The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-02-07

credit with the other companies OF which they were
agents. As instance of the large amount of such
transactions, and of their freedom in miapropriat-
ing our property we may mention that during the
'ast year they took up two of their own notes for
$50 600 each, which had been more than once before
enewed by procuring 10 be discounted by the party
yho held them the obligations of this company OF
be same amount, although in form the TRANSACTIONS
rere separate and distinct. In other words they
aid their own debts to the amount OF sl00O0O IN
-wo transactions, by substituting the Indebtedness
OF the company therefor
As we have said, these things were carefully con-
cealed from the directors. Besides which there was
an extraordinary and fraudulent conceament from
them of the true condition Of the affairs OF the COM
pany, to be hereafter noticed; and 1t may
be mentioned here that IN N March ;a,cn.. 1897,
charged TO wool" hand. and the ac-
count made up for the directors showed the balance
OF interest for the six months to be ss3 37 Al where
as it should have been sl0s,377 AZ. So in Septem
Der of the same year, there Misrepresentation
in the same item of s26,s56 81 charged to "cloth."
thus reducing apparently the balance of interest
from slO9 sos 62 to $50 S4S 95. 1t may bet has
been-said in Justification of these acts, that as
part of the interest in fact incurred by
of holding on hand large stocks of wool and CLOTH
that it no more than fair to charge those items
with portion of interest This might be true
enough if the object were TO distribute the interest
to the various items of the accounts But no such
distribution was in fact made-no other charges OF
interest were made to particular accounts-one SIX
months part was concealed by charging to wool,
another to cloth-and no such mode Oh keeping ac'
counts is usually practised IN this or other conpa
MES; and the fact of such charges having nm! been
made was not communicated to the other offlcers or
to the stockholders of the company, who were In
tentonaly left ignorant and misled, and deceived,
as to the amount of interest which had been paid.
The result of the whole matter of the dealings of
the firm in making free OF the money and Gre
dit of the company for their own uses and purposes
is after giving them various credits, as will be shown
in the statement hereinafter made that they owe to
the company the sum of sos ,562 %, Uhe commit
tee do not intend by this any other statement they
make, to particular accounts to admit their regu
larity or justice. or any particular liability OF the
company. They only mean to state what appears
or is claimed to be correct by other partesD after
deducting sl45673 so, the amount OF acceptances
unlawfully charged to No Mill account and which
has been eXtinguished as claim against them by as
Stunning that account as hereafter stated, which
is to be increased by whatever amount should justly
be added for extra interest which they from time TO
time paid and charged it on the company lndebt
edness incurred for their own use. As we cannot
tell when this Indebtedness commenced, and how
long therefore it has continued, we know not OF
course what amount of extra interest has been paid
on so much debt have carried for their account
Ii must be very large sum. The amount might,
perhaps, be ascertained or appropriated by long,
patient and careful examination; but it would re-
ouire the services Of an expert accountant for
longer period of time than could have devoted to
it or withheld our report from the stockholders
This large sum Of money, says the company, has
been taken from the company by Its confidential
directors from whom the facts have been carefully
concealed This conduct is severely denounced by
the committee as fraudulent and criminal.
In regard 10 what has become OF the proceeds of
this great defalcation the committee remark
Although the committee has had free access to
the books Of the firm, and have had communication
with three OF its members we are not able fully to
respond 10 this requirement; we will furnish some
particulars which have been, however, more or less
known before Lawrence, Stone Co. became pro-
pretorSpf the Pemberton Mills to the extent of two
ffths Of the whole stock, and il is understood have
paid into that company sl60 900 on account Of it.
They have made large advances to private parties.
They have bought large amounts Of the stocks OF the
Bay State and Middlesex Companies from time to
time having largely increased the number of shares
which they held when they assumed the agency of
the company They have paid out ss7 900 to secure
the passage of the tariff of 1857 and have advanced
in cash or in credit TO the New England Worsted
Company 800 900. These sums account for a por
ton OF their Interpretations Of the property Of
these concerns. For the rest We cannot say.
As the appropriation Of money expended for pro-
curing the passage Of the tariff has excited discus
sion in private and the House of Representatives
al Washington has raised committee TO investigate
the transaction il may be unnecessary to say more
VIC will, however add that il is shown that at. and
for some time after the failure Of Lawrence, Stone
Co, there was in drawer in their counting room,
memorandum in detail Of many, If not all the items
of expenditure, which at least by one or
two persons. Unfortunately il not carefully
smined at the time, and when IL was again sought
for il had mysteriously disappeared. We are told,
however that more than half the sum was paid over
has Teen summoned TO appear before the committee
at Washington.
The committee refer to an agreement obtained by
Lawrence Stone Co.. OF the directors In 1856, by
which they had leave 10 ht up Mil No. at Law
renee at their own cost, and run il for their own
benefit for five years, aud subject to certain condi
tons and remark:
They Immediately proceeded to purchase this
machinery, set il up in the mill, and to
put II. in operation A part Of the work
was done at your machine shop without
QufhOT1tX knowledge
the directors. part was ordered from the Lowell
Machine Shop, Of which some portion has been put
in the mill the balance is finished but is not yet n
and IL il understood that no part has been so far de-
Eyered 10 pass the property Such at least Is the
claim Of that company. Lawrence. stone X Co, so
far as they have paid anything for what has been
done. have done II from the means OF the Bay State
and Middesex Companies, for they had Of their
own.
As stated at your last meeting by Mr.. Kuhn, your
treasurer, there are outstanding acceptances of
the teasurers drafts amounting TO sl45.673 so,
which have not been entered on the companys
books. and for which IL does not appear that II has
received any consideration He adds: These &C.
ceptanccs are understood TO have been given on
account Of the business Of mill No 81 II turns out,
however. further investigation, that although
they charged, they not given specifically
for that account and were charged merely TO put
them 10 some account, and keep them from your
book and the knowledge Of your directors; aud
that they specifically, no more were chargeable to-
or belonged TO that account than any other accept
ances originally charged, at two different times was
sl65 679 So of which $40 900 has been paid.
The bookkeeper says he instructed 10 make
that charge, that nearly within the amount
Of the expenditures on that head The directors,
acting under legal advice on the oath Of December
last assumed the whole Of that account of the com.
pany the effect Of which will be that a. the Dom.
pany have by the unlawful use Of their acceptances
means credit paid for il, the property will belong
20 them-and the indebtedness Of lawrence Stone
a Co. a. stated in Mr. Kuhn report, which included
the acceptances charged TO that account will be
sAA srft hg do
stated by him A statement Of this account will be
found at the end Of the report. There liabilities
OF Lawrence. Stone x Co % various parties amount
ing, as they state, % t2s 345 u which are not In
cluded, because they do not form a lien upon the
counts assets.
The treasures statement, made at the last meet