annexed three pages are a true and correct excerpt from the minutes of a meeting of the Board of Directors of the Reconstruction Finance Corporation on March 3, 1949, relating to American Lithofold Corp., St. Louis, Mo.; on file in the Washington office of Reconstruction Finance Corporation; and in my custody as part of the official records of Reconstruction Finance Corporation. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of Reconstruction Finance Corporation to be affixed at Washington, D. C., on this 2d day of July 1951. LEO NEILSON, Secretary, Reconstruction Finance Corporation. EXCERPT-MINUTES OF A MEETING OF THE BOARD OF DIRECTORS OF THE RECONSTRUCTION FINANCE CORPORATION, MARCH 3, 1949 A special meeting of the Board of Directors of the Reconstruction Finance Corporation was held at 811 Vermont Avenue, N. W., Washington, D. C., at 9:30 a.m., Thursday, March 3, 1949, in accordance with article I of the bylaws. Present: Mr. Hise, presiding; Mr. Gunderson; Mr. Mulligan; Mr. Willett. Mr. Nielson, Secretary; Mr. Singer, Assistant Secretary; Mr. Thomas, Assistant Secretary; Mr. Dougherty, General Counsel; Mr. Young, Assistant to the Chairman; Mr. Considine, Controller; Mr. Dodds, Chief, Small Business Division; Mr. O'Donnell, Assistant Chief, Small Business Division; Mr. Fisher, Acting Chief, Division of Personnel; Mr. Weaver, Manager, Office of War Activity Liquidation; Mr. Rutland, Chief, Plant Liquidation Division, Office of War Activity Liquidation; Mr. Rhett, Chief, Sales Branch, Plant Liquidation Division, Office of War Activity Liquidation; Mr. Luce, Acting Assistant Loan Manager, Office of Loans; Mr. Foster, Chief, Loan Operations Division, Office of Loans; Mr. Buskie, Chief, Field Operations Division, Office of Loans; Mr. Levinson, Chief, Transportation Branch, Office of Loans; Mr. Seabury, Head, Air, Motor and Marine Section, Office of Loans; Mr. Seeley, Examiner; Mr. Ralston, Chief Counsel, Office of Rubber Reserve; Mr. Devin, Counsel; Mr. Hersh, Counsel. Louis H. Bean, Consultant and Charles R. Johnsons, Manager, Seattle Loan Agency, also were present. The Board adopted the following resolution: "Whereas, Smaller War Plants Corporation, by resolution adopted on July 25, 1944, authorized a loan in the amount of $1,671,000 (herein called the 'First Loan') to American Lithofold Corporation, St. Louis, Missouri, which loan has been transferred to this Corporation pursuant to Executive Order 9665; and "Whereas, Smaller War Plants Corporation, by resolution adopted on September 11, 1945, authorized a loan in the amount of $40,776 (herein called the 'Second Loan') to borrower, which loan has been transferred to this Corporation pursuant to Executive Order 9665: Now,, therefore, be it "Resolved: First, That this Corporation make a loan pursuant to paragraph (1) of subsection (a) of section 4 of the Reconstruction Finance Corporation Act, to borrower, on its Application No. 1, Docket No. LBE-25041, dated November 19, 1948, in the amount and on the conditions hereinafter stated: 1. Amount: Eighty Thousand Dollars ($80,000). 2. Note payable: Within three years, with provision for monthly payments thereon as follows: a. $2,000, plus interest, commencing in thirty days. b. Net Earnings Clause covering 50% of Borrower's net earnings. 3. Annual compensation of R. J. Blauner, W. F. Leschen, J. E. Toole, and J. H. Husgen to be limited to $34,250, in the aggregate, without the prior written consent of Agency Manager, provided that all compensation or arrangements therefor, including, but not limited to salaries and commissions, to be paid to any of the officers and directors of Borrower and to any of the members of the Blauner family shall be subject to the approval of Agency Manager. 4. Collateral: a. Mortgage covering all Borrower's machinery and equipment, provided that the lien of the hypothecation required by this paragraph 4 may be subordinate to the lien of all hypothecations securing the First Loan and the Second Loan. b. Life Insurance on the lives of R. J. Blauner and/or J. H. Hugsen in the aggregate face amount of $45,000, having an aggregate cash surrender value of approximately $9,000. 5. Guaranty of American Carbon Company, R. J. Blauner and the wife of R. J. Blauner, provided that the guaranty of R. J. Blauner and the wife of R. J. Blauner shall be secured by: a. A third mortgage covering the land and buildings occupied by Borrower, said third mortgage to be subordinate only to a first mortgage securing an indebtedness in the amount of approximately $42,000 to the Neimeyer Estate and to the second mortgage now securing the guaranties executed in connection with the First Loan and the Second Loan. b. The prime hypothecation of all of the stock or other interests or evidences of interest held by R. J. Blauner and the wife of R. J. Blauner in the following affiliated companies of Borrower: American Carbon Company, Machinery Development Company, Atlantic Coast Sales, Systems Engineering Company, and B-K Supply Company. 6. Use of Proceeds: Solely for Operating Expenses. 7. Agency Manager to be in receipt of evidence, satisfactory to him, that the financial assistance authorized by this resolution is not otherwise available to Borrower on reasonable terms. 8. After-Acquired Property Agreement. 9. Disbursement of the Loan proceeds shall be made from time to time against the aforesaid collateral, provided that, prior to each disbursement, Agency Manager shall be in receipt of evidence, satisfactory to him, that the disbursement then to be made is needed and will be used by Borrower solely for Operating Expenses. 10. Such other conditions as Agency Manager or Agency Counsel may impose pursuant to outstanding general requirements and instructions of this Corporation. "Second, That the Loan shall be disbursed through the St. Louis Custodian in accordance with the foregoing requirements and the applicable general instructions and requirements of this Corporation; provided that the first disbursement shall be made not later than sixty days, and no disbursement shall be made later than six months, after the date of adoption of this resolution." Memorandum to file. EXHIBIT No. 12 ATLANTA 3, GA., January 25, 1949. Re: Ory Lumber and Construction Co., Inc., Fairmount, Ga. Date of application: September 10, 1948. (Declined by Washington Office Reconsidered on basis of $60,000. (Declined by Washington Office November 4, 1948.) On January 17, Mr. Frank Prince of the Washington office called in regard to the declined application of Ory Lumber and Construction Co. He advised that considerable pressure was being brought to have loan of $60,000 approved, and suggested that we endeavor to give applicant a commitment for loan of $60,000 with such conditions as would amply protect the Corporation. Mr. Pierce and the undersigned made a trip to Fairmount to inspect the plant and also contacted Mr. Dyer, president of Commercial Bank at Jasper. Prince advised that Ory had a better set-up than he thought and that he was in hopes we could give commitment to Ory that would protect the Corporation and at the same time allow him to comply with the terms and conditions required without working any undue hardships on him. During our conversation with Ory, he mentioned that he had good connections in Washington and could get things done where others could not, and your examiner is inclined to believe his connection is through the C. J. Harris Lumber Co., of Jefferson, Mo. While here, Mr. Prince left with us copies of letters from the following that had been received by the Washington office, as well as copy of his memorandum to Howard showing terms and conditions upon which he would recommend loan. Letter dated December 10, 1948, from Roscoe Pickett. Letter dated December 2, 1948, from C. J. Harris Lumber Co. Telegram dated December 10, 1948, from C. J. Harris Lumber Co. Letter dated December 10, 1948, from Commercial Bank, Jasper, Ga. Letter dated December 2, 1948, from Commercial Bank, Jasper, Ga. Letter dated November 11, 1948, from Commercial Bank, Jasper. Ga. Mr. Ory was told to furnish the following copy of balance sheet as of December 31, 1948; operating statement from January 1 to December 31, 1948; operating statement for year ended December 31, 1947; operating statement for year ended December 31, 1946; copy of bill of sale from partnership to corporation, copy of timber leases; letter from C. J. Harris Lumber Co. as to quantity of lumber they will take during the year, cost figures as to operation, legal description of lots, breakdown of cost of construction and description of type of houses, description and location of mills in the woods, and copy of contracts for use, if any, personal financial statement of Ory, amount of hazard insurance and type, plat of property and buildings where plant located; and that upon receipt of the above, consideration would be given to a loan of $60,000. During our conversation with Mr. Ory it was mentioned that in Georgia there were two ways of financing inventory, one inventory mortgage, and the other field warehouse, and that it was not known what method would be required by RFC. Ory immediately stated that field warehouse would be costly. Upon checking with Mr. Dyer at Jasper, he advised that he was sold on Mr. Ory, and he had confidence he would be able to operate satisfactorily-said his bank was willing to participate and help us service the loan in any way. It was suggested by Mr. Prince that the bank O. K. all disbursements, and this Mr. Dyer readily agreed to do. After looking over applicant's plant, and taking everything into consideration, it might be possible to recommend loan with such conditions that will protect the Corporation; however, I am inclined to believe that any inventory of lumber pledged as collateral should be field warehoused so that control can be held at all times, as our previous experience of advances against inventory mortgages was not entirely satisfactory. C. B. TURNER, Examiner. EXHIBIT No. 13 MEMORANDUM OF TELEPHONE CONVERSATION BETWEEN MR. EVERETT AND MR. CHAUNCEY DODDS, WASHINGTON RFC, ON FEBRUARY 4, 1949, RE ORY LUMBER & CONSTRUCTION Co., FAIRMOUNT, GA. Mr. Everett told Mr. Dodds he had just finished reading the examiner's report on the $60,000 loan application of the above company, and although it is not too good a loan, the examiner recommends it and Mr. Everett thinks we can go along on it. He wondered if Frank Prince and Mr. McAfee had discussed the warehousing of this lumber on the former's recent visit to the agency, as the examiner in his report says it will be handled by bonded warehouse, which will be expensive. Dodds said he did not know but would get Mr. Prince on the line. Mr. Prince was brought in on the conversation at this point and advised that he had told Ory this would have to be handled either in the form of a Georgia inventory mortgage or by bonded warehouse and that Ory had "kicked up a little" about the cost. Prince had stated to applicant that the Corporation "wouldn't interpose anything on that, other than wanting the lien on it." In talking to Mr. McAfee, Mr. Prince said the former had advised him that ordinarily he would not mind taking an inventory mortgage, but in this case we did not want to do it, for reasons which Mr. Everett knew. Prince affirmed that he and Examiner C. B. Turner had notified Ory, in the presence of Mr. Dyer at Jasper, Ga., that there might be a field warehousing arrangement but that would have to be determined later. He expresed himself as believing the loan was all right-that applicant has a pretty good sawmill and is turning out a pretty good grade of lumber. Prince told Mr. Ory that there were too many people pressing this thing for him to break faith with them. He thought perhaps we might have a little difficulty with Ory on the field warehousing, but if we do, he advised he would get in touch with Dyer at the bank, for he believes Ory has a lot of confidence in him and will do anything Dyer tells him to do. Mr. Everett is to call Washington when this loan application is approved by |