The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-07-22
A SIMPLE TRICK.
How Devlin Made His Oil Com
pany Pay Dividends.
Borrowed the Money For the
Specific Purpose.
1T WAS EASY ENOUGH.
How Stockholders Were Fooled
in the Earnings.
Directors We're a Mere Set of
Puppets.
TT WAS EASY ENOUGH

c. ]. Devlins oil company bor-
| rowed money to pay dividends, at the
same time owing several thousand
| dollars for current expenses of plant.
| At a meeting of the stockholders OF
the America Oil and Gas company
held in Topeka this morning the
startling statement was made by the
president, c. L. Short, who is also one
of the directors. that money had been
borrowed to pay dividends. This
statement was practically confirmed
by Col. J. d. Norton, another director,
who said:
I'VE have made mistakes. I see it
! now. Our judgment was wrong. We
acted at the instance and on the
counsel of a large stockholder, one of
the directors
This reference was to C. J. Devlin,
the bankrupt mine operator and
banker.
Following the trouble in Mr.. Dew
| Inns affairs and the failure of the
| First National bank, a meeting of the
board of directors of the America Oil
and Gas company was recently held
and called a stockholders meeting for
| today. In the call for the meeting it
was announced that the company was
in debt $4,000. This news was a
revelation to stockholders generally,
even to those who hold a very large
number of shares. fifty or more thou
sand, the par value of the shares be-
| ing ten cents.
| Mr.. Devlin has been large stock
! holder in the company for several
years, holding about SIS, 600 shares. and
with his associates has controlled a ma
| jority of the 2,500,000 shares. Nearly
| two years ago this condition of affairs
prevailed so that he elected the follow
/ oad xxyI1n
| ed again at the last annual meeting of
the stockholders in November, 1904: c.
]. Devlin, D. w. Norton, c. L. Short,
| r. B. Gilluly, ]. D. Norton, c. S. Down
! ing, J. D. Norton, Jr.
| j. D. Norton for years has been Mr..
| Devlin's secretary and confidential man
| in his business affairs generally. J. D.
! Norton, Jr-, is his son. d. w. Norton
Devlin's attorney. c. L. Short was a
close friend of Mr.. Deylin's and con-
nected with the Santa F'e for many
years. Mr.. c.. S. Downing was formerly
! closely identified with Mr.. Devlin's as
fairs but never qualified as a director
| for the company after his reelection in
| November.
Mr. Devlin's resignation as a director
was read at this mornings meeting
| There were represented today either in
person or by proxy 100000 shares "a
| large majority. Among the Stockhold-
ers present in person were James E
| Hurley, general manager of the Santa
| F'e and one of the receivers of the Dew
| lin properties; it was in the latter ca
pacity that Mr.. Hurley was on hand;
| J. D. Norton, jr., D. w. Norton, Albert
Parker, J. F. Afford, Willard n. Hall,
| B. M Payne M. T. McGraw of Newton,
| NJ F. Hadley, cashier Farmers bank,
Mooresviile, Indiana; r. B. Gilluly, Ben
nett r. Wheeler, A. S. Rankin, Frank 2.
MacLennan, A. E. Sweet, A. G. King
aman, C. S. Downing, ]. w. O'Neil, q.
w. OFT, c. L. Short, j. D. Norton and
w. A. Pierce.
| A general discussion of the affairs of
the company developed a surprising
state of affairs. The president and di-
rectors present we're asked to explain
the $12, 900 Indebtedness. Mr.. G. L.
| Short, president of the con- s.1ny, stated
that when he first became connected
with the company about two years ago
! last April that he found pressing ac-
counts demanding payment; that he ad-
vanced for this purpose $500 in the
! spring of 1903. Col. J. D. Norton stated
| that some time later he advanced about
| 81, 700 to the company in the same way.
Messrs. Short and Norton both stated
/ that this money had not been returned
to them and was part of the indebted
ness.
do you mean to say" said Mr..
| Hurley, that this company paid divi-
neds owing you this money advanced
| to the company?'
The gentlemen admitted that re-
markable fact
In regard to the rest of the $40
| Indebtedness President Short then
made the startling statement given at
T! the head of this article, saying: You
will find that money was borrowed to
pay dividends"
Mr. Short and Mr.. Norton gave the
stockholders to understand that they
| had opposed that method of doing
| business, but had been overruled by
Mr.. Devlin. Mr.. Gilluly, another di-
rector, said he knew nothing of the
/ transa ction and had no idea that such
thing had been done. Neither did
he know about the creation of the in
debtedness. Mr.. Gilluly afterwards
said: 'sThis is the last company 1 will
| be a director in without knowing
what is going on
The confessions of the directors be-
| fore the meeting today were pitiable.
They acknowledged that the stock-
holders were not kept advised of af-
fairs; directors themselves were in the
dark Mr.. Devlin ran things to suit
himself and little or no account taken.
| Mr. Short was paid a salary of $4,000
a year and has contract for some time
| TO run. He said that he had had little
to do as the oil business has been at a.
low ebb.
1t was plainly developed that Mr..
Devlin had been 'the whole thing;"
| that he had dominated the directory
and himself had acted as a board. go
| ing to the extent of insisting that
money should be borrowed to pay
dividends. Sixteen thousand dollars in
dividends have been paid, six thous-
and dollars of which seems to bave
| been borrowed at the First National
and Toluca banks.
! Upon motion of Frank P. MacLen-
nan. an auditing committee, Albert
Parker, F. M. Bonebrake and H L.
! Shirer, was selected to investigate the
books and accounts of the organization
from it's inception to date and report
at an early adjourned meeting of the
| stockholders.