Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1910-09-09
Sensational Evidence Relative
to Fraudulent Methods of
DefunCt Steele Miller Co.,
introduced at Hearing
100000 INSURANCE q
FOR BOGUS COTTON
Liabilities of Firm Exceeded
Assets by More Than So
900, ACCOMMODATING Capital
Was Only $4,000

JACKSON. Miss, Sept. Sensational
evidence relative TO the details of the
fraudulent methods of the defunct Steele
Miller company. cotton factors at Corinth.
Miss, developed during the taking of de-
positions in the United States bankruptcy
court here today.
Figures compiled by Expert Accountat
Elliott show that the liabilities of the
firm exceed the assets by more than $S,-
900, and that the working capital of the
Steele Miller company did not exceed
$4,000. No effort has been made to ascer-
tain how far back the series of alleged
frauds perpetrated on European spinners
extends, but 1t has been shown that the
Steele-Miller compan yentered the new
cotton year on September l, 1909, with a
shortage of 1890 bales. In other words,
they had issued bogus bill Of lading for
this amount of cotton that did not exist.
A few weeks later the firm owed C..
Scheuch, of Havre, France, $4,000 bales of
cotton for which bogus bills of lading had
been Issued then transferred it's business
to a firm Mn Bremen with whom he became
involved for 5000 bales.
At the time of the failure, the company
was shipping 24,094 bales of cotton on the
steamship Texas from New Orleans to
Information to this effect was received
by the attorneys half an hour before the
vessel sailed. and they managed to get in
touch with the federal authorities in New
Orleans and the cargo was seized just as
the gang plank was being lifted.
WAS NO "HOLD-OUT."
Up to this time the books and evidence
adduced fails to show where any part OF
the money fraudulently obtained was
used or diverted to any other business
than the cotton market. There was no
hold out" that the attorneys have been
able TO discover and when the crash came
1t left the members of the firm practi-
cally penniless. The books show the COM
pany was continually engaged in forming
bills of lading for the purpose of getting
E=cney to buy cotton and becoming more
heavily involved On each succeeding deal.
One singular feature developed by the
scrutiny OF the bogus bills of ladings is
all the cotton described in the bogus bills
was fully insured and during the season
the company paid out fully 100000 for
fire insurance on cotton that never exist
ed. The attorneys for the creditors will
endeavor to force the fire insurance COM
panuy to rebate the premium on the
ground that they did not assume any risk
as the cotton was not in existence. On
will contend that they wrote the policy in
good faith, believing the cotton was in
existence.
BOGUS BILLS SHOWN
During the taking of the dispositions
from more than a dozen local freight
agents OF the various railway lines, num-
erous bogus bills of lading have been ex-
hibited, but thus far the Jackson agency
of the Illinois Central railroad is the only
one shown to have issued undated a bill
OF lading.
The local agent of the Steele Miller COM
pany was Mr.. F. A. Shingleur, a cotton
buyer of this city, who went on the stand
as a witness today.
According to letters exhibited nv the at :
torneys for the bankruptcy referee. the
Steele-Miller company would afterwards
supply the dates, numbers and weights
for these undated bills of lading
The hearing at this place comes to a
close this morning, but will probably be
resumed at a later date at Aberdeen.
Postoffice Inspector w. c. Watson.
who is attending the investigation, stat
ed today that in his opinion none of tn
local agents of the Steele Miller compa-
ny were in any way involved in the
criminal acts Of the firm.
The testimony thus FAR has failed TO
incriminate any local agent" said Mr..
Watson. These men seemed to be in
total ignorance of the methods of the
firm and did not even suspect what
was going on until just before the. fail
ure.
I'VE expect to secure from these
agents some valuable testimony that
can be used in the criminal prosecution
of members Of the firm"
Mr.. F., A. Shingleur, local agent for
nnrYorN nv in To al -
on the stand today and told a straight
forward story of all business transac-
lions of the local office. His testimony
sh owed that he was at all times act
ing under instructions from the office
at Corinth.