The examination of Steen was continued. in the afternoon. In reply to Mr, Franklin he said there had beech a meeting of the directors with regard to the transaction. Three of the directors were present and the other two knew of the meeting, at which Steen explained the "proposed transaction.
that time he had been a director since September 1, 19240 The resignations made on the 22nd were made effective on the 25th because Steen anticipated putting the transaction through by that date. "AS a matter of fact the transaction was not completed until the 20th. that date Mack and three Chinese and Kentwell called at his effec, and produced a letter from the China Savings-Bank to the effect that they had credited the 'C. 0. C. with $200,000. Steen produced 840 shares of the C. O, C, and 442 founder shares which the others counted.
Witness continued that he showed ther letter of credit to Wong, who admitted that he had written and signed 4€. Wu went through the letter and pointed out a discrepancy n the English translation. The words were "have deand the Chinese "can de-it." Steen told the buyers that was not satisfactory and that they would have to definitely state "have Aoponited," Wong told that funds for the whole amount were available at once. Litchfield requested that the lotter of credit be entered in the books and in front of the buyers and the brokers the entry was made by Litehfeld. The Realty Syndicate' shares were thereupon transferred to Steen and an entry made in the C, 0. C. books withdrawing them as an asset, An entry was mile in a new Journal because the old journal had been lost at the time that Beck, their book-keeper, resigned.
The Reason for Leaving Mr, Franklin here produced a Totter signed by Sanchez managing director, but Mr. Bryan said he would not admit that, Sanchez was either managing director or a director.
Litchfield, continued Steen, remained in the employ of the C. 0. C, after the transaction, and though Litchfield, on the' request of Sanchez, Steen sent_to tne latter the letter of credit. Steen admitted paying Mack $5,000 commission on the deal, but he har nothing whatever to do with the firm after. He had no idea what had happened to the assets of the company. Aniong the asgots was a loan of Tls. 70,000, Ho did not know what became of it. The reason why they wanted to "get out of the company was that they had been losing money and thought Chinese could better operate such a business. They had never had a satisfactory manager and the directors could not give sufficient time to the company.
Cross-examined by Mr. Schuhl, Steen said that at the time he had only heard of the difficulties of Kentwell. He did not know that he had been debarred front practi ing in the Courts, and as to his reputation, well he' knew very little about him. At the time he bought the ©, 0, C. he found things net quite right, but not bad. "He found that some of the capital had been lost. Me did not remember any criminal charge against Kentwell—hho seemed to remember that he had been charged with fraud.
Mr, Schuhl suggested that the three French directors were merely "dummy" directors, and sought to prove this by their holdings. Steen said each director was sivan ten free shares and bought an additional 600. Tater in the evidence Steen stated that the French directors were nominated by the board in order to comply with the new French Ordinance.
Text read from the printed page and cleaned; old type leaves the occasional error.