New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-08-04
PITNEY DLSTRUSTS" 1T.
R4PS STOCK WATERING.
Fice-ChancelIor Crit;cises Universal
Tobacco CompanH Sharply.

The application for a receiver for the Univer-
sal Tobacco Company and an injunction forbid
ding the company 10 issue 100000 worth OF
stock, made at Trenton on July -. came Up be
fore Vice Chancellor Pitney at Jersey City yes
terday. The COMPLIMENTS who are Edwin a
McAIpin. Joseph Herman. J. ". Rhoades, +. c.
Babcock and Charles VI. Allaire. in their COM
plant. which was read by Gilbert Collins. their
counsel allege that William H. Butler. president
of the company has mismanaged its affairs in
mis- own interest II part the allegations We're
as follows
He president Butler) has evidenced a pronounced
hostility TO other holders OF the preferred stock cf
stated 70 render the holdings OF such shareholders
Ea!GeIess and by acton heretofore taSh ana SC''
either wreck the company to bring about such a
situation that the stock OF the company held BY
less to the other holders thereof
Altn9ugn uhaer contract 70 serve ne Jo.ngala a.
general MANAGE and not 10 eRgage IN me PI0secu
he has devoted his time and efforts to very large
extent in promoting the business Of another cor
which he and his brother. George P. Butler, have a
large financial interest about nine-tenthS Of the
stock standing in the name of George P. Butler.
pany in purchasing large amounts of machinery
from corporation known as the United Standard
Machine Company, IN which he and MS brother
nayg SPEs n9 1g aee the OF sucn
He has wilfuiiy, and Intentionally sought to waste
and dispose Of the assets Of the company for his
own Personal gain and that Of his brother and in
the preferred stock held in the treasury OF the
company for the nominal sum OF s3 share to his
brother. and he has sought to create a fictitious
market for such stock in order 10 give color to
He has been guilty of the misapplication of the
funds Of the company in various particulars Hay
his
brother which is in large measure composed OF
alleged claims for salary, and evidenced by notes
unpresented checks and book accounts, and which
is subject to great reduction, if not total cancela-
ton, upon a proper accounting. he mas procured
the authorizat ton and creation OF an issue or ne
pay such alleged Indebtedness with said bonds. re-
Cetving bonds Oe the value OF 500 for each 80
debtedness. and such bonds will hereupon be sub
ject pass into the hands Of innocent holders Tor
value
Remarks by Mr.. Collins on the increase of the
companys stock from 100000 to 100000 and
to alleged juggling with the stock were inter
rupted by the court. yice-Chancelor Pitney
said:
I wish here to express my judicial .distrust q
such practices. There is no honesty in a stock
tbe f6 OF 01 OF OF the holders Of the Common
stock the preferment Of those holding preferred
people who invest their money, and it Is thievery
10 do IL
Attorney General Robert H. McCarter, counsel
for defendants. read affidavit made by Presi-
dent Butler. in which he denied all the allega-
tons. He said he had conducted the affairs Of
the company in the interests Of the stockholders
He told Of his previous connection with other
companies. the last being the Union Tobacco
Company from which he had retired when 1t
absorbed by the trust. He charged that
Mr.. McAlpin had reduced the profits of his own
company from S30O0O year 10 almost nothing.
He charged that the complaint was inspired by
malice and was made with a view TO injurinG
the company. Mr.. Butler also alleged that all
the compliments were dummies except McAlptn.
Herman. he said an employe Of the com
pany, while Rhoades and Allaire were employees
Of the H. B. Hons Company, NeW-York bToh-
ers. and held no stock except such as had been
transferred to them by George r. Sheldon.
Frank Tiford and Henry r. Wilson.
a brief argument between Messrs. Collins and
McCarter followed, and the case was adjourned
until August II.