Norwich bulletin., 1911-01-28
PUTNAM
Closing Session of Hearing in E. M. Arnold Bankruptcy Case-Minister and Laymen Testify to Peculiar Transactions of Putnam's Napoleon of Finance.


 Transactions of Putnam's Napoleon of Finance.
 Another group of the clients of Ern- l est M. Arnold was examined before Referee in Bankruptcy Andrew J. | Bowen of WiIlimantic when the third 1 of series of hearings was commenced | in the city court room in this city Fri | day morning at Il o'clock, the object 1 being to determine if any creditors were made preferred by MT. Arnold after his business affairs became en- 1 tangled, and if so to recover, if posst- l bl,e such assets as have passed from l the state
 Attorneys Charles l.. Torrey of Put nam and Samuel Harvey of Williman- i tie represented George F. Holbrook. l trustee of the Arnold estate. The at;- 1 tendance was larger than at the previ- ous hearing much curiosity being man. 1 ifested.
 C. Fred Waterman's Testimony. | c. Fred Waterman, agent of the I, French River Textile company, at Me- | chanicsvill was the first witness. He l said he had known MT. Arnold for sew eraI years and had loaned him money from time to time. MT. Waterman did not remember just how much these loans, which were made by checks, l amounted to in total, but the transac- tions had started at the solicitation of 1 MT. Arnold. The loans were made on l notes generally of the short term va l at the rate of per cent. MT. Water ] man said that Arnold paid the notes when due, and that he had had no trouble with the account until the spring of 1910.
 Presents from Arnold. At times MT. Arnold had given him $200 to $500 as presents, as Mr. Arnold AH. <~a rr,tc e due. Mir. Waterman said he had two or three notes coming due in the spring of last year, he could not remember exactly on which dates. About June 1 of last year MT. Waterman had de- manded from MT. Arnold that he make some payments to him. his investments | with Arnold at that time, together with his brothers investments,a amount ing to $4,200. MT. Arnold gave various reasons why he could not meet tha demand for settlement, and after a reasonable length of time MT. Water man went to see him again. Failing to collect, he placed the matter in the hands of his attorney, J. F. Sarpen- ter.
 Had Not Heard Of Andem Mortgage MT. Waterman said he had not heard of the Andem mortgage at that time Continuing, MT. Waterman stated that he was called on the telephone by MT
  that he went to MT. Carpenters office This was for the purpose of a confer ence about the loans, and he under stood that MT. Arnold and his attorney F. F. Russell were in another room but he did not see them, MT. Carpen ter passing back and forth as interme- diary.
 Guaranteed Two Notes. Messrs Arnold and Russell finally made the proposition which was ac- cepted, this being that MT. Russell was to guarantee two notes to MT. Water man, one of $1,000, the other of $500 MT. Arnold to give short term notes for the balance of the $4,200. This was done. Later MT. Carpenter secured an additional $267.50 from MT. Arnold The balance is still due.
 Has Arnold Notes for $11,3o0. Warren R. Spencer of Grosvenordale. an overseer in the mill there, was next put on Ha said he had loaned MT, Arnold money on notes and that he now holds one for $11,300. MT. Spen~ cer said his first investments with MT. Arnold were made four or five years ago and amounted at first from $2,00O to $3O0o. He said he got per cent. and whatever extra profits MT. Arnold was able to make he shared with him lMr Spencer also had received pres entS-"
 Agreed to Reduce Notes. On Jufy l, lS1U, Ilc ndQ two Ol MI Arnold's notes, one for $11,200 and one for $1,300. MT. Arnold asked him to reduce them, so MT. Spnecer agreed to call the s11,20o $1o,000. The final l agreement was to combine the two notes as $11,300. When asked if the note fro=1 MT. Arnold immediately pre- ceding the one of $11,200 was not one of $6,700 and tlfa his folder showed $1,S00 to $2,00O quarterly payments up on it, he said he would be surprised Ii it were true, but he would not deny but that it was.
 Acknowledged Checks.
 He was shown several checks to him from MT. Arnold, which he had cashed, among them one for $1,500 and another for $5,850. These checks dat ed in January and February of last year. Mr. Spencer said they had tc do with separate transactions. MT Arnold still owes him $11300.
 chauffeur's Testimony.
 Joseph Larrow, who drove the auto- mobile for MT. Arnold. was the nex' witness He was examined relative te his Knowledge of the sale of the ma chine He said he did not know Mir Arnold sold the car to William Raf- fer!ty. One day in June Mir. Arnold told him to take the car to. Joys ea- rage for repairs. He did so. Soog afterwards he heard MT. Rafferty ha6 ] bought the car, but when he went tt the garage it was still there. Witnes. thought the car went to Hartford tha1 day.
 T Mr. Iarrow said Mir. Arnold late,