Evening journal., 1897-04-17
FAILURE Of BIG MILLS.
Surprising Disclosures About
Two New Bedford Concerns.
UNIQUE SYSTEM OF BOOKKEEPING.

Accounts Kept In Such Manner a. TO
Cancel LOSSES Notes For ~. 100000 Not
Mentioned IN Reports to the state by
the Bennett and Columbia Companies.
New Bedford. Mass. April l7.-At a
meeting Of the creditors OF the Bennett
and Columbia mills corporations lt was
discovered that 81. O,OO0 in notes OF the
two concerns had been Issued. of which
no account has appeared in the returns
submitted by them to the state. Upon
learning this and that more than $780,
600 had been charged to the account Of
the plant, when il should have appeared
as profit and loss. thereby showing a
surplus instead Of deficit, 1t was voted
to place both corporations in the hands
Of receivers. The disclosures which re-
suited from the examination of the af-
fairs OF the companies showed them 70
| be in much worse condition than had
been anticipated and it Is left TO the
discretion Of the receivers whether or
not they shall be petltloned into in
solvency.
The meeting was held in the board Of
trade rooms
The first business was that Of receiv-
ing the report Of experts who had been
examining the books. From this 1t APP
peared that not only have notes Of the
corporations aggregating S2.400,000 been
issued, OF which no account has been
made, as required by law, but also that
notes Of the Lambeth Rope company
TO the amount Of $40 600 have long been
carried Further than this. the COluSl-
bia company. il is feared is so deeply
| involved as to make the future Of the
corporation well nigh hopeless. II was
learned that notes held by the Bennett
mills TO an amount in excess OF $500 0eo
are included in its Indebtedness.
The bookkeeping Of both concerns was
found to be faulty and misleading, the
plant account being a sort ~ refuge
for troublesome BALANCES. which have
gone on increasing until they amount
TO more than 100000, most Of which, In
the opinion Of the experts should have
been charged to profit and loss. The
result is that the mills have ostensiby
been making money when the facts are
probably otherwise.
Five Receivers Appointed.
After a full discussion Of the situation
it was voted to place the matter IN the
hands Of five receivers. who are en-
powered TO act for the best interests
| Dl all tonteIHtNf anu TO HtllAiNN Aht
companies into bankruptcy. IL such
course is deemed wise DR.. Stephen w.
Hayes, Anurew C.. Pierce. Jr., oliver
Prescott. Jr. Theophilus King Of the
Bank Of Redemption Of Boston and
Frederick @. Sayles OF Pawtucket were
selected as receivers and authorized %
petition the court for appointment 70
act IN that capacity.
At the meeting Dr. Hayes. the re-
! Gently elected president of the corpo-
! rations, explained what had led up 20
/ the present crisis. He said he had been
chosen president OF the two corpora
I tions late on Saturday afternoon and
{ had started an investigation into IN,
I condition of the mills.
= He went to Boston and there found
e that proceedings had been begun
? against them. He at once secured tn
y services of Mr.. Parker, an expert, II
e Boston. Mr. Parker came TO New Bed
$ ford the next day with his assistant
= and had since been at work with tho
n mill experts night and day preparing
d for this meeting. Mr.. Parker then reac
. his report, after which, on motion Of
= Walter Clifford, who said he represent.
s ed several Of the New Bedford and Fal
River creditors, the five receivers were
appointed.
Lemuel lie Baron Holmes inquired az
to the method Of issuing notes and Mr.
g Parker stated that he found In his ex
animation no attempt TO defraud. Mr.
q Hadley the treasurer had charge,
a many things TO the plant, and included
y In the account was interest none,
amounting to more than 100000 sine
n the factory had been in operation.
= There was some $4,000 or $4,000 o
expenses. such as interest, insurance
d taxes and labor. charged to the ac
v count. which looked like a means o
y disposing of an uncomfortable deficit
II All this the expert considered mislead
ing bookkeeping. He also expainel
% that 100000 has been dlsbursed in divi
10 dends which ought never 10 have beel
e paid.
n O. n. Sampson called attention 10 tn
n fact that the mills have orders whicl
la would run them for three months, an
IL is essential to dll them at once.
p An attachment for 100000 has bee
80 placed on the Lambeth Rope compan
,r by the Columbia Spinning company.