11
THE MORNING OREGONIAN. SATURDAY. AUGUST 7, 1915.
JOB COST $30,000,
AUDITOR
UNITED STATES CASHIER COMPANY. AND DEFENDANT INVENTOR, WHO
HAVE TESTIFIED FOR DEFENSE IS THE TRIAL. .
SAYS CASHIER HEAD
Stock Sale After Withdrawal
Laid to Misunderstanding
of Directors' Action.
RESOLUTION IS QUESTIONED
I FORMER
: :
xm -
Es-Major of The Iallc. tTrirf Tar-
ret of Proecatloii. Says Pcc'l
alon to Mop ra lea Not Au
thorised at Meeting.
rr,f,nnod Trm trt Psee.t
price, and that the question had arisen
u to whether this stock, already Issued
by the company, could b resold.
A legal opinion that Ita aala was par.
fectly lecUimat and could go on had
bcn obtained, be aald.
Growing out of tha question of this
resold stock. bwever. Mr. Menefee
testified, a resolution withdrawlne; all
atock of tha company from aala waa In
troduced at tha meeting of January 10.
-1 want to tha extent of telling th
V.M ih.i wofilit raatsn If this reso
lution were passed.- said Mr. Menefee.
"With approximately one-quarter of lt
atock yet to ba sold. It would hare
been rulnoua for the company to bare
.m-A iM. resolution. After I naa
explained this, the resolution waa with
"1 never heard that a resolution
tiiinii selltnK atock waa on the mln-
k. ramninv." went on Mr.
xi....... with earnestness, "until
n here and beard It read la
court."
FnaaJna of ReeolnUos Denied.
"What hare you to say about the
correctness of tha record of tha nieet-
t.murr l- llir asked Mr.
- -
1 k m
-i think from what I remember tha
It la absolutely Incorrect." replied Mr.
Menefee. -I can't r-et any other con
atructlon of It. W talked It over too
thoroughly for ma to ba mistaken. e
vr rieht an salltnc stock Just as
usual, without a thought of any reso
lution because none had been paased.
O. A Campbell, one of tha merabera of
the board will bear ma out In this.
TMrf tou aver hear of the resolution
from the time It was discussed at the
meetlnir until you heara u reaa in
court from tha minutes of tha meet
ing?" questioned Mr. Cake.
Direct ere Declared laf erased.
t remember that Mr. P.eamea once
asked me If the company atock wasn't
withdrawn from the market," returned
the witness. "1 said that It was never
withdrawn, and that we Just stopped
eallina- In 112. That waa the only
time until I heard It.ln court that the
matter of wlthdrawlna; stock from sale
waa so much as mentioned by anyone.
-Why. the directors knew all about
our continuing with tha sale of com-
uanr stock.' went on Mr. venerea.
"The progress of stock selling was dls
cussed In connection with tha com
pany's finances."
"It has bern brought out In tha erl
dence that after the resolution men
tioned. Ji.OO odd shares wera sold.'
said Mr. Cake.
"I hare no doubt those figures are
correct." answered Mr. Menefee.
"Mr. House also testified for the Gov
ernment." continued Mr. Cake, "that
approximately K.aae shares wera can
celed In tha same period T
K Uteres Oonbted.
"I haven't checked up his figures,
but I do not doubt the figures." said
Mr. Menefee. He went on to explain
that stock was not canceled from the
books of the company until certificates
for amounts sold had been Issued, and
that no certificates were sold until the
stork had been paid for.
"We didn't even Issue certificates n
notes, unless we had every reason to
believe that the person giving the note
was thoroughly responsible, said Mr.
Menefee. "So when stock was canceled
It waa only a matter of bookkeeping.
The amount of stork sold remained the
same, with the difference that the
shares canceled had been paid for.
Public Career la (Nlven.
Mr. Cake began hia . examination of
Mr. M'nefee by questioning him as to
Ms life before he assumed the presi
dency of tha Cashier Company.
"I was born In The Pallet, and
am 4 years old." said Mr. Menefee. He
testified further that he had removed
bis family to Portland In February
110. He was admitted to tha bar In
October. lt. he said, and had prac
tired law from that time to 1J10.
"What public offices have you held in
Ti laller-
"T was City Recorder from 1IJ1 to
ltlV said Mr. Menefee. "In 1134
was appointed Mayor to fill an unex
. Tired term, and 1 was twice re-elected.
I was elected District Attorney of that
district in 10. and re-elected In 1304,
serving until July. 10S.
Mr. Menefee went on to tell that he
llrst became connected vri'h the United
states Cashier Company i November.
I so, when William Davidson, of Port
lard, then president of the company
interested him In it. He Invested 11000
in stork, be said.
Ptter Patent Bench! Previously.
"When was the Potter patent
bonahtr asked Mr. Cake.
"It was bought befqre 1 even be
came a stockholder." said Mr. Menefee.
"Mr. Davidson botight It and sold It to
the company, on a contract calling for
payment of $20,004 cash and 100)
hares. The company waa then capl
talised at 1200.000."
He testified that Mr. Davidson re
mained president and manager until
February. 1J10. when Allen Todd was
made manager. His salary waa f ISO
month. a d he waa to get 10 per cent
en any rmnjr he raised for the com
pany.
Early In 110. Mr. Menefee said. Mr.
Davidson went out aa president and h
was elected. He waa then at Tha Dalles.
prarricine- law.
"How did you happen to coma down
to Portland"
"Well.- said Mr. Menefee. "Todd did
not bare ar.y success, so I came down
and spent three or four weeks trying
to learn what was the matter and
trying to get mm started, we bad a
quarrel and Todd waa fired.
"I called a meeting of the directors
and put It up to them to get aomeone
else aa manager. They asked ma to
take charge."
"Had you sought the management?"
asked Mr. Cake.
Salary la Waived.
"1 certainly had not." replied Mr.
Menefee. "I didn't want to taka It.
Hut after being In session for two or
three daya discussing It, the directors
finally prevailed upon me to accept IT."
-What were tha terms 7"
They offered to wive me the aame
contract Todd had. with tha proviso
that If I succeeded they would give
me a stock certificate for 15.000 shares.
I finally said 1 would waive the SliO a
month part and taka only the per
centage. I told them. If I don't make
anything. I won't taka anything.'"
"At tha time was the atock of any
market valuer
"No. tha company had nothing but Ita
capital stock and such patent contracts
as It had."
"It had no manufacturing plant of
any kind?" 1
"No."
"Who auggested giving you the 13,
000 shares of atock T"
"Well. I can't Just say as to that.
Of course. I had to give up my busi
nesa. and I couldn't take thla over un
less I could maka something. I had
to close up my law practice and asso
ciations In The Dalles."
Mr. Menefee had previously testified
that Mr. Davidson had found difficulty
In carrying the Potter patent, and that
be bad agreed to help him by taking
some of his stock off his hands. He
testified that ha paid Mr. Davidson
1 15.000 for 2500 shares, and bought
2500 shares more from two retiring
directors for 000. a total of 121.000
for 6000 shares.
Litigation la Avoided.
Tha witness also said that when the
company got rid of Todd aa manager
tha latter said his contract waa broken.
and to avoid litigation be had paid
him t000 for his holdings of 1000
shares, bringing bis own holdings to
(000 shares.
Have you at any time while with
the United States Cashier Company re
ceived any salary?"
"No. I have not.
'Now. what happened to the 1S.OO0
shares you got from the company un
der their contract with you?"
Mr. Menefee testified that when T.
M. LeMonn became aalea manager In
110 it waa agreed that he waa to get
10 per cent commission in lieu of sal
ary and 2200 shares if he made good.
The witness said he gave him thla
2500 shares out of his 1S.000.
Any other contributions paid out of
your 15.000 shares?"
Company Takea Back Sharea.
The witness went on to enumerate
that he gave Mr. Barnet. a director.
159U shares because of notes he had
advanred to the company and trouble
he had taken for it: l.uo shares to
Robert 3. I'pton. another director, for
the same reason: 1000 shares to O. A.
Campbell, and 690 sharea to Mr. David
son. Another 200 shares that went
somewhere was also taken out of the
15.000.
"What became of the remainder?"
"Well, sooo shares was taken back
by tha company."
We will go Into that later." aald
Mr. Cake. "This makea 12.200 shares,
leaving you. out of the 15.000 shares
you were to have, approximately 28U0
ahares?"
That la substantially correct," re
turned Mr. Menefee. "I may have paid
out a few other shares here and there."
'Now, Mr. Menefee. please explain
another feature, that of the per cent
you got." said Mr. Cake.
The contract offered me called for
$150 a month salary and 10 per cent
on sales." said Mr. Menefee. "I took
it for 10 per cent without my salary."
W hen you moved down from The
Dalles, did you do It with any pur
pose of fraud, or In absolute good
faith?"
Goad Faith Is Asserted.
I waa absolutely In jcood faith
and I am $30,000 worse off today than
when I went into the company."
Mr. Menefee testified to the nego
tiations leading up to the purchase of
the Bllyeu model after It had been ex
amined and approvrd by directors of
the company, following the failure of
the original Potter model. "
He explained that under the con
tract, by which $200,000 rash and $60.
000 In stock was to be paid for It. S5.000
sharea of stock were put In escrow.
"This was done to protect the stock
holders." aald Mr. Menefee, "so that
f we had defaulted' In any payments.
the stock wouKl have been taken, but
the Bilyeu model would have remained
the -property of the company.
ere you ever urged to take the
Bilyeu cashier Just aa it waa and put
it on the markets
"Tea. I was." aald Mr. Menefee. "And
it was my intention to do that. But
wa are never satisfied, you know. The
engineers thought we could develop
not only it, but other machines, and so
we went on trying to improve on our
plans all the time."
The company'a much-discussed ad
visory board waa taken up by Mr. Cake.
Board Declared Bona Fide.
"It waa a bona fide board, formed
with the Idea of making the CashleV
Company thoroughly a stockholders'
company." aaid Mr. Menefee. Ho said
that it was the plan to have members
of the advisory board obtain proxies
of stockholders In their districts and
attend the annual meeting. The com
pany even paid expenses of advisory
board members living out of tha city.
be said.
Did the advisory board ever meet?"
questioned Mr. Cake.
'Yes. It met in 1312." said Mr. Mene
fee. "One of those who attended was
stockholder living In Chicago, and
we paid hla expenses." He declared
that the company aent form lettera of
meetings to advisory board members,
but admitted that some of tha members
might have been overlooked. The 1912
meeting was the only one he recalled.
Attorney Cake may not finish hit
direct examination of Mr. Menefee be.
for noon today, in which event th
cross-examination by United States At
torney Realties will not begin until
Monday.
Something like 185 letters of indorse
ment of their bank cashier machine re
ceived from various banks. Including
the United States National of Portland
by J. C Ainaworth, and the Merchants
National, by J. Frank Watson: of de
partment stores. Including Meier &
Frank, by Julius I. Meier, and many
others, were introduced by the defense.
Many of them were read to the jury
by Attorney Robert I. Magulre.
Mr. Bllyea Cross-Examined. '
At the morning session United States
Attorner Reames continued hia cross
examination of Thomas Bllyeu. defend
ant Inventor and director of th com
pany.
Ha brought out that Mr. Bilyeu was
a member of the advisory board of the
company before he was a director.
"Ever meet with the advisory board?"
queried the prosecutor. . '
"No sir," said Mr. Bllyeu.
"Did you read the advertisement of
October 29, 19117"
"I may have aeen It I seldom read
ads. however."
-Do you mean to say you didn't read
that advertisement?"
"I may have read it-"
"Did the United States Cashier Com
pany on October 29. 1911. own a patent
to the adding machine they advertised
they owned a patent for?"
"1 believe not." ,
-Did the United States Cashier Com
pany on October 29, 1911. have an. ap
plication on file for an adding machine
patent?"
"I believe not." - .
Th United States Attorney asked the
witness if any patents were ever issued
to the United States Cashier Company
by the United States Patent Office or
to any of Its officers or to Mr. Bilyeu
himself, "covering any of these ma
chines." that waa not referred to by
E. D. Sewall. auperviaor of the clossl
flcatlon bureau of the patent office,
while he was on the stand.
Mr. Bilyeu said he believed there
were. He said he thought fMr. Sewall
had given the Impression that some of
the patents owned by the Interna
tional Money Machine Company were
never owned by the United States
Cashier Company, which he said was
untrue.
Farther Kxasalaatlon Possible.
The United States Attorney, however.
after having Mr. Bilyeu produce the
patents he mentioned, asked him:
'Now you haven t produced a single
patent or application for a patent that
Mr. Sewall did not produce a certified
copy of. have you?"
"I believe not," returned Mr. Bllyeu.
When the witness was excused. Mr.
Reames reserved the right for further
cross-examination.
To discredit the testimony of Edward
C. Baker, ex-auditor of the United
States Cashier Company, now acting
manager of Its successor, the Inter
national Money Machine Company,
given Thursday, Mr. Reames Introduced
and read alx letters which Mr. Baker
la said to have written to S. M. Mears,
of Portland, director of the Cashier
Company.
One extract from a letter of April 11,
1916, read:
"Tou know that all explanations of
the old company affairs were carefully
avoided last March, and I am sure you
know why they were avoided. It Is
not necessary for us to hash over all
this, for we both know it to be true.
'I know our hands were tied, yours
and mine. In so far as showing up
everything In its true light waa con
cerned, owing to the conditions with
which I am sure you are quite familiar;
but thla fact does not do away with the
fact that the people here did not know
true conditions at the time they put
their money Into the business, nor did
they know true conditions for a long
tima afterward.
I Credit for Efforts Given. -
"In fact, they don't know them yet,
although they od know more than they
did a few months ago. I am quite sure
you did not know -the true condition
of the Portland company for many
months after you became actively as
sociated with the business, and I doubt
whether you know more than half the
truth yet, but undoubtedly you are en
titled to great credit for having put
matters In better shape after you did
begin to learn things.
"The directors here are desirous of
but one thing, and that is a fair re
vision of the selling contract between
the two companies. They are trying to
do for this company what you tried to
do for the Cashier Company during th
Summer and Fall.of 1913, the difference
being that they are attempting to cure
while there is still life In the patient,
whereas you were at a disadvantage in
your work owing to the fact that your
patient' had died and waa smelling bad
before you were called In."
The United States Oeologlral Survey is
studjing the lavas of Hawaiian volcano.
The work, is particularly pertinent because
all tha islands of that group have been
built up gradually by volcanic discharges of
lava, from a beginning deep down In the asa.
HAZELWOOD
FEATURES
Hazel wood Candy
We use the purest ingredients in our candy and our customers are
invited to visit our Candy Kitchen and watch us make it.
Hazelwood Breakfasts
Luncheons and Dinners
Seating Capacity 450
We are continually reducing many of our prices, which is made
possible by the abundant supply of fresh Oregon fruits and vege-
tables, our practical equipment and the experience acquired by years
of hard work and careful study.
Hazelwood Soda Fountain
The most modem equipped soda fountain on the Pacific Coast.
All Ice Creams are kept at an even temperature by our artificial
ice plant. Our Ice Creams are made from pure cream, cane sugar
and flavored with pure Mexican bean vanilla or fresh fruit and DO
NOT contain any gelatine or patent ice cream powders, which are
frequently used to disguise inferior ingredients.
Hazelwood Orchestra
J. F. N. Colburn, Director
In addition to "getting the BEST CANDY, the BEST FOOD and
the BEST SODA FOUNTAIN SPECIALS at prices that are no
higher, and many times less, than elsewhere, our customers have the
pleasure of hearing, their favorite music played in a masterly manner.
Satisfaction Guaranteed to All Patrons of The Hazelwood or Their
Money Refunded.
The Hazelwood
"Washington at Tenth
Confectionery
and Restaurant
1 -o "
-"ffcW?AV
INFORMATION FOR TOURISTS
Mountain, River and Beach Resorts
Where to Take a Short Trip Out of Portland
Herewith is list of short trips in and about Portland. If you are in doubt about any point, or the trip
you have heard about is not mentioned here, call at the Information Bureau of the Chamber of Commerce
or phone them Bell Phone, Broadway 440 or Automatic, A 6091. Information will gladly be given.
Literature of interesting points furnished Time Cards, Beach and Mountain Resort literature. The
Oregonian asks the names and addresses of tourists for publication. Enclose your business card with
name of your party to Summer Resort Dept., The Oregonian, Portland.
The Hazelwood
Confectionery
and Restaurant
Washington St, a Tent
Best Food Served at
Lowest Possible Cost
t .
Amid Homelike Surronn ding's
IUTUB CAPACTTT 45.
The Oaks (the Coney Island of tho
Wt) Kvery form of entertain
ment and accommodation for tour
lata. Orchestral and band concerts,
prima donna and musical comedy
1 company every afternoon and night
In the open-air theater. . Perform
ances free. Admission to park It
cents. Reached by express special
Oaks train (far i cents), from
First and Alder; or by launch (10
cents), from Morrison-street Bridge
Parks Washington Park, head of
Washington street, with small soo
and aviary. Take any car west on
Washington street excepting Six
teenth; far f cents. Celebrated
statue, "Coming of th Whit Man,"
also "Sacajawea," Excellent view
of th city.
. RELIANCE
MT. HOOD AUTO STAGES .
Dally to Mount Hood resorts
Sound trip S: Gov. Camp tT.&O.
Epsclal rates for wesk-end and climb.
Ing psrtles. Information, reservations
and tickets at
BOrTLEnOE 6FTO FLORAL OtX..
IS Id at. Main SM. A SS11. H
vr jrviiou uarace. East 130.
MOUNT HOOD RESORTS.
Cland Cns Inn Is a delightful re
treat. 000 feet above sea level, on a
sheltered spur of th very mountain
Itself, and Is located Just at th
upper edge of the timber Una
Th trip to the Inn usually Is mad
by rail to Hood River and thence by
atage. Th round-trip rate. Includ
ing all traveling expenses, is 12.a.
Service begins July 1 and continues
to September 15.
Electric carllne to Boring, 14
miles; automobile to Welch's. Rho
dodendron and Tawney:. round trip
from Portland; 7.7S. Sam as above
with horse stag all th way. I&.7.
Welch's, Rhododendron and Taw-.
aeyn are located on the south side
of th mountain. Automobile from
Portland to either resort, round trip,
each 6. Oregonian on sale at these
resorts.
" COLUMBIA RIVER HIGHWAY
A acenio drive of rare beauty,
built along th south ahor of th
Columbia River, a distance of more
than 40 ralles from Portland. A.
series of remarkable waterfalls,
rugged peaks and deep canyons ar
among th attractions.
McCROSKEVS
Mt. Hood Auto Stage
dally to Mt. Hood resorts, 8 A. M. and
4 P. M. Round trips f5. Government
Camp $7.30. Special rates for week
end and cltmblnr parties. Informa
tion and reservations, at Hawthorne
icarage. 443 Hawthorne ave. Phon
East S33.
SAFETY FIRST.
Yellowstone Park Tonr S24UO
Complete satisfaction guaranteed
or money refunded. You can pay
more but cannot get better serv
ice. Buy tickets at Salt Lake,
Ogden, Pocatello or Yellowstone
OLD FAITHFUL. PEBMAKEXT
CAMPS.
COLUMBIA
Gorge Trips
Low round-trip fares to many
F'Oints of interest along: the Co
umbia Highway. Direct train
service to some of the world's
most wonderful scenery. Cool
resting; places within easy reach
afoot from stations named below.
OREGON CITY BOAT
Sunday Excursions to Oreros City
ad Wsy Landing.
Leave Taylor-St. Dock A. M
12:80 and 1:10 P.M.
ROUND TRIP 40c
Phone Main 40.
SOL DUC HOT SPRINGS
AND SANATORIUM
the greatest health and plaaaur
reaort on th Paclflo Coast, in th
heart of th Olymplo Mountains,
open for th season, For full
Information address
rr. Sol Dsn. Wash.
SWASTIKA AUTO SERVICE
Stage to ML Hood Resorts
J a. H. M. Klbben. Irnp.
Leaves Travel Bureau, td and Waah
Ins-ton Bts s 8 A. M.
Pasasngers called for and delivered at
their homes. Rapid, ssfs and court sous
service. Phone reservations in advance.
Tabor !7.v
SUNDAY SPECIAL leaves Journal bids,
at A. M. Returning leaves at ft P. M.
safety at All Times
ML Hood Auto Line
calls and delivers to any part of
city, day or night, to Mount Hood
resorts. Round trip. o; Govern
ment Camp, $7.60.
Phone. Mala SSI. or A 2331.
ANDERSON BROS.
Windemuth
OS THE WILLAMETTE.
Open River and Tank Bathing-. Take
fast launch foot of Salmon street
every balf-liour, commencing- 1:30 P.
M., far B cents, or Brooklyn car to
Woodward ave.; free launches connecting.
Round Trip t
latourell si.un
Bridal Veil LOO
Multnomah Falls LOO
Bonneville . . . . ,
Cascade Locks... 1S
Hood River 2.00
Mosler S.SS
The Dallea 8.00
Sun- Saturday-
day. Monday.
1..M
l.RO
L7S
3.00
3.80
8.75
Thirty-day tickets at slightly,
higher fares. Train leaves Union
Depot 7:50 A. M. daily; returns
5:30 P. M. Ask the
0RKGOX- WASHIJifiTOY RAIL
ROAD A NAVIGATION CO.
(Union Pacific System.)
City Ticket
Office
at
Third St.
Broadway
4TO0,
Att"2l
For In
formation. Tickets.
Etc