Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1903-03-25
The Alliance Exchange.

Columbia special Of March q, to the
News and Courier: The argument III
behalf of a petition for the appointment
of a receiver for the Alliance Exchange
was heard today by Judge Gary In MS
Office in the Greenfield building. the
petition was filed by H. E. Brookshlre
sna the Cash Hill Sub-Alliance. The
complaint has already been published
and It is sufficient only to report that
II alleges that the Alliance Exchange
directors have diverted the use OF the
money, $4,000, from the purpose 1or
which it was intended, and tnat It
should be returned to the stockholders.
They express the fear that it might be
dissipated and they assert, also' that
there are several claims against 1t ana
that they should not be paid until their
validity Is passed upon. Those con-
stituting the exchange directorate and
who resisted the application are: A. e.
Lyles, ]. L. Keitt, ]. B. Douthit, ). n
Ashe, S. T. McKeown, o. P. GoodmanA
The creditors are M. L. Donaldson, z.
]. Colt and others. The answer Is a
document of some interest in that 1t
gives some of the inside workings OF the
Exchange. From it some of the 1ol-
lowing facts are taken: 1t Is denleu
that any other business was ever en-
gagged in except as an agency for the
purchase of farm supplies for the ben.
IF Ia Alliance.
Is denied that any individual In sub
Alliances had stock in the Exchange,
hut that such sub-alliances owned stock
as an organization. After detailing the
manner of conducting the business tne
answer alleges: That M. L. Donaldson
was appointed the first agent OF the Elk,
change. and it was then contemplated
that the capital stock should be loaned
at interest, with the expectation tnat
the interest and fees would pay
the expenses Of the agency. 1t was
well-known to stockholders that the
capital stock was not to be used py
Donaldson IN actual conduct OF busl-
ness or to pay salaries or expenses. In
1890 the Jute Bagging Trust was form
ed and the stockholders, with full &C
uuiescence Of the county trustee STOCK
holders, determined to place $4,000 In
the National Bank, of Greenville, to
the order of M. L. Donaldson, agent,
and in 1891 an additional sum OF $l.OSO
was loaned to Donaldson for the pur-
pose Of buying bagging for members;
In November, 1891, 1t was developed
that there was an actual or supposed
deficiency in the funds after they had
gone into the hands Of the agent. The
agency was then moved to Columbia
and D. P. Duncan was put in charge
until January, 1901, and the admins
tration of Duncan had resulted in addl-
tional loss to the corporation. Early IN
Duncan's administration all OF the
loans were called in except few hum
dred dollars, which could not be real
lied on, and it was placed In the Far
mers' and Merchants Bank, In Column
bia. That in 1900 1t was determined TO
sell out the stock, as the dividends had
been irregular, and the stock was sold
to ]. P. Matthews at par, less $1,S5O, the
amount Of an overdraft, which had been
incurred by D. P. Duncan, and the note
Of ]. P. Matthews, for SIG, .65 was TAX
en- for said stock, secured by deposit
Of $40, 900 of the stock Of the bank. That
the amount of the overdraft added to
the aggregate amounts put into the
hands Of Mr.. M. L. Donaldson aggre-
gates $3.50, which was the total short
age Of the capital stock before the ad-
gan. The existence of any just claim
against the fund is denied. The story
Of the disagreement as to what should
be done with the fund was detailed
down to the determination of the stock
holders, by a very large majority, to
dissolve and pay out the funds to the
contributors through the sub-Alliances
The directors have been carrying out
the plan by making preparations to di-
vide the fund by sending out notices,
so that the proper distributes might
be determined. They deny that they
have attempted to control the corpora
tion any more than by carrying out the
instructions Of stockholders. They deny
that they are indebted to Donaldson or
Colt. In conversation with a men,
ber of the board Donaldson mentioned
something about a claim, to which the
reply was: You can't have any claim.
You know your office was on a con-
tingency." Donaldson replied: II know
that, but if we can get the matter into
the hands of a receiver a lot of these
fellows will not come in to claim the
a surplus in the receivers hands. and
out of that" After the presentation of
the papers brief argument was made
and Judge Gary announced that he
would reserve his decision. Bellinger,
Townsend & Haskell and Jones Ver-
ner represented the petitioners; Hunt,
Hunt & Hunter. Of Newberry, and w.
H. Lyles, of Columbia, represented the
defendants.