New-York tribune., 1911-02-03
,F|ND LOANS TO DIRECTORS
Carnegie Trust Investigators
Make Preliminary Report.
TOTAL PUT AT S2,8OO,OOO
Cummins and Associates SAID
to Have Raised Money to
Meet Obligations.

r.. ,,,es,ira,ion into the affairs OF the
Carnerie Trust Company by the S'a'e
Ranking Department and the DISTRICT AZ
,ornev's Office was made public IN pa
xestordav. disclosing some Of the most III
vowed high financing seen here since tne
oavs Of dummy" loans before the pd"'
of 1907. -
Loans of approximately $2,Soo.co. accord
ing 10 the preliminary reports OF '''e ~
vestieation. are apparently stanoihs =" VIZ
hooks Of the Carnegie trust 'o'lI'"'
,eains, the group headed by w. ). Gum
Minis and Joseph b Reichmann' ""' WIZ
most active in its directorate.
According 10 the legal advisers o' '"V
Cummins group however. TINS large 'o'"'
will Re greatly decreased when the lI''''
tiration is finished. because as muVH a.
81 4ennO OF It. they say. was par' " d
trust fund deposited IN tho trust company
BY the Independent Fertilizer ComPah!' .
concern in which the Cummns group h''o
three-qusrters Of the stock.
Al the Offices Of Crocker. Weeks & Lewis
attorneys for several Of the directors con-
cerned. it was stated that the expenditure
o. this s.. 100000 was purely matter ne
tween the fertilizer company and the trust
eompany. and that il should not he referred
20 as a loan IN any event
Their legal responsibility said a mem-
Ier Of the firm ON this point referring 10
NI~ Crmmins and his friends who CON
troucd both concerns, as bank directors
fo~ these transactions will depend entirely
rNon the extent OF their ownership in me
fertilizer company. and f. as J understand
they own thrcc-Q,Nrtors of the latter il
vii be solely a question of their rcSpoh j.
tiu-y 10 themselves
Nceere Cummins. Reichmanu and Con-
Con. who have been away from the city
s,rCe the carnegie Trust closed itS DOORS
have returned. and IL is said that they have
succeeded IN raising enough money to ilS-
,ra~se All their obligations TO the creditors
- tre trus- company
TIC ci-t- or New York had on deposit 500
~. vhcr the company closed Is doors ana
fr this amo.nt the directors had gwen
their personal guarantee.
The sc-cafled fertilizer loans" Of S-.F''-
90 hinged upon - transaction between me
1rCerendcnt Fertilizer Company. which was
p combination of nvrDs previously compet-
irc i'm that business. and the tennessee
conner Company Iu the fall of 1905 Mr..
G.mmins negotiated a contract between
trfse two concerns. 10y the terms Of "hlcn
4rA fertilizer company delivered Sl5")"" ~
-. stock to tho .opIer company. hui the
,c.ral delivery was made 10 Mr. Cummius.
z, was understood that this stock was to
re held i'm trust by m" carnegie Trust
Ccmranv. but later developments, which
lroueb, about the COLLAPSE Of the fertilizer
combinations left the stock in the hands Of
ro and his friends had acquired con-
trolling interest iu the combination. ana
tho notes Of the independent Fertilizer
Comuanv directors to the extent of $ls"'-
o-o remained IN the trust company.
The state Bank Department. according
~ the reports of the INVESTIGATION. forced
the directors OF the Carnegie Trust COM
rtrv to take up ;hc notes ol the lndepen-
den; Fertilizer Company.
Tho 2i0o60 the Investigation shows
was spent bv the Cummins group I'm the
rrr,lasc of the Van Nordcn Trust COM
,ar,. and i'm the fan of 1879, when the
state Banking DEPARTMENT demanded that
tho directors Of ,he carnegie Trust replace
.le NOTES Of the independent Fertilizer
Ccnran, with cash or It's equivalent. Mr..
,-umminy and his friends appealed 10 An
f~eV .'.,ncoie for help partly ON the
eiturd that when Mr.. Cummins came into
irc trust company it had been represented
T. lin, that It was founded and conducted
wish the mo al backing of the steel mag
nate.
According to the reports of the inveS-
tsltion Mr. Cawo .ic uaf up S3ooo"0
worth Of United States steel bonds. which
vycro sold for S.ooAo'p. and this deposit.
together with a note for $jg6U1' from a
fr,rd of Mr Roichmann made MP
$24ooo1 OF "fe~tilizer' notes As security
Nr Carnegie received the Van Nordon
Trust Company stock which Mr.. CUmmins
and his associates had acquired, as we'll as
note for 100000 signed by the Ii
rectoIs
Messrs Cumluins and Reichmann had a
long conference yesterday with their law
vers. Stanohfed and Lovy. but neither
the former diIecors If the Carnegie Trust
Company nor the lawyers offered anything
IN confirmation O, denial Of the reports
rom the Investigation of the trust COM
uanv's books as far AS it has proceeded.
80