New-York tribune., 1889-11-07
A CRAVE QUARREL AVER1ED.
COTTON OIL TRUSTEES SUBSCRIBE TO THE
Lc5S.
THE BASIS OF REORGANIZATION ADOPTED
vIND1cAT1NG GENERAL THOMAS.


vINDICATING GENERAL THOMAS.
The committee of which Frederick p Olcott is
chairman reported plan of reorganization az an
adjourned meeting of the shareholders OF the
American Cotton OIL Trust yesterday The sta'e-
ment of the settlement with the executive Officers
showed that the trust had lost a considerable sum
of money. The Tribune said last week that fresi'
dent Flagler and Treasurer Moss had attempleu -
support the market for account OF the Irusu' a"N
that when the action was repudlated by the Jun
trustees the Trust was secured by the surrehu' =,
of valuable assets. The sensational puollcauon v
shortage in the accounts had no fouhua'iOH
except in this endeavor of the principal officers
10 perform their duties. In their anxiety ui'y ,
overstepped the bounds of prudence, and lns'e"u
of success they met defeat. The fullest eA M
Of the situation is afforded by the counsel Oh 'N-
trust in letter 10 the committee In thls u "'0
said: ,,s.
In the condnct Of the business II has been the Gus
tom of is executive officers TO utilize the AUry%V
OIL Company of NewYork as e inahfe heeD enabled
tn FAC lita'e their financial arrangements. Ihe Pe9s
dent and treasurer of the Trust FOR the and
with the intent, as they state OF maintaining ar
strengthening It's credit have deomed IL hecssi ~ the
desirable to support the price OF tne & accounts
market by conducting certain Trust cerncatc 49, "a
m the name and for the account Of the American va va
Company and without the knowledge OF ct Inc are
of
now entirely closed with loss 10 tho company "a
tI FIagIer and Moss who alone officers. In;
auClrafed and manacei these accounts, haVr app
before the trustees with their respective coils'I
have FRANKLY expressed desire 10 maxi slosta
contribution toward the same. aggregang the sun "a
sISo 600 and Mr. Mos 100000. This leaves the
net loss 1927 ,5l1 and the trustees recommend tha'
the matter be adjusted on that basis
The committee accepted the suggestion with
,t.v- fno r,pohahIp theory
nothing more could be obtained. 1t proceeded
Immediately to report 81 the general basis 9f
reorganization" as follows:
The trust and all its property and assets arc to BE-
merged into the American Cotton on Company. when
already owns several properties and in which the & ls
common stock amounting 10 S21 002 900 and preerre
stock entitled 10 per cent non-cunulatiVe dVAeh Us
deemabIe at lO5 and IS secured by the shares of all
companies received under the agreement The bliaCS t
Of S44j4OOO. in excess OF the amount required ip.
exchange Is TO be at the disposal OF the directors I
the use Of the company; In other words me posers
holders of the trust certificates Will receive 80 per cent
in stock and % In preferred stock OF tho neT
corporation. The capitalization under this plan VII
SO $4,000. Both classes Of stock have equal yoim5
power The committee recommends the adoption o.
the plan
At the meeting Of the shareholders yesterday
when this report presented. one opponent WAS
present. He asked. among other things If General
Samuel Thomas was to be trustee or the new
company. The result OF the objection was the
immediate offer by General Thomas to resign
his place in the Board of Trustees and the Com:
mttee Of Reorganization. The offer was rejected
with almost complete unanimity and many share
holders pressed forward to congratulate him on
what was considered TO be a vindication. 1t is
an open secret that grave scandal IN the manage
ment of the Trust has been averted only by the
generosity Of General Thomas. The settlement
with the two principal officers might have been
made in the courts if his, friendship for them had
not intervened The value of his services was
recognized by the shareholders in a fattering way.