[Tom MacWood]

Tom,

Can you post those articles?

Not that I doubt their existence, by November 24, Lloyd had taken half of HDC for Merion members to invest in, and profit from...but by then the decision to buy the land was 5 months old.

No, unfortunately I cannot, but I copied them from previous posts so you can probably find them. If half the membership profited it would not be conflict of interest?

[Phil_the_Author]

David,

What is so hard for you to understand? You posted " " when I again asked you to post your "alternative perspective" which YOU OFFERED TO DO! Those were your exact words, so it is beyond me as to your first responswe which was "Perhaps you can be a bit more specific?" followed by the frowning face with the question marks.

You've been quick to accuse others of "playing games" in things they posted and some might think with your responses to me that you are doing that. Let me assure you that I am not saying that and I thought your offer was an honest and sincere one.

So WHY won't you post it? If its me that you don't want to post it for I'll understand; just say so. Or if there is another reason, please do so. But to give the answers you gave when YOU are the one who made the statement of offer for the information is a bit strange and hard to understand...

[TEPaul]

"If half the membership profited it would not be conflict of interest?"






I'm wondering why at least one contributor on here has constantly questioned (or perhaps implied) if there was some kind of conflict of interest going on with what-all Horatio Gates Lloyd did for MCC and HDC in the years 1910 and 1911 (and on). One reason could be that he doesn't seem to read these posts very carefully or to have familiarized himself with the details of the financial interworkings of MCC and HDC at this time (1910-11)

It still appears to remain somewhat complicated to determine exactly what Lloyd et al did (the so-called MCC "Guarantors" of $30,000 for a down payment for the $85,000 purchase of the 117 acres) and then what Lloyd et al did for the MCC members via a stock subscripton offering for one half of a $300,000 HDC stock underwriting (offering).

However, Jim Sullivan did not say that half the membership profited. The reality of the $300,000 stock offering was that one half of it was allocated for MCC members to subscribe to and the other half was allocated to be subscribed to by other than MCC members (presumably the HDC partners in cash or in land value for HDC stock). (It appears the Philadelphia and Ardmore Land Co and the Haverford Development Co (pretty much the same partners) were basically straight partnerships with the sole asset of each company being land value).

And then almost simultaneously the MCCGA Company was formed with a board of directors and stock that was also offered to the MCC membership to subscribe to. The basic purpose of the MCCGA Company was to raise the money to pay for the land for the golf course and the cost to build it. When that was accomplished the MCCGA Co. leased it to MCC which they would do for the next 32 years.

Horatio Gates Lloyd seemed to be central to all of this and consequently may've been one of the greatest angels any golf club ever had in that the membership of MCC was never involuntarily assessed to pay for any of it other than a minimal annual fee to play golf which was used over time to pay off the debt MCCGA Co had incurred to do it all.

[Tom MacWood]

Horatio Gates Lloyd seemed to be central to all of this and consequently may've been one of the greatest angels any golf club ever had in that the membership of MCC was never involuntarily assessed to pay for any of it other than a minimal annual fee to play golf which was used over time to pay off the debt MCCGA Co had incurred to do it all.

I don't think there is any doubt he was an angel to MCC, but wasn't he the greatest angel HDC could ever partnered with too? Couldn't that be considered a conflict of interest? Did Lloyd ever reveal his involvement with the land development company to the membership of Merion?

[TEPaul]

".......but wasn't he the greatest angel HDC could ever partnered with too? Couldn't that be considered a conflict of interest? Did Lloyd ever reveal his involvement with the land development company to the membership of Merion?"



Tom MacWood:

It would be helpful to know whose interest you think may've been compromised somehow with what-all Lloyd did for both MCC and HDC.

I would suggest you first read what has been referred to on here as the Lloyd "circular" that was sent out to the MCC membership on Nov. 15, 1910 under his name. It's only been posted on this website about two dozen times over the years but it appears you may not be much aware of it or what it says. If you can't find it on here I'd suggest you ask Cirba to post it again, then read it carefully and consider very carefully what-all it says and then get back to any of us regarding what you might feel created any conflict of interest or compromised anyone's interest in what Lloyd did with MCC and HDC, financial and otherwise in 1910 and 1911.

But I will tell you one thing he and his committee did not do, and that was agree to pay an architect to design Merion East. MCC was very clear about that and its board and meeting minutes reflect that distinctly in writing, as do later reports from those from MCC who were present in the beginning.

[Tom MacWood]

TEP
I'm not looking for some grand conspiracy, it is a very simple question, would being involved on the search committee and principal in the land development company have been considered a conflict of interest in those days? Would it be considered a conflict of interest today?

[Jeff_Brauer]

TMac,

I think I answered that one - there is potential for that and it could if not above board, both then and now.  But, being an angel to both a club and a developer trying to create a ready made market for its lots doesn't sound like much of a crime or conflict to me.  It sounds like he offered the same "chance" of investing in lots to all members, and if they chose not to take advantage of it, that was their prerogative, no?

[TEPaul]

"TEP
I'm not looking for some grand conspiracy, it is a very simple question, would being involved on the search committee and principal in the land development company have been considered a conflict of interest in those days? Would it be considered a conflict of interest today?"


Tom MacWood:

That would depend on the details of the circumstances involved. Knowing the details of the circumstances involved, in my opinion, there was no conflict of interest with what Lloyd did for MCC and/or HDC. Do you know any of the details of the circumstances involved back then with Lloyd or what he wrote and revealed to the membership of MCC when that "circular" was sent out to all of them on November 15, 1910?

The latter is a very simple question.
 
 

[DMoriarty]

Phil,  The   is because I have no idea what you want of me.   As I explained to Jim and then you, there are dozens if not hundreds of posts in this thread with which I disagree, and I'd need a full time staff to even begin address them all.  If anyone would actually like my opinion about anything in particular I would have been glad to provide it had I not already.  Given that no one has come up with anything in particular, then that is that.

Plus, lately I am finding it nearly impossible to convey even the simplest ideas so that you understand them.  Surely the blame lies with my poor communication skills and until I can improve on those, I don't see much point in us discussing anything at all.

Good Luck.

DM

[Phil_the_Author]

David,

It certainly appeared as if you had a specific point in mind when you made the statement. If I misunderstood it I apologize.

[Tom MacWood]

"TEP
I'm not looking for some grand conspiracy, it is a very simple question, would being involved on the search committee and principal in the land development company have been considered a conflict of interest in those days? Would it be considered a conflict of interest today?"


Tom MacWood:

That would depend on the details of the circumstances involved. Knowing the details of the circumstances involved, in my opinion, there was no conflict of interest with what Lloyd did for MCC and/or HDC. Do you know any of the details of the circumstances involved back then with Lloyd or what he wrote and revealed to the membership of MCC when that "circular" was sent out to all of them on November 15, 1910?

The latter is a very simple question.
 

If I recall he made a real estate offer to the membership in November 15, 1910, but I don't recall if he ever revealed to the membership he was principal in the real estate company. Was that because of the possible appearance of a conflict of interest? Being a member of the search committee and personally profiting from that position would appear to be a conflict of interest, wouldn't it?

[TEPaul]

"If I recall he made a real estate offer to the membership in November 15, 1910, but I don't recall if he ever revealed to the membership he was principal in the real estate company. Was that because of the possible appearance of a conflict of interest? Being a member of the search committee and personally profiting from that position would appear to be a conflict of interest, wouldn't it?"



Tom MacWood:

Have you ever actually read the "circular" Lloyd sent out to the membership on Nov. 15, 1910? Do you even know what it is? When was the last time you read it? What does it say about members of MCC profiting from the real estate investment opportunity or the stock offering in relation to those from MCC who had already invested? What does it say should there be an over-subscription?

[Tom MacWood]

I've read it many times and yes I do understand it was presenting a good real estate opportunity to the membership. Are you under the impression Lloyd and the other members of syndicate were prepared to take a loss on the real estate venture?

[Jeff_Brauer]

TMac,

Is not making a profit your definition of ethical?

[JESII]

Tom,

Are you under the impression that Lloyd was one of the principle managers of HDC?

[Patrick_Mucci]

TEP
I'm not looking for some grand conspiracy, it is a very simple question, would being involved on the search committee and principal in the land development company have been considered a conflict of interest in those days? Would it be considered a conflict of interest today?

Tom MacWood,

I think the answer depends upon the distinction between form and substance.

At to it's form, it appears to be a clear conflict of interest.

However, doesn't the existance of a conflict of interest depend more upon the substance of the party/ies involved ?
Isn't the test then a matter of the party's integrity.

I think the POTENTIAL for a conflict of interest exists.

But, if the party at hand is unquestionably principled, I don't think there's a conflict of interest.

The question you pose would seem to imply that the party couldn't be objective/fair with all sides and I don't think that's the case, especially with principled men

[JESII]

Pat,

Even more basic than that...doesn't a conflict of interest scenario generally lead to a loss for one party or the other? THis seemed like a win/win for all parties.

[Patrick_Mucci]

Pat,

Even more basic than that...doesn't a conflict of interest scenario generally lead to a loss for one party or the other? THis seemed like a win/win for all parties.

Jim,

I don't think that the "outcome" is the determining factor when it comes to establishing whether or not a conflict of interest existed.

At a club I'm very familiar with, the Board of Governors voted NOT to purchase an adjacent piece of property for use as a range.
A member of the Board who was in favor of the purchase, who disagreed with the Board's decision, went out and bought the land on his own.  Subsequently, he sold it to the club for the exact same price he paid for it.  He could have made a profit.  He continued to serve on the Board.  Was there the potetnial for a conflict of interest ?  Yes, But, his integrity was unquestionable and everyone benefited

[JESII]

Fair enough, that makes sense.

I think what we had in Lloyd was a master facilitator. I still haven't seen his role as that of an "ANGEL" though. Angel implies financial support with little or no expectation of personal profit...did Lloyd do that here?

[Patrick_Mucci]

Jim,

I like the phrase, "master facilitator"

Those guys knew how to get things done and they did it their way, irrespective of what others thought.

[JESII]

Just let some of the dirtballs on here run with Master Facilitator for a little while and see what they come up with...




I've asked this a few times on these threads, but if you were HDC, would you have felt like Lloyd doubled your money (by steering this whole deal), or cut it in half (by insisting MCC members get half the stake)?

[Tom MacWood]

Tom MacWood,

I think the answer depends upon the distinction between form and substance.

At to it's form, it appears to be a clear conflict of interest.

However, doesn't the existance of a conflict of interest depend more upon the substance of the party/ies involved ?
Isn't the test then a matter of the party's integrity.

I think the POTENTIAL for a conflict of interest exists.

But, if the party at hand is unquestionably principled, I don't think there's a conflict of interest.

The question you pose would seem to imply that the party couldn't be objective/fair with all sides and I don't think that's the case, especially with principled men[/color]

I agree, and I get the impression there was more leeway regarding those types of situations back then. Today the appearance of a conflict would prevent most from even considering it. Which is why I asked the question, I was curious how conflict of interest has changed over the years.

[TEPaul]

"I've read it many times and yes I do understand it was presenting a good real estate opportunity to the membership. Are you under the impression Lloyd and the other members of syndicate were prepared to take a loss on the real estate venture?"



Tom MacWood:

It seems to me what Lloyd did for HDC was to underwrite a stock subscription offering. As to who he used to basically be the underwriter is still something of a question, at least to me. He could have used a number of his friends in a basic syndicate for the purpose or he may've even used Drexel Co., a company he was a partner of at the time (I note that all subscribers were asked to contact him at Drexel & Co and I also note that is what Drexel & Co. did).

However, since this venture seemed pretty specific in scope and interest it seems the stock subscription offering was only offered to MCC members to the tune of half the offering and the other half was offered to people who were not from MCC. I would assume those not from MCC were other interested investors or perhaps the principals of HDC. I also note that of those in the syndicate with Lloyd another was from Drexel & Co, a E. E. Stottesbury who would become the managing partner of Drexel & Co as well a man who would buy a considerable number of the lots in the HDC development.

Am I under the impression the syndicate (or underwriters of the stock offering) were prepared to take a loss on the real estate venture?

Of course they were prepared to take a loss if that occured. That is what stock underwriters essentially do----eg they lend money to some venture by evaluated the risk and reward of a venture. If they fail to sell out the stock subcription underwriters are essentially required to make up the difference of the nominal amount of the stock offering. According to Lloyd's "circular" to the MCC membership the stock offering in this case was $300,000 and he also mentioned in the circular that a considerable amount of the stock underwritting had already been subscribed for.

[Jeff_Brauer]

TMac,

I see your point and am also generally under the impression that things are tighter today than they might have been in 1910.  Many new regulations went into effect after the 1929 crash which are largely in place today, although it appears that some that were loosened led to the same kind of stock market speculation excesses that occurred in the 1920's.  IT seems as if there are more limitations on serving on multiple boards, etc.

That said, I am certainly no expert on that, and I am not sure if those regulations would cover this kind of small, in house transaction.  I don't think HDC or MCC were publicly traded corporations.   As a private deal, again, if no one got screwed because of misrepresentations, then there was probably no conflict of interest.   

[TEPaul]

Jeffrey:

With this particular MCC and HDC thing and Lloyd's participation on both sides, I must say I do not see any evidence of any conflict of interest with what was put forward for all back then which we have the documentation of and for. However, we (Merion) will be bringing in some very expert business historians to offer their opinions on it all.

There isn't much question that people back then like Lloyd tended to set up corporations if they were even transfering some bucks from one side of the street to the other. Why wouldn't they? They were obviously some sharp and powerful cats and they sure did have the finest legal advice available. They definitely knew how to work leverage and razor thin differences in interest rates particularly when they were dealing in large volume which they often were. I guess it was just a mentality, a culture.

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