The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-13

ne Esshsy-ssvsn Thsus~~d Dsllazs Com
gressson.l J~A
D much is being said II resAac ~ the Mddessx kss
1swreDes Stone Co., and " suSsry Of Congress and
.swspsPsr eds0Fs shaa nr report Of The stsssmsDs
ysoeny made 70 the s ekhslders Of the Mddseeex Mills
Nm MOI be uninssrertA,s. Here as;-
lfrom re Boston Tfamcrrt, Dec. 30
1he annual Getting Of the Stockholders Of dc Addeeex
m was held ~ The warehouse Of Lawrence Stone Co..
Mix street. th forenoon for tne choice Of officers Of the
corporation and 70 transact any other legal business The
seport OF the investigating committee chosen al
g meeting examine the Of the company,
49, he chief subject OF interest The report lengthy
ssA able document, which deliberately discusses t.e c
seecns o. he c'rPoratcs since lts estaosnnsne No
Ysb,sh the following extracts from IT, AZ containing INC
substance of It's ststemerks- ,.
Your committee have 70 report thae in compliance VIE
your voee, they have made thorough examination Inc
Astory and past transactions Of the company sclar n
required TO eiucsdae its present position have vera
aeA valued property and assets and have prepared
en- accurate stateneat condition and resources at this
sDe
10 20 bach 70 the year $780, when the company
as nrst chartered with capital Of 500 ooo Al this time
" s. Lawrence stone q Co were ,ne sole cwness ana
investment gradually increased from the earnags 70
eoeo0o0 The accounts OF the company with the excep
en- Of unfortunate of mill books kept upon the
books OF the nrm and It's funds merged with theirs upos
Sheir cash book When w ls4l the capital stock was
raised to $500 the increase subscribed By outside
uart,es general board Of directors appointed and
Ae company assumed the position Of open corporation
No change the Of keeping the accounts, how
ever followed. Mr. Samuel Lawrence remained the trea
Arer and Lawrence, Stone Co, selling agents, and the
sompsnys accounts continued to be kept with them, as
with genera commission merchants.
They sold The goods and collected the notes
Tor them, as their own property and accepted and paid
he treasurers drafts on them for the procee Is they
were the financial agents and bankers Of the
psny, whose payments and negotiations were made en-
annual accounts rendered by Lawrence, Stone Co., 70
she treasurer and running over space OF ten years,
appears thai during large part or thai tme the company
has been issuing its drafts and negotiating them IN the
banks street, for much larger amount than ts
regular business required lawrence stone Co. credit
ed the company with the net proceeds Of these drafts and
allowed them per for the of the money which
remained In their hands until the maturity Of the accep
ances 30 the company lost the difference between
SIX per cent the which the paper nego
Gated, II q higher rate paid This lose appears in
rome years TO have amounted from ten 10 fifteen thou
sand dollars besides the strain the companys credit
caused by this excessive issue OF paper.
In january, 1855, separate set Of books was for the
st opened for the Mid iesex Company and the
with Lawrence Stone Co. far modi9e1 that
he notes received for sales OF merchandise we're handed
the when received and recorded his boks
1he treasurer drew Lawrence Stone Co. for accom-
medallion only and their acceptances were undentood "
be provided for by the treasurer AT maturity.
Under this system there cash interest account
with lawrence Stone Co and the proceeds OF the com
panys drafts no longer remained apparently in their
hands Had Lawrence, Stone h Co paid from their own
1uDds they bound 10 do their acceparces given
prior 10 the change in the system of bookkeeping, the
would have been properly adjusted and the
rcssary of paper would have disappeared. But
find that 70 meet these payments, they borrowed the
money Of the company, upon their own morandum
checks which reckoned in the cash OF the company
and appeared upon its books only under the head of
general account which was represented to the directors
10 be schedule Of unsettled balances, petty loans, &c
Whenever the balance became so large that it must
have attracted the attention Of the directors shown TO
them the payments Of the next month charged in,
assumed by Lawrence Stone Co. reducing the appa
rent balance on hand by so much. For example, ap
pears that May 80 1857 notes and accepnces due in
June 70 the amount Of $3.50 00O were charged paid
and as voucher, memorandum was put in agreeing on
the part OF Lawrence Stone Co.. to protect them at ma
turity. When the companys accounts were examined,
after Lawrence, Stone Co.'S failure on the 30h of Sep
tember, found that they owed upon their memo
Yandum checks $20s 600 in addition 70 various loans at
banks for which the companys paper was given col
lateral, and which will increase the Indebtedness of law
renee, Stone a Co. 70 $l27 900.
By examination Of Lawrence, Stone & Co.'s books, il
appears that they have been the habit OF dividing their
annual earnings without accommodating any reserve, AVID
a. for many years ey hap been rrt,.ay isoluen,
sustained IN their various enterprises only " TIE money and
credit Of e companies they appreciated They were large
holders Of the stock Of both companies owning nrm
and individuals 27T shares OF the Mddlesex and 452
shares Of the Bay state Mile They also held $50 shares
% the New England worsted Company, and we end an
Of leans TO various parties amounting to
s sa u" S , ssno % aSon, Gas de
fsvsed m ne N,c York house printing, editorial serices
saslng esnses and Oser esaTge, which aRpsar 70 ..
I0iimaie and Propsr No satlgactory explanation has
bca a, yet AFFORDED q ne s17ssoai.on q tss baianoe
and financial agents. They have diverted the
Funds and credit OF the company 10 eir purposse
using It's assets their own property mourning liability
and risk regardless that they were unwarranaby nvov
ing the interests OF the stockholders Independently OF
the loss which must result from their insolvency, the
company has sustained heavy yearly charge OF extra
interest upon the large sum kept afoat from which has
received benefit They have taken advantage Of the
implicit confidence reposed IN their integrity aud hdey
hey have injured and endangered the interests they
chosen and trusted TO defend But II Is only just 10 say
that no motives Of private individual advantage with
intention Of injury the company dscernibe in
those transactions They do no, appear TO have enriched
stock held by them tends prove their confidence in the
intimate results Of the business Their conduct appears
so dependent upon the enterprises they had IN hand
who identified themselves with the companies they
represented that they considered any eIpedcn justin
able to MAINTAIN their connection with them.
Al the request Of the members Of the firm in New York
Me committee would state that they see no reason 10 be
pevc them 10 have been aware OF the indebtedness II
lawrence, stone 90 10 the company. They seldom
Boston fully occupied with the bnsiness OF
Their branches and appear have had full confidence
IN the financial management Of the Boston house. They
protested against the extension Of the business IN several
amount Of capital were made entirely without their know
ledge II Is also due 10 Mr. Perry 70 state that he
entirely ignorant Of the o the company funds by the
hrm his position manufac turing partner did require
him % have any knowledge of the financial condition Of
the bm and he appears 10 have relied upon the repre-
senashs OF his partners who assured him Of s sovenoy
and wealth.
A close investigation Of the management Of the manu-
ssrfurng department enables the committee speak very
highly Of the assduiy and energy Of the agents IN en-
mcng strict discipline aud keeping the operty IN ell
eaea, working order No depreciation Of buildings or
machinery has been suffered, and ample testimony s
borne 10 the industry and fidelity with which the agents
duty has been performed Blu, In selection Of persons
for this difficult and responsible Office, attention
% have been paid 20 their previous education and qualh
cations, IN the important points OF practical mechanical
knowledge and skill With the best inventions and most
honorable ambition become masters o. their business
eey have been obliged 90 learn ~ practice and expert
nebt at the company's expense.
On general view q the management OF the company
there appear salient points 70 blame The fault
nrs, the oo~eness snd ipecency Of corporate organ
yations generally Throughout the business from the
purchase Of the wool 10 the sale OF the goods End the
unnecessary expense, the want % dgmeai
and orethought, the absence OF combined and In
slgent action between the different branches. The close
savings the energetic individual attention, The careful
calculation o cost and result which should characterize
the operation of such business have been neglected TO
extent which would destroy the credit Of any ndvi
final rIa % he mill VIZ