The evening world., 1894-07-16
the TRUST
THAT FAILED,
nsArthur c. Palmer and Miles
tf'sss:sH 0'Brien Named for the
OGU Umbrella Company.
COMPOSED OF 10 COMPANIES.
Organized in June, 1892, with
a Share Capital Of Eight
Million Dollars.
GILBERT M. SPE,R, JR., REFEREE.
Ordered to Show Cause, at Their
Own Request, Why the Trust
Should Not Be Diss oIved.


Judge Gildersleeve. Of the Superior
Court. to-day appointed Arthur c..
Palmer and Miles NJ. o'Brien receivers
Of the Umbrella Company. which is COM
posed Of ten companies OF umbrella
manufacturers.
Gilbert M. Speir. jr.. Is appointed ref
cree in the proceeding. and the companie
are required to show cause on their own
application, why the combination should
not be dissolved.
The trust when organized was COM
posed Of the following firms: Follmer
Clogg & Co.. New York and Philadelphia;
Rose Bros. & Hartman. Lancaster, Pa /:
Excelsior Manufacturing Co., New York
and Boston; Wright Bros. & Co.. New
York and Philadelphia: William II. Rich,
New York; Ellis Knapp & Co.. New
York; Alva Hall & Co.. New York:
White. Howard & Major. New York;
Brown Matzenbacker. New York. and
Heiter. Glenn & Cawley. New York
Last May Messrs Glenn and Cawley,
of the last-named firm. withdrew from
the firm and the Trust, and formed the
firm Of Glenn. Cawley & Co. Mr.. Heiter
remained with the Trust.
Mr. Cawley. OF Glenn. Cawley g. Co..
was seen by an Evening World" re-
porter this afternoon.
II am not AT all surprised to hear that
. receiver has been appointed" said Mr..
Cawley. This firm Is now in no way
connected with the Trust. we got out
last May.
II do not think there Is the least
doubt but that tho Trust Is entirely SOL
vent. The going into the hands of re-
ceivers Is but the inevitable result OF the
bad business which the Company has
been doing.
I'VE foresaw that and withdrew"
Samuel Untermyer, OF the firm Of Gug-
genheimer. Untermyer & Marshall the
counsel for the Company. was asked as
to the condition of the Company. and
the causes leading to the appointment
Of receivers. Mr.. Untermyer said:
The Company was organized In June.
1892, under the laws OF the State OF New
York, with an authorized share capital
Of 100000. and with power to Issue
100000 OF debenture stock. 1t was
formed for the purpose of acquiring and
consolidating into one Company the lead
ing manufacturers of umbrellas in the
United States. The Company succeeded
in acquiring the factories of eleven lead
ing concerns. representing about 60 per
cent. of the domestic output. In pay
ment for the assets of these plants It
issued upward OF 100000 debenture
stock and paid about S4.5OO,O 900 OF Its COM
mon stock for the good will OF these
businesses. The balance of the deben-
ture stock and common stock is still I'M
issued.
1.-THE Manufacturers found. as tho re-
suit OF two years OF very disastrous ex-
perience. that the attempt to consolidate
= business Of this kind Is failure.
The element OF individual effort, stimu-
lated by personal interest. which is nee
essary to the success of such q business
u lost, and as the result the manufac-
turers outside Of the Company have had
the best Of the fight. The Board Of Di-
rectors was made up Of the leaders Of
the various concerns. and there has been
some difference between the members of
the Board.
The Company was launched at = very
unfortunate period, and the hard times
Of the past year have had very great
deal to do with the result. None of the
stock Is held by parties outside OF those
TO whom 1t was originally issued. 1t was
all placed in trust, SO that none OF it
could be sold. But very small fraction
Of the 100000 of debenture stocleis held
outside he original vendors OF the Com
pany. the debts Of the company do not
exceed 81, soOOOO. including the s.. 1000, 900
Of debenture stock.
1T il tia opinion Of most Of the
debenture s,ockholders that the claims
of the general creditors should have a
preference over this $1,000. COZ of oeben-
ture stock. and in order that there
should be no doubt on this point, about
70 per cent. of the holders of debenture
stock have consented that the general
''-editors shall first be paid / do not,
cierefore. think that the creditors need
concern themselves very much, nor that
they have any very great interest in the
outcome of the present proceedings.
THE fate OF this Company again illus
trates the fact that the economic laws
OF business will take care of and regu
late these combinations OF capital far
better than legislation looking to their
suppression. II by combination, the
combined Company can furnish the pro-
quot TO the consumer more cheaply than
could be done by the outsiders, IL will
succeed, and II 1t cannot do this II Is
sure TO rail-
rhese combinations have against
them the important element of lack of
intense individual Interest, and they
nave to contend with the exlstense Of
mat interest in their competitors. Peo-
pie need never fear these aggregations
OF capital, for their failure or success
depends on whether they eventually In.
5urs or benefit the public"