The Topeka state journal., 1902-08-18
TRUST FAILS.
Elgin Creamery in the Hands of
a Receiver.
Combine Operated 135 Plants in
Three States.
LARGEST OF IT'S KIND.
Assets Placed at $SOO,OOO,
Liabilities $35O,OOO.
Eight Thousand to 10000
Farmers Are Involved.

Chicago. Aug. 1s.-The Elgin Cream
ery company. which operates 1876 cream
cries throughout Illinois, Iowa and Wis
consin has failed. The creditors are es-
timated to number nearly 10000, over
5000 being farmers. The American
Trust and Savings bank was appointed
receiver and it's bond fixed at $5OO,OO0.
The assets of the company are claimed
to be $8OO,OO0 while the liabilities are
estimated at $350000 Inability to re-
alize on outstanding accounts is given
as the cause of the failure.
The Elgin Creamery company is the
largest concern of its kind in the United
States, and was organized by the con-
solidation of scores of Independent
plants throughout the country. Its au-
thorized capital stock is $4OO. 900 or
this amount $275,000 is outstanding ana
paid up. In the neighborhood of forty
creameries originally formed the basis
uaIly acquired until the concern owned
135 separate plants. The headquarters
of the concern are at 154 Lake street.
The filing of the petition was brought
about by the merchandise creditors,
and was entirely unexpected, although
the concern was known to be in a
cramped condition financially. The
American Trust and Savings bank is
not a creditor of the company
The petition on which the affairs of
the concern were placed in the charge
of the trust CON pany was hurriedly pre-
pared and recites the formal allegations
of bankruptcy sufficient to invoke the
powers of the court. 1t was prepared
by Gregory, POppenhuSen & McNab and
William Warfield Wilson.
1t charges that the concern is insOl-
vent and that the claims of the creditors
enumerated in the petition remain un-
although long dllR For the o.
lection of the assets of the company
and the ultimate payment of the cred
itOrS the appointment of the receiver is
asked.
AS soon as Referee Eastman had read
the petition he granted the motion for
the appointment of a receiver, and des-
ignated the American Trust and Saw
ingS bank The receiver took possess
sion of the Chicago offices, and agents
will be sent at once in dozen different
directions to take legal possession of
the various plants of the company. The
plaintiff creditors kept their action
secret as far as possible in order to pre-
vent attachments on the holdings of the
con pany in other states.
Chicago capital was largely interested
in the company. Many of the stock
holders, however, are farmers, but their
individual holdings are understood to
be small. The concern was rated by
commercial agencies at from $1OO, 1000 to
$500 900.
ton has almost controlled the creamery
business of the three states in which it
operated When it was formed it took
over all the best independent concerns
engaged in the manufacture of butter
Its affairs were generally thought to
be IN \ 1ourishing condition.
The news of the failure will be sur
prise to the thousands of farmers who
have been doing business with it. Many
hold yearly contracts for the sale of
their enti.e output of milk to the COM
pany. Under these agreements the
products was delivered to the nearest
cream cry each day.
In order that a heavy financial loss
may not be caused to the farmers de-
pendent on the company for the sale of
their milk arrangements already have
been mace by the receiver to continue
the operation of the various plants No
tees to that effect will be sent out at
the same time the agents for the re-
ceiver take legal possession of the
creameries.
Under the receivership all the credi-
tors will share alike in the assets of the
concern when they go into court and
prove their claims. Attorneys for the
creditors would not express any opinion
on the failure, but from other sources it
was learned that there probably will be
sufhc1ent assets to pay all claims in full
The company has been doing a busi-
ness OF S3.O0OO0O year and this large
volume of business on a paid up capital
OF only $275,000 is one of the causes as
signed for the failure. Officials of the
company declare the concern has been
making money ever since it's incorpora-
ton. Obediah Sands is president and
general manager of the company 1t was
through his activity that the concern
was organized. NJ. P. Boyle is secre-
tary.
THE failure of the company is due to
a lack of capital to carry on the large
volume of business which we were do
ing" said President Sands. 1.-THE con-
Germ has been making money and its
business has been exceedingly good this
year 1t is oud hone to be able to re-
organize at an early date with a much
larger capital The appointment of the
receiver will protect all creditors, and
there will be no preferences. There is
no cnance of any of the creditors being
forced to take loss as a result of the
failure. The various plants conducted
by the company will continue in opera
ton as usual, and the business will moi
be allowed to suffer-
I'VE are not in a position at this
time to give any opinion on the condi-
ton of the COMPANY" said one of the
attorneys for the creditors. ''The Iega
action was taken in order to head of
attachment proceedings in the various
states, which would endanger ths
claims of the creditors not party tt
these proceedings. The trust comDan.
as receiver will continue to operate the
plant at least until a decision is reach
eu AS TO the disposition of the asset )
1t is possible that the concern will bs
reorganized on sounder basis. will
sufficient capital to carry on the volnn.
of business heretofore transacted"
William Warfield Wilson. acting at
torney for the creditors of the Eleil
Creamery company left last night fol
Des Moines, Iowa, where he will appear
before the United States courts and asl
Tor an auxiliary receiver for the cream
cries operated by the concern in tina
state. Joseph L. McNabb, another at
torney, has gone to Madison, Wis, t,
preform the same mission in that state
The American Trust & Savings banl
has already been appointed receiver a
the home office of the company, and al
effort will be made to have the trus
company made receiver at all points.
The Elgin Creamery company ha
failed because its business was expand
ed far beyond the scope of its capital
said Attorney Wilson. I'VE hope to b.
able to conduct the affairs of the com