The Portland daily press., 1890-09-26
CUMBERLAND BONE COMPANY.
Meeting of Its Creditors and Those
Of Mr.. Spring Yesterday.

The following report was presented:
REPORT OF CREDITORS COMMITTEE.
The committee appointed by the creditors
of the Cumberland Bone company and E. G.
Spring have attended to their duty and beg
leave to make the following report:
The committee have visited the works of
the Cumberland Bone Company at Booth
bay, which they find to be an extensive plant,
apparently we'll organized and furnished with
expensive machinery and appliances for car
rying on the business of the company. They
also visited the works of the PhOspho-Am-
monia company, lately constructed in the
vicinity of the Cumberland Bone Company
for the purpose of manufacturing ammonia a
and other chemical products entering into
the fertilizers heretofore manufactured by
the Cumberland Bone Company, and found
the same nearly completed and ready Tor ex-
perimental work. The committee have also
caused the accounts OF the Cumberland Bone
Company and e. g. Spring to be examined
so far as they relate to the claim of E. G.
Spring against the Cumberland Bone Compa-
ny by an expert accountant, whose report is
herewith submitted.
According to the trial balance of the Cum
berland Bone Company taken in June of the
present year the property at Boothbay stands
upon the books as $13S. 24459, an increase of
ST., 409. 9S above the figures at which itstood
upon the books of the company in the year
1886. The notes payable of the company In
lat
an increase Of S211. 665 Ga above the amount
of such claims in the year 1886. These DIFF
ferences show that lsrge amount of money
has been expended upon the manufacturing
plant of the company within the last four
years, and that the business Of the company
has been carried on at loss, the extent of
which Is indicated somewhat by the above
figures.
The claim of Mr.. Spring is largely for ad.
vances made to the company on notes for
which he holds the the company's notes to the
amount Of $17O.3oo. The new plant that has
been inaugurated by the Phospho-Ammonia
Company at Boothbay has been entirely
built by means furnished by Mr.. Spring,
who appears to have been the only member
of that company who has advanced any
funds for its business and the amount of
such advances appear upon the books to be
S31, 84S.95. These two companies are distinct
in their organization and business and
yet were Intended to cooperate in
results as 1t was expected that the
Cumberland Bone Company would utilize in
ny, and to that end the Cumberland Bone
Company has lately expended a considerable
sum of money In erecting new works to uti-
lie such products. The interest of Mr..
Spring in the new company stands In some
what peculiar position: as his subscription
much larger than the amount
already advanced by him, and unless made
good 1t Is claimed that the amount already
paid In will be forfeited. Your committee
have not had access to the necessary docu-
ments to enable them to pass upon the valid
ity of this claim. but are led to believe that
some means will be found to render available
to creditors his interest in this plant, which
his friends alone have created.
The committee have deemed 1t proper to
consider what course should be recommend
ed to the creditors in view OF the situate
of the property and the necessity of winding
up, In some way, its affairs. Mr.. Spring
assets are largely represented by his claim
against the Cumberland Bone Company, his
other assets having been pledged to secure
lateral. The notes Of the Cumberland Bone
Company were transferred by Mr.. Spring to
the Casc0 National Bank about two months
since to secure prior indebtedness, but your
committee are Informed by representatives
of the bank that they do not claim to hold
these notes Of the Cumberland Bone Compa-
ny as against the other creditors. These notes
should be re- transferred to Mr.Spripg 's estate
and the majority of the committee recon.
mend that voluntary assignment
person who may be selected by the
creditors as assignee, as the readiest
and most economical method of settling his
estate. Your committee find that certain
bonds of the Cumberland Bone Company
which were issued in 1876 and matured in
1886, are nominally in the hands of Mr..
Spring, the amount so held by him being
$53 900, but ON examining the records of the
company your committee are of the opinion
that these bonds have not been legally is
sued TO Mr.. Spring and that he is not entitled
t. hold them as against the company or its
creditors. They are informed that Mr..
Spring is willing to surrender these bonds to
the company and such surrender should be
promptly made. Mr.. Spring appears to have
nearly $4,000 of assets invested with the
Lift NH and Eror Ivliv No.
pany. From the best information we can
gather these investments after the liabilities
are paid would give him small balance for
his creditors.
The question as to the manner In which
the affairs of the Cumberland Bone Company
can best be administered is one that has re-
ceived the attention of the committee, and
after considering several plans the majority
of the committee are of the opinion that the
insolvent law of this state presents the safe
est and plainest method of procedure for the
interests Of creditors and all concerned. The
insolvent law of the state has been
carefully considered, and is intended
to meet the various questions that arise In
the proof OF claims, adjustment of priorities
and the distribution of assets. The minori-
ty of the committee prefer proceedings In
equity to dissolve the corporation and to
place its property in the hands of receiver,
but the majority OF the committee are unable
to see the advantage of such course, as the
creditors have no interest to dissolve the
corporation and nothing is likely to be
saved In the way Of expense. 1t Is an unus-
ual method Of administration upon an insol-
vent estate and attended with difficulties.
On the contrary the insolvent law seems
specially adapted to meet the wants of the
case, as it provides for authority to be given
to the assignee to carry on under the direc-
tion of the court, the business of the compa-
ny for limited period, If after hearing the
court Is of the opinion that such course Is
for the interest of all concerned. 1t is diff
cult to see why court of equity should be
asked In such case to exercise the functions
OF an insolyent court and to displace by re-
ceiver the machinery which the legislature
hasspecially provided for the settlement of
insOlvent estates.
The conclusion, therefore, which the ma
jority Of your committee has reached is that
the Cumberland Bone Company should
forthwith file voluntary petition to be de-
creed insolvent and that its affairs should
be wound up in the ordinary way OF the in
solvent court.
lSignedl FREDERICK Robe,
GEO. S. HUNT,
81. n. JOSE.
The following is the report of the experts ::
EXPERTS REPORT.
To the Committee of Creditors of the Cum
bertdnd Bone Company, Gentlemen:
In accordance with your, request, we have
cAdutHCu buc Ctdiln Va InAs LIE VI OPlluk
against the Cumberland Bone Company for
loans to said corporation amounting to $780,
300 and represented In eighteen notes of the
company.
We have assumed the books of the compa-
ny to have been correctly kept, as reported
by Mr.. Bingham and Mr.. Haskell, and have
not, therefore, undertaken any general audit
ing of the accounts, but rather confined our
selves to an examination Of those accounts,
which seemed to throw light upon the mat
ter In question.
In our examination of this account, we
have gone back to the beginning of the In,
debtedness of the company to Mr.. Spring,
which was ON the 3rd of March, 1886, when
he loaned the company $500, taking there
for its note November for same amount,
and through the series of notes, either new
or renewals of old ones, until May q, 1890,
when the last note, which appears in the
claim, was given, being for the sum of
5000. In this time 1853 notes were given on
various times, from demand to six months,
and In amounts from $500 to $4,000.
The cash book shows that cash was &C
tually received for each of the notes, ex-
cepting of course, renewals, and it also ap-
pears from the same source. that the money
thus received was expended for the proper
and required purposes Of the company,
and taken In connection with other loans
and receipts of the company, was
no more than necessary to meet these dis
Dursements, there being at no time any large
amount OF cash carried forward in balances.
IL also appears that for considerable neriods