The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-08-02
SUSPE ENS|ON OF A
GREAT GRAIN HOUSE
Business of Phillips Too Great
to Carry.
THE BOOKS IN A TANGlE
Trade Transferred Until New Set
Can be Compiled.
THE COMPANY ABSOLUTELY SOLVENT
Such is the Claim Made by Its ATTORNEY. An
nouncement of the Suspension Causes
Scarcely Ripple in Board of
Trade Market.
(By the Associated Press.)

Chicago, Ills, August board of
startled today by the announcement that
the George H. Phillips Company which
became famous throughout its pool opera
tons in the Chicago corn pit during the
last year had transferred all its open
trades to McReynolds and Company. It
was first rumored that a large defalca-
ton had been discovered in an examina-
tion of the books but this proved un
true, having it's only foundation in the
fact that one of the head book-keepers
was confined to his home by illness.
Lack of facilities for the proper clerical
needs OF the concern, which had acquired
an enormous commission trade according
to a statement given the Associated Press
By Attorney John S. Goodwin who, as a
representative of the law firm of Black
and Goodwin, has taken charge of the
company's affairs, was the sole reason
for temporarily suspending business. The
tangled condition of the books became ap-
parent some time ago, when the Board
of Trade directors ruled that the Phillips
Company should furnish to each member
of the May cCrn pool a detailed account
of the entire transaction. A large force
was then put to work on the books and
in their efforts to disentangle the multi
tudinous trades it became apparent that
every trade on the company's books since
November. 1910, would have to be checked
over, entailing an enormous amount of
work. AS the firms business kept in
creaSing at a remarkable rate, the ma
chinery of the house was found made
o,I,k J1,Ixy O1ct
was decided to simply transfer all trades
and for the time being throw the bus-
ness of the house into other hands until
a complete new set of books shall have
been compiled. Mr.. Phillips while re-
GREETING the necessity of this action, said
it was absolutely the only course open
to hin, 'This does not mean we are
quitting business" )" he said. con the con-
trary we shall execute all orders but will
have 10 ask that usual margins accom-
pany all orders until our books are
checked over"
Following is a statement given the
Associated Press by Attorney Goodwin
for Mr.. Phillips:
''The company was Incorporated in No
vember, 1900, with capital of 100000.
The business grew so rapidly that, in the
spring of this year the capital was in
creased TO $3.50, 900 and with that increase
came still additional increase in business,
so that the office force was simply over
wheImed 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 records of
the transactions we're rot being kept in
the proper shape for such deals. About
a week ago expert accountants were put
to work on the books. | have gone over
the legal end of the firms affairs, and
have found it absolutely correct. The eX-
pert accountants found that it would be
absolutely necessary to make a new set
of books dating from January 1st, 1900,
and checking over every item of the i'm
mense business. The errors were, appar-
emily, made without partiality, credits
being debited, and vice versa. But up to
p. m. yesterday after a weeks work
and after all errors had been corrected up
to that time the books showed the firm
to be absolutely solvent On my ad-
vice, they cut off, however, all old bust
ness at midnight last night-the last day
of the month, and transferred all their
open trades to McReynolds and every
trade of the house is protected and every
trade made yesterday was made at d
ing out circular asking all our custom
ers to send US a 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 hap
pens which does not seem probable, we
shall take care of every claim and pro-
ceed with the business as heretofore. The |
accountant, so far, has found no evidence, |
whatever, of criminal irregularity bur |
simply mistakes due to the immense
amount of business handled with ade- |
quate facilities for caring therefor"
The announcement of the above turn |
off of affairs caused scarcely ripple in |
the Board of Trade markets. Corn eased |
about &c, but soon regained the loss. |
The wheat market was but slightly af- |
fected. and oats followed the course of |
the corn market.
About the only excitement visible was |
the usual scurry of settling clerks, hur-
rying about checking up open trades.