New-York tribune., 1911-03-14
!. Trust Company Case Begins,
y storv of Ironmaster's Big
oan Becomes Public.
GRAND JURY HEARS BANKERS
, -, steel Bonds on Independent
r,rt;,;zer and Bank Shares,
and Has Only s5oo,ooo
Back SO Far.

r.sterday coincident win 'ne peg '''''i'e
''s'' .n,.stigation by District Attorney
o. ' ~ the wrecking of the insu-
tuton. ,..,., ;,,o .uo
one agsregating s2,4oo,oO0. and
&c collateral security the stock OF
,,orihlnd Independent Fertilizer
o.,orv. =. and the other. amounting to
~. ..','i noa and secured by the Endorsements
~ defunct Fidelity Funding Com
o,d p T. Keiran. its promoter.
F- F.mcb the Fidelity Funding Com
hsd been in the hands of re-
'' si,ce tho fall of 1905. the notes
" its Endorsement were carrled
.,so,s AZ their face value up to the
-. the Carnegie company closed us
All Of the notes in this group
-, been due since November, l9oe
.,e other deal. involving S2.4oo,W"'
.o,es for S6OO.OOO each were Sc
- bv c. {. Dickinson on the sta'
-, that they were wanted ior use
- davs in the trust -,~artmert OF
-. rarnecie Company. The notes were
.-,diafelv guaranteed by the mem
,.., n the Cummins syndicate, bacF
- ,bs stock of the Independent fertli-
,,,- Company, which iiad been abah-
49,. three months before 10y its pre-
Is and nut In the vaults OF the
c..-ssia company, while their full face
r,,se in cash was withdrawn and dsed
e. the purchase of the Van Norden
rps, Company and the Nineteenth ana
--s,,,h Ward banks. one Of the notes
-.s drawn hv the fertilizer company.
andrew Carnegie was afterward drawn
,,,o this transaction. when S2.o",Vo IN
sssl bonds. lent by him to the Carnegie
,,-,nanv n tide II over a run. were 500
and ,te money used to pay off three or
10 notes. Mr.. Carnegie has instead OF
Sc bonds stock Of the Independent Fer
,l,er Company and three of the com
,,ries Of the Cummins syndicate and
rs,.s for s.. 100000 guaranteed by the
Cummins syndicate.
The first witnesses before the grand
ivy were Robert l.. Smith. Nice-presl-
dent of the Carnegie company; watkins
crockett, former president of the Madi-
son Trust Company, and Bradley Mar
Tin. IT,. president Of the Nineteenth "aro
Bank The first loan investigated was
that Of $500 900. to William Fereusoh'
a law clerk. on Robin securities.
Genesis Of Fertilizer Concern.
The Jndependent Fertilizer Compan!
vas incorporated on November IL I9oo'
Under the laws Of New Jersey with an
authorized capital stock of So0.OoO,op
divided equally between per cent Gu
mulative preferred and common STOCK
Three thousand dollars Of the author-
.zed capitalization was paid in at the
time Of the Incorporation, and after
ward stock enough was sold and loans
enough We're made to get together
100000 to pay the Lewisohns for an
option on contract with thelr
Tennessee Copper Company.
The Lewisohns seem u have been the
only ones who ever got any real money
from the Fertilizer Company. The law
yers who drew up the Incorporation
1spers were never paid for their
services. il is said and within six weeks
O. the organization withdrew from the
service Of the company because they
could not agree with the directors on
important questions Of policy. Within
another fortnight, the company was
Qulescent and only twice since then
mas II given an appearance Of life; once
when Il borrowed S600,0OO from the
carnegie Trust Company. and once to
appear Is security on the loan Of S.
1'"Vo from Andrew Carnegie.
J.. {. Meadows, who was connected
WIN the Buffalo Fertilizer Company
'hd vas the promoter Of the Inde-
pehaent Fertilizer Company. had con-
'tNed II as the ambitious scheme TO
'Vinohe the small fertilizer companies
''n 'he South and rival the Agricult-
"'' Chemical Company. familiarly
A"V"A as tho Fertilizer Trust. He
.'Vgnt IN Waldemar Schmidtmann. the
'"Hah potash man. who was made
''0S'ent Of the company. and T. NJ.
''oeTSon, of Nashville who was d.
10" Many meetings Of representa-
a'@ OF fertilizer companies were held
" 'ne Hotel Astor, and the company
''VA or'ces first at No. - Broad street
"uo ai'erward at No. 115 Broadway, In
'''n building the Carnegie Trust Com
.1''y mad It's Offices. Efforts were made
ee' j. p Morgan & Co. to finance
proposed combination. but after a
''e'u examination that firm refused
s9 INTO the affair
10 the meantime. william j Cum
'''s had brought the fertilizer COM
! inc only asset IT ever had. con-
Ing OF an option on contract
vas never made. The Tennessee
spper Company. Of Ducktown. Tenn.
sulphuric acid as a by-product be-
use OF an injunction secured by the
'.'ne's Of Georgia and Tennessee
'''"S' the spread OF the fumes from the
"paHys smelter The Germifood
:. "pdny had short time contract for
'ulphuric acid produced by the Ten
copper Company. The Indepen-
feftilizer Company wanted q con-
tor the sulphuric acid Of the cop
- company. as that acid is a base for
NHciai fertilizers. and II feared rival
'"1 get control OF the output
Deal with the Lewisohns.
>, through Anderson. Cummins knew
Ivy Ivy the fertilizer company needed the
- contract and he obtained from the
"'sohns an option on a long time con-
(onfinurd arr .uxs