Evening journal., 1912-11-22
Master w. G. Mahaffy Discus
SeS Many Phases Of Re-
CeiverShip of Big Plant
RECOMMENDS $4,000
FOR EACH RECEIVER

United States Commissioner William
G Mahany. master in the receiyership
case of the Diamond State Steel Com
pauy. criticised some phases Of the
rsceiyership.
Howard T. Wallace and James
3. Winchester were the receivers Of
the defunct company.
The claims Of the receivers for
$4,000 for their services are disal-
lowed by the court the amount fixed
being $4,000 each. The receivers all
ready have been allowed $4,000, of
which their counsel. Ward. Gray and
Ncary received $1,000
The receivers are surchargcd by
the master a total OF $21 ,467 Sc. rep
rosenting the difference which he
finds should have remained in the
treasury between Ss9,772.26 and $685.
304 Al.
Exceptions to the report have been
filed by counsel for both creditors
and receivers.
After reciting the facts leading up
10 receivership, Mr.. Mahafys re-
port sets forth that pursuant TO the
decree they filed in the court on
March n, 1905. an inventory purport-
sng to describe the property and as
sets OF the company; that while IL is
Bet forth in the affidavit that the fore
going is n true and correct inven-
tory Of the assets and estate of tho
company, others parts thereof contra
dict such statements and the evidence
clearly shows that II was not a full
and complete inventory.
II further sets forth that the in
ventory values according to the state
ments in the inventory we're fixed by
the receivers at amounts which the
receivers then believed were sufficient
" below the market prices 'at the
time" to at least cover expenses Of
loading and handling the material;
that the aggregate of these inventory
values excluding the real estate and
plant and including Sb,S1S.S5 In cash
turned over to them by the defendant
company was $4O9, ,603.98: but there
should be deducted from the total the
sum of $29.161.77 as such amount in
the inventory value of such portions
Of the investment account ($28,576)
aud the accounts receivable ($4O-
5S577) less lump deduction OF $4O,-
600 for estimated loss by suits and
collections that had been therefore
delivered by the defendant company.
The master found n sale of $780,
S53.10 worth OF material more than
they had inventorled which resulted
from the manner in which the inven-
tory was taken and also from the dis
covery by the receivers of additional
materials after the inventory was
taken restatement of the inven-
tory. as the master holds. should have
been given shows that the receivers
took into possession general assets in
ventOried at 1856, ,632.92. The boob
value of the real estate and plant Is
s465S.56S The receivers sold th'
real estate and plant at public sale
.f0r $4,000 They realized from th'
sale of general assets S25S,s25.54.
The master in considering the &C.
counts of the receivers sets forth d
statement of their disbursements un-
der the various heads which are there
after considered in the report An.
other statement of sales by monthly
and quarterly periods during the en-
tire term or receivership also II
given.
The report shows thar tho FIRST
creditors relate TO the approval and
allowance OF substantially all the
credits claimed by the receivers IN
their accounts and vouchers from
which the items IN the statement ol
disbursements have been grouped
ana II is alleged there In that sucl
expenditures were unnecessary. i'm
proper aud unreasonable. The items
"a -
gregate $59,S91 20 represent wages OF
1aborers and salaried employees.
That the sum Of $4Sq.65 returned :,
the receivers was improperly paid b.
the receivers out OF the funds OF thl
estate to certain employees for wager
accruing after March 20, 1907, unde
>an arrangement with owners of rea
estate: that the amount OF $3,4271 II
in one class represents the wages
paid to one master mechanic at tn
rate OF $50 per week, and one car
penter. with an occasional assistan
for short periods; that the employ
ment Of the former was practicall
continued from December 70. 1904. {
March 8, 1907
The master holds that the evidenc
tending to show how the labor wa
used and the necessity therefore
found principally in the testimony {
r. W. Todd; that serious doubts a
10 the accuracy of the above distrl
button by Todd exists after consider
ing the same in connection with tn
other parts Of the record; that tn
entire time covered by these salarie
aud wages may be separated int
three periods when determining whs
reductions should be made.
It is held tha. there was an e,
pense of about $1,000 during the fir'
two years of receivership in the Ell
ployment Of one class OF agents: tn;
the general business OF the receiver
IN liQuidating the assets did not II
cuirc the retention OF any one {
more Of these employees; that II
number OF such employees and the
length of service was excessiN
"that the sum is excessive 10 such
degree that substantial part of tn
S37.TO7 40 represents unnecessary an
extra expenditures for salaries
wages. and that this sum should
reduced TO the amount that man
ordinarr business ability. prudenl
aud capacity would have expendl
under like circumstances
The master reci.es that +. W. Tol
had in his testimony applied 1913 4
the wages of these clerks 10 both d
Inventory and catalogue. and he fu
fher testified that he estimated that
" Wallace. Herring. " l.. Tod
Hance. Walker and himself render
services in connection with the inve
tory amounting 10 S1.S37.50; that
appears tha. the estimated expen
for these agents in preparing the
ventory IS 1924; that careful COZ