National Republican. (Washington City (D.C.)) 1872-1888, 1881-06-02
TERRA GOTTA TROUBLES,
Serious Charges Filed Against the Man.
agement OF the Company.

9Eement or the company.
Mr.. Edward C. Dean, through his attor-
| neys, MeSsrs. Hine and Thomas, yesterday filed
billin equity against the Potomac Terra Gotta Com
pany and the trustees of the company, Messrs John
/ Lynch, ST., John Lynch. jr., John c. McKelden,
| and Benjamin F. Grafton, asking for the appoint
ment of receiver; that the defendants be en-
joined from further disposing of or encumbering
the property or mourning further liability. and
calling for an account of the earnings and labiu-
| ties of the concern. The bill of complaint makes
| the most serious charges against the management
| ofthe company, and especially against Mr.. John
Lynch ST., the president. Mr.. Dean AYERS that he
holds 40 shares of stock in the company, W hich
was organized May l, 1878. The capital stock was
originally fixed at S5OGOO divided into LOCO shares,
but in 1874 was increased to $4,000. Mr.. Dean
charges that the company has failed to make a:d
| publish any reports showing
THE FINANCIAL CONDITION
of the company, as required by law for the years
1874, 1870 1875 and $780, and also that large num-
| Der of shares of stock had been sold for which
promissory notes had been received in payment
instead of cash. and that the company is now doing
| business without having the entire amount OF
stock paid up; that the president and trustees
have never made or recorded a sworn statement of
! the amount of capital stock in the office of the
Recorder of Deeds that the annual reports of the
condition of the company has been since 1876
steadily growing worse, until it is now insolyent.
" The condition of said company" the bill says
" is much worse than is shown by said reports, and
it owes debts and has sustained losses not shown
or included in said reports"
THE STOCKHOLDERS.
In the month of March last, the bill says, the
stock-book showed that there were 5,SS2 shares is
sued, distributed as follows S. E Spring, of Maine
cIa ii, y T-ce Gov
E. Paine A; J. n. Winslow, of Maine, LOO; L. r.
futile, 40; E. C. Dean, 40; J. C. McKelden, 40
Solomon Grover, 6OO Enoch Totem, go; W. ].
Murtagh, %; E. 3. Smith, IS; F. Riyes, 200;
A. Cotton, ,, and Peter Parker, 200. The list now
remains substantially the same, except that re-
Gently the elder Lynch purchased the stock of
Messrs. Totten and futile. Lynch, having the
proxies of Messrs. Spring and Winslow, holds the
controlling interest, which, Mr.. Dean charges, he
takes advantage of to promote his personal inter-
ests, to the detriment of the company. The com
pany has been doing losing business, it is alleged,
for four years, and its affairs are tangled and con-
fused.
THE LOSSES
of the company for the two years ending January,
1884, reached, it is stated the of $40 64042 and
the liabilities now amount to more than $4,000;
the real estate-l63 acres of clay lands heavily
incumbered to secure deferred payments of pur-
chase money; the building and machinery are de-
preciating in value, and Mr.. Dean charges that Mr..
Lynch ST., without consulting his cotrustees, has
recently sold several brick machines. The bill
charges bad management and alleges that Mr.
futile recently made repeated requests to
see books and was refused, being told that
they had not been posted, upon which Mr..
futile, becoming dissatisfied, sold his stock to Mr.
Lynch for twelve and half cents on a dollar. The
Messrs. Lynch, ST. and jr, the bill says are in re-
ceipt of extravagant salaries as president and sec
rotary respectively of the concern, and they are
combined with Mr.. McKelden to absorb all the in
come in salaries. There have been no money
dividends says Mr. Dean, and he cannot sell his
stock for fifty cents on dollar Mr. Lynch, ST., is
also charged with pTacticing
FRAUD UPON THE STOCKHOLDERS.
! 1t is alleged that in 1872 he purchased twenty
three acres of land from John w. Wiltberger for
$500, and in 1878 transferred it to the company,
subject 10 an incumbrance of S6,O0O for $4,000 in
stock; that he purchased one hundred and thirty
acres OF land from Mary Queen and others in 1873
for $4,000, paying $1,000 in cash, and transferred
it to the company, with an incumbrance of $1,000
for $4,000 stock, and in 1875 purchased between
ten aud eleven acres ofland from George W. Tai
bert for 5000 paying 654 cash, and transferred it
to the company for s. 056 il stock subject to 81 $40
incumbrance. By these transactions Mr. Lynch, it
is alleged, made $4,000 in paid-up stock.
The bill alleges that not S5OOJO of stock has been
paid in and about e-half of the subscriptions
were fictitious. The stock alleged to be held by
Messrs. Spring and Winslow is represented by Mr..
Lynch, jr., and, it is charged, was only pledged
and never paid for and has been voted fraudu-
lently. Mr.. Lynch it is asserted declares that the
company will make large additions to the build |
ings this season and increase the Indebtedness of
the concern. Mr.. Dean further asserts that Mr.. |
Lynch jr, is young and UNQUALIFIED by profigate |
habits and lack of experience for the office of Sec
rotary. Justice Wylie made an order setting the |
case for hearing on Friday, the 10th instant.