150 its first default on the regular payments on its indebtedness, the $20,000 payment due the Security First National Bank on July 1. The Bank was asked to waive the payment until a later date. quest the funds on hand could then be used to meet other expenses necessary to keep the School operative. At that time, the Business Manager reported on some negotiations for the sale of the buildings, and was authorized to quote the figure of $1,650,000, including all improvements. Board member, Mrs. Lyman Stewart, for sentimental reasons, could not bring herself to vote for the sale of the buildings. Although she absented herself when the vote was taken, she did express her willingness to sell the property as a last resort. Actually, she was expressing the feelings of the Board, faculty, and friends of Biola. The financial situation continued to deteriorate. By July, 1931, Biola had been forced to default on its payment of both the principle and interest to the Security First National Bank. No funds were available with which to make the payment. Also, because the operational funds would be exhausted after the current month, the Business Manager suggested that all faculty and staff take a vacation without pay for one or two months, or that the opening of the fall semester be postponed until October to avoid permanent closure of the School. In addition to these financial straits, the Farmers and Merchants Bank asked Biola to reduce its note, because every time the Examiners reviewed the Bank's records they were critical of them for carying this Mortgage. Shortly thereafter the Bank notified Biola that it must deposit certain stock of the Lyman Stewart Trust Fund pledged to Biola as security for ad- vances already made by the Bank. The market value of such collateral had depreciated so much in value that the loan was no longer secure. In a desperate effort to reduce the operating expenses, faculty and staff, with the exception of a few necessary ones in the Business Department,
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