Honolulu Republican, Volume IV, Number 498, 16 January 1902 — LONG DISCUSSION ON BANK ELECTION [ARTICLE]

LONG DISCUSSION ON BANK ELECTION

Proxies Need Not be Stamped Minority Stockholders Can Transact Easiness Cooper Sees Macfarlane at Waikiki. National Laws Quoted.

Colonel George Macfarlane was seen at the Hawaiian hotel last even ing in regard to the First National Bank stockholders’ meeting affair. j “The impression which seems to I have been current to a great extent, that I was planning to have Mr. J. F Morgan become the president of the First National Bank.” said Colonel Macfarlane. “is a wrong one. 1 will tell you how it was that Mr. Morgan s name came to be mentioned for the presidency of the bank. “When I was in San Francisco. Mr. Steinhart. the senior manager in the Anglo-Caiiforr.ia Bank of San Francisco and London, sent for me to say that Mr. Morgan had arrived and that he had brought with him a letter from Mr Cooper, cashier of the First National Bank of Hawaii. The letter was full of praise for Mr. Morgan and referred to his standing in the community and his general knowledge of valuations in Hawaii. The letter also referred to the existence of strained relations, in the First National, between Mr. Cooper and Mr. Brown, the president. Friction of Bank Officers. “Mr. Morgan simply confirmed the report of the strained relations in the Honolulu bank, saying that there had been considerable friction between President Brown and Cashier Cooper. This friction was well understood in Honolulu and had become almost a public scandal. “Mr. Steinhart asked Mr. Morgan what suggestions he had to offer in regard to solving the friction problem. “It was thought that either Mr. Cooper or Mr. Brown ought to resign. It was believed that, as Mr. Morgan was one of the board and had been introduced by a very friendly letter from Mr. Cooper and as Mr. Cooper was the business man of the bank, it would be best for all parties concerned for Mr. Brown to resign as president. This was practically the conclusion which was arrived at between Mr. Steinhart and Mr. Morgan. “Just which one of these gentleman the suggestion came from I don't know.

MORGAN SEEMED LOGICAL CANDIDATE “It appeared that Mr. Morgan was the logical candidate to take the place of Mr. Brown and was perfectly familiar with all bank matters and was friendly with Mr. Cooper, who was the business man of the institution. “Mr. Steinhart informed Mr. Morgan that if Mr. Morgan thought it advisable. he would write a letter to President Brown. If Mr. Morgan would take the position of president himself, being friendly to both parties. Mr. Brown could resign in favor of Mr. Morgan. “It was at about this stage of the discussion that Mr. Steinhart sent for me, and my recollection is that Mr. Morgan said that he was certain that on bis return to Honolulu he could induce Mr. Brown to resign and allow him (Mr. Morgan! to succeed Mr Brown. Matter Leaks Out. “Mr. Morgan advised Mr. Steinhart not to write to Mr. Brown, intimating that such a change would not be objected to. and fearing that Mr. Brown would resist the idea if the suggestion should come from anyone bat himself. “All I had to do in the matter was simply to acquiesce in the proposal put forward, which 1 did. “But. it appears that In some way the matter leaked out and it became the talk that Mr Morgan was to return to Honolulu to try to secure for himself the pos.tion of president. “However. Mr. Brown, having been.

I informed in some manner that Mr. Morgan »i,s to become bis succ«— r. immediately accused tbe Anglo-Cali-fornia Bank of forming a conspiracy to throw him out of office. The Angio- [ California Bank was entirely innocent of any such plot. "I will state as an absolute fart, aa far as I am concerned, that I have not seen M l- . Morgan since my arrival here, nor have 1 any instructions from the Anglo-Californian Bank to try to secure the presidency for Mr. Mor gan.

TRY TO UNDERMINE THE PARENT BANK "It was rumored that Ca?h:cr Cooper and l’-es‘d*nt Brown mad-' up their differences and immediately commenced to unde-mine the par-n: bank, which hnd created the Kim National Bank here, with Mr James Campbell, by securing; for the corporation its chart-r from Washington. “At the meeting of stockholders the other day I could not call to mind wnether the tax on proxies to rote had been repealed or not. I knew that a sweeping change had been made since last July but did not re member if these changes applied to proxies, "I rested perfectly at ease, how ever. after I got in my protest and was fully convinced that the Anglo California Bank, which had sent tnthe proxies in a sealed envelope, would not hare sent them to me in an imperfect condition, as such institutions are perfectly familiar with all such conditions of business and do not make mistakes. Tax on Proxies Repealed. "This morning I immediately set to work to look up the Amended War Revenue Tax and learned that thtax on proxies, ten cents, had been repealed. “1 at once decided to comra-nc'’ mandamus proceedings in the Federal Court and saw Attorney J J. Dunne who is now engaged In drawing up the necessary papers. Th-» suit will be begun as soon as possible, Attorney J A Magoon is a!so engaged in the proceedings. "The matter resolves If a* If into a case between the interests of the stockholders of the Mainland and the Territorial organization "The matter must of necessity be brought up in the United States Di trict Court as It is a national bank affair and the interests of tho~e who are not local people are at stake. “Attorney J. A. Magoon repr> - r.t* interest in the Afong Estate wh **e proxies were ruled out by Mr Brown

MORGAN NEED NOT BE NEXT PRESIDENT "If the mandamus proceedings should resalt In the Federal Court declaring the stockholders’ meeting of the First National Bank to b“ void’ would a new meeting result in Mr. Morgan becoming president?" was asked. “No! Net n-ressarily. I shall force anyone on the local stockholders who Is not an acceptable candidate, but I shall ask for an adjournment of thirty days out of respect to the wishes of Mrs. Campbell. 1 shall bring about a discussion among all the stockholders, that there may result a unity of feeling for some can didate for the position of president “If Mr. Brown should resign and no local gentleman should be available for the position of president, someone will b« selected from New York who is thoroughly familiar with the national banking system ’ Persona Non Grata. "Will Mr. Brown’s action In the matter of the proxies cause a breach between himself and the AngloCalifomia Bank?" was asked. “As the representative of the Anglo California Bank, that Is hardly

for me to say." answered Colonel Macfarlane. “Mr Brown .= at pres ent persona non grata." MACFARLANE DECLINES PRESIDENCY TWICE ‘ Would you accept the presidency?" *T hav» declined the presidency twice as I am so much of an absentee." gaid the Colonel "Notwithstanding that I organized the First National Bank here, as agent of the original syndicate, and went to Washington and. with th«* influence of the Seligmans. secured not only the National Bank charter for them, but arranged with Secretary Gage and Assistant Secretary Vanderlip for the fiscal agency and the United States Government depository. 1 have always declined for the reason that my interests abroad keep me absent from the country for too long periods .for m** to do justice to the interests of the bank in the capacity of presi dent. “My only desire now Is to get away to look after my interests abroad as soon as possible. Before I go. however. I hope to see someone appointed to the position of president of the bank who will be acceptable to both sides. "Notwithstanding the fact that 1 hold the majority of the votes. I do no f want to place anyone at the head who is not acceptable to both sides. 1 I want to see the affairs of the bank conducted for the best interests of the band and of ail concerned therein. Won’t Throw Mud. I have tried to maintain as dig nified and calm an attitude as possible throughout this contest and will not allow any provocation to cause me to indulge in coarse speech. through the press, I will not throw any mud.’’ "Where you aware of the existence of any friction in the bank on the occasion of your last visit to Honolulu?” "When I w - as here in April last, with Mr. Fowler of London. I was aware of the fact that there w - as some friction between Mr. Cooper and Mr. Brown. "Mr. Cooper called on me at Waikiki and informed me of the trouble. 1 paid but little attention to the mat ter. however, for 1 thought whatever trouble there was would be healed over before long. I was here on a speciqj visit and had no time to even visit the bank, much less to take any part in what personal differences existed in the institution.” LAW IS QUOTED ON TAKING OF PROXIES There was considerable discussion among business men yesterday as to the legality of Cecil Brown's ruling in the matter of the proxies held by Colonel George Macfarlane at the meeting of the stockholders of the: First National Bank of Hawaii on Tuesday. The subject is one of great importance to all concerned in business corporations, as plantation companies and other corporations have been holding meetings right along for the past few months and accepting un stamped proxies. The action of Cecil Brown in turning down Colonel Macfarlane’s proxies. therefore, caused many people to look up the law in the matter and ask : questions concerning the war revenue tax. Collector Roy H. Chamberlain, of t ie Internal Revenue Bureau in this 1 Territory, was seen yesterday and kindly quoted the law for the benefit of The Republican, as follows: Provision* of the War Tax. In Law and Regulations Concerning Documentary and Proprietary Stamps under the Act of June 13. 'B9B. it is provided; "Power of attorney or • proxy voting at a n y election for officers of any incorporated company or association, except religious, charitable. or literary societies, or public cemeteries, ten cents," In the War Revenue Act. as amended by the Act of March 2. 1901. in force July 1. 1901. however, this sec i tion of the original act is repealed. To quote from this amended act. showing where the tax was canceled: Taxes repealed on and after July 1. 1901; Certificates of deposit. "Postoffice money orders. "Promissory notes, "Mortgages. 1 “Leases, 1 "Export bills of lading (declared unconstitutional by United States Sui t preme Court, Treas. Dec. No. 3281, “Manifests for Custom-house entry of clearance of cargo. •POWERS OF ATTORNEY. “Protest*. “Charter parties. "Certificate* of all kinds except certificate* of profit* or certificate* showing interest in property or ac cumulations of companies. "Warehouse receipts.” Further on in the body of the book.

where formerly the prevision concerning proxies appeared, the section is entirely eliminated and is conspicuous by its absence in the amended law of March Z. 1901. which went into effect on July 1, 1901. COPT OF THE PROXY USED AT THE MEETING Ae so much interest attaches to the proxies, the following exact ropy, of that in use at th** annual m-eting of th** First National Bank of Hawaii, is given; I hereby constitute and appoint . of Honolulu. Island of Oahu. Territory of Hawaii. my lawful proxy for me and in my name ti vote my shares of stock of The First National Bank j of Hawaii, at Honolulu, owned by me and standing in my name on the 1 books of said Company, at the An- , nual Meeting of the stockholders thereof, to be held for the election cf Directors on the 14th of January, 1902. and in event of there being no i quorum, then at any subsequent j meetings of stockholders which will ! be held for a similar purpose in the year 1902; hereby ratifying and confirming all that the said may do by virtue hereof, with full power of substitution. Witness my hand and seal this day of 1901 In presence of In the proxies held by Colonel Macfarlane the date of the meeting was not inserted, as it was unknown in San Francisco. MINORITY OF STOCK CAN DO BUSINESS Another question which is deeply interesting* the busines men of Honolulu is whether a minority of the stockholders of a bank can transact business. This point is fully covered in the following extract from a letter of instructions to bank cashiers from the Comptroller of the Currency. William B. Ridgely. dated Washington. D. C.. November 29. 1901: "It is unnecessary under the National Bank Act. to have a majority of the stock represented at the annual meeting, as any number of shareholders may organize and elect directors. Notice need not be given of the meeting, unless provided for by the by-laws, or business is to be transacted that requires a specific stock vote, such as the amendment of the articles of association; in which event, thirty days’ notice in writing or by publication in a local newspaper should be given shareholders, if the articles do not provide to the contrary. "If the shareholders meet on the day named in the articles for the annual meeting, but do not elect directors. they may adjourn the meeting from day to day (exclusive of Sundays or legal holidays) without notice. If they do not meet on the dayfixed. or meet and adjourn to a future date (days intervening), thirty days' n< tice by publication in a newspaper must be given of the meeting, as provided by Section 1*149 of the United States Revised Statutes." Votes that Were Cast. The statistics of the votes present. ; oast and ruled out at the meeting of the stockholders of the First National Bank of Hawaii, by President Brown at the meeting on Tuesday. 2086 Votes cast 2086 2292 Ruled out. not being stamped 2292 107 Shares not represented by the owners 107 500 Shares owned by the Campbell Estate not voted because ruled out by the president 500 33 Shares owned by Co). Macfarlane not voted 33 5000 shares. representing the capital stock of the 8ank..5000 Mr*. Campbell's Letter. The much talked of letter of Mrs. Campbell, in which she expresses the wish that the stockholders' meeting be adjourned for thirty days, and to which wish Colonel George Macfarlane refers in his interview. Is as follows ; San Francisco. Jan 4. 1902. Mr. Joseph O. Carter and Cecil Brown My Co Executors of the Estate of James Campbell, deceased. Honolulu. Dear Sirs; —It is my intention to leave for home by today's steamer, the Alameda, but being prevented from so doing 1 am thereby unable to attend the meeting of the First Na tional Bank of Hawaii at Honolulu, to be held during this month. I beg to inform you that it is my wish and 1 hereby instruct you that none of the stock in said bank held by the -state of my husband shall be voted on the day fixed for the annual meeting. but only at an adjourned meeting fixed for the dav at least thirty days later enabling me to be present at said adjourned meeting Yours very truly. ABIGAIL CAMPBELL.