Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1911-12-30
SUITS FILED AGAINST 9WANsoN
MANUFACTURING COMPANY IN
FEDERAL COURT.
NEW ILLINOIS COMPANY
ASSUMES IOWA OBLIGATIONS
to Secure Capital Were
Fraudulent, 10 Charge Of Plaintiff
Company Recently Removed From
Shenandoah to Marssiiiss, ilI.-eis
Sums Involved In Suits Instituted.
pecial to Times-Republican.

Special to Times Republican.
Council Bluffs. Dec. 3O.-The varying
fortunes of the Swanson Manufacture
ing Company, late of Shenandoah, and
now located at Marseilles. ILL.,, have re-
suited in several law suits in which
big sums are involved. which have
just been filed in the United States court
at Creston. and in which several Of the
leading financial and business men of
southeastern Iowa are made defend
ants.
The title to the principal action filed
| in federal court at Creston, is E. Spen-
Ger, trustee of the Swanson Manufac-
turing Company a bankrupt, plaintiff,
against Ebert A. Reed, E. H. Nit
chell, Earl Sheets and Herman 9.
Swanson, defendants. The sums in
volved in the action and three others
aggregate about 100000. Both plain
tiff and defendants are men Of large
affairs
The plaintiff alleges fraud in tho
conduct of the affairs of the Swanson
concern. which was formerly located
at Shenandoah but which. for finan-
cial consideration, during recent
months, was moved to, Marselles. III.
1t is thru alleged manipulation OF the
affairs of the company resulting from
the removal to Illinois, that the law
suits developed.
Firm Contracted Large Indebtedness.
The petition AYERS that Herman S.
Swanson. privous to the date of the
Incorporation of the Swanson Manu-
featuring Company under the laws OK
The state of Illinois, had been and was
a stakeholder owning nearly all the
common stock, and manager of cor
poration organized under the laws of
Iowa.. known as the Swanson Manu-
featuring Company. having its princi-
pan place of business in Shenandoah.
and that while this business was be-
ing carried on the corporation con-
tracted large Indebtedness to various
parties in Page county, Iowa. including
the defendants. E. A. Reed, E. HI. Nit
chell and Earl Sheets"
It is then recited that the people of
Marseilles. ILL.,, DESTROYS of securing the
removal Of the plant to that city. sub
scribed $4,000 to the capital stock Of
the Illinois company and that John
Hoss, of Moline. agreed to double this
sum by subscribing $4,000 to the stock
and that it was this offer which in
duced the public subscription Of $780,
900 to the stock. It Is then alleged
that after the public had dsposittHf;d ]
>1v,vvv III IseIrIcS-DduK 10 cohH
plete the deal it was discovered that
Hoss had not put up any part OF his
subscription and that then the deal
with the citizens fell thru.
! Assumed Iowa Indebtedness.
The allegation Of fraud contained In
the petition of the plaintiff is based
upon what is charged followed. 1t is
alleged that the directors Of the Swan
son company, secretly and without no
tice to their creditors. passed a resolu :
ton that the Swanson Manufacturing
Company Of Illinois should assume the
Indebtedness Of the Swanson Manufac-
turing Company Of Shenandoah In the
state of Iowa; that the assumption OF
said Indebtedness was without consid-
Grafton, made solely for the purpose OF
robbine the creditors of the Swanson
Manufacturing Company of Illinois.
It is alleged that the defendants Their
deposited $4,000 to the credit OF the
company pretending that it was pale
in by John Hoss. Taking this pay
ment as an evidence Of good faith, II
is charged that the public subscribed
s54.500 to the stock Of the company
and with the understanding that tn
money was to be used in the genera
business of the COMPANY. 1t is ALLEGED
that it was later learned that Ebert A
Read had in fact put up the $4,000 ant
that it had been falsely claimed 1t wa
paid in by Hoss, and that it was dom
for the purpose Of deceiving and induc
ing the citizens OF Marseilles to bu!
the bonds of the company. The de
PENDANTS are then charged with takinl
ls41610.4s of the money paid IN 10
stock of the concern with which t
; liouidate the claims against the low
concern and that other sums wer
taken aggregating in all $72,346
Three other actions are begu
against the same defendants by Ryer
son g. Co, of Chicago: the Linkbel
Company Of Chicago, and the Ply
mouth state Bank Of wisconsin. 1t
alleged that each Of these plaintiff
purchased $1,000 worth Of the bonds 9
the Illinois company and now deman
that sum from the Iowa people VIII
are charged withs having misused tn
money thus subscribed