Business & Finance: Millennium Payment

  • Share
  • Read Later

With the possible exception of Herbert Hoover who became famed for other things, John Hays Hammond was the world's most famed mining engineer. From early youth he was familiar with horses, guns and gold mining. He mined gold with Cecil Rhodes, became an intimate of rulers and statesmen, a contented and hale old man in his last years. But his life once hung by a thread when, after the failure of the Jameson Raid into the Transvaal, Hammond was sentenced to death by the Boers for conspiracy. The sentence was commuted and he got off with a fine of $125,000.

Last year when John Hays Hammond died at the age of 81 in an easy chair in his showplace at Gloucester, Mass., he left an estate estimated at $2,500,000, mostly to his four children, Inventor John Hays Jr., Artist Natalie, Composer Richard, Financier Harris. Observing that his own taste for economic adventure ran in the blood of his children, especially in that of Son Harris, Father Hammond protected them by leaving the bulk of their inheritances not outright but in trust funds. It was largely due to this foresight that in a Manhattan court last week Harris Hammond was granted a remarkable financial reprieve which would have reminded the old man, had he been still alive, of his own narrow escape in the Transvaal.

Harris Hammond earns $20,000 per year, aside from the income from his inheritance. He is president of Dominguez Oil Fields Co. which earned $2,000,000 last year, and of Laughlin Filter Corp., a small New Jersey company which manufactures centrifuges. In 1928 Mr. Hammond and Philadelphia's Anthony Joseph Drexel ("Tony") Diddle Jr. were among the directors of Acoustic Products Co., which later became Sonora Products Corp. of America. When Sonora went bankrupt and Irving Trust Co. became its receiver, that Manhattan bank charged that Sonora's directors had personally used an option owned by the. company to buy De Forest Radio Co. stock for 50¢ a share, then selling the stock at market prices and pocketing fat profits. Harris Hammond and three other directors were found liable for more than $2,000,000. "Tony" Biddle in 1935 compromised his claim and sailed off to become the New Deal's Minister to Norway. The judgment against Hammond stood at $1,838,755. He pointed out that he could not pay the sum from his father's estate because it was held in trust. After questioning the elder Hammond's motives in establishing these trusts, the bank asked for a garnishment order of $1,160 monthly against Harris Hammond's income.

During the hearings Mr. Hammond protested that he could not stand such a slice because he had to pay some $2,400 in Federal and State income taxes; $9,133 a year for a co-operative apartment; and $12,000 a year for household expenses ("for servants, laundry, meats, groceries, drugs, electricity, gas, doctor's bills, valet service, and wearing apparel for himself and his wife, and for entertainment").

Last week in Manhattan Federal Judge John C. Knox, having hearkened to this plea, signed a garnishment order—but an order for only $160 per month. At this rate the judgment against Mr. Hammond would be liquidated in 957 years and eight months. Irving Trust Co. would collect its last cent in the year 2895 A. D.