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


Of tho charges against J. b. drecnhut,
ex.pre,ident Of the whisky trust, and
some OF hia associates, was reached this
evening In a bill filed in tho United
States circuit court by Receiver John L.
McNulta. Greenhut and Nelson Norris
arc accused OF having used tho funds OF
tho trust for outsidc speculation OF u
personal character, in which they mot
with u loss Of 100000. Then, TO mako
good tho Losses, thoy are charged with
having conspired TO secure tho
assent Of tho board OF directors
OF tho trust to the increase
OF bonds in the summer OF 1893; that
they sold $1,000, 900 Of the bonds at fifty
cents on the dollar. appropriated tho
proceeds to make up their losses in
speculations. and secured possession Of
100000 OF the bonds so isaued at tho
fifty cent valuation in order to milk"
the trust for the other fifty cents on tho
dollar, thus giving thema profit OF $780,
900 on the transaction, besides securing
the payment Of their losses in specula.
tons. Tho character OF tho specula-
tons is not set forth.
Besides Greenhut and Morris, there
are other defendants to the bill, er-
Directors William Hobart aud J. W.
Freiborr, OF Cincinnati; Lewis MadduS,
liobart's partner, and Julius Freiborg,
Walters brother and the Central Trust
Company, Of Now York.
All but the trust company are charged
with duplicity In the bond transactions.
The bill alleges that, at a special
meeting OF the board Of directors Of the
old trust in Chicago, on May II, 1898. n
resolution was adopted providing for
the issuance OF bonds 4. 4 per cent in.
terest, payable in twenty years. 10 the
amount OF $4,000, 900; $500, 900 OF tho
bonds to be placed with the Central
Trust Company OF New York as security
for the payment Of rebate claims.
Used FUNDS AUTHORITY.
Several mouths preceding the date Of
the meeting, owing to avast speculation
upon the stock exchange, to mee.lomes
incurred, Messrs. Grecnhut, Morris and
Hobart, il. il claimed In the bill. had
used 4 large amount OF the funds Of the
trust without the authority OF the board
Eoi directors. Their losses amounted 10
about $500. 900, and the 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 pnr-
chasing d largo amount OF the bonds at
a reduced price and without the knovl-
edge OF the other members OF the board
OF directors.
They induced Hermann Schalner &
Co., bankers Of Chicago. on Nay %,
1898. to submit n bid for tho purchase OF
81. 100000 Of the bonds at so cents on
tho dollar. While the bid was made in
the namo 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 80 tho board
OF directors accepted the offer OF Her.
man Schafner & Co. On June . Her.
man Schaffner met his death By drown
ing in tho lake, and tho bank OF which
he was the head made an as
signment the day following. Il
lAltl IcIuhlc AGStnohi ~ hbhtiiou tLC
purchase Of the bonds through that
source. and an arrangement was made
by Grecnhut and Morris with the firm
OF Couuselmen & Day, OF Chicsgo,
with aud through whom many Of the
said speculations had Heretofore boon
| carried on" to submit a similar PROPOSE
ton 10 tho board OF directory. On June
| 5, this was done. At tho suggestion Of
President Greenhut. owing to tho fact
| that the bonds could not be- secured for
ready delivery, the board voted to EN-.
power the president to make a contract
| with tho firm OF Counselman & Day to
deliver tho bonds when ready and to
make a motto for the amount OF tho pur.
chase price OF the $500, 600 o. bonds,
which the firm proposes to take At so
cent. on tho dollar.
sLIrPEEY DEALINGS.
On juno 0 Counselman, & Day paid
to tho president and treasurer Of the
trust, tho latter officer being Hobart,
| the sum OF Sl07. III Al by check; ST.
555 81 was retained as intorost accrued
| 81 1000 as commissions. The other $780,
900 necessary TO make up the 500, 900
was paid by tho return aud cancellation
| OF n note OF that amount made by Treas.
urer Hobart to Councilman & Day on
MAY 70, five days before tho board OF
| directors was asked TO grant tho issu-
ancc OF tho bond. That no,e, the re-
ccivcr alleges, was part OF the losses in
| Cured by tho stock speculations Of tho
preceding November, December, Janu-
ary and February; that it represented
u number OF notes made from time TO
time 10 cover losses. and which were
finally merged into IL note Of $500. 900:
In September. 1898. Greenhut, as
president. and Hobart. rs treasurer,
sold to Morris $4,000 Of tho bonds for
$37, 800.
On October Il, 1895, Grceuhu, and
Hobart sold to MadnuS & Hobart, OF
Cincinnati. $4,000 Of tho bonds for
S37. 800. tho payment being mndo by n
note OF tho trust, held by tho firm, 10.
bart, tho treasurer, being q member OF
tho firm.
On tho SAINT da,o $780, 900 OF tho bonds
were sold to j. Waiter FroiberG, OF Gin.
clnnnti, for $4,000, tho latter also being
n director OF tho trust nj that time.
lHc roCoiNot ueCinTut tuaI my uuu vi
OF such salos to said directors wal cou.
trary to tho obligation OF their trust as
officials, aud was made without tho
knowledge OF tho other members OF tho
| company or tho consent Of tho directors.
None Of tho proceeds, tho receiver al.
lrgcs. was cvo applied TO tho use OF tho
Diatiilins and Cattle flooding Com.
pany.
The receiver avcra that tho $500. 900 OF
bonds sold to Counsclman & Day nro
hold and owned by Nelson Morris that
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