The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1895-05-17

Conspiracy Against tho Company.
Sensational Suit Filed In Chicago.
CHICAGO. May lG.-The elimination
Of tho charges against ]. B. Grconhut,
ox.pre,ident Of tho whisky trust, aud
some Of hia associates, was reached this
evening In bill filed in tho United
States circuit court by Receiver John i.
McNulta. Groeuhut and Nelson Norris
arc accused OF having used the funds OF
the trust for outside speculation OF 4
personal character, in which they met
with loss Of S500.000. Then, 10 make
good the losses, they are charged with
having conspired TO secure the
assent Of the board OF directors
OF tho trust to tho increase
OF bonds in the summer OF 1898; that
they sold ST, 900, 900 OF tho bonds at fifty
cents on the dollar. appropriated the
proceeds TO make up their losses In
apoculations. and secured possession OF
SS00.090 OF the bonds so issued at tho
fifty cent valuation In order to "lnilk"
the trust for the other fifty cents on the
dollar, thus giving them prof. Of $780,
900 on the transaction, besides securing
tho payment OF their losses in specua.
tions. The character OF tho spccua-
tions Is not set forth.
Besides Greenhuf and Morris, there
are other defendants to the bill, ex-
Directors William Hobart aud J. W.
Freiborr, OF Cincinnati; Lewis Maddux,
Hobarts partner, and julius Freiborg,
Walters brother and the Central Trust
Company. Of New York.
All but the trust company are charged
with duplicity in the bond tran nsactions.
The bill alleges that, at special
meeting OF the board Of directors OF tho
old trust in Chicago, on May II, 1898. n
resolution was adopted providing for
the issuance OF bonds at 6 per cent in.
forest, payable in twenty yoars, TO the
amount OF $4,000, 900; S2,50O,O0o OF tho
bonds to be placed with the Central
Trust Company Of New York as security
for the payment Of rebate claims
USED FUNDS WITHOUT AUTHORITY.
Several months preceding the date OF
the meeting. owing to a vast speculation
upon the stock exchange, to meet losses
incurred, Messrs. Greenhus, Morri, and
Hobart. it il claimed In the bill, had
used large amount oil the funds OF the
trust without tho authority Of the board
OF directors. Their losses amounted 10
about $500. 900, and tho receiver alleges
that the financial condition OF the trust
was greatly impaired thereby. Green.
hut and Morris. the bill alleges, then
conspired to enrich themselves by pur.
chasing large amount OF the bonds at
d reduced price and without the knowl-
edge Of the other members OF the board
OF directors.
They induced Hermann schaflner K
Co.. bankers Of Chicago. on May %,
1898. to submit bid for tho purchase OF
Sl,O00.000 OF the bonds at so cents on
tho dollar. While the bid was made in
the name OF the banking firm. the re-
ceiver alleges that it was in fact made
for the benefit and on behalf OF Green.
hut aud Morris. On May 30 tho board
OF directors accepted the offer OF Her
man Schattner & Co. On June . Her.
man Schadner met his death BY drown
ing in the lake, and tho bank OF which
he WAS the head made an as
signment the day following. It
then became necessary to abandon the
purchase OF the bonds through that
source. and an arrangement was made
by Greenhut and Morris with tho firm
OF Counsolmen & Day, OF Chicago,
with and through whom many Of the
said speculations had therefore been
carried on" to submit similar roposi-
tion to the board OF directory. On June
5. this was done. At the suggestion OF
President Greenhut, owing to the fact
that the bonds could not bb secured for
ready delivery. the board voted to cnl.
power the president to make contract
with tho firm OF Counse!man & Day to
deliver the bonds when ready aud to
make noto for the amount OF tho pur.
chase prico OF the SS00,000 o: bonds,
which the firm proposes 10 take at SO
cents on tho dollar.
sLlrrgIY DEALINGS.
On June 0 Counselman & Day paid
to the president and treasurer Of the
trust, the latter officer being Hobart,
tho sum OF Sl97, Al A by check; ST..
555 56 WAS retained as in,orcst accrued
1000 as commissions. The other $780,
900 necessary TO make up the 100000
was paid by tho return aud cancellation
oil n note OF that amount made by Treas.
urer Hobart to Counselman & Day on
May 70. five days before tho board OF
directors was asked TO grant tho issu-
ancc OF tho bond. That noie, the re-
ce!vny alleges, was part ol the losses in
Cured by the stock speculations OF tho
preceding November, Dccombe Janu-
ary and February; that 1t represented
n number OF notes made from time to
time 10 cover losses. and which were
finally merged into one note OF 5000. 900.
In September, 1898. Groenhut, rs
president. and Hobart, ns treasurer,
sold to Morris $4,000 OF tho bonds for
$37, 800.
p On October II, 1895, Groeuhut and
IIobar. sold to AIndnux & Hobart, OF
Cincinnati, $4,000 OF tho bonds for
SG 800. tho payment being mado by
note OF tho trust, held by tho firm, Ho.
bart, tho treasurer. being member OF
tho firm.
On tho same date $4,000 OF tho bonds
wore sold to J. Waiter FroiberG, OF Gin.
cinnati, for S@5, 900, tho latter also being
director OF the trust at that time.
rho rece!vor declares that any and all
OF such sales to said directors was cou-
trnry to tho obligation Of their trust as
officials. aud was mado without the
knowledge OF tho other mombors OF tho
company or tho consent OF tho directors.
None Of tho proceeds, tho receiver al
lcges. was cyor applied TO tho usc Of tho