St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-07-31
a CLEAR EXPOSITION.
Manager Cardin Tells How 1t All
Occurred.


{. L. Cardin, of MINNEAPOLIS. mana
ger OF the Northern Pacific Elevator
company, was shown the New York
Worlds story, and said that it
was not only unfortunate that
it should be published at this
time, as everything was progress
ing satisfactorily for a settlement of the
troubles into which the company had
been plunged, but it was wildly eXag-
gerated. He said that there was held
by banks in the East, scattered from
Dan TO Beersheba, throughout that sec
ton, about $1,000, ,000 of the eomDany's
paper, for which the banks held about
so per cent collateral in the way OF
warehouse receipts.
Does this look as if the banks were
likely to lose any money!" he asked.
Would they loan a dollar of money on
go cents of collateral unless they were
secure in some other way? The fact is
that the paper bears the Endorsement on
the Lake Superior Elevator company,
which OWNS miIIiOn-d0lIar plant at
Duluth and whose stockholders are
liable for a million more and able to
pay it. The Eastern banks are not only
amply protected. but are satisfied with
the situation.
Now let me say" he went on, "that
at the time these warehouse certificates
were issued there was bushel OF wheat
in the country behind every busheI
called for by the certificates. But the
Duluth managers OF the elevator COM
Chicago when 1t advanced y cents
on them, and in order to pro-
tect themselves from loss they
sold on the Duluth board of trade
5lS.000 bushels of actual wheat which
had been shipped into Duluth. credited
the money up on the books ana squared
the Chicago losses. II was these losses
that forced the company into a Ueceiv-
er's hands preeipitated by attachments
of Canadian banks. which learned Of
the loss, but which were, as are the
Eastern banks, ,Srotected by the indorse-
ments Of the Lake Superior Elevator
company, WHICH owned 81 per cent of
the stock OF the Northern Pacific Ele-
vatOr company. These banks later
waived the attachments
The situation was practically this:
One set of men was buying wheat in
the country ana issuing warehouse Ger
tifcates against it to get more money to
buy more wheat with, while another set
was selling the wheat. There was Moth
ing criminal IN the transaction. but it
may have been breach OF trust on the
part OF some OF the Duluth men. as the
president of the company declared
that the parties who sold the wheat
had no right to do so. But they
probably presumed that the market
would hold them up, ana that the money
which went into Chicago would come
back. leaving the certificates to stand rs
collateral for the Eastern Indebtedness.
but the mar ket went against them. and
they were forced to sell 500, 600 bushels
of the wheat already hypothecated in
order 10 recoup the losses.
THE reorganization of the company
was about completed when this story
was published. The dispatch from Bos-
ton. however. IS inaccurate in saving
thatlt was to be reorganiZed under
the name of the Lake Su-
perior Elevator company. a new
name was to have been chosen.
The fact that the Lake Superior COM
Dany was an ind0rser on the paper of
the Northern Pacific was probably what
led to this mIsstatement. The plan of
reorganization includes the taking Of
stock by the Lake Superior company as
/ in the old company, and the assuming
of the Indebtedness Of the Northern
Pacific company by the new company by
whatever name it may be known"
MT. Cardin said that he issued the
warehouse certificates for all The wheat
that was bought, ana with the eXcep-
ton OF about 100000 bushels. for which
the certificates were issued by the
/ president of the company during his
Cardin's) absence, and Is prepared to
testify on oath that there was a -bushel
OF actual wheat in the country Tor every
busheI represented by a certificate.