Letters and Literary Memorials of Samuel J. Tilden, v. 1

by Samuel J. Tilden

"Now, I answer your question: You 'are not justified in being surprised that I am acting for the trustee and his bondholders "without notice"' to you. You had notice all the time that I was at liberty so to act, and much of the time that I was so acting. If you are surprised, you are under some misapprehension as to the situation. I would have omitted no courtesy towards you. I had no suspicion that you did not understand my position exactly as I understand it.

"When the question as to the proposed lease came before me, suddenly and unexpectedly, it was with the declaration of Mr. Meyer that he was 'opposed to it, unless I could show him reasons to the contrary, which he did not think I could.' I looked at it to see if I could devise modifications which would make it safe for the bondholders.

"The difficulty of the case is the short and uncertain duration of the lease. I was not able to see in it, as drawn, sufficient guards to satisfy the bondholders. I spent a morning with Mr. Lane and Mr. Meyer discussing amendments; and we left for Ohio, with the understanding between him and us that we should have a conference there upon the subject of amendment. It was only when the motion was on and the argument was about beginning that we learned to our surprise that Mr. Backus had decided that no negotiation for any modification would be entertained. So the question had to be argued as it stood. Just before I left Cleveland, Mr. Backus said to me that if we would recognize the advance ($1,390,000) as to be ultimately paid, he would do everything to give us security in the operation of the lease; and, if, when I got to New York, it was thought advisable to negotiate, he would come here on your request. After my return I did think it advisable to consider the question, and so said to Mr. Lane; but he declined. Shortly after, the motion in Philadelphia, of which Mr. Cuyler had given notice, in pursuance of a reservation he had caused to be made in the original order, came on.

"I allude to these circumstances to show that I have treated you fairly and considerately while in an adversary position on this question of temporary lease.

"One word as to Mr. Flagg. The payment of the $1000 for his services was due him, and should have been provided for. I first called the attention of Col. Stebbins to it, and then yours. The purchase of the bonds of Mr. Flagg—to a trifling amount—was no greater favor than had been accorded on a large scale to parties who had stood in the way of the arrangement for the close of the receivership and the making of the lease. That he had taken no selfish care for himself did not seem any reason why he should be treated with less consideration. I submitted the matter to you as the proper party. You treated it with equity and courtesy. You are entitled to the same spirit from Mr. Flagg. But you could not have supposed that he would be unfaithful in any respect to his trust.

"In conclusion, what the first mortgage bondholders want is:

"1. That the suit for foreclosure should be prosecuted, in proper form and with proper parties, to give a good title at the sale, and that they be represented in these suits by their own agent and not by agents of any adversary party.

"2. That, if a sale and purchase of the property be made which operates to discharge their lien, with or without an agreement for reorganization, the title be taken by satisfactory agents for their security.