Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1906-02-27
MAIL ORDER CRASH

Hands of Recever-The Postal De-
| partment Was gating-Much
Stock Sold.
| Chicago, Feb. 27.-Federal Judge S.
II. Bethea yesterday appointed Edwin
c. Day. receiver for the Cash Buyers
| Union First National cooperative So
ciety. The concern is a mammoth
mail order house OF $5O0O,00O capital
stock, supposed to be modelled after the
Manchester cooperative Society of
England. 1t has stockholders among
farmers and laboring people turnout
the country. 1t occupies an eight-story
building at jackson boulevard and
Green street.
The action was taken on the petition
OF three creditors who acted at The di-
rect instigation Of the postal authors
ties, who have been conducting an in
vestigation Of the company during the
last six months. Criminal prosecution
depends upon the examination of the
books, which will be taken up under
the receiverShip.
The postoffice inspectors say that ST.
027,000 worth OF common stock has
been sold. Julius Kahn, formerly with
Sears, Roebuck q Co., is president. Adj
mitted liabilities are close to 100000,
and it is estimated that the merchan-
n bo, nd to, at II ma. ha N,
$3.50, 900. The open bank account Of
the society is $50.
Seek to Block Receivership.
Following this action move to
block the receivership and all court
proceedings was taken at a meeting of
representatives of twenty-five creditors
held in the office of the society. This
meeting was called for the purpose of
ascertaining the condition of the So
ciety The claims of the creditors
represented We're $4,000.
Many complaints have been made to
the postoffice department about the
society. Inspector Stuart was advised
from Washington to make q careful
investigation. The society was incor
porated three years ago in New Jersey
with capital of s5,000,000. The adver
Using was extensive at first, 100000
being spent in circulating catalogs.
Stock amounting to $1.027.000 was sold
thru the mails. The stockholders paid
$40 share. They were told that a
10 per cent dividend would be paid
each year and that stockholders would
receive 5 per cent discount on all pur
chases made and a D per cent commits
sion on all sales made to customers.
Discoveries of Inspectors.
The inspectors discovered that of the
s1,O27,000 received from the sale of
stock, $1.000,000 from sales of goods
during the last year, and thousands of
dollars received in other ways, all that
the society now holds is placed at a
high valuation by the postoffice men
at 100000. The receipts of the COM
pany during January and February are
placed at $26OOO0 Many orders have
not been filled, and many employees
have not been paid. The rental of the
building is $4,000 a year, and there
are $50 employees.
The prospectus Of the scheme was
alluring. A man from Texas bought
the literature and bought share of
stock for $40 When he came to Chi
cago he bought a bill of goods and as
his discount for being a stockholder
received SAT. He went away with the
idea of drumming up more trade.
The action of the postoffice inspec-
tors in standing behind and urging the
receivership is an Indication that pros
ecution is not far off. although In
spectors Ketcham and Kimball who
have had the case, would not admit
that this was decided upon. Mr.. Kahn
was visited by these inspectors three
weeks ago and asked for statement
of his business. No such document
has been forthcoming. The appoint
ment of the receiver makes the books
accessible.