Evening journal., 1913-08-09


all payments made on account by
them thereon
1T goes without saying that the
quarterly returns of every receipts
and disbursements we're wholly in
adequate to furnish the data re-
quisite for the final settlement and
adjustment OF the affairs of the steel
company, and could not be deemed
resting upon them as trustees to
keep proper books of account and
vouchers as above stated The fact
that the quarterly accounts of the
receivers largely failed to specify
with particularly the items or
classes Of items for which expendi-
lures we're made. and the items or
classes of items for which moneys
were received by them, rendered it
all the more important that the books
and vouchers, in contradistinction to
the quarterly vouchers. should be
full, detailed and explicit Had their
books and vouchers been properly
kept the reference OF July %, 1910,
would have entailed but little trouble
and the consumption of but little time
/ for the ascertainment and determina-
tion by the master of the matters
submitted TO him on the reference.
But owing TO the failure of the re-
ceivers to make ineligible and suf-
iciently particular entries in their
books of account and vouchers as
they should have done under the
duty which they as trustees owed to
the bondholders and general credi-
tors, complicated problem confront
ed those conducting the proceedings
before the master TO supplement and
explain the entries i'm the books and
vouchers by oral and documentary
evidence. This necessitated the TAX
ing of a large amount of oral testi-
lmony besides the production of doc
lumentary evidence, involving a delay
of several years and in the incurring
of heavy costs and expenses and the
loss of interest to the bondholders
and general creditors whom the re-
ceivers we're in duty bound to pro-
tect. The loss thus occasioned re-
sulting TO the bondholders and gem
eral creditors will amount to many
thousand dollars and is largely at
trihutable to the negligent omission
by the receivers to keep their ac-
counts in such form and with such
particularly as to be ineligible TO
those for whom they we're trustees.
Further, the receivers claim credit for
large sums improperly expended by them
without authority of the court IN an un.
successful effort TO reorganize the steel
company OF sell the plant as a whole at
private sale before receiving any au-
thority for either of these purposes. The
court never authorized a reorganization
of the steel company or a disposition of
its plant at private sale, nor did it au-
thorize the sale of the plant until Sep
tenber o. l906. when il ordered that il
be exposed to public sale. Yet the re
ceivers claim credit for various sums for
travelling expenses, including a large
amount improperly expended from time
to time by the receiver Wallace, within
the period Of eighteen months next fol
lowing the appointment of the receiv-
ers. December 10, 1904. by way Of his
travelling expenses. and the entertain
ment of sundry persons whom he con
suited on the subject Of the disposition
of the plant In many instances travel
ing expenses were incurred for different
purposes. some legitimate and others IL
legitimate. and we're included in a single
voucher, and were so expressed as not
to he susceptible on their face Of an as
oertsinment of the relative amounts of
the legitimate and illegitimate eXpendi-
lures and in such case il was necessary
TO resort 10 evidence aliunde Although
the receivers were not OF might not have
been entitled to any credit by reason Of
the confusion of their accounts. the mas.
ter using whatever light he could obtain
upon the subject, has erred. if erring at
al, in treating the receivers with undue
liberality in his determination of the
amount TO which they were entitled to
credit by way of travelling expenses And
statement similar TO the above is ap-
plicahe TO the case Of credits claimed by
the receivers for travelling and other ex-
penses Of varions officers employed by
them with the difference that in the case
of such subordinate officers the expendi-
lures were usually stated with greater
particularitv and were in smaller
amounts The witness. Frank w. Todd,
was permitted 10 draw from the petit
cash drawer from time TO time consider
able sums Of money upon depositinC in
the drawer receipts for the same, speci-
fying only that the sum therein men
ItA'Nfh WIZ i'i NN lFHN''f NANH'"h H"H
itemization whatever
Further, the evidence shows that the
receivers were extravagant and at fault
in employing and paying an unnecessary
number of clerks and employees and rent
ing an unnecessary number Of offices at
la large expenditure until after the sale
and delivery Of the real and personal
property Of the steel company, and re.
taininr fhorca fter and at least until the
order Of reference to the master July 27
1910. two clerks on substantial salaries
when there were not sufficient re-