Evening star., 1901-08-01
TOO MUCH BUSINESS
G. q Phillips Company of Chicago
Transfers Its Trades.
OVERWHELMED WITH ORDERS
Time Needed to Get the Firms
Books Oyerhauled.
TRADERS WERE STARTLED

CHICAGO. August Board of trade and
)usiness circles generally were startled To-
iay by the announcement that the George
1. Phillips Company, which became famous
through it's pool operations in the chicago
,orn pit during the past year. had trans
erred all It's open trades to McReynolds q
Company. 1t was at first rumored that a
large defalcation had been discovered In an
examination of the books. but this proved
untrue, having its only foundation In the
act that one of the head bookkeepers was
confined to his home by illness.
Lack of facilities for the proper clerical
needs of the concern. which had acquired
IN enormous commission trade. according
to a statement given by Attorney John .
Goodwin, was the sole reason for tempo
-arily suspending business. The tangled
condition of the books became apparent
some time ago, when the board of trade
directors ruled that the Phillips Company
:houId furnish to each member of the May
rorn pool detailed account of the entire
transaction. A large force was then put
20 work on the books, and in their efforts
% disentangle the multitudinous trades 1t
became apparent that every trade on the
,ompany's books since November. 100,
would have to be checked over, enta1lln8
IN enormous amount of work.
Entire Business Transferred.
! remarkable rate the machinery Of the
house was found inadequate, and at mid
night on July 81 1t was decided to simply
transfer all trades and for the time being
brow the business of the house into other
hands until a complete new set of books
shall have been compiled. Mr.. Phillips.
while regretting the necessity OF this &C
lion, said 1t was absolutely the only course
open to him. This does not mean we are
,,,3f h,,ufn hn Coi6 n
trary, we shall execute all orders. but will
nave to ask that usual margins accompany
all orders until our books are checked
over"
Following Is a statement given the Asso-
ciated Press by Attorney Goodwin for Mr..
Phillips:
1.-THE company was Incorporated In No
-ember. 1900, with a capital Of $4,000.
rhe business grew so rapidly that In the
spring of this year the capital was In
rreased to $3.50 900, and with that increase
anne still additional increase in business,
so that the office force was simply over
whelmed. We have been doing the larg-
st commission business of any house In
the world, but 1t had recently come to the
attention of the firm that the records of
he transactions were not being kept in
The proper shape for such deals About a
week ago expert accountants We're put to
work on the books. l have gone over lie
legal end of the firms affairs, and have
found 1t absolutely correct. The expert
accountants found that 1t woould be alb
Soiuleay HeSeSSdfS 10 MAKE new set OIL
books dating from January 1. 1900, and
checking every item of the immense busi-
ness. The errors were. apparently, made
without partiality, credits being debited,
and vice versa. But up to IN yesterday,
after a weeks work and after all errors
had been corrected up to that time the
books showed the firm to be absolutely SOL
vent.
Acted on Attorneys Advice.
'On my advice they cut or however, all
old business, 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 profit
for the customers. We are sending out a
circular asking all our customers to send
us statement OF their claims against the
'ompany, so that we may have them au-
dited and use them In preparing new
set of books. with the expectation that un-
less 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 whatever Of criminal ir-
regularity. but simply mistakes due to the
immense amount Of business handled with
inadequate facilities for caring therefore"
The announcement Of the above turn of
anafrs caused scarcely ripple in the board
OF trade markets. Corn eased about &c.
but soon regained the loss. The wheat
market was burt slightly affected and oats
followed the course of the corn market
About the only excitement visible was
the unusual scury of settling clerks
hurrying about checking UP open trades