St. Paul daily globe., 1894-05-06
HOW Big RECEIVERS WORK.
The Work illustrated by the Case
Of the National Cordage Co.
THE DUTY OF THE RECEIVER NOT 50 LleHT
Receivership Business and Changed
an Apparently Bankrupt Concern
Into an OrganizatiOn Full Of
Promise.

Tt is popular idea that the receiver OF a
big property has a soft snap. This is mis-
take. While in ordinary cases of receiver
ships it may not be a difficult task to arrange
a settlement satisfactory to the courts, it is
not so where large interests are involved.
The average receiver is expected to wind up
the business, save all he can to the creditors
ana turn over the balance to the court. His
ordinary commission is five per cent of the
total amount handled, and after he has shown
the court that he has done all that can be ac-
complished for the benefit Of both creditors
and the business, he is given his commission
and his bondsmen are released.
But when it comes to very large Inercan-
tile, manufacturing or commercial enterprise,
the situation is different. The complications
that arise are numerous. The receiver has
to learn the business to begin with. Then he
has to get acquainted with all the creditors,
ascertain what their claims are and how
pressing they may be, and fix up scheme
that will be mutually agreeable all around.
He has to make an inventory of the assets
and liabilities. When this inventory is COM
pleted, he sizes the situation up and states
the condition of affairs in report to the
court. If the court is satisfied that the cred
itors ought to accept the conditions pre-
scribed by the receivers it issues an order to
that effect. If it thinks the outlook is bad
and the chance Of the creditors being repaid
is very slight, it orders the receiver to wind
up the business and pay the creditors the
largest percentage possible.
Probably the best way to explain the work
and duties of a receiver is to take we'll
known case as an Illustration. No failure of
recent years has SO shaken the commercial
world and at the time threatened such dis
astrous results as that of the National Cord
age Company. Millions of dollars were in
volyed when the great corporation asked for
receiver. The shares, both preferred and
common, were listed on the New York Stock
Exchange. They had been selling at high
figure. Good round dividends had been
paid. The concern was supposed to be in
splendid condition. When the crash came,
everybody was startled. The company was
organized under the laws of the State of New
Jersey. Consequently, when it went down,
application for a receiver had to be made to
the court of chancery of that commonwealth.
Chancellor McGill heard the motion at Jersey
City. He named the receivers He appointed
as first receiver Edward F. C. Young, presi-
dent of the First National Bank of Jersey
City. Mr.. Young is the star receiver of the
country. He has made reputation in that
line. It will appear further in that his sue
cess with the cordage corporation entities
him to the rank he had partially attained
when he pulled the Dixon Crucible Works,
manufacturers of the Dixon lead pencils,
crucibles, etc., out of a hole some years ago.
Chancellor McGill appointed Young because
he knew his ability in the receiver line. He
required large bail, which Mr.. Young furnished
without difficulty. Along with Mr.. Young,
another receiver was appointed in the person
of G. Weaver Lozer. Mr.. Lozer was one of
the officers of the National Cordage Company.
He knew the business workings of the con-
Germ. He came from Cincinnati originally,
and although comparatively young, displayed
SO much shrewdness and familiarity with the
trade that he rapidly arose to a leading posi-
ton in the company. He conducted the de-
tails OF the receivership, while Mr.. Young
furnished the thought and management that
have turned an apparently bankrupt corpor-
alton, by means of reorganization, into a
strong and promising enterprise.
Following the cordage failure as sample
of such affairs, it can be stated that so
soon as Young and Lozer were appointed, had
qualified through their bondsmen and taken
their oaths OF Office, they took possession
of the business. Mr.. Young was the active
spirit, and therefore his name will be used
almost solely in narrating what was done.
1t should be borne in mind, however, that Mr..
Lozer was associated closely and consulted
always in every step that was taken. After
Young had taken possession of the Office of
the Cordage Co., 135 Front St., New York, he
sent for the creditors. Perhaps it would be
more accurate to remark that the creditors
came without invitation. They wanted to