The Washington times., 1908-12-08
Flatly Contradicts Former
Head of Concern, Who
Claims 1t Is Solvent.
w. N. CROMWELL
is INTERESTED
Priests, Nuns, and Catholic
Churches Said to Be Losers
by Crash.

NEW YORK, Dec. s.-Reiterating his
allegations that the affairs of the FL
deity Funding Company are in such
involved shape that the creditors will
probably recover nothing. that ST.
Mary's Academy at Nauvo, Ill, is hope
lessly bankrupt through its dealings
with the concern, and declaring that P.
j. Kiernan, former president, doesn't
dare return to New York and submit
TO examination as to his operations,
Thomas F. Gilroy, jr., receiver for the
company today exhibited an order from
the supreme court for the examination
Of Herman, who is now in Washing
ton. He further declared that the state
ment Of Kiernan that the company is
solvent is an absolute lie''~ and said
the examination of the accounts show
that there is one million and a half
dollars that can not be accounted for
from the books.
incidentally the name Of William Mel
son Cromwell. of Panama Canal fame.
was brought into the case today
Whether or not with his consent Il
was shown that creditor of the Fidelity
Company, of the Columbia Construction
Company, and of the Federal COnstruC-
tion Company, as we'll as OF p J. Kie-
ran personally, have signed a power OF
attorney giving the firm of Sullivan &
Cromwell, and W. Nelson Cromwell.
personally, the right 70 settle any and
all claims in whatever manner deemed
best
Copies Of this power Of attorney have
been sent TO Receiver Gilroy, but he de-
clines TO make any statement on the
subject other than he had not been no
tifed personally by Mr.. Cromwell that
such power of attorney meets with his
approval
AS the hours go on the affairs OF the
corporation seem to become more
and more involved. The question of
veracity is raised between Herman and
CTiIroy and the former. from the New
willard Hotel in Washington. passes
the lie to Gilroy IN the offices of the
company here, and the latter passes it
beck with interest
Bankers Involved.
The real development of the day was
the statement of Receiver Gilroy that
many weIl-known bankers in this city,
Pittsburg, Cleveland and other financial
Centers are to be made defendants in
suits TO recover what Gilroy alleges are
Illegal bonuses paid to them for loans
made by the Fidelity Company. The
complaints have already been drawn,
but not vet fled. They will be signed
by Gilroy today' and then service will
be sought
According 20 GIlroy the amounts in
volved are enormous, in fact so large
that he declines at this time to make
public just how large they were or
the brokers involved. Taking one loan
at random, however, he cited IT as a
fair sample.It showed that bonus Of
$4,000 was paid for a temporary ac-
Commodation Of $4,000. The bank
> NHa
and accepted a note for S1S5.OOO. plus
Interest, and this amount, with many
similar sums. Receiver Cilroy VII now
try to recover by process Of law
Says Kienan Lies.
The statement that the affairs Of the
company are not involved, made by Mr..
Herman, is a deliberate lie. declared
Gilroy to the United Press today. For
instance, there is carried on the books
in my possession accounts receivable OF
$3.50, 900. There is not the slightest
chance that we will recover $4,000 OF
this Then there are Treasury bonds Of
10000 which are worth what they will
bring for old paper. Besides that I'm
notes which are unsecured, and in paper
OF all kinds, We finG approximately 81
100000 more, but not a cent of IL is good.
The creditors Of the corporation are
scattered all over We have lot of
them in Buffalo. in Pennsylvania. mi
nOis, Chic, Iowa. Washington, Mis-
souri,, and all through Canada.
Hard to Specify.
"It is hard to be specific when deal
ing in these figures. SO far as the
reported loss Of the Church of St.
homas Aquina, in Cleveland, is con-
cerned, I know very little. My ac-
counts seem to show this loan was in
the nature Of bonds that were dealt
(Con5inued on Thirteenth Page)