Formula

From his ten-room apartment atop Philadelphia's Temple University Hospital last winter Henry Latham Doherty dispatched an offer to settle a stockholders' suit. To his Cities Service Co. he would donate $1,250,000, pay the opposing attorneys' fee, but under no conditions admit "any remissness" (TIME, Feb. 15). Mr. Doherty thereby concocted a formula which other rich men, suspected of remissness by their past or present stockholders, could readily adapt to their own needs. Last week Albert Henry Wiggin, boomtime head of Chase National Bank, offered $2,000,000 to settle stockholders' actions brought after Bankster Wiggin's embarrassing session with Ferdinand Pecora and the Senate Banking & Currency Committee in 1933. In his offer Mr. Wiggin revealed that he had already paid out more than $1,000,000 in settlement of similar suits.

Mr. Wiggin's current offer was made in connection with two other offers of $250,000 each from the estates of Charles Hayden and Lewis Cass Ledyard Jr., both of whom were Chase directors and defendants in the stockholders' action. The suit, said Mr. Wiggin, was hampering proper administration of the two estates, and their offers were not to be construed as a posthumous confession of remissness. While flatly denying the validity of the charges, Mr. Wiggin declared: "In view of the fact that I was the senior executive officer charged with the management of the affairs of both institutions [Chase and its security affiliate] at the time the acts complained of are alleged to have occurred, in connection with which negligence is charged, I assume sole responsibility for losses sustained by such negligence, if any, for the purposes of this settlement." Acceptable to the suing stockholders, Mr. Wiggin's offer must be approved by the courts. Payments by the Hayden and Ledyard estates would go to Chase Bank, while the Wiggin money would be divided equally between the bank and Amerex Holding Corp., successor to Chase Securities. Bankster Wiggin's terms were 25% down and the balance in three equal annual installments.

No sooner had Mr. Wiggin molded the Doherty formula to his personal problem than Standard Gas & Electric Corp. reported an offer of $1,000,000 in settlement of suits against it which had never been filed, only threatened. Charging waste, misapplication and misappropriation of assets, a group of minority stockholders in Standard Gas were ready to ask $100,000,000 from the directors and various controlling interests, including H. M. Byllesby & Co. and U. S. Electric Power Corp. Reason advanced for quick settlement was that it would speed the reorganization of Standard Gas & Electric, now in famed Section 77B.

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