The sun., 1904-08-27
FRAUD CHARGE IN STOCK DEAL
INTERNATIONAL AGENCY MEN
ACCUSE EX-PRESIDENT.
Charge That McCauley Had Stock Voted
to Him, Sold It as the COmpany's
and Kept the Proceeds Ap-
p0in ted I'm New Jersey Lawsuit.

and Kept the Proceeds-Receiver Ap'
poin ted I'm New Jersey Lawsuit
As a result OF the financial troubles Of the
International Mercantile Agency at SAG
Broadway, for which a receiver was APP
pointed yesterday in New Jersey mass
of papers and books of the company have
been taken to the District Attorneys office
and are being investigated by Assistant
District Attorney Garvan.
No information could be obtained at the
! District Attorneys yesterday as to the
purpose of this investigation, and Mr.. Gar.
van refused to discuss it.
1t was learned, however, that within the
last few days Charles A. Henderson, third
vice-president of the company, has been
at the District Attorneys Office several
times. He was there yesterday afternoon
and saw Mr.. Garvan. Thomas N. McCauley,
who resigned not long ago as president
! of the company, also has been to see MIR.
| Garvan. That was a couple OF days ago.
| 1t is said in connection with the investi-
! cation being made by the District Att orney
! that there may be sensational develop
! ments
A legal fight is now on between McCauley
and the company which he practically
| organized two years ago. A few days ago
McCauley brought suit against the colo-
| pany to recover $54 ,22O.6O, which he says
he loaned the company. An attachment
| was granted by Justice Davis Of the
Supreme Court, and the company's Offices
at 348 Broadway are now in the hands Of
the Sheriff.
Now McCauley is made defendant in a
suit in equity, the bill for which was fled
in the United States Circuit Court, Southern
District, on Thursday, and which calls for
an accounting of McCauleys management
1t is alleged that McCauley, as president
Of the company, had voted to himself by
dummy board Of directors 81 ,2O0 400 OF the
common stock Of the company and that no
sold this stock as treasury stock of the
company and appropriated the money to
his own Use.
It is further alleged that McCauley got
this stock for property and assets of no
value to the company and that after he had
resigned as president the company was
unable to raise funds on tina sale OF stock,
because Of McCauley's had management,
and because money which should have
gone into the treasury of the company
went into his own pocket.
These charges are all denied by McCsn-
ley. He says that the company is In trou-
BILE now because Of bad management after
he got out. He further says that a good
deal OF the stock that was voted to him
he gave away to advance the interests OF
the company. He admits, however, that
he got rid Of all this stock with the excep-
tion of about S1OO 900 Worth, before he re-
signed from the company. Since then he
has sold the rest.
The company insists that there is about
S75O,OOo coming TO it from McCauley, and
on Monday the board Of directors passed
resolution authorizing that he be sued
In the suit against McCauley 1t is set
forth that he brought into the reorganiza-
tion OF the Mercantile Agency the Sprague
Mercantile Agency, with branches in Tor
onto, Montreal and this city, and the Mutual
Mercantile Agency. The latter agency was
the one started by Erastus Wiman, and
the assets of this company. it is alleged,
McCauley bought for $4,000.
McCauley got the 81, 200 900 in stock
in return, 1t is alleged in the suit against
him that this was grossly in excess OF the
value Of the property.
On jan H. 1902, the meeting was held at
which McCauey got the stock. The di-
n.
way, Harry j. Jones, Ross NJ Turner Ken
meth H. McLaren. Edmund c. Bidden and
V. Z. Englebock Some OF these were clerks,
and all were dummies OF McCauey, it is
alleged, while none OF them had any sub
stantial interest. Turner Is now McCauley's
partner. These directors resigned a month
afterward.
The company states that those who
lx<>l nDnn
McCauleys stock paid for it in checks,
drafts and promissory notes payable to
the order Of the company and that these
were indorsed by Mc( auley in the name
OF the company. deposited in his own bank
account, and kept by him.
McCauley and his counsel, A. J. Baldwin
OF Griggs, Baldwin Baldwin, said yester-
day that 1t was absolutely false that
McCauley had ever sold any of the stock
of the company on the representa- ton
that 1t was treasury stock.
McCauley said that IL the company had
followed out his business policy it would
be all right now, and that the directors on
Monday last asked him to return as presi-
dent. This Is denied by Masten 4 Nichols,
counsel for the company
After McCaulcys resignation. W. c. |
Lane, president of the Standard Trust
Company was elected president. He re-
signed in June. but his resignation was
never formally accepted. 1t is said that |
wealthy Canadians were heavy investors
In the stock of the company.
George R.. Beach Is the receiver appointed |
on the application of Newell |
W. Bloss, a stockholder in the company. |
The order reetrains the officers OF the COM |
pany from exercising any of their privileges |
until the matter comes up in the Court of |
Chancery on Sept. 0 for argument. Mr..
Bloss i'll his application, says that the COM
pany is now insolvent and is without funds |
TO resume business
Another receiver will be asked for In
this State.
81 AAR AlIHT ~ DIZTRECG