The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1913-04-12
EUREKA COMPANY
UNDER EXAMINATION

A meeting of the creditors of the Eu-
reka Fertilizer Company was held in the
Court House on Friday of last week.
About thirty persons were present The
OF creditors to Henry A. Warburton Esq,
the Referee in Bankruptcy. After the
schedule of ere 1.tors had been made up,
Mr.. c. c. Caldwell, President of the
Eukeka Company, was put on the stand
for examination by the creditors, Mr..
Caldwell testified to having been the
Company's president since its organiza- :
tion in 1888. Did not know they were
losing money until the fall of 1912 and
even then thought they might pull
through. Never especially examined
the books, leaving their care to .ul
Mobrlein, the book-keeper. Knew that
il had been practice of the book keeper
for years to initiate" the value of mer-
chandise carried on the books in order to
make them balance. Admitted that such
proceeding would naturally deceive
creditors of the company. Had been
practice to pay per cent. on preferred
stock and per cent. on common stock,
without knowing whether company had
surplus earning to warrant such pay
ment. The directors were accus toned to
signing notes in blank and leaving them
In office, which notes were afterward fill
ed up for discount. Company had issued
over 100000 of stock, preferred and COM
mon. Had also issued, as collateral, GER
tfcates of stock which were never paid
thnrnfnrn
paper.
Eugene VI. Haines, of the Board of
Directors, was put on the stand. Had
been director since 1907 and attended
the meetings of same regularly. Several
notes, bearing his purported signature,
were submitted to him for inspection,
and he swore that he had not placed the
Signature there himself or authorized
anyone else to do so for him.
The meeting here took recess until
Tuesday morning at $50. Upon reas-
sembling on Tuesday, Mr.. Caldwell was
recalled to the stand and interrogated as
TO the signatures of several notes sub
mitted by attorneys for banks and indi-
fiduals who held such notes. Mr.. Cald-
well also testified that such notes were
INTENDED as notes OF Eureka Company.
and not as notes of the directors individ-
ually, and that the company received
proceeds of the notes.
j. f. Marshall was sworn and testified
TO having succeeded R. l.. Christie as a
director some twenty years ago Had
been secretary of company since the
death of j. T. Graham. Had nothing TO
do with keeping of tn ebooks. When Mr.
Graham was elected Clerk of the Circuit
Court, Mr.. Mohrlein was brought to the
once and put in charge of the books
Said Mr.. Mohrlein was instructed by Mr.
Gfaham to initiate the company's credit
OF merchandise, as he would have to do
so to make his books balance. Witness
was not familiar with the book keeping
as his time was taken up with making
sales and collections on same. Attended
meetings of Directors and voted with
the rest to pay dividends on stock
though personally had not favored such
action for several years, as he thought
the company needed the money. Made
no Investigation as to whether was
any surplus out of which 10 pay such
dividends, accepting the representations
made to him. Came face to face" with
the real condition of the company in No
count for the padding of the merchan-
disc account on the books by some
S4S,OOO. Did not know of any directors or
officers ever having borrowed money
from the company. Believed all the sig
natures of directors to notes submitted
were genuine, as it had been the custom
for years for them to sign such notes in
blank and keep supply of them il the
once for use when needed. Banks in
sisted on such individual signatures as
additional security to the company's sig
pature.
The creditors determined to hold an
other meeting at $3.50 on Saturday, April
10, to examine Mr.. Mohrlein, yne book
Keeper, whose illness had prevented his
attendance at the meetings so far.
Before taking a recess the creditors
proceeded to the election or trustees, the
voting to be by amounts or creditors
claims allowed. The total amount OF
such claims, allowed by the Referee is
over $4,000 About 100000 of the same
were voted at the meeting, resulting in
the unanimous election of William S.
Evans, Robert G. Thackery and Fred T
Haines, as Trustees, with bond fixed at
$40 600.