The New York herald., 1878-11-07
A. & W. SPRAGUE.
Complaints Of Creditors Against Mi.
Chaffee, the Trustee.
THE MILLS AT WORK.
The Trustees Own Statement OF the Con-
diton Of the Property.
HE MILLS AT WORK.
INVESTIGATION COURTED

PROVIDENCE, X. l., Nov. D, 1878.
The numerous creditors of the famous house
a A. W sprague, of Rhode Island. are getting ner-
yous again. and in vain do they look for payment Of
the due them. They have received no inter-
est dividend since January l. 1876 and of them,
far as is known by the majority of the creditors,
have received any part OF the principal. Inc
firm obliged to suspend in OCTOBER
1878, and during the following month
at public meeting of the creditors il this city repre-
sented that they proposed TO make conveyance OF
all their property and estate for the equal beneht OF
the creditors. This conveyance it was proposed
should vest in sees be chosen by the creditors,
perfect, absolute and complete control OF their prop
erty, that they ithe creditors) should that by
no bad management and by no possibility OF
bad counsel except such should come
from the creditors themselves through their
counsel could property subjected to any sacri
ce and that for any misconduct of the trustees there
would always be remedy before the Court. The
creditors claim that relying upon the representations
Of Amasa Sprague. William Sprague, Fanny Sprague,
May Sprague and the firm of A. X w Sprague. they
elected three prominent and influential business men
70 receive the proposed conveyance. The conveyance
duly submitted to the gentlemen appointed, but
before the same wss consummated the respondents
made conveyance of their property to Mr.. Zachariah
'Chanee. and this without the knowledge or con-
sent of the creditors 1t will be remembered that
they conveyed to Mr.. Chaffee all of their property,
zeal personal and mixed not exempt from attach
ment the shares in the various corporations.
These shares the creditors alege to have been trans
erred to Mr. Chaifee his request in writing They
we're to be held as collateral security for
;he performance Of the conditions Of the
conveyance This conveyance was made upon
The trusts and conditions generally that he
Chafeel might allow the grantors to remain in the
possession and use of the granted premises until
breach of the conditions and upon the further cond
ton that if the grantors paid the interest and prn
cipal 16500 negotiable promissory notes, payable
three years from January l. 1874 with interest at the
rate of 310per cent per year. payable semi-annuay
and to be signed by the A. 4 W. Sprague Manu-
featuring Company, and indorsed by the
frm Of A. w. sprague. said conveyance
should be void but otherwise to remain in full These
notes. being for $50 for 500 900 for $2oO
5000 for $780, 1000 for 900 and 1900 for $1,000.
duly issued. 1t explicitly specified in the
conveyance that in Of default in the payment Of
either principal interest of the notes referred to,
Mr.. Chaffee should sell the property and apply the
proceeds toward paying the notes and the interest as
well. 1t will thus be that the time
for paying the notes expired January l. 1877.
The creditors accepted and hold the extern
sion notes III March. 1874 the creditors startled
by the announcement that the NATIONAL BAnh OF toI-
of this city filed petition in bankruptcy
against the A. 4 W. Sprague Manufacturing Company
This petition. however. withdrawn in consdera-
that the firm would execute deed OF assignment
FOR the benefit Of their creditors. deed Of assign
ment promptly delivered to Mr.. Chafee upon the
following trusts and conditions. viz z:That he Chaee
should convert the same into money. and the pro-
reeds should be first applied to the payment of all the
creditors VINO should bring in their claims and extend
the time OF payment and second to the payment Of
all other creditors of the firm.
DIssArIsFTEp CREDITORS.
As before stated interest has been paid these
notes since January l. 1876. About year ago cred
itors representing s4,20O.oo0 about one-haH of the
total indebtedness. resolved to what they
could do in the premises. and they filed
bill in equity In the Supreme Court, and they
expect 70 get hearing either this month next An
unsuccessful attempt has been made to advance it
the calendar. The committee appointed represent
that they will press the matter and prove the allega
tons in their bil and they just determined
ever to il they have rights which Mr.
Chafee the spragues bound TO respect
They allage that Mr. Chafee is acting in
the interest of the firm. and tht he
has made effort to sell the prop
Frty and thus honor the obligations. They fur
her allcge that he has suffered the debtors or
the personal possession and Of and in the receipt
Of the income from the valuable property conveyed
to him and also shares the capital stock Of corpora
tons paying dividends and that while receiving no
income from the property he has paid out Of the
trust funds in his hands large amounts for taxes
insurance and other expenses in and about
the same. They claim that he has right 10
experiment with the property in the way Of adding
new machinery, &c, and that in all mstters Of this
kind shey the creditors) should have voice. They
also allcge that he has bad experience in cotton
spinning and calico printing, and that he has
ployed Incompetent persons to conduct the business
and has allowed william and Amasa sprague
largely control the business whs at their will,
have discharged skilfui and experienced superin-
tendents and workmen, and since default
made IN the carrying out Of the condi-
tons y the conveyance he has suffered the gem
emen referred to aud other debtors grantors in the
trust deed to withdraw large from the business
and appropriate them to their own use and has
otherwise ncgligently and unskilfuly managed the
nIanufactnring business that. while the buildings.
fixtures and machinery have been deprecating in
value and large amount Of personal property
has mysterousy disappeared very large and
rnaccouniable debt has been contracted the
amount ot which, together with other spe-
cifc information TO the general conditions
Of things connected with the estate, IL Is impossible
for them ~ obtain owing the that they are
dend to the books They do not like il because
he has expended large sums O money in the purchase
az machinery IN the erection Of new buildnga III the
villages in Rhod. Island and Connecticut where the
mills located and also in making expensive changes
and additions to the estates in Maine and New Uanu-
shire, and also to an estate in Washington, u. q.
Iu the opinion ~ the creditors he has also allowed
and William Sprague to retain in their
expensive and valuable horses, and has allowed them
~ engage in the business OF breeding and raising
horses the expense and risk Il the trust estate In
his hands. and has sold at private sale very secret
and questionable manner 3,lO0 shares Of the Union
Horse Railroad Company their most productive aud
valuable property for the u ss7 80 fr share when
The par value OF the 100 ne should, in
their opinion. have sold the vast amount Of unpro-
aucve property in his hands. instead Of selling that
which he knew constantly paying handsome
dividends. Frequently the spraguc notes sold.
aud have boon purchased at prices ranging
from sixteen to twenty-three cents. and in
tho opinion Of the creditors Mr. Chaflee has
used the funds in his hands trustee for
ne purchase Of these notes. and that he holds
he same either i'm his or IN the name Of
some third person for his or for the use and
benefit of the debtors This is DONE in the opinion of
the creditors. in order that the firm may become pos
-. I...at nnaalllln In nrlnr