The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1892-03-26
INSOLVENCY DENIED.
THE aEcCULLOUGH IRON co.
FILES IT'S ANSWER
TO the BiH Asking the Appoint
mcnt Of Il Receiver.

To the Bil Asking the Appoint
mcnt Of a Receiver.
The Mccullough Iron Company by its
Attorucys. Nessrs Bernard Carer. Il ebert
G. Thacseery, and y. 7. Freddy filed an
answer oB Noniay "a TIL Uatei So IS
Circuit Court At Baltimore, 10 the h,il OF
the Fidelity INSURANCE.. Trust and safe
Deposit Company Of Philadelphla trust c
under the will OF De;apla;ne Mcdaniel,
in yqhiah the complainant asked for the
ap2sirtmeut o. = receiver to wind mp the
affairs OF the company. The answer
alleges that the bill WIS filed At the InSti
CATION of Joseph l. Mcdaniel, president
OF Tie iron company, ag tinSt the wishes
and protest OF the large majority OF
stockholders. Tie ir0H company, it is
stated. has always been furnishing and
prosperous, has distributed in dividends
amongst it's stockholders $1,015, 900. and
has always promptly met its obligations.
1t Ias oeeu nourisding and prosper
ous company From time to time its
profits and losses have tiuctuated in
accordance with the general demand tOr
iron. The general business which the
company conducts is OF two kinds; the
manufacture OF what is known in the
trade as IIArvej's patent cleaned black
sheet .rGn. and what Is known as char
coal bloom sheet iron, which IS princi
pally used for gavanizing purposes.
Prior to 1878 the galvanizi8g was
done directly by the Mccullough
Iron Company, but in that year sub
sid;ary corporation known as the Nc
Daniel aud Harvey Co, was organized
to carry nu The gaivaniZ!ug business, the
stock holders OF both companies being
the same. The operations at the North
| East and Octoraro mills and North East
| Forge, together with the Charbon Works
| annexed to the former, have been prlnci-
pally devoted to the manufacture OF
bloom sheet iron above referred to, and
| iron manufactured by these mills has
| AWAY had a high anu deserved reputa
| ton in the market. The manufacture
| of this iron, has not OF late been appar
| entity productive on the books OF the
| company owing to the low prices with
! which these mills were credited 10y the
| Mcdaniel aud Harvey Co, who alone
| got their products, and also owing to the
/ extraordinary low price OF steel b!ilets
/ and sheets. together with the general
/ prevailing duiluesS IN the iron market.
! The latter ciuseS are believed to DE but
temporary and have frequently occurred
! in TIDE prior history OF the Company.
| Il contemplated changes are made, or
! il the price of steel bullets and sheet ad-
vances, or il the present condition OF the
/ iron market improves, there IS 40 reason
| why the mills Saould not be operated at
! "A substantial profit. AS matter Of fact
| the general business OF the company last
| year was operated at q profit, aud the
reason that 5hage is al apparent loss OF
81 600 WAS used By the fact that s32 600
Was expended III betteTments, improve
mentS ne" boilers and p .r,Iauent build
irgs. aud $500 81 ih:s was charged
directly against the profits vi tie works.
The answer dalIas lnIt the M2Gui- |
Tough Iron CpnPaaF is not II position
to compete with other corporations manu- |
iactuiiug the same line OF goods, and
that i not now conducted with success |
Tor which it. was Incorporated. On the |
contrary, II is avarred tn u the Minquas
Mil alone made a manufacturing profit |
OF $2l 900 last year. aAd that the North |
east and OGtOraro Mills made manu-
featuring profit of IS 600, aud that the
apparent loss Of - coo to the total bust
ness foT the year was caused by the ez
pendItuIes for the permanent improve |
ments above nau, d. Dividends amount |!
ing to $50 22j have also been declared |
since 1850 upon the stock of the Nc |
Daniel Il Harvey Company, 3 subsidiary |
company as hereinafter stated III the |
seventh paragraph OF this answer. And |
the alterations aud changes which are |
IN contemplation of construction will |
result ia still further increasing the |
profitable business o! this company.
Tue defendant denies tie truth of the |
matters contained in the statement of |
Joseph l.. Mcdaniel that the directors |
ignored his request 10 look into the |
matter Of the cost OF new and improved |
mills and ia tchInery and appoint ! COM
mtttea IT, select location for The same. |
Ftg more than year past the directors |
nave been considering matters relative |
- improved processes aud keeping mp |
their plant in accord nee with every |
large sums in necessary improvements, |
rep irs aud additions. The said Joseph |
l.. Mcdaniel has frequently seated that |
the company with the Improvements
nos made could successfully compete |
With mills manufacturing steel sheets !
II particular he stated this. at the semi |
annual meeting in October 1891. when |
tile whole board vas present. He has |
also borrowed money ugon his stock, |
representing It as worth at least its par |
vaue. The defendant AYERS that the |
statement of the complainant as to the |
reduction of the surplus, and also the |
statement as to this OF the said Joseph |
l. Mcdaniel, upon which the bill is |
founded, are misleading In the first |
place, the surplus upDu which tho coh
| plainant 81 greatly relies was created IN |
great part III he year 1879 by IA credit |
from the McDaDIei & Harvey Company |
o $l2> 900 and the complainant, while |
feI3 ing up Ha this surplus thus created, |
now offsets TO : similar credit made upon |
! precisely tie same hasIs. In tho mex
place, the period of tiWe taken is far too |
short an interval 10 determine the nature |
OF the general prosperity OF the company |
| Thus II 1873 the company was without |
any surplus and owed $500 600 exclusive |
nt its capital stock, and had this com
| plaiuauf taken the year 1878 DIS start |
| Irr y Nnt ter its cnmput atom whereby to |
Determine the present condition of the |
| comp 3Hv. the result would have shuwn |
| th-t this defendant is to day over |
$500 600 better IF than it was at that
date. and IGtt + has in addition, ennr. |
m ,u-'N increased It's business. and has |
turth"r paid and F.struhrrl amongst its |
! S-npl. H,:F.r! <.I)I G0p - 4 ivi I.uuS Siura |