The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1897-10-18
Big GROCERY FIGHT
Chancellor Asked to Ap-
point a Receiver For the
American Grocery
Company.
HOW 4 GREAT BUSINESS WAS WRECKED
President Of the Concern Charged
with Mismanagement-He Viu-
dicaies His Course.

dicaies His Course.
The greater part of Chancellor McGiIl's
time this morning was taken up in con-
sidering the application of Edgar Fl Dun
ming and other stockholders of the Amer1-
can Grocery Company for the appointment
of a receiver for the company. Counsel
for the applicants read a lengthy bill and
numerous affidavits The bill set forth
that the company was organized in June.
1884. in this county as successor or the
Thurber-Wh Whyiand Co., wholesale grocers.
The company began business on !uly l.
1894, and did profitable business tor the
first two years. The third year opened
with excellent prospects. but during that
time Thomas L. Marsalis. who was pres
ident of the company. made changes In
the mode of business which were detri-
mental to the welfare of the concern.
Customers complained that their orders
were not filled and statesmen becoming
dissatisfied, had left the company. taking
their trade with them. On January l..
1897, Marsalis issued a circular to the
trade saying that the company would no
longer deal in certain lines of groceries
which had been very profitable. He also
caused the place of business of the COM
pany to be moved to smaller building
which was disastrous to its interests.
The bill also claimed that the corpora
ton has not enough employees TO take
care of it's stock, which is becoming de-
pleted on account of leakage and for want
of proper care. 1t was further charged
that Marsalis and his friends had con.
tinually postponed the annual meeting OF
the stockholders for the purpose of
weaving the stockholders and getting
them to consent TO dissolution of the
company. Marsalis was also charged
with mparing the value of the trade
marks which the company had purchased
from the Thurber- Whyland Company by
letting other firms use them without
compensation. All of these things the
injurng the company. The bill prays for
the appointment of a receiver and an ac-
counting by Marsalis.
Accompanying the bill was an aHidavit
by William NJ Mosler of Bayonne, the
credit clerk of the company. The
deponent hade been in the credit depart
ment of the concern for sixteen years
and was thoroughly acquainted with the
business done by the old firms. which
preceded the company in the business
He corroborated the allegations of the
bill, which related to the acts OF Mr.
him that he wished to get rid of the
common and secured preferred stocks.
Mr.. Allan McDermott, in opposing the
application, read an affidavit by Mr. Mar
sails.
At the time of transfer OF Thurber-
Whyiand Company, he said, there was
outstanding 81 100000 of the preferred
that company, the holders of which be-
came entitled to receive stock in the
American Grocery Company under the
plan of reorganization. An assessment of
20 per cent. was levied upon the preferred
and 10 per cent. upon the common stock of
the Thurber-Whyland Co., the holders on
payment of such assessments to receive
in exchange for their preferred stock
preferred stock of the American Company
and in exchange for common stock COM
mon stock of American Company. share
preferred stock of the American Grocery
Company to the amount of cash paid
under such assessments. The amount of
cash paid under this assessment was
others paid in cash about 100000. re-
ceiving first preferred stock for the
same. There are now issued and out
Standing ea groory CT the cd@papy soSh Of e hs zhas
of the first preferred, 1879 shares OF ths
common stock, and In addition to said
stock the American Grocery Company Is
sued its pfomissory notes, asgrega1ng
$227. 900, given 10 the creditors of the Thur
ber- Whyland Company. These note3 have
been paid by the American Company.
Company were estimated at $3.000000, of
which 200 was for account of nores,
only about $4,000 of which was oollects-
bis-
Mr.. Marsals also swore that he had
been twenty years in the wholesale gro
Gerry business, and during that time Sotd
over $40. 900 of goods at a good pront
He admits that he discontinued the sale of
certain lines: and in doing so was actual
ed by motives Of prudence and economy.
When he took charge of the company 1t
owed $250, 600 Ee deemed it wise to pay
that off and he succeeded In three years
in reducing that Indebtedness to $4,000.
On April l. 1897, the company was In d
fair way to do a good business and II
let alone would have done so. The re-
moval was not an unwise move. because
the company got into new building well
adapted to the business in the heart of
tn wholesale grocery business and G.
saving of $25 600 a year in rent.
A previous application for a receiver
for the company was made in the United
States Circuit Court upon the same
grounds that the present application was
made and denied by that court He
denied that he wanted to get rid OF the
common and secured preferred stock OF
the company, and said that he owned one
tenth of one and one-sixth Of the other
to show how preposterouS Mosler'S state
ment was. Mr.. McDermott read the
affidavit of a number of prominent bust
ness men. all testifying to the integrity
and business ability of Mr. Marsalis The
casa is still on