The Savannah morning news., 1904-09-04
SUITS AGAINST
TRUST COMPANY
SEEK TO RECOVER 100000.
CONTINENTAL TRUST CO. OF BALTT-
MORE THE DEFENDANT.

False, Fraudulent and DeceftfuI,
Representations, PIaintiRs De-
clare, Were Made to Induce Them
to Subscribe to the Underwriting
Syndicate of the United states Cot
ton Duck CorpOrntion-showi OF
the plaintiffs.
New York, Sept. 3.-Two actions
seeking to recover 100000 from the
Continental Trust Company of Baltl-
more were begun in the United States
Circuit Court here to-day.
The suits were brought by the Cen
trail National Bank of New York, in
liquidation, and the Merchants Trust
Company of New York. The first
named complainant seeks to recover
the sum of 100000. which it paid as
subscriber to the underwriting sym
dicate of the United States Cotton
Duck Corporation. The Merchants
Trust Company asks judgment for
100000, which 1t likewise paid on a
subscription TO the same syndicate.
The complainants allege that the de-
fendant company, in promoting the,
United States Cotton Duck Corporation,
used false. fraudulent and deceitful"
representations to induce them to sub
scribe to it's underwriting syndicate,
with an intent to deceive and defraud", ,
them.
According TO the two complainants
The defendant in 1899 undertook to pro-
mote the Mount Vernon and Wood
berry Cotton Duck Company, and is
sued for the latter $4,000 of its
stock to purchase certain cotton duck
manufacturing plants in Mount Ver-
non, Baltimore, Laurel, Md, Franklin
vile, Md, Tallahassee, Fla, Columbia,
s. c., and New Hartford, Conn. These
plants We're not worth collectively. the
complainants allege, over $S. .000,0 900, and
We're not capable of earning more than
$5OO,o00 per annum. The Mount Ver-i
non and Woodoerry Cotton Duck Com
pany, the complainant also claims, was
insolvent and its stock and bonds, with
the exception of it's first mortgage
! bonds. were of little or no marketable
value, all of which facts, it is contend
ed. were well known to the defendant
corporation.
To Take in Georgia Properties.
The charge is then made that the
J defendant, to enable 1t to sell the
stock of the Mount Vernon and Wood
berry Cotton Duck Company, formed
a new corporation known as the United
| States Cotton Duck Corporation, which
was to take over the properties of the
Mount Vernon and Woodberry Com
pany and acquire additional cotton
duck manufacturing plants at Man
chester, N. H., La Grange, Ga, Ho-
gansville, Ga, and at West Point, Ca.
and to this end issued stock to the
value of $50, 900. The total value
of the combined plants it was pro-
posed to take into the new corpora
tion did not at any time, the COM
plainants declare, exceed the sum OF
sl2.000.000 and collectively were not
capable OF earning more than $750,000
per annum.
The complainants allege that they
were induced to invest in this new
corporation, on the strength of print
ed statement issued by the defendant,
which purported to show that the new
corporation was capable of earning
profits sufficient to pay all fixed
charges and dividends on its $50, 900
issue of stock.
The complainants characterize the
printed statement as false, fraudu-
lent and deceitful." and issued ito de-
ceive and defraud complainants" and
other investors.