The Portland daily press., 1883-11-02
SHAW BROS FAILURE.
Report of the Creditors Meeting
IN Boston Yesterday.
The Firin's Estimate OF Assets Reduced
from Five to Two Millions Creditors
Refuse an Offer of ses,le,nent on sr Basis
of 33 1-3 Per Gent.

1nc FHKas ASstlMeEe OF Assets kseoucS"
from Five TO Two SailIiOns--Crealitors
Refuse an Offer of set,Ienaent on sr BASIS
Or331-3 Per Gent.
BosToN, Nov. IAN adjourned meeting Of
the creditors of r. Shaw & Bros. was held at
2 o'clock this afternoon at the Shoe and Leath-
er Exchange. Immediately after the meeting
was called to order, George f. Morse, Esq, on
behalf of the firm, submitted the following
statement:
MR.. MoRsE's STATEMENT.
Gentlemen: We understand that the purpose
OF adjournment for two weeks from last meet
ing was to give each Of you an opportunity. to
examine the committees report and decide Tor
yourselves what you think you should receive
upon your claims as fair dividend, based up
on the market value of the property; and also
to give us an opportunity to examine the re-
port and present to you our ideas of the vAlue
of the estate, and, if we found it feasible, to
make you an offer OF settlement.
In giving our views we shall present to you
great many facts and arguments which will
60 to diminish very seriously the estimate put
upon the property by your committee. Not
that We wish in any sense to unduly cry down
Values but these unfortunate facts actually
ing facts we shall endeavor TO be truthful, and
we believe our arguments are sound at least
they are the result OF our own convictions, and
we must act upon them though you may not
agree with us. Some criticism of public
character has been directed against us because
we did not aid the committee, and lest we
should be further blamed-as we Justly should
be, if it were true-for sitting back and let
ting the committee grope in the dark, and
then coming in with our criticisms of its work
uFcd dAcI IN tot hot tUn how olr up haOrl
ready to aid the committee and have SO in
formed the members Of it; and Mr.. Fayette
Shaw proffered his services in its aid. The
only questions asked of us were as to the value
OF property where no property existed. In-
deed we regret that the committee did not see
fit to compare views with us before making its
report, as we feel sure it would have resulted
in large reduction in our estimates.
The committee, as it says in its report, did
its work largely independent OF us and our
books. We have endeavored to examine with
care the report submitted by the committee,
and view it in the light of our knowledge of
the business and assets of the firm, and to
make such criticisms and suggestions as will
bring the full attention OF creditors to points
important for them to consider in deciding
what course they will take in the settlement
with the firm, or in otherwise marshaling the
assets. Although we fully appreciate the vast
amount of work which your committee gave to
its duties, and though we recognize the ability
which it has bestowed upon its report, we
think it will be recognized by that class of our
creditors who are skilled in the values of this
kind of property, that some classes of the
property have been highly overestimatsd; and
in some cases, indeed, property Las been styled
an asset which can only be recognized as
liability.
We are frank to say, on the other hand that,
in many cases, the estimates are correct, in a
few cases low; and we have no criticism to
make upon their intended fairness 1t will be
no reproach to its members if we say that it
may possibly have been wiser had there been
more npon that committee who were skilled in
the tanning of sole leather and in the values of
that class of property, and especially OF the
values of tanneries, extract works and their ap-
purtenances, and bark, bark-lands and bark
leases, whom put into the market for sale.
We shall submit herewith an inventory OF this
property, with our own estimate of value: and
while we may err in some items, in the aggre-
gate we believe that we have appraised it for
more than it will bring in the open market, and
that it will require careful fostering to make it
realize the net amount herein set forth.
With regard to the NeWtonville property of
F. Shaw, alluded to in your report. Mr.. Fay
cite Shaw bought the Newtonville property
eighteen years ago, and paid for it himself. 1t
does not appear npon the books at all The
account which the Committee alludeS to upon
the books includes some expenses incurred in
and abont the premises within the past few
years, and also includes the house built some
three years ago, and given by Mr.. Shaw to his
daughter, Mrs. Kimcall as wedding present;
and also the house recently built for another
daughter, Mrs; Curtis; but these sWere both
teen years ago. This account also contains
many other items, such as taxes, repairs and
extra expenses OF living, above what were nn-
dergone by the other partners in tho tirm; and
although the partners have not finally account
ed for 27 years, it was kept in this way for pHrF
poses of future accounting, and was stEletly a
private account of FaygtSe Shaw; and no mem
Der of the firm t5f a moment ever assumed
otherwise, or that itw firm investment.
In regard to payments made to John f.
Mills, and notes given him previous to the as
signment, it was thought better that his &C
count should be liquidated, than that it should
be left unliguidated, to become a matter of
subsequent litigation. 1t had been an account
of some years standing. AS Mr.. Mills imme-
diately made an assignment OF his property for
the benefit of his creditors, no hardship could
result, as we understand that the assignee of
Mr.. Mills has in.his possession, as such assign
ee, JAIL the notes above set forth, to be dis
trbuted in pursuance of the terms OF the as
signment.
The committee, in its comments upon the
Vanceboro firm, concludes that firm is solvent
and that the creditors OF that firm must be
paid in full, and that the claim of 1857 ,433
which the Vanceboro' firm owes the Boston
firm will not be entitled to its dividend with
the other creditors of the Vanceboro firm. We
think it is quite possible that this view of the
committee is errnomous, and that the debt OF
the Vanceboro' firm to the firm proper stands
as all the other debts of the Vsnceboro' firm.
We are advised, at least, that this is an open
question; and we consider it an important one
in any settlement which may be made, and
important to the creditors of the firm proper in
any event.
The committee, in it's tables of assets and
liabilities, puts in many bark-leases as an asset
of the firm-mainly those on the ST. Croix and
Machias waters. We have no doubt, taking
all our contracts for bark-leases, they will con-
stitute liability of about 100000, instead of
an asset of $75 900, as estimated by the COM
mittee The committee, in its report, says
that only such damages can be claimed against
the estate, under these bark-leases, as have al
ready accrued, and that all damages for future
breaches would remain as claim merely
against an insolvent concern-that is, against
us Individually. We are advised that il we
have finally broken our contracts with these
lessons, and if we have determined to continue
to operate no longer under them-as will be
the inevitable result if we go out OF business
it is fair question whether these lessons are
not entitled to have all their damages for
breach of the contract assessed in a gross sum,
to prove against the estate, and that this
would be the rule under the insolvent law of
Massachusetts, by recent provision.
The insolvency laws of Massachusetts, might
be invoked at the instance of such creditors
IOr budt r0a5OH IL lOr no ObuoI, IL Lu0 pdrLl6S
find no remedy at common law, or by other
statutes; and, indeed, if such liability hangs
over us, it may force US to get a discharge
therefrom. We made these contracts from
our experience acquired on the Penobscot and
Kennebec waters, that one thousand feet of
scaled hemlock is guaranty for one cord of
hemlock bark. Our experience on the ST.
Croix and Machias waters has pro ven that al
though thousand feet of scaled lumber on
the Penobscot and Kennebec waters gives one
cord of hemloek bark, the customs on the st.
Croix and Machias waters require twice that
amount of lumber to give cord of bark; and
we have found that we were deceived as to the
value of these leases. That is to say, we pay
fifty cents per cord for the bark from each one
thousand feet of scaled hemlock. On the Ken
nebec and Penobscot, this gives, by the Gus
tom, a cord of bark, which costs US fifty cents;
while on the St. Croix and Machias, whore
these leases which the committee considers of
great value, mainly are, the custom requires
tW thousand feet of scaled lumber to cord of
bark; and hence the bark on the trees costs us
one dollar per cord-which, in those localities,
it is at least its full value, and double what
We expected we were to pay when the con-
tracts were made. 1t will be seen, that under
other leases, which the committee acknowl-
edge as liability, the basis is by the cord.
A large quantity of the lands in Maine and