The Savannah morning news., 1901-08-02
CORN KING IN A HOLE
PHILLIPS OF CHICAGO DID TOO
MUCH BUSINESS.
A MOST UNUSUAL FAILURE,
BooKKEEPERS COULD NOT KEEP
Up WITH WORK.

Man Who Made the Famous Corner
May lie "a bankrupt ana May Not
Be-His Fame Brought Him So
Much business That His Clerks
Could Not Handle II, and His
Books Are All in a Tangle-The
Open Business Transferred to Me-
Reynolds q Co.
Chicago, Aug. board of Trade
and business circles generally were
startled to-day by the announcement
that the George II. Phillips Company,
which became famous through its pool
operations in the Chicago corn pit, dur
ing the past year, had transferred all
it's open trades to McReynolds and
Company. 1t was at first rumored that
"a large defalcation had been discovered
in an examination of the books, but
this proved untrue, having it's only
foundation in fact that one of the head
bookkeepers was confined to his home
by illness.
Lack of facilities for the proper cler-
ical needs of the concern, which had
acquired an enormous commission
trade, was, according to a statement
given the Associated Press by Attorney
John S. Goodwin, who, as a represen-
tative of the law firm of Black and
Goodwin, has taken charge of the COM
pany's affairs, was the sole reason for
temporarily suspending business. The
tangled condition of the books
became apparent some time ago
when the Board of Trade
directors ruled that the Phillips
Company should furnish to each MEM
ber of the May corn pool a detailed ac-
count Of the entire transaction. A large
force was then put to work on the
books and in their efforts to disentan-
gle the multitudinous trades it became
apparent that every trade on the COM
pany's books since November, 1900.
would have to be checked over, entail
ing an enormous amount of work. AS
the FIRMS business kept increasing at
a remarkable rate, the machinery of
the house was found inadequate and at
midnight on July 81 1t was decided to
simply transfer all trades and for the
time being throw the business of the
| house into other hands until new set
| of books shall have been compiled. Mr..
Phillips, while regretting the necessity
of this action. said it was absolutely
the only course open to him.
This does not mean we are quitting
business" he said. "On the contrary
we shall execute all orders, but will
have to ask that usual margins accom-
pany all orders until our books are
checked over"
Begun with Small Capital.
Following is a statement given the
Associated Press by Attorney Goodwin
for Mr.. Phillips:
THE company was incorporated In
November. 1900 with a capital of $780,
900. The business grew so rapidly that
in the spring of this year the capital
was increased to $3.50, and with the
increase came still additional increase
in business, so that the office force was
simply overwhelmed. We have been
doing the largest commission business
of any house in the world. but it had
recently come to the attention of the
firm that the record of the transac-
tions were not being kept in the proper
shape for such deals. About a week
ago expert accountants were put 10
work on the boks. have gone over
the legal end of the firms affairs and
have found them absolutely correct.
The expert accountants found that 1t
would be absolutely necessary to make
new set of books, dating from Jan. 1.
1900, and checking every item of the
immense business. The errors were ap.
parently made without partality, cred.
its being debited, and vice versa. But
up to p. m. yesterday, after a weeks
work and after all errors had been cor
rected up to that time the books show
ed the firm to be absolutely solvent.
VIII Make n New start.
On my advice they cut, however,
all old business at midnight last night,
the last day of the month, and trans
ferred all their open trades to Mercy
nods and every trade of the house is
protected and every trade made yes
terday was made at a profit for the
customers. We are sending out cir
cular asking the customers to send us
statement of their claims against the
company, so that we may have them
audited and use them in preparing a
new set of books with the expectation
that, unless something happens, which
does not seem probable, we
shall take care of every claim
and proceed with the business
as heretofore. The accountant,
so far, has found no evidence, what
ever, of criminal irregularity, but sim
ply mistakes due TO the immense
amount of business handled with in
adequate facilities for caring therefor"
Did Not Cause Panic.
The announcement of the above turn
of affairs caused scarcely a ripple in
the Board of Trade markets. Corn
eased off about y cent, but soon regain
ed the loss. The wheat market was
but slightly affected and oats followed
the course Of the corn market.
About the only excitement visible
was the unusual scurry of settling
clerks hurrying about checking up
open trades.