The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-02-02
THE HARD TIMES.
Collapse of FOuse, Hershberger s. Co.'s
Mercantile Agency.
THEIR ASSIGNMENT.
History of the Firm and It's Late
Difficulties. e

The mercantile agency firm OF Fouse, Hershberser
& Co., whosel Offices occupy the seconi door OF the
building No. $40 Broadway, succunbed yesterday
under the pressure of Indebtedness, which their at
torney believes does not much exceed $40, o0o The
principals made an assignment favor or ther legal
adviser, Mr.. o. II. Sanderson, VINO is making out
statement oil assets and liabilities which he expects
VIII be ready for the pubic to-day or tomorrow.
Mercantile agencies arc . sort 81 organization 30
peculiarly American, and occupying such anoma-
lous position nIhe business world that little insight
INTO their worklngs'w DO interesting, in view OF the
failure now recorded. The story Of their system OF
working Is told at length the affidavit OF Mr. l. G.
Fouse mado by him in December last before tAe Court
Of Common Pleas. This affidavit was submitted in q
suit prosecuted by the firm which suspended yesterday
against similar concern under the mana gem nj
OF Messrs. Dun, Barlow Co., in which tho
plaintiffs claimed damages to tho amount OF 500, 900
Tor alleged libel Mr.. Fouse said that. after having
been engaged in msrcantile pursuits, he began III
1872, 10 put into execution plan conceived BY him
Tor forming organizations which he called business
mems unIons.' These associations vi the
chants the respective counties, Tor whom Mr..
Fousc appointed an agent, subject TO their approval
TO make collections in LII cir behalf and at tho same
time furnish Information to thom in regard 10
customers" and TO report to him all matters Affecting
the financial standing of the various merchants. II
claimed that the Information obtained in this way
gave Satisfaction Ind the business was rapidly sx
landed from Ohio Into Indiana, Illinois, Michigan,
q
States. Sir. Henry Hershberser joned Mr.. Fousc Six
months alter he started, and the central Office
removed 10 New York city In 1874
EXTENDING THE BUSINESS.
The business had now grown ~ such an extent that
the firm were prepared TO 'embrace the whole coun-
try" Branch Offices were established In the large
cities throughout the Union, and the Information
gathered by each ono was comm I'm cated to all the
others During all this time the business mems
unions had been kept up aud collecting agency
started connection with the other branches Thus
the enterprising nrm were able they clumed 70 tell
h,pss, nn3a An0s. nj md nal Anx
glance and TO undertake at the same time the colec-
ton o; debts Que from the one portion OF the
mercial world who patr0nzed thom to tho other
ton whose names they also expected on thor books.
Mr. Fouse satd:' Our par d. tered largely from that
Of other mercantile agencies. When taking subscrp-
asked from the subscribers list such pur-
they might destre 10 have watch kept over"
This admission unpeasantly suggests that while
chants apparently putting the utmost trust in each
others commercial Integrity, they were employing
detectives to "watch one anothcr's actions, ana that
they knew this was the case. Tho firm 10 which Mr.
Fouse belonged insisted that .rating In business
''by marking them as entitled to certain amount Of
credit, or possessed Of certain amount OF capital,
not only Unsatisfactory but IL was perilous by
reason OF the numerous changes constantly going on
in tho business community" Then Mr.. F0use goes
nrm concluded no, 10 issue sa.nss," but to subs.i.
tute especial reports" therefor.
COMMERCIAL TRAVELLERS TICKETS
AS part OF this system the Arm issued 10 their
subscribers what they called commercial travellers
tickets which their agents are derected 10 present
10 certain attorneys when needing legal assistance or
SPECIAL information ..Thc attorneys namedU were
always the agents OF the mercantile agency;
what with subscrl0ers' fees commission on collec.
tions effected, and Qwd pro quo from "tho attorneys
named, the mercantile agency had all Sides lucra-
tive trade Up to the middle OF December, 1877 this
record OF !, 700 "wsekly Items" Among their agents
were "about 1000 lawyers, besides some 1900 off,
Gals or others, engaged IN furnishing Information
and correspondents distributed over the whole coun-
try" The concern claimed 70 have 400 900 detailed
in the United States In New York city alone 1000
subscribers were claimed BY Mr. Fouse. OF course,
young ard seemingly ~ ar% as .na; Of
10 have envious rivals, and one OF these, Il was be-
heved BY them. existed in the house Of MessrA Dun,
engaged In the same Of business the defunct
establishment There IL this difference. how
ever Da1 ps,S Ssa'ow .rcs.b ps0sS So rss's
fortune 70 happen across their agents, but IL Is
understood they make NO collections. bun. Barlow
Co., so the collapsed firm assert, were jealous
at the success OF the new agency and acted so that
thersupon Fouse, hershbsrger Co commenced suit
against aud obtained order for the Of Robert
g. pun. Charles Barlow, Matthias b. Smith and Eras-
tus Wiman. In the proceedings which followed, Mr.;
Fouse made the affidavit above quoted
AN UyPLRAsAKr TURN.
But things we're soon destined 70 take an unfavor-
able turn Tor the Nessrs Fouse, Hersh be rger Co.
mad a misunderstanding with them, ana In bringing
suit against them Tor some $4,000 damages he said
number OF uDknd things IN bis affidavit, which
caused the arrest OF FOuse Co Mr.. Potter accused
his EMPLOYERS Of making Misrepresentation 10
him concerning the opening OF agencies In
Troy and Albany. After detailing iheir method
OF operation he went say, In substance that In
November 1876, no entered into negotiations to open
agencies IN Albany and Troy and assume personally
the xpcnse and hazard oil running them. He claimed
that the firm represented that business In the city OF
Albany then Of the annual cash value $l2 000
that he paid 5000 cash Tor BUSINESS that lie
opened Offices IN Troy and Albany, employing
= corps OF assistants TO help him. Upon
trial he found that The represe to the bus-
subscribers declined TO continue their subscr ons,
excepting lew whose names taken aL rates not
exceeding half The usual prices The law Van.
derpoel Green & Cunning appeared for the mercan-
tile agency and succeeded IN getting the partners out
OF prison on $4,000 baiL
EMBARRAssMEXrs
Hardly had tho partners freed themselves tenn po.
rary IRON the designs OF SIR. Potter when new en-
morning made In favor Of their creditors the assign
ment already mentioned. Mr.. Sanderson, the AS.
sgnee Of the hrm stated that could yet give
anything like Just estimate OF the assets aud liza.
might exceed the latter which placed the neigh
borhood OF $40, 600 The assets he said, consist
solely OF books and records which would benefit
but man engaged In the mercantile agency
bust ness From further statements made by
the assignee II appears that for some time past z
feeling OF dissatisiacon has existed among IN I'm.
beers OF the arm. who had been engaged In negotia.
lions tor either taking In another partner or Tor
count Of conflicting interests, could agree upon
any determined aud mutually satisfactory course.
II 10 beevcd that these crcumst stances mpeiied the
trm 10 make their assignment and leave tho city. Al
all events the fact Of their leaving the city s estab-
lisned beyond doubt Tor inquiry At the residence OF
Mr. Fouse, No. 403 West Invent ysccond Street. last
evening, revealed that that gentleman mad gone
OF Town early in the day to transact important bust
ness and as not expected 10 return for time
and that ''he was accompanied by The other members
oil tho nrm."