The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-05-17
the Distillfng Company Accused OF
Squanderfng Its Money.
100000 LOST BY THE TRUST
ATTEMPT TO MAKE GOOD THE
AMOUNT BY ISSUE OF BONDS.
Alleged DupIicity I'm Various Finan-
cial TranSactiOns-The Allegations
Made by Receiver McNulta.

NI1lI<A1O, May lo.-lne cuimlnatlOn OF
the charges against j. Il. Greenhut. ex-
president of the Whisky Trust, and SONS
of his associates, was reached this evening
in a bill filed in the United stetes Circuit
Court by receiver John b. McNulta. Green>
hut and Nelson Morris are accused OF hav-
ing used the funds of the Trust for OUT
side speculations of personal character,
in which they met with loss OF s5oo.0oo.
Then, 10 make good the losses they ars
charged with having ocnspired 10 secure
the assent OF the board OF directors oe
the Trust to the issuance OF bonds i'm the
summer of 1898: that they sold 81 900 900 oe
the bonds at 80 cents on the dollar. appro-
priated the proceeds to make up their losses
i'm speculations and secured possession oc
SSOo.OO0 Of the bonds so issued at the 60
cent valuation IN order to milk the Trust
for the other 80 cents of the dollar, thus
giving them a profit of 100000 on the trans
action, besides securing the payment of
their losses in speculations. The character
of the speculations is not set forth
Besides Greenhut and Morris there are
other defendants to the bill, ex-directors
William y. Hobart and j. Walter Freibergs
of Cincinnati, Louis Maddux. Hobart's part-
ner and Julius Frieberg. Walters brother,
| and the Central Trust Company. OF New
York. All but the Trust Company are
charged with duplicity in the bond trans-
action
The bill alleges that at a special meeting
| of the board of directors Of the old trust
| in Chicago on May Il. 1893 resolution was
adopted providing for the issuance OF bonds
| at per cent. interest, payable in twenty
years. to the amount Of 81. 0oO-se. .5ooo9o
| of the bonds to be placed with the Cen-
trail Trust Company of New York as SEE
| curity for the payment Of rebate claims.
| Several months preceding the date Of ths
| meeting, owing to a vast speculation upon
| the Stock Exchange to meet losses i'm
CURED, Messrs. Greenhut. Morris and Ho-
| large amount OF the funds OF the trust
| without the authority of the board Of
| directors. Their losses amounted TO about
| financial condition of the trust was greatly
impaired thereby. Greenhut and Morris.
| the bill alleges, then conspired TO enrich
| themselves by purchasing large amount
of the bonds at a reduced price, and with
Of the board of directors They induced
Herman Schaffner & Co., bankers. of Chi-
S on May 81 - = iss G 1 to 9 submit & bid for
| cents on the dollar. While the bid was
made in the name of the banking firm. the
| for the benefit and ON behalf OF Greeenhut
and Morris. On May 80 the board of di-
| Schaffner & Co.
PLANS CHANGED BY DEATH
On June 2. Herman Schaffner met his
death by drowning in the lake and the
| bank or which he was the head, made am
assignment the day following. 1t then be-
came necessary to abandon the purchase OF
the bonds through the firm of Counselman
Day, of Chicago, with and through
whom many OF the said speculations had
heretofore been carried on to submit a.
similar proposition TO the board of directors.
On June this done. At the sugges-
4 President In fhs
fact that the bonds could not be secured
for ready delivery, the board voted to eni-
| power the president to make a contract
with the firm of Counselman a. Day TO de-
liver the bonds when ready and TO make
note for the amount OF the purchase OF
the $4,000 of bonds. which the firm pro-
| posed to make at 80 cents on the dollar.
on June Counselman & Day paid to the
president and treasurer OF the trust the
latter officer being Hobart. the sum or
S191, 444.44 by check; 81 $3.50 was retained
interest accrued and $1,000 commissions
The other 100000 necessary TO make up the
s400,0c0 was paid by the return and cancel
Treasurer Hobart TO Counselman a. Day
on May II. five days before the board OF
directors was ask 10 grant the issuance OF
was part OF the losses incurred by the stock
speculations of the preceding November,
| December. January and February; that lt
represented number OF notes made from
time to time to cover losses and which were
'i In September, 1893, Mr.. Greenhut. as presi-
dent. and Hobart, as treasurer. sold 10
Morris $1,000 Of the the bonds Irnsnnn, for ss5 s5d
| Morris sold TO Maddox x Hobart, of Gin
cinnati, $4,000 of the bonds for .50o the
held by the firm Hobart. the treasurer. be-
ing member of the firm On the same
| date $4,000 of the bonus were sold TO j.
| Walker Freiberg of Cincinnati for $1,000.
the latter also being director Of the trust
The receiver declares that any and all of
| such sales to said directors was contrary
to the obligation of thfir trust as officials
| the other members OF the company. or the
| consent OF the directors. None OF the pro-
| ceeds. the receiver alleges, was ever applied
| to the use of the Distilling and Cattle-feed-
| ing Company The receiver AYERS that ths
Dav are held and owned by Nelson Morris:
| that the So, 600 OF bonds sold TO Norris are
still held by him; that the $4,000 OF bonds
by them Jointly and the 10000 worth pur-
chased by J. Walter Freiberg are held BY
s. 800 ooo of bonds deposited with the Central
| Loan and Trust Company. security for
the rebates. are still in the possession or
The receiver prays that the court enjoiu
] all OF the defendants from disposing OF the
| bonds TO other parties: that they be re-
| auired to answer. ana that an accounting bs
| had; that any amount OF the bonds ascer-
| tanned TO be owing by the trust be paid
for at the purchase price OF 30 cents on the
dollar. and that the balance OF the bonds
recites that he is desirous of winding up
the affairs OF the trust and wishes to sell
| its property and make distribution 10
! the stockholders. He sets forth that OF the
| 81 10000 OF bonds deposited with the trust
| company i'm New York, a settlement Of the
| matter is nearing completion. that all
| claims have been made. and the item OF re-
bate claims is about $40. .0oo and that many
| of these will be disputed by the receiver.
| President Rice, of the reorganized Whisky
| Trust presided over q brief meeting at the
| Great Northern Hotel this afternoon. No
| business was transacted and adjourn
| ment was taken until tomorrow at go
1 -
t ed nSsff
PEORIA. ILL.,. May ls.-The report OF the
State Senate committee against feeding OF
distillery slop 10 cattle is received with
mingled INDICATION and amusement An this
city, which is the center of that industry
and where as many as 900 head OF cattle
have been fed at distileries AT one time.
When corn was HIGH as much as is cents
bushel was paid for slop and the contract
price with Nelson Morris at distiiling and
cattle feeding houses Is six cents. To pro-
hibit feeding of the cattle would largely
reduce the revenue and profits OF the dis
tilleries. and Walter Barker. manager OF
/ the Peoria distileries OF the Disttiling and
! Cattle Feeding Company, sad to-day fl
wo,sld drive the distiliing business out OF tho