, one of
the monuments In this moral progress was
the passage of the railroad rate bill. It
met the opposition of many of the rail
roads, not because they were in sympathy
with the trusts, for I think they in many
respects had been more sinned against
than sinning, but because they resented
the close control, that rigid supervision
which the public demanded in view of the
possibilities which the disclosure as to their
past transactions revealed. The fight made
by the Administration has been a note
worthy one. And now, after a victory has
been won, after there has been Introduced
Into the hearts of all men. and especially
of these leaders, these trust managers and
financial opponents of the Administration,
the fear of the law, the panic comes on.
The trust magnates, solidly Intrenched with
great financial resources, are not the ones
to suffer the most from it. It is the men
who have had no such lawful or fruitful
method of making money, the great body
of business men and wage earners. This
is the feature of the panic that arouses
one's deepest sympathy and regret.
Criminals Blame Roosevelt.
The agents and sympathizers and defend
ers of the trusts and other Innocent but
mistaken persons now rush forward to place
the blame of the present conditions upon
the Administration. They seek to use the
panic an an argument for giving up the
moral victory which has been won. Ap
parently, they would take a retrograde step
back to the conditions which existed 1 five
or six or ten years ago, when, unhampered
by State law, these trusts were building
the financial bulwarks behind which they
are now fighting. They rely upon the sore
ness and mental strain and suffering
. through which all the honest business men
of the community have had to pass as a
golden opportunity for driving home their
attacks upon the Administration and par
alyzing the enward movement toward the
supremacy of the law.
It Is said that the policy of the Admin
J . j.
I r ' ' t
! I - . J?i-: I
t ' f S'-v it 1 t
t s i f f
-9 I
t ' -"I I
istration has been directed for the last
four years against organized capital and
that It has thereby frightened investors. I
deny it. The course of the Administration
has been directed against such organized
capital as wai violating the statutes of the
United States and no others. It had every
consideration and desire to assist organ
ised capital which was engaged In legiti
mate business. It Is true that the execution
of the policy of the Admlnlntratlon has In
volved the bringing to the light of public
criticisms the violation of the law by in
fluential and powerful corporations, and
their prosecution. Through the investiga
tion of National and State tribunals there
have been revealed, as I have already said
breaches of trust, stock-Jobbing, over-issue
of stocks and mismanagement in some of
our largest corporations. They have prop
erly been severely condemned by all. in
cluding the President.
Knowledge of those things doubtless af
fected cur credit In Europe and hastened
the panic; but those who are morally re
sponsible for such a result are the guilty
managers, not those who In the course of
their official duty have made known to the
business world the facts and commented
on them.
Only Arraigned Dishonest.
It is said that the Administration has ar
raigned the whole business community as
dishonest. I deny it. The President has
condemned the lawbreakers. He has con
vinced those who have unlawfully accu
mulated enormous powers and capital that
they are not immune. He has put the fear
of the law in their hearts. They have been
cute enough to attempt to protect them
selves by giving the Impression that his
action has been directed against the whole
business community. It is true that the
Concluded on Pago a.)
WAR DEGLftRED BY
ANGRY
MOTHERS
Girls Are Tortured by
Secret' Society.
ORDEALS MAKE ONE HYSTERICAL
Campaign Against Organiza
tions in Schools.
CANDIDATE TELLS SECRETS
Imagining Simulated Tortures Are '
Heal, She Faints Under Supreme
Test, Then Tells Mother Who
Starts Extermination War.
NEW YORK, Dec. 30. (Special.) The
nerve-racking terrors of an initiation into
a Greek-letter society of girls, students in
private and preparatory schools in the
city, caused a meeting of 20 angry moth
ers at the home of Mrs. Elizabeth Mooro
this afternoon. Their first purpose is to
break up the local organization of the
Sigma Gamma Society, and their second
is to start a campaign throughout the
country against secret societies among
schoolgirl.
It was the story of Julia Hills, not yet
17, as told by her to her mother, that
caused Mrs. Mills to take the first steps
against what she considers a dangerous (
organization. There are 26 members of
the local chapter. Miss Josephine Moore,
daughter of Mrs. Moore, is the high
priestess.
Scared Into Hysterics.
Julia Mills was "initiated" Saturday
night. THe girl stagrgered home half hys
terical, and Mrs. Mills demanded an ex
planation. Fairly burning with indigna
tion, she repeated the story today at the
meeting of the mother?.
The initiation was held at the Moore
home. Mias Mills, according to her story,
was summoned to appear there last Sat
urday. When she was ushered in, she
was led into a dimly-lighted room be
tween two columns of black-robed, black
masked figures up to the high priestess.
"Are you prepared to undergo ordeals
to prove yourself fit to become a sister
of this order?" solemnly asked the priest
ess. Some of the "Horrors."
"I am," she answered, and was led
to an ante-room. At a signal she was led
back to the assemblage and told that af
ter this first test there could be no turn
ing back.
"This will be a test of your fortitude,
of your fitness to be a sister. Tou are
ordered to thrust your hand into a small
caldron, of molten lead, which you see
before you. Ready, obey orders."
Miss Mills dashed her hand into the
liquid and sank to her knees in fright.
After she recovered her composure in
part she was surprised to note that the
caldron was filled with mercury.
Again she was led into the ante-room
and brought back blindfolded. A droning
voice told of a clammy hand, which each
of the beloi'ed sisters had grasped be
fore becoming one of the order. A priest
ess was ordered to bring in on a tray
the hand. The candidate was ordered to
graps it. Shuddering, she involuntarily
drew back her arm when she felt the
clammy fingers. She was led back blind-.
folded into the small room, ignorant of
the fact that she had grasped a wet
chamoisskin glove filled with sand, and
not a human hand.
Again she was led forth, this time to
drink a nauseating liquid out of a skull,
I which liquid would "serve to make her
of one blood with her other prospective
sisters." Revolting at each gulp, she was
compelled to drain the skull. So the
nerve-racking tests went on.
Faints at Supreme Test.
Finally the yolce of the priestess was
heard to say: v
"Now for the final, supreme test.
Gather all your remaining pourage and
prepare for the most severe test of all.
Faithful guardians, lead the candidate
to an ante-room, strip her to the waist,
bind her arms behind her and then bring
her back."
In a few moments the girl, now almost
1 hysterical, was brought back. Then the
same aroning voice went on.
"In order that this ceremony be in
delibly fixed on your mind It is neces
sary that the letters of our beloved fra
ternity be burned upon your 'back in
acid. Guardians, brand the candidate."'
At the first touch Miss Mills sank
senseless to the floor. When she had
been revived it was explained to her that
the branding had been done with a piece
of Ice.
REJECTS MURRAY'S OFFER
Labor Leader Will Not Settle Mon
tana Telephone Strike. .
HELENA, Mont., Dec. ' 30. The last
proposal of General Manager Murray, of
the. Rocky Mountain Bell Telephone Com
pany, has been re.1ectd by Alexander
Falrgrieve. of the Montana Federation of
Labor. Mr. Fairgrleve points out that he
once offered to submit the whole matter
to arbitration, which Mr. Murray de
clined, but now the latter desires to
submit the matter to such a board, of
which he names two members, leaving
the unions to name the third member.
Witnesses in the contempt proceedings,
which come tomorrow morning before
Judge Hunt, arrived from Butte today.