Daily capital journal. (Salem, Oregon) 1903-1919, 1912-01-22

That the Lowenberg-G Going COM
pany, the stove manufacturers, who
for years past have had a contract
With the state of Oregon for convict
labor to manufacture its stoves, de-
clared dividends when there was no
surplus funds on hand with which to
meet them, that the management OF
the company's affairs were so extrava-
CANT that he realized that it was only
q matter of time until bankruptcy
stared them in the face, and that to
induce the convicts to give efficient
labor that he handed out special
prizes to them, are a few of the fea-
lures contained in a sensational an
swer made by R. B. Fleming to the
suit brought against him by the COM
pany. and which answer was filed to-
day.
Mr. Fleming was for years the SUI
perintendent of the company for the
foundry. Several months ago, realiz-
* aa aH al u
ing that the way the business OF the
company was being conducted that
ruin was staring it in the face, he al
leges, he resigned. Afterwards the
company brought a civil suit against
him. charging him with the conversion
Of its funds, and today he filed his an
swer to that charge.
What He Alleges.
Hatbegins with the allegation that
ever since the organization of the
company until August, 1911, he was
superintendent of the company's
business at the state prison, also a
stockhelder, and that during that
time II maintained offices at Port
land.
The company, he asserts, hired
from The state certain convicts to
work IN the foundry, and that while
INSOFAR as the world was con-
cerned. he was presumed to keep the
company's books that they were in
reality kept by convicts and that his
reports to the company are based
unon their bookkeeping work. Some
Of the convicts were competent, he
alleges, while others were not, and
ID addition he had the burden thrust
upon him of one convict bookkeeper
altar the other leaving the prison as
his term expired. : Frequent changes
would occur, and he given but about
i9 hours notice to meet his man and
atralehten up the accounts. Based
upon the books kept by these con-
viels, be says, he furnished his reg
ular feports to the company in g
faithful manner.
He inrther alleges that in the fire
Of 1903 That many of the books of the
company were destroyed and that as
to these he is unable to make an ac.
counting But that when he re.
signed from the company's services
In Auguest of last year he turned
over to the company all accounts ant
books belonging to them.
How The Prize System Worked.
With relation to the free prizc
system which was inaugurated to get
more efficient work he says that par
Of this prize money he paid to tht
allteflntendent of the prison ant
rarl directly to the convicts by him
Ifif system was necessary, he says
10th as to the convicts and the fret
he|N to get the best service. Some
l|Iese prizes were paid out of hi!
QH1 rockets. In order to avoid dis
action, he says, bonus on sal
AI|1 were kept secret He cites al
a1 astration the case of A. H
SfIr, who was ostensibly receiv
IN9 125 month. He declares tina
~ 1es always dealt faithfully Will
empany. and that while he re
en|f>t fuel free, that it was in con
4s1a&ion Of the moderate salary h
uHs afawing.
Dividends But No Funds.
Tive to declaring dividends tn
41NNtf says:
nag this defendant is now am