The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-01-28
NOTES AND MORTGAGES
HOW THEY WE'RE ExECUTEO BY
THE kRAG-REYNOLDs COMPANY.
A New York Broker ON the Witness
stand - News of the
Courts.

The entire day was devoted to the intro
duction of various notes and other docu-
ments in the Krag Reynolds case in Judge
Carriers room Of the Superior Court yester-
day. Late in the evening the further hear
ing of the case was continued until next
Monday. The attorneys expressed the
opinion last night that not more than
week will be necessary for the trial. Moth
ing Of particular interest developed in the
testimony yesterday, as it was mainly adj
duced for the purpose of identifying the
various notes and mortgages in controversy
and establishing the circumstances that at
tended their execution. Additional attorneys
put in an appearance yesterday to watch
proceedings, while not taking an active
part. They represent unsecured creditors,
and now and then offer suggestions. Later
on, when the real fight opens, other legal
lights of the Marion county bar who are
protecting absent clients who may be vi
tally interested will keep a close watch on
affairs
Yesterday Vice President Mckee, of the
Indiana National Bank, and nj. B. Wilson,
president of the Capital National Bank,
went on the stand to identify the notes
that We're secured by the first mortgage of
Dec. 21, 1897 which were executed in lieu
of former notes. Attorney Regensberger, Of
New York, a representative of Snow,
Church & Co., had Frank L. Sheldon, a
New York broker, formerly of Lafayette,
identify notes for $4,000 that he had
handled for the Krag-Reynolds Company,
as we'll as signatures on notes for $4,000 adj
ditional that had been discounted directly
by another bank. The notes were signed
Krag- Reynolds Company, by Charles M.
Reynolds treasurer" Mr.. Regensberger,
on behalf of the banks who are beneiiciaries
under second and subsequent mortgages,
showed by Mr.. Sheldon that Charles M.
Reynolds and Mr. Hord, of Hord & Perkins.
attorneys for the firm, visited him in New
York Dec. Y, 1897. he met Mr.. Reynolds
IN response to a telegram at the Waldorf
Hotel, where the Indianapolis merchant ex-
planned that the firm was in a bad way
financially and must receive help or fail.
Mr.. Reynolds was unable to tell the exact
amount of liabilities. After he had talked
to Mr. Reynolds Mr. Hord came in and was
introduced to him. The witness said they
discussed the condition of the firm, and he
learned from them that they had some sort
of a scheme" by which the company was
10 pc reorgamzed and recapltalized at a
suthctent figure to wipe out the existing
indebtedness. The Indianapolis banks, wit
ness said he was informed, had agreed to
take stock if the New York banks would
90 likewise Nothing was said to him about
mortgages to the Indianapolis banks having
been given-he knew nothing of any mort
cages having been issued at that time. Mr..
Gates, Of Gates d Hume, representative of
the California Packing Company, an unse-
cured creditor, objected to the introduction
OF Inc notes and mortgages and Mr.. Shell
dons Identification of the signature of the
Krag- Reynolds Company by Charles NJ
there had been ne s 6n me ta tSt
had ever been authorized to borrow money
IN the name of the firm and bind it TO his
acts, nor that the company had ever held
out to the banks or to the world that Rey-
nodS was so authorized.
The court ruled that as it had been shown
that the notes purported to be signed by
the Krag Reynolds Company and the money
realized from them had been deposited to
the credit Of the firm they were prima facie
ana admissible to evidence as against KTag-
Reynolds without passing on the conten-
ton that they were issued without author
lty as against other interests. After consul
tatlon among the attorneys the cross-ex-
animation was taken up There was a sharp
tilt when Judge Ayres Undertook to go into
the meeting between Mr. Reynolds, Mr..
Itord and the brolSer Mr. Sheldon, in New
YORK. Judge Ayres argued that when the
witness said there was talk of a Scheme
the whole question was opened up and in
this he was sustained and evidence was
brought out showing the transactions that
were had in New York for the next five
days; There Were several conferences at
when banking interests. were present. On
the date last named Mr.. Hord telephoned
the witness the contents of a telegram he
had received from Mr.. Perkins, at Indian
apolis saying second and other mortgages
had been made to New York banks. Later
in the day there was a conference of the
New ] OrK bankers ana It was decided that
witness should go to indianapolis to look
into affairs and see what could be done for
the protection of the banks. The witness
had no personal interest in the notes other
than that he had acted as broker. In answer
to Mr.. Gates witness said he had no recol-
lection of making special efforts to ascertain
by what right Mr. Reynolds signed the firm
name, although he had learned from Mr.
krag that Mr.. Reynolds looked after the
financial affairs of the firm. His answer
that he presumed" the banks investigated
that proposition was objected to and then
he said he did not know. He was forgetful
of a number Of incidents in the Krag-Rey
noldS transactions, for instance not being
able TO tell more definitely when he con-
Versed with Mr.. Krag than that it was
Indianapolis and twice, at best in his own
Office. He had no recollection of Mr. Hord
having been surprised at learning the
amount of the firms liabilities in New York
nor had he any recollection of giving Mr.
Itord a typewriter statement on a little
strip Of paper the night of Dec. % contain
ing a list of the notes he had handled as
broker. when Mr.. Hord questioned him. He
was not sure he did not furnish a list later
in the week. Neither could he remember Mr.
Hord having asked him over the telephone
to call the creditors together in his Office
when the telegram was received Dec q.
Mr. Hord asked questions indicating he
wished to show he was himself ignorant of
the true state of affairs when he went TO
New York with Mr.. Reynolds. When the
witness said he was sorry that he could not
remember. Mr. Hord replied shortly that he
did not care anything about that. but
wanted to get at the facts. Some of the at
torneys said at the end of the day that
little of Importance had been brought out
and that the real fight would come next
week, when the effort TO establish fraud
under the statutes in the execution of the
notes and mortgages begins.