The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-06-26
BIGGEST FAILURE
IN HISTORY OF j. s.
Receivers Appointed for the H. B.
Claflin Company, of New
York City.
NUMEROUS OTHERS INVOL WE'D
Concern Owes More Than $50
100000 and It's Assets Said
to Be $44,0O0,OOO.
NUMEROUS OTHERS INVOL WE'D
Especial to The rimes.D,snatch. !


than &3o,o0o.ooo. which at the present
time II is unable To pay. It's assets
Rre said TO be s.4,o0000Q.
John Clafiin. head Of the company,
and Its chief individual stockholder. is
the owner of a chain of nearly thirty
other dry goods enterprises through
out the country, which are involved In
the failure. Receivers for several OF
these were named to-day. and similar
action, IL was announced, would be
taken In the case Of the rest. Their
business will be continued under re-
ceivcrs management until their tinan-
cial affairs have been adjusted.
From 5000 To 5000 banks in all
parts of the United states compose the
bulk OF the Clanin creditors. They
hold notes assregating the major part
of the liabilities. These notes are said
to have been issued by the various
Clafiin stores. indorscd by the II ~.
Clanln Co. and the proceeds used.
when discounted, in financing their
UNITED DRY GOODS co.
NOT INVOLVED IN FAILURE
The United Dry Goods Company. a
Sji.Q0o.o00 corporation. financed sew
cral years ago by J. i. Morgan s. Co.
IL take over other C!atiin interests. Is
not involved in the failure. Neither 81
the Associated Merchants Company.
owned by the United Dry Goods Com
pany. and which in turn owns one
half Of the II. B. Clahin Co and other
large stores principally in New York.
Mr.. Claiiin. who was president of
both the dry goods ana Associated MGR
chants companies. resigned those posi-
tions to-day. and II IS understood that
when the ii. Il. clanin 60. is rcor-
Eanized. its connection with both the
former companies will be severed.
Cornelius y. Bliss. son OF the late New
York dry goods merchant Of that name,
Il. u a 10 -
According TO MIR. Ciaiiin, The failure
was due 10 tho unprecedented shift
imi of trade centres in New York CITY.
which compelled the concern TO rely
mainly on its retail stores In other
cities for It's profits
Their rapidly extending business
hc said. "occasioned large cn pital
Cuiremcnts. whicI we have not. peen
I1ic 10 meet
VAIN EXPORTS TO RAISE
ENOUGH TO SAVE COMPANY
The crash came to-day. after vain
efforts had been made by Mr. ClaHin
to induce J. l.. Morgan * Go. and ot!cr
Wall Street banking interests TO loan
him money TO tide over his cnbarrass-
mcnt. These bankers. II WAS learned.
advanced the company several million
dollars about two weeks ago. but
banks continued to press their claims.
until IL became evident that virtually
the whole $3o.GoU000 would have TO
bc raised to save the company from
failure.
Mr.. Clanin. at a conference lasting
until after midnight last might with
j. T.. Morgan. i. :. Alexander presi-
dent Of the National Bank OF Com
mcrce; Albert II. Wiggin. president of
the Chase National Bank. and other
iinanciers made a last appeal. hut the
decision went against him. The bank
ers believed a rcceivership and Il rcor-
.,.,,,s L..
which would include its separation
from the United Dry Goods Company
and the Associated Merchants Com
pany, was the wisest course. At this
meeting. Mr. Clahn is said 10 have
announced his intention to resign from
the two latter concerns.
To-day John G. Eaincs. vice -prcsi-
dent of III. B. Claflin Co, nlod a friend
~ suit in equity against II. alleging
that il was unable at present TO meet
It's liabilities. This was admitted by
the company, and Judge Hand. in Fed
cral Court. appointed as receivers
Joseph Is. Martindalc, president of the
Chemical National Bank, and Fred
crich y. Juilliard. a dry goods mcr-
chant.
INVOLUNTARY BANKRUPTCY
PETITION ALSO Is FILED
Almost simultaneously a petition in
involuntary bankruptcy was filed by
the three merchandise creditors, whose
attorneys announced they would seek
the appointment OF other receivers.
In this action subpocnas were issued
for Mr. Cla!iin Mr.. EaIncs and Dexter
y. Force. treasurer Of the company,
10 appear and show cause on OF be
fore July =, why ii should not be adj
Judged bankrupt
Immediate steps to protect the In
tcrcsts Of notcholders and the mer-
chandise creditors were taken by the
IL,
ing each. The noteholdcTs' commit
tee Of which j. $. Alexander is chair
man. asked that all claims be deposit
ed with them, and similar request
was made i'm behalf of the merchandise
creditors. called together by attorneys
for the Merchants Protective Asso
citation.
Both committees announced they
would demand "a voice i'll the rcorgani-
Hation plans. Still another protective
committee was organized under the
auspices OF the Creditors Audit and
Adjustment Association, and the re-
ceivers are directed by the court also
to organize Il creditors committee to
he chosen by all the creditors at an
carly meeting.
Al this meeting the creditors will
be authorized by the court To vote
whether the recaivership shall he con-
tinued, and whether other receivers
shall be appointed. The authority
granted them by the court appears To
give them virtual control Of the com
pany's business subject to the approval
of the court.
FOURTH FINANCIAL.
CRISIS or COMPANY
The failure to-day marked the
fourth financial crisis of the II. u.
Clahin Co. since II was first cstab-
lished in this city in 1Si3, with the
firm name of Bulkley & Cla hin. 1t was
tidod over financial difficulties In the
War Between the States. when South
criI debtors failed to meet their North
ern obligations; again In the panic OF
1873, and again in the panic OF 1907,
UyontInuod m Coco,d p,o. \