The citizen. (Honesdale, Pa.) 1908-1914, 1909-04-23
KNAPP EXPLAINS
Poor Judgment and Poor
Management.
WHERE THE THOUSANDS WENT.
Head Of Suspended Institutions
Says He Alone ls to Blame.

Charles Knapp, President of the de-
funct Binghamton Trust Co., has issued
the following statement relative to the
suspension of that bank, and the banks
of Knapp Brothers at Callicoon and De-
post:
1.-The time has come to end this talk
of who is to blame for the closing of the
Knapp Brothers Banks at Deposit and
Callicoon, and to present some facts
which will explain to any thinking per-
son the true condition of affairs.
"In the first place the Outing Pub
fishing Company has secured from the
Knapp Brothers, Bank in Deposit more
than $5O0,OOO This immense sum has
been advanced since the Outing Publish
ing Company came to Deposit, and there
are records for every penny.
1.-THE first sum advanced to the Out
ing Publishing Company WAS used for
the purchase of 5000 of the stock of
the company. 1t was necessary to do
this to get the printing contract. For
three months the magazine was printed
on contract. 1t was then discovered
that unless the magazine was purchased
outright, the printing contract would be
lost.
"The party or parties who were in
control of the Outing Magazine before
we became interested represented that
the paid circulation was about 10000
copies per month, when, as matter of
fact, we discovered that it was between
5000 and 10000.
"In the meanwhile the establishment
necessary to turn out magazine such
as the Outing had been erected in De-
posit at a cost of from $25 200 to $50, 900.
"James Knapp Reeve, Charles P.
Knapp and Casper Whitney purchased
controlling interest in the Outing Mag
azine, and it was necessary to spend
considerable money in publicity cam
paign, because of the limited circulation
which would not pay the expense of a
plant such as had been provided.
"This portion of the business was in
charge of Casper Whitney, who pur-
chased large spaces in metropolitan
newspapers and used immense sums in
increasing the circulation of "Outing."
During one year about $50, 900 was spent
for this purpose, and at this great cost
the circulation was increased from about
10000 paid subscriptions per month up
to nearly $4,000, with a large increase in
newsstand sales.
"Soon after the above transactions
the Outing Publishing Company secured
the contract for publishing the Era Mag
azine, and again it was necessary to add
to the equipment, until we had about
$3.50, 900 invested in machinery and $780,.
600 in buildings.
Although $4,000 may seem to be a
large valuation for the buildings, it was
necessary to prepare special foundations
for the entire floor space, and in some
places it was necessary to fill II feet
with grouting. This gravel grouting was
hauled distance of half a mile, and
there was other special work which was
expensive.
1.-THE life of the Era Magazine was
short, and we had to keep the large
equipment we had secured to turn out
this publication, so we began to boom
the Bohemian. and "Gray Goose"
The publicity campaign of these two pro-
ducts of the Outing plant cost another
$4,000.
'During 1907, we made a big play
for circulation, which cost at least $685.
600. This money was expended as fol-
lows:
'Ten thousand dollars for two double
pages in the four largest subscription
agency catalogues and subsidiary agen-
cies.
'Three thousand for postage and sta
tionery, and the balance for stenogra-
pliers, whose work was of such a nature
as to demand fair salaries.
"After making this big play the panic
of 1907-'08 struck us and hurt both the
circulation and advertising pages of all
our publications.
''In the meantime we had been pay
ing immense sums for art and manu-
scripts in order to make Outing tine lead
ing magazine of its kind in the United
States.
''The circulation of the magazine was
not large enough to warrant these ex-
penditures, and the sums spent in this
manner did not increase the sales of the
magazine as had been expected.
~ still believe that under proper
management and a proper system of
bookkeeping, the Outing Magazine could
be made, in a short time, to pay off all
its indebtedness, and If this is done
Knapp Brothers profit and loss account
will be on the right side of the ledger.
"The Outing plant is here, reality
and a tangible asset. When the final
disposition is made the money will go to
the creditors of Knapp Brothers. II