The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-04-20
WILL WAIT ON REYNOLDS
INVESTIGATION OF GROCERY FIRM
GOES OVER TILL FRIDAY.
Wallace krag on the Stand Yesterday
Mortgage Transaction.


Court Fred w. Expert and Wallace Krag
were the witnesses called. Mr.. Expert was
led to throw some further light on his pecu-
liar system of bookkeeping which awakened
SO much comment he day before.
Mr.. Krag was on the stand all the after
noon and his testimony was directed toward
Illuminating in general way the business
methods of the Krag-Reynolds Company.
Mr.. Brown tried in every manner possible
to show by this witness that the minutes
of certain stockholders and directors meet
ings had been manufactured after the time
of the failure. Mr.. Krag was an unsatis-
factory witness. He seemed altogether
ignorant Of everything that had gone on in
the financial department of the business,
and II don't know was his almost invari-
able answer. He was pleasant and good
natured. q
Fred w Expert was on the stand all the
morning. He was questioned still farther
as TO thf ticket system" in vogue at the
Krag-f ynolds concern, and an attempt
was male TO show that Private ledger
b. in which many entries in controversy
are made, was fixed up after Oct. So 1877.
The witness denied having compiled the
book after that date. He couldn't remem-
Der just where nor when lie bought the book,
DuL SdiNl iit WOuid NC SlStd " t1Ai - - OS'~'
1t was shown that the $4,000 paid out by
checks to c. NJ Reynolds and the Dayton
concern i'm which his brothers were inter-
ested had been carried as cash on hand, so
that, as Mr.. Ketcham suggested 1.-THE $780,
600 cash was really $4,000 hole" Mr..
Keteham got in two or three leading ques-
lions at this point, summing up the testi-
mory of the day before in humorous
fashion. Oct go the date which figures i'll
so many of the Krag Reynolds transac-
tions, he called wash day." Judge Allen
remarked: Il begin to see into this thing
now.''
A $4,000 FIXTURES ITEM.
The witness also testified that in Decem-
her last when he was clearing up the
book, he discovered what was an apparent
shortage of $4,000. This amount, he said, he
understood had gone,t G. NJ Reynolds for
advances made of stock. 1t was brought
out that the Krag-Reynods Company
bought fixtures of A. b. Gates & 10 for
which $4,000 was paid in cash. The witness
said these fixtures in his opinion. were not
worth $1,000. 'It was simply buying air
said he.
Mr.. Expert was examined by Mr. korbly
as to the business of the Krag-Reynolds
Company during the three years OF its ex-
istence. BY referring to the books he testi-
fed that during the first year the net profits
were So 365 O3: the second year there was
net loss of s14,972.52, not including bad debts;
the third year, from Oct. 20, 1896, 70 oct ~,
1897. there net loss of $Zl, 46yoS Inc
witness said he never at any time In 1891
made any statement to the stockholders or
their heavy loss He testified that at the
end of the third year the books showed :; a
surplus debit of 100000 and grew quite
angry because the legal gentleman couldn't
understand him. The lawyers had consld~
erable fun With the th srRs os oo ought to
know what that was, and Mr.. Spaan Won
dered how Mr. Ketcham came to guess lt
first. The witness didn't know whether or
not any dividends had ever been paid, ana
he couldn't remember what bad debts We're
on the books in October 1897 He SAID SAD tha at
no member of the corporation ever talked TO
him about the condition into which the
business was getting. He insisted that he
did not know of the firms insolvency be-
cause he thought Mr. Reynolds was a rich
man and believed he would continue TO BACK
the firm. % -,
William Wallace Krag, secretary of the
Krag- Reynolds Company, and son or W. "A.
Krag, was the witness OF the aIternoon.
He testified that the 9riginal eapatass SIM s10 0eG
OF this he himself held $4,000 OF common
stock as trustee for his father W. A. krag
held one share and G. W. Smith one snare
He had no actual money in the business.
and didn't know how much Mr.. Reynolds
had. His business was to travel and TO col
lect Nicholas sMcCarty Harrison. ne salo,
bought $4,000 of preferred stock, and after
wards $4,000 more, for all Of which he paid
cash. -.
ness said to keep the minutes OF the busl-
ness meetings, but frequently ne was away
and wrote his minutes aIter ne t .ho4 tba
Mr.. Brown endeavored to show that the
minutes of the meetings on pee, IL 1871, at
which the chattel mortgage for $lz9,VOO was
signed and Mr. Reynolds was authorized 10
leave for New York to dispose of addltlonal
stock were manufactured or changed after
the assignment had been made ano We're
n nf facts
of the witness were so hazy that nothing
could be satisfactorily proved, Don't you
know that the receiver was demanding
those minutes for several days and couldn't
get them because you were copying them
mo, sir, said the witness he denied
that they were copied after the assignment,
but could not tell exactly when they were
written or by whom, or whether they were
eOiieo'' THE $4,000 MORTGAGE.
reading of the minutes of the Dec. ii
meeting Showed that it was at that meet
ing that the $4,000 mortgage was signed
This mortgage the witness said, was for
the protection of home creditors. He was
asked if it was not understood, in case Mr..
REYNOLDS succeeded in disposing OF the ad-
dttional stock in New York, that the chattel
mortgage was never to see the light OF day
He said he did not so understand 1t. he
had no knowledge of the mortgage, he said,
until just before the meeting at which IT
was signed -, -,
Mr.. Brown-Isn't it true that you knew all
about this scheme to keep the mortgage I'M
der in case Mr.. Reynolds raised money In
New York?
Witness-No sir. knew nothing ABOUT IT.
Mr. BroWn-But you consented TO the ar
rangement at the meeting?
Witness-Yes. Anything Mr. Reynolds
said was all right with me.
Mr.. Brown-You knew that such a scneme
would be wrong? =
Witness-I didn't give it any thought Mr..
Reynolds attended to that part OF the busl,
ness l had perfect confidence In MN, ana
had no say" in the matter.
Judge Allen interposed here: TEL US what
you know about design in TINS matter, II
there was any
ia love to tell you if 1 could. but don't
know anything about it, replied the Wit
ness. I'D be tickled to death II could
help you.s
The witness testified that he knew nothing
about the cash tickets kept by Book
keeper Expert against the Wmie Taper I
Company and others, but that ne mao often
been told by Mr.. Reynolds to hustle col
lections for the reason that the White
Paper Company had not paid up;
so far as you know, SAID Mr. Brown,
"Mr Reynolds might have put all that
$1S2, 600 in his pocket, mightnt heT
Yes he might. / didn't know anything
about that part of the business, was the
reply. ITO be frank with you, I've learned
more to-day and yesterday about krag-
Reynolds Company affairs than ever knew
before
with the investigation without Mr.. c. M.
REYNOLDS An EFFORT will be made to get
him here by his attorneys for next Friday.
The case will not be heard IN the meantime,
as Judge Allen has other business on hand.
Mr. Reynolds, 1t is said by ms VIE; IS III