Evening journal., 1913-08-09

In a lengthy opinion hanueu ooWn
~ Judge Edward G. Bradford In the
United States Court yesterday after
noon lust before staring for New
York to take a steamer today for
Europe. he upheld William G. Ma
hairy special master, in his report
10 the court. The master in his re-
port recommended that Howard T.
Wallace and James p. Winchester, re-
ceivers for the Diamond State Steel
Company. be surcharged S21,467.S5,
representing credits claimed by them
for expediture held by the master 10
have been unnecessary. The master
In his report also reduced the COM
pensation asked by the receivers for
themselves and their counsel from
$4,000 to S37 900
Under Judge Bradfords opinion the
receivers will be required TO pay back
to the estate of that corporation S2l,-
467.g5. IL also confirms Master Ma
hafys report in all particulars.
Counsel for the receivers had filed
exceptions to the masters report and
Judge Bradford heard argument on
them the later part Of April. Ward,
GRAY and Neary we're counsel for the
receivers. while the creditors and
bondholders we're represented by
William Clark Mason, Of Philadel-
phia, and Horace G. Easburn OF this
city.
The Diamond state steel Company
went into the hands OF receivers De-
.cember 12. 1904. The plant was sold
in 1906 but The receivers did not ME
their annual account until August J.,
1910. The total receipts Of the re-
ceivers amounted to S441,243.S2 and
the disbursements $167O2240.
In his opinion Judge Bradford sets
forth that In a number OF instances
the books Of the receivers fail to dis
close facts and conditions testified 10
by them. which, had they existed,
would or should have disclosed the
entries therein. The court says that
this circumstance further tends to
make the testimony Of Receiver II. L.
Wallace unsatisfactory. The court
sets forth that the management OF
the estate by the receivers displays
improvidence. irregularity and neg
lieence, but adds mat the court does
not impute TO either receiver dis
honest or immoral intent
The opinion of Judge Bradford IN
part Is as fOlloWs'
This case has been heard on ex-
ceptions taken. on the one hand, by
James p. Winchester and Howard T.
Wallace. receivers of the Diamond
State Steel Company, hereinafter re-
ferred to as the steel company, and
on the other, BY sundry bondholders,
and general creditors OF that COM
pany, to the report Of William c..
Mahafy, special master, to whom the
accounts Of the said receivers and
certain matters relating 10 the ad-
iustment. settlement and distribution
of the estate of the steel company
were referred. The order or refer
ence TO the special master was made
July q, 1910, In consequence of GER
tain petitions filed in this case by
the receivers.
Masters Course.
After duly giving notice as re-
uuired by the order the master pro-
ceeded with the taking of evidence,
oral and documentary. touching the
matters referred to him. The evil
dence Is voluminous. filling between
S400 and $500 typewriter pages
wholly aside from a large mass OF
documentary evidence consisting of
books, vouchers and other papers.
The taking OF evidnce began October
S. 1910, and was finished April a.
1911. sessions for the purpose having
been held by the master on forty
eight days. After the conclusion Of
the evidence the master proceeded to
consider the same, hearing protracted
arguments from counsel, consuming
four full days. After laboriously
considering the evidence. in connec-
tion with the arguments and ruling
upon numerous objections taken to
his draft report. not only by the re-
ceivers. hut sundry bondholders and
general creditors of the steel com
pany the master filed the same as
his report, embodying therein his
findings. conclusions and recommen-
dations November IS. 1912 To the
report as filed the receivers and the
said bondholders and general credi-
tors respectively filed exceptions in
this court December Is and IA. 1912
AT the time appointed for the hearing
of these exceptions. objections having
been taken by the said bondholders
and general creditors TO the gen
erality and form of the exceptions o
the receivers, leave was asked anc
obtained to file amended exceptions
on both sides. This was done b,
the general creditors March 3. 1918
and by the bondholders and recisv
ers March 8. 1913. The amendmen
exceptions contained certain specifca
tons not set forth IN any objection
heretofore taken before the maste
70 his report, and the same wer,
referred to him Tor consideration
disposition and further report in con
necuon with his original report file,