South Bend news-times. (South Bend, Ind.) 1913-1938, 1914-06-25
Receivers Appointed for H. B.
CIafIin Co., Controlling 28
Stores = Liabilities May
Reach 80 Millions.
LOST MILLION THROUGH
REDUCTION OF TARIFF
Small Bankers Call in Short
Time Loans and Company is
Unable to Meet Demand,
Causing Suspension.

NEW YORK. June 25.-Federal
Judge Hand today appointed JOS.
3. MartindaIe. president Of the Chem
ical National bank. and Frederick
Juliard, receivers for the II. b. Claflin
company. one of the largest dry goods
concerns in the United States, and the
Defender Manufacturing Co.
The petition against the Clafin COM
pany was filed by John 9. Eames, of
New York, on behalf of his other
creditors. Eames claimed that the
Clahin company owed him s3,66S on
a loan and that it has several million
dollars of Indebtedness.
The petition against the Defender
Co was filed by w. p. Odell of New
Jersey, a note creditor for $4,000.
Judge Hand fixed the receivers
bond of the Clahin company at $780,
600. and $4,000 for the Defender
company.
An involuntary petition In bank
ruptcy was also filed against the Claf-
lin company by John Muller, William
Worth and Alfred Bergner. creditors
claiming respectively S731, $3,l5l and
$2S,730.
The failure Of the Clafiin company
is one of the greatest that has ever
startled the commercial life of New
York. 1t is reported in financial
circles that the liabilities amount to
fully $4,000. 600.
II Is understood that there are about
5000 banks throughout the country
corporation and controls 2S dry ygoods
five of the more important New York
banks are believed to be affected also.
The Clafiin company is a $4,000, 600
coronation and controls S dry goods
firms in the United States
Formed I'm 1890.
The Claflin company was incorpO-
rated in 1890 and this incorporation
was followed by the organization in
1900 of the associated merchants COM
pany. with $20,00O,0OO of authorized
capacity which in turn was followed
by the organization in 1909 of the
United Drygoods company, with SOL
GOO 600 of authorized ca )ltal.
The larger companies were holding
companies and included among their
assets many of the Claflin interests.
one Of the causes contributing to
the suspension of the Claftin company
was that the concern lost 81, 600, 600
over night through the tariff reduction.
Another reason was that the concern
for some time past had been operating
by making only temporary loans in
stead of long time loans, and that
when the different bankers decided 10
call in their loans the order hit the
Clahin Co. a terrific blow.
Small Banks Call Loans.
Some Of the New York banks who
were holding the Clahin papers were
said TO have been willing TO leave
them uncaued. but most of the Claf-
lin loans had been made of the smaller
so-called country banks, and these in
sisted upon q payment OF the notes
upon maturity.
II was learned on the highest au-
thOrity the the Associated Merchants
and the United Drygoods companies
were in no way involved in the sus-
pension OF the Clatlin company. These
concerns held only comparatively
small part of the Clahin stock, and
their loss will be so small that they
could continue paying dividends on
their own stock even If their holdings
IN the Clafin company were dead
loss.
IL was stated today that a number
Of bankers have decided another store
which is controlled by the Associated
Merchants and United DrygOods COM
pany This store has considerable
paper IN circulation but its assets can
more than take care of its every obh-
cation. However. the store has found
IL "A bit hard OF late 10 get loans CT
the amount II desires, owing 10 the
new conservative rule among bankers.